UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
x ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2017May 31, 2021
OR
¨ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission File No. 000-55383
|
(Exact name of registrant as specified in its charter) |
Nevada |
| 46-2876282 |
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
32932 Pacific Coast Highway, #14-254
Dana Point, California 92629
(Address (Address of principal executive offices, zip code)
(949) 933-5411
(Registrant’s telephone number, including area code)
(Former (Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒ No o☐
Indicate by check mark 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 Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o ☒ No x☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer |
| Accelerated filer |
|
Non-accelerated filer |
| Smaller reporting company |
|
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes o ☐ No x
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o
APPLICABLE ONLY TO CORPORATE ISSUERS☒
As of January 12, 2018,July 1, 2021, there were 6,017,40634,874,605 shares of common stock, $0.001 par value per share, outstanding.
FAIRWIND ENERGY INC.AGENTIX CORP.
(A Development Stage Company)
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED NOVEMBER 30, 2017MAY 31, 2021
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2 |
Table of Contents |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of FairWind Energy Inc.Agentix Corp., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of oil and gas prices, the possibility that equipment development efforts will not produces equipment that prospective customers want to purchase,ongoing coronavirus pandemic, the Company’s need for and ability to obtain additional financing, product demand, market and customer acceptance, competition, pricing and development difficulties, as well as general industry and market conditions and growth rates, general economic conditions, and other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
3 |
Table of Contents |
FairWind Energy, Inc.Agentix Corp.
Consolidated Balance Sheets
|
|
|
|
| From Inception |
| ||
|
|
|
|
| (April 15, 2020) to |
| ||
|
| May 31, 2021 |
|
| August 31, 2020 |
| ||
|
| (Unaudited) |
|
|
|
| ||
Assets |
|
|
|
|
|
| ||
Current Assets |
|
|
|
|
|
| ||
Cash |
| $ | 7,808 |
|
| $ | 242,750 |
|
Inventory |
|
| 50,000 |
|
|
| - |
|
Prepayment |
|
| - |
|
|
| 50,000 |
|
Total current assets |
|
| 57,808 |
|
|
| 292,750 |
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | 57,808 |
|
| $ | 292,750 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 270,914 |
|
| $ | 41,318 |
|
Accounts payable - related party |
|
| 99,103 |
|
|
| 27,870 |
|
Accrued expenses |
|
| 100 |
|
|
| 100 |
|
Total current liabilities |
|
| 370,117 |
|
|
| 69,288 |
|
|
|
|
|
|
|
|
|
|
Long Term Liabilities |
|
| - |
|
|
| - |
|
Total liabilities |
|
| 370,117 |
|
|
| 69,288 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
Common stock par value $0.001: 50,000,000 shares authorized; |
|
|
|
|
|
|
|
|
34,874,605 and 34,489,605 shares issued and outstanding as of May 31, 2021 (unaudited) and August 31, 2020, respectively |
|
| 34,875 |
|
|
| 34,490 |
|
Common stock to be issued (520,000 shares) |
|
| 180,000 |
|
|
| - |
|
Additional paid-in capital |
|
| 933,648 |
|
|
| 552,883 |
|
Accumulated deficit |
|
| (1,460,832 | ) |
|
| (363,911 | ) |
Total stockholders’ (deficit) equity |
|
| (312,309 | ) |
|
| 223,462 |
|
Total liabilities and stockholders’ (deficit) equity |
| $ | 57,808 |
|
| $ | 292,750 |
|
November 30, 2017 August 31, 2017 (Unaudited) Assets Current Assets Cash Total current assets Note and Accrued Interest Receivable Note and accrued interest receivable Allowance for doubtful accounts Note and accrued interest receivable, net Computer Equipment Computer equipment Accumulated depreciation Computer equipment, net Total assets Liabilities and Stockholders' Deficit Current Liabilities Accounts payable - related party Accrued expenses Total current liabilities Long Term Liabilities Convertible note payable, net of unamortized discount Convertible note payable, related-party, net of unamortized discount Total long term liabilities Total liabilities Stockholders' Deficit Preferred stock par value $0.001: 25,000,000 shares authorized; 0 shares issued or outstanding Common stock par value $0.001: 50,000,000 shares authorized; 6,017,406 and 6,017,406 shares issued and outstanding, respectively Additional paid-in capital Accumulated deficit Total stockholders' deficit Total liabilities and stockholders' deficit $ 6,527 $ 3,688 6,527 3,688 10,226 10,226 (7,226 ) (7,226 ) 3,000 3,000 1,328 1,328 (990 ) (924 ) 338 404 $ 9,865 $ 7,092 $ 3,202 $ 3,137 1,841 1,606 5,043 4,743 15,898 13,011 66,747 54,419 82,645 67,430 87,688 72,173 - - 6,017 6,017 1,057,890 1,037,890 (1,141,730 ) (1,108,988 ) (77,823 ) (65,081 ) $ 9,865 $ 7,092
See accompanying notes to the unaudited consolidated financial statements.
