Item 2.01. Completion
of Acquisition or Disposition of Assets.
On April 14, 2023, the Registrant
completed the acquisition of Veritaz. Under said Stock Exchange Agreement, the Registrant acquired all of Veritaz 10,000 Ordinary Shares
outstanding for 2,000,000 shares of the Registrant. As a result, Veritaz became a wholly owned subsidiary of the Registrant.
Description of Business
On April 19, 2023, the Company acquired Veritz Trading
and Axim Private Limited in a stock for stock trade. Veritaz Trading and Exim Private Limited was incorporated in India and registered
under the Companies Act, 1956 having its registered office at S-61 Panscheel Park, New Delhi -110019. Veritaz is a company focused towards
marketing technical and performance textiles in the Indian market and has bagged Indian market representations from pioneer technical
textile & Field Medical Products and equipment’s. Further, Veritaz has also developed exclusive relationships in technical textile
range to Indian armed forces, Paramilitary, MHA, B2B & B2C segments of the open Indian Market.
RISK FACTORS
An investment in our securities involves a
high degree of risk. You should not invest in our securities if you cannot afford to lose your entire investment. In deciding whether
you should invest in our securities, you should carefully consider the following information together with all of the other information
contained in this Current Report. Any of the following risk factors can cause our business, prospects, financial condition or results
of operations to suffer and you to lose all or part of your investment.
General Risks Relating to our Business, Operations of Financial Condition
We have a limited operating history and are subject to the risks
encountered by early-stage companies.
Veritaz Trading and Exim Private Limited was incorporated
in India and registered under the Companies Act, 1956 having its registered office at S-61 Panscheel Park, New Delhi -110019. Because
our operating company has a limited operating history, you should consider and evaluate our operating prospects in light of the risks
and uncertainties frequently encountered by early-stage companies in rapidly evolving markets. For us, these risks include:
·
risks that we may not have sufficient capital to achieve
our growth strategy;
·
risks that we may not develop our product and service
offerings in a manner that enables us to be profitable and meet our customers’ requirements;
·
risks that our growth strategy may not be successful;
and
·
risks that fluctuations in our operating results will
be significant relative to our revenues.
These risks are described in more detail below.
Our future growth will depend substantially on our ability to address these and the other risks described in this section. If we do not
successfully address these risks, our business would be significantly harmed.
We have a history of net losses, may incur
substantial net losses in the future and may not achieve profitability.
Although we have begun to generate revenues,
we have incurred significant losses since inception. We expect to incur increased costs to implement our business plan and increase revenues,
such as costs relating to expanding
our crowd funding platform into additional country
markets. If our revenues do not increase to offset these additional expenses or if we experience unexpected increases in operating expenses,
we will continue to incur significant losses and will not become profitable. If we are not able to significantly increase our revenues,
we will likely not be able to achieve profitability in the future.
Our operating losses and working capital
deficiency raise substantial doubt about our ability to continue as a going concern. If we do not continue as a going concern, investors
could lose their entire investment.
Our operating losses and working capital deficiency
raise substantial doubt about our ability to continue as a going concern. If we do not generate revenues, do not achieve profitability
and do not have other sources of financing for our business, we may have to curtail or cease our development plans and operations, which
could cause investors to lose the entire amount of their investment.
If we are unable to manage our anticipated
post-Share Exchange growth effectively, our business could be adversely affected.
We anticipate that a significant expansion of
our operations and addition of operating subsidiaries, including one in the United States, and new personnel will be required in all areas
of our operations in order to implement our post-Share Exchange business plan. Our future operating results depend to a large extent on
our ability to manage this expansion and growth successfully. For us to continue to manage such growth, we must put in place legal and
accounting systems, and implement human resource management and other tools. We have taken preliminary
steps to put this structure in place. However, there is no assurance that we will be able to successfully manage this anticipated
rapid growth. A failure to manage our growth effectively could materially and adversely affect our ability to market our crowd funding
platform in multiple venues.
The regulations in India and in
other countries could negatively affect our business.
Other than the India
regulatory framework, there are currently are no laws or regulations that specifically govern US public companies operating
in India or that require us to register with or seek permission from The India regulatory agency. Changes in local regulations within
India relating to future offering of securities to the public, could negatively affect our operations in India.
