UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

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

 

For the Quarterly Period Ended March 31,September 30, 2023.

 

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. 000-53259

 

POWERDYNE INTERNATIONAL, INC.

(Exact name of the small business issuer as specified in its charter)

 

Delaware 20-5572576

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

45 Main Street

North Reading, Massachusetts 01864

(Address of principal executive offices)

 

(401) 739-3300

(Registrant’s telephone number, including area code)

 

 

(Former name, former address, and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No

 

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

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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.

 

Securities registered pursuant to Section 12(b) of the Act: None

 

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

 

There are 1,884,930,584 shares of issuer’s Common Stock outstanding as of May 8,November 01, 2023.

 

 

 

 

 

TABLE OF CONTENTS

 

 Page No.
PART I. 
  
Item 1. Financial Statements (Unaudited). 
   
 Condensed Consolidated Balance Sheets as of March 31,September 30, 2023, and December 31, 2022 (Audited)3
   
 Condensed Consolidated Statements of Operations for the three and nine months ended March 31,September 30, 2023, and 20224
   
 Condensed Consolidated Statements of Changes in Stockholders’ Deficit(Deficit) / Equity for the threenine months ended March 31,September 30, 2023, and 2022,5
   
 Condensed Consolidated Statements of Cash Flows for the threenine months ended March 31,September 30, 2023, and 20226
   
 Notes to Condensed Consolidated Financial Statements7
   
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations17
Item 3. Quantitative and Qualitative Disclosures About Market Risks19
Item 4. Controls and Procedures19
PART II.20
Item 1. Legal Proceedings.20
Item 1A. Risk Factors.20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.20
Item 3. Defaults Upon Senior Securities.20
Item 4. Mine Safety Disclosures.20
Item 5. Other Information.20
Item 6. Exhibits.20
EXHIBIT INDEX20
   
Item 3. Quantitative and Qualitative Disclosures About Market Risks.SIGNATURES19
 21
Item 4. Controls and Procedures19
PART II.
Item 1. Legal Proceedings.20
Item 1A. Risk Factors.20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.20
Item 3. Defaults Upon Senior Securities.20
Item 4. Mine Safety Disclosures.20
Item 5. Other Information.20
Item 6. Exhibits.20
EXHIBIT INDEX20
SIGNATURES21

 

2

POWERDYNE INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 March 31, 2023  December 31, 2022  September 30, 2023 December 31, 2022 
   (audited)     (audited) 
ASSETS             
             
Current Assets:                
Cash $72,771  $33,962  $8,845  $33,962 
Accounts receivable  227,166   222,489   172,857   222,489 
Inventory  53,135   54,982   91,779   54,982 
Total current assets  353,072   311,433   273,481   311,433 
                
Property and equipment        
Property and Equipment        
Cryptocurrency miners  -   15,000   15,000   15,000 
Less: accumulated depreciation  -   (15,000)  (15,000)  (15,000)
Total property and equipment  -   -   -   - 
                
Intangible asset - Cryptocurrency  9,536   6,103   -   6,103 
                
Total Assets $362,608  $317,536  $273,481  $317,536 
                
LIABILITIES AND STOCKHOLDERS’(DEFICIT) / EQUITY        
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) / EQUITY        
                
Current Liabilities:                
Accounts payable and accrued expenses  117,708   78,920  $95,010  $78,920 
Advance deposits  20,895   10,231   -   10,231 
Due to related party-CEO  213,079   223,079 
Due to related party - CEO  238,079   223,079 
Due to related party  238,079   223,079 
Sales tax payable  1,040   1,241   1,375   1,241 
Income tax payable  2,950   2,950   2,950   2,950 
Total Current Liabilities  355,672   316,420   337,414   316,420 
                

Stockholders’ (Deficit) / Equity:

                
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, 2,000,000 shares issued and outstanding as of March 31, 2023, and-0- as of December 31, 2022  200   200 
Common stock, $0.0001 par value, 2,000,000,000 shares authorized, 1,884,930,584 shares issued and outstanding as of March 31, 2023, and 1,862,430,584 shares issued and outstanding as of December 31, 2022  188,493   186,243 
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, 2,000,000 shares issued and outstanding as of September 30, 2023, and 2,000,000 as of December 31, 2022  200   200 
Common stock, $0.0001 par value, 2,000,000,000 shares authorized, 1,884,930,584 shares issued and outstanding as of September 30, 2023, and 1,862,430,584 shares issued and outstanding as of December 31, 2022  188,493   186,243 
Additional paid-in capital  4,814,651   4,807,901   4,814,651   4,807,901 
Accumulated deficit  (4,996,408)  (4,993,228)  (5,067,276)  (4,993,228)
Total Stockholders’ (Deficit) / Equity  6,936   1,115   (63,933)  1,116 
                
Total Liabilities and Stockholders’ (Deficit) / Equity $362,608  $317,536  $273,481  $317,536 

 

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

 

3

POWERDYNE INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

  For the three months ending  For the three months ending 
  March 31, 2023  March 31, 2022 
       
       
Revenues $450,274  $32,056 
Cost of revenues  302,723   32,012 
Gross profit  147,551   44 
Operating expenses  150,731   39,355 
Loss from operations  (3,180)  (39,311)
Loss on related party acquisition  -   1,391,370 
Loss before income taxes  (3,180)  (1,430,681)
Income tax (provision) / benefit  -   - 
         
Net loss $(3,180) $(1,430,681)
         
Basic and diluted loss per common share $(0.00) $(0.00) 
Basic and diluted - weighted average common        
shares outstanding  1,870,430,584   1,862,430,584 
  For the three  For the three  For the nine  For the nine 
  months ended  months ended  months ended  months ended 
  September 30, 2023  September 30, 2022  September 30, 2023  September 30, 2022 
             
