Mastermind (MMND) 10-Q 15 May 24 2024 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2024	May 15, 2024
Cover [Abstract]
Entity Registrant Name	MASTERMIND, INC.
Entity Central Index Key	0001088638
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		34,505,520
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-26533
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	82-3807447
Entity Address Address Line 1	2221 Peachtree Rd. NE
Entity Address Address Line 2	Suite D-134
Entity Address City Or Town	Atlanta
Entity Address State Or Province	GA
Entity Address Postal Zip Code	30309
City Area Code	678
Local Phone Number	420-4000
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 761,064	$ 1,137,010
Accounts receivable	212,856	254,329
Unbilled receivables	1,982,877	1,679,929
Prepaid expenses and other current assets	56,501	29,198
Total Current Assets	3,013,298	3,100,466
Property and equipment, net	34,401	37,898
TOTAL ASSETS	3,047,699	3,138,364
Current liabilities:
Accounts payable and accrued expenses	65,026	213,120
Unearned revenues	112,553	121,196
Total Current Liabilities	177,579	334,316
Deferred tax liabilities	242,113	223,691
Total Liabilities	419,692	558,007
Stockholders' Equity
Preferred stock: 1,000,000 shares authorized; $0.001 par value; no shares issued and outstanding	0	0
Common stock: 125,000,000 shares authorized; $0.001 par value; 34,505,520 shares issued and outstanding	34,506	34,506
Additional paid in capital	62,865	62,865
Retained earnings	2,530,636	2,482,986
Total Stockholders' Equity	2,628,007	2,580,357
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 3,047,699	$ 3,138,364

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	34,505,520	34,505,520
Common stock, shares outstanding (in shares)	34,505,520	34,505,520

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Consolidated Statements of Operations (Unaudited)
Revenues	$ 804,900	$ 1,136,958
Cost of revenues	316,786	425,141
Gross profit	488,114	711,817
Operating Expenses:
Management consulting	100,725	210,625
Professional fees	44,104	67,183
Wages and benefits	194,723	186,944
General and administrative	91,666	88,760
Total Operating Expenses	431,218	553,512
Income from operations	56,896	158,305
Other Income (Expense)
Interest income	9,176	4,013
Loss on disposal of property and equipment	0	(329)
Total other income	9,176	3,684
Income before provision for income taxes	66,072	161,989
Provision for income taxes	18,422	43,871
Net income	$ 47,650	$ 118,118
Basic and diluted income per common share
Basic	$ 0	$ 0
Diluted	$ 0	$ 0
Weighted average number of common shares outstanding
Basic	34,505,520	34,505,520
Diluted	34,505,520	34,505,520

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Balance, shares at Dec. 31, 2022		34,505,520
Balance, amount at Dec. 31, 2022	$ 2,680,676	$ 34,506	$ 62,865	$ 2,583,305
Net income	118,118	$ 0	0	118,118
Balance, shares at Mar. 31, 2023		34,505,520
Balance, amount at Mar. 31, 2023	2,798,794	$ 34,506	62,865	2,701,423
Balance, shares at Dec. 31, 2023		34,505,520
Balance, amount at Dec. 31, 2023	2,580,357	$ 34,506	62,865	2,482,986
Net income	47,650	$ 0	0	47,650
Balance, shares at Mar. 31, 2024		34,505,520
Balance, amount at Mar. 31, 2024	$ 2,628,007	$ 34,506	$ 62,865	$ 2,530,636

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income	$ 47,650	$ 118,118
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	3,497	3,875
Loss on disposal of property and equipment	0	329
Deferred tax	18,422	43,871
Changes in operating assets and liabilities:
Accounts receivable	41,473	(217,956)
Unbilled receivables	(302,948)	(279,433)
Prepaid expenses and other current assets	(27,303)	(41,865)
Accounts payable and accrued expenses	(148,094)	62,409
Unearned revenues	(8,643)	(11,857)
Net cash used in operating activities	(375,946)	(322,509)
Cash flows from investing activities:
Proceeds from sale of equipment	0	1,200
Purchase of property and equipment	0	(3,408)
Net cash used in investing activities	0	(2,208)
Net change in cash	(375,946)	(324,717)
Cash, beginning of period	1,137,010	1,712,771
Cash, end of period	761,064	1,388,054
Supplemental Cash Flow Information
Income taxes paid	28	0
Interest paid	$ 0	$ 0

