UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT UNDER SECTION 13 OR 15(d)15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly periodfiscal year ended September 30, 2017March 31, 2023
or
o ¨TRANSITION REPORT UNDER SECTION 13 OR 15(d)15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ______________________to _____________
Commission file number 000-54464
THUNDER ENERGIES CORPORATION |
(Exact Name of Registrant as specified in its charter) |
Florida | 45-1967797 | |
(State or jurisdiction of Incorporation or | (I.R.S Employer Identification No.) |
|
| |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code727-940-3944786-855-6190
Securities registered under Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A |
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of class)
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. xYes¨☒ No
☐
Indicate by check markcheckmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rulerule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). xYes¨☒ 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 definitiondefinitions of "accelerated filer,” “large accelerated filer,"” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| Accelerated filer |
|
Non-accelerated filer |
| Smaller |
|
Emerging |
|
If an emerging growth company, indicate by check mark if the registrantRegistrant 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 ¨ ☐Nox.☒
The number of shares outstanding of the issuer’s common stock,Common Stock, $0.001 par value, $.001 per share, outstanding as of November 10, 2017May 15, 2023 was 17,078,743. shares.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This report contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “seeks,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” below. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Such statements may include, but are not limited to, information related to: anticipated operating results; licensing arrangements; relationships with our customers; consumer demand; financial resources and condition; changes in revenues; changes in profitability; changes in accounting treatment; cost of sales; selling, general and administrative expenses; interest expense; the ability to secure materials and subcontractors; the ability to produce the liquidity or enter into agreements to acquire the capital necessary to continue our operations and take advantage of opportunities; legal proceedings and claims.
Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this report and the documents that we reference and filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the documents is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).
NONE
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THUNDER ENERGIES CORPORATION
TABLE OF CONTENTS
| Heading | Page | |
| PART I – FINANCIAL INFORMATION | ||
| Mine Safety Disclosure | 59 | |
| Item 5. | Other Information | 60 |
| Item 6. | Exhibits | 61 |
| SIGNATURES | 62 | |
| 3 |
Part I. Financial Information
PART 1. FINANCIAL INFORMATION
ItemITEM 1. Financial Statements.FINANCIAL STATEMENTS
THUNDER ENERGIES CORPORATION
Unaudited Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 32,210 | $ | 48,881 | ||||
| Notes receivable - related party | 27,835 | 26,200 | ||||||
| Deferred offering costs | 25,750 | 9,000 | ||||||
| Prepaid expenses and other assets | 2,403,000 | 61,811 | ||||||
| Total current assets | 2,488,795 | 145,892 | ||||||
| Total assets | $ | 2,488,795 | $ | 145,892 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 80,019 | $ | 82,819 | ||||
| Accrued expenses | 1,552,438 | 283,745 | ||||||
| Derivative liability | 93,969 | 85,590 | ||||||
| Short-term convertible notes payable, net of discount of $0 and $0, respectively | 2,037,066 | 1,568,366 | ||||||
| Accrued interest | 7,082,511 | 4,756,266 | ||||||
| Total current liabilities | 10,846,003 | 6,776,786 | ||||||
| Non-current liabilities: | ||||||||
| Long-term convertible notes payable | 8,000 | 8,000 | ||||||
| Total non-current liabilities | 8,000 | 8,000 | ||||||
| Total liabilities | 10,854,003 | 6,784,786 | ||||||
| Commitments and contingencies (Note 9) | – | – | ||||||
| Stockholders' deficit | ||||||||
| Preferred stock - Series A: $ par value, authorized; and shares issued and outstanding, respectively | 50,000 | 50,000 | ||||||
| Preferred stock - Series B: $ par value, authorized; and shares issued and outstanding, respectively | 69 | 5 | ||||||
| Preferred stock - Series C: $ par value, authorized; and shares issued and outstanding, respectively | 10 | 10 | ||||||
| Common stock: $ par value authorized; and shares issued and outstanding, respectively | 25,140 | 25,140 | ||||||
| Additional paid-in-capital | 1,912,824 | 720,888 | ||||||
| Common stock to be issued | – | 52,000 | ||||||
| Accumulated deficit | (10,353,251 | ) | (7,486,937 | ) | ||||
| Total stockholders' deficit | (8,365,208 | ) | (6,638,894 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 2,488,795 | $ | 145,892 | ||||
See notes to unaudited condensed consolidated financial statements
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Condensed Balance Sheets September 30, December 31, 2017 2016 ASSETS Current Assets Cash Total Current Assets Non-current assets Intangible assets, net of accumulated amortization and impairment of $15,070 and $14,920, respectively Total non-current assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable Deposits Accrued interest Accrued compensation, related parties Note payable, related parties Total Current Liabilities TOTAL LIABILITIES COMMITMENTS AND CONTINGENCIES Stockholders' Deficit Preferred stock: $0.001 par value, 750,000,000 authorized; 50,000,000 and 50,000,000 shares issued and outstanding, respectively Common stock: $0.001 par value 900,000,000 authorized; 42,519,708 and 17,136,743 shares issued and outstanding, respectively Additional paid in capital Accumulated deficit Total Stockholders' Deficit TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 36,540 $ 961 36,540 961 250 400 250 400 $ 36,790 $ 1,361 $ 450 $ --- 170,012 --- 29,728 20,905 63,000 865,846 522,000 532,500 785,190 1,419,251 785,190 1,419,251 50,000 50,000 42,520 17,137 2,043,885 877,908 (2,884,805 ) (2,362,935 ) (748,400 ) (1,417,890 ) $ 36,790 $ 1,361
THUNDER ENERGIES CORPORATION
Unaudited Condensed Consolidated Statements of Operations
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net revenues | $ | – | $ | – | ||||
| Cost of sales | – | – | ||||||
| Gross Profit | – | – | ||||||
| Operating expenses: | ||||||||
| Advertising and marketing expenses | 209,014 | – | ||||||
| Stock based compensation | – | 750,000 | ||||||
| General and administrative | 322,676 | 54,450 | ||||||
| Total operating expenses | 531,690 | 804,450 | ||||||
| Loss from operations | (531,690 | ) | (804,450 | ) | ||||
| Other (income) expense: | ||||||||
| Change in derivative liability | 8,379 | (3,339 | ) | |||||
| Accretion of debt discount | – | 77,671 | ||||||
| Interest expense | 2,326,245 | 469,992 | ||||||
| Gain on disposal of discontinued operations | – | (901,000 | ) | |||||
| Total other (income) | 2,334,624 | (356,676 | ) | |||||
| Loss before income taxes | (2,866,314 | ) | (447,774 | ) | ||||
| Income taxes | – | – | ||||||
| Net loss | $ | (2,866,314 | ) | $ | (447,774 | ) | ||
| Net loss per share, basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of shares outstanding | ||||||||
| Basic and diluted | ||||||||
See notes to unaudited condensed consolidated financial statements
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THUNDER ENERGIES CORPORATION
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit
| Preferred Stock A* | Preferred Stock B* | Preferred Stock C* | ||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
| Balance, January 1, 2022 | 50,000,000 | $ | 50,000 | 5,000 | $ | 5 | 10,000 | $ | 10 | |||||||||||||||
| Common shares returned to treasury for cancellation* | – | – | – | – | – | – | ||||||||||||||||||
| Issuance of fully vested common shares issued against employment services*# | – | – | – | – | – | – | ||||||||||||||||||
| Net loss | – | – | – | – | – | – | ||||||||||||||||||
| Balance, March 31, 2022 | 50,000,000 | $ | 50,000 | 5,000 | $ | 5 | 10,000 | $ | 10 | |||||||||||||||
| Balance, January 1, 2023 | 50,000,000 | $ | 50,000 | 5,000 | $ | 5 | 10,000 | $ | 10 | |||||||||||||||
| Common shares issued for services | – | – | – | – | – | – | ||||||||||||||||||
| Conversion of common stock for Series B preferred stock# | – | – | 64,000 | 64 | – | – | ||||||||||||||||||
| Net loss | – | – | – | – | – | – | ||||||||||||||||||
| Balance, March 31, 2023 | 50,000,000 | $ | 50,000 | 69,000 | $ | 69 | 10,000 | $ | 10 | |||||||||||||||
(continued)
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Common Stock | to be Issued | Paid | Accumulated | Stockholders' | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | in Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, January 1, 2022 | 80,140,735 | $ | 80,140 | – | $ | – | $ | (693,112 | ) | $ | (2,020,464 | ) | $ | (2,583,421 | ) | |||||||||||||
| Common shares returned to treasury for cancellation* | (55,000,000 | ) | (55,000 | ) | – | – | 55,000 | – | – | |||||||||||||||||||
| Issuance of fully vested common shares issued against employment services# | – | – | 25,000,000 | 25,000 | 725,000 | – | 750,000 | |||||||||||||||||||||
| Net loss | – | – | – | – | – | (447,774 | ) | (447,774 | ) | |||||||||||||||||||
| Balance, March 31, 2022 | 25,140,735 | $ | 25,140 | 25,000,000 | $ | 25,000 | $ | 86,888 | $ | (2,468,238 | ) | $ | (2,281,195 | ) | ||||||||||||||
| Balance, January 1, 2023 | 25,140,735 | $ | 25,140 | 52,000,000 | $ | 52,000 | $ | 720,888 | $ | (7,486,937 | ) | $ | (6,638,894 | ) | ||||||||||||||
| Common shares issued for services | – | – | 12,000,000 | 12,000 | 1,128,000 | – | 1,140,000 | |||||||||||||||||||||
| Conversion of common stock for Series B preferred stock# | – | – | (64,000,000 | ) | (64,000 | ) | 63,936 | – | – | |||||||||||||||||||
| Net loss | – | – | – | – | – | (2,866,314 | ) | (2,866,314 | ) | |||||||||||||||||||
| Balance, March 31, 2023 | 25,140,735 | $ | 25,140 | – | $ | – | $ | 1,912,824 | $ | (10,353,251 | ) | $ | (8,365,208 | ) | ||||||||||||||
* Per Note 1, on acquisition of TNRG Preferred Stock, Mr. Shvo (the Company’s previous CEO) submitted 55,000,000 shares of restricted common stock to the Company’s treasury for cancellation. In addition, on February 28, 2022, Mr. Shvo sold 100% of the issued and outstanding shares of preferred stock of the Company to purchaser, as defined.
# Relates to issue of unregistered securities as described in Note 6. In addition, in January 2023, the Company issued 12,000,000 common shares. All shares are reflected in the Company’s disclosures. These shares were subsequently converted to Series B preferred shares in February 2023.
See notes to unaudited condensed consolidated financial statements
Condensed Statements of Operations (Unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 REVENUE OPERATING EXPENSES Research and development Professional fees Selling, general and administrative expenses Total operating expenses Net loss from operations Other income (expense) Interest expense Interest expense related to derivative liability Change in derivative Net loss before income taxes Income taxes Net loss Basic and diluted loss per share Weighted average number of shares outstanding $ --- $ --- $ --- $ 12,610 45,229 6,507 70,810 31,845 55,775 42,389 238,172 141,643 51,881 57,610 181,040 171,521 152,885 106,506 490,022 345,009 (152,885 ) (106,506 ) (490,022 ) (332,399 ) (24,654 ) (2,764 ) (31,848 ) (7,752 ) 31,000 --- --- --- 118,698 --- --- --- (27,041 ) (109,270 ) (521,870 ) (340,151 ) --- --- --- --- $ (27,041 ) $ (109,270 ) $ (521,870 ) $ (340,151 ) $ (0.00 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) 36,487,737 17,020,019 25,218,938 16,889,251
THUNDER ENERGIES CORPORATION
See notes to condensed financial statementsUnaudited Condensed Consolidated Statements of Cash Flows
Condensed Statements of Cash Flows For the Nine Months Ended September 30, 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss Adjustment to reconcile net loss to net cash used in in operations: Amortization Stock based compensation Changes in assets and liabilities: Increase (decrease) in operating liabilities: Accounts payable Deposits Accrued interest Accrued expenses, related parties Net Cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Payment made for patent Net Cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from shareholder loans Principal payments on shareholder loans Proceeds from sale of stock Net Cash provided by financing activates Net increase in cash Cash Beginning of period End of period Supplemental cash flow information Cash paid for interest Cash paid for taxes $ (521,870 ) $ (340,151 ) 150 150 1,111,360 62,356 450 (2,101 ) 170,012 --- 8,823 7,752 (802,846 ) 189,000 (33,921 ) (82,994 ) --- (3,665 ) --- (3,665 ) 29,500 81,500 (40,000 ) --- 80,000 --- 69,500 81,500 35,579 (5,159 ) 961 12,822 $ 36,540 $ 7,663 $ --- $ --- $ --- $ ---
| For the Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,866,314 | ) | $ | (447,774 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
| Accretion of debt discount | – | 77,671 | ||||||
| Change in fair value of derivative liability | 8,379 | (3,339 | ) | |||||
| Gain on disposal of discontinued operations | – | (901,000 | ) | |||||
| Stock based compensation | – | 750,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Notes receivable - related party | (1,635 | ) | – | |||||
| Deferred offering costs | (16,750 | ) | – | |||||
| Prepaid expenses | (1,189 | ) | – | |||||
| Accounts payable | (2,800 | ) | 54,648 | |||||
| Accrued interest | 2,326,245 | 469,994 | ||||||
| Accrued expenses | 68,693 | – | ||||||
| Other current liabilities | – | – | ||||||
| Net cash (used in) provided by operating activities | (485,371 | ) | 200 | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible notes payable | 468,700 | – | ||||||
| Net cash provided by financing activities | 468,700 | – | ||||||
| Net (decrease) increase in cash | (16,671 | ) | 200 | |||||
| Cash at beginning of period | 48,881 | – | ||||||
| Cash at end of period | $ | 32,210 | $ | 200 | ||||
| Non-cash investing and financing activities: | ||||||||
| Issuance of common stock for finder's fees in conjunction with investment | $ | 1,140,000 | $ | – | ||||
| Accrued expenses for finder's fees in conjunction with investment | $ | 1,200,000 | $ | – | ||||
| Conversion of common stock for Series B preferred stock | $ | 64,000 | $ | – | ||||
| Common shares returned to treasury for cancellation | $ | – | $ | 55,000 | ||||
See notes to unaudited condensed consolidated financial statements.statements
Notes to Unaudited Condensed Consolidated Financial Statements
For the period ending September 30, 2017Three Months Ended March 31, 2023 and 2022
(Unaudited)
NOTE 1 – NATURE OF BUSINESS
Corporate History and Background
Thunder Energies Corporation (“we”, “us”, “our”, “TEC” or the “Company”) was incorporated in the State of Florida on April 21, 2011.
On July 29, 2013, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from CCJ Acquisition Corp. to Thunder Fusion Corporation. The Amendment also changed the principal office address of the Company to 150 Rainville Road, Tarpon Springs, Florida 34689. On May 1, 2014, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from Thunder Fusion Corporation to Thunder Energies Corporation. The Amendment also changed theCompany’s principal office address of the Company to 1444 Rainville Road, Tarpon Springs, Florida 34689.PMB 388, 8570 Stirling Rd., Suite 102, Hollywood, FL, 33024.
The businessAcquisition of TNRG Preferred Stock
Fiscal Year 2022
On February 28, 2022, Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual and principal shareholder (“Shareholders”) of Bear Village, Inc., a Wyoming corporation, (the “Purchaser”) collectively acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of Thunder Energies Corporation, ("TEC"a Florida corporation, (the “Company” or the “Registrant”) is focused, depending on funding, on the manufacturing, sale and service of three new cutting edge technologies (patents and trademarks pending): the new Santilli telescopes with concave lenses; the new hadronic reactorsfrom Mr. Yogev Shvo, an individual domiciled in Florida (the “Seller”) (the “Purchase”). The consideration for the synthesisPurchase was provided to the Seller by the Company on behalf of the neutron from the hydrogen gas,Shareholders and the new HyperFurnaces for the full combustion of fossil fuels. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to andwas recorded as compensation expense.
The Preferred Stock acquired by the Company, including the Hadronic reactors.Purchaser consisted of:
1. 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock.
2. 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock.
3. 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock.
As part of the Purchase, on April 13, 2022, Mr. Shvo submitted shares of restricted common stock to the Company’s treasury for cancellation, in consideration for the transfer to him by TNRG of all of the issued and outstanding membership interests, assets and liabilities of Nature and THEHEMPLUG, LLC a Florida limited liability company (“HP”), both of which are wholly-owned subsidiaries of TNRG.
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The purchase price of $50,000 for the Preferred Stock was paid in cash. The consideration for the purchase was provided to the Seller by the Company on behalf of the Purchasers. The Company had been in discussions with the Purchasers for repayment and finalized the Employment Agreements (“Employment Agreements”) on October 1, 2022 for positions in the Company. As a result, the Company recorded the purchase price as compensation on March 1, 2022. The Purchase of the Preferred Stock was the result of a privately negotiated transaction which consummation resulted in a change of control of the Registrant.
1) Purchaser accepts TNRG subject to the following existing debt and obligations:
a. $35,000 Convertible Note held by ELSR plus accrued interest
b. $85,766 Convertible Note held by ELSR and SP11 plus accrued interest
c. $220,000 Convertible Note held by 109 Canon plus accrued interest
d. $410,000 Convertible Note held by Moshe Zucker plus accrued interest of which $190,000 has recently been converted into shares of restricted common stock.
e. Auditor Invoice estimated at $30,000 past due and $37,000 for completion of 2021
f. Accountant Invoice estimated at $42,500 and approximately $4,500 for completion of 2021
g. No other debt or liability is being assumed by Purchaser
h. Purchaser specifically assumes no liability regarding any dispute between Orel Ben Simon and the Seller. Seller shall indemnify Company as required in the body of the Agreement.
i. Company may be subject to potential liability and legal fees and associated costs regarding the FCV Matter if in excess of the Seller indemnification provisions set forth in Section 11 of the Agreement
j. Purchaser on behalf of the Company is responsible for assuring the Company’s timely payment of all Company federal and state and any related tax obligations for fiscal year 2021 with the exception of taxes due relating to income, sales, license, business or any other taxes associated with Nature and HP
2) The transfer to Seller of all of TNRG’s security ownership interest in each of Nature and HP shall include the following existing Nature debt and related matters:
a. EIDL Loan ($149,490 plus $9,290 accrued interest)
b. $72,743 note due to Orel Ben Simon plus accrued interest
c. All cases in action and potential legal liabilities concerning current disputes with Nature, HP, Ben Simon, Seller and any other parties.
As a result of the Purchase and change of control of the Registrant, the existing officers and directors of the Company, Mr. Adam Levy, Mr. Bruce W.D. Barren, Ms. Solange Bar and Mr. Yogev Shvo (Chairman) have either resigned or been voted out of their positions.