Revenues $366,303  $370,718  $1,100,901  $744,703 
Cost of revenues  291,556   221,518   838,095   509,492 
Gross profit  74,747   149,200   262,806   235,211 
Operating expenses  67,203   101,433   336,854   271,371 
Loss on related party acquisition  -   -   -   1,391,370 
Income / (loss) from operations and before income taxes  7,544   47,767   (74,048)  (1,427,530)
Income tax (provision) / expense  -   -   -   - 
                 
Net income / (loss) $7,544  $47,767  $(74,048) $(1,427,530)
                 
Basic and diluted income / (loss) per common share $0.00  $0.00  $(0.00) $(0.00)
Basic and diluted weighted average common shares outstanding  1,880,930,584   1,862,430,584   1,880,150,364   1,862,430,584 

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

4

POWERDYNE INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT(DEFICIT) / EQUITY

(Unaudited)

 

         Additional   Total           Additional     Total 
 Preferred Stock  Common Stock  Paid-In  Accumulated  Stockholders’  Preferred Stock  Common Stock  Paid-In  Accumulated  Stockholders’ 
 Shares  Amount  Shares  Amount  Capital  Deficit  Deficit  Shares  Amount  Shares  Amount  Capital  Deficit  Deficit 
Balance, December 31, 2021  -  $-   1,862,430,584  $186,243  $3,308,101  $(3,651,212) $(156,868)  -  $-   1,862,430,584  $186,243  $3,308,101  $(3,651,212) $(156,868)
                                                        
Issuance of Preferred Stock for Merger Transaction with Related Party  2,000,000   200   -   -   1,499,800   -   1,500,000 
Issuance of preferred stock for merger transaction with related party  2,000,000   200   -   -   1,499,800   -   1,500,000 
                                                        
Net loss  -   -   -   -   -   (1,430,681)  (1,430,681)  -   -   -   -   -   (1,427,530)  (1,427,530)
                            
Balance, March 31, 2022  2,000,000  $200   1,862,430,584  $186,243  $4,807,901  $(5,081,893) $(87,549)
Balance, September 30, 2022  2,000,000   200   1,862,430,584   186,243   4,807,901   (5,078,742)  (84,398)

 

              Additional     Total 
  Preferred Stock  Common Stock  Paid-In  Accumulated  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Deficit  Equity 
                      
Balance, December 31, 2022  2,000,000  $200   1,862,430,584  $186,243  $4,807,901  $(4,993,228) $1,115 
                             
Issuance of common stock for services  -   -   22,500,000   2,250   6,750   -   9,000 
                             
Net Loss  -   -   -   -   -   (3,180)  (3,180)
                             
Balance, March 31, 2023  2,000,000  $200   1,884,930,584  $188,493  $4,814,651  $(4,996,408) $6,936 

              Additional     Total 
  Preferred Stock  Common Stock  Paid-In  Accumulated  Stockholders’ 
  Shares  Amount  Shares  Amount  Capital  Deficit  Equity 
                      
Balance, December 31, 2022  2,000,000  $200   1,862,430,584  $186,243  $4,807,901  $(4,993,228) $1,116 
Balance  2,000,000  $200   1,862,430,584  $186,243  $4,807,901  $(4,993,228) $1,116 
                             
Issuance of common stock for services  -   -   22,500,000   2,250   6,750   -   9,000 
                             
Net Loss  -              -   -   -   -   (74,048)  (74,048)
Balance, September 30, 2023  2,000,000   200   1,884,930,584   188,493   4,814,651   (5,067,276)  (63,933)
Balance  2,000,000   200   1,884,930,584   188,493   4,814,651   (5,067,276)  (63,933)

 

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

 

5

 

POWERDYNE INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 For the three For the three  For the nine For the nine 
 months ended months ended  months ended months ended 
 March 31, 2023  March 31, 2022  September 30, 2023 September 30, 2022 
Operating Activities:                
Net loss $(3,180) $(1,430,681) $(74,048) $(1,427,530)
Adjustments to reconcile net loss to net cash provided by / (used) in operating activities:        
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  -   750   -   2,250 
Reversal of non-cash related party loss on acquisition  -   1,391,370   -   1,391,370 
Reversal of non-cash increase in - intangible assets - Crypto  (3,433)  - 
Reversal of non-cash increase in intangible assets - Crypto  6,103   6,320 
Issuance of common stock for consulting services  9,000   -   9,000   - 
Changes in operating assets and liabilities:                
Accounts receivable  (4,677)  (32,723)  49,631   (110,900)
Inventory  1,847   (82,588)  (36,796)  (65,850)
Accounts payable and accrued expenses  38,789   (5,199)  16,090   29,646 
Advance deposits  10,664   4,669   (10,231)  3,185 
Sales and income taxes payable  (201)  255 
Net cash provided by / (used in) operating activities  48,810   (154,146)
Sales taxes payable  135   1,017 
Net cash used in operating activities  (40,117)  (170,493)
                
Investing Activities:                
Increase in intangible asset - Cryptocurrency  -   292 
Net cash and assets acquired from CEO’s business  -   108,630 
Net cash provided by investing activities  -   292   -   108,630 
                
Financing Activities:                
Due to related party - CEO (reimbursement) / advances  (10,000)  214,771 
Net cash provided by / (used in) financing activities  (10,000)  214,771 
Due to related party-CEO advances  15,000   114,179 
Net cash provided by financing activities  15,000   114,179 
                
Net increase in cash  38,810   60,917   (25,117)  52,316 
Cash, beginning of period  33,962   9,057   33,962   9,057 
                
Cash, end of period $72,771  $69,974  $8,845  $61,372 
                
Non-cash investing and financing activities:                
Preferred stock issued upon acquisition $-  $1,500,000  $-  $1,500,000 
Supplemental disclosure if cash flow information        
        
Supplemental disclosures of cash flow information        
Cash paid for interest $-  $-  $-  $- 
Cash paid for taxes $-  $-  $-  $- 

 

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

 

6

 

POWERDYNE INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

1. ORGANIZATION

 

Powerdyne, Inc., was incorporated on February 2, 2010, in Nevada, and is registered to dofor business in Rhode Island and Massachusetts. On February 7, 2011, Powerdyne, Inc. merged with Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, a publicly held Delaware corporation.

