UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) [X]☒ QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2017 OR [ ] TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition period from ________to _________
Commission
file numberFile Number: 000-55889DENSE FOREST ACQUISITION CORPORATION (ExactGlobal Diversified Marketing Group Inc.
(Exact name of registrant as specified in its charter)
Delaware 82-3707673 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9454 Wilshire Blvd. #612 Beverly Hills, CA 90212 (Address of principal executive offices) (zip code) 310-888-1870 (Registrant's
Delaware | 82-3707673 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
4042 Austin Boulevard, Suite B Island Park, New York | 11558 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code)
code: 800-550-5996
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Not applicable | Not applicable | Not applicable |
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 X ☒ 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, or a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer,"
"accelerated filer"” “accelerated filer,” “smaller reporting company,” and "smaller reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated Filer
Non-accelerated filer
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☒ |
If an emerging growth company, X
(doindicate by check mark if the registrant has elected not check if a smaller reporting company)
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 X ☐ No
Indicate ☒
As of August 4, 2022, the numberregistrant had shares of shares outstandingits common stock issued and outstanding.
GLOBAL DIVERSIFIED MARKETING GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
JUNE 30, 2022
TABLE OF CONTENTS
2 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The following unaudited interim financial statements of each ofGlobal Diversified Marketing Group Inc. (referred to herein as the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
May 14, 2017
Common Stock, par value $0.0001 20,000,000
Documents incorporated by reference: None
__________________________________________________________________________
CONDENSED FINANCIAL STATEMENTS
Condensed Balance Sheets as of March 31, 2018 (unaudited)
and December 31, 2017 2
Condensed Statement of Operations for the Three Months
Ended March 31, 2018 (unaudited) 3
Condensed Statement of Cash Flows for the Three Months
Ended March 31, 2018 (unaudited) 4
Notes to Condensed Financial Statements (unaudited) 5-8
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
2018 2017
------------ ------------
(Unaudited)
Current assets
Cash $ - $ -
------------ ------------
Total assets $ - $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities $ 250 $ 1,000
------------ ------------
Total liabilities 250 1,000
------------ ------------
Stockholders' Equity
Preferred stock, $0.0001 par value
20,000,000 shares authorized;
none issued and outstanding at
March 31, 2018 and December 31,
2017, respectively - -
Common Stock, $0.0001 par value,
100,000,000 shares authorized;
20,000,000 shares issued and
outstanding at March 31, 2018
and December 31, 2017, respectively 2,000 2,000
Additional paid-in capital 1,712 312
Accumulated deficit (3,962) (3,312)
------------ ------------
Total stockholders' deficit (250) (1,000)
------------ ------------
Total liabilities and
stockholders' deficit $ - $ -
============ ============
The accompanying notes are an integral part of these unaudited
condensed financial statements.
2
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
For the three months
ended March 31, 2018
-------------------
Revenue $ -
Cost of revenues -
-----------------
Gross profit -
-----------------
Operating expenses 650
-----------------
Operating loss (650)
-----------------
Loss before income taxes (650)
Income tax expense -
-----------------
Net loss $ (650)
=================
Loss per share - basic and diluted $ (0.00)
=================
Weighted average shares - 20,000,000
basic and diluted =================
The accompanying notes are an integral part of these unaudited
condensed financial statements.
3
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
For the three months
ended March 31, 2018
-------------------
OPERATING ACTIVITIES
Net loss $ (650)
Expenses paid by stockholder and contributed
as capital 1,400
Changes in Operating Assets and Liabilities:
Increase in accrued liability (750)
----------------
Net cash provided by (used in) operating activities -
----------------
Net increase in cash -
Cash, beginning of period -
Cash, end of period $ -
===============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Income tax $ -
===============
Interest $ -
===============
The accompanying notes are an integral part of these condensed
unaudited financial statements.
4
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Dense Forest Acquisition Corporation“Company,” “we,” “us” or “our”) are included in this Quarterly Report on Form 10-Q (the "Company"“Quarterly Report”) was incorporated on
December 1, 2017 under the laws of the state of Delaware to engage in any
lawful corporate undertaking, including, but not limited to, selected
mergers and acquisitions. .
The Company has been in the developmental stage
since inception and its operations to dateaccompanying unaudited financial statements have been limited to issuing
shares to its original shareholders and effecting a changeprepared in control. The
Company will attempt to locate and negotiateaccordance with a business entity for the
combination of that target company with the Company.
Any combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. In most instances the target company
will wish to structure the business combination to be within the definition
of a tax-free reorganization under Section 351 or Section 368 of the Internal
Revenue Code of 1986, as amended. No assurances can be given that the Company
will be successful in locating or negotiating with any target company. The
Company has been formed to provide a method for a foreign or domestic private
company to become a reporting company with a class of securities registered
under the Securities Exchange Act of 1934.
BASIS OF PRESENTATION
The summary of significant accounting policies presented below is designed
to assist in understanding the Company's unaudited condensed financial
statements. Such unaudited condensed financial statements and accompanying
notes are the representations of the Company's management, who are responsible
for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 which we filed with the Securities and Exchange Commission (“SEC”) on March 14, 2022 (the “Annual Report”), as updated in subsequent filings we have made with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.
3 |
Global Diversified Marketing Group Inc.