Such changes could result in our having to change our business model, which could negatively impact future revenues. Further, there are
various regulators in India that monitor and regulate financial markets and supervise financial service providers involved in the sale
of investments and securities. These regulators monitor financial activities and could determine that specific laws and regulations that
apply to the financial sector. Such a determination could negatively affect our operations in India and impact our ability to operate
our business and generate revenues. Additionally, the implementation of new regulations or the application of existing laws and regulations
in other countries where Veritaz may wish to begin operations could have a negative impact on our future growth plans.
6
Changes in regulations within India
governing our operations, specifically relating to the sale of securities to the public, could negatively affect our business.
Changes in local regulations within India relating
to the offering of securities to the public could negatively affect the business operations of Veritaz within India. Such changes could
result in the Company having to change its business model, which could negatively impact future revenues.
Inappropriate business behavior of entrepreneurs
raising funds via our platforms could result in reputational or financial damages to
our business.
Although Veritaz
business is limited to providing a platform for matching investors and entrepreneurs, there is a possibility that inappropriate
business behavior exhibited by any of the entrepreneurs raising capital through our platform could result in reputational or financial
damages to us. We enforce a thorough due diligence process for all companies raising funds via our products and we require participating
entrepreneurs to sign legally binding terms of use releasing Veritaz from any responsibility for entrepreneur impropriety or misdeed.
Nevertheless, our clients might regard Veritaz as being responsible for any impropriator behavior of the entrepreneur and this could result
in reputation damage to us that could impact our future revenues.
Increasing competition within our emerging
industry could have an impact on our business prospects.
Our products sold to the Indian military is an
emerging industry where new competitors are entering the market frequently. These competing companies may have significantly greater financial
and other resources than we have and may have been developing their products and services longer than we have been developing ours. Although
our portfolio of products and related revenue stream sources are broad, increasing competition may have a negative impact on our profit
margins.
Our business is subject to risks generally
associated with fluctuating economic tendencies in the capital markets.
The demand for our products can change over time
due to fluctuations in the global and local economies and in the related capital requirements of small and medium-sized enterprises. These
fluctuations could negatively impact our future revenue streams.
Fluctuations in interest rates could impair
the ability of companies to raise capital on the Veritaz platform.
Fluctuations in interest rates could
influence the attractiveness for investors to allocate capital to small and medium-sized enterprises raising capital on our financial
platform. This could result in reduced revenues to us.
If we lose the services of our founders
or other members of our senior management team, we may not be able to execute our business strategy.
Our success depends in a large part upon the
continued service of our senior management team. In particular, the continued service of our founders, Joseph Passalaqua, Chief Executive
Officer, is critical to our vision, strategic direction, culture, products and technology. We do not maintain key-man insurance for any
of our founders or other members of our senior management team. The loss of any of our founders, even temporarily, or any other member
of senior management could harm our business.
We may not be able to adequately protect
our proprietary technology, and our competitors may be able to offer similar products and services, which would harm our competitive position.
Our success depends in part upon our proprietary
technology. We rely primarily on trademark, copyright, service mark and trade secret laws, confidentiality procedures, license agreements
and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could copy or otherwise
obtain and use our technology without authorization, or develop similar technology independently. We also pursue the registration of our
domain names, trademarks, and service marks in the United States. We cannot assure you that
the protection of our proprietary rights will
be adequate or that our competitors will not independently develop similar technology, duplicate our products and services or design around
any intellectual property rights we hold.
If third parties claim that we infringe their intellectual property,
it may result in costly litigation.
We cannot assure you that third parties will not claim
our current or future products infringe on their intellectual property rights. Any such claims, with or without merit, could cause costly
litigation that could consume significant management time. As the number of product and services offered in the market increases and functionalities
increasingly overlap, companies such as ours may become increasingly subject to infringement claims. Such claims also might require us
to enter into royalty or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them
on terms acceptable to us.
We may need additional financing. Any limitation
on our ability to obtain such additional financing could have a material adverse effect on our business, financial condition and results
of operations.