Business

Business	3 Months Ended
	Mar. 31, 2024
Business
Business	1. Business Mastermind, Inc. (the “Company”, “we”, “us”, or the “organization”) is an involvement marketing service agency that designs, creates and develops branding and marketing campaigns, primarily for large corporate clients with well-known brands. We specialize in customer conversion initiatives that we believe facilitate the involvement of more of the “right customers” with the brands of our clients. We focus on converting prospects to customers. Our programs can take on various forms, including creating and managing content marketing, influencer marketing, social marketing/community management, digital issues management communications, promotions, Augmented Reality Marketing, and UX Analytics & Digital Intelligence.

Interim Financial Statements an

Interim Financial Statements and Basis of Presentation	3 Months Ended
	Mar. 31, 2024
Interim Financial Statements and Basis of Presentation
Interim Financial Statements and Basis of Presentation	2. Interim Financial Statements and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information pursuant to Rule 8-03 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments), which we consider necessary, for a fair presentation of those financial statements. The results of operations for the three months ended March 31, 2024 and cash flows for the three months ended March 31, 2024, may not necessarily be indicative of results that may be expected for any succeeding period or for the entire fiscal year. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K as of and for the fiscal year ended September 30, 2023 as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments, which are evaluated on an ongoing basis, and that affect the amounts reported in our unaudited financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to revenue recognition, allowance for doubtful accounts, useful lives and valuation of property and equipment. There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2024, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023. Cash and Cash Equivalents Cash includes cash on hand. Cash equivalents include short-term, highly liquid investments, with a remaining maturity at the date of purchase of three March 31, December 31, 2024 2023 Cash $ 105,773 $ 60,824 Money market funds 655,291 1,076,186 $ 761,064 $ 1,137,010 Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250,000 per institution. The amount in excess of the FDIC insurance as of March 31, 2024, was approximately $405,000. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant. Reclassifications Certain prior period amounts have been reclassified to conform with the current period presentation. Change in Year End On February 1, 2024, the Board of Directors of Mastermind, Inc. (the “Company”) approved a change in the Company’s fiscal year end from September 30 to December 31, effective for the fiscal year beginning January 1, 2024 and ending December 31, 2024. As a result of the change in fiscal year end, the Company filed on February 16 th

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2024
Related Party Transactions
Related Party Transactions	3. Related Party Transactions On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $15,000 for the three months ended March 31, 2024 and 2023, respectively (Note 5). During the three months ended March 31, 2024, and 2023, we made payments to our three members pursuant to the terms of our operating agreement, as amended, for services rendered to us. The Company recorded expenses to our three

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2024
Property and Equipment
Property and Equipment	4. Property and Equipment Property and equipment consist of the following: March 31, December 31, 2024 2023 Furniture, fixtures and office equipment $ 93,135 $ 93,135 Less: accumulated depreciation (58,734 ) (55,237 ) Property and equipment, net $ 34,401 $ 37,898 Depreciation expense for the three months ended March 31, 2024 and 2023, were $3,497 and $3,875, respectively.

Licensing Agreements

Licensing Agreements	3 Months Ended
	Mar. 31, 2024
Licensing Agreements
Licensing Agreements	5. Licensing Agreements On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $15,000 for the three months ended March 31, 2024 and 2023, respectively. In consideration for the Perpetual License, we agreed to pay the following fees through calendar year 2039: Fiscal Years Ending December 31, Amount 2024 $ 60,000 2025 60,000 2026 120,000 2027 120,000 2028 120,000 Thereafter 1,320,000 $ 1,800,000