Financial Statements for the Sixth Months Ended June 30, 2022
Index to the Consolidated Financial Statements
F-1 |
Global Diversified Marketing Group Inc. and Subsidiary
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, | December 31, | |||||||
2022 | 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 62,956 | $ | 312,574 | ||||
Accounts receivable | 240,671 | 174,579 | ||||||
Prepaid expenses | 51,500 | 51,984 | ||||||
Inventory | 315,445 | 664,337 | ||||||
Other assets | 999 | 999 | ||||||
Total current assets | 671,571 | 1,204,472 | ||||||
Property and equipment, net | 555 | �� | 833 | |||||
Operating lease right of use assets | 108,287 | 80,271 | ||||||
Other assets-security deposit | 1,600 | 1,600 | ||||||
Total assets | $ | 782,013 | $ | 1,287,175 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expense | $ | 228,580 | $ | 491,684 | ||||
Current portion of operating lease payable | 19,043 | 13,508 | ||||||
Government loans payable | 529,065 | 529,065 | ||||||
Loans payable | 134,704 | 37,807 | ||||||
Total current liabilities | 911,392 | 1,072,063 | ||||||
Lease liabilities | 89,393 | 66,763 | ||||||
Total liabilities | 1,000,785 | 1,138,826 | ||||||
Commitments and contingencies | - | |||||||
Stockholders’ Equity(Deficit): | ||||||||
Preferred stock, Series A $ | par value, shares authorized, issued and outstanding- | - | ||||||
Common stock, $ | par value, shares authorized; and issued and outstanding as of June 30, 2022 and December 31, 2021, respectively1,511 | 1,447 | ||||||
Additional paid-in capital | 27,813,737 | 27,688,665 | ||||||
Accumulated deficit | (28,035,915 | ) | (27,543,659 | ) | ||||
Accumulated other comprehensive income | 1,895 | 1,895 | ||||||
Total stockholders’ equity(deficit) | (218,772 | ) | 148,349 | |||||
Total liabilities and equity | $ | 782,013 | $ | 1,287,175 |
See accompanying notes to unaudited condensed consolidated financial statements
F-2 |
Global Diversified Marketing Group Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months | Three Months | Six Months | Six Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2022 | 2021 | 2022 | 2022 | |||||||||||||
Sales, net | $ | 560,724 | $ | 556,579 | $ | 893,608 | $ | 1,379,979 | ||||||||
Cost of goods sold | 411,065 | 316,856 | 635,617 | 805,709 | ||||||||||||
Gross margin | 149,659 | 239,723 | 257,991 | 574,270 | ||||||||||||
Operating expenses: | ||||||||||||||||
Payroll and taxes | 204,047 | 324,975 | 356,496 | 400,295 | ||||||||||||
Legal and professional fees | 96,195 | 110,435 | 139,411 | 635,045 | ||||||||||||
Rent | 35,764 | 4,356 | 41,009 | 8,712 | ||||||||||||
Selling, general and administrative and expenses | 96,583 | 168,343 | 206,720 | 306,473 | ||||||||||||
Total operating expenses | 432,589 | 608,109 | 743,636 | 1,350,525 | ||||||||||||
Income (loss) from operations | (282,930 | ) | (368,386 | ) | (485,645 | ) | (776,255 | ) | ||||||||
Other (expense) | ||||||||||||||||
Interest expense | (5,531 | ) | (3,746 | ) | (6,611 | ) | (6,423 | ) | ||||||||
Total other (expense) | (5,531 | ) | (3,746 | ) | (6,611 | ) | (6,423 | ) | ||||||||
Income (loss) before income taxes | (288,461 | ) | (372,132 | ) | (492,256 | ) | (782,678 | ) | ||||||||
Provision for income taxes (benefit) | - | - | - | - | ||||||||||||
Net loss | $ | (288,461 | ) | $ | (372,132 | ) | $ | (492,256 | ) | $ | (782,678 | ) | ||||
Basic and diluted earnings (loss) per common share | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) | ||||
Weighted-average number of common shares outstanding: | ||||||||||||||||
Basic and diluted | 15,030,014 | 14,029,474 | 14,759,554 | 13,764,065 | ||||||||||||
Comprehensive income (loss): | ||||||||||||||||
Net income(loss) | $ | (288,461 | ) | $ | (372,132 | ) | $ | (492,256 | ) | $ | (782,678 | ) | ||||
Unrealized gain on foreign exchange | - | 333 | - | (4,932 | ) | |||||||||||
Comprehensive income (loss) | $ | (288,461 | ) | $ | (371,799 | ) | $ | (492,256 | ) | $ | (787,610 | ) |
See accompanying notes to unaudited condensed consolidated financial statements
F-3 |
Global Diversified Marketing Group, Inc and Subsidiary
Condensed Consolidated Statement of Stockholders’ Deficit
(Unaudited)
Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | |||||||||||||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Income(Loss) | Equity | |||||||||||||||||||||||||
Balance, December 31, 2020 | 1,000 | $ | - | 13,132,518 | $ | 1,313 | $ | 26,267,208 | $ | (26,329,779 | ) | $ | 9,892 | $ | (51,366 | ) | ||||||||||||||||
Common stock issued for services | 349,681 | 35 | 485,503 | 485,538 | ||||||||||||||||||||||||||||
Change in foreign currency translation | (5,265 | ) | (5,265 | ) | ||||||||||||||||||||||||||||
Common stock issued in private placements | 415,628 | 42 | 299,958 | 300,000 | ||||||||||||||||||||||||||||
Net loss | - | - | (410,545 | ) | (410,545 | ) | ||||||||||||||||||||||||||
Balance, March 31, 2021 | 1,000 | $ | - | 13,897,827 | $ | 1,390 | 27,052,669 | (26,740,324 | ) | $ | 4,627 | $ | 318,362 | |||||||||||||||||||
Common stock issued for services | 149,179 | 15 | 274,506 | 274,521 | ||||||||||||||||||||||||||||
Change in foreign currency translation | 333.00 | 333 | ||||||||||||||||||||||||||||||
Net loss | - | - | (372,132 | ) | (372,132 | ) | ||||||||||||||||||||||||||
Balance, June 30, 2021 | 1,000 | $ | - | 14,047,006 | $ | 1,405 | 27,327,175 | (27,112,457 | ) | $ | 4,960 | $ | 221,082 |
Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | |||||||||||||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Income(Loss) | Equity | |||||||||||||||||||||||||