Under the terms of the stock purchase agreement the new controlling shareholder was permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors. Mr. Ricardo Haynes became the sole Director, CEO and Chairman of the Board of the Registrant, and the acting sole officer of the Company.
Fiscal Year 2020
On July 1, 2020, Yogev Shvo, a third party individual and principal shareholder of Nature Consulting LLC (“Nature” or “Purchaser”) personally acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of TNRG from Saveene Corporation, a Florida corporation (the “Seller”) (The “Purchase”). The purchase price of $250,000 for the Preferred Stock was paid in cash and was provided from the individual private funds of Purchaser.
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The Preferred Stock acquired by the Purchaser consisted of:
| 1. | 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock. | |
| 2. | 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. | |
| 3. | 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock. |
NOTE 2 – GOING CONCERNBASIS OF PRESENTATION
The accompanying interim unaudited condensed consolidated financial statements (“Interim Financial Statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are presented in accordance with the requirements of Rule 10-01 of Regulation S-X. Accordingly, these Interim Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. These Interim Financial Statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2022 included in the Form 10-K filed with the SEC on March 31, 2023. In the opinion of management, the Interim Financial Statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented. The operating results and cash flows of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.
The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities.
Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $10,353,251 and $7,486,937 at March 31, 2023 and December 31, 2022, respectively, had a working capital deficit of $8,357,208 and $6,630,894 at March 31, 2023 and December 31, 2022, respectively, and had a net loss of $2,866,314 and $447,774 for the three months ended March 31, 2023 and 2022, respectively, with limited revenue earned since inception, no current revenue generating operations, and a lack of operational history. These matters raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
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In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability.
The accompanyingconsolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
UNAUDITED INTERIM FINANICAL STATEMENTSThis summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the consolidated financial statements.
Use of Estimates
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United Statespreparation of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The interim financial statements should be read in conjunction with the annual financial statements included in the Form 10K/A as of December 31, 2016 and filed with the Securities and Exchange Commission on April 14, 2017.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.
BASIS OF PRESENTATION AND USE OF ESTIMATES
The Company prepares itsthese consolidated financial statements in conformityaccordance with accounting principles generally accepted in the United States of America ("GAAP"), which requirerequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuredisclosures of contingent assets and liabilities at the datedates of the consolidated financial statements and the reported amounts of revenuesnet sales and expenses during the reporting period.reported periods. Actual results couldmay differ from those estimates.estimates and such differences may be material to the consolidated financial statements. The more significant estimates and assumptions by management include among others: derivative valuation. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
CASH AND CASH EQUIVALENTSCash
The Company’s cash is held in a bank account in the United States and is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company considers all highly liquid investments with an original maturityhas not experienced any cash losses.
Accounts Receivable
Accounts receivable are non-interest-bearing obligations due under normal course of three months or less atbusiness. Management reviews accounts receivable on a monthly basis to determine if any receivables will be potentially uncollectible. Historical bad debts and current economic trends are used in evaluating the date of acquisitionallowance for doubtful accounts. The Company includes any accounts receivable balances that are determined to be cash equivalents. Cashuncollectible in its overall allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available, the Company has no allowance for doubtful accounts as of March 31, 2023 and cash equivalents totaled $36,540 at September 30, 2017 and $961 at December 31, 2016. During the period ending June 30, 2017 the Company experienced fraudulent checks written against the corporation bank account totaling $14,200. The bank investigated the fraudulent activity and reimbursed the Company $14,200 during the period2022.
CASH FLOWS REPORTINGCash Flows Reporting
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, andcategory. The Company uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
RELATED PARTIES
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Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company.
Income Taxes
Income taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Consolidated Balance Sheets in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the Consolidated Statements of Operations.
ASC 740-10-30 was adopted from the date of its inception. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of ASC 740-10, and currently, the Company does not have a liability for unrecognized income tax benefits.
Advertising and Marketing Costs
Advertising and marketing expenses are recorded when they are incurred. Advertising and marketing expense was $209,014 and $0 for the three months ended March 31, 2023 and 2022, respectively.
Revenue Recognition
On January 19, 2019 (date of formation), the Company adopted Accounting Standards Codification 606 (“ASC 606”), FINANCIAL INSTRUMENTSRevenue from Contracts with Customers. Results for the reporting periods beginning on January 19, 2019 (date of formation) are presented under ASC 606.
The Company’sCompany generates all of its revenue from contracts with customers. The Company recognizes revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. The Company determines revenue recognition through the following steps:
| 1. | Identification of the contract, or contracts, with a customer. | |
| 2. | Identification of the performance obligations in the contract. | |
| 3. | Determination of the transaction price. | |
| 4. | Allocation of the transaction price to the performance obligations in the contract | |
| 5. | Recognition of revenue when, or as, we satisfy a performance obligation. |
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At contract inception, the Company assesses the services promised in our contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company allocates the entire transaction price to a single performance obligation.
Impairment of Long-lived Assets
We periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the discounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value. The Company recorded no impairments as of March 31, 2023 and December 31, 2022.
Our impairment analyses require management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting useful lives of the assets, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales and discounted cash flow models. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to an impairment charge in the future.
Leases
The Company determines whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether it should be classified as an operating or finance lease. Operating leases are recorded in the balance sheet as: right-of-use asset (“ROU asset”) and operating lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date of the lease and measured based on the present value of lease payments over the lease term. The ROU asset also includes deferred rent liabilities. The Company’s lease arrangements generally do not provide an implicit interest rate. As a result, in such situations the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU assets and liabilities. Lease expense for operating leases is recognized on a straight-line basis over the lease term.
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Fair Value of Financial Instruments
The provisions of accounting guidance, FASB Topic ASC 825 requires all entities to disclose the fair value of financial instruments, includingboth assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of March 31, 2023 and December 31, 2022, the fair value of cash, notes receivable, accounts payable, accrued expenses, and notes payable. Thepayable approximated carrying amounts of current assets and current liabilities approximate their fair value becausedue to the short maturity of the relatively short period of time between the origination of these instruments, and their expected realization.quoted market prices or interest rates which fluctuate with market rates.
ASC 820, Fair Value Measurements and Disclosures, defines fair
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants on the measurement date. ASC 820 also establishes aValuation techniques used to measure fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs)must maximize the use of observable inputs and (2) an entity’s own assumptions about market participant assumptions developed based onminimize the best information available in the circumstances (unobservable inputs).use of unobservable inputs. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Theis based on three levels of inputs, of which the fair value hierarchyfirst two are described below:considered observable and the last unobservable, as follows:
| · | Level 1 |
| ||
| · | Level 2 | – Inputs other than | ||
| · | Level 3 |
|
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There have been no transfers between levels.
The derivatives are evaluated under the hierarchy of ASC 480-10, ASC Paragraph 815-25-1 and ASC Subparagraph 815-10-15-74 addressing embedded derivatives. The fair value of the Level 3 financial instruments was performed internally by the Company using the Black Scholes valuation method.
The following table summarize the Company’s fair value measurements by level at March 31, 2023 for the assets measured at fair value on a recurring basis:
| Schedule of fair value measurements | ||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||
| Derivative liability | $ | – | $ | – | $ | 93,969 | ||||||
The following table summarize the Company’s fair value measurements by level at December 31, 2022 for the assets measured at fair value on a recurring basis:
| Level 1 | Level 2 | Level 3 | ||||||||||
| Derivative liability | $ | – | $ | – | $ | 85,590 | ||||||
Debt
The Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes.
Debt with warrants – When the Company issues debt with warrants, the Company treats the warrants as a debt discount, records them as a contra-liability against the debt, and amortizes the discount over the life of the underlying debt as amortization of debt discount expense in the Consolidated Statements of Operations. When the warrants require equity treatment under ASC 815, the offset to the contra-liability is recorded as additional paid in capital in our balance sheet. When the Company issues debt with warrants that require liability treatment under ASC 815, such as a clause requiring repricing, the warrants are considered to be a derivative that is recorded as a liability at fair value. If the initial value of the warrant derivative liability is higher than the fair value of the associated debt, the excess is recognized immediately as interest expense. The warrant derivative liability is adjusted to its fair value at the end of each reporting period, with the change being recorded as expense or gain to Other (income) expense in the Consolidated Statements of Operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense. The debt is treated as conventional debt.
Convertible debt – derivative treatment – When the Company issues debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock; and b) classified in shareholders’ equity in its statement of financial position.
If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using the Black Scholes method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the Consolidated Statement of Operations. The debt discount is amortized through interest expense over the life of the debt.
Convertible debt – beneficial conversion feature – If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible and is recorded as additional paid in capital and as a debt discount in the Consolidated Balance Sheet. The Company amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the statement of operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the Consolidated Statement of Operations.
If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
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Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
INTANGIBLE ASSETS
The Company has applied the provisions of ASC topic 350 – Intangible – goodwill and other, in accounting for its intangible assets. Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 to 17 years. The balance at September 30, 2017 and December 31, 2016 was $250 and $400, respectively.
September 30, 2017 Gross Carrying Value Accumulated Amortization Intellectual property Patents $ 1,000 $ 750 14,320 14,320
December 31, 2016 Gross Carrying Value Accumulated Amortization Intellectual property Patents $ 1,000 $ 600 14,320 14,320
IMPAIRMENT OF LONG- LIVED ASSETS
The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.
NON-MONETARY TRANSACTION
According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on Hyfuel’s books and records was nominal. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In the transfer agreement 1,000,000 shares of common stock was transferred in exchange for the properties.
REVENUE RECOGNITION
The Company recognizes revenue when it is realized or realizable and earned.
The Company generates revenue through their optical division which produces for sale its Galileo and Santilli telescopes and its Division of Nuclear Instruments which produces for sale its Directional Neutron Source.
The Company had zero revenues for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2016 the Company recognized revenues of $0 and $12,610; respectively. The Galileo and Santilli telescopes made up 100% of the sales for the three and nine months ended September 30, 2016.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
RESEARCH AND DEVELOPMENT
The Company expenses research and development costs when incurred. Research and development costs include engineering and testing of product and outputs. Indirect costs related to research and developments are allocated based on percentage usage to the research and development. We spent $45,229 and $6,507 for the three months ended September 30, 2017 and 2016; respectively. We spent $70,810 and $31,845 for the nine months ended September 30, 2017 and 2016, respectively.
DEFERRED INCOME TAXES AND VALUATION ALLOWANCE
The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of September 30, 2017 or December 31, 2016.
NET LOSS PER COMMON SHARE
Net loss per share is calculatedincluded in accordance withthe Consolidated Statements of Operations, represents the net profit (loss) per share that would have been reported had the Company been subject to ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Share” as a corporation for all periods presented.
Diluted earnings or loss(loss) per share isare computed usingon the basis of the weighted average number of common shares and diluted(including common stock to be issued) plus dilutive potential common shares outstanding. Dilutive potential common sharesoutstanding for the reporting period. In periods where losses are additional common shares assumed to be exercised.
Basic net loss per common share is based onreported, the weighted averageweighted-average number of shares of common stock outstanding at September 30, 2017. As of September 30, 2017, theexcludes common stock equivalents, have not been included as they arebecause their inclusion would be anti-dilutive.
The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period:
| Schedule of anti dilutive shares | ||||||||
| March 31, 2023 | December 31, 2022 | |||||||
| Series A convertible preferred stock | 500,000,000 | 500,000,000 | ||||||
| Series B convertible preferred stock | 69,000,000 | 5,000,000 | ||||||
| Total potentially dilutive shares | 569,000,000 | 505,000,000 | ||||||
Nine months ended September 30, 2017 2016 Options to purchase shares of common stock* Series A convertible preferred stock** Total potentially dilutive shares 7,530 4,959 50,000,000 50,000,000 50,007,530 50,004,959
________
* Options to purchase shares are calculated in accordance with employment agreements.Commitments and Contingencies
**-Total potentially dilutive shares reflects a 10 for 1 conversion into common shares per its designation.
SHARE-BASED EXPENSE
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:(a) the goods or services received; or (b) the equity instruments issued.
Share-based expense for the nine months ended September 30, 2017 and 2016 was $1,111,360 and $62,356 respectively.
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. There were no known loss commitments or contingencies as of September 30, 2017March 31, 2023 and December 31, 2016.2022.
Concentrations, Risks, and Uncertainties
RECENT ACCOUNTING PRONOUNCEMENTS
Business Risk
From timeSubstantial business risks and uncertainties are inherent to time, new accounting pronouncements are issued that we adopt asan entity, including the potential risk of business failure.
The Company is headquartered and operates in the specified effective date. We believeUnited States. To date, the Company has generated limited revenues from operations. There can be no assurance that the impact of recently issued standards that are not yet effective mayCompany will be able to successfully continue to produce its products and failure to do so would have an impacta material adverse effect on ourthe Company’s financial position, results of operations and financial statements.cash flows. Also, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, price of raw material, competition, and governmental and political conditions.
Interest rate risk
Financial assets and liabilities do not have material interest rate risk.
ASU Update 2014-09 Revenue from Contracts with Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly.
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ASU Update 2014-15 Presentation of Financial Statements – Going Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines management’s responsibility to evaluate whether there is a substantial doubt about an organization’s ability to continue as a going concern. The additional disclosure required is effective after December 31, 2016 and will be evaluated as to impact and implemented accordingly.
NOTE 4 – INTANGIBLE PROPERTY
On August 10, 2013, the Company entered into an Asset Assignment Agreement (the “IBR Assignment Agreement”) with Institute For Basic Research, Inc., a Florida corporation (“IBR”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the IBR Assignment Agreement, IBR irrevocably assigned to the Company all rights, title, ownership and interests in all of IBR’s internet website domain name assets, owned and hereinafter acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.
On August 11, 2013, Thunder Energies Corporation (f/k/a Thunder Fusion Corporation) entered into an Asset Assignment Agreement (the “Assignment Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to the Assignment Agreement, HyFuels irrevocably assigned to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.
Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000 shares of our common stock were transferred in exchange for the assets. The transfer was valued at one thousand dollars ($1,000.00), the value of the shares issued at par ($0.001) in exchange for the assets. This amount was determined by the Company to approximate the basis of those assets.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)Credit risk
The Company recordedis exposed to credit risk from its cash in banks and accounts receivable. The credit risk on cash in banks is limited because the property and intangibles (7 reactors, intellectual property rightscounterparties are recognized financial institutions.
Recent Accounting Pronouncements
Recently issued accounting updates are not expected to develophave a material impact on the technology, and website)Company’s consolidated financial statements.
NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS
As of March 31, 2023, the Company had prepaid expenses for consulting services related to Investment in WC Mine Holdings of $2,340,000. On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an intangible asset. The valuationentity controlled by the father of the properties wasCompany’s Director Real Estate Development, to provide consulting services to the par valueCompany. As part of the consideration terms of the agreement, Top Flight was entitled to a total of 12,000,000 common shares, valued at $1,140,000 (based on the Company’s stock receivedprice on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights (see Note 9). On January 5, 2023, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to investment in WC Mine Holdings in exchange forof promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000 and accordingly, the rightsCompany issued common shares to Top Flight valued at $1,140,000 on January 5, 2023. Since this agreement is contingent on until such time as the Coin is ‘live” on NYXEX exchange and assets.the Company’s Regulation A being declared effective, the shares issued valued at $1,140,000 along with bonus of $1,200,000 recorded as prepaid expenses as of March 31, 2023. Also, the amount of bonus is payable as of March 31, 2023 and shown as accrued expenses in the Condensed Consolidated Balance Sheet.
The Company has capitalized the legal expenses associated with filing applications with the United States Patent and Trademark Office. At September 30, 2017, the Company has capitalized $14,320. The Company has recorded $14,320 of impairment loss for the patent application process as of December 31, 2016.
The Company recognized amortization expense of $150 for the nine months ended September 30, 2017 and 2016. The Company has accumulated amortization of $750 as of September 30, 2017.
NOTE 5 – CONVERTIBLE NOTENOTES PAYABLE
Convertible Note Payable
Short Term
$85,766 Note
On March 14, 2017,April 22, 2019; The Company executed a convertible promissory note with Power Up Lending Group, Ltd.GHS Investments, LLC (“GHS Note”). The noteGHS Note carries a principal balance of $53,000$57,000 together with an interest rate of eight percent (8%(8%) per annum and a maturity date of December 30, 2017.February 21, 2020. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per shareshare) in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this GHS Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. As of December 31, 2019, the principal balance outstanding was $57,000.
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The holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this note, to convert all or any part of the outstanding and unpaid principal amount into Common Stock. The conversion shall equal sixty-onesixty-five percent (61%(65%) of the average of the lowest two (2) trading prices for the Common Stock during the twelve-daytwenty (20) day trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of thirty-ninethirty-five percent (39%(35%).
On September 8, 2017January 9, 2020, Mina Mar Corporation, a Florida corporation (d/b/a Mina Mar Group) acquired 50,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) of Thunder Energies Corporation (the “Company”), from Hadronic Technologies, Inc., a Florida corporation. The purchase price of $94,766 for the Preferred Stock was paid by the assumption of a Company note obligation of $85,766 by Emry Capital Inc (“Emry”), with the balance paid in cash.
On March 24, 2020, the then current note obligation of $120,766 held by Emry was partially sold $35,000 of the face amount to the preferred shareholder Saveene. On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares into series B and 10,000 shares of series C shares. The face amount of the Company tenderednote obligation post the sumaforementioned conversions and purchases is $85,766 as of $76,025March 31, 2023.
The Company accounts for an embedded conversion feature as a derivative under ASC 815-10-15-83 and valued separately from the note at fair value. The embedded conversion feature of the note is revalued at each subsequent reporting date at fair value and any changes in fair value will result in a gain or loss in those periods. The Company recorded a derivative liability of $93,969 and $85,590 as of March 31, 2023 and December 31, 2022, and recorded a change in derivative liability of $8,379 and $(3,339) during the three months ended March 31, 2023 and 2022, respectively.
On June 24, 2020, Emry, holder of a convertible promissory note in principal amount of $85,766 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to Power Upthird party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument.
As a result of the failure to pay-off and canceltimely file our Form 10-Q for the principal and interest on the note. For the nine monthsthree-month periods ended September 30, 20172020, March 31, 2022 and 2021, June 30, 2022, and September 30, 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. The Company recorded default interest of $14,931 and $7,398 during the three months ended March 31, 2023 and 2022, respectively.
The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the GHS Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
On April 17, 2023, the Company informed SP11 and ELSR Corporation of an illegal convertible promissory note (the “Notes”) in the name of Thunder Energies Corporation. The Notes are being cancelled by Thunder Energies Corporation as there is no record of consideration paid to the Company, the agreement for the Notes was not an arms length transaction with the lender and borrower, and it violates Chapter 687 of the 2022 Florida Statutes – Commercial Relations, Interest and Usury; Lending Practices. The Company will no longer accrue interest or penalties on these Notes. The Company will continue to recognize the Notes and accrued interest currently recorded in the Consolidated Balance Sheets with a total balance due of $6,810,915 ($120,766 of Notes and $6,690,149 of accrued interest) as of March 31, 2023.