Table of Contents |
Unaudited Consolidated Statement of Operations
|
| For the Three |
|
| From Inception |
|
| Nine Months |
| |||
|
| Months Ended |
|
| (April 15, 2020) to |
|
| Ended |
| |||
|
| May 31, 2021 |
|
| May 31, 2020 |
|
| May 31, 2021 |
| |||
|
| (Unaudited) |
|
| (Unaudited) |
|
| (Unaudited) |
| |||
|
|
|
|
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| |||
Revenue |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees |
|
| 98,132 |
|
|
| - |
|
|
| 794,599 |
|
Research and development |
|
| 57,500 |
|
|
| - |
|
|
| 251,220 |
|
General and administrative expenses |
|
| 17,609 |
|
|
| - |
|
|
| 51,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
| 173,242 |
|
|
| - |
|
|
| 1,096,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
| (173,242 | ) |
|
| - |
|
|
| (1,096,926 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
| - |
|
|
| - |
|
|
| (5 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before Income Tax Provision |
|
| (173,242 | ) |
|
| - |
|
|
| (1,096,921 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Provision |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | (173,242 | ) |
| $ | - |
|
| $ | (1,096,921 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and Diluted |
| $ | (0.00 | ) |
| $ | - |
|
| $ | (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
- Basic and Diluted |
|
| 34,874,605 |
|
|
| - |
|
|
| 34,687,767 |
|
Statements of Operations
For the Three For the Three Months Ended Months Ended �� November 30, 2017 November 30, 2016 (Unaudited) (Unaudited) Operating Expenses Professional fees Salary and wages - officers General and administrative expenses Total operating expenses Loss from Operations Other Expense Loss on fair value of derivative instruments Interest expense, net Other expense, net Loss before Income Tax Provision Net Loss Loss per share Weighted average common shares outstanding 5,565 63,805 20,000 20,053 116 7,922 25,681 91,780 (25,681 ) (91,780 ) - 36,652 7,061 1,811 7,061 38,463 (32,742 ) (130,243 ) $ (32,742 ) $ (130,243 ) - Basic and Diluted $ (0.01 ) $ (0.02 ) - Basic and Diluted 6,017,406 6,017,406
See accompanying notes to the unaudited consolidated financial statements.
Table of Contents |
FairWind Energy, Inc.Agentix Corp.