Although we expect in the future to raise sufficient
funfs to implement our business plan, there can be no assurance that we will not require additional capital. The raising of additional
capital could result in dilution to our stockholders. In addition, there is no assurance that we will be able to obtain additional capital
if we need it, or that if available, it will be available to us on favorable or reasonable terms. Any limitation on our ability to obtain
additional capital as and when needed could have a material adverse effect on our business, financial condition and results of operations.
If we fail to maintain proper and effective
internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results,
our ability to operate our business and investors’ views of us.
Ensuring that we have adequate internal financial
and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and
time-consuming effort that will need to be evaluated frequently. Section 404 of the Sarbanes-Oxley Act requires public companies to conduct
an annual review and evaluation of their internal controls. Our failure to maintain the effectiveness of our internal controls in accordance
with the requirements of the Sarbanes-Oxley Act could have a material adverse effect on our business. We could lose investor confidence
in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock. In addition,
if our efforts to comply with new or changed laws, regulations, and standards differ from the activities intended by regulatory or governing
bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be
harmed.
7
Risks Relating to our Securities
There is not now, and there may not ever be,
an active market for the Company’s Common Stock.
There currently is no public market for our Common
Stock. Further, although our Common Stock is currently quoted on the OTC, trading of our Common Stock is minimal. When our stock does
trade more vigorously, such trading may be extremely sporadic. For example, several days may pass before any shares may be traded. As
a result, an investor may find it difficult to dispose of, or to obtain accurate quotations of the price of, our Common Stock. Accordingly,
investors must assume they may have to bear the economic risk of an investment in our Common Stock for an indefinite period of time. There
can be no assurance that a more active market for
the Common Stock will develop, or if one should develop,
there is no assurance that it will be sustained. This severely limits the liquidity of our Common Stock, and would likely have a material
adverse effect on the market price of our Common Stock and on our ability to raise additional capital.
We cannot assure you that the Common Stock will
become liquid or that it will be listed on a securities exchange.
Until our Common Stock is listed on a national securities
exchange such as the New York Stock Exchange or the Nasdaq Stock Market, we expect our Common Stock to remain eligible for quotation on
the OTC. In those venues, however, an investor may find it difficult to obtain accurate quotations as to the market value of our Common
Stock. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers
who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter
broker-dealers from recommending or selling our Common Stock, which may further affect the liquidity of the Common Stock. This would also
make it more difficult for us to raise capital.
Our Common Stock is subject to the “penny stock”
rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce
the value of an investment in the stock.
The SEC has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than
$5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require:
●
that a broker or dealer approve a person’s account for transactions in penny stocks; and
●
the broker or dealer receive from the investor a written agreement to the transaction, setting forth
the identity and quantity of the penny stock to be purchased.
In order to approve a person’s account for transactions
in penny stocks, the broker or dealer must:
●
Obtain financial information and investment experience objectives of the person; and
●
make a reasonable determination that the transactions in penny stocks are suitable for that person
and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny
stocks.
The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form
sets forth:
●
the basis on which the broker or dealer made the suitability determination; and
●
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute
transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of
common stock and cause a decline in the market value of stock.
8
Disclosure also has to be made about the risks of
investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
The price of our Common Stock may become volatile,
which could lead to losses by investors and costly securities litigation.
The trading price of our Common Stock is likely to
be highly volatile and could fluctuate in response to factors such as:
·
actual or anticipated variations in our operating results;
·
announcements of developments by us or our competitors;
·
announcements by us or our competitors of significant
acquisitions, strategic partnerships, joint ventures or capital commitments;
·
adoption of new accounting standards affecting our Company’s
industry;
·
additions or departures of key personnel;
·
sales of our Common Stock or other securities in the
open market; and
·
other events or factors, many of which are beyond our
control.
The stock market is subject to significant price and
volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class
action litigation has often been initiated against the company. Litigation initiated against us, whether or not successful, could result
in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.
We do not anticipate dividends to be paid on
our Common Stock, and investors may lose the entire amount of their investment.
Cash dividends have never
been declared or paid on the Common Stock, and we do not anticipate such a declaration or payment for the foreseeable future. We expect
to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their shares.
We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders
will not lose the entire amount of their investment.
If securities analysts do not initiate coverage
or continue to cover our Common Stock or publish unfavorable research or reports about our business, this may have a negative impact on
the market price of our common stock.