Balance, December 31, 2021 | 1,000 | $ | - | 14,473,256 | $ | 1,447 | $ | 27,688,665 | $ | (27,543,659 | ) | $ | 1,895 | $ | 148,349 | |||||||||||||||||
Common stock issued for services | 15,000 | 2 | 4,514 | 4,515 | ||||||||||||||||||||||||||||
Net loss | - | - | (203,794 | ) | - | (203,794 | ) | |||||||||||||||||||||||||
Balance, March 31, 2022 | 1,000 | $ | - | 14,488,256 | $ | 1,449 | $ | 27,693,179 | $ | (27,747,454 | ) | $ | 1,895 | $ | (50,930 | ) | ||||||||||||||||
Common stock issued for services | 620,000 | 62 | 120,558 | 120,620 | ||||||||||||||||||||||||||||
Net loss | - | - | (288,462 | ) | - | (288,462 | ) | |||||||||||||||||||||||||
Balance, June 30. 2022 | 1,000 | $ | - | 15,108,256 | $ | 1,511 | $ | 27,813,737 | $ | (28,035,915 | ) | $ | 1,895 | $ | (218,772 | ) |
See accompanying notes to unaudited condensed consolidated financial statements
F-4 |
Global Diversified Marketing Group Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net income (loss) | $ | (492,256 | ) | $ | (782,678 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Depreciation | 864 | 278 | ||||||
Stock-based compensation | 125,135 | 760,059 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (66,092 | ) | (76,840 | ) | ||||
Prepaid expenses | 484 | 17,626 | ||||||
Right of use assets | (28,603 | ) | 8,110 | |||||
Inventory | 348,891 | (316,432 | ) | |||||
Other assets | - | 9,892 | ||||||
Operating lease payable | 28,165 | (9,888 | ) | |||||
Accounts payable and accrued expenses | (263,104 | ) | 110,412 | |||||
Net cash (used in) operating activities | (346,516 | ) | (279,461 | ) | ||||
Cash flows from financing activities: | ||||||||
Increase (decrease) in loans payable, net | 96,898 | 45,109 | ||||||
Proceeds from private placements | - | 300,000 | ||||||
Government loans | - | 29,165 | ||||||
Net cash provided by financing activities | 96,898 | 374,274 | ||||||
Effect of exchange rates on cash and cash and cash equivalents | - | (4,932 | ) | |||||
Net increase (decrease) in cash and cash equivalents | (249,618 | ) | 94,813 | |||||
Cash and cash equivalents at beginning of period | 312,574 | 62,555 | ||||||
Cash and cash equivalents at end of period | $ | 62,956 | $ | 152,436 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 6,611 | $ | 6,423 | ||||
Cash paid for income taxes | $ | - | $ | - |
See accompanying notes to unaudited condensed consolidated financial statements
F-5 |
GLOBAL DIVERSIFIED MARKETING GROUP INC.
NOTES TO THE (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Global Diversified Marketing Group Inc. (the “Company”), formerly known as Dense Forest Acquisition Corporation, was incorporated in Delaware on December 1, 2017, and changed its name on June 13, 2018, as part of a change in control. As part of the change in control, its then officers and directors resigned and contributed back to the Company shares of the outstanding shares of its common stock, $ par value per share (the “Common Stock”), and appointed new officers and directors. On June 14, 2018, the new management of the Company issued shares of its Common Stock to Paul Adler, the then president of the Company.
On November 26, 2018, the Company effected the acquisition of Global Diversified Holdings, Inc. (“GDHI”), a private New York company owned by the Company’s president, with the issuance of shares of the Company’s Common Stock in exchange for all of the outstanding shares of GDHI. GDHI became a wholly-owned subsidiary of the Company, and its activity for the six months ended June 30, 2022 and 2021 is reflected in these financial statements along with the expenses of the Company.
Prior to the acquisition of GDHI, the Company had no business and no operations. Pursuant to the acquisition, the Company acquired the operations and business plan of GDHI, which imports and sells snack food products. For accounting purposes, GDHI is considered to be the acquirer, and the equity is presented as if the business combination had occurred on January 1, 2017.
Basis of Presentation
The 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 all material respects, andUS dollars. Certain prior year amounts have been consistently appliedreclassified to conform to the presentation in preparing the current year. The Company has adopted a December 31 year-end.
Management’s Representation of Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally presentincluded in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"(“GAAP”) werehave been condensed or omitted pursuant toas allowed by such rules and regulations. Theregulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results for the
three months ended March 31, 2018of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
Principles of Consolidation
The accompanying consolidated financial statements include the resultsaccounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, accounts receivable from customers, accounts payable, and loans payable. The carrying amounts of these financial instruments approximates fair value due either to be expected for the year ending December 31, 2018.
USE OF ESTIMATES
length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
F-6 |
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAPaccounting 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 condensed financial statements,
and the reported amounts of revenues and expenses during the reporting
periods.balance sheet. Actual results could differ from those estimates.
