GFOO Genufood Energy Enzymes Corporation (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

Commission File Number 000-56112

GENUFOOD ENERGY ENZYMES CORP.

(Exact name of registrant as specified in its charter)

1108 S. Baldwin Avenue, Suite 107

Arcadia, California 91007

(Address of principal executive offices, including zip code.)

(855) 707-2077

(Telephone number, including area code)

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

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES ☒  NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒   NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 808,900,041 shares as of June 30, 2023. 

GENUFOOD ENERGY ENZYMES CORP.

FORM 10-Q FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

GENUFOOD ENERGY ENZYMES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

GENUFOOD ENERGY ENZYMES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

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

GENUFOOD ENERGY ENZYMES CORPORATION

CONDENSED CONSOILDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)

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

GENUFOOD ENERGY ENZYMES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

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

GENUFOOD ENERGY ENZYMES CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) 

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect”, “anticipate”, “hope” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. Some of the key factors impacting these risks and uncertainties include, but are not limited to:

Overview

On August 1, 2022, the board of directors (the “Board”) of the Company unanimously approved to expand our business in the area of electric vehicle supply equipment (“EVSE”) and will direct the management team to implement its new business plan in such industry. On August 16, 2022, the Company formally announced its intention to reposition as EVSE solutions provider, seeking to grow business in EVSE industry, including building, owning, and operating the next generation of electric vehicle charging stations in the U.S. The Company intends to bring convenient, reliable, and accessible charging experience to electric vehicle drivers, utilizing frictionless technology and carbon-neutral vehicle-charging infrastructure.

On October 26, 2022, we entered into three Charging Station Site Host Agreements (the “Agreements”) with two institutions (the “Site Hosts”), respectively, pursuant to which the Site Hosts agree to allow us to install our electric vehicle charging stations at the locations set forth in the Agreements (the “Charging Stations”). Under the Agreements, we have agreed to share our revenue generated by the sales of electricity at the Charging Stations with the Site Hosts in accordance with the schedules set forth therein.

As of December 31, 2022, the Company has purchased certain electric vehicle charging equipment. Furthermore, the Company is in the process of obtaining permits to construct the Charging Stations at the three confirmed sites. As of December 31, 2022, the Company contracted an architectural firm on providing designing and engineering services for two sites, and working on technical issues for the third site.

As of February 13, 2023, the Company has received the finalized site plans and electrical diagrams from the architectural firm and electrical engineers for 2 sites. The Company has also received permission from the site owners to proceed with the charging station construction permit applications with the local municipalities. The Company expects to install up to a total of 10 charging units for the first 2 sites, and have them operational in October of 2023.

Hukui Investment

Hukui Biotechnology Corporation (“Hukui”) and we entered into a Series C Preferred Shares Subscription Agreement dated September 23, 2020 (the “Hukui Agreement”), pursuant to which we agreed to purchase an aggregate 200,000 shares of Hukui’s Series C Preferred Stock (the “Series C Preferred Shares”) at $10.00 per share, for an aggregate investment of $2,000,000.

The Hukui Agreement provided that we would purchase the Series C Preferred Shares in three tranches, through a date on or before June 30, 2022, as follows:

An individual and resident of the Republic of China (the “Purchaser”), Hukui and we entered into a Stock Purchase Agreement dated as of November 17, 2021 (the “Stock Purchase Agreement”), pursuant to which we agreed to sell the 140,000 shares of Hukui’s Series C Preferred Stock that we had purchased in the First Tranche Closing and the Second Tranche Closing (the “Hukui Shares”) to the Purchaser for $350,000 in cash, or $2.50 per share. The sale of the Hukui Shares closed on November 19, 2021.

On December 17, 2021, Hukui and we entered into an Agreement (the “Termination Agreement”), pursuant to which our obligation to make the Third Tranche Investment was terminated and the Hukui Agreement was terminated. As a result, we have no continuing contractual obligation to make any investment in Hukui.

Results of Operations

Three-Month Period Ended June 30, 2023 compared to the Three-Month Period Ended June 30, 2022

Revenues

We did not generate any revenues during the three-month period ended June 30, 2023 and 2022.

Operating Expenses

We incurred total operating expenses of $83,649 and $65,091 for the three-month periods ended June 30, 2023 and 2022, respectively. Our operating expenses consist of legal fees, other professional fees, payroll expenses, stock-based compensation, rent, bank charges, and transfer agent fees. The increase in operating expenses for the three-month period ended June 30, 2023 compared to the same period ended in 2022 was primarily due to increase in payroll expenses and stock-based compensation.

