# EDGAR Filing Document

**Accession Number:** 0001967511
**File Stem:** 0001477932-23-001661
**Filing Date:** 2023-3
**Character Count:** 164736
**Document Hash:** 5f8e90736f4b87a85e637be175765c08
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001477932-23-001661.hdr.sgml**: 20230322

**ACCESSION NUMBER**: 0001477932-23-001661

**CONFORMED SUBMISSION TYPE**: C/A

**PUBLIC DOCUMENT COUNT**: 5

**FILED AS OF DATE**: 20230322

**DATE AS OF CHANGE**: 20230322

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Next Dynamics, Inc.
- **CENTRAL INDEX KEY:** 0001967511
- **IRS NUMBER:** 870712328
- **STATE OF INCORPORATION:** TX
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** C/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-31946
- **FILM NUMBER:** 23751865

**BUSINESS ADDRESS:**
- **STREET 1:** 226 N. FRONT ST.
- **STREET 2:** SUITE 143
- **CITY:** WILMINGTON
- **STATE:** NC
- **ZIP:** 28401
- **BUSINESS PHONE:** 510-520-6063

**MAIL ADDRESS:**
- **STREET 1:** 226 N. FRONT ST.
- **STREET 2:** SUITE 143
- **CITY:** WILMINGTON
- **STATE:** NC
- **ZIP:** 28401

### Attached PDF Documents

**Attachment 1:** `exhibita.pdf`

# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

| OMB APPROVAL |
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# FORM C
UNDER THE SECURITIES ACT OF 1933

(Mark one.)

☐ Form C: Offering Statement
☐ Form C-U: Progress Update: ____
☑ Form C/A: Amendment to Offering Statement: Updated Target & Maximum Offering Amounts
☐ Check box if Amendment is material and investors must reconfirm within five business days.
☐ Form C-AR: Annual Report
☐ Form C-AR/A: Amendment to Annual Report
☐ Form C-TR: Termination of Reporting

Name of issuer: Next Dynamics, Inc.

Legal status of issuer:

Form: C Corporation

Jurisdiction of Incorporation/Organization: Texas, United States

Date of organization): September 3, 2003

Physical address of issuer: 226 N. Front St, Suite 143, Wilmington, NC 28401

Website of issuer: www.nextdynamicscorp.com

Is there a co-issuer? ____ yes ☑ no. If yes,

Name of co-issuer: ____

Legal status of co-issuer:

Form: ____

Jurisdiction of Incorporation/Organization: ____

Date of organization: ____

Physical address of co-issuer: ____

Website of co-issuer: ____

Name of intermediary through which the offering will be conducted: Castle Placement, LLC

CIK number of intermediary: 0001638202

SEC file number of intermediary: 008-69612

CRD number, if applicable, of intermediary: 189511

Amount of compensation to be paid to the intermediary, whether as a dollar amount or a percentage of the offering amount, or a good faith estimate if the exact amount is not available at the time of the filing, for conducting the offering, including the amount of referral and any other fees associated with the offering:

7.5% of all capital raised from investors

Any other direct or indirect interest in the issuer held by the intermediary, or any arrangement for the intermediary to acquire such an interest:

Equity in the company in the amount of 2% multiplied by the capital raise divided by the post-money valuation at closing

Type of security offered: Class A Common stock

SEC 2930 (3/21) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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Target number of securities to be offered: 25,000

Price (or method for determining price): $1.00

Target offering amount: $25,000

Oversubscriptions accepted: ☐ Yes ☑

If yes, disclose how oversubscriptions will be allocated: ☐ Pro-rata basis ☐ First-come, first-served basis

Other - provide a description:

Maximum offering amount (if different from target offering amount): $5,000,000

Deadline to reach the target offering amount: 3/20/2024

**NOTE: If the sum of the investment commitments does not equal or exceed the target offering amount at the offering deadline, no securities will be sold in the offering, investment commitments will be cancelled and committed funds will be returned.**

Current number of employees: 3 (Contractors)

| Total Assets: | Most recent fiscal year-end: $373,158 | Prior fiscal year-end: $777,424 |
| --- | --- | --- |
| Cash & Cash Equivalents: | Most recent fiscal year-end: $255,192 | Prior fiscal year-end: $504,740 |
| Accounts Receivable: | Most recent fiscal year-end: - | Prior fiscal year-end: - |
| Short-term Debt: | Most recent fiscal year-end: $54,799 | Prior fiscal year-end: $44,589 |
| Long-term Debt: | Most recent fiscal year-end: $55,216 | Prior fiscal year-end: $47,850 |
| Revenues/Sales | Most recent fiscal year-end: - | Prior fiscal year-end: - |
| Cost of Goods Sold: | Most recent fiscal year-end: - | Prior fiscal year-end: - |
| Taxes Paid: | Most recent fiscal year-end: - | Prior fiscal year-end: - |
| Net Income: | Most recent fiscal year-end: $556,034 | Prior fiscal year-end: $952,954 |

Using the list below, select the jurisdictions in which the issuer intends to offer the securities:

**[List will include all U.S. jurisdictions, with an option to add and remove them individually, add all and remove all.]**

AL, AK, AZ, AR, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NV, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, DC

## GENERAL INSTRUCTIONS

### I. Eligibility Requirements for Use of Form C

This Form shall be used for the offering statement, and any related amendments and progress reports, required to be filed by any issuer offering or selling securities in reliance on the exemption in Securities Act Section 4(a)(6) and in accordance with Section 4A and Regulation Crowdfunding (§ 227.100 et seq.). The term “issuer” includes any co-issuer jointly offering or selling securities with an issuer in reliance on the exemption in Securities Act Section 4(a)(6) and in accordance with Securities Act Section 4A and Regulation Crowdfunding (§ 227.100 et seq.). This Form also shall be used for an annual report required pursuant to Rule 202 of Regulation Crowdfunding (§ 227.202) and for the termination of reporting required pursuant to Rule 203(b)(2) of Regulation Crowdfunding (§ 227.203(b)(2)). Careful attention should be directed to the terms, conditions and requirements of the exemption.

### II. Preparation and Filing of Form C

Information on the cover page will be generated based on the information provided in XML format. Other than the cover page, this Form is not to be used as a blank form to be filled in, but only as a guide in the preparation of Form C. General information regarding the preparation, format and how to file this Form is contained in Regulation S-T (§ 232 et seq.).

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### III. Information to be Included in the Form

#### Item 1. Offering Statement Disclosure Requirements

An issuer filing this Form for an offering in reliance on Section 4(a)(6) of the Securities Act and pursuant to Regulation Crowdfunding (§ 227.100 et seq.) must file the Form prior to the commencement of the offering and include the information required by Rule 201 of Regulation Crowdfunding (§ 227.201).

An issuer must include in the XML-based portion of this Form: the information required by paragraphs (a),(e), (g), (h), (l), (n), and (o) of Rule 201 of Regulation Crowdfunding (§ 227.201(a), (e), (g), (h), (l), (n), and (o)); selected financial data for the prior two fiscal years (including total assets, cash and cash equivalents, accounts receivable, short-term debt, long-term debt, revenues/sales, cost of goods sold, taxes paid and net income); the jurisdictions in which the issuer intends to offer the securities; and any information required by Rule 203(a)(3) of Regulation Crowdfunding (§ 227.203(a)(3)).

Other than the information required to be provided in XML format, an issuer may provide the required information in the optional Question and Answer format included herein or in any other format included on the intermediary's platform, by filing such information as an exhibit to this Form, including copies of screen shots of the relevant information, as appropriate and necessary.

If disclosure in response to any paragraph of Rule 201 of Regulation Crowdfunding (§ 227.201) or Rule 203(a)(3) is responsive to one or more other paragraphs of Rule 201 of Regulation Crowdfunding (§ 227.201) or to Rule 203(a)(3) of Regulation Crowdfunding (§ 227.203(a)(3)), issuers are not required to make duplicate disclosures.

#### Item 2. Legends

(a) An issuer filing this Form for an offering in reliance on Section 4(a)(6) of the Securities Act and pursuant to Regulation Crowdfunding (§ 227.100 et seq.) must include the following legends:

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.

In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.

The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.

These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

(b) An issuer filing this Form for an offering in reliance on Section 4(a)(6) of the Securities Act and pursuant to Regulation Crowdfunding (§ 227.100 et seq.) must disclose in the offering statement that it will file a report with the Commission annually and post the report on its website, no later than 120 days after the end of each fiscal year covered by the report. The issuer must also disclose how an issuer may terminate its reporting obligations in the future in accordance with Rule 202(b) of Regulation Crowdfunding (§ 227.202(b)).

#### Item 3. Annual Report Disclosure Requirements

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An issuer filing this Form for an annual report, as required by Regulation Crowdfunding (§ 227.100 et seq.), must file the Form no later than 120 days after the issuer's fiscal year end covered by the report and include the information required by Rule 201(a), (b), (c), (d), (e), (f), (m), (p), (q), (r), (s), (t), (x) and (y) of Regulation Crowdfunding (§§ 227.201(a), (b), (c), (d), (e), (f), (m), (p), (q), (r), (s), (t), (x) and (y)). For purposes of paragraph (t), the issuer shall provide financial statements certified by the principal executive officer of the issuer to be true and complete in all material respects. If, however, the issuer has available financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) that have been reviewed or audited by an independent certified public accountant, those financial statements must be provided and the principal executive officer certification will not be required.

An issuer must include in the XML-based portion of this Form: the information required by paragraphs (a), and (e) of Rule 201 of Regulation Crowdfunding (§ 227.201(a) and (e)); and selected financial data for the prior two fiscal years (including total assets, cash and cash equivalents, accounts receivable, short-term debt, long-term debt, revenues/sales, cost of goods sold, taxes paid and net income).

### SIGNATURE

Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form C and has duly caused this Form to be signed on its behalf by the duly authorized undersigned.