The trading market for the Common Stock will depend
on the research and reports that securities analysts publish about our business and the Company. We do not have any control over these
analysts. There is no guarantee that securities analysts will cover the Common Stock. If securities analysts do not cover the Common Stock,
the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject
of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover the
Company or fails to publish regular reports on the Company, we could lose visibility in the financial markets, which could cause our stock
price or trading volume to decline.
9
You may experience dilution of your ownership
interests because of the future issuance of additional shares of the Common Stock.
In the future, we may issue our authorized but previously
unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders and the purchasers of Common
Stock offered hereby. We are currently authorized to issue an aggregate of 510,000,000 shares of capital stock consisting of 500,000,000
shares of Common Stock and 10,000,000 shares of preferred stock with preferences and rights to be determined by the our Board of Directors.
As of the closing of the Share Exchange, there will be 202,030,320 shares of our Common Stock and no shares of our preferred stock outstanding.
We may also issue additional shares of our Common Stock or other securities that are convertible into or exercisable for our Common Stock
in connection with hiring or retaining employees, future acquisitions, future sales of its securities for capital raising purposes, or
for other business purposes. The future issuance of any such additional shares of our Common Stock may create downward pressure on the
trading price of the Common Stock. There can be no assurance that we will not be required to issue additional shares, warrants or other
convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below
the price at which shares of the Common Stock will be initially quoted on the OTC.
Financial Information.
Management’s
Discussion and Analysis of Financial Condition and Results of Operation.
Overview
The following discussion and analysis of our financial
condition and results of operations (“MD&A”) should be read in conjunction with our financial statements and the accompanying
notes to the financial statements included in this Form 10-K.
The MD&A is based on our financial statements,
which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Background
We have recently acquired Veritaz. Prior to that date,
we did not engaged in any business operations. Therefore, these financial information, does not include the finances of Veritaz.
No revenue has been generated by the Company. That
will change with th acquisition of Veritaz.
10
Results of Operations
Working Capital
| | |
Dec. 31, | |
June 30, |
| | |
2022 | |
2022 |
| | |
| |
|
| Current Assets | |
$ | — | | |
$ | — | |
| Current Liabilities | |
| 120,144 | | |
| 104,543 | |
| Working Capital (Deficit) | |
$ | (120,144 | ) | |
$ | (104,543 | ) |
Cash Flows
| | |
| Dec. 31, | | |
| June 30, |
|
| | |
| 2022 | | |
| 2022 |
|
| | |
| | | |
| |
|
| Cash Flows from (used in) Operating Activities | |
$ | — | | |
$ | — |
|
| Cash Flows from (used in) Financing Activities | |
| — | | |
| — |
|
| Net Increase (decrease) in Cash During Period | |
$ | — | | |
$ | — |
|
Three and Six Months Ended December 31, 2022 compared to Three and
Six Month Ended December 31, 2021
Operating Revenues
We have generated
no revenues for the three and six months ended December 31, 2022 and December 31, 2021.
Operating
Expenses and Net Loss
Operating expenses
for the three months ended December 31, 2022 were $13,703 compared with $2,753 for the three months ended December 31, 2021. The increase
in operating expenses were attributable to an increase in other general and administrative expenses from $2,753 for the three months ended
December 31, 2021 to $13,703 for the three months ended December 31, 2022.
Operating expenses
for the six months ended December 31, 2022 were $15,461 compared with $8,783 for the six months ended December 31, 2021. The increase
in operating expenses were attributable to an increase in other general and administrative expenses from $8,783 for the six months ended
December 31, 2021 to $15,461 for the six months ended December 31, 2022.
During the three
months ended December 31, 2022, the Company recorded a net loss of $13,773. compared with net loss of $2,824 for the three months ended
December 31, 2021.
During the six months
ended December 31, 2022, the Company recorded a net loss of $15,601. compared with net loss of $8,924 for the six months ended December
31, 2021.
11
Liquidity and Capital Resources
As of December 31,
2022, the Company's cash balance was $0 compared to cash balance of $0 as of June 30, 2022. As of December 31, 2022, the Company's total
assets were $0 compared to total assets of $0 as of June 30, 2022.