CASH
Stock-Based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This Section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. During the six months ended June 30, 2022 and June 30, 2021 stock-based compensation was $ and $ respectively.
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well asCash Equivalents
The Company considers all highly liquid short-term investments with the original maturities of 90 daysthree months or less. The Company did not haveless to be cash equivalents as of March 31, 2018equivalents. On June 30, 2022, and December 31, 2017, respectively.
CONCENTRATION OF RISK
Financial instruments that potentially subject2021, the Company to concentrations
of credit risk consist principallyhad $62,956 and $312,574, respectively of cash.
Factoring
The Company placesaccounts for the transfer of our accounts receivable to a third party under a factoring agreement in accordance with ASC 860-10-40-5 “Transfers and Servicing”. ASC 860-10 requires that several conditions be met in order to present the transfer of accounts receivable as a sale. Even though we have isolated the transferred (sold) assets and we have the legal right to transfer our assets (accounts receivable) we do not meet the third test of effective control since our accounts receivable sales agreement with the factor requires us to be liable in the event of default by one of our customers. Because we do not meet all three conditions, we do not qualify for sale treatment and our debt incurred with respect to the sale of our accounts receivable is presented as a loan payable in on our consolidated balance sheet. As of June 30, 2022 and December 31, 2021, the amounts due to factors in both periods was $-0-.
Accounts Receivable
Accounts receivable are generated from sales of snack food products to retail outlets throughout the United States. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current creditworthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for its customers and maintains a provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. An allowance for doubtful; accounts are provided against accounts receivable for amounts management believes may be uncollectible. The Company historically has not had issues collecting on its accounts receivable from its customers. The Company factors certain of its receivables to improve its cash flow.
Bad debt expense for the three months ended June 30, 2022, and 2021 was $-0- and $-0-, respectively; the allowance for doubtful accounts on June 30, 2022, and 2021 was $-0- and $-0-, respectively.
Inventory
Inventory consists of snack food products and packaging supplies, and are stated at the lower of cost or market.
F-7 |
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its useful life are charged to expense as incurred.
Revenue Recognition
Beginning January 1, 2018, the Company implemented ASC 606, Revenue from Contracts with high quality banking institutions. Customers. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.
The Company didrecognizes revenue from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.
Advertising and Marketing Costs
The Company’s policy regarding advertising and marketing is to record the expense when incurred. The Company incurred advertising and marketing expenses of $23,520 and $125,580 during the six months ended June 30, 2022 and 2021, respectively.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not havebe recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash balances
inflows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the Federal Deposit Insurance Corporation limit ascarrying amount over the fair value of March 31,
2018the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Income Taxes
Income taxes are computed using the asset and December 31, 2017, respectively.
5
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
INCOME TAXESliability method. Under ASC 740, "Income Taxes,"the asset and liability method, deferred income tax assets and liabilities are recognized fordetermined based on the future tax consequences attributable to temporary differences between the financial statement carrying amountsreporting and tax bases of existing assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using the currently enacted tax rates expected to apply to
taxable income inand laws. A valuation allowance is provided for the years in which those temporary differencesamount of deferred tax assets that, based on available evidence, are not expected to be recovered or settled. Valuation allowancesrealized.
The Company’s income tax returns are open for examination for up to the past three years under the statute of limitations. There are no tax returns currently under examination.
Comprehensive Income
The Company has established when it is more likely than not that some or allstandards for reporting and display of comprehensive income, its components, and accumulated balances. When applicable, the deferred tax
assets will not be realized. AsCompany would disclose this information on its Statement of March 31, 2018Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and December 31, 2017,
there were no deferred taxesdistributions to owners. During the six months ended June 30, 2022, Company had a balance of $1,895 in accumulated other comprehensive income which arose from unrealized gain due to the uncertainty of the realization of
net operating loss or carry forward prior to expiration.
LOSS PER COMMON SHARE
foreign currency fluctuations.
F-8 |
Basic income (loss) per common share excludes dilution and is computed by dividing
net loss byhas been calculated based on the weighted average number of common shares of Common Stock outstanding during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As
of March 31, 2018 and December 31, 2017, there are no outstanding dilutive
securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting for fair value measurements
of financial assets and financial liabilities and for fair value
measurements of nonfinancial items that are recognized or disclosed at
fair value in the unaudited condensed financial statements on a recurring
basis. Additionally, the Company adopted guidance for fair value
measurement related to nonfinancial items that are recognized and
disclosed at fair value in the unaudited condensed financial statements
on a nonrecurring basis. The guidance establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques 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
measurements) and the lowest priority to measurements involving
significant unobservable inputs (Level 3 measurements). The three
levels of the fair value hierarchy are as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Company has the ability to
access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their
fair values because of the short maturity of these instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations
(Topic 805): Clarifying the Definition of a Business". The amendments
in this ASU clarify the definition of a business with the objective of
adding guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions (or disposals) of assets or
businesses. Basically these amendments provide a screen to determine
when a set is not a business. If the screen is not met, the amendments
in this ASU first, require that to be considered a business, a set
must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create output and
second, remove the evaluation of whether a market participant could
replace missing elements. These amendments take effect for public
businesses for fiscal years beginning after December 15, 2017 and
interim periods within those periods, and all other entities should
apply these amendments for fiscal years beginning after December 15,
2018, and interim periods within annual periods beginning after
December 15, 2019.
Recent Accounting Pronouncements
The Company does not expect that the adoption of this guidance will have a material impact on its condensed financial
statements.