 

On December 13, 2010, Powerdyne International, Inc., formerly Greenmark Acquisition Corporation, filed an Amended and Restated Articles of Incorporation in order to, among other things, increase the authorized capital stock to 300,000,000 common shares, par value $0.0001 per share. Unless the context specifies otherwise, as discussed in Note 2, references to the “Company” refers to Powerdyne International, Inc. and Powerdyne, Inc. after the merger.

 

At the closing of the merger, each share of Powerdyne, Inc.’s common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for the right to receive7,520shares of common stock of Powerdyne International, Inc. Accordingly, an aggregate of 188,000,000 shares of common stock of Powerdyne International, Inc. were issued to the holders of Powerdyne, Inc.’s common stock.

 

In 2014, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital stock to 550,000,000 common shares, par value $0.0001 per share.

 

On January 26, 2015, Powerdyne International, Inc. filed an amendment to its Articles of Incorporation which increased the authorized capital stock to 2,020,000,000 shares consisting of 2,000,000,000 common shares, par value $0.0001 per share and 20,000,000 shares which may be designated as common or preferred stock, par value $0.0001 per share.

 

On March 6, 2022, pursuant to a Securities Purchase Agreement (the “SPA”), Powerdyne International, Inc. (the “Company”), acquired all of the issued and outstanding membership interests of Creative Motion Technology, LLC, a Massachusetts limited liability company, (the “Membership Interests”Interest”). Membership Interests areis owned by Mr. James F. O’Rourke, the principal owner and sole director and officer of the Company. The purchase price paid by the Company was 2,000,000 shares of its Series A Preferred Stock valued at $1,500,000 (“Shares”), which each. The Series A Preferred Stock, is convertible into 1,000shall be entitled to have one thousand (1,000) votes per one (1) share common shares, at each meeting of stockholders of the Company at a fixed price of $0.0001 atCorporation (or pursuant to any action by written consent) with respect to any and all matters presented to the optionstockholders of the holder.Corporation for their action or consideration. The holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.

 

Creative Motion Technology, LLC (“CM Tech”) is a small New England based motor manufacturer founded in 2004 and has been in business for over 17 years. CM Tech’s management has over 60 years of design and manufacturing expertise, specializing in the design and custom building of industrial servomotors both brush and brushless motor designs. CM Tech’s current market focus is on the niche motor demands for low volume, high-quality cost-effective motors which are primarily used in industrial robotics for the semiconductor manufacturing industry. The motors that CM Tech currently has in production primarily provide the X, Y, and Z axis articulation in factory automation robots.

 

Included with CM Tech acquisition is Frame One, which is a custom picture framing shop located in North Reading, MA. Frame One has been in business since 2006 and brings with it a strong client base consisting of local schools, colleges, artist guilds, artists, interior decorators/designers, museums, photographers, art galleries and theaters.

 

7

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

1. ORGANIZATION (continued)

 

The issuance of the 2,000,000 shares of Series A Preferred Stock (“Shares”) pursuant to the Securities Purchase Agreement were made in reliance on the exemption from registration afforded under Section 4(2), of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder. Such offer and sale were not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the Seller/Investor in connection with the issuance by the Company of the Shares.

 

2. REVERSE MERGER ACCOUNTING

 

On February 7, 2011, Greenmark Acquisition Corporation, which was a publicly held Delaware corporation, merged with Powerdyne, Inc. Upon closing of the transaction, Greenmark Acquisition Corporation, the surviving corporation in the merger, changed its name to Powerdyne International, Inc.

 

The merger was accounted for as a reverse-merger, and recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). Powerdyne, Inc. was the acquirer for financial reporting purposes and the Company was the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the merger are those of Powerdyne, Inc. and have been recorded at the historical cost basis of Powerdyne, Inc., and the financial statements after completion of the merger include the assets and liabilities of the Company and Powerdyne, Inc., historical operations of Powerdyne, Inc. and operations of the Company from the closing date of the merger. Common stock and the corresponding capital amounts of the Company pre-merger were retroactively restated as capital stock shares reflecting the exchange ratio in the merger. In conjunction with the merger, the Company received no cash and assumed no liabilities from Greenmark Acquisition Corporation.

 

3. SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

 

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s financial statements. Such condensed consolidated financial statements and accompanying notes are a representation of the Company’s management, who are responsible for integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (‘GAAP”) in all material respects and have been consistently applied in preparing the accompany condensed consolidated financial statements.

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.

 

8

 

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Going Concern

 

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. As of March 31,September 30, 2023, the Company had an accumulated deficit of $4,996,4085,067,276. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.

 

The Company’s activities will necessitate significant uses of working capital beyond March 31,September 30, 2023. Additionally, the Company’s capital requirements will depend on many factors, including the success of the Company’s sales and the status of competitive products. The Company plans to continue financing its operations with cash received from financing activities, revenue from operations and or affiliate funding.

 

While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or, if additional capital is needed, that such funds if available, will be obtainable on terms satisfactory to the Company.

 

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

Principals of Consolidation

 

Our condensed consolidated financial statements include the accounts of Powerdyne International, Inc. and its one division and related subsidiaries. All intercompany transactions have been eliminated.

 

Reclassifications

Certain amounts in the prior period have been reclassified to confirm for the current period presentation.

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit. The Company has not incurred any loss from this risk.

 

Use of Estimates

In preparing these unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

9

 

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31,September 30, 2023, and December 31, 2022, respectively.

 

Allowance for Sale Returns and Doubtful Accounts

 

Sales Returns – We may, on a case-by-case basis, accept returns of products from our customers, without restocking charges, when they can demonstrate an acceptable cause for the return.