Unaudited Consolidated Statement of Changes in Stockholders’ Equity
For the Nine Months Ended May 31, 2021 and For the Period April 15, 2020 (Inception) to May 31, 2020
Statements of Cash Flows
|
| Common stock par value $0.001 |
|
| Common |
|
| Additional |
|
|
|
|
| Total |
| |||||||||
|
| Number of Shares |
|
| Amount |
|
| Stock to be Issued |
|
| Paid-in Capital |
|
| Accumulated Deficit |
|
| Stockholders’ Deficit |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance, August 31, 2020 |
|
| 34,489,605 |
|
| $ | 34,490 |
|
| $ | - |
|
| $ | 552,883 |
|
| $ | (363,911 | ) |
| $ | 223,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (216,713 | ) |
|
| (216,713 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2020 (unaudited) |
|
| 34,489,605 |
|
|
| 34,490 |
|
|
| - |
|
|
| 552,883 |
|
|
| (580,624 | ) |
|
| 6,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash |
|
|
|
|
|
|
|
|
|
| 80,000 |
|
|
|
|
|
|
|
|
|
|
| 80,000 |
|
Common stock issued to consultant |
|
| 385,000 |
|
|
| 385 |
|
|
|
|
|
|
| 380,765 |
|
|
|
|
|
|
| 381,150 |
|
Net Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (706,966 | ) |
|
| (706,966 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, February 28, 2021 (unaudited) |
|
| 34,874,605 |
|
| $ | 34,875 |
|
| $ | 80,000 |
|
| $ | 933,648 |
|
| $ | (1,287,590 | ) |
| $ | (239,067 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash |
|
|
|
|
|
|
|
|
|
| 100,000 |
|
|
|
|
|
|
|
|
|
|
| 100,000 |
|
Net Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (173,242 | ) |
|
| (173,242 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2021 (unaudited) |
|
| 34,874,605 |
|
| $ | 34,875 |
|
| $ | 180,000 |
|
| $ | 933,648 |
|
| $ | (1,460,832 | ) |
| $ | (312,309 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 15, 2020 (Inception) (unaudited) |
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2020 (unaudited) |
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
For the Three For the Three Months Ended Months Ended November 30, 2017 November 30, 2016 (Unaudited) (Unaudited) Cash Flows from Operating Activities Net loss Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of derivative liabilties Depreciation expense Amortization of debt discount Common shares issued for services and warrant expense Changes in operating assets and liabilities: Accounts payable and accounts payable - related party Accrued expenses Net Cash Used in Operating Activities Cash Flows from Investing Activities Issuance of notes receivable Net Cash Used in Investing Activities Cash Flows from Financing Activities Proceeds from convertible notes payable, related parties Net Cash Provided by Financing Activities Net Change in Cash Cash - beginning of reporting period Cash - end of reporting period Supplemental disclosure of cash flow information: Interest paid Non Cash Financing and Investing Activities Capital contribution related to salaries waived Reclassification of tainted warrants to derivative liabilty Recognition of derivative discount $ (32,742 ) $ (130,243 ) - 36,652 66 66 5,215 1,811 - 52,149 65 (939 ) 20,235 20,000 (7,161 ) (20,504 ) - (10,000 ) - (10,000 ) 10,000 45,000 10,000 45,000 2,839 14,496 3,688 619 $ 6,527 $ 15,115 $ 1,611 $ - $ 20,000 $ 20,000 $ - $ 87,493 $ - $ 31,190
See accompanying notes to the unaudited consolidated financial statements.
Table of Contents |
Unaudited Consolidated Statement of Cash Flows
|
| Nine Months |
|
| April 15, 2020 (Inception) |
| ||
|
| May 31, 2021 |
|
| to May 31, 2020 |
| ||
|
| (Unaudited) |
|
| (Unaudited) |
| ||
|
|
|
|
|
|
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
Net loss |
| $ | (1,096,921 | ) |
| $ | - |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock issued for services |
|
| 381,150 |
|
|
| - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Inventory |
|
| (50,000 | ) |
|
| - |
|
Prepayments and other current assets |
|
| 50,000 |
|
|
| - |
|
Accounts payable and accounts payable - related party |
|
| 300,829 |
|
|
| - |
|
Net Cash Used in Operating Activities |
|
| (414,942 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
| 180,000 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities |
|
| 180,000 |
|
|
| - |
|
Net Change in Cash |
|
| (234,942 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash - beginning of reporting period |
|
| 242,750 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash - end of reporting period |
| $ | 7,808 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
| $ | - |
|
| $ | - |
|
Income tax paid |
| $ | - |
|
| $ | - |
|
See accompanying notes to the unaudited consolidated financial statements.
F-4 |
Table of Contents |
FairWind Energy, Inc.Agentix Corp.