As of December 31,
2022, the Company had total liabilities of $120,144 compared with total liabilities of $104,543 as of June 30, 2022. The increase in total
liabilities is attributed to an increase in account payable and accrued liabilities from $21,089 for the year ended June 30, 2022 to $22,554
for the six months ended December 31, 2022, and an increase in account payable-related from $79,659 for the year ended June 30, 2022 to
$93,655 for the six months ended December 31, 2022.
As of December 31,
2022, the Company has a working capital deficit of $120,144 compared with working capital deficit of $104,543 as of June 30, 2022.
Cashflow from Operating Activities
During the six
months ended December 31, 2022 the Company used $0 cash for operating activities compared
to the use of $0 cash for operating activities during the six months ended December 31, 2021.
Cashflow from Financing Activities
During the six
months ended December 31, 2022 and December 31, 2021,
the Company did not receive any cash from financing activities.
Subsequent Developments
None.
Going Concern
We have not
attained profitable operations and are dependent upon the continued financial support from our shareholders, the ability to raise equity
or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding
our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no significant
off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material
to stockholders.
Future Financing
The Company
will consider selling securities in the future to fund operations. There is no assurance that we will achieve any additional sales of
the equity securities or arrange for debt or other financing to fund our operations and other activities.
12
Critical Accounting Policies
Our consolidated financial
statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied
on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting periods.
We regularly evaluate the
accounting policies and estimates that we use to prepare our consolidated financial statements. A complete summary of these policies is
included in the notes to our consolidated financial statements. In general, management's estimates are based on historical experience,
on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and
circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has implemented
all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements
unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued
that might have a material impact on its financial position or results of operations.
Properties.
The Company neither rents nor owns any
properties. The Company utilizes the office space and equipment of its President at no cost. Given the limited need of the Company, management
believes that the office space is more than suitable and adequate. The Company currently has no policy with respect to investments or
interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
Security Ownership of Certain Beneficial
Owners and Management.
Principal Stockholders
The following table sets forth, as of December 31,
2022, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who beneficially
own more than 5% of the outstanding shares of Common Stock of the Company.
| | |
| |
NUMBER OF
SHARES | |
PERCENT OF
SHARES |
| NAME AND ADDRESS OF | |
TITLE | |
BENEFICIALLY | |
BENEFICIALLY |
| BENEFICIAL OWNER | |
OF CLASS | |
OWNED | |
OWNED |
| Sea Alive, Inc. (Joseph C. Passalaqua, owner) | |
| Common | | |
| 200,016,922 | | |
| 99.99 | % |
| 106 Glenwood Drive | |
| | | |
| | | |
| | |
| Liverpool, NY 13090 | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| All Directors and officers as a group (1 members) | |
| Common | | |
| 200,016,922 | | |
| 99.99 | % |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
Directors and Executive Officers.
Our Board of Directors
The following table sets forth information regarding our current
directors and each director nominee, as of the date of filing.
| | |
| |
| |
|
| NAME | |
| AGE | | |
| POSITION | | |
| DIRECTOR SINCE | |
| Joseph C. Passalaqua | |
| 73 | | |
| Director | | |
| 2010 | |
| | |
| | | |
| | | |
| | |
Joseph C. Passalaqua
Mr. Passalaqua,
73, was employed by Summit Auto Group from 2012 through 2016. He became President of Plantation Corp., in January of 2010. He is the owner
of Prime Auto Group, LLC which he formed in August 2015.
Our Executive Officers
We designate persons serving in the following positions as our
named executive officers: our chief executive officer, chief financial officer. The following table sets forth information regarding our
executive officers as of the dated of this filing, May 3, 2021.
| | |
| |
| |
|
| NAME | |
| AGE | | |
| POSITION | | |
| OFFICE SINCE | |
| Joseph C. Passalaqua | |
| 73 | | |
| Chief Executive Officer, CFO and Secretary | | |
| 2010 | |
| | |
| | | |
| | | |
| | |
Joseph C. Passalaqua’s biographical summary is included
under “Our Board of Directors.
13
Executive Compensation.