Next Dynamics, Inc.

(Issuer)

By

(Signature and Title)

Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), this Form C has been signed by the following persons in the capacities and on the dates indicated.

(Signature)

President & CEO

(Title)

March 20, 2023

(Date)

### *Instructions.*

1. The form shall be signed by the issuer, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and at least a majority of the board of directors or persons performing similar functions. If there is a co-issuer, the form shall also be signed by the co-issuer, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and at least a majority of the board of directors or persons performing similar functions.

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2. The name of each person signing the form shall be typed or printed beneath the signature.

Intentional misstatements or omissions of facts constitute federal criminal violations. See 18 U.S.C. 1001.

## OPTIONAL QUESTION & ANSWER FORMAT

### FOR AN OFFERING STATEMENT

Respond to each question in each paragraph of this part. Set forth each question and any notes, but not any instructions thereto, in their entirety. If disclosure in response to any question is responsive to one or more other questions, it is not necessary to repeat the disclosure. If a question or series of questions is inapplicable or the response is available elsewhere in the Form, either state that it is inapplicable, include a cross-reference to the responsive disclosure, or omit the question or series of questions. The term “issuer” in these questions and answers includes any “co-issuer” jointly offering or selling securities with the issuer in reliance on the exemption in Securities Act Section 4(a)(6) and in accordance with Securities Act Section 4A and Regulation Crowdfunding (§ 227.100 et seq.). Any information provided with respect to the issuer should also be separately provided with respect to any co-issuer.

If you are seeking to rely on the Commission’s temporary rules to initiate an offering between May 4, 2020, and February 28, 2021, intended to be conducted on an expedited basis due to circumstances relating to coronavirus disease 2019 (COVID-19), you will likely need to provide additional or different information than described in questions 2, 12, and 29. If you are seeking to rely on the Commission’s temporary Rule 201(bb) for an offering initiated between March 1, 2021, and August 28, 2022, you will likely need to provide additional or different information than described in questions 2 and 29. When preparing responses to such questions, please carefully review temporary Rules 100(b)(7), 201(aa), 201(bb), and 304(e) and tailor your responses to those requirements as applicable.

Be very careful and precise in answering all questions. Give full and complete answers so that they are not misleading under the circumstances involved. Do not discuss any future performance or other anticipated event unless you have a reasonable basis to believe that it will actually occur within the foreseeable future. If any answer requiring significant information is materially inaccurate, incomplete or misleading, the Company, its management and principal shareholders may be liable to investors based on that information.

### THE COMPANY

1. Name of issuer: Next Dynamics, Inc.

### ELIGIBILITY

2. ☑ Check this box to certify that all of the following statements are true for the issuer:

- Organized under, and subject to, the laws of a State or territory of the United States or the District of Columbia.
- Not subject to the requirement to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.
- Not an investment company registered or required to be registered under the Investment Company Act of 1940.

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- Not ineligible to rely on this exemption under Section 4(a)(6) of the Securities Act as a result of a disqualification specified in Rule 503(a) of Regulation Crowdfunding. (For more information about these disqualifications, see Question 30 of this Question and Answer format).
- Has filed with the Commission and provided to investors, to the extent required, the ongoing annual reports required by Regulation Crowdfunding during the two years immediately preceding the filing of this offering statement (or for such shorter period that the issuer was required to file such reports).
- Not a development stage company that (a) has no specific business plan or (b) has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies.

**INSTRUCTION TO QUESTION 2: If any of these statements is not true, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.**

3. Has the issuer or any of its predecessors previously failed to comply with the ongoing reporting requirements of Rule 202 of Regulation Crowdfunding? ☐ Yes ☑ No

Explain: ________________________________________________________________________

# **DIRECTORS OF THE COMPANY**

4. Provide the following information about each director (and any persons occupying a similar status or performing a similar function) of the issuer:

Name: Andre Beauchesne Dates of Board Service: 09/2019 - Present
Principal Occupation: Investor
Employer: Dates of Service: 1998 to Present
Employer's principal business: Gestion Andre Beauchesne

List all positions and offices with the issuer held and the period of time in which the director served in the position or office:

Position: Chairman and CEO Dates of Service: 09/2019 - 08/2021
Position: Chairman Dates of Service: 08/2021 - Present
Position: Dates of Service:

Business Experience: List the employers, titles and dates of positions held during past three years with an indication of job responsibilities:

Employer: Alt 5 Sigma
Employer's principal business: Blockchain Exchange
Title: Co-Founder Dates of Service: 11/2016 - Present
Responsibilities:

Employer:
Employer's principal business:
Title: Dates of Service:
Responsibilities:

Employer:

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**Name:** Antoni Binek
**Dates of Board Service:** September 2019 - Present
**Principal Occupation:** Inventor & Engineer
**Employer:** Next Dynamics, Inc.
**Dates of Service:** September 2019 - Present

**Positions / Offices Held With Issuer & Period of Time Served:**

**Position:** Inventor & Chief Engineer
**Dates of Service:** September 2019 - Present

**Business Experience: Employers/Titles/Service Dates for Positions Held Last Three Years**

**Employer / Business / Title:** N/A
**Dates:** N/A

**Name:** Jerome Cliché
**Dates of Board Service:** August 2021 - Present
**Principal Occupation:** Advisor / Investor / Financial Communications
**Employer:** LMC Communications Inc. / Founder
**Dates of Service:** 2003 - Present

**Positions / Offices Held With Issuer & Period of Time Served:**

**Position:** N/A
**Dates of Service:** N/A

**Business Experience: Employers/Titles/Service Dates for Positions Held Last Three Years**

**Employer / Business / Title:** LMC Communications, Inc. / Financial Communications / Founder
**Dates:** 2003 - Present

**Name:** Jacob Salk
**Dates of Board Service:** August 2021 - Present
**Principal Occupation:** Finance / Defense / Technology
**Employer / Title:** Next Dynamics, Inc., President, CEO & CFO
**Dates of Service:** August 2021 - Present

**Positions / Offices Held With Issuer & Period of Time Served:**

**Position:** President, CEO & CFO
**Dates of Service:** August 2019 - Present

**Business Experience: Employers/Titles/Service Dates for Positions Held Last Three Years**

Employer / Business / Title: Zenith Ventures Group LLC / Financial Consulting / Managing Partner
Dates: February 2017 - Present

Employer / Business / Title: Zukin Partners LLC / Strategic Financial Advisory / Partner
Dates: August 2018 - Present

Employer / Business / Title: Zukin Certification Services LLC / Projections & Valuation Advisory / Managing Director
Dates: December 2021 - Present

Name: Sam Mouallem
Dates of Board Service: April 2022 - Present
Principal Occupation: Defense Distribution
Employer / Title: Simex Defense, Inc. / Founder & President
Dates of Service: 1994 - Present

Positions / Offices Held With Issuer & Period of Time Served:

Position: N/A
Dates of Service: N/A

Business Experience: Employers/Titles/Service Dates for Positions Held Last Three Years

Employer / Business / Title: Simex Defence, Inc. / Defense Distribution / Founder & President
Dates: 1994 - Present

Employer's principal business: ________________________
Title: ________________________ Dates of Service: ________________________
Responsibilities: ________________________

## OFFICERS OF THE COMPANY

5. Provide the following information about each officer (and any persons occupying a similar status or performing a similar function) of the issuer:

Name: Jacob Salk
Title: President, CEO & CFO
Date: 08/2021 - Present
Responsibilities: Strategy, Finance, Operations, Business Development, Military Advisory Board, General Mgmt.

List any prior positions and offices with the issuer and the period of time in which the officer served in the position or office:

Position: N/A
Date: 08/2021 - Present
Responsibilities: ________________________

Position: ________________________ Dates of Service: ________________________
Responsibilities: ________________________

Position: ________________________ Dates of Service: ________________________
Responsibilities: ________________________

Business Experience: List any other employers, titles and dates of positions held during past three years with an indication of job responsibilities:

Employer: Zenith Ventures Group LLC
Employer's principal business: Financial Consulting
Title: Founder & Managing Partner
Date: 02/2017 - Present
Responsibilities: Consulting / Advisory, Client Management, Business Development

Employer: Zukin Partners LLC
Employer's principal business: Strategic Financial Advisory
Title: Partner
Date: 09/2018 - Present
Responsibilities: Strategic Financial Advisory, Client Management

Employer: Zukin Certification Services LLC
Employer's principal business: Projections & Valuation Advisory
Title: Managing Director
Date: 12/2021 - Present
Responsibilities: Projections / Valuation Analysis, Diligence & Review

INSTRUCTION TO QUESTION 5: For purposes of this Question 5, the term officer means a president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any person routinely performing similar functions.

## PRINCIPAL SECURITY HOLDERS

6. Provide the name and ownership level of each person, as of the most recent practicable date, who

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is the beneficial owner of 20 percent or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power.

| Name of Holder | No. and Class of Securities Now Held | % of Voting Power Prior to Offering |
| --- | --- | --- |
| Andre Beauchesne | 60,000 Preferred Shares | 99% |
|  |  | % |
|  |  | % |
|  |  | % |

INSTRUCTION TO QUESTION 6: The above information must be provided as of a date that is no more than 120 days prior to the date of filing of this offering statement.

To calculate total voting power, include all securities for which the person directly or indirectly has or shares the voting power, which includes the power to vote or to direct the voting of such securities. If the person has the right to acquire voting power of such securities within 60 days, including through the exercise of any option, warrant or right, the conversion of a security, or other arrangement, or if securities are held by a member of the family, through corporations or partnerships, or otherwise in a manner that would allow a person to direct or control the voting of the securities (or share in such direction or control - as, for example, a co-trustee) they should be included as being “beneficially owned.” You should include an explanation of these circumstances in a footnote to the “Number of and Class of Securities Now Held.” To calculate outstanding voting equity securities, assume all outstanding options are exercised and all outstanding convertible securities converted.