$220,000 Note
On September 21, 2020, the Company issued a convertible promissory note in the principal amount of $220,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder's option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company's equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
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The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature (“BCF”) and determined that the instrument does have a BCF. A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible, and is recorded as additional paid in capital and as a debt discount in the Balance Sheet. As such, the proceeds of the notes were allocated, based on fair values, as $220,000 to the debt discount. The debt discount is accreted over the term of the convertible notes to interest expense recorded was $23,025.in the accompanying consolidated Statements of Operations. The principal balance due at March 31, 2023 is $220,000 and is presented as a short-term liability in the balance sheet.
NOTE 6– SHAREHOLDERS’ EQUITY
As a result of the failure to timely file our Form 10-Q for the three-month periods ended September 30, 2020, March 31, 2022 and 2021, June 30, 2022, and September 30, 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. On July 19, 2021, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in the Notes related to the Company’s failure to timely file its Form 10-Q for the three-month period ended September 30, 2020, the Form 10-K for the year ended December 31, 2020, and the three-month period ended March 31, 2021. In exchange for the Agreement, the Company agreed to pay a one-time interest charge of $11,680 in the year ended December 31, 2021. The Company recorded default interest of $16,611 and $13,560 during the three months ended March 31, 2023 and 2022, respectively.
The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
COMMON STOCK$410,000 Note (previously $600,000)
On October 9 and October 16, 2020, the Company issued a convertible promissory note in the principal amount totaling $600,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder's option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company's equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature (“BCF”) and determined that the instrument does have a BCF. A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible, and is recorded as additional paid in capital and as a debt discount in the Balance Sheet. As such, the proceeds of the notes were allocated, based on fair values, as $600,000 to the debt discount. The debt discount is accreted over the term of the convertible notes to interest expense in the accompanying consolidated Statements of Operations.
On December 6, 2021, the holder of the note converted $190,000 of the Note into shares of the Company’s common stock. The principal balance of $410,000 was due October 16, 2022 and is presented as a short term liability in the balance sheet.
As a result of the failure to timely file our Form 10-Q for the three-month periods ended September 30, 2020, March 31, 2022 and 2021, June 30, 2022, and September 30, 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. On July 15, 2021, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in the Notes related to the Company’s failure to timely file its Form 10-Q for the three-month period ended September 30, 2020, the Form 10-K for the year ended December 31, 2020, and the three-month period ended March 31, 2021. The Company recorded default interest of $30,517 and $24,891 during the three months ended March 31, 2023 and 2022, respectively.
The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
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April 2022 Notes
In April 2022, the Company authorized convertible promissory notes (“April 2022 Notes”) that varies from 0% to 10% per annum and are due and payable on various dates from December 31, 2022 through October 31, 2024 for aggregate gross proceeds of $1,469,300 (including $1,500 against which services were received) through March 31, 2023. Notes totaling $300,000 issued in February 2023 and December 2022 allows for the repurchase of up to a total of converted common shares at $2.50 per share and notes totaling $100,000 issued in March 2023 allows for the repurchase of up to a total of converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The holders of the April 2022 Notes have the right, at the holder's option, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.07 per share for notes amounting to $750,100, $0.70 per share for notes amounting to $284,200, and $1.00 per share for notes amounting to $435,000 into the Company’s common stock if before any public offering. The April 2022 Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature (“BCF”) and determined that the instrument does not have a BCF.
The Company has not repaid fifty convertible notes totaling $487,100 and these convertible notes are now in default. The Company is currently in discussions with these note holders to convert the Notes into the Company’s common stock upon the Company’s Regulation A being declared effective.
$4,000,000 Promissory Note
On January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WCMH giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime Coins (“Coins”), valued at $1,450,000. The Fourth & One agreement is contingent on until such time as the Coin is "live" on NYXEX exchange and the Company’s Regulation A being declared effective. The expectation is that the conversion will take place as part of the Regulation A filing (see Note 9).
$40,000,000 Convertible Note
On May 13, 2022, the Company issued a convertible promissory note in the principal amount totaling $40,000,000 in exchange for Coins, valued at $800 per Coin. The convertible promissory note bears no interest and is due and payable in twenty-four (24) months. The holder of this Note has the right, at the holder's option, to convert the principal amount of this Note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $2.00 per share. As amended effective May 7, 2023, the Convertible Promissory Note shall not be enforceable until such time as the Holder’s consideration, RoRa Coin is “live” on an exchange, or swap engine, and available through a mutually agreed upon cryptocurrency wallet such as NyX, MetaMask, Exodus, Ledger, or similar. The expected date for being live is June 3, 2023. The parties agree to establish a time is of the essence date of December 31, 2023 for Holder to meet the “live” requirement. Should Holder not meet the “live” requirement by December 31, 2023, then Borrower shall return all RoRa Coins and Holder shall release all claims on any shares or Convertible Promissory Note, Conversion rights shall not vest until such time as the holder’s consideration, Coins are live on a U.S. Exchange and available through a mutually agreed upon cryptocurrency wallet. Subsequent to the Coins live date and before the holder coverts the Note, should the Company issue any dilutive security, the conversion price will be reduced to the price of the dilutive issuance. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note as described above.
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The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting.
Promissory Debenture
On February 15, 2020, the Company entered into Promissory Agreement and Convertible Debentures (“Promissory Debentures”) with Emry for a principal sum of $70,000 (which was paid in two tranches: $50,000, paid on February 15, 2020, and $20,000, paid in April 2020). The Promissory Debentures bear interest, both before and after default, at 15% per month, calculated and compounded monthly. At the election of the holder, at any time during the period between the date of issuance and the one year anniversary of the Promissory Debentures, the Promissory Debentures are convertible into shares of the Company’s common stock at a conversion price of $0.001 per share. In addition, the Promissory Debentures provide for an interest equal to 15% of TNRG annual sales, payable on the 2nd day following the date of issuance of the Company’s audited financial statements.
On June 24, 2020, Emry, holder of (i) Promissory Debentures in principal amount of $70,000 dated February 15, 2020, and (ii) that certain convertible promissory note in principal amount of $85,766 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to third party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument.
On October 4, 2020, SP11 converted $35,000 of its Promissory Debentures at $0.01 per share into shares of the Company’s common stock. On November 22, 2021, the loan of $48,000 and accrued and unpaid interest of $573,798 totaling $621,798 was forgiven by EMRY. On April 17, 2023, the Company informed SP11 and ELSR Corporation of an illegal convertible promissory note (the “Notes”) in the name of Thunder Energies Corporation. The Notes are being cancelled by Thunder Energies Corporation as there is no record of consideration paid to the Company, the agreement for the Notes was not an arms length transaction with the lender and borrower, and it violates Chapter 687 of the 2022 Florida Statutes – Commercial Relations, Interest and Usury; Lending Practices. The Company will no longer accrue interest or penalties on these Notes. The Company will continue to recognize the Notes and accrued interest currently recorded in the Consolidated Balance Sheets with a total balance due of $6,810,915 ($120,766 of Notes and $6,690,149 of accrued interest) as of March 31, 2023.
NOTE 6 – STOCKHOLDERS’ DEFICIT
Common Stock
The Company has been authorized to issue shares of common stock, $.001$ par value.value of which there are 25,140,735 issued and outstanding at March 31, 2023 and December 31, 2022, respectively. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.
As part of the Purchase, on April 13, 2022, Mr. Shvo submitted shares of restricted common stock to the Company’s treasury for cancellation, in consideration for the transfer to him by TNRG of all of the issued and outstanding membership interests, assets and liabilities of Nature and HP, both of which are wholly-owned subsidiaries of TNRG.
On March 18, 20161, 2022, as amended on October 1, 2022 and December 28, 2022, the Company issued 18,000 sharesentered into an Employment Agreement with Mr. Ricardo Haynes whereby Mr. Haynes became the sole Director, CEO and Chairman of the Board, and the acting sole officer of the Company. The Employment Agreement is in effect until September 30, 2027. Under this Engagement Agreement, Mr. Haynes will be entitled to a non-related party for services, recordedtotal of common shares, vesting immediately, valued at $750,000 (based on the fair market valueCompany’s stock price on the date of issuance). In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the share price,Company’s common stock. The shares are included under Common stock to be issued in the amountStatement of $2,880.Changes in Shareholders’ Deficit at December 31, 2022.
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On April 1, 20166, 2022, as amended on December 2, 2022, the Company issued 250,000entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a non-related party for services, recordedtotal of common shares, valued at $150,000 (based on the fair market valueCompany’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the share price,Company’s common stock. The shares are included under Common stock to be issued in the amountStatement of $37,500.Changes in Shareholders’ Deficit at December 31, 2022.
On April 6, 20162022, the Company issued 22,000entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of common shares, valued at $60,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to non-related parties for services, recorded at the fair market valueSeries B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the share price,Company’s common stock. The shares are included under Common stock to be issued in the amountStatement of $3,300.Changes in Shareholders’ Deficit at December 31, 2022.
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On August 23, 2016 the Company issued 70,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $14,000.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
On August 30, 2016 the Company issued 18,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $3,600.
On September 16, 2016 the Company issued 6,726 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $1,076.
On October 19, 2016 the Company issued 28,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $11,480.
On December 28, 2016 the Company issued 30,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $6,900.
On January 3, 2017 the Company issued 150,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $31,500.
On January 4, 2017 the Company issued 40,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $8,800.
On January 9, 2017 the Company issued 3,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $690.
On January 10, 2017 the Company issued 5,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $1,250.
On January 24, 2017 the Company issued 8,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $2,080.
On January 27, 2017 the Company issued 36,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $10,800.
On February 13, 2017 the Company issued 10,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $2,100.
On March 6, 2017 the Company issued 10,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $3,000.
On April 12, 2017 the Company issued 150,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $22,500.
On May 9, 2017 the Company issued 70,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $5,600.
On June 5, 2017 the Company issued 120,000 shares to non-related parties for services, recorded at the fair market value of the share price, in the amount of $10,000.
On June 8, 2017 the Company issued 16,530,769 shares to related parties for conversion of accrued compensation of $991,846, recorded at the fair market value of the share price.
On July 7, 2017 the Company issued 120,196 shares to a non-related party for services, recorded at the fair market value of the share price, in the amount of $8,413.
On July 14, 2017 the Company issued 150,000 shares to a non-related party for services, recorded at the fair market value of the share price, in the amount of $13,350.
On September 7, 2017 the Company sold 8,000,000 restricted shares to non-related parties for cash proceeds in the amount of $80,000.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
PREFERRED STOCKPreferred Stock
The Company has been authorized to issue 750,000,00050,000,000 shares of $.001$0.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation.
Series A: The certificate of designation for the Preferred A Stock provides that as a class it possesses a number of votes equal to fifteen (15) votes per share and may be converted into ten (10) $0.001 par value common shares.
On October 10, 2013, the Company issued fifty million (50,000,000) shares of our Series “A”B Convertible Preferred Stock (the “Preferred Stock”) to Hadronic Technologies Press, Inc. (“Hadronic”), a Florida corporation maintaining its principal place of business at 35246 US Highway 19 North, Suite #215, Palm Harbor, Florida 34684. Our Directors, Dr. Ruggero M. Santilli and Mrs. Carla Santilli each own fifty percentwas authorized for 10,000,000 shares of the equity in Hadronic. The Series “A” ConvertibleCompany. Each share of Preferred Stock has 15is entitled to one thousand (1,000) votes per share and is convertible into 10 shares of our common stock at the election of the shareholder. Shares were valued at the par valueholder converts into one thousand (1,000) shares of theCompany common stock equivalents, $500,000.stock.
At September 30, 2017 and December 31, 2016 there were Fifty million (50,000,000) shares of Series A ConvertibleC Non-Convertible Preferred Stock issued and outstanding, respectively.
OPTIONS AND WARRANTS
In accordance with employment agreements, common stock options are issued annually to the officerswas authorized for 10,000,000 shares of the Company. The numberEach share of sharesPreferred Stock is determined by the number of shares outstandingentitled to one thousand (1,000) votes per share and at the endelection of the year at a percentage per the employment agreements, as described below.holder. The strike priceseries C is the fair value trading price as of the anniversary date of the employment agreements. The options are based on the number of shares outstanding of the Company at the year end, at an exercise price at market price at the employment agreements annual anniversary, July 25th. As of September 30, 2017 the officers are entitled to 7,530 options, at an average exercise price of $0.4875. There is no expiration date to these options and only vest upon a change in control. The options were valued at $3,747, however no expense has been recognized with the associated options, as no options have vested or are considered by management to probable vest. The options were valued using the Black Scholes Method, using the following assumptions:Non-Convertible Preferred Stock.
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There are no other warrants or options outstanding to acquire any additionalDuring February and March 2023, holders of 64,000,000 shares of common stock (57,000,000 shares from related parties and 7,000,000 shares from third parties) elected to exchange these shares for an aggregate of 64,000 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company as of September 30, 2017.Company’s common stock.
THUNDER ENERGIES CORPORATION
Notes to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)Fiscal Year 2022
NOTE 7– RELATED PARTY TRANSACTIONS
ADVANCES, PAYABLES AND ACCRUALS
Amounts includedOn February 28, 2022, Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual and principal shareholder of Bear Village, Inc., a Wyoming corporation, (the “Purchaser”) collectively acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of Thunder Energies Corporation, a Florida corporation, (the “Company” or the “Registrant”) from Mr. Yogev Shvo, an individual domiciled in accruals represent amounts dueFlorida (the “Seller”) (the “Purchase”). The consideration for the Purchase was provided to the officers and directors for corporate obligations underSeller by the employment agreements. PaymentsCompany on behalf of the CompanyShareholders and accruals made under contractual obligation are accruedwas recorded as compensation expense (see below)Note 1).
NOTE 7 – RELATED PARTY TRANSACTIONS
Other than as set forth below, and as disclosed in Notes 6 and 9, there have not been any transaction entered into or been a participant in which a related person had or will have a direct or indirect material interest.
On June 8, 2017April 2, 2022, the Company issued 16,530,769 shares toentered into a demand note (“Demand Note”) with Bear Village, Inc., a related partiesparty, for conversion$36,200. The Demand Note bears no interest, is due on demand, and is unsecured. The Company advanced Bear Village $1,635 and received no repayments during the three months ended March 31, 2023. The Company had no advances and received no repayments from Bear Village during the three months ended March 31, 2022. The Company has a balance due from Bear Village of accrued compensation$27,835 as of $991,846, recorded atMarch 31, 2023.
On April 6, 2022, as amended on December 2, 2022, the fair market valueCompany entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the share price. AsCompany’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of September 30, 2017 and December 31, 2016 accrued expenses were $63,000 and $865,846, respectively.over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. |
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NOTE PAYABLE
In support of the Company’s efforts and cash requirements, it has relied on advances from the majority shareholders until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. All advances made in support of the Company are formalized by demand notes, at a 2.15% interest rate.
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 3. | Shall be paid $21,000 per month beginning May 2022 increasing to $25,000 per month beginning January 2023. | ||
| 4. | Additional awards may be made at the Company’s discretion based on other strategic goals. There were no additional awards granted for the three months ended March 31, 2023. | ||
During the ninethree months ended September 30, 2017,March 31, 2023 and 2022, the Company paid Top Flight $245,000 ($75,000 for monthly consulting services and $170,000 for goals based bonus) and $0, respectively, with a balance due of $1,277,000 and $247,000 as of March 31, 2023 and December 31, 2022, respectively.
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (“EPS”) computations.
Basic earnings (loss) per share are computed by dividing net earnings available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period:
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Series A convertible preferred stock | 500,000,000 | 500,000,000 | ||||||
| Series B convertible preferred stock | 69,000,000 | 5,000,000 | ||||||
| Total potentially dilutive shares | 569,000,000 | 505,000,000 | ||||||
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The following table sets forth the computation of basic and diluted net loss per share:
| Schedule of earning per share | ||||||||
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net loss attributable to the common stockholders | $ | (2,866,314 | ) | $ | (447,774 | ) | ||
| Basic weighted average outstanding shares of common stock | 47,940,735 | 69,529,624 | ||||||
| Dilutive effect of options and warrants | – | – | ||||||
| Diluted weighted average common stock and common stock equivalents | $ | 47,940,735 | $ | 69,529,624 | ||||
| Loss per share: | ||||||||
| Basic and diluted | $ | (0.06 | ) | $ | (0.01 | ) | ||
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Legal
From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time that may harm our business. We are currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition or operating results except:
Employment Contracts
On March 1, 2022, as amended on October 1, 2022 and December 28, 2022, Mr. Ricardo Haynes, the Company’s sole Director, Chief Executive Officer Dr. Ruggero M. Santilli(“CEO”) and immediate family members have loanedChairman of the company $29,500 for operations. DuringBoard, and the period endingacting sole officer of the Company entered into an Employment Agreement with the Company. The Employment agreement terminates September 30, 20172027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, Mr. Haynes is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under this Employment agreement, the CEO will be entitled to the following:
| · | $5,700 for services performed from March 1, 2022 – June 30, 2022. | |
| · | Lump Sum payment of $21,299 for services from July 1, 2022 – December 31, 2022. | |
| · | Base salary of $11,000 per month paid on a bi-weekly basis starting January 2, 2023. | |
| · | Bonus of $14,201 was paid in November and December 2022. | |
| · | Automobile allowance of $1,500 per month starting January 2, 2023. | |
| · | shares of TNRG common stock in the Company which vest immediately. | |
| · | newly issued Preferred A shares of TNRG stock CUSIP (88604Y209) Cert No. 400002. | |
| · | newly issued Preferred B shares of TNRG stock CUSIP (88604Y209), Cert. No. 500002. | |
| · | newly issued Preferred C shares of TNRG stock CUSIP (8860Y209), Cert No. 600002. | |
| · | $7,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| · | RoRa Coins in possession of the Company. |
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On October 1, 2022, the Company had made $40,000entered into Employment Agreements with individuals for positions in principal paymentsthe Company. Each of the Employment agreements shall begin October 1, 2022 and terminate September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, each employee is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the demand note.implementation of a Company employee option plan. Under these Employment agreements, each employee will be entitled to the following:
At September 30, 2017 and December 31, 2016 demand notes accumulative balances were $522,000 and $532,500, respectively. Accrued interest at September 30, 2017 and December 31, 2016 was $29,728 and $20,905, respectively.
