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 December 31, 2023

 

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. 000-56301

 

OUTDOOR SPECIALTY PRODUCTS, INC.

(Exact name of registrant as specified in charter)

 

NEVADA   46-4854952
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)

 

3842 Quail Hollow Drive, Salt Lake City, Utah   84109
(Address of principal executive offices)   (Zip Code)

 

(801) 560-5184

Registrant’s telephone number, including area code)

 

 

 

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

 

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

 

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 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, a 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.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer Smaller reporting company
  Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any news 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 

 

The number of shares outstanding of each of the issuer’s classes of common stock as of February 9, 2024 is 5,284,318.

 

 

 

 

 

 

OUTSIDE SPECIALTY PRODUCTS, INC.

FORM 10-Q

 

FOR THE THREE MONTHS ENDED DECEMBER 31, 2023

 

Special Note Regarding Forward-Looking Statements ii
   
PART I - Financial Information  
   
Item 1. Financial Statements (Unaudited) 1
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 7
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
   
Item 4. Controls and Procedures 9
   
PART II - Other Information  
   
Item 1. Legal Proceedings 10
   
Item 1A. Risk Factors 10
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10
   
Item 3. Defaults upon Senior Securities 10
   
Item 4. Mine Safety Disclosures 10
   
Item 5. Other Information 10
   
Item 6. Exhibits 11
   
Signatures 12

 

i

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements and information in this report on Form 10-Q may constitute forward-looking statements. The words believe, may, potentially, estimate, continue, anticipate, intend, could, would, project, plan, expect and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

 

our future financial and operating results;
our business strategy;
our intentions, expectations and beliefs regarding anticipated growth, market penetration and trends in our business;
the effects of market conditions on our stock price and operating results;
our ability to maintain our competitive technological advantages against competitors in our industry;
our ability to timely and effectively adapt our existing technology and have our technology solutions gain market acceptance;
our ability to introduce new products and bring them to market in a timely manner;
our ability to maintain, protect and enhance our intellectual property;
the effects of increased competition in our market and our ability to compete effectively;
costs associated with defending intellectual property infringement and other claims;
our expectations concerning our relationships with customers and other third parties;
the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as consumer spending;
risks associated with sourcing and manufacturing; and
our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and United States export regulations.

 

These forward-looking statements speak only as of the date of this Form 10-Q and are subject to uncertainties, assumptions, and business and economic risks. As such, our actual results could differ materially from those set forth in the forward-looking statements. Moreover, we operate in a competitive and changing environment, and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied in our forward-looking statements.

 

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.

 

You should read this Report on Form 10-Q and the documents that we have filed with the SEC as exhibits hereto with the understanding that our actual future results and circumstances may be materially different from what we expect.

 

ii

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Index to Financial Statements

 

Condensed Balance Sheets (Unaudited) at December 31, 2023 and September 30, 2023 2
   
Condensed Statements of Operations (Unaudited) for the Three Months Ended December 31, 2023 and 2022 3
   
Condensed Statements of Changes in Stockholders’ Deficit (Unaudited) for the Three Months Ended December 31, 2023 and 2022 4
   
Condensed Statements of Cash Flow (Unaudited) for the Three Months Ended December 31, 2023 and 2022 5
   
Notes to the Unaudited Condensed Financial Statements. 6

 

1

 

 

OUTDOOR SPECIALTY PRODUCTS, INC.

Balance Sheets

(Unaudited)

 

   December 31,
2023
   September 30,
2023
 
Assets:        
Current Assets:        
Cash  $1,540   $3,162 
Prepaid expense   5,550    458 
Inventory   3,660    3,661 
Total current assets   10,750    7,281 
           
Other Assets:          
Patents, net   
-
    
-
 
           
Total Assets  $10,750   $7,281 
           
Liabilities and Stockholders’ Deficit:          
Current Liabilities:          
Accounts payable  $7,822   $2,310 
Accrued interest   5,954    5,012 
Line of credit-related party   111,913    98,360 
           
Total Liabilities   125,689    105,682 
           
Stockholders’ Deficit:          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding   
-
    
-
 
Common stock, $0.001 par value, 190,000,000 shares authorized, 5,284,318 shares issued and outstanding   5,285    5,285 
Additional paid-in capital   99,232    99,232 
Accumulated deficit   (219,456)   (202,918)
Total Stockholders’ Deficit   (114,939)   (98,401)
           
Total Liabilities and Stockholders’ Deficit  $10,750   $7,281 

 

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

 

2

 

 

OUTDOOR SPECIALTY PRODUCTS, INC.