6
______________________________________________________________________
DENSE FOREST ACQUISITION CORPORATION
Notes to Unaudited Condensed Financial Statements
In May 2017, the FASBrecently issued ASU 2017-09, "Scope of Modification
Accounting", which amends the scope of modification accounting for
share-based payment arrangements, provides guidance on the types of
changes to the terms or conditions of share-based payment awards to
which an entity would be required to apply modification accounting
under ASC 718. For all entities, the ASU is effective for annual
reporting periods, including interim periods within those annual
reporting periods, beginning after December 15, 2017. Early adoption
is permitted, including adoption in any interim period. The Company
does not expect that adoption of this guidance will have a material
impact on its condensed financial statements and related disclosures.
In November 2016, the FASB issued Accounting Standards Update No. 2016-18,
"Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18").
The new guidance is intended to reduce diversity in practice by adding or
clarifying guidance on classification and presentation of changes in
restricted cash on the statement of cash flows. ASU 2016-18 is effective
for annual and interim periods beginning after December 15, 2017. Early
adoption is permitted. The amendments in this update should be applied
retrospectively to all periods presented. Managementbelieves that this
ASU will only impact the Company if it has restricted cash in the future.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic
230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-
15"). ASU 2016-15 will make eight targeted changes to how cash receipts and
cash payments are presented and classified in the statement of cash flows.
ASU 2016-15 is effective for fiscal years beginning after December 15, 2017.
The new standard will require adoption on a retrospective basis unless it
is impracticable to apply, in which case it would be required to apply the
amendments prospectively as of the earliest date practicable. Management
believes that the impact of this ASU to the Company's condensed financial
statements would be insignificant.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force) and the United States Securities and Exchange
Commission did not or are not believed by management to have a materialsignificant impact on the Company's presentCompany’s results of operations, financial position, or future financial statements.
cash flow.
NOTE 2 - GOING CONCERN
The
As of June 30, 2022, the Company has not yet generated any revenue since inception to datehad cash and has sustained operating losscash equivalents of $650 for the three months ended
March 31, 2018. The Company had$62,956, a working capital deficit of $250$239,822 and had an accumulated deficit of $3,962 as of March 31, 2018 and a working
captial deficit of $1,000 and an accumulated deficit of $3,312 as of
December 31, 2017. The Company's continuation$28,035,915. These conditions raise substantial doubt about the Company’s ability to continue as a going concern
is dependent on its ability to generate sufficient cash flows from
operations to meet its obligations and/or obtaining additional financing
from its members or other sources, as may be required.concern. The accompanying unaudited condensed financial statementsconsolidated financials have been prepared assuming that the Company will continue as a going concern; however, the above
condition raises substantial doubt about the Company's ability to do so. The
unaudited condensed financial statementsconcern and, accordingly, do not include any adjustments to
reflectthat might result from the possible future effects on the recoverability and classificationoutcome of assets or the amounts and classifications of liabilities that may result
shouldthis uncertainty. If the Company beis, in fact, unable to continue as a going concern.
In order to maintain its current levelconcern, the shareholders may lose some or all of operations,their investment in the Company will
require additional working capital from either cash flow from operations
or from the sale of its equity. However, the Company currently has no
commitments from any third parties for the purchase of its equity. If the
Company is unable to acquire additional working capital, it will be required
to significantly reduce its current level of operations.
Company.
NOTE 3 - ACCRUED LIABILITIES
As– CAPITAL STOCK
The Company has March 31, 2018$ par value common stock (the “Common Stock”) authorized. The Company had and shares of Common Stock issued and outstanding as of June 30, 2022, and December 31, 2017,2021, respectively. shares of
2022 Common Stock Issuances
During the Company had accrued
professional fees of $250 and $1,000, respectively.
NOTE 4 - STOCKHOLDERS' DEFICIT
On December 1, 2017,three months ended March 31, 2022 the Company issued 20,000,000 founders shares of its common stock for services which were valued at $4,515. All issuances made by the Company are valued based upon the closing trading of the Company’s Common Stock on the date when the Board of Directors authorizes and approves the issuance of such shares.
During the three months ended June 30, 2022 the Company issued twothe Company’s valued at $ per share, 350,000 shares to its Board of Directors in lieu of cash payments. These shares were value valued at $ per shares. The Company also issued shares to a service provider valued at $ per share. shares to
2021 Common Stock Issuances
During the year ended December 31, 2021, the Company issued a total of shares of Common Stock as follows:
871,341 shares were issued for services to consultants and one employee. These shares were valued at $
officerswere valued at $250,250. shares were awarded to four independent directors and
These charges amounting to $ were recorded as $ in “professional fees” and $ in payroll on the Company’s Consolidated Statements of Operations during the year ended December 31, 2021.
F-9 |
Preferred Stock
The Company has legal services provideda class of preferred stock designated Class A Super Voting Preferred Stock (“A Stock”). There are shares of A Stock designated. Each share of such stock shall vote with the Common Stock and have 100,000 votes. A Stock has no conversion, dividend, or liquidation rights. Accordingly, the holders of A Stock will, by reason of their voting power, be able to control the affairs of the Company. The Company is authorized to issue 100,000,000has issued shares of common
stockA Stock to Paul Adler, the company’s Chief Executive Officer, and 20,000,000majority shareholder giving him effective voting control over the Registrant’s affairs for the foreseeable future. shares of $ par value preferred stock authorized. On February 24, 2020, the Company filed a Certificate of Designation for
NOTE 4 – RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2022, and June 30, 2021, the Company incurred salary expense of $193,193 and $147,500 respectively, related to services provided to it by its CEO.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company renewed a 60-month lease agreement on October 1, 2021, to rent approximately 1,000 square feet of office space in Island Park, New York. The lease requires monthly payments of $1,748 for the first 24 months and after that increases by approximately 3% each year, and contains one five year renewal option. Future minimum lease payments due under this operating lease, including renewal periods, are as follows:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF OPERATING LEASE LIABILITY
December 31, 2022 | $ | 20,980 | ||
December 31, 2023 | 21,137 | |||
December 31, 2024 | 21,771 | |||
December 31, 2025 | 22,425 | |||
December 31, 2026 | 17,194 | |||
Total | $ | 103,509 |
Under the guidelines of ASC 842, renewal of the lease at the end of its term was not considered probable. The Company record right of use assets and lease liabilities of $83,415 related to this lease.