EMPLOYMENT AND CONSULTING CONTRACTS
| · | Ms. Tori White, Director Real Estate Development. | |||
| ○ | $24,000 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |||
| ○ | RoRa Coins in possession of the Company. | |||
| · | Mr. Eric Collins, Chairman and Chief Operations Officer. | |||
| ○ | $12,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |||
| ○ | RoRa Coins in possession of the Company. | |||
| · | Mr. Donald Keer, Corporate Counsel | |||
| ○ | $3,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |||
| ○ | RoRa Coins in possession of the Company. | |||
| · | Mr. Lance Lehr, Chief Operating Officer | |||
| ○ | $2,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |||
| ○ | RoRa Coins in possession of the Company. | |||
The Company has employment and consulting contractshad been in discussions with its key employees, the controlling shareholders, who are its officers and directorsShareholders for repayment by them of the Acquisition of Preferred Shares and finalized the Employment Agreements on October 1, 2022 for positions in the Company. As a result, the Company recorded the purchase price payable by these employees as compensation on March 1, 2022 (see Note 1).
Consulting Agreements
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 2. | Up to common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
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| · | a total of common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 3. | Shall be paid $21,000per | ||
| 4. | Additional awards may be made at the | ||
During the ninethree months ended September 30, 2017, Dr. Santilli has accrued $135,000 in management fees per his employment contract. As noted above under Advances, PayablesMarch 31, 2023 and Accruals,2022, the Company converted $708,461paid Top Flight $245,000 ($75,000 for monthly consulting services and $170,000 for goals based bonus) and $0, respectively, with a balance due of accrued management fees into 11,807,692 shares$1,277,000 and $247,000 as of common stock. As of September 30, 2017 the accrued management fees for Dr. Santilli were $45,000.
During the nine months ended September 30, 2017, Carla Santilli has accrued $54,000 in consulting fees per her consulting contract. As noted above under Advances, PayableMarch 31, 2023 and Accruals, the Company converted $283,385 of accrued consulting fees into 4,723,077 shares of common stock. As of September 30, 2017 the accrued consulting fees for Carla Santilli were $18,000.
EQUITY TRANSACTIONSDecember 31, 2022, respectively.
On June 8, 2017April 6, 2022, the Company issued 16,530,769entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of common shares, valued at $150,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to related parties for conversion of accrued compensation of $991,846, recorded at the fair market valueSeries B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the share price.
THUNDER ENERGIES CORPORATION
NotesCompany’s common stock. The shares are included under Common stock to Condensed Financial Statements
For the period ending September 30, 2017
(Unaudited)
OTHER
The Company does not own or lease property or lease office space. At the current time, the office space used by the Company was arranged by the majority shareholders of the Company to use at no charge. It is anticipated that the Company will enter into formal lease arrangementsbe issued in the near future.
The amounts and termsStatement of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
NOTE 8 – COMMITMENTS AND CONTINGENCIESChanges in Shareholders’ Deficit at December 31, 2022.
On June 2, 2017April 6, 2022, the Company receivedentered into a down paymentConsulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of $120,067 forover $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the constructionthird party will be entitled to a total of common shares, valued at $60,000 (based on the Company’s stock price on the date of issuance) and deliveryvesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of a Directional Neutron Source Model TEC-DNS-05. the Company’s common stock. The total contract amount is $194,481.shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
Investment in WC Mine Holdings
On September 8, 20172022, the Company received additional paymententered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of $49,94551.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the constructionKinsley Mountain mineral, resources, and deliverywater rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matured on October 31, 2022 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Directional Neutron Source Model TEC-DNS-05.Company’s Regulation A II Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to convert the Coins on or before October 31, 2022 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on October 31, 2022. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as part of the Regulation A filing.
The balance of $24,469 is due on delivery. Delivery is schedule for six (6) months from the date of deposit which was June 2, 2017.
NOTE 9– SUBSEQUENT EVENTS
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On November 1, 2022, the Company and Fourth & One mutually agreed to terminate the Agreement and the Company was released from any obligations.
On October 6, 2017January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WCMH giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000. In exchange, the Company issued 150,000 shares to non-related parties for services, recordedFourth & One a promissory note of $4,000,000 and Coins, valued at $1,450,000. The Fourth & One agreement is contingent on until such time as the fair market valueCoin is “live” on NYXEX exchange and the Company’s Regulation A being declared effective. The expectation is that the conversion will take place as part of the share price, in the amount of $15,000.Regulation A filing.
Sponsorship Agreement
On October 9, 2017December 15, 2022, the Company entered into a Joint Marketing and Advertising Agreement with the Las Vegas Aces (“Aces”) professional Women’s basketball team. The Aces shall provide the Company branding, digital advertising, and partner marketing and advertising for payments totaling $875,000, $901,250, and $928,288 for the years 2023, 2024, and 2025, respectively. The agreement is effective December 15, 2022 through December 31, 2025, with an option to extend for an additional two years, unless terminated sooner. During the three months ended March 31, 2023 and 2022, the Company made no payments to the Aces with a balance due of $243,438 and $36,745 as of March 31, 2023 and December 31, 2022, respectively.
Financing Engagement Agreement
On August 25, 2022, the Company entered into a Legal Services Agreement with The George Law Group in connection with an issuance of multi-tranched securitization (“Financing”) which shall utilize a pledge of the Company’s stock and other properties currently owned or under the Company’s control. The legal fee shall be one-half of one percent (0.5%) of the par amount of any Financing. The Company has paid a retainer of $21,000 during the three months ended March 31, 2023 with a prepaid balance of $63,000 and $42,000 as of March 31, 2023 and December 31, 2022, respectively.
NOTE 10 – SUBSEQUENT EVENTS
April 2022 Notes
Subsequent to March 31, 2023, the Company offered and sold an additional $202,000 of the April 2022 Notes bearing no interest and are due and payable on December 31, 2023. Notes totaling $200,000 issued in April 2023 allows for the repurchase of up to 400,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share.
ELSR and SP11 Promissory Debenture and Convertible Note
On April 17, 2023, the Company informed SP11 and ELSR Corporation of an illegal convertible promissory note (the “Notes”) in the name of Thunder Energies Corporation. The Notes are being cancelled by Thunder Energies Corporation as there is no record of consideration paid to the Company, the agreement for the Notes was not an arms length transaction with the lender and borrower, and it violates Chapter 687 of the 2022 Florida Statutes – Commercial Relations, Interest and Usury; Lending Practices. The Company will no longer accrue interest or penalties on these Notes. The Company will continue to recognize the Notes and accrued interest currently recorded in the Consolidated Balance Sheets with a total balance due of $6,810,915 ($120,766 of Notes and $6,690,149 of accrued interest) as of March 31, 2023.
$40,000,000 Convertible Note
On May 13, 2022, the Company issued a convertible promissory note in the principal amount totaling $40,000,000 in exchange for 50,000 shares to non-related parties for services, recordedRoRa Prime Coins (“Coins”), valued at $800 per Coin. The convertible promissory note bears no interest and is due and payable in twenty-four (24) months. The holder of this Note has the right, at the fair market valueholder's option, to convert the principal amount of this Note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $2.00 per share. As amended effective May 7, 2023, the Convertible Promissory Note shall not be enforceable until such time as the Holder’s consideration, RoRa Coin is “live” on an exchange, or swap engine, and available through a mutually agreed upon cryptocurrency wallet such as NyX, MetaMask, Exodus, Ledger, or similar. The expected date for being live is June 3, 2023. The parties agree to establish a time is of the share price, inessence date of December 31, 2023 for Holder to meet the amount of $5,500.“live” requirement. Should Holder not meet the “live” requirement by December 31, 2023, then Borrower shall return all RoRa Coins and Holder shall release all claims on any shares or Convertible Promissory Note.
Special Note Regarding Forward Looking Statements.
This quarterly report on Form 10-Q of Thunder Energies Corporation for the period ended September 30, 2017March 31, 2023 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements. Where in any forward-looking statements, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ materially from those anticipated and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the cost and effects of legal proceedings.
You should not rely on forward looking statements in this quarterly report. This quarterly report contains forward looking statements that involve risks and uncertainties. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report. Our actual results could differ materially from those anticipated in these forward-looking statements.
Our Business Overview.Corporate History and Background
Thunder Energies Corporation f/k/a Thunder Fusion Corporation and CCJ Acquisition Corp. (“we”, “us”, “our”, “TNRG” or the “Company”) was incorporated in the State of Florida on April 21, 2011. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and had made no efforts to identify a possible business combination. The business purpose of the Company has been to seek the acquisition of or merger with, an existing company. The Company selected December 31 as its fiscal year end.
On July 25,29, 2013, Dr. Ruggero M. Santilli acquired from the Company’s existing shareholders, a control block of stock in the Company consistingfiled with the Florida Secretary of two million nine hundred forty thousand (2,940,000) sharesState, Articles of restricted common stockAmendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from CCJ Acquisition Corp. to Thunder Fusion Corporation. The Amendment also changed the principal office address of the Company to 150 Rainville Road, Tarpon Springs, Florida 34689. On May 1, 2014, the Company filed with the Florida Secretary of State, Articles of Amendment to its Articles of Incorporation (the “Amendment”) which changed the name of the Company from Thunder Fusion Corporation to Thunder Energies Corporation. The Company subsequently changed its principal office address to 3017 Greene St., Hollywood, Florida 33020.
On March 24, 2020, the Company announced its operational affiliate plans with Saveene.Com Inc. (“Saveene”) the preferred shareholder. Under the agreement, Saveene granted the Company access to several yachts and jets for the purpose of offering these vessels to the end-user and the general public for sale and or charter. Additionally, the Company gained access to several patent-pending technologies and the entire Saveene back office that focuses on the yacht and jet industry sector. This operational affiliate plan with Saveene.Com allowed the Company to offer a white-label type solution and original equipment manufacturer under the Company’s own brand name Nacaeli, dispensing the need to acquire and carry any inventory. All future Company and or Nacaeli brand fulfillment orders general maintenance, and upkeep matters such as mechanical repair, buffering, and similar will be outsourced other than administrative operational and corporate governance tasks.
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On March 24, 2020, the Company held a meeting and voted to create two separate classes of preferred shares. Class “B” and class “C’ preferred shares. One class of shares B would be used to offer securitization for the watercraft while class C preferred shares would be used in conjunction with the securitization of air crafts.
Series B Convertible Preferred Stock (the “Preferred Stock”) was authorized for 10,000,000 shares of the Company. Each share of Preferred Stock is entitled to one thousand (1,000) votes per share and at the election of the holder converts into one thousand (1,000) shares of Company’s common stock, so at the completion of the stock purchase, the Purchaser owns approximately 100% of the fully diluted outstanding equity securities of the Company and approximately 100% of the voting rights for the outstanding equity securities. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser.
Series C Non-Convertible Preferred Stock (the “Preferred Stock”) was authorized for 10,000,000 shares of the Company. Each share of Preferred Stock is entitled to one thousand (1,000) votes per share and at the election of the holder. The series C is Non-Convertible Preferred Stock. The Purchaser owns approximately 100% of the fully diluted outstanding equity securities of the Company and approximately 100% of the voting rights for the outstanding equity securities. The consideration for the purchase was provided to the Purchaser from the private funds of the principal of the Purchaser.
On January 9, 2020, Mina Mar Corporation, a private equity transaction. As Florida corporation (d/b/a resultMina Mar Group) acquired 50,000,000 shares of this acquisition, Dr. Ruggero M. Santilli owned 98%Series A Convertible Preferred Stock (the “Preferred Stock”) of Thunder Energies Corporation (the “Company”), from Hadronic Technologies, Inc., a Florida corporation. The purchase price of $94,766 for the Preferred Stock was paid by the assumption of a Company note obligation of $85,766 by Emry Capital Inc (“Emry”), with the balance paid in cash.
On March 24, 2020, the then current note obligation of $120,766 held by Emry was partially sold $35,000 of the face amount to the preferred shareholder Saveene. On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares into series B and 10,000 shares of series C shares. The face amount of the Company note obligation post the aforementioned conversions and purchases is $85,766 as of December 31, 2022.
On June 24, 2020, Emry, holder of a convertible promissory note in principal amount of $85,766 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to third party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument.
On April 17, 2023, the Company informed SP11 and ELSR Corporation of an illegal convertible promissory note (the “Notes”) in the name of Thunder Energies Corporation. The Notes are being cancelled by Thunder Energies Corporation as there is no record of consideration paid to the Company, the agreement for the Notes was not an arms length transaction with the lender and borrower, and it violates Chapter 687 of the 2022 Florida Statutes – Commercial Relations, Interest and Usury; Lending Practices. The Company will no longer accrue interest or penalties on these Notes. The Company will continue to recognize the Notes and accrued interest currently recorded in the Consolidated Balance Sheets with a total balance due of $6,810,915 ($120,766 of Notes and $6,690,149 of accrued interest) as of March 31, 2023.
Acquisition of TNRG Preferred Stock
Fiscal Year 2022
On February 28, 2022, Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual and principal shareholders of Bear Village, Inc., a Wyoming corporation, (the “Purchaser”) personally acquired 100% of the issued and outstanding shares of preferred stock (the “Preferred Stock”) of Thunder Energies Corporation, a Florida corporation, (the “Company” or the “Registrant”) from Mr. Yogev Shvo, an individual domiciled in Florida (the “Seller”). (The “Purchase”) The consideration for the purchase was provided to the Purchaser from the individual’s private funds.
The Preferred Stock acquired by the Purchaser consisted of:
| 1. | 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock. | |
| 2. | 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. | |
| 3. | 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock. |
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As a result of the Purchase, the Purchaser owns approximately 100% of the fully diluted outstanding equity securities of the Company and approximately 100% of the voting rights for the outstanding equity securities.
As part of the Purchase, on April 13, 2022, Mr. Shvo submitted 55,000,000 shares of restricted common stock to the Company’s treasury for cancellation.
The purchase price of $50,000 for the Preferred Stock was paid in cash. The consideration for the purchase was provided to the Seller by the Company on behalf of the Purchasers. The Company had been in discussions with the Purchasers for repayment and finalized the Employment Agreements (“Employment Agreements”) on October 1, 2022 for positions in the Company. As a result, the Company recorded the purchase price as compensation on March 1, 2022. The Purchase of the Preferred Stock was the result of a privately negotiated transaction which consummation resulted in a change of control of the Registrant.
| 1) | Purchaser acquired TNRG subject to the following existing debt and obligations: |
| a. | $35,000 Convertible Note held by ELSR plus accrued interest | |
| b. | $85,766 Convertible Note held by ELSR and SP11 plus accrued interest | |
| c. | $220,000 Convertible Note held by 109 Canon plus accrued interest | |
| d. | $410,000 Convertible Note held by Moshe Zucker plus accrued interest of which $190,000 has recently been converted into 3,800,000 shares of restricted common stock. | |
| e. | Auditor Invoice estimated at $30,000 past due and $37,000 for completion of 2021 | |
| f. | Accountant Invoice estimated at $42,500 and approximately $4,500 for completion of 2021 | |
| g. | No other debt or liability is being assumed by Purchaser | |
| h. | Purchaser specifically assumes no liability regarding any dispute between Orel Ben Simon and the Seller. Seller shall indemnify Company as required in the body of the Agreement. | |
| i. | Company may be subject to potential liability and legal fees and associated costs regarding the FCV Matter if in excess of the Seller indemnification provisions set forth in Section 11 of the Agreement | |
| j. | Purchaser on behalf of the Company is responsible for assuring the Company’s timely payment of all Company federal and state and any related tax obligations for fiscal year 2021 with the exception of taxes due relating to income, sales, license, business or any other taxes associated with Nature and HP |
| 2) | The transfer to Seller of all of TNRG’s security ownership interest in each of Nature and HP to Seller shall include the following existing Nature debt and related matters: |
| a. | EIDL Loan ($149,490 plus $9,290 accrued interest) | |
| b. | $72,743 note due to Orel Ben Simon plus accrued interest | |
| c. | All cases in action and potential legal liabilities concerning current disputes with Nature, HP, Ben Simon, Seller and any other parties. |
As a result of the Purchase and change of control of the Registrant, the existing officers and directors of the Company, Mr. Adam Levy, Mr. Bruce W.D. Barren, Ms. Solange Bar and Mr. Yogev Shvo (Chairman) have either resigned or been voted out of their positions.
Under the terms of the stock purchase agreement the new controlling shareholder was permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors. Mr. Ricardo Haynes became the sole Director, CEO and Chairman of the Board of the Registrant, and the acting sole officer of the Company.
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Fiscal Year 2020
On August 10, 2013,July 1, 2020, Yogev Shvo, a third party individual and principal shareholder of Nature Consulting LLC (“Nature” or “Purchaser”) personally acquired 100% of the Company entered into an Asset Assignment Agreementissued and outstanding shares of preferred stock (the “IBR Assignment Agreement”“Preferred Stock”) with Institute For Basic Research, Inc.,of TNRG from Saveene Corporation, a Florida corporation (“IBR”(the “Seller”) that also is beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli. Pursuant to(The “Purchase”). The Purchase price of $250,000 for the IBR Assignment Agreement, IBR irrevocably assigned toPreferred Stock was paid in cash and was provided from the Company all rights, title, ownership and interests in allindividual private funds of IBR’s internet website domain name assets, owned and hereinafterPurchaser.
The Preferred Stock acquired by IBR including, but not limited to, all physical and intangible assets and intellectual property related to the assets.Purchaser consisted of:
| 1. | 50,000,000 shares of Series A Convertible Preferred Stock wherein each share is entitled to fifteen (15) votes and converts into ten (10) shares of the Company’s common stock. | |
| 2. | 5,000 shares of Series B Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. | |
| 3. | 10,000 shares of Series C Non-Convertible Preferred Stock wherein each share is entitled to one thousand (1,000) votes and is non-convertible into shares of the Company’s common stock. |
Acquisition of Assets of Nature
On August 11, 2013, Thunder Energies Corporation14, 2020 (the “Company”“Closing Date”), TNRG and the members of Nature entered into an Asset AssignmentInterest Purchase Agreement (the “Assignment“Interest Purchase Agreement”) with HyFuels, Inc., a Florida corporation (“HyFuels”) beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli.which closed on the same date. Pursuant to the Assignmentterms of the Interest Purchase Agreement, HyFuels irrevocably assignedthe members of Nature sold all of their membership interests in Nature to the Company all physical assets, intangible assets, accounts receivable, intellectual property, accounting software, billing software, client lists, client prospects, trade secrets, proprietary property, the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value and the like.