Statements of Operations

(Unaudited)

 

   For the Three Months Ended
December 31,
 
   2023   2022 
Revenue  $13   $130 
Cost of Sales   (1)   (12)
Gross Profit   12    118 
           
Operating Expenses:          
General and administrative   15,608    10,053 
Total Operating Expenses   15,608    10,053 
Loss from Operations   (15,596)   (9,935)
Other Expense:          
Interest expense   942    615 
Total other expense   942    615 
Net Loss  $(16,538)  $(10,550)
Net loss per share of common Stock – basic and diluted
  $(0.00)  $(0.00)
Weighted average number of common shares outstanding – basic and diluted
   5,284,318    5,284,318 

 

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

 

3

 

 

OUTDOOR SPECIALTY PRODUCTS, INC.

Statements of Changes in Stockholders’ Deficit

For the three months ended December 31, 2023, and 2022

(Unaudited)

 

   Common Stock   Additional
Paid-in
   Accumulated   Total
Stockholders’
 
   Shares   Amount   Capital   Deficit   Deficit 
Balance, September 30, 2022   5,284,318   $5,285   $99,232   $(156,446)  $(51,929)
Net loss for the three months ended December 31, 2022   -    
-
    
-
    (10,550)   (10,550)
Balance, December 31, 2022   5,284,318   $5,285   $92,232   $(166,996)  $(62,479)
                          
Balance, September 30, 2023   5,284,318   $5,285   $99,232   $(202,918)  $(98,401)
Net loss for the three months ended December 31, 2023   -    
-
    
-
    (16,538)   (16,538)
Balance, December 31, 2023   5,284,318   $5,285   $92,232   $(219,456)  $(114,939)

 

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

 

4

 

 

OUTDOOR SPECIALTY PRODUCTS, INC.
STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Three Months Ended
December 31,
 
   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net Loss  $(16,538)  $(10,550)
Adjustments to Reconcile Net Loss          
To Net Cash Used by Operating Activities          
Depreciation and Amortization   
-
    102 
Changes in Operating Assets and Liabilities:          
Increase in prepaid expense   (5,092)   (4,126)
Increase in accounts receivable   
-
    (13)
Decrease in inventory   1    13 
Increase in accounts payable   5,512    
-
 
Increase in accrued interest   942    615 
Net Cash Used by Operating Activities   (15,175)   (13,959)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Net Cash Used by Investing Activities   
-
    
-
 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from line of credit - related party   13,553    13,946 
Net Cash Provided by Financing Activities   13,553    13,946 
           
Net Increase (Decrease) in Cash   (1,622)   (13)
Cash at Beginning of Period   3,162    1,241 
Cash at End of Period  $1,540   $1,228 
           
SUPPLEMENTAL DISCLOSURES:          
Cash Paid During the Period For:          
Interest  $
-
   $
-
 
Income taxes  $
-
   $
-
 

 

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

 

5

 

 

OUTDOOR SPECIALTY PRODUCTS, INC.

Notes to the Unaudited Condensed Financial Statements

Three Months Ended December 31, 2023

 

NOTE 1: Condensed Financial Statements

 

The accompanying unaudited financial statements of Outdoor Specialty Products, Inc. (the “Company”) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended September 30, 2023.

 

These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three months ended December 31, 2023, are not necessarily indicative of the results that may be expected for the year ending September 30, 2024.

 

NOTE 2 – Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying financial statements, the Company did not generate sufficient revenue to generate net income, has a negative working capital, and has a limited operating history. These factors, among others, may indicate that there is substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

 

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.  The Company intends to seek additional funding through additional stockholder loans and debt or equity offerings to fund its business plan.  There is no assurance that the Company will be successful in raising additional funds.

 

NOTE 3 – LINE OF CREDIT – RELATED PARTY

 

During the three months ended December 31, 2023, the Company amended the revolving promissory note agreement with its related party to extend the maturity date to December 31, 2024 and increase the maximum principal indebtedness to $127,500. The revolving promissory note bears interest at the rate of 3.5% per annum. The Company received proceeds under the line of credit of $10,000 during the three months ended December 31, 2023, resulting in principal balances of $93,521 and $83,521, with accrued interest of $5,246 and $4,444, at December 31, 2023 and September 30, 2023, respectively.