November 30, 2017 and 2016
Notes to the Unaudited Consolidated Financial Statements
(Unaudited)For the Nine Months Ended May 31, 2021
Note 1 - Organization and OperationsBasis of Presentation
FairWind Energy, Inc.Description of the Company
FairWind Energy, Inc. (the "Company"“Company”, “Fairwind Energy”) was incorporated on April 18, 2013 under the laws of the State of Nevada. Effective June 17, 2019, the Company changed its name to Agentix Corp. The Company engages in composite design, engineeringis focused on the development of synthetic agonists, inverse agonists and manufacturing to be used in solar/wind hybrid power systems, oilantagonists which modulate the endocannabinoid system (ECS). The ECS is a network of G-protein coupled receptors (GPCRs) that help regulate a variety of metabolic and gas industry pumping and civil engineering and infrastructure products.neurotransmission functions.
Note 2 - SignificantMerger
On May 28, 2020, the Company, entered into a Share Exchange Agreement (the “Share Exchange Agreement”), by and Critical Accounting Policiesamong the Company, and PracticesGSL Healthcare, Inc., a Nevada corporation (“GSL Healthcare”), and the holders of common stock of GSL Healthcare, which consisted of two stockholders. The closing date occurred on June 1, 2020.
Under the terms and conditions of the Share Exchange Agreement, the Company offered and sold 27,932,271 shares of common stock of the Company in consideration for all of the issued and outstanding shares of common stock of GSL Healthcare. The effect of the issuance is that former GSL Healthcare shareholders hold approximately 88.0% of the then issued shares of common stock of the Company, and GSL Healthcare is a wholly-owned subsidiary of the Company.
The management ofmerger between the Company is responsibleand GSL Healthcare was treated as a reverse capitalization for financial statement reporting purposes with GSL Healthcare deemed the selection and use of appropriate accounting policiesacquirer and the appropriateness ofCompany deemed the accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company's financial conditionacquiree. Accordingly, GSL Healthcare’ assets, liabilities and results and require management's most difficult, subjective, or complex judgments, often as a result of operations became the need to make estimates about the effects of matters that are inherently uncertain. The Company's significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.
Basis of Presentation
The accompanying financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and with the rules and regulations of the United States Securities and Exchange Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the auditedhistorical financial statements of the Company forCompany. Prior to the reporting period ended August 31, 2017 and notes thereto contained inShare Exchange, 3,806,613 shares of the Company’s Annual Report on Form 10-K.then outstanding common stock remained outstanding as part of this merger.
Note 3 – Going Concern
The Company'sCompany’s unaudited consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the unaudited consolidated financial statements, the Company had an accumulated deficit at November 30, 2017,on May 31, 2021, a net loss, and net cash used in operating activities for the three months then ended.activities. These factors raise substantial doubt about the Company'sCompany’s ability to continue as a going concern.
The Company is attempting to commence operations and generate sufficient revenue; however, the Company'sCompany’s cash position mayis not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.
The unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4 – Related Party TransactionsPrinciples of Consolidation
The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, GSL Healthcare, Inc., a 100% owned entity. Intercompany transactions and balances have been eliminated in consolidation.
Note 2 - Significant and Critical Accounting Policies and Practices
Free Office SpaceBasis of Presentation
The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the audited financial statements of the Company for the reporting period ended August 31, 2020 and notes thereto contained in the Company’s Annual Report on Form 10-K.
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Agentix Corp.
Notes to the Unaudited Consolidated Financial Statements
For the Nine Months Ended May 31, 2021
Fair Value of Financial Instruments
The Company has been provided office spacefollows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Michael Winterhalter, Chief Executive Officer,Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at no cost.least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. The Company’s equity investments are considered Level 3, as pricing inputs are generally unobservable and not corroborated by market data.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined principally on a first-in-first-out average cost basis. Inventories consist of finished goods held for sale. Management determinedregularly reviews inventory quantities on-hand and records an inventory provision for excess or obsolete inventory based on the future expected demand for products. Inventory write-downs are measured as the difference between the cost of the inventory and market value, based upon assumptions about future demand that such cost is nominal andare inherently difficult to assess. During the nine months ended May 31, 2021, the Company did not recognize the rent expense in its financial statement.record a provision for excess or obsolete inventory.
Convertible Prepayment
As of August 31, 2020, the Company recorded a $50,000 payment as a deposit for inventory, which was reflected in the Company’s balance sheet as Prepayment.