Summary Compensation Table
The following table sets forth information
concerning the compensation of our principal executive officer, our principal financial officer and each of our other executive officers
during 2019 and 2020.
| Name and Principal Position | |
Fiscal Year | |
Salary ($) | |
Bonus ($) | |
Stock Awards ($) | |
Option Awards ($) | |
Nonequity Incentive Plan Compen- sation ($) | |
Non- Qualified Deferred Compen- sation Earnings ($) | |
All Other Compen- sation ($) | |
Total ($) |
| | |
| |
| |
| |
| |
| |
| |
| |
| |
|
| Joseph C. Passalaqua | |
| 2021 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | |
| (Principal Chief Executive Officer, President and Director) | |
| 2022 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | | |
$ | 0 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Employment Agreements
The Company does not have employment agreements
with any of its officers or directors and there are no other employees.
Directors Compensation
No director received compensation for services
rendered in any capacity to us during the fiscal years ended June 30, 2021 and June 30, 2022.
Indemnification of Directors and Officers
Our Articles of Incorporation, as amended
and restated, and our Bylaws provide for mandatory indemnification of our officers and directors, except where such person has been adjudicated
liable by reason of his negligence or willful misconduct toward the Company or such other corporation in the performance of his duties
as such officer or director. Our Bylaws also authorize the purchase of director and officer liability insurance to insure them against
any liability asserted against or incurred by such person in that capacity or arising from such person's status as a director, officer,
employee, fiduciary, or agent, whether or not the corporation would have the power to indemnify such person under the applicable law.
Compensation Committee Interlocks and
Insider Participation
We have not established a compensation
committee. We are not currently subject to any law, rule or regulation requiring that we establish a compensation committee.
14
Certain Relationships and Related Transactions.
Other than as described herein, none of
our directors or executive officers, nor any person who beneficially owns, directly or indirectly, shares carrying more than five percent
of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children,
siblings, and in- laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last
two years or in any presently proposed transaction which, in either case, has or will materially affect us.
We do not have a specific policy or procedure
for the review, approval, or ratification of any transaction involving related persons. We historically have sought and obtained funding
from officers, directors, and family members as these categories of persons are familiar with our management and often provide better
terms and conditions than we can obtain from unassociated sources. Also, we are so small that having specific policies or procedures of
this type would be unworkable.
Legal Proceedings.
Market Price of, and Dividends on, the Registrant’s
Common Equity and Related Stockholder Matters.
(a) Market
Information
Our common stock trades on the OTC PINK
Exchange under the ticker symbol “PBAJ” The following table sets forth, for the periods indicated, the high and low closing
sales prices of our common stock (where the end of the quarter was on a weekend or holiday and in cases where there was otherwise no trading
activity, the high and low prices nearest and prior to the date have been used):
| FISCAL YEAR ENDED JUNE 30, 2021: |
|
High |
|
|
Low |
|
| September 30, 2020 |
|
$ |
20.0000 |
|
|
$ |
10.0000 |
|
| December 31. 2020 |
|
$ |
10.0000 |
|
|
$ |
1.0100 |
|
| March 31, 2021 |
|
$ |
10.0000 |
|
|
$ |
3.0100 |
|
| June 30, 2021 |
|
$ |
2.7600 |
|
|
$ |
2.0000 |
|
| |
|
|
|
|
|
|
|
|
| FISCAL YEAR ENDED JUNE 30, 2022: |
|
|
|
|
|
|
|
|
| September 30, 2021 |
|
$ |
1.0000 |
|
|
` |
5.0000 |
|
| December 31, 2021 |
|
$ |
1.2500 |
|
|
$ |
1.2500 |
|
| March 31, 2022 |
|
$ |
9.9900 |
|
|
$ |
3.7500 |
|
| June 30, 2022 |
|
$ |
6.3640 |
|
|
$ |
5.0000 |
|
(b) Holders
As of December 31, 2022, there were approximately
1,514 holders of record of our common stock, not including holders who hold their shares in street name.
(c) Dividends
The Company has never declared or paid
any cash dividends. It is the present policy of the Company to retain earnings to finance the growth and development of the business and,
therefore, the Company does not anticipate paying dividends on its Common Stock in the foreseeable future.
15
(d) Equity
Compensation Plan Information
The Company does not currently have an
equity compensation plan but intends to adopt one in the future. In lieu of an equity compensation plan the Company has granted shares
of restricted stock to its officers, directors and others for services periodically and as part of some of the officers’ employment
agreements.