 

Also, during the three months ended December 31, 2023, the Company amended the revolving promissory note agreement with another principal stockholder to extend the maturity date to December 31, 2024 and increase the maximum principal indebtedness to $22,500. The revolving promissory note bears interest at the rate of 3.5% per annum. The Company received proceeds under the line of credit of $3,553 during the three months ended December 31, 2023, resulting in principal balances of $18,392 and $14,839, with accrued interest of $708 and $568, at December 31, 2023 and September 30, 2023, respectively.

 

NOTE 4 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from the balance sheet date through the date of the financial statements were issued and determined that there are no events requiring disclosure.

 

6

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

You should read the following discussion in conjunction with our financial statements, which are included elsewhere in this report.

 

Overview

 

We are and have since our inception in 2014 been engaged in the business of developing, selling, and marketing products in niche markets within the specialty outdoor products marketplace. We introduced our proprietary “Reel Guard” product in 2014 and continue to offer it for sale. We have postponed the production of the SLINKOR product while we attempt to redesign it to replace the lead weight with a weight made from a non-lead material and to implement a more automated manufacturing process. Our initial efforts to locate a weight made of non-lead material were unsuccessful and we are now focusing our efforts on a complete redesign of the product that would involve the use of a single injection molded component made of a material with weighting properties similar to lead. We believe the use of a single injection molded product would allow us to accelerate the manufacturing process, which we anticipate would increase production capacity and reduce costs as compared to the manual manufacturing process currently used by the Licensor to produce the SLINKOR. No assurances can be given that the proposed injection molded product will be successfully completed or that it will be available for production and sale. We do not plan to commence manufacturing of the new product until the design has been completed and additional debt or equity funding has been received to cover the manufacturing costs.  

 

Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We did not generate sufficient revenue to generate net income, we have negative working capital, and we have a limited operating history. These factors, among others, may indicate that there is substantial doubt that we will be able to continue as a going concern for a reasonable period of time. Our financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.  Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. We intend to seek additional funding through additional stockholder loans and debt or equity offerings. We also intend to increase our sales through the addition of our SLINKOR product when and if its redesign is completed. There is no assurance that we will be successful in raising additional funds or that the SLINKOR product will result in an increase in sales.

 

Results of Operations for the Three and Three months Ended December 31, 2023 and 2022

 

Revenues

 

From our inception in 2014 through the present, our revenue has resulted solely from sales of our proprietary Reel Guard product and our cost of sales also relate solely to that product. Our Reel Guard product is offered for sale on our website and on eBay and sales vary from quarter to quarter based on the number of customers that become aware of the product and decide to make a purchase. Total revenue for the three months ended December 31, 2023, was $13, compared to $130 for the three months ended December 31, 2022, a decrease of $117, or approximately 90%. We are not aware of any reason for the decline in sales.

 

Cost of Sales

 

Cost of sales for the three months ended December 31, 2023 was $1, compared to $12 for the three months ended December 31, 2022, a decrease of $11, or approximately 92%, which is in line with the decrease in revenue. Cost of sales as a percentage of revenue for the three months ended December 31, 2023 and 2022 was approximately 8% and 10%, respectively. Our cost of sales as a percentage of revenue did not differ significantly from 2022 to 2023 since we offered only one product for sale and there have been no material changes in the sales price or manufacturing cost of our product.

 

General and Administrative Expenses

 

General and administrative expenses were $15,608 for the three months ended December 31, 2023, compared to $10,053 for the three months ended December 31, 2022, an increase of $5,555 or approximately 55%. General and administrative expenses consist primarily of legal, accounting, and Edgar filing expenses and the increase in 2023 is primarily attributable to higher legal fees.

 

7

 

 

Depreciation and Amortization Expense

 

Depreciation and amortization expenses currently are not material to our business. Depreciation and amortization expense was $0 for the three months ended December 31, 2023 as compared to $102 for the three months ended December 31, 2022. As of September 30, 2023, the Company wrote off the remaining net balance on its patent after it was determined an impairment existed in accordance with ASC 360 which requires that a company recognize an impairment loss if, and only if, the carrying amount of a long-lived asset (asset group) is not recoverable from the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset.