Investments
The Company follows ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 primarily affects equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Among other things, this guidance requires certain equity investments to be measured at fair value with changes in fair value recognized in net income. As such, the Company measures its equity investments at their fair value at end of each reporting period.
Investments accounted for under the equity method or cost method of accounting above are included in the caption “Equity investments” on the Balance Sheet. Management uses Level 3 inputs, as defined in paragraph 820-10-35-37 of the FASB Accounting Standards Codification, to measure the fair value of its financial instruments.
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Agentix Corp.
Notes to the Unaudited Consolidated Financial Statements
For the Nine Months Ended May 31, 2021
The changes in carrying amount of the equity investment were as follows:
Nine Months May 31, 2021 | Inception (April 15, 2020) to August 31, 2020 | |||||||
Beginning balance | $ | - | $ | - | ||||
Acquisitions | - | 19,553 | ||||||
Dispositions | - | - | ||||||
Impairment | - | (19,553 | ) | |||||
Ending balance | $ | - | $ | - |
Research and Development
The Company follows paragraph 730-10-25-1 of the FASB Accounting Standards Codification (formerly Statement of Financial Accounting Standards No. 2 ”Accounting for Research and Development Costs”) and paragraph 730-20-25-11 of the FASB Accounting Standards Codification (formerly Statement of Financial Accounting Standards No. 68 ”Research and Development Arrangements”) for research and development costs. Research and development costs are charged to expense as incurred. Research and development costs consist primarily of remuneration for material and testing costs for research and development.
Related Parties
The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related parties include a. affiliates (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Deferred Tax Assets and Income Tax Provision
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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 the statements of operations in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.
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Agentix Corp.
Notes to the Unaudited Consolidated Financial Statements
For the Nine Months Ended May 31, 2021
Earnings per Share
Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21 through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36 and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method: a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS computation.
There were no dilutive common shares for the three and nine months ended May 31, 2021.
Stock-Based Payments
Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.
For non-employees, the Company follows ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under the ASU No. 2017-07, most of the guidance on stock payments to nonemployees is aligned with the requirements for share-based payments granted to employees. As such, most of the guidance in ASC 718 associated with employee share-based payments, including most requirements related to classification and measurement, applies to nonemployee share-based payment arrangements.
No stock options or warrants were issued or outstanding as of May 31, 2021.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning in fiscal 2022. The Company is evaluating the impact of the adoption of ASU 2019-12 on its financial statements but does not expect such adoption to have a material impact.
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Agentix Corp.
Notes to the Unaudited Consolidated Financial Statements
For the Nine Months Ended May 31, 2021
On August 5, 2020 the FASB issued the ASU 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40)”. The amendments in this update address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, accounting models for specific features are removed and amendments to the disclosure requirements are included. For contracts in an entity’s own equity, simplifies the settlement assessment by removing some requirements. Additionally, the amendments in this update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is assessing the effects, if any, that the adoption of this accounting pronouncement may have on its financial statements.
Note Payable3 - Related Parties
During the threenine months ended November 30, 2017,May 31, 2021, the Company incurred $112,500 of management fees, $45,000 for reimbursement of rent and $17,093 of advances to the Company to cover certain operating expenses from SBS Management LLC, a company issuedcontrolled by Mr. Scott Stevens who is a convertible promissory note on November 1, 2017 for $10,000 to Michael Winterhalter. The note matures on its third anniversary with interest payable at 8% per annum. The outstanding note and accrued interest convert at the optionshareholder of the holder orCompany. As of May 31, 2021, $71,233 was included in Accounts payable – related party on the accompanying unaudited balance sheet as of May 31, 2021. The advances are unsecured, non-interest bearing, with no formal terms of repayment.
During the period from inception (April 15, 2020) to August 31, 2020, Gray’s Peak Capital, a company founded by Mr. Scott Stevens who is a shareholder of the Company, atmade advances to the volume weighted average priceCompany to cover certain operating expenses. These advances are unsecured, non-interest bearing, with no formal terms of repayment. As of May 31, 2021, the common stockamounts due Gray’s Peak Capital for the preceding 10 days, with a conversion floor of $0.10these advances was $27,870 and was included in accounts payable – related party on the 10-day Volume Weighted Average Price (“VWAP”). The Company evaluated the conversion option of the convertible promissory note for embedded derivatives and beneficial conversion features determining the conversion option to contain neither.accompanying balance sheet.