 

Doubtful Accounts – Accounts receivable areis recorded at net realizable value or the amount we expect to collect on gross customer trade receivables. We evaluate the collectability of our accounts receivable based on a combination of factors. If we become aware of a customer’s inability to meet its financial obligations after a sale has occurred, we record an allowance to reduce the net receivable to the amount we reasonably believe we will be able to collect from the customer. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and historical experience. If the financial condition of our customers were to deteriorate or if economic conditions worsen, additional allowances may be required in the future. All of our accounts receivable are trade-related receivables.

 

The allowance for sales returns and doubtful accounts as of March 31,September 30, 2023, amounted to $0 (March 31,(September 30, 2022 - $0).

 

The Company sometimes receives cash deposits in advance of manufacturing and shipping its products. As of March 31,September 30, 2023, there is $20,8950 (December 31, 2022 - $10,231) in advance deposits recorded on the balance sheet. When the products are shipped to the customer the advance deposits are recognized as product revenue.

 

Inventory

 

Inventory, consisting principally of products held for sale, is stated lower of cost, using the first-in, first-out method, and net realizable value. The amount presented in the accompanying consolidated balance sheet has no valuation allowance.

 

We regularly evaluate our inventory to identify costs in excess of the lower of cost and net realizable value, slow-moving inventory and potential obsolescence.

 

Equipment

 

Equipment is stated at cost. Capital expenditure for improvements and upgrades to existing equipment are also capitalized. Maintenance and repairs are expensed as incurred. The computer equipment is depreciated over 5 years on a straight-line basis. Depreciation expenses for the three and six months ended March 31,September 30, 2023, and 2022 were $0 and $750, respectively.

 

10

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Intangible Asset – Cryptocurrency

 

The Company considers intangible assets - cryptocurrency to be revenue that has been earned, but for which no cash has been received. Intangible assets consist of crypto mined coins that are held in a digital wallet and have not been cashed out. The basis of the valuation is the market price of the Sia coins on March 31,September 30, 2023. The Company considers this to be an intangible asset under GAAP guidelines. The Company had $$-9,5360- of intangible assets as of March 31,September 30, 2023, and $6,103 as of December 31, 2022. Revenue is recognized on the last date of the quarter based on the transaction price of the Sia coin at that date times the number of coins in the wallet. Unrealized gains and losses are recognized quarterly based on the fluctuation in the market value of the coin versus the value booked when obtained. As of March 31,September 30, 2023, there was no evidence that the Company’s intangible assets were impaired. The Company holds other cryptocurrencies under intangible assets, such as Bitcoin, etc. and these currencies are marked to market at the end of each quarter ended. The crypto-currency brokerage account also holds cash that is re-classed to cash at the end of each quarter ended. The Company recorded an increase of $3,443 in the crypto-currency in the three months ended due to the increase in the crypto-currency market.

 

The Company disposed of all of its cryptocurrency intangible assets on April 3,5, 2023, and closed our cryptocurrency brokerage account. There was a nominal loss of $22 on the disposition.

 

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

 

In accordance with ASC 360, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.

11

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023, and 2022

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of (Continued)

 

When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company’s management currently believes there is no impairment of its long-lived assets. There can be no assurance, however, that market conditions will not change or demand for the Company’s products under development will continue. Either of these could result in future impairment of long-lived assets. The Company as of September 30, 2023, has no long-lived assets with any tangible value recorded on the balance sheet for accounting purposes.

 

Shipping Activities

 

Outbound shipping changes to customers are included in “Product revenue”. Outbound shipping-related costs are included in “Costs of products sold”.

Stock-Based Compensation

 

We account for all share-based compensation in accordance ASC 718-20 Stock-Based Compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite vesting period.

 

Income Taxes

 

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement 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 years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.

11

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023, and 2022

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes (Continued)

 

ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, seeks to reduce the diversity in practice associated with certain aspect of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of January 1, 2007, and have analyzed filming positions in each of the federal and state jurisdictions where are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and Massachusetts as our “major” tax jurisdictions. With limited exceptions, we remain subject to Internal Revenue Service (“IRS”) examination of our income tax returns filed within the last three (3) years, and to Massachusetts Department of Revenue examination of our income tax returns within the last four (4) years. However, certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized.

 

We believe that our income tax filing positions and deductions will be sustained in the audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

 

Income taxes payable as of March 31,September 30, 2023, and December 31, 2022, was $2,950.

Fair Value of Financial Instruments

 

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

 

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

 

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

Level 3 inputs are unobservable inputs for the asset or liability.

 

The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company elects to disclose the fair value measurement at the beginning of the reporting period during which the transfer occurred.

 

The Company’s financial instruments consisted of cash, accounts receivable, intangible assets – cryptocurrency, accounts payable and accrued expenses, advance deposit, due to related party - CEO, sales tax payable, and income tax payable. The estimated fair value of these financial instruments approximates its carrying amount due to the short maturity of these instruments.

LossIncome / (Loss) per Common Share

 

Basic lossincome / (loss) per common share excludes dilutive securities and is computed by dividing net lossincome / (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. As of March 31,September 30, 2023, and December 31, 2022, there were no outstanding dilutive securities, except as of March 31, 2023, there was 2,000,000 Series A Preferred Stock outstanding, however, they were not included in the calculations as they are considered anti-dilutive.anti-dilutive and the Shares inclusion would not change the loss per share calculations as of September 30, 2023, and 2022.

 

12

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Income / (Loss) per Common Share (Continued)

The following table represents the computation of basic and diluted lossesincome / (losses) per share:

 

LossIncome / (loss) per share is based upon the weighted average shares of common stock outstanding.