 

Research and Development Expenses

 

Research and development expenses are not currently material to our business. We did not incur research and development expenses in the three months ended December 31, 2023 or 2022.

 

Liquidity and Capital Resources

 

As of December 31, 2023, we had total current assets of $10,750, including cash of $1,540, and current liabilities of $125,689, resulting in a working capital deficit of $114,939. Our current liabilities include a principal outstanding balance of $111,913, and $5,954 in accrued interest, under the short-term revolving loan agreements with our president and another principal stockholder that are due on or before December 31, 2024. As of December 31, 2023, we had an accumulated deficit of $219,456 and a total stockholders’ deficit of $114,939. We have financed our operations to date from sales of our Reel Guard product, proceeds from our 2014 private placement, and proceeds from the short-term revolving loan agreements.

 

For the three months ended December 31, 2023, net cash used by operating activities was $15,175 as a result of a net loss of $16,538, which was (i) reduced by a decrease in inventory of $1, an increase in accounts payable of $5,512, and an increase in accrued interest of $942, and (ii) increased by an increase in prepaid expense of $5,092. By comparison, for the three months ended December 31, 2022, net cash used by operating activities was $13,959 as a result of a net loss of $10,550, which was (i) reduced depreciation and amortization of $102, a decrease in inventory of $13, and an increase in accrued interest of $615, and (ii) increased by an increase in prepaid expense of $4,126 and an increase in accounts receivable of $13.

 

For the three months ended December 31, 2023 and 2022, we had no cash flows used in or provided by investing activities.

 

For the three months ended December 31, 2023, we had net cash provided by financing activities of $13,553 consisting of proceeds from the revolving loan agreements. For the three months ended December 31, 2022, we had net cash provided by financing activities of $13,946, also consisting of proceeds from the revolving loan agreements.

 

Following our incorporation in 2014, we completed the private placement of 285,714 shares of our common stock to accredited investors in a private placement at a price of $0.35 per share for total proceeds of $100,011. The proceeds from the private placement together with our limited product sales were sufficient to fund our operations through our fiscal year ended September 30, 2020. On January 4, 2021, we entered into a revolving promissory note agreement with our president and principal stockholder that, as amended, provides for total loans of up to $127,500 at an interest rate 3.5% per annum, which is repayable on or before December 31, 2024. We received proceeds under the revolving promissory note of $10,000 during the three months ended December 31, 2023, resulting in principal balances of $93,521 and $83,521, with accrued interest of $5,246 and $4,444, at December 31, 2023 and September 30, 2023, respectively. During December 2021, we entered into a revolving promissory note agreement with another principal stockholder that, as amended, provides for loans of up to $22,500 at an interest rate of 3.5% per annum, which is repayable on or before December 31, 2024. We received proceeds under the second revolving promissory note of $3,553 during the three months ended December 31, 2023, resulting in principal balances of $18,392 and $14,839, with accrued interest of $708 and $568, at December 31, 2023 and September 30, 2023, respectively.

 

8

 

 

We do not believe we will generate adequate revenues to meet our obligations for the next twelve months and will require additional loans under the revolving note agreements in order to meet such obligations. Cash flow from operations has not historically been sufficient to sustain our operations without the additional sources of capital described above. Our future working capital requirements will depend on many factors, including our revenues, an increase in the amounts and extension of the due dates of the revolving loan agreements if required, the expansion of our product line to include the new SLINKOR product, and the costs of redesigning and manufacturing the SLINKOR product. To the extent our cash, cash equivalents, and cash flows from operating activities and the revolving note agreements are insufficient to fund our future activities, we may need to raise additional funds through additional stockholder loans or private equity or debt financing. We also may need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies, or products. If additional funding is required, we may not be able to effect an equity or debt financing on terms acceptable to us or at all.

 

Cash Requirements

 

As of December 31, 2023 and September 30, 2023, we did not have any lease obligations or requirements or other agreements requiring a significant commitment of cash.

 

Off-Balance Sheet Arrangements

 

As of December 31, 2023 and September 30, 2023, we did not have any off-balance sheet financing arrangements.

 

Critical Accounting Estimates

 

There have been no material changes to our critical accounting estimates as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not Applicable. The Company is a “smaller reporting company.”

 

Item 4. Controls and Procedures

 

Evaluation of disclosure controls and procedures.