Note 5 –4 - Equity
Waived Compensation Investments
The Company follows ASU 2016-01, Financial Instruments – Overall: Recognition and Michael Winterhalter collectively waived paymentMeasurement of Financial Assets and Financial Liabilities, and as such, equity investments are recorded at their market value, with the change in fair value being reflected in the amountconsolidated statement of $15,000 foroperations.
In conjunction with the threemerger, the Company purchased a 10% LLC interest in API Holdings Inc., which holds certain equity investments obtained from the purchased shares of stock of four entities with ownership percentages of less than 5%. The LLC interest held by the Company was recorded at the purchase price of $19,553.
During the period from inception (April 15, 2020) to August 31, 2020, management determined that the fair value of the equity investment was $nil and as such, management recorded an impairment charge of $19,553. There have been no observable price changes during the nine months ended November 30, 2017. Waived compensation expense is credited to additional paid in capital contribution.May 31, 2021. As such, the Company has measured the value of the investment at $nil as of May 31, 2021, which management believes approximates market value.
TheNote 5 - Equity
As of May 31, 2021 and August 31, 2020, the Company has authorized 50,000,000 shares of common stock at a par value of $0.001 per share and Eric Krogius collectively waived payment inhad issued and outstanding shares of common stock of 34,874,605 and 34,489,605 as of May 31, 2021 and August 31, 2020, respectively.
Shares issued for services
During the amount of $5,000 for the threenine months ended November 30, 2017. Waived compensation expense is credited to additional paid in capital contribution.
Note 6 – Notes Receivable and Convertible Note Payable
TheMay 31, 2021, the Company issued a note receivable on September 28, 2016 in the amount385,000 shares of $10,000 to Black Diamond Bits, LLC. The interest rate is 8% and the principal and interest will be due in its entirety on January 1, 2017 for a total amount of $10,200. As of November 30, 2017 Black Diamond has not consummated the sale of their business, which had been the trigger for Black Diamond Bits, LLC to fully pay their obligation. Two payments have been made to date of $291 and $193 in April and June 2017, respectively. Communications with Black Diamond management indicate repaymentcommon stock of the note may come from sales revenue. Fairwind Energy has sent this notecompany to collectionsa consultant. The shares were fully vested upon issuance and has reserved against credit losses onwere recorded at a price $0.99 per share, which was the note inthen fair market value of the amount of $7,226. This isshares based on the collection agency’s historically collected rate, average of 85% collections, weighted against management’s estimate.Company’s quoted stock price.
TheShares issued for cash
During the nine months ended May 31, 2021, the Company issued 520,000 shares of its common stock to certain accredited investors for cash of which 320,000 shares were issued at a convertible promissory note on October 1, 2016price of $0.25 per share for total proceeds of $80,000 and 200,000 shares were issued at a price of $0.50 per share for total proceeds of $100,000. These offerings were made available solely to Julie Cameron Down Revocable Trustaccredited investors as defined under Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended.
As of May 31, 2021, the Company had not issued the shares issued for cash and as such, the $180,000 was reflected in the amount of $25,000. The interest rate is 8% and the maturity date is September 30, 2019 in which all outstanding principal togetheraccompanying unaudited consolidated balance sheet as common stock to be issued.
Note 6 - Subsequent Events
In accordance with interest on this note shall be due. The outstanding note and accrued interest convert at the option of the holder orASC 855, the Company athas analyzed its operations subsequent to May 31, 2021 through the volume weighted average price of the common stock for the preceding 10 days (10-day VWAP). On March 1, 2017 this note was amendeddate these financial statements were issued and has determined that it does not have any material subsequent events to introduce a conversion floor of $0.10 on the 10-day VWAP. This amendment extinguished the conditions that generated derivative liabilities related to this note.disclose in these financial statements.