Consideration for the assignment agreements consisted of one million (1,000,000) shares of our common stock that were issued to Dr. Ruggero M. Santilli, as designee for IBR and HyFuels. Company management determined the amount of consideration based upon ASC 845-10-S99 pertaining to transfer of non-monetary assets. According to ASC 845-10-S99, transfers of non-monetary assets to a company by its promoters or shareholdersTNRG in exchange for stock prior to or at the time of the entity’s initial public offering should be recorded at the transferors’ historical cost basis determined under Generally Accepted Accounting Principles. As such, the cost basis carried on the books and records of HyFuels and IBR was minimal or essentially zero. Therefore, the accounting principles in ASC 845-10-S99 were followed and the Company recorded the intellectual and physical properties at its historical cost basis, which was at the historical cost basis of a nominal amount. In connection with the aforementioned assignment agreements, 1,000,000sixty million (60,000,000) shares of our common stock were transferred in exchange for the assets.
The Company’s filings will include a disclosure in the MD&A section and notes to the financial statement under the heading “Non-Monetary Transaction”. Management believes that the $1,000.00 cost is reflective of the salvage value of the physical property, at a minimum. Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.
Our Company purchased internet website domain name assets owned by IBR and the intellectual and physical property known as intermediate nuclear fusion without radiation, the physical property consisting of seven (7) Hadronic reactors, all copyrights, patents, patent applications, patent assignments, trademarks and anything having commercial or exchange value owned by HyFuels as related to the reactors. None of the assets purchased had ever generated revenue for IBR or HyFuels. Although the Asset Assignment Agreements were more comprehensive in their description of “assets”, the aforementioned items were the only assets assigned to the Company.
A further description of the assignors, IBR and HyFuels, follows. IBR is a Florida Corporation whose only business operations are the publication of an internet blog relating to scientific and academic matters. IBR does not generate revenue and has no expenses. Furthermore, IBR has never maintained a checking account. This status has been consistent over the last several years. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for IBR. IBR does not have any ownership interest in any of our securities.
HyFuels is a Florida corporation that utilized research and development funds to create the seven Hadronic reactors, but otherwise has no business operations since its inception. Its sole purpose is to serve as a patent holding company. Our Chief Executive Officer and Director, Dr. Ruggero M. Santilli is president and a director for HyFuels. HyFuels also does not have any ownership interest in any of our securities.
Neither IBR nor HyFuels has made any effort to commercialize the assets for purposes of generating revenue. Both IBR and HyFuels continue to exist as Florida corporations separate and distinct from the Company. Though they are deemed “related” entities through a common officer and director with our Company, they remain otherwise “unaffiliated” with our Company.
IBR maintains its principal place of business at 90 East Winds Court, Palm Harbor, Florida 34689. HyFuels maintains its principal place of business at 35246 US Highway 19 North, #215, Palm Harbor, Florida 34684. There is no continuity of facilities with the Company.
Neither IBR nor HyFuels had an employee base, a distribution system, a sales force, a customer base, production techniques or trade names associated with the assets. Their ownership rights may arguably be referred to as operating rights but there were essentially no operations associated with the assets.
The only activities of the assignors involved the creation of the Internet website domain names and the creation of the seven Hadronic reactors and associated patents pending. These assets did not generate revenue prior to the assignment, so there is essentially no financial data to report regarding “revenue producing activity previously associated with the acquired assets”. Furthermore, there is no “sufficient continuity of operations with our Company so that disclosure of prior financial information regarding IBR or HyFuels is material to an understanding of future operations regarding our Company.
Description of Business, Principal Products, Services
The business of Thunder Energies Corporation ("TEC") is focused on the development of a new clean combustion of fossil fuels (oil, diesel, coal, etc.) with controlled minimal contaminants in the exhaust. Our business objective is achieved via new forms of processing fossil fuels, new additives to the combustion and the assistance of a high voltage electric discharges (patents pending) that burn combustible contaminants in fossil fuel exhaust while providing added on clean energy. The expected principal product, depending on funding, is a new type of furnace for the clean combustion of fossil fuel available in any desired size for any type of energy application, from home heating to large plants for the clean production of electricity. The expected services are to be rendered by providing technical assistance to the market consisting of existing fossil fuel electric power plants for their decrease of pollutants in the exhaust and their verification of EPA regulations on the release of contaminants in the atmosphere. A prototype new furnace is expected to be available within one year following the availability of the necessary funds. As we are a development stage company, we have not yet generated any revenue from the assets that were recently assigned to and acquired by the Company, including the Hadronic reactors. The Hadronic reactors have been utilized to test and confirm the technology for ultimate inclusion in the new furnaces. Thunder Energies Corp. is a developer of new technologies that are being brought to market by three divisions: 1) Division of Optical Instruments (TEC-DOI); 2) Division of Nuclear Instruments (TEC-DNI); and 3) Division of Fuel Combustion (TEC--DFC). All intellectual properties, including patents, patent applications, domain names, copyrights, know how, etc., are exclusively and irrevocably owned by Thunder Energies Corp. without any royalty payments. Out of the three divisions, TEC-DOE has initiated production and sale of pairs of Galileo and Santilli telescopes with 70 mm, 100 mm, and 150 mm. The remaining two divisions are expecting funding for their commercialization.
Distribution Methods Of The Products and Services
For this first division TEC-DOE we have initiated advertisement via direct e-mail and public news releases. Initially, we anticipate marketing via large advertisements on the internet, such as via PRWeb and PRNewswire Releases. For the other two divisions we expect to market through contacts that we are able to generate, and via direct contacts of potential buyers of TEC new fossil fuel furnaces or TEC services for the improvement of existing fossil fuel burning plants.
Status of Any Publicly Announced New Product Or Service
Regarding the sale of telescopes, we have made several news releases and radio interviews. In addition, we have presented all TEC technologies to investors’ conferences. For the other two divisions TEC-DNE and TEC-DFC the company contemplates no advertisement until the availability of production equipment. We have, however, published scientific papers on the new sciences underlying the Combustion and Nuclear Divisions.
Competitive Business Conditions And The Smaller Reporting Company’s Competitive Position In The Industry And Methods Of Competition
There are no known competitors for the new telescopes with concave lenses produced and sold by TEC-DOE. There exist many types of furnaces for the combustion of fossil fuels but they are all based on conventional combustion of fossil fuels and then the removal of contaminants in the exhaust. By contrast, the main function of TEC furnaces is that of improving the combustion with consequential reduction of contaminants in the exhaust while increasing the energy output for the same fossil fuel. There is no known competition for the detection of fissionable material via a thermal neutron source under development by TEC-DNE.
Sources And Availability Of Raw Materials And The Names Of Principal Suppliers
The company has selected qualified manufacturers for the telescopes of TEC-DOE. All components for the new telescope are readily available on the open market. Suppliers are available for the other two technologies and will be selected following completion of their development. The raw material needed by the TEC furnaces is given by conventional fossil fuels all available in the U.S.A. by a large number of suppliers.
Dependence On One Or A Few Customers
There are many potential customers for the pair of telescopes produced by the. TEC-DOE division. Our marketing analysis has identified the potential customers in all individuals and associations interested in sky watching. For the other two technologies, we have not yet performed market analysis.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements Or Labor Contracts, Including Duration
A first patent application is pending, while additional patent applications are expected depending on funding. Trademarks are expected to be applied for depending on funding. No franchisee or license is expected during the first three years of operation. Labor contracts for employees are planned for implementation following legal assistance and decisions by our Board of Directors.
Need For Any Government Approval Of Principal Products Or Services
No governmental approval or permits are necessary for the telescopes. No governmental approval or permits is expected for the development of the new furnaces for the clean combustion of fossil fuels. Following their availability, the TEC furnaces will be subject to and must comply with applicable EPA requirements for permitted levels of contaminants in the exhaust. In regard to the neutron source we need to further analyze the requirements
Effect Of Existing Or Probable Governmental Regulations On The Business
There are no governmental regulations affecting the sale of the telescope technology. Due to its novel conception, a principal objective of TEC furnaces is that of surpassing current EPA requirements for the contaminants in the combustion exhaust released in the atmosphere. We expect that the neutron source technology will be government regulated and we are in the process of analyzing and assessing the impact of such regulations on the business.
Estimate Of The Amount Of Money Spent During Each Of The Last Two Fiscal Years On Research And Development
There have been no funds expended by the Company on research and development in the last two fiscal years. All funding for the development of our products to date has been derived from related entities, IBR and HyFuels, which are beneficially controlled by our Chief Executive Officer, Dr. Ruggero M. Santilli.
Costs and Effects Of Compliance With Environmental Laws
There are no environmental laws affecting the sale of pairs of telescopes as we simply assemble telescopes, cameras and proprietary concave lenses. We are unable to estimate the costs and effects of compliance with environmental laws prior to completion of a TEC prototype furnace.
Number Of Total Employees And Number Of Full-Time Employees
At this time, the Company has two full time employees and five persons working part time in various functions.
Implications of Being an Emerging Growth Company
We qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:
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We have already taken advantage of these reduced reporting burdens in this amendment to our Current Report on Form 8-K, which are also available to us as a smaller reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. We are choosing to utilize the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. This election allows our Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.TNRG’s Common Stock. As a result of this election, ourtransaction, Nature became a wholly-owned subsidiary of TNRG.
The Interest Purchase Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. Breaches of the representations and warranties will be subject to customary indemnification provisions, subject to specified aggregate limits of liability.
The membership Interest Purchase Agreement will be treated as an asset acquisition by the Company for financial accounting purposes. Nature will be considered the acquirer for accounting purposes, and the historical financial statements of Nature, before the membership exchange will replace the historical financial statements of TNRG before the membership exchange and in all future filings with the SEC.
Immediately following the Interest Purchase Agreement, the business of Nature became TNRG’s main operation.
Recent Developments
During February and March 2023, holders of 64,000,000 shares of common stock (57,000,000 shares from related parties and 7,000,000 shares from third parties) elected to exchange these shares for an aggregate of 64,000 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock
On January 19, 2023, the Company initiated a Regulation A Tier II offering of up to 75,000,000 of the Company’s common stock at $5.00 per share. The Company expects that, not including state filing fees, the amount of expenses of the offering that it will pay will be approximately $3,700,000 based on the maximum number of shares sold in this offering.
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On January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. TNRG recently engaged three licensed geologists to assess the preliminary value of the minerals at Kinsley Mountain on the 4 patented and 98 unpatented claims by drone surveillance, a small collection of surface samples and historical information at Kinsley Mountain and neighboring geological formations. The Kinsley project is located in the Kinsley Mountains in Elko and White Pine counties, northeastern Nevada, approximately 150 kilometers northeast of Ely, Nevada, and 83 kilometers southwest of West Wendover, Nevada. Access is via paved U.S. Highway Alternate 93 to approximately 65 kilometers southwest of the town of West Wendover, Nevada, and then south for 18 kilometers on an improved gravel road, known as the Kinsley Mountain mine road, to the project site. The approximate geographic center of the Kinsley project is 40° 09′ N latitude and 114° 20′ W longitude.
On December 15, 2022, the Company entered into a Joint Marketing and Advertising Agreement with the Las Vegas Aces (“Aces”) professional Women’s basketball team. The Aces shall provide the Company branding, digital advertising, and partner marketing and advertising for payments totaling $875,000, $901,250, and $928,288 for the years 2023, 2024, and 2025, respectively. The agreement is effective December 15, 2022 through December 31, 2025, with an option to extend for an additional two years, unless terminated sooner.
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 3. | Shall be paid $21,000 per month beginning May 2022 increasing to $25,000 per month beginning January 2023. | ||
| 4. | Additional awards may be made at the Company’s discretion based on other strategic goals. There were no additional awards granted for the three months ended March 31, 2023. | ||
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Description of Business
TNRG was founded in April 2010 and underwent new management as of April 2022. The new team’s singular objective is to rapidly increase the current and future shareholder value of its stock by divesting from its stagnant CBD/Hemp retail cannabidiol business model and expanding its investments footprint into the following business sectors to create a diversified portfolio of cash flowing assets such as the following:
| · | Diversified cash flowing assets such as fixed-income | |
| · | Commercial real estate projects that include resorts and associated timeshare and condo developments | |
| · | Entertainment venues including indoor outdoor water parks, family entertainment centers, adventure parks | |
| · | Residential real estate projects that include eco-friendly multi-family housing and | |
| · | Precious metal/mineral mining ventures |
Company Mission
Our mission is to protect our investors through a diversified asset base with various asset classes that allow it to stay liquid and self-sufficient. A diverse balance sheet also helps to head off any unforeseeable market shifts and political changes around the globe, which are critically important in uncertain times. Our new team of experienced leaders have created an exciting vision that is still in the early stages of redevelopment and growth, yet one that promises to offer investors an opportunity to take part in an exciting journey right from the start.
Business Objective
The principal business objective is to generate revenue through strategic partnerships and joint ventures that focus on income generation coupled with capital preservation through proactive portfolio management utilizing a conservative liquidity and investment posture to optimize returns to our shareholders. We achieve this vision through prudent management of borrowed funds together with our capital and shareholders’ equity that is invested primarily in a diversified balance sheet of real estate investments and fixed-income that earns the spread between the yield on our assets and the cost of our borrowings and hedging activities. The business is financed by an appropriate mix of shareholders’ equity and the sale of corporate debt to achieve its primary business objective of an annual return on equity greater than its cost of equity, while maintaining a sound financial structure. This is achieved by rigorous due diligence to vet assets and investments that have significant upside potential while minimizing risks through an investment strategy that pursues an “absolute return” or positive returns to preserve investor capital and returns to our shareholders. We believe that our business objectives are supported through our long-term conservative financial vision, the diversity of our investment strategy and comprehensive risk management approach to preserve investor capital for our shareholders.
Fixed-Income Strategy
This strategy enables the company to maximize profitability by taking advantage of different market cycles, while diversifying risk. The company’s investment objective is to generate consistent capital appreciation over the long-term, with relatively low volatility with the pursuit of an “absolute return” or seeking to achieve positive returns, by, for example, taking long and short positions and by engaging in various hedging strategies, regardless of the performance of the traditional equity and fixed income markets. Additionally, from time to time, the company may use derivative instruments, such as total return swaps or other structured products and may invest, to a limited extent, in registered investment companies, including exchange-traded funds.
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Recent Developments
Convertible Note Payable
Short Term
April 2022 Notes
In April 2022, the Company authorized convertible promissory notes (“April 2022 Notes”) that varies from 0% to 10% per annum and are due and payable on various dates from December 31, 2022 through October 31, 2024 for aggregate gross proceeds of $1,469,300 (including $1,500 against which services were received) through March 31, 2023. Notes totaling $300,000 issued in February 2023 and December 2022 allows for the repurchase of up to a total of 385,714 converted common shares at $2.50 per share and notes totaling $100,000 issued in March 2023 allows for the repurchase of up to a total of 100,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The holders of the April 2022 Notes have the right, at the holder's option, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.07 per share for notes amounting to $750,100, $0.70 per share for notes amounting to $284,200, and $1.00 per share for notes amounting to $435,000 into the Company’s common stock if before any public offering. Subsequent to March 31, 2023, the Company offered and sold an additional $202,000 of the April 2022 Notes bearing no interest and are due and payable on December 31, 2023. Notes totaling $200,000 issued in April 2023 allows for the repurchase of up to 400,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The April 2022 Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting. The Company therefore performed an analysis to determine if the conversion option was subject to a beneficial conversion feature (“BCF”) and determined that the instrument does not have a BCF.
As of May 15, 2023, the Company has not repaid April 2022 Notes convertible notes totaling $487,100 with maturity dates of December 31, 2022 through April 30, 2023 and these convertible notes are now in default. The Company is currently in discussions with the note holders to convert the April 2022 Notes into the Company’s common stock upon the Company’s Regulation A being declared effective.
$4,000,000 Promissory Note
On January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WCMH giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 Coins, valued at $1,450,000. The Fourth & One agreement is contingent on until such time as the Coin is “live” on NYXEX exchange and the Company’s Regulation A being declared effective. The expectation is that the conversion will take place as part of the Regulation A filing.
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$40,000,000 Convertible Note
On May 13, 2022, the Company issued a convertible promissory note in the principal amount totaling $40,000,000 in exchange for 50,000 RoRa Prime Coins (“Coins”), valued at $800 per Coin. The convertible promissory note bears no interest and is due and payable in twenty-four (24) months. The holder of this Note has the right, at the holder's option, to convert the principal amount of this Note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $2.00 per share. As amended effective May 7, 2023, the Convertible Promissory Note shall not be comparableenforceable until such time as the Holder’s consideration, RoRa Coin is “live” on an exchange, or swap engine, and available through a mutually agreed upon cryptocurrency wallet such as NyX, MetaMask, Exodus, Ledger, or similar. The expected date for being live is June 3, 2023. The parties agree to companies that comply with public company effective dates.establish a time is of the essence date of December 31, 2023 for Holder to meet the “live” requirement. Should Holder not meet the “live” requirement by December 31, 2023, then Borrower shall return all RoRa Coins and Holder shall release all claims on any shares or Convertible Promissory Note, Conversion rights shall not vest until such time as the holder’s consideration, Coins are live on a U.S. Exchange and available through a mutually agreed upon cryptocurrency wallet. Subsequent to the Coins live date and before the holder coverts the Note, should the Company issue any dilutive security, the conversion price will be reduced to the price of the dilutive issuance. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note as described above.
We could remainThe Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting.
Investment in WC Mine Holdings
On January 5, 2023, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matured on March 31, 2023 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Company’s Regulation A II $5.00 per share Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to convert the Coins on or before June 1, 2023 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on June 1, 2023. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as part of the Regulation A filing.