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2024
Commitments and Contingencies
Commitments and Contingencies	6. Commitments and Contingencies Litigation On February 11, 2022, a Complaint and Demand for Jury Trial (the “Complaint”) was filed by a plaintiff (the “Plaintiff”) in the United States District Court for the Eastern District of Pennsylvania. The Complaint named Mastermind, Inc. (“the Company”) and Daniel Dodson, the Company’s Chief Executive Officer, (the “CEO”). The Company and the CEO are collectively referred to herein as “Defendants”. The Complaint includes alleged breach of contract and alleged breach of implied contract by the Defendants related to the Plaintiff’s allegations that he was entitled to 3,000,000 shares of common stock of the Company from the reverse merger transaction completed on February 14, 2018. The Defendants successfully had the Complaint transferred to the United States District Court for the Northern District of Georgia. In September of 2023, the court dismissed in part the breach of contract claims against the CEO and the Company. The alleged breach of implied contract by the Defendants is pending further litigation. The Defendants will contest the complaint and strongly believe they will prevail. As of March 11, 2024 Mastermind was successful at getting the lawsuit dismissed. On March 8, 2024 Cimino’s attorney filed a stipulation of dismissal with prejudice, and the clerk accepted the stipulation and dismissed and closed the case. The dismissal with prejudice (as opposed to without) would make it extremely difficult, if not impossible for Cimino to revive an action against Mastermind based upon the same facts/transactions. Other than the above we are not a party to any other legal proceedings, other than ordinary routine litigation incidental to our business, which we believe will not have a material effect on our financial position or results of operations.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2024
Income Taxes
Income Taxes	7. Income Taxes Prior to February 14, 2018, the effective date of the Business Combination, no provision for income taxes was made since we were treated as a partnership for income tax purposes and the income or loss was passed through to our members. We are required to file federal and state income tax returns in the United States. The preparation of these tax returns requires us to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by us. In consultation with our tax advisors, we base our tax returns on interpretations that are believed to be reasonable under the circumstances. We have estimated our provision for income taxes in accordance with the Tax Act and guidance available as of the date of this filing. The tax returns, however, are subject to routine reviews by the various federal and state taxing authorities in the jurisdictions in which we file tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by us (“uncertain tax positions”) and, therefore, may require us to pay additional taxes. As required under applicable accounting rules, we accrue an amount for our estimate of additional income tax liability, including interest and penalties, which we could incur as a result of the ultimate or effective resolution of the uncertain tax positions. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed 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 the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. There were no unrecognized material tax benefits at March 31, 2024, and December 31, 2023. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have no uncertain tax positions. Tax returns are subject to examination by the federal and state taxing authorities for generally three years after filed. There are no income tax examinations currently in process. The Company files its income tax returns on the cash basis of accounting utilizing a December 31 tax year end. Deferred tax assets relating to current liabilities result from accounts payable and accrued expenses and unearned revenues which are not currently deductible for tax purposes. Deferred tax liabilities relating to current assets result from accounts receivables, unbilled receivables and prepaid expenses which are not currently recognized as income for tax reporting purposes. As of March 31, 2024, the Company has $848,051 of net operating loss carryforwards on tax basis, which is prepared on cash basis, that are available to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Stockholders Equity

Stockholders Equity	3 Months Ended
	Mar. 31, 2024
Stockholders Equity
Stockholders' Equity	8. Stockholders Equity Preferred Stock As of March 31, 2024, and December 31, 2023, we were authorized to issue a total 1,000,000 shares of preferred stock. There were no shares of Preferred Stock issued or outstanding as of March 31, 2024, and December 31, 2023. Common Stock As of March 31, 2024, and December 31, 2023, we were authorized to issue a total of 125,000,000 shares of common stock. As of March 31, 2024, and December 31, 2023, there were 34,505,520 shares of common stock issued and outstanding, respectively. During the three months ended March 31, 2024 and 2023, the Company did not issue any shares of common stock. Dividends During the three months ended March 31, 2024 and 2023, there were no dividends declared or paid. Common Stock Options During the three months ended March 31, 2024 and 2023, there were no stock options exercised or issued. A 2018 Equity Incentive Plan consisting of four million (4,000,000) shares of Common Stock was adopted by written consent of holders of 85% of the voting securities. No options or shares have been issued under this plan as of March 31, 2024, and December 31, 2023.

Concentration of Credit Risk an

Concentration of Credit Risk and Major Customers	3 Months Ended
	Mar. 31, 2024
Concentration of Credit Risk and Major Customers
Concentration of Credit Risk and Major Customers	9. Concentration of Credit Risk and Major Customers For the three months ended March 31, 2024, three customers represented approximately 47%, 28% and 19%, respectively, of our total revenues. For the three months ended March 31, 2023, three customers represented approximately 42%, 34% and 21%, respectively, of our total revenues. As of March 31, 2024 , As of December 31, 2023 ,

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2024
Subsequent Events
Subsequent Events	10. Subsequent Events The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no such events that warrant disclosure or recognition in the consolidated financial statements presented herein.