NOTE 6 – LOANS PAYABLE
As of June 30, 2022 and December 31, 2021 the Company had the following loans payable
SCHEDULE OF DEBT
June 30, 2022 | December 31,2021 | |||||||
Credit Line – Sterling (a) | $ | 31,923 | $ | 37,807 | ||||
Credit Line-Loan Builder (b) | 102,781 | - | ||||||
Total loans payable | $ | 134,704 | $ | 37,807 |
(a) | The maximum borrowing level under this unsecured facility is $100,000 at an interest rate of 2.5% over prime |
(b) | The maximum borrowing level on this facility is $125,000 with a fixed interest rate of 10% |
NOTE 7 – CONCENTRATIONS
The Company does substantially all of its business with 4 to 5 customers. These customers accounted for 91 % and 99% of revenues for the six months ended June 30, 2022, and 2021, respectively.
SCHEDULE OF CONCENTRATION OF RISK
June 30, 2022 | June 30, 2021 | |||||||
Customer A | 36 | % | 25 | % | ||||
Customer B | 29 | % | 21 | % | ||||
Customer C | 15 | % | 20 | % | ||||
Customer D | 11 | % | 19 | % | ||||
Customer E | - | 14 | % | |||||
Total | 91 | % | 99 | % |
NOTE 8 – SUBSEQUENT EVENTS
On April 4, 2022, the Company issued preferred stock. AsCommon Stock to its director of March 31, 2018,
20,000,000operations as a bonus on his one year anniversary of employment. These shares were valued at $ . On April 25, 2022, the Company granted an aggregate of shares of common stock and no preferred stockCommon Stock to four directors of the Company. These shares were issued and
outstanding.
NOTE 5 - SUBSEQUENT EVENT
Management has evaluated subsequent events through May 15, 2018,
the date which the financial statements were available to be issued.
Except for the events disclosed above, all subsequent events requiring
recognition have been incorporated into these financial statements
in accordance with FASB ASC Topic 855, "Subsequent Events."
7
______________________________________________________________________
valued at $ .
F-10 |
ITEM 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Dense Forest Acquisition Corporation)(OPERATIONS.
The information set forth in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forward-looking statements” within the "Company") was incorporated
on December 1, 2017 under the lawsmeaning of Section 27A of the StateSecurities Act of Delaware to engage in any
lawful corporate undertaking, including, but not limited to, selected mergers
and acquisitions. The Company is a blank check company and qualifies1933, as an
"emerging growth company" as defined in the Jumpstart Our Business Startups
Act which became law in April, 2012.
Since inception the Company's operations to the balance sheet date
covered by this report were limited to issuing sharesamended, Section 21E of common stock to its
original shareholders and filing a registration statement on Form 10 on
March 8, 2018 with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) increase in our revenue and profitability, (ii) prospective business opportunities and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward-looking statements relate to register its classour plans, liquidity, ability to complete financing, to enter into future agreements with companies, and plans to successfully expend our business operations and the sale of common
stock.
our products. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. All forward-looking statements speak only as of the date of this Quarterly Report. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, or other information contained herein, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.
Overview
The Company has no operations nor does it engage in any business activities
generating revenues.
As of March 31,was incorporated on December 1, 2017 as a Delaware corporation under the name “Dense Forest Acquisition Corporation.” On November 26, 2018, the Company had not generated revenueseffected the acquisition of Global Diversified Holdings, Inc., a private New York snack and had
no income or cash flows fromgourmet food company (GDHI), pursuant to which Company acquired the operations since inception. and business plan of GDHI, and GDHI became our wholly owned subsidiary.
The Company had sustained net lossis an early-stage global multi-line consumer packaged goods (“CPG”) company with branded product lines and is a food and snack manufacturer, marketer and distributor in the United States, Canada, and Europe. The Company is focused on developing and marketing products that appeal to consumers’ growing preference for healthy snack food and operates through snacks segments offering Italian Wafers, French Madeleines, Italian Croissants, Macaron Cookies, Wafer Pralines, and other wholesome snacks.
The Company intends to develop additional gourmet foods and snack products under its trademarked brands and to expand the Company’s offering portfolio by identifying, producing and marketing new products. Management believes that the strategy of $650acquiring small brands regional brands and adding these to the Company’s national distribution can prove beneficial for the Company.
4 |
Impact of COVID-19
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. The COVID-19 pandemic has caused significant disruptions to the global financial markets. The full impact of the COVID-19 outbreak continues to evolve, is highly uncertain and subject to change. The Company is not able to estimate the effects of the COVID-19 outbreak on its operations or financial condition in the next 12 months. However, while significant uncertainty remains, the Company believes that the COVID-19 outbreak may have a negative impact the ability to raise financing and access capital.
Results of Operations
The information set forth below should be read in conjunction with the financial statements and accompanying notes elsewhere in this Quarterly Report.