 

SCHEDULE OF COMPUTATION OF BASIC AND DILUTED INCOME (LOSS) PER SHARE

 March 31, 2023  March 31 2022  For the three
months ended
September 30, 2023
 For the three
months ended
September 30, 2022
 For the nine
months ended
September 30, 2023
 For the nine
months ended
September 30, 2022
 
 For the three For the three          
 months ended months ended 
 March 31, 2023  March 31 2022 
     
Loss available for common shareholders $(3,180) $(1,430,681)
Income / (loss) available for common shareholders $7,544  $47,767  $(74,048) $(1,427,530)
                        
Basic and fully diluted loss per common share $(0.00)  $(0.00) $0.00  $0.00  $(0.00) $(0.00)
                
Weighted average common shares outstanding – basic and diluted  1,870,430,584   1,862,430,584   1,880,930,584   1,862,430,584   1,880,150,364   1,862,430,584 

Use of Estimates and Assumptions

Our management has made several estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

Recent Accounting Guidance Not Yet Adopted

 

Accounting for Income Taxes

 

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes”. The pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, “Income Taxes”. The pronouncement also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for us beginning in the third quarter of fiscal 2022, with early adoption permitted. We are still evaluating the impactThe adoption of this guidance willdid not have an impact on our condensed consolidated financial statements.

 

In October 2020, the FASB issued ASU No. 2020-10 Codification Improvements, to make incremental improvements to U.S. GAAP and address stakeholder suggestions, including, among other things, clarifying that the requirement to provide comparative information in the financial statements extends to the corresponding disclosures section. The amendments in this update will be effective for us beginning with fiscal year 2021, with early adoption permitted. The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date. The adoption of the amendments in this update did not have a material impact on our condensed consolidated financial position and results of operations.

In August 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities in a Business Combination”. The pronouncement requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with revenue recognition guidance as if the acquirer had originated the contract. That is such acquired contracts will not expected tobe measured at fair value. The amendments in this update will be effective for us beginning with fiscal year 2023, with early adoption permitted. The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date. The adoption of the amendments in this update did not have a material impact on our condensed consolidated financial position and results of operations.

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

13

POWERDYNE INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Revenue Recognition

 

Sia coin is the only crypto coin that Powerdyne is mining.used to mine. The coins are held in the Company’s Sia coin digital wallet. When coins are going to be exchanged for USD, they are then transferred to the company’s exchange wallet held at a US based crypto exchange which provides support for two-factor authentication. We also have wallet password management, and offsite backups. The coins are held in anticipation of future price appreciation as crypto currencies become more widely accepted, but some coins may be exchanged for USD on an as needed basis. The Company also realizes there is no guarantee the coins will appreciate in value. Revenue is recognized on the last date of the quarter based on the market price of the Sia coin at that date times the number of coins in the wallet and the difference between the current market value and the value recorded on the consolidated balance sheet in previous quarter. The Company no longer is in the business of producing Sia coins.

 

As of March 6, 2022, with the acquisition of CM Tech, we recognize revenue from contracts with customers in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). Revenue is recognized at the point at which control of the underlying products are transferred to the customer. Satisfaction of our performance obligations occurs upon the transfer of control of products from our facilities. We consider customer purchase orders to be the contracts with a customer. All revenue is generated from contracts with customers.

 

Business Segments

 

We primarily service the Original Equipment Manufacturers (OEM’s) in the semiconductor market by supplying custom designed motors for the robotics used in semiconductor manufacturing equipment. We provide cost-effective value-added turn-key solutions to our clients’ drives and articulation needs.

 

The Market

 

We service the Global Semiconductor Equipment Manufacture’s our Sales to International customers were 36% and 54% of our total sales induring the complete annual years for December 31, 2022, and 2021, respectively.

14

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

4.EQUIPMENT – NET

Equipment consists of the following as of September 30, 2023, and December 31, 2022:

SCHEDULE OF EQUIPMENT-NET

  September 30, 2023,  December 31, 2022 
  (unaudited)  (audited) 
Cryptocurrency miners $15,000  $15,000 
Less accumulated depreciation  (15,000)  (15,000)
Total Equipment $  $- 

Equipment is stated at cost and depreciated on a straight- line basis over the assets’ estimated useful lives: computer equipment 5 years.

During the quarter ended March 31, 2019, Powerdyne International, Inc. purchased several crypto currency miners and began mining certain crypto coins.

During the year ended December 31, 2022, Powerdyne stopped the mining of Sia coin and any crypto currency due to the lack of productivity of its crypto miners.

5. DUE TO RELATED PARTY – CEO

 

During the threenine months ended March 31,September 30, 2023, the Company’s CEO was reimbursed $10,000 for money advanced to the Company. However, our CEO also advanced another $25,000 to fund operations during the same period. In the comparative quarternine months ended March 31,September 30, 2022, our CEO advanced $214,771114,679 to the Company. The Company owes the following amounts to our CEO as of March 31,September 30, 2023, and December 31, 2022, was $213,079238,079 and $223,079, respectively. The balances owed to our CEO are due on demand and therefore recorded as a current liability.

 

5.6. ACQUISITION OF PRIVATE COMPANY OWNED BY CEO

 

On March 6, 2022, pursuant to a Securities Purchase Agreement (the “SPA”), Powerdyne International, Inc. (the “Company”), acquired 100%100% of the issued and outstanding membership interests of Creative Motion Technology, LLC, a Massachusetts limited liability company, (the “Membership Interests”). The Membership Interest is owned by Mr. James F. O’Rourke, the principal owner and sole director and officer of the Company. The purchase price paid by the Company was 2,000,000 shares of its Series A Preferred Stock valued at $1,500,000, which each. The Series A Preferred Stock, is convertible into 1,000shall be entitled to have one thousand (1,000) votes per one (1) share common shares, at each meeting of stockholders of the Company at a fixed price of $0.0001 atCorporation (or pursuant to any action by written consent) with respect to any and all matters presented to the optionstockholders of the holder.Corporation for their action or consideration The holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.