## BUSINESS AND ANTICIPATED BUSINESS PLAN

7. Describe in detail the business of the issuer and the anticipated business plan of the issuer.

### RISK FACTORS

**A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.**

**In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.**

**The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.**

**These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.**

8. Discuss the material factors that make an investment in the issuer speculative or risky:

8

(1) Highly capitalized competitor brings non-infringing technology to market, replacing the need for this product
(2) The loss of key personnel could harm the business
(3) New technology could nullify advancements in ballistics
(4) Increased ballistics performance may not be viewed as valuable enough relative to costs
(5)
(6)
(7)
(8)
(9)
(10)
(11)

INSTRUCTION TO QUESTION 8: Avoid generalized statements and include only those factors that are unique to the issuer. Discussion should be tailored to the issuer's business and the offering and should not repeat the factors addressed in the legends set forth above. No specific number of risk factors is required to be identified. Add additional lines and number as appropriate.

# THE OFFERING

9. What is the purpose of this offering?

Seeking $1.5MM to complete testing and development of a new product

10. How does the issuer intend to use the proceeds of this offering?

Funds will be used to complete testing and development of Nemesis projectile

|  | If Target Offering Amount Sold | If Maximum Amount Sold |
| --- | --- | --- |
| Total Proceeds | $1,500,000 | $ |
| Less: Offering Expenses |  |  |
| (A) Transaction Expenses | 112,500 |  |
| (B) Loan Repayment | 56,177 |  |
| (C) |  |  |
| Net Proceeds | $ | $ |
| Use of Net Proceeds |  |  |
| (A) General & Administrative | 665,662 |  |
| (B) Manufacturing & Testing | 532,529 |  |
| (C) Sales & Marketing | 133,132 |  |
| Total Use of Net Proceeds | $1,500,000 | $ |

INSTRUCTION TO QUESTION 10: An issuer must provide a reasonably detailed description of any intended use of proceeds, such that investors are provided with an adequate amount of information to understand how the offering proceeds will be used. If an issuer has identified a range of possible uses, the issuer should identify and describe each probable use and the factors the issuer may consider in allocating proceeds among the potential uses. If the issuer will accept proceeds in excess of the target offering amount, the issuer must describe the purpose, method for allocating oversubscriptions, and intended use of the excess proceeds with similar specificity.

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11. (a) Did the issuer make use of any written communication or broadcast script for testing the waters either (i) under the authorization of Rule 241 within 30 days of the initial filing of the offering statement, or (ii) under the authorization of Rule 206? If so, provide copies of the materials used.

N/A

(b) How will the issuer complete the transaction and deliver securities to the investors?

12. How can an investor cancel an investment commitment?

**NOTE: Investors may cancel an investment commitment until 48 hours prior to the deadline identified in these offering materials.**

**The intermediary will notify investors when the target offering amount has been met.**

**If the issuer reaches the target offering amount prior to the deadline identified in the offering materials, it may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment).**

**If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to the issuer upon closing of the offering and the investor will receive securities in exchange for his or her investment.**

**If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.**

## OWNERSHIP AND CAPITAL STRUCTURE

### The Offering

13. Describe the terms of the securities being offered.

14. Do the securities offered have voting rights? ☑ Yes ☐

15. Are there any limitations on any voting or other rights identified above? ☐ Yes ☑

Explain: \_\_\_\_\_

16. How may the terms of the securities being offered be modified?

### Restrictions on Transfer of the Securities Being Offered

The securities being offered may not be transferred by any purchaser of such securities during the one year period beginning when the securities were issued, unless such securities are transferred:

1. (1) to the issuer;
2. (2) to an accredited investor;
3. (3) as part of an offering registered with the U.S. Securities and Exchange Commission; or
4. (4) to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

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**NOTE:** The term “accredited investor” means any person who comes within any of the categories set forth in Rule 501(a) of Regulation D, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person.

The term “member of the family of the purchaser or the equivalent” includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and includes adoptive relationships. The term “spousal equivalent” means a cohabitant occupying a relationship generally equivalent to that of a spouse.

### Description of Issuer’s Securities

17. What other securities or classes of securities of the issuer are outstanding? Describe the material terms of any other outstanding securities or classes of securities of the issuer.

| Class of Security | Securities (or Amount) Authorized | Securities (or Amount) Outstanding | Voting Rights | Other Rights |
| --- | --- | --- | --- | --- |
| Preferred Stock (list each class in order of preference): | 10,000,000 | 60,000 | 550,000 votes/share | N/A |
| Class A Preferred Stock |  |  | ☑ Yes ☐ No | ☐ Yes ☑ No Specify: _____ |
| _____ |  |  | ☐ Yes ☐ No | ☐ Yes ☐ No Specify: _____ |
| Common Stock: | 1,000,000,000 | 23,147,535 | ☑ Yes ☐ No | ☐ Yes ☑ No Specify: _____ |
| Debt Securities: |  | $235,770 | ☐ Yes ☑ No | ☐ Yes ☑ No Specify: _____ |
| Other: |  |  | ☐ Yes ☐ No | ☐ Yes ☐ No Specify: _____ |
| _____ |  |  | ☐ Yes ☐ No | ☐ Yes ☐ No Specify: _____ |

| Class of Security | Securities Reserved for Issuance upon Exercise or Conversion |
| --- | --- |
| Warrants: | 856,000 |
| Options: |  |

11

Other Rights:

18. How may the rights of the securities being offered be materially limited, diluted or qualified by the rights of any other class of security identified above? N/A

19. Are there any differences not reflected above between the securities being offered and each other class of security of the issuer? ☑ Yes ☐ No

Explain: Class A Preferred has superior voting rights of 550,000 votes per share and $0.05 per share liquidation preference.

20. How could the exercise of rights held by the principal shareholders identified in Question 6 above affect the purchasers of the securities being offered? N/A

21. How are the securities being offered being valued? Include examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions.

The securities are being valued based upon a good-faith determination of the Company's Board of Directors as to the value of the share

22. What are the risks to purchasers of the securities relating to minority ownership in the issuer?

23. What are the risks to purchasers associated with corporate actions including:

- additional issuances of securities,
- issuer repurchases of securities,
- a sale of the issuer or of assets of the issuer or
- transactions with related parties?

24. Describe the material terms of any indebtedness of the issuer: See detail on next page in addition to below.

| Creditor(s) | Amount Outstanding | Interest Rate | Maturity Date | Other Material Terms |
| --- | --- | --- | --- | --- |
| Oncore, Inc. | $78,000 | 12.0% | 8/3/2024 | 25% Conversion Discount |
| Simex Defence, Inc. | $37,770 | 12.0% | 6/27/2024 | 25% Conversion Discount |
| Gestion Andre Beauchesne | $120,000 | 14.0% | 12/9/2023 & 2/3/2024 |  |
| Beauchesne Capital | $26,437 | 2.0% (Monthly) | 12/31/2025 |  |

25. What other exempt offerings has the issuer conducted within the past three years?

| Date of Offering | Exemption Relied Upon | Securities Offered | Amount Sold | Use of Proceeds |
| --- | --- | --- | --- | --- |
| 01/2020 | 1933 | Class A Common Stock | $2,334,727 | General corporate purposes |
|  |  |  | $ _____ |  |
|  |  |  | $ _____ |  |

26. Was or is the issuer or any entities controlled by or under common control with the issuer a party to any transaction since the beginning of the issuer's last fiscal year, or any currently proposed transaction, where the amount involved exceeds five percent of the aggregate amount of capital raised by the issuer in reliance on Section 4(a)(6) of the Securities Act during the preceding 12-month period, including the amount the issuer seeks to raise in the current offering, in which any of the following persons had or is to have a direct or indirect material interest:

12

# **Convertible Notes**

| Holder | Amount | Interest Rate | Maturity Date | Other Material Terms |
| --- | --- | --- | --- | --- |
| Simex Defence, Inc. | $37,770 | 12.0% | 6/27/2024 | 25% Conversion Discount |
| Oncore, Inc. | $78,000 | 12.0% | 8/3/2024 | 25% Conversion Discount |
| Total | $115,770 |  |  |  |

# **Promissory Notes**

| Holder | Amount | Interest Rate | Maturity Date | Other Material Terms |
| --- | --- | --- | --- | --- |
| Gestion Andre Beauchesne | $60,000 | 14.0% | 2/3/2024 |  |
| Gestion Andre Beauchesne | $60,000 | 14.0% | 12/9/2023 |  |
| Total | $120,000 |  |  |  |

# **Other Debt**

| Holder | Amount | Interest Rate | Maturity Date | Other Material Terms |
| --- | --- | --- | --- | --- |
| Beauchesne Capital | $26,437 | 2.0% | 12/31/2025 | Monthly Interest |
| Banque National de Canada | $32,012 | N/A | N/A |  |
| Credit Bail Global | $55,792 | N/A | 8/1/2025 | Equipment Lease |
| Total | $114,241 |  |  |  |

(1) any director or officer of the issuer;
(2) any person who is, as of the most recent practicable date, the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power;
(3) if the issuer was incorporated or organized within the past three years, any promoter of the issuer; or
(4) any immediate family member of any of the foregoing persons.

If yes, for each such transaction, disclose the following:

| Specified Person | Relationship to Issuer | Nature of Interest in Transaction | Amount of Interest |
| --- | --- | --- | --- |
| Andre Beauchesne | Chairman | Working Capital Loans | $198,000 |

# INSTRUCTIONS TO QUESTION 26:

The term transaction includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships.

Beneficial ownership for purposes of paragraph (2) shall be determined as of a date that is no more than 120 days prior to the date of filing of this offering statement and using the same calculation described in Question 6 of this Question and Answer format.

The term "member of the family" includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the person, and includes adoptive relationships. The term "spousal equivalent" means a co-habitant occupying a relationship generally equivalent to that of a spouse.