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow for timely decisions regarding required disclosure. Due to inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Further, 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 degree of compliance with the policies and procedures may deteriorate. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

 

Under the supervision and with the participation of our management, including our President and Treasurer who serves as our principal executive and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“the Exchange Act”) as of December 31, 2023, the end of the period covered by this report. Based upon that evaluation, our principal executive and financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, due to the existence of the material weaknesses in our internal control over financial reporting described in our annual report on Form 10-K for the year ended September 30, 2023.

 

Changes in internal controls over financial reporting.

 

Except as described below, there was no change in our internal control over financial reporting during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. During such quarter, in order to address the material weaknesses in our internal control over financial reporting described in our annual report on Form 10-K for the year ended September 30, 2023, we put in place additional review related to the accuracy of accounting for inventory and strengthened our procedures around complex accounting issues such as asset impairments and set guidelines for how to conduct and document the reviews of those complex topics. We believe additional testing is required before concluding that the material weaknesses have been remediated.

 

9

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any material pending legal proceedings.

 

Item 1A. Risk Factors

 

Not Applicable. The Company is a “smaller reporting company.”

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults upon Senior Securities

 

Not Applicable.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

10

 

 

Item 6: Exhibits

 

The following are included as exhibits to this report:

 

Exhibit

Number

  Title of Document   Location
         
3.1   Articles of Incorporation  

Incorporated by Reference(1)

3.2   Articles of Merger dated February 24, 2021  

Incorporated by Reference(1)

3.3   Bylaws   Incorporated by Reference(1)
10.1   Fifth Amendment to Revolving Promissory Note Agreement with Kirk Blosch dated as of October 9, 2023   This Filing
10.2   Fourth Amendment to Revolving Promissory Note Agreement with Ed Bailey dated as of October 9, 2023   This Filing
31.1   Section 302 Certification of Chief Executive and Chief Financial Officer   This Filing
32.1  

Section 1350 Certification of Chief Executive and Chief Financial Officer

  This Filing
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 (formatted in Inline XBRL and contained in Exhibit 101).    

 

(1)Incorporated by reference to the Company’s Registration Statement on Form 10-12G filed June 24, 2021.

 

11

 

 

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.

 

  Outdoor Specialty Products, Inc.
     
Dated: February 9, 2024 By /s/ Kirk Blosch
    Kirk Blosch
    President, Secretary and Treasurer
    (Principal Executive and Accounting Officer)

 

 

12

 

--09-30 NV 0.00 0.00 5284318 5284318 false Q1 2024 0001610718 0001610718 2023-10-01 2023-12-31 0001610718 2024-02-09 0001610718 2023-12-31 0001610718 2023-09-30 0001610718 us-gaap:RelatedPartyMember 2023-12-31 0001610718 us-gaap:RelatedPartyMember 2023-09-30 0001610718 2022-10-01 2022-12-31 0001610718 us-gaap:CommonStockMember 2022-09-30 0001610718 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001610718 us-gaap:RetainedEarningsMember 2022-09-30 0001610718 2022-09-30 0001610718 us-gaap:CommonStockMember 2022-10-01 2022-12-31 0001610718 us-gaap:AdditionalPaidInCapitalMember 2022-10-01 2022-12-31 0001610718 us-gaap:RetainedEarningsMember 2022-10-01 2022-12-31 0001610718 us-gaap:CommonStockMember 2022-12-31 0001610718 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001610718 us-gaap:RetainedEarningsMember 2022-12-31 0001610718 2022-12-31 0001610718 us-gaap:CommonStockMember 2023-09-30 0001610718 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001610718 us-gaap:RetainedEarningsMember 2023-09-30 0001610718 us-gaap:CommonStockMember 2023-10-01 2023-12-31 0001610718 us-gaap:AdditionalPaidInCapitalMember 2023-10-01 2023-12-31 0001610718 us-gaap:RetainedEarningsMember 2023-10-01 2023-12-31 0001610718 us-gaap:CommonStockMember 2023-12-31 0001610718 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001610718 us-gaap:RetainedEarningsMember 2023-12-31 0001610718 us-gaap:RelatedPartyMember 2023-10-01 2023-12-31 0001610718 us-gaap:RelatedPartyMember 2022-10-01 2023-09-30 0001610718 2022-10-01 2023-09-30 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure

Exhibit 10.1

 

FIFTH AMENDMENT TO REVOLVING PROMISSORY NOTE AGREEMENT

 

This Fifth Amendment to Revolving Promissory Note Agreement is made and entered into as of the 9th day of October 2023, by and between Outdoor Specialty Products, Inc., a Nevada corporation (“Borrower”), and Kirk Blosch (“Noteholder”).