 

Creative Motion Technology, LLC (“CM Tech”) is a small New England based motor manufacturer founded in 2004 and has been in business for over 17 years. CM Tech’s management has over 60 years of design and manufacturing expertise, specializing in the design and custom building of industrial servomotors both brush and brushless motor designs. CM Tech’s current market focus is on the niche motor demands for low volume, high-quality cost-effective motors which are primarily used in industrial robotics for the semiconductor manufacturing industry. The motors that CM Tech currently has in production primarily provide the X, Y, and Z axis articulation in factory automation robots.

 

Included with CM Tech acquisition is Frame One, which is a custom picture framing shop located in North Reading, MA. Frame One has been in business since 2006 and brings with it a strong client base consisting of local schools, colleges, artist guilds, artists, interior decorators/designers, museums, photographers, art galleries and theaters.

 

The foregoing description of the SPA does not purport to be complete and is qualified in its entirety by reference to the complete text of the document, which is filed as an exhibit to this report and is incorporated herein by reference.

 

The following table summarizes the consideration transferred to acquire CM Tech and the amounts of identified assets acquired recorded at historical cost at the acquisition date and the consideration provided:

 

SCHEDULE OF AMOUNTS OF IDENTIFIED ASSETS ACQUIRED AND LIABILITIES

        
Cash $26,042  $26,042 
Inventory  82,588   82,588 
Total Assets Acquired  108,630   108,630 
Loss on acquisition of entity owned by CEO.  1,391,370   1,391,370 
        
The purchase price consists of the following:        
Preferred Shares  1,500,000 
Preferred shares  1,500,000 
Total Purchase Price $1,500,000  $1,500,000 

 

The historical cost of the assets acquired includes cash and inventory at approximately $108,630. There is no impairment to the cash and inventory received.

 

15

 

POWERDYNE INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31,September 30, 2023, and 2022

 

5.6. ACQUISITION OF PRIVATE COMPANY OWNED BY CEO (Continued)

 

The pro forma information below presents statements of operations data as if the acquisition of CM Tech took place on January 1, 2020.

SCHEDULE OF STATEMENTS OF OPERATION

 Consolidated Consolidated 
 For the year For the year 
 Ended ended 
 December 31, 2021  December 31, 2020  Consolidated For
the year Ended
December 31, 2021
 Consolidated For
the year ended
December 31, 2020
 
          
Revenues $1,224,290  $985,613  $1,224,290  $985,613 
Cost of Goods Sold  721,243   525,454 
Cost of goods sold  721,243   525,454 
Gross profit $503,047  $460,159  $503,047  $460,159 
Operating expenses  265,779   245,531   265,779   245,531 
                
Net Income $237,268  $214,628  $237,268  $214,628 

 

6.7. STOCKHOLDERS’ (DEFICIT) / EQUITY

Preferred Stock – There are 20,000,000 shares of authorized preferred stock, par value $0.0001 per share, with 2,000,000 shares issued and outstanding as of September 30, 2023 (December 31, 2022 – 2,000,000). The Series A Preferred Stock, shall be entitled to have one thousand (1,000) votes per one (1) share, at each meeting of stockholders of the Corporation (or pursuant to any action by written consent) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration. The holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.

Common Stock – There are 2,000,000,000 shares of authorized Class A common stock, par value $0.0001 per share, with 1,884,930,584 shares issued and outstanding September 30, 2023, and December 31, 2022, respectively.

March 6, 2022, the Company issued 2,000,000 preferred shares to our CEO in exchange for his 100% owned private company CM Tech and Frame One. The Series A Preferred Stock, shall be entitled to have one thousand (1,000) votes per one (1) share, at each meeting of stockholders of the Corporation (or pursuant to any action by written consent) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration. The holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class.

Stock issued for services.

On February 27, 2023, the Company issued 7,500,000 shares to a consultant as compensation for accounting services rendered.

 

On February 27, 2023, the Company issued 15,000,000 shares to a consultant as compensation for legal services rendered.

 

The Company recorded $9,000 as compensation expense for the 22,500,000 shares issued to third party consultants, which was the fair value of the shares on the date of issuance.

 

7.8. INCOME TAXES

The Company’s income taxes are filed on an annual basis. Management’s best estimate for the accounting for income taxes, uncertain tax positions and its income tax provision is determined on an annual basis. Please see the Company’s December 31, 2022, Form 10-K for the annual detailed disclosures.

9. COMMITMENTS AND CONTINGENCIES

Office Space

Our corporate headquarters are in a full-service office suite located in a building in North Reading, Massachusetts, consisting of approximately 5,000 square feet of retail, manufacturing, and office space. The lease was signed in 2006 and is extended every twelve months. The Company is required to provide six months’ notice before the lease is terminated. We pay $4,000 per month. There was a two-month deposit, which was applied against monthly rents over ten years ago.

 

Litigation

 

There areis no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party to.

 

16

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

Note about Forward-Looking Statements

This Quarterly Report on Form 10-Q includes statements that constitute “forward-looking statements.” These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “intends,” “plans,” “expects,” or “anticipates,” and do not reflect historical facts.

Specific forward-looking statements contained in this portion of the Annual Report include, but are not limited to: (i) statements that are based on current projections and expectations about the markets in which we operate, (ii) statements about current projections and expectations of general economic conditions, (iii) statements about specific industry projections and expectations of economic activity, (iv) statements relating to our future operations, prospects, results, and performance, and (v) statements that the cash on hand and additional cash generated from operations together with potential sources of cash through issuance of debt or equity will provide the Company with sufficient liquidity for the next 12 months.

Forward-looking statements involve risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results, future performance and capital requirements and cause them to materially differ from those contained in the forward-looking statements include those identified in our 2022 Form 10-K under Item 1A “Risk Factors” and Part II, Item 1A. “Risk Factors” below, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.

In addition, the foregoing factors may generally affect our business, results of operations and financial position. Forward-looking statements speak only as of the date the statements were made. We do not undertake and specifically decline any obligation to update any forward-looking statements. Any information contained on our website www.powerdyneinternational.com or any other websites referenced in this Quarterly Report are not part of this Quarterly Report.