Compute the amount of a related party's interest in any transaction without regard to the amount of the profit or loss involved in the transaction. Where it is not practicable to state the approximate amount of the interest, disclose the approximate amount involved in the transaction.

# FINANCIAL CONDITION OF THE ISSUER

27. Does the issuer have an operating history? ☑ Yes ☐ No

28. Describe the financial condition of the issuer, including, to the extent material, liquidity, capital resources and historical results of operations.

# INSTRUCTIONS TO QUESTION 28:

The discussion must cover each year for which financial statements are provided. Include a discussion of any known material changes or trends in the financial condition and results of operations of the issuer during any time period subsequent to the period for which financial statements are provided.

For issuers with no prior operating history, the discussion should focus on financial milestones and operational, liquidity and other challenges.

For issuers with an operating history, the discussion should focus on whether historical results and cash flows

13

are representative of what investors should expect in the future.

Take into account the proceeds of the offering and any other known or pending sources of capital. Discuss how the proceeds from the offering will affect liquidity, whether receiving these funds and any other additional funds is necessary to the viability of the business, and how quickly the issuer anticipates using its available cash. Describe the other available sources of capital to the business, such as lines of credit or required contributions by shareholders.

References to the issuer in this Question 28 and these instructions refer to the issuer and its predecessors, if any.

Please see next page for financial commentary and certification of executive officer.

## FINANCIAL INFORMATION

29. Include the financial information specified below covering the two most recently completed fiscal years or the period(s) since inception, if shorter:

Aggregate Offering

Amount
(defined below):

(a) $107,000 or less:

(b) More than
$107,000, but not
more than
$535,000:

Financial Information
Required:

☐ The following information
or their equivalent line
items as reported on the
federal income tax return
filed by the issuer for the
most recently completed
year (if any):
o Total income
o Taxable income; and
o Total tax;
certified by the principal
executive officer of the
issuer to reflect accurately
the information reported on
the issuer's federal income
tax returns; and
☐ Financial statements of the
issuer and its predecessors,
if any.

☐ Financial statements of the
issuer and its predecessors,
if any.

Financial Statement
Requirements:

Financial statements must be certified
by the principal executive officer of
the issuer as set forth below.

If financial statements are available
that have either been reviewed or
audited by a public accountant that is
independent of the issuer, the issuer
must provide those financial
statements instead along with a signed
audit or review report and need not
include the information reported on
the federal income tax returns or the
certification of the principal executive
officer.

Financial statements must be
reviewed by a public accountant that
is independent of the issuer and must
include a signed review report.

If financial statements of the issuer

14

### **Question 28 - Description of Financial Condition & Use of Proceeds**

For the year ended December 31, 2020, the Company incurred a net loss of approximately $953,000, with operating expenses largely pertaining to technology development, engineering and manufacturing / production expenses inclusive of material costs, as well as personnel costs, marketing/advertising, and licenses. The Company did not generate any product licensing or distribution revenues, and thus operations were funded by capital from investors.

For the year ended December 31, 2021, the Company actively sought to reduce operating expenses and incurred a net loss of approximately $556,000, a nearly 42% reduction versus the prior year. Expenses again largely pertained to technology development, engineering and manufacturing / production expenses inclusive of material costs, significantly reduced management / personnel costs. The Company did not generate any product licensing or distribution revenues, and operations were funded by capital from investors.

The Company has since made additional strides in streamlining operations and reducing expenses. Given the Company's nominal current monthly cash burn (under $60,000), proceeds from the offering will enable the company to continue to fund its existing operations structure, expand sample production, augment its research and development activities including testing of current and additional to-be-manufactured products, and overall help see the Company through to a larger capital raise ($5-$10 million Regulation A+), revenue generation from licensing / distribution, and planned up-listing.

### **Question 29 - Financials & Executive Officer Certification**

Please see enclosed financials for the fiscal years ended December 31, 2020 and December 31, 2021.

### **Certification of Executive Officer Regarding Financial Statements:**

I, Jacob Salk, certify that the financial statements of Next Dynamics, Inc. included in this Form are true and complete in all material aspects.

Jacob Salk
President & CEO

are available that have been audited by a public accountant that is independent of the issuer, the issuer must provide those financial statements instead along with a signed audit report and need not include the reviewed financial statements.

(c) More than $535,000:

☐ Financial statements of the issuer and its predecessors, if any.

If the issuer **has** previously sold securities in reliance on Regulation Crowdfunding:

Financial statements must be **audited** by a public accountant that is independent of the issuer and must include a signed audit report.

If the issuer **has not** previously sold securities in reliance on Regulation Crowdfunding and it is offering more than $535,000 but not more than $1,070,000:

Financial statements must be **reviewed** by a public accountant that is independent of the issuer and must include a signed review report.

If financial statements of the issuer are available that have been audited by a public accountant that is independent of the issuer, the issuer must provide those financial statements instead along with a signed audit report and need not include the reviewed financial statements.

INSTRUCTIONS TO QUESTION 29: To determine the financial statements required, the Aggregate Offering Amount for purposes of this Question 29 means the aggregate amounts offered and sold by the issuer, all entities controlled by or under common control with the issuer, and all predecessors of the issuer in reliance on Section 4(a)(6) of the Securities Act within the preceding 12-month period plus the

15

current maximum offering amount provided on the cover of this Form.

To determine whether the issuer has previously sold securities in reliance on Regulation Crowdfunding for purposes of paragraph (c) of this Question 29, “issuer” means the issuer, all entities controlled by or under common control with the issuer, and all predecessors of the issuer.

Financial statements must be prepared in accordance with U.S. generally accepted accounting principles and must include balance sheets, statements of comprehensive income, statements of cash flows, statements of changes in stockholders’ equity and notes to the financial statements. If the financial statements are not audited, they shall be labeled as “unaudited.”

Issuers offering securities and required to provide the information set forth in row (a) before filing a tax return for the most recently completed fiscal year may provide information from the tax return filed for the prior year (if any), provided that the issuer provides information from the tax return for the most recently completed fiscal year when it is filed, if filed during the offering period. An issuer that requested an extension of the time to file would not be required to provide information from the tax return until the date when the return is filed, if filed during the offering period.

A principal executive officer certifying financial statements as described above must provide the following certification**:

I, [identify the certifying individual], certify that:

(1) the financial statements of [identify the issuer] included in this Form are true and complete in all material respects; and

(2) the tax return information of [identify the issuer] included in this Form reflects accurately the information reported on the tax return for [identify the issuer] filed for the fiscal year ended [date of most recent tax return].

[Signature]

[Title]

** Intentional misstatements or omissions of facts constitute federal criminal violations. See 18 U.S.C. 1001.

To qualify as a public accountant that is independent of the issuer for purposes of this Question 29, the accountant must satisfy the independence standards of either:

(i) Rule 2-01 of Regulation S-X or
(ii) the AICPA.

The public accountant that audits or reviews the financial statements provided by an issuer must be (1) duly registered and in good standing as a certified public accountant under the laws of the place of his or her residence or principal office or (2) in good standing and entitled to practice as a public accountant under the laws of his or her place of residence or principal office.

An issuer will not be in compliance with the requirement to provide reviewed financial statement if the issuer received a review report that includes modifications. An issuer will not be in compliance with the requirement to provide audited financial statements if the issuer received a qualified opinion, an adverse opinion, or a disclaimer of opinion.

16

The issuer must notify the public accountant of the issuer's intended use of the public accountant's audit or review report in the offering.

For an offering conducted in the first 120 days of a fiscal year, the financial statements provided may be for the two fiscal years prior to the issuer's most recently completed fiscal year; however, financial statements for the two most recently completed fiscal years must be provided if they are otherwise available. If more than 120 days have passed since the end of the issuer's most recently completed fiscal year, the financial statements provided must be for the issuer's two most recently completed fiscal years. If the 120th day falls on a Saturday, Sunday, or holiday, the next business day shall be considered the 120th day for purposes of determining the age of the financial statements.

An issuer may elect to delay complying with any new or revised financial accounting standard until the date that a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002) is required to comply with such new or revised accounting standard, if such standard also applies to companies that are not issuers. Issuers electing such extension of time accommodation must disclose it at the time the issuer files its offering statement and apply the election to all standards. Issuers electing not to use this accommodation must forgo this accommodation for all financial accounting standards and may not elect to rely on this accommodation in any future filings.

30. With respect to the issuer, any predecessor of the issuer, any affiliated issuer, any director, officer, general partner or managing member of the issuer, any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated in the same form as described in Question 6 of this Question and Answer format, any promoter connected with the issuer in any capacity at the time of such sale, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities, or any general partner, director, officer or managing member of any such solicitor, prior to May 16, 2016:

(1) Has any such person been convicted, within 10 years (or five years, in the case of issuers, their predecessors and affiliated issuers) before the filing of this offering statement, of any felony or misdemeanor:

(i) in connection with the purchase or sale of any security? ☐ Yes ☑

(ii) involving the making of any false filing with the Commission?

Yes ☑

(iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities?

Yes ☑

If Yes to any of the above, explain: _________________________

(2) Is any such person subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before the filing of the information required by Section 4A(b) of the Securities Act that, at the time of filing of this offering statement, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:

(i) in connection with the purchase or sale of any security? ☐ Yes ☑

(ii) involving the making of any false filing with the Commission?

Yes ☑

(iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor

17

of purchasers of securities? ☐ Yes ☑

If Yes to any of the above, explain: _______________

(3) Is any such person subject to a final order of a state securities commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:

(i) at the time of the filing of this offering statement bars the person from:

(A) association with an entity regulated by such commission, authority, agency or officer? ☐ Yes ☑

(B) engaging in the business of securities, insurance or banking?

Yes ☑

(C) engaging in savings association or credit union activities?