 

WHEREAS, Borrower and Noteholder entered into that certain Revolving Promissory Note Agreement, dated January 4, 2021, in the original principal amount of $40,000.00, as amended on December 1, 2021, June 2, 2022, November 21, 2022, and May 10, 2023 (collectively, the “Original Note”), which currently provides for a maturity date of December 31, 2023, and a maximum principal indebtedness of $85,000.00; and

 

WHEREAS, Borrower and Noteholder desire to further amend the Original Note to increase the amount of principal indebtedness and extend the Maturity Date as provided herein.

 

NOW, THEREFORE, in consideration of the premises and covenants set forth herein, the parties hereto agree as follows:

 

1. Increase in Principal Indebtedness. The Original Note is hereby amended by changing the principal amount of the Note at the top of the first page from US $85,000 to US $127,500 and by changing the amount of the Principal Indebtedness in the preamble of the Original Note from EIGHTY-FIVE THOUSAND AND NO/100 DOLLARS ($85,000) to ONE HUNDRED TWENTY-SEVEN THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($127,500.00).

 

2. Extension of Maturity Date. Section 1(a) of the Original Note captioned “Maturity Date,” is hereby amended by changing the Maturity Date from December 31, 2023, to December 31, 2024.

 

3. Defined Terms / No Further Modification. Any terms used but not defined herein shall have the meanings ascribed to them in the Original Note. Except as expressly set forth herein, the Original Note shall remain unmodified and shall continue in full force and effect.

 

Dated as of the date first written above.

 

Borrower: OUTDOOR SPECIALTY PRODUCTS, INC.
     
  By /s/ Kirk Blosch
  Name:   Kirk Blosch
  Title: President
     
Noteholder:    
     
  /s/ Kirk Blosch
  Kirk Blosch

 

Exhibit 10.2

 

FOURTH AMENDMENT TO REVOLVING PROMISSORY NOTE AGREEMENT

 

This Fourth Amendment to Revolving Promissory Note Agreement is made and entered into as of the 9th day of October 2023, by and between Outdoor Specialty Products, Inc., a Nevada corporation (“Borrower”), and Ed Bailey (“Noteholder”).

 

WHEREAS, Borrower and Noteholder entered into that certain Revolving Promissory Note Agreement, dated December 1, 2021, in the original principal amount of $7,000.00, as amended on June 2, 2022, November 21, 2022, and May 10, 2023 (collectively, the “Original Note”), which currently provides for a maturity date of December 31, 2023, and a maximum principal indebtedness of $15,000.00; and

 

WHEREAS, Borrower and Noteholder desire to further amend the Original Note to increase the amount of principal indebtedness and extend the Maturity Date as provided herein.

 

NOW, THEREFORE, in consideration of the premises and covenants set forth herein, the parties hereto agree as follows:

 

1. Increase in Principal Indebtedness. The Original Note is hereby amended by changing the principal amount of the Note at the top of the first page from US $15,000 to US $22,500.00 and by changing the amount of the Principal Indebtedness in the preamble of the Original Note from FIFTEEN THOUSAND AND NO/100 DOLLARS (US$15,000) to TWENTY-TWO THOUSAND FIVE HUNDRED AND NO/100 DOLLARS (US$22,500.00).

 

2. Extension of Maturity Date. Section 1(a) of the Original Note captioned “Maturity Date,” is hereby amended by changing the Maturity Date from December 31, 2023, to December 31, 2024.

 

3. Defined Terms / No Further Modification. Any terms used but not defined herein shall have the meanings ascribed to them in the Original Note. Except as expressly set forth herein, the Original Note shall remain unmodified and shall continue in full force and effect.

 

Dated as of the date first written above.

 

Borrower: OUTDOOR SPECIALTY PRODUCTS, INC.
     