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Employment Agreements
On March 1, 2022, as amended on October 1, 2022 and December 28, 2022, Mr. Ricardo Haynes, the Company’s Chief Executive Officer and President (“CEO”) entered into an emerging growth companyEmployment Agreement with the Company. The Employment agreement terminates September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, Mr. Haynes is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for upmedical and dental insurance, and entitled to five years, orstock options upon the implementation of a Company employee option plan. Under this Employment agreement, the CEO will be entitled to the following:
| · | $5,700 for services performed from March 1, 2022 – June 30, 2022. | |
| · | Lump Sum payment of $21,299 for services from July 1, 2022 – December 31, 2022. | |
| · | Base salary of $11,000 per month paid on a bi-weekly basis starting January 2, 2023. | |
| · | Bonus of $14,201 was paid in November and December 2022. | |
| · | Automobile allowance of $1,500 per month starting January 2, 2023. | |
| · | 25,000,000 shares of TNRG common stock in the Company which vest immediately. | |
| · | 7,500,000 newly issued Preferred A shares of TNRG stock CUSIP (88604Y209) Cert No. 400002. | |
| · | 750 newly issued Preferred B shares of TNRG stock CUSIP (88604Y209), Cert. No. 500002. | |
| · | 1,500 newly issued Preferred C shares of TNRG stock CUSIP (8860Y209), Cert No. 600002. | |
| · | $7,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| · | 1,500 RoRa Coins in possession of the Company. |
On October 1, 2022, the Company entered into Employment Agreements with individuals for positions in the Company. Each of the Employment agreements shall begin October 1, 2022 and terminate September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months notice. In addition, each employee is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under these Employment agreements, each employee will be entitled to the following:
| · | Ms. Tori White, Director real Estate Development. |
| o | $24,000 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| o | 4,800 RoRa Coins in possession of the Company. |
| · | Mr. Eric Collins, Chairman and Chief Operations Officer. |
| o | $12,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| o | 2,500 RoRa Coins in possession of the Company. |
| · | Mr. Donald Keer, Corporate Counsel |
| o | $3,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| o | 700 RoRa Coins in possession of the Company. |
| · | Mr. Lance Lehr, Chief Operating Officer |
| o | $2,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| o | 500 RoRa Coins in possession of the Company. |
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Consulting Agreements
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the earliestCompany is profitable with a balance sheet of (i)over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the last dayfollowing:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 3. | Shall be paid $21,000 per month beginning May 2022 increasing to $25,000 per month beginning January 2023. | ||
| 4. | Additional awards may be made at the Company’s discretion based on other strategic goals. There were no additional awards granted for the year ended December 31, 2022. | ||
During the three months ended March 31, 2023 and 2022, the Company paid Top Flight $245,000 ($75,000 for monthly consulting services and $170,000 for goals based bonus) and $0, respectively, with a balance due of $1,277,000 and $247,000 as of March 31, 2023 and December 31, 2022, respectively.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 5,000,000 common shares, valued at $150,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the first fiscal yearCompany’s common stock. The shares are included under Common stock to be issued in which our annual gross revenues exceed $1 billion, (ii)the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 2,000,000 common shares, valued at $60,000 (based on the Company’s stock price on the date that we becomeof issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
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Sponsorship Agreement
On December 15, 2022, the Company entered into a “large accelerated filer”Joint Marketing and Advertising Agreement with the Las Vegas Aces (“Aces”) professional Women’s basketball team. The Aces shall provide the Company branding, digital advertising, and partner marketing and advertising for payments totaling $875,000, $901,250, and $928,288 for the years 2023, 2024, and 2025, respectively. The agreement is effective December 15, 2022 through December 31, 2025, with an option to extend for an additional two years, unless terminated sooner. During the three months ended March 31, 2023 and 2022, the Company made no payments to the Aces with a balance due of $243,438 and $36,745 as defined in Rule 12b-2 underof March 31, 2023 and December 31, 2022, respectively.
Preferred Stock
During February and March 2023, holders of 64,000,000 shares of common stock (57,000,000 shares from related parties and 7,000,000 shares from third parties) elected to exchange these shares for an aggregate of 64,000 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Exchange Act,Company’s common stock.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us on which would occur if the market valueto base an evaluation of our common stockperformance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to increases in the cost of services. To become profitable and competitive, we must receive additional capital. We have no assurance that future financing will materialize. If that financing is held by non-affiliates exceeds $700 million asnot available, we may be unable to continue operations.
Overview of Presentation
The following Management’s Discussion and Analysis (“MD&A”) or Plan of Operations includes the last business dayfollowing sections:
| · | Plan of Operations | |
| · | Results of Operations | |
| · | Liquidity and Capital Resources | |
| · | Capital Expenditures | |
| · | Going Concern | |
| · | Critical Accounting Policies | |
| · | Off-Balance Sheet Arrangements |
General and administrative expenses consist primarily of personnel costs and professional fees required to support our operations and growth.
Depending on the extent of our most recently completed second fiscal quarter,future growth, we may experience significant strain on our management, personnel, and information systems. We will need to implement and improve operational, financial, and management information systems. In addition, we are implementing new information systems that will provide better record-keeping, customer service and billing. However, there can be no assurance that our management resources or (iii)information systems will be sufficient to manage any future growth in our business, and the datefailure to do so could have a material adverse effect on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.our business, results of operations and financial condition.
We are a reporting company and file all reports required under sections 13 and 15d of the Exchange Act.
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Results of Operations and Critical Accounting Policies and Estimates.Operations.
The results of operations are based on preparation of financial statements in conformity with accounting principles generally accepted in the United States. The preparation of financial statements requires management to select accounting policies for critical accounting areas as well as estimates and assumptions that affect the amounts reported in the financial statements. The Company’s accounting policies are more fully described in Note 3 to the Notes of Financial Statements.
Results of Operations for the Three Months Ended March 31, 2023 and 2022
| Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
| Net revenues | $ | – | $ | – | ||||
| Cost of sales | – | – | ||||||
| Gross Profit | – | – | ||||||
| Operating expenses | 531,690 | 804,450 | ||||||
| Other expense | (2,334,624 | ) | (356,676 | ) | ||||
| Net loss before income taxes | $ | (2,866,314 | ) | $ | (447,774 | ) | ||
Net Revenues
For the three months ended September 30, 2017March 31, 2023 and 2016.
Revenues.2022, we had no revenues.
Total Revenue.Cost of Sales The Company did not have any revenues
For the three months ended March 31, 2023 and 2022, we had no cost of sales as we had no revenues.
Operating Expenses
Operating expenses decreased by $272,760, or 33.9%, to $531,690 for three months ended March 31, 2023 from $804,450 for the three months ended September 30, 2017. Total revenuesMarch 31, 2022 primarily due to decreases in stock based compensation of $750,000, and compensation costs of $50,000, offset primarily by increases in investor relations costs of $19,600, consulting fees of $198,140, marketing costs of $209,014, professional fees of $58,746, travel costs of $39,895, and general and administration costs of $1,845, as a result of adding administrative infrastructure for our anticipated business development.
For the three months ended September 30, 2017March 31, 2023, we had marketing expenses of $209,014 and 2016 were $0 and $0 respectively.
Expenses.
Total Expenses. Total operating expenses for the three months ended September 30, 2017 and 2016 were $152,885 and $106,506, respectively. Total operating expenses consisted of research and development of $45,229 and $6,507, respectively; professional fees of $55,775 and $42,389, respectively and selling, general and administrative expenses of $51,881 and $57,610, respectively. Research and development increase by approximately 595%$322,676 primarily due to an increase in materials purchased. Professionalprofessional fees increased by approximately 31% due to the increase in shares issued for services. Selling,of $63,396, investor relations costs of $19,600, consulting fees of $198,140, travel costs of $39,895, and general and administration costs of $1,645, as a result of adding administrative infrastructure for our anticipated business development.
For the three months ended March 31, 2022, we had operating expenses increased by approximately 10% due to operations.of $804,450 comprised of stock based compensation of $750,000, payroll costs of $50,000, and general and administration costs of $4,450.
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Other income (expense)Expense. Total other income and
Other expense for the three months ended September 30, 2017 and 2016 were $125,844 and ($2,764), respectively. Total other income and expense consisted of interest expense of ($24,654) and ($2,764), respectively; interest expense related to derivative liability of $31,800 and $0, respectively and change in derivative of $118,698 and $0, respectively. Interest expense increased by approximately 791% due to interest paid on convertible note payable. Interest expense related to derivative liability decreased by approximately 100% due to paying off the convertible note payable. Change in derivative liability decreased by approximately 100% due to paying off the convertible note payable.
Results of Operations for the nine months ended September 30, 2017 and 2016.
Revenues.
Total Revenue. Total revenues for the nine months ended September 30, 2017 and 2016 were $0 and $12,610 respectively. The Company did not have any revenues for the nine months ended September 30, 2017.
Expenses.
Total Expenses. Total operating expenses for the nine months ended September 30, 2017 and 2016 were $490,022 and $345,009, respectively. Total operating expenses consisted of research and development of $70,810 and $31,845, respectively; professional fees of $238,172 and $141,643, respectively and selling, general and administrative expenses of $181,040 and $171,521, respectively. Research and development increased by approximately 122% due to the increase in materials purchased. Professional fees increased by approximately 68% due to the increase in shares issued for services. Selling, general and administrative expenses increased by approximately 6%. The increase was due to operations.
Other income (expense). Total other income and expense for the nine months ended September 30, 2017 and 2016 were ($31,848) and ($7,752), respectively. Total other income and expense consisted of interest expense of ($31,848) and ($7,752), respectively. Interest expense increased by approximately 310March 31, 2023 totaled $2,334,624 primarily due to interest expense associatedon notes payable of $2,326,245 and the change in derivative liability of $8,379, compared to other expense of $356,676 for the three months ended March 31, 2022 primarily due to the gain on extinguishment of debt in conjunction with change of control of $901,000 and the convertible note payable. The convertible notechange in derivative liability of $3,339, offset primarily by interest expense in conjunction with debt discount of $77,671 and interest expense on notes payable was paid in full on September 8, 2017.of $469,992.
Net loss before income taxes and discontinued operations
Net loss before income taxes and discontinued operations for the three months ended March 31, 2023 and 2022 totaled $2,866,314 and $447,774, respectively, primarily representing the operating and other expense as described above.
Financial Condition.
Total Assets. Total
Assets were $2,488,795 as of March 31, 2023. Assets were cash of $32,210, notes receivable – related party of $27,835 (due from Bear Village), deferred offering costs of $25,750, and prepaid expenses and other assets at September 30, 2017 andof $2,403,000. Assets were $145,892 as of December 31, 20162022. Assets were $36,790 and $1,361, respectively. Total assets consist of cash of $36,540$48,881, notes receivable – related party of $26,200 (due from Bear Village), deferred offering costs of $9,000, and $961, respectively and intangible assets, netprepaid expenses of accumulated amortization, of $250 and $400, respectively.$61,811.
Total Liabilities. Total liabilities at September 30, 2017 and December
Liabilities were $10,854,003 as of March 31, 2016 were $785,190 and $1,419,251, respectively. Total liabilities consist2023. Liabilities consisted primarily of accounts payable of $450 and $0, respectively; deposits$80,019, derivative liability of $170,012 and $0, respectively;$93,969, accrued expenses of $1,552,438, accrued interest of $29,728$7,082,511, short-term convertible notes payable of $2,037,066, and $20,905, respectively;long-term convertible notes payable of $8,000. Liabilities were $6,784,786 as of December 31, 2022. Liabilities consisted primarily of accounts payable of $82,819, derivative liability of $85,590, accrued salariesexpenses of $63,000$283,745, accrued interest of $4,756,266, and $865,846, respectively; noteconvertible notes payable to related parties of $522,000 and $532,500, respectively. Accounts payable increased by approximately 100% due to operations. Deposits increased by 100% due to the down payment for the sale of a Directional Neutron Source on June 2, 2017 and additional funds paid on September 8, 2017. The equipment is expected to be delivered in six (6) months and the balance will be due on delivery. The total contract amount is $194,481. Accrued interest increased by approximately 42% due to increased borrowings. Accrued compensation decreased by approximately 93% due to the conversion of the accrued salaries into common stock.$1,576,366.
Liquidity and Capital Resources.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinarynormal course of business.
The Company sustainedhad an accumulated deficit of $10,353,251 at March 31, 2023, had a working capital deficit of $8,357,208 and $6,630,894 at March 31, 2023 and December 31, 2022, respectively, and had a net loss of $521,870$2,866,314 and $447,774 for the ninethree months ended September 30, 2017March 31, 2023 and $340,1512022, respectively, and net cash used in operating activities of $485,371 and net cash provided by operating activities of $200 for the ninethree months ended September 30, 2016. The Company has accumulated losses totaling $2,884,805 at September 30, 2017. BecauseMarch 31, 2023 and 2022, respectively, with no revenue earned since inception, and a lack of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products.operational history. These factorsmatters raise substantial doubt about the Company’s ability to continue as a going concern.
While the Company is attempting to expand operations and increase revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering or an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or on terms acceptable to the Company. The accompanyingability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
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The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.be necessary if we are unable to continue as a going concern.
We are presently able to meet our obligations as they come due. At September 30, 2017General – Overall, we had a working capital deficitdecrease in cash flows of $748,400. Our working capital deficit is due to$16,671 in the results of operations.
Netthree months ended March 31, 2023 resulting from cash used in operating activities of $485,371, and offset primarily by cash provided by financing activities of $468,700.
The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
| Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (485,371 | ) | $ | 200 | |||
| Investing activities | – | – | ||||||
| Financing activities | 468,700 | – | ||||||
| Net (decrease) increase in cash | $ | (16,671 | ) | $ | 200 | |||
Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022
Cash Flows from Operating Activities – For the three months ended March 31, 2023, net cash used in operations was $485,371 compared to net cash provided by operations of $200 for the ninethree months ended September 30, 2017March 31, 2022. Net cash used in operations was primarily due to a net loss of $2,866,314 for three months ended March 31, 2023 and 2016 were ($33,921)the changes in operating assets and ($82,994), respectively. Netliabilities of $2,372,564, primarily due to the increase in accrued interest of $2,326,245 and accrued expenses of $68,693, offset partially by decreases in accounts payable of $2,800, notes receivable – related party of $1,635, deferred offering costs of $16,750, and prepaid expenses of $1,189. In addition, net cash used in operating activities includes ouradjustments to reconcile net profit from the change in fair value of derivative liability of $8,379.
For the three months ended March 31, 2022, net cash provided by operating activities was $200. Net cash provided by operations was primarily due to a net loss amortization,of $447,774, and the changes in operating assets and liabilities of $524,642, primarily due to accounts payable of $54,648 and accrued interest of $469,994. In addition, net cash provided by operating activities was offset primarily by adjustments to reconcile net loss from the accretion of the debt discount of $77,671, change in derivative liability of $3,339, the gain on disposal of discontinued operations of $901,000, and common stock issued for services accounts payable, deposits, accrued salaries and accrued interest.of $750,000.
Net cash used in investing activities forCash Flows from Investing Activities – For the ninethree months ended September 30, 2017March 31, 2023 and 2016 were $0 and ($3,665) respectively. Net2022, the Company had no cash used inflows from investing activities includes legal expenses paid for patents.activities.
NetCash Flows from Financing Activities – For the three months ended March 31, 2023, net cash provided by financing was $468,700, due to proceeds from short term convertible notes. The Company had no cash flows from financing activities for the ninethree months ended September 30, 2017 and 2016 were $69,500 and $81,500, respectively. Net cash provided by financing activities includes proceeds from notes payable- related party and proceeds from the sale of common stock..March 31, 2022.
Financing – We anticipateexpect that our current working capital position, together with our expected future liquidity requirementscash flows from operations will arise from the needbe insufficient to fund our growth from operations pay currentin the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements forleast the next twelve months. We cannot guaranteeHowever, this belief is based upon many assumptions and is subject to numerous risks, and there can be no assurance that we will not require additional funding in the future.
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We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures. However, we will be available on favorable terms, if at all. If adequate funds are not available, thencontinue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to expand our operations. If adequate funds are not available,obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global economic crisis, we believe thatit may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing, it may contain undue restrictions on our officers and directors will contribute fundsoperations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.
Common Stock
As part of the Purchase, on April 13, 2022, Mr. Shvo submitted 55,000,000 shares of restricted common stock to paythe Company’s treasury for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stockcancellation, in consideration for the loanstransfer to him by TNRG of all of the issued and outstanding membership interests, assets and liabilities of Nature and HP, both of which are wholly-owned subsidiaries of TNRG.
On March 1, 2022, as amended on October 1, 2022 and December 28, 2022, the Company entered into an Employment Agreement with Mr. Ricardo Haynes whereby Mr. Haynes became the sole Director, CEO and Chairman of the Board, and the acting sole officer of the Company. The Employment Agreement is in effect until September 30, 2027. Under this Employment Agreement, Mr. Haynes will be entitled to a total of 25,000,000 common shares, vesting immediately, valued at $750,000 (based on the Company’s stock price on the date of issuance). In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or whether wethirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will merely preparebe entitled to the following:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
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On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 5,000,000 common shares, valued at $150,000 (based on the Company’s stock price on the date of issuance) and signvesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 2,000,000 common shares, valued at $60,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
Preferred Stock
During February and March 2023, holders of 64,000,000 shares of common stock (57,000,000 shares from related parties and 7,000,000 shares from third parties) elected to exchange these shares for an aggregate of 64,000 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock.
Convertible Note Payable
Short Term
April 2022 Notes
In April 2022, the Company authorized convertible promissory notes. If wenotes (“April 2022 Notes”) that varies from 0% to 10% per annum and are forceddue and payable on various dates from December 31, 2022 through October 31, 2024 for aggregate gross proceeds of $1,469,300 (including $1,500 against which services were received) through March 31, 2023. Notes totaling $300,000 issued in February 2023 and December 2022 allows for the repurchase of up to seek funds from our officers or directors, we will negotiatea total of 385,714 converted common shares at $2.50 per share and notes totaling $100,000 issued in March 2023 allows for the specific terms and conditionsrepurchase of such loan when made, if ever. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more privateup to a total of 100,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of our company’s securities after$5.00 per share. The holders of the completionApril 2022 Notes have the right, at the holder's option, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.07 per share for notes amounting to $750,100, $0.70 per share for notes amounting to $284,200, and $1.00 per share for notes amounting to $435,000 into the Company’s common stock if before any public offering. We would most likely relySubsequent to March 31, 2023, the Company offered and sold an additional $202,000 of the April 2022 Notes bearing no interest and are due and payable on December 31, 2023. Notes totaling $200,000 issued in April 2023 allows for the repurchase of up to 400,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The April 2022 Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
As of May 15, 2023, the Company has not repaid April 2022 Notes convertible notes totaling $487,100 with maturity dates of December 31, 2022 through April 30, 2023 and these convertible notes are now in default. The Company is currently in discussions with the note holders to convert the April 2022 Notes into the Company’s common stock upon the transaction exemptions from registration provided byCompany’s Regulation D, Rule 506 or conduct another private offering under Section 4(2)A being declared effective.
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$4,000,000 Promissory Note
On January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WCMH giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 Coins, valued at $1,450,000. The Fourth & One agreement is contingent on until such time as the Coin is “live” on NYXEX exchange and the Company’s Regulation A being declared effective. The expectation is that the conversion will take place as part of the Securities ActRegulation A filing.