Yes ☑

(ii) constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct and for which the order was entered within the 10-year period ending on the date of the filing of this offering statement? ☐ Yes ☑

If Yes to any of the above, explain: _______________

(4) Is any such person subject to an order of the Commission entered pursuant to Section 15(b) or 15B(c) of the Exchange Act or Section 203(e) or (f) of the Investment Advisers Act of 1940 that, at the time of the filing of this offering statement:

(i) suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer, investment adviser or funding portal? ☐ Yes ☑

(ii) places limitations on the activities, functions or operations of such person?

Yes ☑

(iii) bars such person from being associated with any entity or from participating in the offering of any penny stock? ☐ Yes ☑

If Yes to any of the above, explain: _______________

(5) Is any such person subject to any order of the Commission entered within five years before the filing of this offering statement that, at the time of the filing of this offering statement, orders the person to cease and desist from committing or causing a violation or future violation of:

(i) any scienter-based anti-fraud provision of the federal securities laws, including without limitation Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act, Section 15(c)(1) of the Exchange Act and Section 206(1) of the Investment Advisers Act of 1940 or any other rule or regulation thereunder?

Yes ☑

(ii) Section 5 of the Securities Act? ☐ Yes ☑

If Yes to either of the above, explain: _______________

18

(6) Is any such person suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade?

☐ Yes ☑ No

If Yes, explain: _________________

(7) Has any such person filed (as a registrant or issuer), or was any such person or was any such person named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before the filing of this offering statement, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is any such person, at the time of such filing, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?

☐ Yes ☑ No

If Yes, explain: _________________

(8) Is any such person subject to a United States Postal Service false representation order entered within five years before the filing of the information required by Section 4A(b) of the Securities Act, or is any such person, at the time of filing of this offering statement, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

☐ Yes ☑ No

If Yes, explain: _________________

**If you would have answered “Yes” to any of these questions had the conviction, order, judgment, decree, suspension, expulsion or bar occurred or been issued after May 16, 2016, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.**

INSTRUCTIONS TO QUESTION 30: Final order means a written directive or declaratory statement issued by a federal or state agency, described in Rule 503(a)(3) of Regulation Crowdfunding, under applicable statutory authority that provides for notice and an opportunity for hearing, which constitutes a final disposition or action by that federal or state agency.

No matters are required to be disclosed with respect to events relating to any affiliated issuer that occurred before the affiliation arose if the affiliated entity is not (i) in control of the issuer or (ii) under common control with the issuer by a third party that was in control of the affiliated entity at the time of such events.

### **OTHER MATERIAL INFORMATION**

31. In addition to the information expressly required to be included in this Form, include:
(1) any other material information presented to investors; and
(2) such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.

INSTRUCTIONS TO QUESTION 31: If information is presented to investors in a format, media or other means not able to be reflected in text or portable document format, the issuer should include

19

(a) a description of the material content of such information;
(b) a description of the format in which such disclosure is presented; and
(c) in the case of disclosure in video, audio or other dynamic media or format, a transcript or description of such disclosure.

N/A

# ONGOING REPORTING

The issuer will file a report electronically with the Securities & Exchange Commission annually and post the report on its website, no later than:

April 30, 2023

(120 days after the end of each fiscal year covered by the report).

Once posted, the annual report may be found on the issuer's website at:

www.nextdynamicscorp.com

The issuer must continue to comply with the ongoing reporting requirements until:

(1) the issuer is required to file reports under Section 13(a) or Section 15(d) of the Exchange Act;
(2) The issuer has filed, since its most recent sale of securities pursuant to this part, at least one annual report pursuant to this section and has fewer than 300 holders of record;
(3) The issuer has filed, since its most recent sale of securities pursuant to this part, the annual reports required pursuant to this section for at least the three most recent years and has total assets that do not exceed $10,000,000;
(4) the issuer or another party repurchases all of the securities issued in reliance on Section 4(a)(6) of the Securities Act, including any payment in full of debt securities or any complete redemption of redeemable securities; or
(5) the issuer liquidates or dissolves its business in accordance with state law.

20

**Attachment 2:** `exhibitb2.pdf`

# **NEXT DYNAMICS INC.**
**Consolidated Financial Statements**
**December 31, 2020**
**(in United States dollars)**

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

## **NEXT DYNAMICS INC.**

Consolidated Financial Statements
December 31, 2020
(in United States dollars)

### **INDEX**

| Independent Auditors Report to the Stockholders | 1 - 2 |
| --- | --- |
| Consolidated Financial Statements |  |
| Consolidated Balance Sheet | 3 |
| Consolidated Statements of operations | 4 |
| Consolidated Statement of cash flows | 5 |
| Consolidated Statements of changes in stockholders' deficit | 6 |
| Notes to Consolidated Financial Statements | 7 - 15 |

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapostol@gmail.com

# LA POSTA & ASSOCIATES

## INDEPENDENT AUDITOR'S REPORT

To the shareholders of and the Board of Directors of **NEXT DYNAMICS INC.**

### Opinion

We have audited the consolidated financial statements of **NEXT DYNAMICS INC.** (hereafter 'the Company') which comprise the consolidated statement of financial position as at December 31, 2020 and December 31, 2019, and the consolidated statement of operations and comprehensive loss, the consolidated statement of shareholders' deficiency and the consolidated statement of cash flows for the initial years then ended, and notes to consolidated statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and December 31, 2019, and its financial performance and its cash flows for the initial 2020 and December 31, 2019 then ended in accordance with accounting principles generally accepted in the United States of America (hereafter 'U.S. GAAP').

### Material uncertainty related to going concern

We draw attention to Note 2 to the consolidated financial statements, which indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

### Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

### Responsibilities of management and those charged with governance for the consolidated financial statements.

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. G.A.A.P., and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

1

---

8530 CHAMP D'EAU, SUITE 202  
MONTRÉAL, QUÉBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: flaposta@gmail.com

### Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charges with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Montreal, Quebec
March 12, 2021

CPA auditor, CA, public accountancy permit No. A106908

2

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: f@postagmail.com

# NEXT DYNAMICS INC.

### Consolidated Balance Sheet As at December 31, 2020 (in United States dollars)

|  | 2020 $ | 2019 $ |
| --- | --- | --- |
| Current Assets |  |  |
| Cash | 504,740 | 273,655 |
| Prepaid expenses and other | 272,684 | 2,180 |
|  | 777,424 | 275,835 |
| Long Term Assets |  |  |
| Equipment (note 2) | 157,561 | 7,631 |
| TOTAL ASSETS | 934,985 | 283,467 |
| Current Liabilities |  |  |
| Trade and other payable (note 3) | 22,409 | 53,647 |
|  | 22,409 | 53,647 |
| Long Term Liabilities |  |  |
| Loan payable (note 4) | 158,309 | - |
|  | 180,718 | 53,647 |
| Shareholders' Deficit |  |  |
| Share Capital (note 5) |  |  |
| Additional Paid in Capital | 2,063,139 | 536,310 |
| 1,000,000,000 Authorized Common Shares - Issued |  |  |
| 17,503,940 in 2020 and 12,000,000 in 2019 | 17,504 | 12,000 |
| 60,000 issued Preferred Shares | 60 | 60 |
| Accumulated deficit | (1,326,436) | (318,550) |
|  | 754,267 | 229,820 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 934,985 | 283,467 |

SEE ACCOMPANYING NOTES

### APPROVED ON BEHALF OF THE BOARD

/s/ Andre Beauchesne

/s/ Gabriel Idan-Romagnolo

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8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

## NEXT DYNAMICS INC.

### Consolidated Statement of operations

As at December 31, 2020

(in United States dollars)

|  | 2020 $ | 2019 $ |
| --- | --- | --- |
| REVENUE | - | - |
| OPERATING EXPENSES |  |  |
| Overhead costs | 128,036 | 2,225 |
| Accounting & legal | 98,492 | 145,558 |
| Management | 270,327 | 5,678 |
| Consulting - Engineering | 172,337 | 68,139 |
| Advertising & promotions | 109,595 | 36,795 |
| Licenses | 29,752 | - |
| Courier & postage | 1,228 | 34 |
| Amortization expense | 4,806 | 114 |
| Insurance | 3,655 | - |
| Bank charges | 2,315 | 1,085 |
| Office supplies | 6,369 | 1,379 |
| Rent | 72,347 | 19,957 |
| Telephone | 4,434 | - |
| Transportation | 1,604 | 62 |
| Travel | 10,760 | 8,112 |
| Utilities | 34 | - |
| Meals | 28,551 | 19,684 |
|  | 944,643 | 308,823 |
| Loss from Operation | (944,643) | (308,823) |
| Other Income (Expense) |  |  |
| Foreign exchange loss | (2,503) | (7,906) |
| Donation | (76) | - |
| Interest | (5,732) | (1,821) |
|  | (8,311) | (9,728) |
| NET LOSS | (952,954) | (318,550) |
| Foreign Currency Translation Loss | (54,932) | - |
| TOTAL COMPREHENSIVE LOSS | (1,007,886) | (318,550) |

SEE ACCOMPANYING NOTES

4

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

### Statement of Cash Flows 2020-09-01 TO 2020-12-31 (in United States dollars)

|  | 2020 $ | 2019 $ |
| --- | --- | --- |
| Funds provided from (used in): |  |  |
| Cash Flows from (used in) Operating activities |  |  |
| Net Loss | (1,007,886) | (318,550) |
| Amortization expense | 4,806 | 114 |
| Prepaid expenses | (270,504) | (2,180) |
| Accounts payable | (31,238) | 53,647 |
| NET CASH PROVIDED FOR (USED IN) OPERATING ACTIVITIES | (1,304,822) | (266,969) |
| Cash Flows from (used in) Investing Activities |  |  |
| Purchase of capital asset | (154,736) | (7,746) |
| NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES | (154,736) | (7,746) |
| Cash Flows from (used in) Financing Activities |  |  |
| Increase in loan payable | 158,309 | - |
| Additional paid in Capital | 1,526,829 | 536,310 |
| Issuance of common shares | 5,504 | 12,000 |
| Issuance of preferred shares | - | 60 |
| NET CASH PROVIDED BY USED IN) FINANCING ACTIVITIES | 1,690,642 | 548,370 |
| Increase (Decrease) in Cash and Cash Equivalents | 231,085 | 273,655 |
| Cash and Cash Equivalents at Beginning of Year | 273,655 | - |
| Cash and Cash Equivalents at End of Year | 504,740 | 273,655 |