Interim Financial Statements _2

Interim Financial Statements and Basis of Presentation (Tables)	3 Months Ended
	Mar. 31, 2024
Interim Financial Statements and Basis of Presentation
Schedule of Cash and Cash Equivalents	March 31, December 31, 2024 2023 Cash $ 105,773 $ 60,824 Money market funds 655,291 1,076,186 $ 761,064 $ 1,137,010

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2024
Property and Equipment
Schedule of Property and Equipment	March 31, December 31, 2024 2023 Furniture, fixtures and office equipment $ 93,135 $ 93,135 Less: accumulated depreciation (58,734 ) (55,237 ) Property and equipment, net $ 34,401 $ 37,898

Licensing Agreements (Tables)

Licensing Agreements (Tables)	3 Months Ended
	Mar. 31, 2024
Licensing Agreements
Schedule of consideration for the Perpetual License	Fiscal Years Ending December 31, Amount 2024 $ 60,000 2025 60,000 2026 120,000 2027 120,000 2028 120,000 Thereafter 1,320,000 $ 1,800,000

Interim Financial Statements _3

Interim Financial Statements and Basis of Presentation (Details ) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Interim Financial Statements and Basis of Presentation
Cash	$ 105,773	$ 60,824
Money market funds	655,291	1,076,186
Cash and cash equivalents net	$ 761,064	$ 1,137,010

Interim Financial Statements _4

Interim Financial Statements and Basis of Presentation (Details Narrative )	Mar. 31, 2024 USD ($)
Interim Financial Statements and Basis of Presentation
Federally insured limit	$ 250,000
Amount in excess of the FDIC insurance	$ 405,000

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related party transaction, expenses from transactions with related party	$ 160,577	$ 270,318
Finite-lived license agreements amount	2,100,000
Amortized expense	27,000	15,000
Licensor [Member]
Amortized expense	27,000	$ 15,000
Licensor [Member] | License Agreement [Member]
Due to related parties	$ 0		$ 0

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property and Equipment
Furniture, fixtures and office equipment	$ 93,135	$ 93,135
Less: accumulated depreciation	(58,734)	(55,237)
Property and equipment, net	$ 34,401	$ 37,898

Property and Equipment (Detai_2

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property and Equipment
Depreciation	$ 3,497	$ 3,875

Licensing Agreements (Details)

Licensing Agreements (Details) - License Agreement [Member] - Licensor [Member]	Mar. 31, 2024 USD ($)
2024	$ 60,000
2025	60,000
2026	120,000
2027	120,000
2028	120,000
Thereafter	1,320,000
Total	$ 1,800,000

Licensing Agreements (Details N

Licensing Agreements (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Licensing Agreements
Finite-lived license agreements amount	$ 2,100,000
Amortized expenses	$ 27,000	$ 15,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative)	Feb. 11, 2022 shares
Commitments and Contingencies
Loss contingency, damages sought, shares of common stock	3,000,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative)	Mar. 31, 2024 USD ($)
Income Taxes
Net operating loss carryforwards	$ 848,051

Stockholders Equity (Details Na

Stockholders Equity (Details Narrative) - shares	Mar. 31, 2024	Dec. 31, 2023
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares, issued	34,505,520	34,505,520
Common stock, shares, outstanding	34,505,520	34,505,520
Preferred stock, shares authorized	1,000,000	1,000,000
2018 Equity Incentive Plan [Member]
Common Stock, Capital Shares Reserved For Future (in shares) Issuance	4,000,000
Percentage of voting securities	85%

Concentration of Credit Risk _2

Concentration of Credit Risk and Major Customers (Details Narrative)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Customer 1 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	47%	42%
Customer 1 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	56%	64%
Customer 2 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	28%	34%
Customer 2 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	31%	26%
Customer 3 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	19%	21%
Contracts3 [Member] | Account Receivable [Member] | Costemer Concentration Risk [Member]
Concentration Risk, Percentage	12%	9%