  By /s/ Kirk Blosch
  Name:   Kirk Blosch
  Title: President
     
Noteholder:    
     
 

/s/ Ed Bailey

  Ed Bailey

  

Exhibit 31.1

 

I, Kirk Blosch, certify that:

 

1.I have reviewed this report on Form 10-Q of Outdoor Specialty Products, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 9, 2024 /s/ Kirk Blosch
  Kirk Blosch
  President, Secretary and Treasurer
  (Principal Executive Officer and
  Principal Financial Officer)

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Outdoor Specialty Products, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2023, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Kirk Blosch, President, Secretary and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

February 9, 2024 /s/ Kirk Blosch
  Kirk Blosch
  President, Secretary and Treasurer

 

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been furnished to Outdoor Specialty Products, Inc. and will be retained by Outdoor Specialty Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

v3.24.0.1
Document And Entity Information - shares
3 Months Ended
Dec. 31, 2023
Feb. 09, 2024
Document Information Line Items    
Entity Registrant Name OUTDOOR SPECIALTY PRODUCTS, INC.  
Document Type 10-Q  
Current Fiscal Year End Date --09-30  
Entity Common Stock, Shares Outstanding   5,284,318
Amendment Flag false  
Entity Central Index Key 0001610718  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Dec. 31, 2023  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 000-56301  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 46-4854952  
Entity Address, Address Line One 3842 Quail Hollow Drive  
Entity Address, City or Town Salt Lake City  
Entity Address, State or Province UT  
Entity Address, Postal Zip Code 84109  
City Area Code (801)  
Local Phone Number 560-5184  
Title of 12(b) Security None  
Entity Interactive Data Current Yes  
v3.24.0.1
Balance Sheets (Unaudited) - USD ($)
Dec. 31, 2023
Sep. 30, 2023
Current Assets:    
Cash $ 1,540 $ 3,162
Prepaid expense 5,550 458
Inventory 3,660 3,661
Total current assets 10,750 7,281
Other Assets:    
Patents, net
Total Assets 10,750 7,281
Current Liabilities:    
Accounts payable 7,822 2,310
Accrued interest 5,954 5,012
Total Liabilities 125,689 105,682
Stockholders’ Deficit:    
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding
Common stock, $0.001 par value, 190,000,000 shares authorized, 5,284,318 shares issued and outstanding 5,285 5,285
Additional paid-in capital 99,232 99,232
Accumulated deficit (219,456) (202,918)
Total Stockholders’ Deficit (114,939) (98,401)
Total Liabilities and Stockholders’ Deficit 10,750 7,281
Related Party    
Current Liabilities:    
Line of credit $ 111,913 $ 98,360
v3.24.0.1
Balance Sheets (Unaudited) (Parentheticals) - $ / shares
Dec. 31, 2023
Sep. 30, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 190,000,000 190,000,000
Common stock, shares issued 5,284,318 5,284,318
Common stock, shares outstanding 5,284,318 5,284,318
v3.24.0.1
Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Revenue $ 13 $ 130
Cost of Sales (1) (12)
Gross Profit 12 118
Operating Expenses:    
General and administrative 15,608 10,053
Total Operating Expenses 15,608 10,053
Loss from Operations (15,596) (9,935)
Other Expense:    
Interest expense 942 615
Total other expense 942 615
Net Loss $ (16,538) $ (10,550)
Net loss per share of common stock - basic (in Dollars per share) $ 0 $ 0
Weighted average number of common shares outstanding – basic (in Shares) 5,284,318 5,284,318
v3.24.0.1
Statements of Operations (Unaudited) (Parentheticals) - $ / shares
3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]    
Net loss per share of common stock - diluted $ 0.00 $ 0.00
Weighted average number of common shares outstanding – diluted 5,284,318 5,284,318
v3.24.0.1
Statements of Changes in Stockholders’ Deficit (Unaudited) - USD ($)
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total
Balance at Sep. 30, 2022 $ 5,285 $ 99,232 $ (156,446) $ (51,929)
Balance (in Shares) at Sep. 30, 2022 5,284,318      
Net loss (10,550) (10,550)
Balance at Dec. 31, 2022 $ 5,285 92,232 (166,996) (62,479)
Balance (in Shares) at Dec. 31, 2022 5,284,318      
Balance at Sep. 30, 2023 $ 5,285 99,232 (202,918) (98,401)
Balance (in Shares) at Sep. 30, 2023 5,284,318      
Net loss (16,538) (16,538)
Balance at Dec. 31, 2023 $ 5,285 $ 92,232 $ (219,456) $ (114,939)
Balance (in Shares) at Dec. 31, 2023 5,284,318      
v3.24.0.1
Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Dec. 31, 2023
Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Loss $ (16,538) $ (10,550)
To Net Cash Used by Operating Activities    
Depreciation and Amortization 102
Changes in Operating Assets and Liabilities:    
Increase in prepaid expense (5,092) (4,126)
Increase in accounts receivable (13)
Decrease in inventory 1 13
Increase in accounts payable 5,512
Increase in accrued interest 942 615
Net Cash Used by Operating Activities (15,175) (13,959)
CASH FLOWS FROM INVESTING ACTIVITIES    
Net Cash Used by Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from line of credit - related party 13,553 13,946
Net Cash Provided by Financing Activities 13,553 13,946
Net Increase (Decrease) in Cash (1,622) (13)
Cash at Beginning of Period 3,162 1,241
Cash at End of Period 1,540 1,228
Cash Paid During the Period For:    
Interest
Income taxes
v3.24.0.1
Condensed Financial Statements
3 Months Ended
Dec. 31, 2023
Condensed Financial Statements [Abstract]  
Condensed Financial Statements