Other expense

During the three-month period ended June 30, 2023, we incurred $748 other expenses due to interest incurred for unpaid penalty from IRS. During the three-month period ended June 30, 2022, we incurred $745 other expense was mainly due to interest incurred for unpaid penalty from IRS.

Net Loss

As a result of the above, our net loss increased from $65,836 in the three-month period ended June 30, 2022 to $84,397 in the same period ended in 2023.

Nine-Month Period Ended June 30, 2023 compared to the Nine-Month Period Ended June 30, 2022

Revenues

We did not generate any revenues during the nine-month periods ended June 30, 2023 and 2022.

Operating Expenses

We incurred total operating expenses of $328,483 and $230,516 for the nine-month periods ended June 30, 2023 and 2022, respectively. Our operating expenses consist of legal fees, other professional fees, payroll expenses, stock-based compensation, rent, bank charges, and transfer agent fees. The increase in operating expenses for the nine-month period ended June 30, 2023 compared to the same period ended in 2022 was primarily due to increase in payroll expenses and stock-based compensation.

Other expense

During the nine-month period ended June 30, 2023, we incurred $194,656 other expenses mainly due to interest incurred for unpaid penalty from IRS and the loss on disposal of our Singapore subsidiary of $192,365. During the nine-month period ended June 30, 2022, we incurred $2,631 other expenses mainly due to interest incurred for unpaid penalty from IRS.

Net Loss

As a result of the above, our net loss increased from $233,147 in the nine-month period ended June 30, 2022 to $523,139 in the same period ended in 2023.

Effect of the COVID-19 Pandemic on our Business

While our liquidity and capital resources are severely limited and present serious obstacles to starting a business, these limitations are unrelated to the COVID-19 pandemic and resulting global economic crisis.

Our personnel are in Taiwan, which has been relatively less affected by the pandemic compared to many other countries in Asia, Europe and the United States.

Depending upon the extent and duration of the pandemic and the resulting global economic crisis, these conditions may have an adverse impact on our ability to raise capital and commence any business we may pursue.

Liquidity and Capital Resources

Working Capital

As of June 30, 2023, we had current assets of $247,354 and a working surplus of $144,236. In comparison, as of September 30, 2022, we had current assets of $150,893 and a working capital deficit of $54,123.

As of June 30, 2023, we had total assets of $274,127, compared with total assets of $150,893 at September 30, 2022. The increase in total assets was primarily due to cash received from fundraising.

We had $103,118 in total current liabilities as of June 30, 2023, consisting of $100,693 in accounts payable, $40 in accrued expenses and $2,385 due to related parties. This is compared to total current liabilities of $205,016 in total current liabilities as of September 30, 2022, consisting of $102,185 in accounts payable and $102,831 due to related parties. The decrease in due to related parties was primarily due to unpaid compensation to officers and directors repaid by shares.

We had total stockholders’ equity of $139,533 and an accumulated deficit of $10,398,628 as of June 30, 2023. In comparison, we had a total stockholders’ deficit of $83,349 and an accumulated deficit of $9,875,489 as of September 30, 2022.

Cash Flows

During the nine months ended June 30, 2023, we used $236,123 of cash in operating activities which was attributable primarily to our net loss of $523,139 offset by loss on disposal of subsidiary, stock-based compensation, and change in operating assets and liabilities of $287,016. In comparison, during the nine months ended June 30, 2022, we used $148,085 of cash in operating activities which was attributable primarily to our net loss of $233,147 offset by change in operating assets and liabilities of $85,062.

During the nine months ended June 30, 2023, we used $26,773 of cash investing activity in purchase of equipment. We received $350,000 in payment for the sale of the 140,000 Hukui Shares during the nine months ended June 30, 2022.

During the nine months ended June 30, 2023 we received $362,000, net of directly associated legal expenses from private offering of our Common Stock. During the nine months ended June 30, 2022, we did not have any financing activity.

There is substantial doubt that we can continue as an ongoing business for the next twelve months unless we obtain additional capital to pay our expenses as they become due. We do not anticipate any significant additional revenue until and unless we begin to execute on our plan of operations involving the start of our new electric vehicle charging station business. There is no assurance that we will ever reach that stage. The condensed consolidated financial statements presented herein do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that we cannot continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to successfully execute our business plan and generate profitable operations in the future, and, until and unless we achieve that, to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operation as and when they become due. To date, our capital requirements have primarily been funded by shareholders through the purchase of our Common Stock in private offerings and short-term borrowings from a former officer and another shareholder.

The Company sold the 140,000 Hukui Shares for $350,000 cash on November 19, 2021 and received $362,000 from private placement during the nine months ended June 30, 2023. The proceeds have been used for operation expenses.