SEE ACCOMPANYING NOTES

5

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

## NEXT DYNAMICS INC.

### Consolidated Statement of changes in stockholders' deficit
For the Year Ended December 31, 2020
(in United States dollars)

|  | Preferred Shares | Common Shares | Shares Amount | Paid-In Capital | Accumulated deficit | TOTAL DEFICIT |
| --- | --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2018 | - | - | - | - | - | - |
| Issuance of Common Shares | - | 12,000,000 | 12,000 | 536,310 | - | 548,310 |
| Issuance of Preferred Shares | 60,000 | - | 60 | - | - | 60 |
| Net loss for the year | - | - | - | - | (318,550) | (318,550) |
| BALANCE, DECEMBER 31, 2019 | 60,000 | 12,000,000 | 12,060 | 536,310 | (318,550) | 229,820 |
| Issuance of Common Shares | - | 5,503,940 | 5,504 | 1,526,829 | - | 1,532,333 |
| Net Loss for the Year | - | - | - | - | (1,007,886) | (1,007,886) |
| BALANCE, DECEMBER 31, 2020 | 60,000 | 17,503,940 | 17,564 | 2,063,139 | (1,326,436) | 754,267 |

SEE ACCOMPANYING NOTES

6

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

## Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

### 1. Organization and summary of significant accounting policies and going concern

#### Organization

The Company and its wholly-owned subsidiaries Next Dynamics Canada Inc. (hereafter “the Group”), were incorporated under the laws of the State of Texas on September 3, 2003 and under the Canadian Business Corporations Act September 18, 2019 (R.S.C., 1985, c. C-44). The Group is engaged in research, development and licencing of patents and proprietary military defense technologies.

#### Basis of presentation and going concern

As reflected in the accompanying financial statements, the Company has a net loss in operations of $1,007,886 and $318,550, for the years ended December 31, 2020 and December 31, 2019 respectively. This factor raises substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date these financial statements were available to be issued. The ability of the Company to continue as a going concern is dependent on the Company’s ability to implement its business plan, raise capital and generate more revenues. Currently, management is seeking capital to implement its business plan. Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Group’s consolidated financial statements are prepared in accordance with U.S. GAAP and presented in U.S. dollars.

#### Principles of consolidation

The Group’s financial statements consolidate those of the Company and its wholly-owned subsidiaries as at December 31, 2019. The subsidiaries have a reporting date of December 31.

All transactions and balances between the consolidate companies are eliminated on consolidation, including unrealized gains and losses on transactions between the companies.

#### Risks and uncertainties for development stage company

The Company is considered to be in an early stage. Our activities since inception include devoting substantially all of the Company’s efforts to business planning and development. Additionally, the Company has allocated a substantial portion of its time and investment to the completion of the Company’s development activities to launch its marketing plan and generate revenues to raising capital. The Company has not generated revenue from operations and has not begun construction of any facilities. The Company’s activities during this early stage are subject to significant risks and uncertainties.

7

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8530 CHAMP D'EAU, SUITE 202  
MONTRÉAL, QUÉBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

# Notes to Financial Statements
For the Year Ended December 31, 2020
(in United States dollars)

# 1. Organization and summary of significant accounting policies and going concern
(continued)

# Use of estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include the valuation of prepaid licence fee, estimate of a contingent loss, and the valuation of deferred tax assets.

# Fair value measurements and fair value of financial instruments

The Company adopted Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company's financial position or operating results, but did not expand certain disclosures.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

These inputs are prioritized below:

- Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
- Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
- Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board's ("FASB") accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The estimated fair value of certain financial instruments, including accounts payable, accrued expenses and loans payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

8

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

## Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

### 1. Organization and summary of significant accounting policies and going concern (continued)

#### Legal and Other Contingencies

The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When legal costs that the entity expects to incur in defending itself in connection with a loss contingency accrual are expected to be material, the loss should factor in all costs and, if the legal costs are reasonably estimable, they should be accrued in accordance with ASC 450, regardless of whether a liability can be estimated for the contingency itself. Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred. Changes in these factors could materially impact the financial statements.

#### Income taxes

The Company accounts for income taxes pursuant to the provision of ASC 740-10, 'Accounting for Income Taxes' ('ASC 740-10'), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

9

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8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

## Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

### 1. Organization and summary of significant accounting policies and going concern (continued)

The Company has adopted ASC 740-10-25, 'Definition of Settlement', which provides guidance on how an entity should determine whether a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

#### Net loss per share of common stock

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At December 31, 2020 and December 31, 2019, the Company has 4,628,000 and 2,955,000 common securities outstanding and 60,000 preferred securities outstanding respectively.

#### Recent accounting pronouncements

In July 2017, the FASB issued ASU 2017-11 'Earnings Per Share' (Topic 260). The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (E'EPS') in accordance with Topic 260. Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a divided and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt - Debt with conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part 1 of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this guidance had no material impact on its accounting and disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of the stock-based compensation guidance in ASC 718 to include share based payment transactions for acquiring goods and services for non-employees. ASU No. 2018-07 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but entities may not adopt prior to adopting the new revenue recognition guidance in ASC 606. The adoption of this guidance had no material impact on its accounting and disclosures.

10

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8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

## Notes to Financial Statements
For the Year Ended December 31, 2020
(in United States dollars)

### 1. Organization and summary of significant accounting policies and going concern (continued)

In August 2018, the FASB issued ASU 2018-13, "Changes to Disclosure Requirements for Fair Value Measurements", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is assessing ASU 2018-17 and does not expect it to have a material impact on its accounting and disclosures.

Other accounting standards which were not effective until after December 31, 2019 are not expected to have a material impact on the Company's financial position or results of operations.

#### Equipment

Equipment is accounted for at acquisition cost less accumulated depreciation. Depreciation is based on estimated useful life using the straight-line method and for the following period:

|  | Period |
| --- | --- |
| Furniture | 3 years |
| Useful lives of depreciable assets |  |
| Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. |  |

#### Intangible assets

Intangible assets not subject to amortization must be tested for impairment annually and, more frequently, when events or changes in circumstances occur that indicate that their carrying amount may not be recoverable.

Intangible assets with finite useful lives are amortized over their estimated useful lives according to the straight-line method over five years. Included in this group is the platform.

Testing of intangible assets not subject to amortization for impairment only when events or changes in circumstances occur that indicate that their carrying amount may not be recoverable.

The Company reviews its intangible assets not subject to amortization annually and, more frequently, when events or changes in circumstances occur and its intangible assets with finite useful lives for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. The Company measures impairment by comparing the asset's estimated fair value to its carrying amount. The estimated fair value of the platform is based on estimated future cash flows to be generated by the assets, discounted at a market rate of interest. The estimated fair value of the cryptocurrency is determined using reputable cryptocurrency exchange platforms designed to track the fair value prices of cryptocurrencies.

11

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

## Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

### 1. Organization and summary of significant accounting policies and going concern (continued)

#### Loans of cryptocurrency

##### *Receivable*

Loans of cryptocurrency receivable are accounted for at the fair value as at the date of the transaction. They are subsequently tested for impairment as are the cryptocurrency described in the intangible assets section.

##### *Payable*

Loans of cryptocurrency payable are accounted for at amortized cost.

#### Convertible instruments

U.S. GAAP requires companies to bifurcate conversion options and certain other features from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in consolidated income as they occur; and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. G.A.A.P.

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible debentures for the intrinsic value of the conversion options embedded in the debt instruments based upon the differences between the fair value of the underlying common shares at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company has not recorded any beneficial conversion feature as at December 31, 2019 as the embedded conversion options in its notes payable do not meet the firm commitment criterion as described under applicable U.S. G.A.A.P.

#### Equity

Common shares and preferred shares represent the par value of the total number of shares issued by the Company. If shares are issued when warrants are exercised, the common shares account also comprises the compensation costs previously recorded as additional paid-in capital. If shares are issued upon the exercise of the conversion option related to the convertible instruments, the common shares account also comprises the equity component of the convertible instruments.

12

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8530 CHAMP D'EAU, SUITE 202  
MONTRÉAL, QUÉBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

Additional paid-in capital includes charges related to the fair value of warrants until such equity instruments are exercised, in which case the amounts are transferred to common shares. If convertible instruments are not exercised at the expiry of the convertible instruments, the equity component of the convertible instrument is transferred to additional paid-in capital.

Accumulated other consolidated comprehensive income comprises foreign currency translation difference arising from the translation of financial statements of the Company's foreign subsidiary in Canadian dollars to the US dollar presentation currency of the Group.

Deficit includes all current and prior losses.

#### Revenue recognition

The Group recognizes revenue, primarily from cryptocurrency platform setup, maintenance and transaction fees, when persuasive evidence of an arrangement exists, delivery to the customer has occurred, the price of the buyer is fixed or determinable and collection is reasonably assured.

#### Share-based compensation

The Company accounts for share-based compensation under ASC 718 Compensation - Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in shares-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant-date must be recognized. The Company treats share-based transactions with its non-employee directors as if they were employees.

The Company accounts for share-based compensation awards to non-employees in accordance with ASC 505-50 Equity-based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or share-based compensation awards granted as either whichever is more reliably measurable. Any warrants issued to no-employees are recorded in expense and additional paid-in capital in shareholder's deficiency over the applicable service periods using variable accounting through the vesting dates based on the fair value of the warrants at the end of each period.