$40,000,000 Convertible Note
On May 13, 2022, the Company issued a convertible promissory note in the principal amount totaling $40,000,000 in exchange for 50,000 RoRa Prime Coins (“Coins”), valued at $800 per Coin. The convertible promissory note bears no interest and is due and payable in twenty-four (24) months. The holder of 1933. See “Note 2 – Going Concern”this Note has the right, at the holder's option, to convert the principal amount of this Note, in our financial statementswhole or in part, into fully paid and nonassessable shares at a conversion price of $2.00 per share. As amended effective May 7, 2023, the Convertible Promissory Note shall not be enforceable until such time as the Holder’s consideration, RoRa Coin is “live” on an exchange, or swap engine, and available through a mutually agreed upon cryptocurrency wallet such as NyX, MetaMask, Exodus, Ledger, or similar. The expected date for additional informationbeing live is June 3, 2023. The parties agree to establish a time is of the essence date of December 31, 2023 for Holder to meet the “live” requirement. Should Holder not meet the “live” requirement by December 31, 2023, then Borrower shall return all RoRa Coins and Holder shall release all claims on any shares or Convertible Promissory Note, Conversion rights shall not vest until such time as the holder’s consideration, Coins are live on a U.S. Exchange and available through a mutually agreed upon cryptocurrency wallet. Subsequent to the possibilityCoins live date and before the holder coverts the Note, should the Company issue any dilutive security, the conversion price will be reduced to the price of the dilutive issuance. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note as described above.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that wethe instrument does not qualify for derivative accounting.
Investment in WC Mine Holdings
On September 8, 2022, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matures on October 31, 2022 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Company’s Regulation A II Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to continueconvert the Coins on or before October 31, 2022 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on October 31, 2022. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as a “going concern.”part of the Regulation A filing.
We
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On November 1, 2022, the Company and Fourth & One mutually agreed to terminate the Agreement and the Company was released from any obligations.
On January 5, 2023, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matured on March 31, 2023 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Company’s Regulation A II $5.00 per share Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to convert the Coins on or before June 1, 2023 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on June 1, 2023. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as part of the Regulation A filing.
Employment Agreements
On March 1, 2022, as amended on October 1, 2022 and December 28, 2022, Mr. Ricardo Haynes, the sole Director, CEO and Chairman of the Board, and the acting sole officer of the Company entered into an Employment Agreement with the Company. The Employment agreement terminates September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, Mr. Haynes is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under this Employment agreement, the CEO will be entitled to the following:
| · | $5,700 for services performed from March 1, 2022 – June 30, 2022. | |
| · | Lump Sum payment of $21,299 for services from July 1, 2022 – December 31, 2022. | |
| · | Base salary of $11,000 per month paid on a bi-weekly basis starting January 2, 2023. | |
| · | Bonus of $14,201 was paid in November and December 2022. | |
| · | Automobile allowance of $1,500 per month starting January 2, 2023. | |
| · | 25,000,000 shares of TNRG common stock in the Company which vest immediately. | |
| · | 7,500,000 newly issued Preferred A shares of TNRG stock CUSIP (88604Y209) Cert No. 400002. | |
| · | 750 newly issued Preferred B shares of TNRG stock CUSIP (88604Y209), Cert. No. 500002. | |
| · | 1,500 newly issued Preferred C shares of TNRG stock CUSIP (8860Y209), Cert No. 600002. | |
| · | $7,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| · | 1,500 RoRa Coins in possession of the Company. |
On October 1, 2022, the Company entered into Employment Agreements with individuals for positions in the Company. Each of the Employment agreements shall begin October 1, 2022 and terminate September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, each employee is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under these Employment agreements, each employee will be entitled to the following:
| · | Ms. Tori White, Director Real Estate Development. |
| ○ | $24,000 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 4,800 RoRa Coins in possession of the Company. |
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| · | Mr. Eric Collins, Chairman and Chief Operations Officer. |
| ○ | $12,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 2,500 RoRa Coins in possession of the Company. |
| · | Mr. Donald Keer, Corporate Counsel |
| o | $3,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 700 RoRa Coins in possession of the Company. |
| · | Mr. Lance Lehr, Chief Operating Officer |
| ○ | $2,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 500 RoRa Coins in possession of the Company. |
The Company had been in discussions with the Shareholders for repayment by them of the Acquisition of Preferred Shares and finalized the Employment Agreements on October 1, 2022 for positions in the Company. As a result, the Company recorded the purchase price payable by these employees as compensation on March 1, 2022.
Consulting Agreements
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 1. | a total of 15,000,000 common shares issued on the inception of the agreement of April 6, 2022, valued at $450,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| 2. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
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| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 3. | Shall be paid $21,000 per month beginning May 2022 increasing to $25,000 per month beginning January 2023. | ||
| 4. | Additional awards may be made at the Company’s discretion based on other strategic goals. There were no additional awards granted for the year ended December 31, 2022. | ||
During the years ended December 31, 2022 and 2021, the Company paid Top Flight $320,600 and $0, respectively, with a balance due of $247,000 as of December 31, 2022.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 5,000,000 common shares, valued at $150,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are not awareincluded under Common stock to be issued in the Statement of any trendsChanges in Shareholders’ Deficit at December 31, 2022.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or known demands, commitments, events or uncertainties thatthirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will resultbe entitled to a total of 2,000,000 common shares, valued at $60,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in or that are reasonably likelythe Statement of Changes in Shareholders’ Deficit at December 31, 2022.
Sponsorship Agreement
On December 15, 2022, the Company entered into a Joint Marketing and Advertising Agreement with the Las Vegas Aces (“Aces”) professional Women’s basketball team. The Aces shall provide the Company branding, digital advertising, and partner marketing and advertising for payments totaling $875,000, $901,250, and $928,288 for the years 2023, 2024, and 2025, respectively. The agreement is effective December 15, 2022 through December 31, 2025, with an option to result in material increases or decreases in liquidity.extend for an additional two years, unless terminated sooner. During the three months ended March 31, 2023 and 2022, the Company made no payments to the Aces with a balance due of $243,438 and $36,745 as of March 31, 2023 and December 31, 2022, respectively.
Capital Resources.
We had no material commitments for capital expenditures as of March 31, 2023.
Fiscal year end
Our fiscal year end is December 31.
Critical Accounting Policies
Refer to Note 3 in the accompanying notes to the consolidated financial statements
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Recent Accounting Pronouncements
Refer to Note 3 in the accompanying notes to the consolidated financial statements.
Future Contractual Obligations and Commitments
Refer to Note 3 in the accompanying notes to the consolidated financial statements for future contractual obligations and commitments. Future contractual obligations and commitments are based on the terms of the relevant agreements and appropriate classification of items under U.S. GAAP as currently in effect. Future events could cause actual payments to differ from these amounts.
We incur contractual obligations and financial commitments in the normal course of our operations and financing activities. Contractual obligations include future cash payments required under existing contracts, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly supported by related operating activities. Details on these obligations are set forth below.
Convertible Note Payable
$85,766 Note
On April 22, 2019; The Company executed a convertible promissory note with GHS Investments, LLC (“GHS Note”). The GHS Note carries a principal balance of $57,000 together with an interest rate of eight (8%) per annum and a maturity date of February 21, 2020. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share) in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this GHS Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid. As of December 31, 2019, the principal balance outstanding was $57,000.
The holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this note, to convert all or any part of the outstanding and unpaid principal amount into Common Stock. The conversion shall equal sixty-five percent (65%) of the lowest trading prices for the Common Stock during the twenty (20) day trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of thirty-five percent (35%).
On January 9, 2020, Mina Mar Corporation, a Florida corporation (d/b/a Mina Mar Group) acquired 50,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) of Thunder Energies Corporation (the “Company”), from Hadronic Technologies, Inc., a Florida corporation. The purchase price of $94,766 for the Preferred Stock was paid by the assumption of a Company note obligation of $85,766 by Emry Capital Inc (“Emry”), with the balance paid in cash.
On March 24, 2020, the then current note obligation of $120,766 held by Emry was partially sold $35,000 of the face amount to the preferred shareholder Saveene. On March 24, 2020, Saveene converted the $35,000 purchase into 5,000 shares into series B and 10,000 shares of series C shares. The face amount of the Company note obligation post the aforementioned conversions and purchases is $85,766 as of December 31, 2022.
On June 24, 2020, Emry, holder of a convertible promissory note in principal amount of $85,766 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to third party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument.
The Company accounts for an embedded conversion feature as a derivative under ASC 815-10-15-83 and valued separately from the note at fair value. The embedded conversion feature of the note is revalued at each subsequent reporting date at fair value and any changes in fair value will result in a gain or loss in those periods. The Company recorded a derivative liability of $93,969 and $85,590 as of March 31, 2023 and December 31, 2022, and recorded a change in derivative liability of $8,379 and $(3,339) during the three months ended March 31, 2023 and 2022, respectively.
As a result of the failure to timely file our Form 10-Q for the three-month periods ended September 30, 2017.2020, March 31, 2022 and 2021, June 30, 2022, and September 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. The Company recorded default interest of $14,931 and $7,398 during the three months ended March 31, 2023 and 2022, respectively.
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The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the GHS Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
On April 17, 2023, the Company informed SP11 and ELSR Corporation of an illegal convertible promissory note (the “Notes”) in the name of Thunder Energies Corporation. The Notes are being cancelled by Thunder Energies Corporation as there is no record of consideration paid to the Company, the agreement for the Notes was not an arms length transaction with the lender and borrower, and it violates Chapter 687 of the 2022 Florida Statutes – Commercial Relations, Interest and Usury; Lending Practices. The Company will no longer accrue interest or penalties on these Notes. The Company will continue to recognize the Notes and accrued interest currently recorded in the Consolidated Balance Sheets with a total balance due of $6,810,915 ($120,766 of Notes and $6,690,149 of accrued interest) as of March 31, 2023.
$220,000 Note
On September 21, 2020, the Company issued a convertible promissory note in the principal amount of $220,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder’s option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company’s equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above. The principal balance due at March 31, 2023 is $220,000 and is presented as a short-term liability in the balance sheet.
As a result of the failure to timely file our Form 10-Q for the three-month period ended September 30, 2020, March 31, 2022 and 2021, June 30, 2022, and September 30, 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. On July 19, 2021, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in the Notes related to the Company’s failure to timely file its Form 10-Q for the three-month period ended September 30, 2020, the Form 10-K for the year ended December 31, 2020, and the three-month period ended March 31, 2021. In exchange for the Agreement, the Company agreed to pay a one-time interest charge of $11,680 in the year ended December 31, 2021. The Company recorded default interest of $16,611 and $13,560 during the three months ended March 31, 2023 and 2022, respectively.
The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
$410,000 Note (previously $600,000)
On October 9 and October 16, 2020, the Company issued a convertible promissory note in the principal amount totaling $600,000. The convertible promissory note bears interest at 8% per annum and is due and payable in twenty-four (24) months. The holder of this note has the right, at the holder’s option, upon the consummation of a sale of all or substantially all of the equity interest in the Company or private placement transaction of the Company’s equity securities or securities convertible into equity securities, exclusive of the conversion of this note or any similar notes, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.05 per share. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
On December 6, 2021, the holder of the note converted $190,000 of the Note into 3,800,000 shares of the Company’s common stock. The principal balance of $410,000 is due October 16, 2022 and is presented as a short term liability in the balance sheet.
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As a result of the failure to timely file our Form 10-Q for the three-month periods ended September 30, 2020, March 31, 2022 and 2021, June 30, 2022, and September 30, 2022, and the Form 10-K for the years ended December 31, 2021 and 2020, the Convertible Notes Payable were in default. On July 15, 2021, the Company entered into a Waiver Agreement (the “Agreement”) waiving the default provisions listed in the Notes related to the Company’s failure to timely file its Form 10-Q for the three-month period ended September 30, 2020, the Form 10-K for the year ended December 31, 2020, and the three-month period ended March 31, 2021. The Company recorded default interest of $30,517 and $24,891 during the three months ended March 31, 2023 and 2022, respectively.
The Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions with the note holder to convert the Note into the Company’s common stock upon the Company’s Regulation A being declared effective.
April 2022 Notes
In April 2022, the Company authorized convertible promissory notes (“April 2022 Notes”) that varies from 0% to 10% per annum and are due and payable on various dates from December 31, 2022 through October 31, 2024 for aggregate gross proceeds of $1,469,300 (including $1,500 against which services were received) through March 31, 2023. Notes totaling $300,000 issued in February 2023 and December 2022 allows for the repurchase of up to a total of 385,714 converted common shares at $2.50 per share and notes totaling $100,000 issued in March 2023 allows for the repurchase of up to a total of 100,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The holders of the April 2022 Notes have the right, at the holder's option, to convert the principal amount of this note, in whole or in part, plus any interest which accrues hereon, into fully paid and nonassessable shares at a conversion price of $0.07 per share for notes amounting to $750,100, $0.70 per share for notes amounting to $284,200, and $1.00 per share for notes amounting to $435,000 into the Company’s common stock if before any public offering. Subsequent to March 31, 2023, the Company offered and sold an additional $202,000 of the April 2022 Notes bearing no interest and are due and payable on December 31, 2023. Notes totaling $200,000 issued in April 2023 allows for the repurchase of up to 400,000 converted common shares at $2.75 per share should the Company fail to meet the Regulation A Tier II offering of $5.00 per share. The April 2022 Notes include customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note and accrual of interest as described above.
As of May 15, 2023, the Company has not repaid April 2022 Notes convertible notes totaling $487,100 with maturity dates of December 31, 2022 through April 30, 2023 and these convertible notes are now in default. The Company is currently in discussions with the note holders to convert the April 2022 Notes into the Company’s common stock upon the Company’s Regulation A being declared effective.
$4,000,000 Promissory Note
On January 5, 2023, the Company reentered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WCMH giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 Coins, valued at $1,450,000. The Fourth & One agreement is contingent on until such time as the Coin is "live" on NYXEX exchange and the Company’s Regulation A being declared effective. The expectation is that the conversion will take place as part of the Regulation A filing.
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$40,000,000 Convertible Note
On May 13, 2022, the Company issued a convertible promissory note in the principal amount totaling $40,000,000 in exchange for 50,000 RoRa Prime Coins (“Coins”), valued at $800 per Coin. The convertible promissory note bears no interest and is due and payable in twenty-four (24) months. The holder of this Note has the right, at the holder's option, to convert the principal amount of this Note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $2.00 per share. As amended effective May 7, 2023, the Convertible Promissory Note shall not be enforceable until such time as the Holder’s consideration, RoRa Coin is “live” on an exchange, or swap engine, and available through a mutually agreed upon cryptocurrency wallet such as NyX, MetaMask, Exodus, Ledger, or similar. The expected date for being live is June 3, 2023. The parties agree to establish a time is of the essence date of December 31, 2023 for Holder to meet the “live” requirement. Should Holder not meet the “live” requirement by December 31, 2023, then Borrower shall return all RoRa Coins and Holder shall release all claims on any shares or Convertible Promissory Note, Conversion rights shall not vest until such time as the holder’s consideration, Coins are live on a U.S. Exchange and available through a mutually agreed upon cryptocurrency wallet. Subsequent to the Coins live date and before the holder coverts the Note, should the Company issue any dilutive security, the conversion price will be reduced to the price of the dilutive issuance. The Note includes customary events of default, including, among other things, payment defaults, covenant breaches, certain representations and warranties, certain events of bankruptcy, liquidation and suspension of the Company’s Common Stock from trading. If such an event of default occurs, the holders of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note as described above.
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting.
Promissory Debenture
On February 15, 2020, the Company entered into Promissory Agreement and Convertible Debentures (“Promissory Debentures”) with Emry for a principal sum of $70,000 (which was paid in two tranches: $50,000, paid on February 15, 2020, and $20,000, paid in April 2020). The Promissory Debentures bear interest, both before and after default, at 15% per month, calculated and compounded monthly. At the election of the holder, at any time during the period between the date of issuance and the one year anniversary of the Promissory Debentures, the Promissory Debentures are convertible into shares of the Company’s common stock at a conversion price of $0.001 per share. In addition, the Promissory Debentures provide for an interest equal to 15% of TNRG annual sales, payable on the 2nd day following the date of issuance of the Company’s audited financial statements.
On June 24, 2020, Emry, holder of (i) Promissory Debentures in principal amount of $70,000 dated February 15, 2020, and (ii) that certain convertible promissory note in principal amount of $85,766 dated April 22, 2019, sold 50% of each (Promissory Debentures and convertible promissory note), including accrued and unpaid interest, fees and penalties, in separate transactions to third party companies, SP11 Capital Investments and E.L.S.R. CORP, Florida companies, such that SP11 Capital Investments and E.L.S.R. CORP each hold 50% of each respective debt instrument.
On October 4, 2020, SP11 converted $35,000 of its Promissory Debentures at $0.01 per share into 3,500,000 shares of the Company’s common stock.
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Investment in WC Mine Holdings
On September 8, 2022, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matures on October 31, 2022 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Company’s Regulation A II Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to convert the Coins on or before October 31, 2022 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on October 31, 2022. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as part of the Regulation A filing.
On November 1, 2022, the Company and Fourth & One mutually agreed to terminate the Agreement and the Company was released from any obligations.
On January 5, 2023, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. In exchange, the Company issued Fourth & One a promissory note of $4,000,000 and 2,000 RoRa Prime digital coins (“Coins”), valued at $1,450,000. The promissory note provides for no interest and matured on March 31, 2023 (“Maturity Date”). In addition, the promissory note provides that the Company may convert all amounts at any time prior to the Maturity Date and after gaining approval by the Securities and Exchange Commission of the Company’s Regulation A II $5.00 per share Offering and Fourth & One may convert all amounts into common stock prior to the Maturity Date at a conversion price of $2.00 per share. The Agreement also provides that should Fourth & One not be able to convert the Coins on or before June 1, 2023 at a conversion ratio of $800 per Coin, the Company will purchase all of the Coins for a total of $1,600,000 (2,000 Coins at $800 per Coin) on June 1, 2023. The Company is currently in discussions with Fourth & One to convert the promissory note into the Company’s common stock. The expectation is that the conversion will take place as part of the Regulation A filing.
Sponsorship Agreement
On December 15, 2022, the Company entered into a Joint Marketing and Advertising Agreement with the Las Vegas Aces (“Aces”) professional Women’s basketball team. The Aces shall provide the Company branding, digital advertising, and partner marketing and advertising for payments totaling $875,000, $901,250, and $928,288 for the years 2023, 2024, and 2025, respectively. The agreement is effective December 15, 2022 through December 31, 2025, with an option to extend for an additional two years, unless terminated sooner. During the three months ended March 31, 2023 and 2022, the Company made no payments to the Aces with a balance due of $243,438 and $36,745 as of March 31, 2023 and December 31, 2022, respectively.
Financing Engagement Agreement
On August 25, 2022, the Company entered into a Legal Services Agreement with The George Law Group in connection with an issuance of multi-tranched securitization (“Financing”) which shall utilize a pledge of the Company’s stock and other properties currently owned or under the Company’s control. The legal fee shall be one-half of one percent (0.5%) of the par amount of any Financing. The Company has paid a retainer of $21,000 during the three months ended March 31, 2023 with a prepaid balance of $63,000 and $42,000 as of March 31, 2023 and December 31, 2022, respectively.