Comparison of Results of Operations for the Three Months Ended June 30, 2022 and 2021
Revenue and Cost of Sales
During the three months ended June 30, 2022, our revenues were $560,724 compared to $556,579 during the period ended June 30, 2021, an accumulated deficitincrease of $3,962$4,145 of less than 1%.
Cost of sales was $411,065 for the three months ended June 30, 2022 compared to $316,856 for the three months ended June 30, 2021, or an increase of $94,209. Gross profit margin percentage for the three months ended June 30, 2022 was 26.7% compared to 43.1 % during the same three month period in 2021. The significant decrease in gross profit margin percentage in 2022 is attributable to increased shipping and inventory costs.
Operating expenses
During the three months ended June 30, 2022 our operating expenses were $432,589 compared to $608,109 during the three months ended June 30, 2021. Excluding stock based compensation in both periods operating expenses were $311,969 and $333,588, respectively for the periods ended June 30, 2022 and 2021, respectively. The primary reasons for the increase in operating expenses excluding stock based compensation in both periods is due to an increase in payroll and rent expenses, more than offset by a reduction in SG&A expenses.
Other Income (Expense)
Other expense was comprised solely of interest expense which amounted to $5,531 during the period ended June 30, 2022 compared to $3,746 during the same three month period ended June 30, 2021. The decrease in interest expenses is due to lower levels of factoring required due to the Company’s improved profitability.
Net loss
As a result of the foregoing the net loss for the three months ended June 30, 2021 was $288,461 compared to a net loss of $372,132 for the three months ended June 30, 2021.
Comparison of Results of Operations for the Six Months Ended June 30, 2022 and 2021
5 |
Revenue and Cost of Sales
During the six months ended June 30, 2022, our revenues were $893,608 compared to $1,379,979 during the period ended June 30, 2021, a decrease of $486,371. The decrease is attributable to a one time order from a major club store chain in the first quarter of 2021, and due to logistics and shipping issues in the first quarter of 2022 as well as transitioning from a public warehouse to our own warehousing facility. We believe those transition issues have been addressed going forward.
Cost of sales was $635,617 for the six months ended June 30, 2022 compared to $805,709 for the six months ended June 30, 2021. The decrease in cost of sales is due to significantly decreased sales levels. Gross profit margin for the six months ended June 30, 2022 was 28.9% compared to 41.6% during the same six month period in 2021. The significant decrease gross profit margin percentage in 2022 is attributable to increased shipping and inventory costs.
For the six months ended June 30, 2022, we had four customers that represented 91% of our business, compared to five customers that represented 99% of our business during the six months ended June 30, 2021. The loss of any these customers could have a material adverse impact on our business.
Operating expenses
During the six months ended June 30, 2022 our operating expenses were $743,636 compared to $1,350,525 during the six months ended June 30, 2021. Excluding stock based compensation in both periods operating expenses were $618,501 and $590,466, respectively for the six month periods ended June 30, 2022 and June 30, 2021, respectively. The primary reasons for the increase in operating expenses excluding stock based compensation in both periods is due to an increase in payroll and rent expenses, partially offset by a reduction in SG&A expenses.
Net loss
Liquidity and Capital Resources
As of June 30, 2022 we had $62,956 in cash compared to $312,574 in cash as of MarchDecember 31, 2018, respectively.2021.
Net cash used in operating activities decreased to $221,381 in the six months ended June 30, 2022 compared to $279,461 during the same period in 2021. The Company'sdecrease in cash used in operating is primarily due to a significantly increased operating loss during the six months ended June 30, 2022 compared to the same period in 2021, is due to a reduction of approximately $349,000 offset by other changes in the balance sheet.
Net cash provided by financing activities was $96,898 during the six months ended June 30, 2022 compared to $374,274 the same six month period end June 30, 2021. The decrease in net cash provided in 2022 is primarily due proceeds of $300,000 from private placements in 2021 compared to zero during the same period in 2022
The Company has recently financed its operations through SBA COVID-19 loans, capital investment, notes payable, and factoring. The Company believes it qualifies for additional SBA loans however there can be no assurance that these loans will be received, on the timing and at what level or terms, the financing will occur.
In the event continuing decreased sales and profits contain, our ability to obtain additional financing or factoring for our receivables could be negatively impacted which could have a material adverse impact on our liquidity or our ability to remain as a going concern.
6 |
Going Concern
The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. On a consolidated basis, we have incurred significant operating losses since inception. The Company’s independent auditors have issued a report raisingauditor has indicated substantial doubt about the Company'sCompany continuing as a going concern based on the Company’s accumulated deficit and accrued liabilities. Our ability to continue our operations as a going concern, realize the carrying value of our assets, and discharge our liabilities in the normal course of business is dependent upon our ability to raise capital sufficient to fund our commitments and ongoing losses, and ultimately generate profitable operations. If we cannot obtain needed funds, we may be forced to reduce or cease our activities with consequent loss to investors. In addition, should we incur significant presently unforeseen expenses or delays, we may not be able to accomplish our goals. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. At present,
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Estimates
Our financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the Company has no operationsaccounting policies and the continuation
of the Company as a going concern is dependent upon financial support from
its stockholders, its abilityestimates used to obtain necessary equity financing to continue
operations and/or to successfully locate and negotiate with a business entity
for the combination of that target company with it.