13

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8530 CHAMP D'EAU, SUITE 202  
MONTRÉAL, QUÉBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)

## 2. Equipment

|  |  |  |  | 2020 | 2019 |
| --- | --- | --- | --- | --- | --- |
|  | COST | ADDITIONS/ DISPOSITIONS | ACCUMULATED AMORTIZATION | NET BOOK VALUE | NET BOOK VALUE |
| FURNITURE | 7,745 | 154,736 | 4,920 | 157,561 | 7,631 |
|  | $7,745 | $154,736 | $4,920 | $157,561 | $7,631 |

## 3. Trade and other payables

|  | 2020 | 2019 |
| --- | --- | --- |
| TRADE PAYABLES | 22,409 | 45,371 |
|  | $22,409 | $45,371 |

## 4. Loan Payable

The loan payable is to the Director of the Company and bears interest at 2% monthly and is not currently due.

## 5. Share Capital

During the period ended December 31, 2020 and December 31, 2019, $5,503,904 and 12,000,000 common shares were issued for a consideration of $1,532,333 and $548,370 in cash respectively.

## 6. Concentrations

### Concentration of credit risk

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institution. The Company's account at this institution is insured by the Federal Deposit Insurance Corporation ('FDIC') up to $25,000. As of December 31, 2020 and 2019, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, The Company evaluated at least annually the rating of the financial institution in which it holds deposits.

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8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

# NEXT DYNAMICS INC.

### **Notes to Financial Statements For the Year Ended December 31, 2020 (in United States dollars)**

#### **7. Income taxes**

The Company has incurred aggregate net operating losses of approximately $1,007,886 and $318,550 for income tax purposes as of December 31, 2020 and December 31, 2019 respectively. The net operating loss carries forward for United States income taxes, which may be available to reduce future years' taxable income. Management believes that the realization of the benefits from these losses appears not more than likely due to the Company's limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance periodically and make adjustments as necessary.

On December 22, 2017, the Tax Cuts and Jobs Act (the 'Act') was signed into law. The Act decreases the U.S. corporate federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The Act also includes a number of other provisions including, among others, the elimination of net operating loss carrybacks and limitations on the use of future losses, the repeal of the Alternative Minimum Tax regime and the repeal of the domestic production activities deduction. These provisions are not expected to have a material effect on the Corporations.

Given the significant complexity of the Act and anticipated additional implementation guidance from the Internal Revenue Service, further implications of the Act may be identified in future periods.

15

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8530 CHAMP D'EAU, SUITE 202  
MONTRÉAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

**Attachment 3:** `exhibitc2.pdf`

# **NEXT DYNAMICS INC.**
**Consolidated Financial Statements**
**December 31, 2021**
**(in United States dollars)**

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: friposta@gmail.com

## NEXT DYNAMICS INC.

Consolidated Financial Statements
December 31, 2021
(in United States dollars)

### INDEX

| Independent Auditors Report to the Stockholders | 1 - 2 |
| --- | --- |
| Consolidated Financial Statements |  |
| Consolidated Balance Sheet | 3 |
| Consolidated Statements of operations | 4 |
| Consolidated Statement of cash flows | 5 |
| Consolidated Statements of changes in stockholders' deficit | 6 |
| Notes to Consolidated Financial Statements | 7 - 15 |

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
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1

# LA POSTA & ASSOCIATES

## INDEPENDENT AUDITOR'S REPORT

To the shareholders of and the Board of Directors of **NEXT DYNAMICS INC.**

### Opinion

We have audited the consolidated financial statements of **NEXT DYNAMICS INC.** (hereafter “the Company”) which comprise the consolidated statement of financial position as at December 31, 2021 and December 31, 2020, and the consolidated statement of operations and comprehensive loss, the consolidated statement of shareholders’ deficiency and the consolidated statement of cash flows for the initial years then ended, and notes to consolidated statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and December 31, 2020, and its financial performance and its cash flows for the initial 2021 and December 31, 2020 then ended in accordance with accounting principles generally accepted in the United States of America (hereafter “U.S. GAAP”).

### Material uncertainty related to going concern

We draw attention to Note 2 to the consolidated financial statements, which indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

### Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the consolidated financial statements” section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

### Responsibilities of management and those charged with governance for the consolidated financial statements.

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. G.A.A.P., and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

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8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: fraposta@gmail.com

2

# **Auditor's responsibilities for the audit of the consolidated financial statements**

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charges with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Montreal, Quebec
February 06, 2022

**CPA auditor, CA, public accountancy permit No. A106908**

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

3

## NEXT DYNAMICS INC.

### Consolidated Balance Sheet As at December 31, 2021 (in United States dollars)

|  | 2021 $ | (note 10) 2020 $ |
| --- | --- | --- |
| Current Assets |  |  |
| Cash | 255,192 | 504,740 |
| Prepaid expenses and other | 6744 | 272,684 |
|  | 261,936 | 777,424 |
| Long Term Assets |  |  |
| Equipment (note 2) | 29,868 | 47,102 |
| Operating lease - rights of use assets (note 3) | 81,354 | 110,459 |
|  | 111,222 | 157,561 |
| TOTAL ASSETS | 373,158 | 934,985 |
| Current Liabilities |  |  |
| Trade and other payable (note 4) | 32,619 | 22,409 |
| Current Portion - obligations rights of use assets | 22,180 | 22,180 |
|  | 54,799 | 44,589 |
| Long Term Liabilities |  |  |
| Obligations under rights of use assets (note 6) | 59,903 | 88,279 |
| Loan payable (note 5) | 55,216 | 47,850 |
|  | 169,918 | 180,718 |
| Shareholders' Deficit |  |  |
| Share Capital (note 7) |  |  |
| Additional paid in capital | 2,063,199 | 2,063,199 |
| 1,000,000,000 Authorized Common shares - Issued |  |  |
| 17,503,940 in 2021 and 2020 | 17,344 | 17,444 |
| 60,000 issued Preferred shares | 60 | 60 |
| Accumulated other comprehensive income | (49,825) | (54,932) |
| Accumulated deficit | (1,827,538) | (1,271,504) |
|  | 203,240 | 754,267 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 373,158 | 934,985 |

SEE ACCOMPANYING NOTES

### APPROVED ON BEHALF OF THE BOARD

_________________________ Director

_________________________ Director

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: triapost@gmail.com

4

## NEXT DYNAMICS INC.

### Consolidated Statement of operations As at December 31, 2021 (in United States dollars)

|  | 2021 $ | (note 10) 2020 $ |
| --- | --- | --- |
| REVENUE | - | - |
| OPERATING EXPENSES |  |  |
| Overhead costs | 39,309 | 128,036 |
| Research & development | 39,458 | - |
| Accounting & legal | 80,126 | 98,492 |
| Management | 90,373 | 270,327 |
| Consulting - Engineering | 136,704 | 172,337 |
| Advertising & promotions | 34,065 | 109,595 |
| Licenses | 3,753 | 29,752 |
| Courier & postage | 2,299 | 1,128 |
| Depreciation expense | 49,035 | 4,806 |
| Insurance | 4,090 | 3,655 |
| Bank charges | 2,345 | 2,315 |
| Office supplies | 6,465 | 6,369 |
| Rent | 49,033 | 72,347 |
| Telephone | 1,587 | 4,434 |
| Transportation | 834 | 1,604 |
| Travel | 4,092 | 10,760 |
| Utilities | - | 34 |
| Meals | 3,883 | 28,551 |
|  | 547,451 | 944,643 |
| Loss from Operation | (547,451) | (944,643) |
| Other Income (Expense) |  |  |
| Foreign exchange loss | (1,309) | (2,503) |
| Donation | - | (76) |
| Interest | (7,274) | (5,732) |
|  | (8,583) | (8,311) |
| NET LOSS | (556,034) | (952,954) |

SEE ACCOMPANYING NOTES

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: triapost@gmail.com

5

## NEXT DYNAMICS INC.

### Statement of Cash Flows 2021-01-01 TO 2021-12-31 (in United States dollars)

|  | 2021 $ | (note 10) 2020 $ |
| --- | --- | --- |
| Funds provided from (used in): |  |  |
| Cash Flows from (used in) Operating activities |  |  |
| Net loss | (556,034) | (952,954) |
| Depreciation expense | 49,035 | 4,806 |
| Prepaid expenses | 265,940 | (270,504) |
| Accounts payable | 10,210 | (31,238) |
| NET CASH PROVIDED FOR (USED IN) OPERATING ACTIVITIES | (230,849) | (1,249,890) |
| Cash Flows from (used in) Investing Activities |  |  |
| Purchase of capital asset | (2,696) | (154,736) |
| NET CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES | (2,696) | (154,736) |
| Cash Flows from (used in) Financing Activities |  |  |
| Increase in loan payable | 7,366 | 158,309 |
| Additional paid in capital | - | 1,526,829 |
| Issuance of common shares | (100) | 5,504 |
| (Decrease) obligations under rights of use assets | (28,376) | - |
| NET CASH PROVIDED BY USED IN) FINANCING ACTIVITIES | (21,110) | 1,690,642 |
| Increase (Decrease) in Cash and Cash Equivalents | (254,655) | 286,016 |
| Effect of exchange rate changes on cash | 5,107 | (54,932) |
| Cash and Cash Equivalents at Beginning of Year | 504,740 | 273,655 |
| Cash and Cash Equivalents at End of Year | 255,192 | 504,740 |