Contractual Obligations

We do not have material contractual obligations and commitments. We only have one lease that is renewed on a month-to-month basis.

Off-Balance Sheet Arrangements

As of June 30, 2023, we had not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. As of June 30, 2023, we had not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our condensed consolidated financial statements. Furthermore, as of June 30, 2023, we had not had any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. As of June 30, 2023, we had not had any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Critical accounting policies and estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. For the nine months ended June 30, 2023 and 2022, no significant estimates and assumptions have been made in the condensed consolidated financial statements. The following are some of the critical accounting policies in relation to the preparation of the condensed consolidated financial statements. For a full summary of our critical accounting policies, please refer to Note 2 to the Condensed Consolidated Financial Statements.

Stock-Based Compensation

We account for stock-based compensation in which we obtain employee services in share-based payment transactions under FASB ASC Topic 718, Compensation – Stock Compensation, which requires us to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments over the vesting period.

Recent accounting pronouncements

We do not expect that the adoption of recently issued accounting pronouncements will have a material impact on our financial position, results of operations, or cash flows. For a full summary of recent accounting pronouncements, please refer to Note 2 to the Condensed Consolidated Financial Statements. 

Currency exchange rates

For financial reporting purposes, the financial statements of the Company’s Singapore subsidiary, which are prepared using the SGD, are translated into the Company’s reporting currency, USD. Assets and liabilities are translated using the exchange rate on the balance sheet date, which was 0.6970 as of September 30, 2022, respectively. Revenue and expenses are translated using average exchange rates prevailing during each reporting period. The 0.7383 average exchange rates were used to translate revenues and expenses for the six months ended March 31, 2022. Stockholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive loss in stockholders’ deficit. 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that the information relating to our Company, including our consolidated subsidiary, required to be disclosed in our reports filed with the Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow for timely decisions regarding required disclosure. We conducted an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this annual report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of the evaluation date, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting, as described below.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of management, including our chief executive officer and chief financial officer, we conducted an evaluation of the design and operating effectiveness of our internal controls over financial reporting based on the framework in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2023 and identified the following material weaknesses:

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Comingling of funds: We do not have adequate control of our petty cash, resulting in the comingling of our petty cash with the nominal account holder’s personal funds.

Lack of Adequate Staffing: We do not have adequate in-house accounting personnel and expertise in key positions, which resulted in overly relying on outside consultants in preparing financial statements and other required disclosures by the Securities and Exchange Commission.

Ineffective oversight: We do not exercise effective oversight and monitoring procedures designed and implemented to certain control activities.

Overly relied on outside professionals: We are unable to prepare internally financial statements and relied on outside professional consultants to prepare financial statements and adequate disclosures.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As a result of the material weaknesses in internal control over financial reporting identified above, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2023  based on the criteria set forth in “Internal Control-Integrated Framework” issued by COSO.

Due to the nature of the material weaknesses, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected. The material weaknesses identified above either individually or in aggregation did not result in any identified misstatements or errors in the Company’s condensed consolidated financial statements at and for the three-month periods ended June 30, 2023.

Management’s Plan for Remediation

Management has discussed the material weaknesses noted above with our independent registered public accounting firm. Management is committed to improving its internal controls and, subject to having adequate financial resources, intends to:

However, due to limitation of funds and personnel, we have so far been unable to begin to implement the plan to remediate the material weaknesses noted above and it is uncertain when we will be able to begin to implement the plan to remediate these material weaknesses.

Inherent Limitations on Effectiveness of Controls

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all control issues or misstatements. Accordingly, our controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our control system are met. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become adequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to any lawsuit or proceeding, which, in the opinion of management, is likely to have a material adverse effect on us or our business.

ITEM 1A. RISK FACTORS

Not required of smaller reporting companies.

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

On February 24, 2023 (the “Closing Date”), the Company entered into Subscription Agreements with each of certain subscribers (each, a “Purchaser” and collectively, the “Purchasers”) who have subscribed to purchase a certain amount of shares of common stock of the Company, par value 0.001 (the “Common Stock”), as set forth in that respective purchasers Subscription Agreement, each subscribing for not less than $5,000 and up to 5,000,000 shares at a purchase price of US$0.001 per share. The Company was conducting this private offering (the “Offering”) pursuant to a private placement memorandum (the “PPM”) whereby the Company was offering and selling a minimum amount of $500,000 (the “Minimum Offering Amount”) and maximum of $1,000,000 of its common shares to accredited investors and non-U.S. persons. The gross proceeds from the private placement were $375,000.00.

The shares of Common Stock issued and sold under the Subscription Agreement as described above were offered and sold by the Company in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None. 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

23