The president of the Company is the president, director and
shareholder of Tiber Creek Corporation. Tiber Creek Corporation assists
companies in becoming public reporting companies and with introductions
toprepare the financial community. Such services may include, whenstatements. The estimates are based on historical experience and if appropriate, the useassumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of an existing reporting company such as
the Company. Tiber Creek isoperations or financial position. Our critical accounting estimates are more fully discussed in continual discussions with client
companies for its assistance and the use of a company such as
the Company as a vehicleNote 2 to become a public company. As such the
Company may effect a change in control pursuant to such discussions.
The Company anticipates that it may effect a change in its name
to Global Diversified Holdings Group Inc. concurrently or subsequently
to this report in anticipation of a possible change in control.
When, and if, the Company effects a change in control, the Company
will file a Form 8-K announcing it.
If any change in control is effected, it is anticipated that
the then current management of the Company will resign as officers and
directors and will contribute back to the Company certain of the
shares currently held by it. Simultaneously new management will
be appointed and elected. New management may issue shares of the
Company's common stock to the new management or others.
At the time of filing this Report, no change in control has
not been effected or finalized.
ITEMour unaudited financial statements contained herein.
Item 3. Quantitative and Qualitative Disclosures Aboutabout Market Risk.
Information not required to be filed by Smaller Reporting Companies.
ITEM
Not applicable because we are an emerging growth company.
Item 4. Controls and Procedures.
Disclosures
Evaluation of Disclosure Controls and Procedures
Pursuant to Rules adopted by the Securities and Exchange Commission,
the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures pursuant to
Exchange Act Rules. This evaluation was done as of the end of the
period covered by this report under
Under the supervision and with the participation of the Company's principal executive officer (who is
also theour management, including our president and principal financial officer).
Management is responsible for maintaining a system of internal
control over financial reporting ("ICFR") that provides reasonable
assurance regarding the reliability of such reporting and the
accuracy and reliability of the preparation of financial statements
of such. Management is responsible to maintain records accurately and
fairly to reflect transactions and transactions are recorded as
necessary. The controls should provide reasonable assurance regarding
the prevention of unauthorized
acquisition or use of assets.
In the present case of the Company, management maintained sole
control of all financial transactions and all assets. Since the
president of the Company is in sole control of the financial
transactions and assets management believes that its control reasonably
and adequately addresses the risk of a misstatement in the financial
reporting. Based upon that evaluation, the principal officer, believes
that the Company's disclosure controls and procedures are effective in
gathering, analyzing and disclosing information needed to ensure that
the information required to be disclosed by the Company in its periodic
reports is recorded, summarized and processed timely. The principal
executive officerwho is directly involved in the day-to-day operations of the Company.
ThisCompany, as of June 30, 2022, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures were effective as of June 30, 2022 to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdown can occur because of simple error or mistake. In particular, many of our current processes rely upon manual reviews and processes to ensure that neither human error nor system weakness has resulted in erroneous reporting of financial data.
As of June 30, 2022 our disclosure controls and procedures were determined to be effective
7 |
Changes in Internal Control over Financial Reporting
During the period covered by this Quarterly Report, does not include an attestation report of
the Company's registered public accounting firm regardingthere were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Management's report was not subject
to attestation by the Company's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management's
report in this Quarterly Report.
Changes in Internal Control Overover Financial Reporting
There was
During the period covered by this Quarterly Report, there were no changechanges in the Company'sour internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no active or pending legal proceedings against us, nor are we involved as a plaintiff in any 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 1A. Risk Factors.
We are a smaller reporting that was identified in connection with such
evaluation that occurredcompany as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Except as set forth below, there were no sales of equity securities sold during the period covered by this reportReport that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the Company
is unaware of such proceedings contemplated against it.
Management is aware that certain current and prior blank check
companies of which Messrs. Cassidy and McKillop, the officers and
directors the officers and directors of the Company have received
subpoenas for documents in regard to an inquiry by the Securities and
Exchange Commission requesting documentation regarding the transactions
and filings for the past five years and former share ownership of certain
blank check companies.
Management of the Company has also received subpoenas
from the Securities and Exchange Commission in regard to certain of
the transactions and filings for the past five years of certain of
its blank check companies. Management has no independent knowledge or
information as to the intent or purpose of such subpoenas but believes
the SEC is investigating whether the change in control transaction is
considered a sale of a security and if so whether a broker needs to be
used to effect the transaction.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the past three years, the Company has issued 20,000,000
common shares pursuant to Section 4(a)(2) ofwere not registered under the Securities Act of 1933
at par as follows:
On December 1, 2017,and were not previously reported in a Current Report on Form 8-K filed by the Company issued the following shares of
its common stock:
Name Number of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
ITEM
Item 3. DEFAULTS UPON SENIOR SECURITIES
Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM
Item 5. OTHER INFORMATION
(a) Not applicable.
(b) Other Information.
None.
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Item 407(c)(3) of Regulation S-K:
During the quarter covered by this Report, there have not been
any material changes to the procedures by which security holders
may recommend nominees to the Board of Directors.
ITEM 6. EXHIBITS
(a) Exhibits
31 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32 Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
Exhibits.
Exhibit No. | Description | |
31.1/31.2* | CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 | |
32.1/32.2* | CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 | |
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
*Filed herewith
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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.
DENSE FOREST ACQUISITION CORPORATION
By: /s/ James M. Cassidy
Chief Executive Officer
By: /s/ James M. Cassidy
Chief Financial Officer
Dated: May 15, 2018
GLOBAL DIVERSIFIED MARKETING GROUP INC. | ||
Date: August 4, 2022 | By: | /s/ Paul Adler |
Name: | Paul Adler | |
Title: | Chief Financial Officer, President, Secretary and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer) |
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