Notes Payable consist of the following as of November 30, 2017:
Julie Cameron Down Revocable Trust Related Party Notes: William Winterhalter Mike Winterhalter Mike Winterhalter Mike Winterhalter Mike Winterhalter Mike Winterhalter Less current maturities Long-term maturities Unamortized Discount $ 25,000 20,000 20,000 10,000 4,000 10,000 10,000 - 99,000 (16,355 ) $ 82,645
Amortization expense in the amount of $5,215 was recorded for the notes payable during the three months ended November 30, 2017.
Maturities of notes payable for each of the fiscal years subsequent to November 30, 2017 are as follows:
2018 2019 2020 $ - 20,000 79,000 $ 99,000
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the financial statements of FairWind Energy Inc.Agentix Corp., a Nevada corporation (the “Company”), and development stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the August 31, 20172020 audited financial statements and related notes included in the Company’s Form 10-K as amended (File No. 000-55383; the “Form 10-K”), as filed with the Securities and Exchange Commission on December 18, 2017.9, 2020. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements
OVERVIEW
The Company was incorporated in the State of Nevada on April 18, 2013 and established a fiscal year end of August 31. It is a development stage company.statements.
Going ConcernMerger
To dateOn May 28, 2020, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”), by and among the Company, has little operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we completeGSL Healthcare, Inc., a Nevada corporation (“GSL Healthcare”), and the financing we endeavor to obtain, as described inholders of common stock of GSL Healthcare, which consisted of two stockholders. The closing date occurred on June 1, 2020.
Under the Form 10-K,terms and implement our initial business plan. The abilityconditions of the Company to continue as a going concern is dependent on raising capital to fund our business planShare Exchange Agreement, we offered and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.
Our activities have been financed from the proceeds of share subscriptions. From our inception to November 30, 2017, we raised a total of $442,301 from private and public offeringssold 27,932,271 shares of our common stock of the Company in consideration for all of the issued and $99,000 from private offeringsoutstanding shares of debt incommon stock of GSL Healthcare. The effect of the formissuance is that former two GSL Healthcare shareholders hold approximately 88.0% of convertible promissory notes.the then issued shares of common stock of the Company, and GSL Healthcare is now a wholly-owned subsidiary of the Company.
The merger between the Company plansand GSL Healthcare was treated as a reverse capitalization for financial statement reporting purposes with GSL Healthcare deemed the accounting acquirer and the Company deemed the accounting acquiree. Accordingly, GSL Healthcare’ assets, liabilities and results of operations became our historical financial statements. Prior to raise additional funds through debt or equity offerings. Therethe Share Exchange, we had 3,806,613 shares of outstanding common stock which remained outstanding as part of the merger.
COVID-19
We continue to evaluate the impact of the COVID-19 pandemic on the industry and our Company and have concluded that while it is no guaranteereasonably possible that the Company will be able to raise any capital throughvirus could have a negative effect on our financial position and results of our operations, the specific impact is not readily determinable as of the date of this or any other offerings. Thefiling. Our financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary shouldresult from the Company be unable to continue as a going concern.outcome of this uncertainty.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based on our interim unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The preparation of these interim unaudited consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:
Basis of Accounting
The Company’s financial statements are prepared using the accrual method of accounting and are presented in United States Dollars.
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Basis of Accounting
CashOur financial statements and Cash Equivalentsrelated notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and with the rules and regulations of the SEC to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with our audited financial statements for the reporting period ended August 31, 2020, as filed on December 9, 2020, and notes thereto contained in our Annual Report on Form 10-K.
The Company considers all highly liquid instruments purchased with maturitiesDeferred Tax Assets and Income Tax Provision
We account for income taxes under Section 740-10-30 of three months or lessthe FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent we conclude it is more likely than not that the assets will not be realized. 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 cash equivalents.recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
PropertyWe adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and Equipmentpenalties on income taxes, accounting in interim periods and requires increased disclosures.
Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.
Fair Value of Financial Instruments
The fair value of cash and cash equivalents and accounts receivable and accounts payable approximates their carrying amount.
Recent Accounting Pronouncements
The Company doesWe do not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.