NOTE 1: Condensed Financial Statements

 

The accompanying unaudited financial statements of Outdoor Specialty Products, Inc. (the “Company”) were prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended September 30, 2023.

 

These unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results of operations of the Company for the periods presented. Operating results for the three months ended December 31, 2023, are not necessarily indicative of the results that may be expected for the year ending September 30, 2024.

v3.24.0.1
Going Concern
3 Months Ended
Dec. 31, 2023
Going Concern [Abstract]  
Going Concern

NOTE 2 – Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the accompanying financial statements, the Company did not generate sufficient revenue to generate net income, has a negative working capital, and has a limited operating history. These factors, among others, may indicate that there is substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.

 

The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability.  The Company intends to seek additional funding through additional stockholder loans and debt or equity offerings to fund its business plan.  There is no assurance that the Company will be successful in raising additional funds.

v3.24.0.1
Line Of Credit – Related Party
3 Months Ended
Dec. 31, 2023
Line Of Credit – Related Party [Abstract]  
LINE OF CREDIT – RELATED PARTY

NOTE 3 – LINE OF CREDIT – RELATED PARTY

 

During the three months ended December 31, 2023, the Company amended the revolving promissory note agreement with its related party to extend the maturity date to December 31, 2024 and increase the maximum principal indebtedness to $127,500. The revolving promissory note bears interest at the rate of 3.5% per annum. The Company received proceeds under the line of credit of $10,000 during the three months ended December 31, 2023, resulting in principal balances of $93,521 and $83,521, with accrued interest of $5,246 and $4,444, at December 31, 2023 and September 30, 2023, respectively.

 

Also, during the three months ended December 31, 2023, the Company amended the revolving promissory note agreement with another principal stockholder to extend the maturity date to December 31, 2024 and increase the maximum principal indebtedness to $22,500. The revolving promissory note bears interest at the rate of 3.5% per annum. The Company received proceeds under the line of credit of $3,553 during the three months ended December 31, 2023, resulting in principal balances of $18,392 and $14,839, with accrued interest of $708 and $568, at December 31, 2023 and September 30, 2023, respectively.

v3.24.0.1
Subsequent Events
3 Months Ended
Dec. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events

NOTE 4 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from the balance sheet date through the date of the financial statements were issued and determined that there are no events requiring disclosure.

v3.24.0.1
Line Of Credit – Related Party (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 31, 2023
Sep. 30, 2023
Line of Credit – Related Party [Line Items]    
Maturity date Dec. 31, 2024  
Principal indebtedness $ 22,500  
Percentage of bears interest 3.50%  
Line of credit $ 3,553  
Principal balances 18,392 $ 14,839
Accrued interest $ 708 568
Related Party [Member]    
Line of Credit – Related Party [Line Items]    
Maturity date Dec. 31, 2024  
Principal indebtedness $ 127,500  
Percentage of bears interest 3.50%  
Line of credit $ 10,000  
Principal balances 93,521 83,521
Accrued interest $ 5,246 $ 4,444

Outdoor Specialty Products (PK) (USOTC:ODRS)
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