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Employment Agreements
On March 1, 2022, as amended on October 1, 2022 and December 28, 2022, Mr. Ricardo Haynes, the Company’s sole Director, Chief Executive Officer (“CEO”) and Chairman of the Board, and the acting sole officer of the Company entered into an Employment Agreement with the Company. The Employment agreement terminates September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, Mr. Haynes is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under this Employment agreement, the CEO will be entitled to the following:
| · | $5,700 for services performed from March 1, 2022 – June 30, 2022. | |
| · | Lump Sum payment of $21,299 for services from July 1, 2022 – December 31, 2022. | |
| · | Base salary of $11,000 per month paid on a bi-weekly basis starting January 2, 2023. | |
| · | Bonus of $14,201 was paid in November and December 2022. | |
| · | Automobile allowance of $1,500 per month starting January 2, 2023. | |
| · | 25,000,000 shares of TNRG common stock in the Company which vest immediately. | |
| · | 7,500,000 newly issued Preferred A shares of TNRG stock CUSIP (88604Y209) Cert No. 400002. | |
| · | 750 newly issued Preferred B shares of TNRG stock CUSIP (88604Y209), Cert. No. 500002. | |
| · | 1,500 newly issued Preferred C shares of TNRG stock CUSIP (8860Y209), Cert No. 600002. | |
| · | $7,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| · | 1,500 RoRa Coins in possession of the Company. |
On October 1, 2022, the Company entered into Employment Agreements with individuals for positions in the Company. Each of the Employment agreements shall begin October 1, 2022 and terminate September 30, 2027 and automatically renews on a year-to-year basis unless terminated by either party on six months’ notice. In addition, each employee is entitled to employee reimbursements totaling $820 per month, entitled to six (6) weeks paid vacation each year, provides for medical and dental insurance, and entitled to stock options upon the implementation of a Company employee option plan. Under these Employment agreements, each employee will be entitled to the following:
| · | Ms. Tori White, Director Real Estate Development. |
| ○ | $24,000 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 4,800 RoRa Coins in possession of the Company. |
| · | Mr. Eric Collins, Chairman and Chief Operations Officer. |
| ○ | $12,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 2,500 RoRa Coins in possession of the Company. |
| · | Mr. Donald Keer, Corporate Counsel |
| ○ | $3,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 700 RoRa Coins in possession of the Company. |
| · | Mr. Lance Lehr, Chief Operating Officer |
| ○ | $2,500 loan forgiveness cancelling debt used for the acquisition of shares in the Company. | |
| ○ | 500 RoRa Coins in possession of the Company. |
The Company had been in discussions with the Shareholders for repayment by them of the Acquisition of Preferred Shares and finalized the Employment Agreements on October 1, 2022 for positions in the Company. As a result, the Company recorded the purchase price payable by these employees as compensation on March 1, 2022 (see Note 1).
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Consulting Agreements
On April 6, 2022, as amended on December 2, 2022, the Company entered into a Consulting Agreement with Top Flight Development, LLC (“Top Flight”), an entity controlled by the father of the Company’s Director Real Estate Development, to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $400 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, Top Flight will be entitled to the following:
| 1. | Up to 50,000,000 common shares and $6,000,000 as bonuses based on the goals outlined in the agreement as follows: | ||
| · | a total of 5,000,000 common shares issued on December 15, 2022, valued at $1,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $400,000 resulting from the Company’s execution of the Joint Marketing and Advertising Agreement with the Las Vegas Aces professional Women’s basketball team. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022. | ||
| · | a total of 12,000,000 common shares issued on January 5, 2023, valued at $1,140,000 (based on the Company’s stock price on the date of issuance), vesting immediately, and a bonus of $1,200,000 resulting from the Company’s investment in Kinsley Mountain mineral, resources, and water rights. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022The shares and the bonus are included under prepaid expenses and other assets in the Consolidated Balance Sheets at March 31, 2023. | ||
| · | a total of 28,000,000 common shares, vesting immediately, and a bonus of $2,800,000 resulting from the activation of the $40,000,000 RoRa coins on a recognized exchange which is expected to occur in June 2023. | ||
| · | a total of 5,000,000 common shares, vesting immediately, and a bonus of $1,600,000 resulting from the Company’s investment and promotion of Bear Village Resort’s facilities in Tennessee and Georgia which is expected to occur in July 2023. | ||
| 2. | Shall be paid $21,000 per month beginning May 2022 increasing to $25,000 per month beginning January 2023. | ||
| 3. | Additional awards may be made at the Company’s discretion based on other strategic goals. There were no additional awards granted for the three months ended March 31, 2023. | ||
During the three months ended March 31, 2023 and 2022, the Company paid Top Flight $245,000 ($75,000 for monthly consulting services and $170,000 for goals based bonus) and $0, respectively, with a balance due of $1,277,000 and $247,000 as of March 31, 2023 and December 31, 2022, respectively.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 5,000,000 common shares, valued at $150,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
On April 6, 2022, the Company entered into a Consulting Agreement with a third party to provide consulting services to the Company. The consulting agreement is in effect until the Company is profitable with a balance sheet of over $200 million or thirty-six (36) months, whichever is longer. Under this consulting agreement, the third party will be entitled to a total of 2,000,000 common shares, valued at $60,000 (based on the Company’s stock price on the date of issuance) and vesting immediately. In February 2023, these shares were converted to Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the Company’s common stock. The shares are included under Common stock to be issued in the Statement of Changes in Shareholders’ Deficit at December 31, 2022.
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Off-Balance Sheet Arrangements
We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Inflation
We do not believe that inflation has had a material effect on our results of operations.
Item 3. Quantitative and Qualitative DisclosuresDisclosure About Market Risk.
We areThe registrant qualifies as a Smaller Reporting Companysmaller reporting company, as defined by SEC Rule 12b-2 of the Securities Exchange Act of 1934229.10(f)(1) and areis not required to provide the information underrequired by this item.Item.
Item 4. Controls and ProceduresProcedures..
(a) Management’s Conclusions Regarding EffectivenessEvaluation of Disclosure Controls and Procedures.Procedures
The management of the Company is responsible for establishingWe maintain disclosure controls and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designedprocedures (as defined in Rule 13a-l5(e) under the supervision ofExchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the Company’s Chief Executivetime period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chairman and Principal Accounting Officer, and Chief Financial Officeras appropriate, to provide reasonable assuranceallow timely decisions regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.required disclosure.
With respect to the period ending September 30, 2017,Our management, under the supervision and with the participation of our management, we conducted an evaluation ofChairman and Principal Accounting Officer, has evaluated the effectiveness of the design and operations of our disclosure controls and procedures as defined in SEC Rules 13a-15(e) and 15d-15(e) promulgated underas of the Securities Exchange Actend of 1934.the period covered by this report. Based on such evaluation, management identified deficiencies that were determined to be a material weakness.
Based upon our evaluation regarding the period ending September 30, 2017, the Company’s management, including its Principal Executive Officer and PrincipalManagement’s Report on Internal Controls over Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Material weaknesses noted are lack of an audit committee, lack of a majority of outside directors on the board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and management is dominated by two individuals, without adequate compensating controls. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.Reporting
The Company’s disclosure controlsmanagement is responsible for establishing and procedures are designedmaintaining effective internal control over financial reporting (as defined in Rule 13a-l5(f) of the Securities Exchange Act). Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013). Based on that assessment, management believes that, as of March 31, 2023, the Company’s internal control over financial reporting was ineffective based on the COSO criteria, due to provide reasonable assurance of achieving their objectives. However,the following material weaknesses listed below.
The specific material weaknesses identified by the Company’s management including its Principal Executive Officeras of end of the period covered by this report include the following:
| · | we have not performed a risk assessment and mapped our processes to control objectives; |
| · | we have not implemented comprehensive entity-level internal controls; |
| · | we have not implemented adequate system and manual controls. As such, there was inadequate cross functional review of the debt agreements; and |
| · | we do not have sufficient segregation of duties. As such, the officers approve their own related business expense reimbursements. | |
| · | At this time, we do not have a quailed financial expert on our board because we have not been able to hire a qualified candidate. |
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Despite the material weaknesses reported above, our management believes that our consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and Principal Financial Officer,cash flows for the periods presented and that this report does not expectcontain any untrue statement of a material fact or omit to state a material fact necessary to make the statements, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Commission that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, canpermit us to provide only reasonable,management’s report in this report.
Management's Remediation Plan
The weaknesses and their related risks are not absolute, assurance that the objectivesuncommon in a company of our size because of the control system are met. Further,limitations in the size and number of staff. Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible.
However, we plan to take steps to enhance and improve the design of aour internal control system must reflectover financial reporting. During the fact that there are resource constraints, andperiod covered by this quarterly report on Form 10-Q, we have not been able to remediate the benefit of controls mustmaterial weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes in the current fiscal year as resources allow:
| (i) | appoint additional qualified personnel to address inadequate segregation of duties and implement modifications to our financial controls to address such inadequacies. | |
| (ii) | appoint a quailed financial expert to our board to address inadequate segregation of duties and financial controls. |
The remediation efforts set out herein will be considered relative to their costs.implemented in the current 2023 fiscal year. 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 the Companyour company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
(b) Management believes that despite our material weaknesses set forth above, our consolidated financial statements for the quarter ended March 31, 2023 are fairly stated, in all material respects, in accordance with U.S. GAAP.
Changes in Internal Controls.Control over Financial Reporting
There have been no changes in the Company’sour internal control over financial reporting during the periodquarter ended September 30, 2017March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’sour internal controlscontrol over financial reporting.
For a full discussion of controls and procedures refer to Item 9A, Controls and Procedures, in our 2016 Annual Report on Form 10-K.
Part II. Other InformationPART II – OTHER INFORMATION
ItemITEM 1. Legal Proceedings.LEGAL PROCEEDINGS.
None.From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. To the best our knowledge, none of our directors, officers or affiliates is involved in a legal proceeding adverse to our business or has a material interest adverse to our business.
ItemITEM 1A. Risk FactorsRISK FACTORS.
We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ItemITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During February and March 2023, holders of 64,000,000 shares of common stock (57,000,000 shares from related parties and 7,000,000 shares from third parties) elected to exchange these shares for an aggregate of 64,000 shares of Series B Convertible Preferred Stock. Each Series B Convertible Preferred Share is entitled to one thousand (1,000) votes and converts into one thousand (1,000) shares of the period ending September 30, 2017,Company’s common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
As of May 15, 2023, the Company has not repaid fifty convertible notes totaling $487,100 and these convertible notes are now in default. The Company is currently in discussions with the note holders to convert the April 2022 Notes into the Company’s common stock upon the Company’s Regulation A being declared effective.
ITEM 4. MINE SAFETY DISCLOSURE.
On January 5, 2023, the Company entered into a Membership Interest Purchase Agreement (“Agreement”) with Fourth & One, LLC (“Fourth & One”) with respect to the sale and transfer of 51.5% of Fourth & One’s interest in WC Mine Holdings, LLC (“WCMH”) giving the Company a 30.9% ownership in WCMH for consideration totaling $5,450,000 for the Kinsley Mountain mineral, resources, and water rights. TNRG recently engaged three licensed geologists to assess the preliminary value of the minerals at Kinsley Mountain on the 4 patented and 98 unpatented claims by drone surveillance, a small collection of surface samples and historical information at Kinsley Mountain and neighboring geological formations. The Kinsley project is located in the saleKinsley Mountains in Elko and White Pine counties, northeastern Nevada, approximately 150 kilometers northeast of its unregistered securities as described below. The sharesEly, Nevada, and 83 kilometers southwest of our common stock were issued pursuantWest Wendover, Nevada. Access is via paved U.S. Highway Alternate 93 to an exemption from registration in Section 4(a)(2)approximately 65 kilometers southwest of the Securities Acttown of 1933. These shares of our common stock qualifiedWest Wendover, Nevada, and then south for exemption under Section 4(a)(2)18 kilometers on an improved gravel road, known as the Kinsley Mountain mine road, to the project site. The approximate geographic center of the Kinsley project is 40° 09′ N latitude and 114° 20′ W longitude.
Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Section 1503(a)”) requires the Company to present certain information regarding mining safety in its periodic reports filed with the Securities Act of 1933 since the issuance of shares by us did not involve a public offering. and Exchange Commission.
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The offering was not a “public offering” as defined in Section 4(a)(2) duefollowing table reflects citations, orders and notices issued to the insubstantial number of persons involved inCompany and Fourth and One by MSHA during the deal, size of the offering, manner of the offeringthree months ended March 31, 2023 (the “Reporting Period”) and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, these shareholders had necessary investment intentcontains certain additional information as required by Section 4(a)(2) since they agreed to receive shares certificates bearing a legend stating1503(a) and Item 104 of Regulation S-K, including information regarding mining-related fatalities, proposed assessments from MSHA and legal actions (“Legal Actions”) before the Federal Mine Safety and Health Review Commission, an independent adjudicative agency that such shares are restricted pursuant to Rule 144provides administrative trial and appellate review of legal disputes arising under the 1933Mine Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” All shareholders are “sophisticated investors” and are family members, friends or business acquaintances of our officers and directors. Based on an analysis of the above factors, we believe we have met the requirements to qualify for exemption under section 4(a)(2) of the Securities Act of 1933 for this transaction.
DuringIncluded below is the nine months ended September 30, 2017,information required by Section 1503(a) with respect to the Company issued 8,852,196 shares to a non-related partyberyllium mining complex (MSHA Identification Number 4200706) for cash and services, recorded at the fair market value of the share price, in the amount of $199,514. During the nine months ended September 30, 2017 the Company issued 16,530,769 shares to related parties for accrued compensation, recorded at a fair market value of $991,846. Additional shares of our common stock were issued at fair market value of the share price as set forth in the table below.Reporting Period:
Date Name Shares Fair Market Value Amount 01/10/17 L. Quick 5,000 0.25 1,250 01/24/17 Dawn Hickman 3,000 0.26 780 01/24/17 Donald James 5,000 0.26 1,300 01/27/17 M Haberlin 36,000 0.28 10,080 02/13/17 Bhalekar A. Achyut 10,000 0.21 2,100 03/06/17 JGR Capital 10,000 0.30 3,000 4/12/17 Simone Geghella 50,000 0.15 7,500 4/12/17 Brian Keith Buckley 100,000 0.15 15,000 5/9/17 Simone Geghella 50,000 0.08 4,000 5/9/17 Errol Rosario 20,000 0.08 1,600 6/5/17 Timothy Scott 100,000 0.10 10,000 6/8/17 Ruggero Santilli 11,807,692 0.06 708,461 6/8/17 Carla Santilli 4,723,077 0.06 283,385 07/07/17 Fenomen 21 120,196 0.07 8,413.72 07/14/17 Brian Buckley 150,000 0.09 13,500.00 09/07/17 La Dolce Vita Trust 800,000 0.01 8,000.00 09/07/17 Jerry Grissaffi 800,000 0.01 8,000.00 09/07/17 Kenneth Radcliffe 1,600,000 0.01 16,000.00 09/07/17 Dennis Radcliffe 1,600,000 0.01 16,000.00 09/07/17 Anna Galo 600,000 0.01 6,000.00 09/07/17 John Garrison 1,000,000 0.01 10,000.00 09/07/17 Phil Uhrik 1,600,000 0.01 16,000.00
| Responses | |||
| (A) | Total number of alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard under Section 104 of the Mine Act for which the Company and Fourth and One received a citation from MSHA | 0 | |
| (B) | Total number of orders issued under Section 104(b) of the Mine Act | 0 | |
| (C) | Total number of citations and orders for alleged unwarrantable failure by the Company and Fourth and One to comply with mandatory health or safety standards under Section 104(d) of the Mine Act | 0 | |
| (D) | Total number of alleged flagrant violations under Section 110(b)(2) of the Mine Act | 0 | |
| (E) | Total number of imminent danger orders issued under Section 107(a) of the Mine Act | 0 | |
| (F) | Total dollar value of proposed assessments from MSHA under the Mine Act | $0 | |
| (G) | Total number of mining-related fatalities | 0 | |
| (H) | Received notice from MSHA of a pattern of violations under Section 104(e) of the Mine Act | No | |
| (I) | Received notice from MSHA of the potential to have a pattern of violations under Section 104(e) of the Mine Act | No | |
| (J) | Total number of Legal Actions pending as of the last day of the Reporting Period | 0 | |
| (K) | Total number of Legal Actions instituted during the Reporting Period | 0 | |
| (L) | Total number of Legal Actions resolved during the Reporting Period | 0 |
Item 3. Defaults Upon Senior SecuritiesITEM 5. OTHER INFORMATION.
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
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Item 6. Exhibits, Financial Statement Schedule.
| Exhibit Number and Description | Location Reference | ||||
(a) | Financial Statements | Filed herewith | |||
(b) | Exhibits required by Item 601, Regulation S-K; | ||||
(3.0) | Articles of Incorporation | ||||
Initial Articles of Incorporation filed with Form 10 Registration Statement on July 21, 2011 | See Exhibit Key | ||||
See Exhibit Key | |||||
Amendment to Articles of Incorporation dated October 7, 2013 | See Exhibit Key | ||||
(3.4) | See Exhibit Key | ||||
Bylaws filed with Form 10 Registration Statement on July 21, | See Exhibit Key | ||||
| See Exhibit Key | ||||
| (11.1) | Statement re: computation of per share | Note 3 to Financial Stmts. | |||
| (14.1) | See Exhibit Key | ||||
Filed herewith | |||||
Filed herewith | |||||
(101.INS) | XBRL Instance Document | Filed herewith | |||
(101.SCH) | XBRL Taxonomy Ext. Schema Document | Filed herewith | |||
(101.CAL) | XBRL Taxonomy Ext. Calculation Linkbase Document | Filed herewith | |||
(101.DEF) | XBRL Taxonomy Ext. Definition Linkbase Document | Filed herewith | |||
(101.LAB) | XBRL Taxonomy Ext. Label Linkbase Document | Filed herewith | |||
(101.PRE) | XBRL Taxonomy Ext. Presentation Linkbase Document | Filed herewith | |||
Exhibit Key
Exhibit Key
3.1 | Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011. | |
| 3.2 | ||
| Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 15, 2013. | |
| 3.3 | ||
| Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on November 15, 2013. | |
| 3.4 | ||
| Incorporated by reference herein to the Company’s Form | |
| 3.5 | ||
| Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on July 21, 2011. | |
| 10.0 | Incorporated by reference herein to the Company’s Form S-1 Registration Statement filed with the Securities and Exchange Commission on March 2, 2018. | |
14.0 | Incorporated by reference herein to the Company’s Form 10-Q Quarterly Report filed with the Securities and Exchange Commission on January 17, 2012. |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THUNDER ENERGIES CORPORATION
NAME | TITLE | DATE | ||
/s/ | Principal Executive Officer, Principal Accounting Officer, Chairman of the Board of Directors |
| ||
|
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Which Have Not Registered Securities Pursuant to Section 12 of the Act
None.
| 62 |