PLANRESULTS OF OPERATIONOPERATIONS
We are a development stage corporationGSL Healthcare, our now principal business and have not yet generated or realized meaningful revenues from our business. We are involved in the design, engineering and manufacturing of composite products. The initial thrusthistorical financial statements of our business will becompany, began operations on April 15, 2020. Thus, a comparable nine month period does not exist. Further, there was no activity for GSL Healthcare for the period from April 15, 2020 to supply products toMay 31, 2020. The following are our results for the oilthree and gas industry. These products will include upstream production products such as sucker rods, fracking plugs, casings and other products where high temperature resistance, chemical resistance and a low weight to strength ratio products offer advantages to traditional materials (e.g., steel). If we are able to supply products to the oil and gas industry, then we plan to continue the development and sales of wind and solar hybrid energy systems. These systems also benefit from the use of higher performance materials (composites) and we will intend to incorporate them in product design and development.
Results of Operations
Three-Month Periods Ended November 30, 2017 and 2016nine months ended May 31, 2021:
We recorded no revenues for the three months ended November 30, 2017 and 2016.since our inception on April 15, 2020.
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For the three months ended November 30, 2017,May 31, 2021, we incurred total operating expenses of $25,681,$173,242, consisting of professional fees of $5,565, salaries$98,132, research and wages to officersdevelopment expenses of the Company of $20,000,$57,500, and general and administrative expenses of $116.$17,609. For the period from April 15, 2020 to May 31, 2020, we had no activity.
For the threenine months ended November 30, 2016,May 31, 2021, we incurred total operating expenses of $91,780,$1,096,926, consisting of professional fees of $63,805, salaries$794,599, which included $381,150 of non-cash common stock expense related to shares we issued for services, research and wages to officersdevelopment expenses of the Company of $20,053,$251,220, and general and administrative expenses of $7,922.$51,106. We also incurred interest income of $5 during the nine months ended May 31, 2021.
Liquidity and Capital Resources
At November 30, 2017,Our unaudited consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in our unaudited consolidated financial statements, we had an accumulated deficit on May 31, 2021 and incurred a net loss and a net use of cash balance of $6,527,in our operating activities during the nine months ended May 31, 2021. These factors raise substantial doubt about our ability to continue as a going concern.
We are attempting to commence operations and generate sufficient revenue; however, our working capital balancecash position is $1,484. We do not have sufficient cash on hand to completesupport our plan of operation for the next 12 months. Wedaily operations. As such, we will need to raise funds to complete our plan of operation and fund our ongoing operational expenses for the next 12 months. Additional funding will likely come from equity financing from the sale of our common stock currently being offered under the Form 10-K.or debt financing. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company.Company and if we obtain debt financing, the terms of any such debt financing may not be favorable to existing shareholders. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or obtaining debt to fund our development activities and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our development to complete our plan of operation and our business will fail.
Subsequent EventsOff-Balance Sheet Arrangements
None through dateThe Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of this filing.operations, liquidity, capital expenditures or capital resources that is material to stockholders
Subsequent Events
In accordance with ASC 855, we have analyzed our operations subsequent to May 31, 2021 through the date these financial statements were issued, and have determined that we don’t have any other material subsequent events to disclose in these financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, our President and Chief Executive Officer, who acts as both our principal executive officer and our principal financial officer, are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of November 30, 2017.May 31, 2021.
There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
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The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
None.
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(a) Exhibits required by Item 601 of Regulation SK.:
Number |
| Description | |
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101.INS * |
| XBRL Instance Document | |
101.SCH * |
| XBRL Taxonomy Extension Schema Document | |
101.CAL * |
| XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF * |
| XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB * |
| XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE * |
| XBRL Taxonomy Extension Presentation Linkbase Document |
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(1) | Incorporated by reference to the Registrant’s Form S-1 (File No. 333-194975), filed with the SEC on April 1, 2014. |
(2) | Incorporated by reference to the Registrant’s Form 8-K (File No. 000-55383), filed with the SEC on July 11, 2019. |
* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| (Name of Registrant) | |||
Date: July 9, 2021 | By: | /s/ Rudy Mazzocchi |
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Title: | President and Chief Executive Officer
and principal financial officer) |
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