Our Company

 

We are an operating company which has experienced losses since our inception. Our sources of cash to date have been capital invested by shareholders and venture capital investors/lenders. On March 6, 2022, the Company acquired CM Tech and received $1,207,168 in revenue from the new operation through to the end of December 31, 2022.

 

On March 6, 2022, pursuant to a Securities Purchase Agreement (the “SPA”), Powerdyne International, Inc. (the “Company”), acquired all of the issued and outstanding membership interests of Creative Motion Technology, LLC, a Massachusetts limited liability company, (the “Membership Interests”). The Membership Interest is owned by Mr. James F. O’Rourke, the principal owner and sole director and officer of the Company. The purchase price paid by the Company was 2,000,000 shares of its Series A Preferred Stock valued at $1,500,000. the Company acquired CM Tech and received $1,207,168 in revenue from the new operation through to the end of December 31, 2022.

 

Creative Motion Technology, LLC (“CM Tech”) is a small New England based motor manufacturer founded in 2004 and has been in business for over 17 years. CM Tech’s management has over 60 years of design and manufacturing expertise, specializing in the design and custom building of industrial servomotors both brush and brushless motor designs. CM Tech’s current market focus is on the niche motor demands for low volume, high-quality cost-effective motors which are primarily used in industrial robotics for the semiconductor manufacturing industry. The motors that CM Tech currently has in production primarily provide the X, Y, and Z axis articulation in factory automation robots.

 

Included with CM Tech acquisition is Frame One (“Frame One”), which is a custom picture framing shop located in North Reading, MA. Frame One has been in business since 2006 and brings with it a strong client base consisting of local schools, colleges, artist guilds, artists, interior decorators/designers, museums, photographers, art galleries and theaters.

 

The foregoing description of the SPA does not purport to be complete and is qualified in its entirety by reference to the complete text of the document, which is filed as an exhibit to this report and is incorporated herein by reference.

 

The issuance of the 2,000,000 shares of Series A Preferred Stock pursuant to the Securities Purchase Agreement were made in reliance on the exemption from registration afforded under Section 4(2), of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated thereunder. Such offer and sale were not conducted in connection with a public offering, and no public solicitation or advertisement was made or relied upon by the Seller/Investor in connection with the issuance by the Company of the Shares.

 

The following discussion contains forward-looking statements, as discussed above. Please see the sections entitled “Forward-Looking Condensed Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

 

Our principal offices are located at 45 Main Street, North Reading, MA 01867, our telephone number is (401) 739 - 3300 and our corporate website (which does not form part of this Quarterly Report Form 10-Q) is located at www.powerdyneinternational.com. Our common stock trades on the OTC Markets under the symbol “PWDY”.

Operations

 

The Company’s strategy is to pursue selected opportunitiesWe primarily service the Original Equipment Manufacturers (OEM’s) in markets where inexpensive and environmentally friendly power sources are needed and/or required.the semiconductor market by supplying custom designed motors for the robotics used in semiconductor manufacturing equipment.

 

17

 

Results of Operations - The three months ended March 31,September 30, 2023, compared to the three months ended March 31,September 30, 2022:

 

Revenues

 

During the three months ended March 31,September 30, 2023, we generated $450,274$366,303 in revenue, and during the three months ended March 31,September 30, 2022, we generated $32,056$370,718 in revenue. CM Tech generated approximately $232,705 and Frame One generated approximately $133,598 in the three months ended September 30, 2022.

 

Cost of Revenues

 

During the three months ended March 31,September 30, 2023, we incurred $302,723$291,556 in cost of revenues, and during the three months ended March 31,September 30, 2022, we generated $32,012incurred $221,518 in cost of revenues. Cost of revenues for CM Tech was $214,059 and Frame One was $31, 292 for the three months ended September 30, 2023.

 

Gross Profit

 

During the three months ended March 31,September 30, 2023, we generated $147,551in$74,747 in gross profits, and during the three months ended March 31,September 30, 2022, we generated $44$149,200 in gross profit.

Operating expenses

During the three months ended September 30, 2023, total operating expenses decreased to $67,203 from $101,433 for the three months ended September 30, 2022. As in the prior nine-month period, there were additional expenses incurred to finalize the SEC reporting requirements for the CM Tech and Frame One acquisition.

The net income for the three months ended September 30, 2023, and 2022 was $7,544 and $47,767, respectively. The decrease in net income is attributable to the decrease in revenues with CM Tech and the acquisition of inventory acquisition during the three months ended September 30, 2023. The acquisition of inventory was to ensure the Company’s ability to fulfil increased demand for its products.

Results of Operations - The nine months ended September 30, 2023, compared to the nine months ended September 30, 2022:

Revenues

During the nine months ended September 30, 2023, we generated $1,100,901 in revenue, and during the nine months ended September 30, 2022, we generated $744,703 in revenue, which was a shortened period from March 7, 2022, the day we acquired CM Tech and Frame One, to September 30, 2022. Revenues increased by $356,198 during the nine months ended September 30, 2023, due to increased demand for our products.

CM Tech generated $845,510 in revenues during the nine months ended September 30, 2023, and Frame One generated $255,391 in revenues during the same period ending.

Cost of Revenues

During the nine months ended September 30, 2023, we incurred $838,095 in cost of revenues, and during the nine months ended June 30, 2022, we generated $509,492 in cost of revenues. The increase in cost of revenues was relatively consistent with the increase in revenue during the nine months ended September 30, 2023.

Gross Profit

During the nine months ended September 30, 2023, we generated $262,806 in gross profits, and during the nine months ended September 30, 2022, we generated $235,211 in gross profit. The periods are not representative to be analyzed against each other since on March 7, 2022, the Company acquired a much larger business than the comparable period for March 31,September 30, 2022. Only twenty-fourtwo hundred seven days of CM tech operations occurred during the threenine months ended March 31,September 30, 2022. Gross profit margins for the nine months ended September 30, 2023, were 23.87% compared to the nine months ended September 30, 2022, was 31.58% which the decrease is due to additional purchases of inventory to for future sales fulfilment.