(e) Information
Related to Outstanding Shares
As of December 31, 2022, there were 200,030,920 shares of our
common stock issued and outstanding.
All of our issued and outstanding common
shares (of which 0 shares are owned by officers, directors) were issued and have been paid for and held for a period in excess of six
months and are eligible to be resold pursuant to Rule 144 promulgated under the Securities Act when the Company has been reporting for
1 year and has ceased being a “shell company” as defined by Rule 144(i)..
The resale of our shares of common stock
owned by officers, directors and affiliates is subject to the volume limitations of Rule 144. In general, Rule 144 permits our affiliate
shareholders who have beneficially owned restricted shares of common stock for at least six months to sell without registration, within
a three-month period, a number of shares not exceeding one percent of the then outstanding shares of common stock. Furthermore, if such
shares are held for at least six months by a person not affiliated with the company (in general, a person who is not one of our executive
officers, directors or principal shareholders during the three-month period prior to resale), such restricted shares can be sold without
any volume limitation, provided all of the other requirements for resale under Rule 144 are applicable.
Recent Sales of Unregistered Securities.
During the Company’s 2022 and 2011
fiscal years ending June 30th , the Company had no sales of unregistered securities.
Note that due to the price differential
between the conversion price on certain notes and the most recent market prices, the Company’s auditor required it to take one-time
non-cash charges deemed “beneficial conversions” despite the fact that no conversions had taken place. This is simply
an accounting convention designed to capture the expense to a Company for issuing shares below deemed market value, notwithstanding the
fact that there was an extremely limited market for the Company’s common stock when the convertible notes were entered into and
the fact that the shares were not actually issued at the time.
Description of Registrant’s Securities to be Registered.
DESCRIPTION OF SECURITIES
The authorized capital stock of Petro USA,
Inc. consists of 500,000,000 shares of Common Stock, $0.0001 par value per share (the “Common Stock”) and 10,000,000 shares
of Preferred Stock, $0.0001 par value per share (the “Preferred Stock”). As of December 31, 2022, there were 200,030.920 shares
of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding.
The following description of certain matters
relating to Petro USA, Inc. securities is a summary and is qualified in its entirety by the provisions of Petro USA, Inc. Certificate
of Incorporation, the Amendment to the Articles of Incorporation and Bylaws.
16
Common Stock
The holders of our common stock are entitled to one
vote per share on all matters submitted to a vote of our stockholders. The holders of the common stock have the sole right to vote, except
as otherwise provided by law, by our articles of incorporation, or in a statement by our board of directors in a Preferred Stock Designation.
In addition, such holders are entitled to receive
ratably such dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.
The holders of the common stock do not
have cumulative voting rights or preemptive rights to acquire or subscribe for additional, unissued or treasury shares in accordance with
the laws of the State of Nevada. Accordingly, the holders of more than 50 percent of the issued and outstanding shares of the common stock
voting for the election of directors can elect all of the directors if they choose to do so, and in such event, the holders of the remaining
shares of the common stock voting for the election of the directors will be unable to elect any person or persons to the board of directors.
All outstanding shares of the common stock are fully paid and nonassessable.
The laws of the State of Nevada provide
that the affirmative vote of a majority of the holders of the outstanding shares of our common stock and is required to authorize any
amendment to our articles of incorporation, any merger or consolidation of Petro USA, Inc. with any corporation, or any liquidation or
disposition of any substantial assets of Petro USA, Inc.
Preferred Stock
The Company has 10,000,000 authorized shares
of Preferred Stock, No shares are issued and outstanding.
Options
The Company has not issued any options
to purchase shares of its common stock, although it may establish a qualified option plan at some point in the future.
Indemnification of Directors and
Officers.
Our articles provide to the fullest extent
permitted by Nevada law, that our directors or officers shall not be personally liable to the Company or our stockholders for damages
for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our articles is to eliminate our
rights and the rights of our stockholders (through stockholders’ derivative suits on behalf of the Company) to recover damages against
a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or
grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our
articles are necessary to attract and retain qualified persons as directors and officers.
Nevada corporate law provides that a corporation
may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he was a director, officer
employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred
by him in connection with such action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his conduct was unlawful.
17