 

Operating expenses

 

During the threenine months ended March 31,September 30, 2023, total operating expenses increased to $150,731$336,854 from $39,3335$271,371 for the threenine months ended March 31,September 30, 2022. The majority of the increase is due to the Company’s CEO taking a salary of $6,000 per month and an advisor taking a salary of $5,000 per month.

 

For the threenine months ended March 31,September 30, 2023, the Company had a net loss of $3,180$74,048 and for March 31,September 30, 2022, there was a loss of $1,430,681,$1,427,530, respectively. During March 31, 2022, we recorded a $1,391,370 loss from acquiring CM Tech since it was purchased from a related party, our CEO. We expect that the Company will continue to generate increases in revenues so that we become profitable and cash flow positive.profitable. However, there is no guarantee that we can achieve these results.

 

18

 

Liquidity and Capital Resources

 

As of March 31,September 30, 2023, and December 31, 2022, we had working capital deficits of $2,601$63,933 and $4,987, respectively. We historically have satisfied our liquidity requirements through cash generated from operations, subordinated related party promissory notes and issuance of equity securities. The majority of our financing of operations comes from our CEO and majority owner. A summary of our cash flows resulting from operating, investing, and financing activities for the nine months ended September 30, 2023, and 2022.

  For the nine
months ended
September 30, 2023
  For the nine
months ended
September 30, 2022
 
Operating activities  (40,117)  (170,493)
Investing activities  -   108,630 
Financing activities  15,000   114,179 

 

For the threenine months ended March 31,September 30, 2023, we had a $38,810 increase$25,117 decrease in cash compared tofrom the year-ended December 31, 2022, thisdue to increased purchases of inventory for sales fulfilment. Our cash flow from operations for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, improved substantially by $130,376. The improvement in our cash flow from operations is primarily due to the CM Tech and Frame One acquisition and the continued growth of our operating business.businesses.

 

The total net cash used by financing activities of $10,000 was due to reimbursing our CEO for the funding of our operations. In the threenine months ended March 31,September 30, 2022, our CEO provided $214,771$114,179 to cover working capital for our organic growth; expenses related to merging CM Tech into Powerdyne International, Inc. and the costs associated with obtaining clearance from FINRA to commence trading in our shares on the OTC markets.

The Company expects that as it continues to grow its top line revenues there will be continued improvement in cash flow from operations.

We believe that funds generated from operations, existing cash balances and, if necessary, related party short-term loans, are likely sufficient to finance our working capital and capital expenditure requirements for the foreseeable future. We have and continue to receive financing in the form of loans from our CEO to provide our required working capital. Our ability to meet our obligations and continue to operate as a going concern is highly dependent on our ability to obtain additional financing. We cannot predict whether this additional financing will be in the form of equity or debt. The financing for these goals could come from further equity financing or could from sales of securities and / or loans. If we are not successful in generating sufficient liquidity from operations or raising sufficient capital resources on terms acceptable to us, this could have a material adverse effect on our business, results of operations liquidity and financial condition.

Inflation

In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. However, any substantial supply side price increase will be shared with our customers.

Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operation.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that 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 deemed by our management to be material to investors.

Recent Accounting Pronouncements

Refer to Note 3 of our condensed consolidated financial statements for recent accounting pronouncements.

 

ItemITEM 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “small reporting company”of September 30, 2023, we did not participate in any market risk-sensitive commodity instruments for which fair value disclosure would be required. We believe we are not requiredsubject in any material way to provide this information under this item pursuantother forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk. We believe we are not subject in any material way to Regulation S-K.other forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controlscontrol and Procedures

Our management has, evaluated,. We carried out an evaluation, under the supervision, and with the participation of our management, including our principal executive officer and principal financial officers,officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b)) under the Securities(as defined in Exchange Act of 1934 (the “Exchange Act”Rules 13a-15(e) and 15d-15(e)). Based onupon that evaluation, our principal executive and principal financial officersas of December 31, 2022, we concluded that as of the end of the period covered by this report, ourCompany’s disclosure, controls, and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosures.

effective.

 

Changes inManagement’s Report on Internal Control overOver Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

The Company’s management, including the Company’s CEO and CFO, do not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent or detect all errors and all fraud. A control system, regardless of how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following: judgements in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes, controls can be circumvented by individuals, acting alone or in collusion with each other, or by management override. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. 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, have been detected.

Our management assessed the design and effectiveness of our internal control over financial reporting as of September 30, 2023. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) of 2013 regarding Internal Control – Integrated Framework. Based on our assessment using those criteria, as of September 30, 2023, our management concluded that our internal controls over financial reporting were operating effectively.

There have beenwere no changes in our internal control over financial reporting that occurred during the period covered by this reportthree or six months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

There is no pending, threatened or actual legal proceedings in which the Company or any subsidiary is a party.

 

ITEM 1A. Risk Factors

 

As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

COMMON STOCK

COMMON STOCK

Stock issued for services.

On February 27, 2023, the Company issued 7,500,000 shares to a consultant as compensation for accounting services rendered.

On February 27, 2023, the Company issued 15,000,000 shares to a consultant as compensation for legal services rendered.

 

The Company relied upon Section 4(2) and/or Regulation D of the Securities Act of 1933, as amended, for the issuance of these securities. No commissions were paid regarding the share issuance and the share certificates were issued, or “book entry”, with a Rule 144 restrictive legend.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable

 

ITEM 5. OTHER INFORMATION

 

None

Item 6. Exhibits.

 

Item 6. Exhibits.

(a) Exhibits.

 

Exhibit Item
   
31.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
   
32.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

 

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SIGNATURES

 

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

 

 POWERDYNE INTERNATIONAL, INC.
   
Dated: May 11,November 14, 2023By:/s/ James F. O’Rourke
  

Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

 

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