SEE ACCOMPANYING NOTES

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

6

# NEXT DYNAMICS INC.

# Consolidated Statement of changes in stockholders' deficit
For the Year Ended December 31, 2021
(in United States dollars)

|  | Preferred Shares | Common Shares | Shares Amount | Paid-In Capital | Accumulated other comprehensive income | Accumulated deficit | TOTAL DEFICIT |
| --- | --- | --- | --- | --- | --- | --- | --- |
| (note 10) |  |  |  |  |  |  |  |
| BALANCE, DECEMBER 31, 2020 | 60,000 | 17,503,940 | 17,504 | 2,063,199 | (54,932) | (1,271,504) | 754,267 |
| Redemption of Common Shares | - | - | (100) | - | - | - | (100) |
| Accumulated other comprehensive income | - | - | - | - | 5,107 | - | 5,107 |
| Net loss for the year | - | - | - | - | - | (556,034) | (556,034) |
| BALANCE, DECEMBER 31, 2021 | 60,000 | 17,503,940 | 17,404 | 2,063,199 | (49,825) | (1,827,538) | 203,240 |
| BALANCE, DECEMBER 31, 2019 | 60,000 | 12,000,000 | 12,000 | 536,370 | - | (318,550) | 229,820 |
| Issuance of Common Shares | - | 5,503,940 | 5,504 | 1,526,829 | - | - | 1,532,333 |
| Accumulated other comprehensive income | - | - | - | - | (54,932) | - | (54,932) |
| Net Loss for the Year | - | - | - | - | - | (952,954) | (952,954) |
| BALANCE, DECEMBER 31, 2020 | 60,000 | 17,503,940 | 17,504 | 2,063,199 | (54,932) | (1,271,504) | 754,267 |

SEE ACCOMPANYING NOTES

8530 CHAMP D'EAU, SUITE 202
MONTREAL, QUEBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

7

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern

##### **Organization**

The Company and its wholly-owned subsidiaries Next Dynamics Canada Inc. (hereafter “the Group”), were incorporated under the laws of the State of Texas on September 3, 2003 and under the Canadian Business Corporations Act September 18, 2019 (R.S.C., 1985, c. C-44). The Group is engaged in research, development and licencing of patents and proprietary military defense technologies.

##### **Basis of presentation and going concern**

As reflected in the accompanying financial statements, the Company has a net loss in operations of $556,034 and $952,954, for the years ended December 31, 2021 and December 31, 2020 respectively. This factor raises substantial doubt about the Company’s ability to continue as a going concern for a period of 12 months from the date these financial statements were available to be issued. The ability of the Company to continue as a going concern is dependent on the Company’s ability to implement its business plan, raise capital and generate more revenues. Currently, management is seeking capital to implement its business plan. Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Group’s consolidated financial statements are prepared in accordance with U.S. GAAP and presented in U.S. dollars.

##### **Principles of consolidation**

The Group’s financial statements consolidate those of the Company and its wholly-owned subsidiaries as at December 31, 2020. The subsidiaries have a reporting date of December 31.

All transactions and balances between the consolidate companies are eliminated on consolidation, including unrealized gains and losses on transactions between the companies.

##### **Risks and uncertainties for development stage company**

The Company is considered to be in an early stage. Our activities since inception include devoting substantially all of the Company’s efforts to business planning and development. Additionally, the Company has allocated a substantial portion of its time and investment to the completion of the Company’s development activities to launch its marketing plan and generate revenues to raising capital. The Company has not generated revenue from operations and has not begun construction of any facilities. The Company’s activities during this early stage are subject to significant risks and uncertainties.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

8

# NEXT DYNAMICS INC.

# Notes to Financial Statements
For the Year Ended December 31, 2021
(in United States dollars)

# 1. Organization and summary of significant accounting policies and going concern
(continued)

# Use of estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include the valuation of prepaid licence fee, estimate of a contingent loss, and the valuation of deferred tax assets.

# Fair value measurements and fair value of financial instruments

The Company adopted Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures" ("ASC 820"), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company's financial position or operating results, but did not expand certain disclosures.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

These inputs are prioritized below:

- Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
- Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
- Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.

The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board's ("FASB") accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The estimated fair value of certain financial instruments, including accounts payable, accrued expenses and loans payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

8530 CHAMP D'EAU, SUITE 202
MONTRÉAL, QUÉBEC H1P 1Y3
Tel: 514-328-9711 Cell: 514-983-8499
Email: frapost@gmail.com

9

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

##### Legal and Other Contingencies

The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When legal costs that the entity expects to incur in defending itself in connection with a loss contingency accrual are expected to be material, the loss should factor in all costs and, if the legal costs are reasonably estimable, they should be accrued in accordance with ASC 450, regardless of whether a liability can be estimated for the contingency itself. Disclosure of a contingency is required if there is at least a reasonable possibility that a loss has been incurred. Changes in these factors could materially impact the financial statements.

##### Income taxes

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

10

## NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

#### Net loss per share of common stock

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At December 31, 2021 and December 31, 2020, the Company has 4,628,000 and 4,628,000 common securities outstanding and 60,000 preferred securities outstanding respectively.

#### Recent accounting pronouncements

In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share” (Topic 260). The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (E”EPS”) in accordance with Topic 260. Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a divided and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt - Debt with conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part 1 of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this guidance had no material impact on its accounting and disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions by expanding the scope of the stock-based compensation guidance in ASC 718 to include share based payment transactions for acquiring goods and services for non-employees. ASU No. 2018-07 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but entities may not adopt prior to adopting the new revenue recognition guidance in ASC 606. The adoption of this guidance had no material impact on its accounting and disclosures.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

11

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

In August 2018, the FASB issued ASU 2018-13, 'Changes to Disclosure Requirements for Fair Value Measurements', which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is assessing ASU 2018-17 and does not expect it to have a material impact on its accounting and disclosures.

Other accounting standards which were not effective until after December 31, 2019 are not expected to have a material impact on the Company's financial position or results of operations.

##### Equipment

Equipment is accounted for at acquisition cost less accumulated depreciation. Depreciation is based on estimated useful life using the straight-line method and for the following period:

|  | Period |
| --- | --- |
| Furniture | 3 years |
| Useful lives of depreciable assets |  |
| Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. |  |

##### Intangible assets

Intangible assets not subject to depreciation must be tested for impairment annually and, more frequently, when events or changes in circumstances occur that indicate that their carrying amount may not be recoverable.

Intangible assets with finite useful lives are depreciated over their estimated useful lives according to the straight-line method over five years. Included in this group is the platform.

Testing of intangible assets not subject to depreciation for impairment only when events or changes in circumstances occur that indicate that their carrying amount may not be recoverable.

The Company reviews its intangible assets not subject to depreciation annually and, more frequently, when events or changes in circumstances occur and its intangible assets with finite useful lives for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. The Company measures impairment by comparing the asset's estimated fair value to its carrying amount. The estimated fair value of the platform is based on estimated future cash flows to be generated by the assets, discounted at a market rate of interest. The estimated fair value of the cryptocurrency is determined using reputable cryptocurrency exchange platforms designed to track the fair value prices of cryptocurrencies.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

12

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

##### Loans of cryptocurrency

###### *Receivable*

Loans of cryptocurrency receivable are accounted for at the fair value as at the date of the transaction. They are subsequently tested for impairment as are the cryptocurrency described in the intangible assets section.

###### *Payable*

Loans of cryptocurrency payable are accounted for at amortized cost.

##### Convertible instruments

U.S. GAAP requires companies to bifurcate conversion options and certain other features from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract; (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in consolidated income as they occur; and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under applicable U.S. G.A.A.P.

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible debentures for the intrinsic value of the conversion options embedded in the debt instruments based upon the differences between the fair value of the underlying common shares at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company has not recorded any beneficial conversion feature as at December 31, 2019 as the embedded conversion options in its notes payable do not meet the firm commitment criterion as described under applicable U.S. G.A.A.P.

##### Equity

Common shares and preferred shares represent the par value of the total number of shares issued by the Company. If shares are issued when warrants are exercised, the common shares account also comprises the compensation costs previously recorded as additional paid-in capital. If shares are issued upon the exercise of the conversion option related to the convertible instruments, the common shares account also comprises the equity component of the convertible instruments.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

13

# NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 1. Organization and summary of significant accounting policies and going concern (continued)

Additional paid-in capital includes charges related to the fair value of warrants until such equity instruments are exercised, in which case the amounts are transferred to common shares. If convertible instruments are not exercised at the expiry of the convertible instruments, the equity component of the convertible instrument is transferred to additional paid-in capital.

Accumulated other consolidated comprehensive income comprises foreign currency translation difference arising from the translation of financial statements of the Company’s foreign subsidiary in Canadian dollars to the US dollar presentation currency of the Group.

Deficit includes all current and prior losses.

##### Revenue recognition

The Group recognizes revenue, primarily from cryptocurrency platform setup, maintenance and transaction fees, when persuasive evidence of an arrangement exists, delivery to the customer has occurred, the price of the buyer is fixed or determinable and collection is reasonably assured.

##### Share-based compensation

The Company accounts for share-based compensation under ASC 718 Compensation - Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in shares-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Incremental compensation costs arising from subsequent modifications of awards after the grant-date must be recognized. The Company treats share-based transactions with its non-employee directors as if they were employees.

The Company accounts for share-based compensation awards to non-employees in accordance with ASC 505-50 Equity-based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or share-based compensation awards granted as either whichever is more reliably measurable. Any warrants issued to no-employees are recorded in expense and additional paid-in capital in shareholder’s deficiency over the applicable service periods using variable accounting through the vesting dates based on the fair value of the warrants at the end of each period.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

14

## NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 2. Equipment

|  |  |  |  | 2021 | 2020 |
| --- | --- | --- | --- | --- | --- |
|  | COST | ADDITIONS/ DISPOSITIONS | ACCUMULATED DEPRECIATION | NET BOOK VALUE | NET BOOK VALUE |
| FURNITURE | 55,449 | - | 25,581 | 29,868 | 47,102 |
|  | $55,449 | $ - | $25,581 | $29,868 | $47,102 |

#### 3. Capital Lease rights of use assets

|  |  |  |  | 2021 | 2020 |
| --- | --- | --- | --- | --- | --- |
|  | COST | ADDITIONS/ DISPOSITIONS | ACCUMULATED DEPRECIATION | NET BOOK VALUE | NET BOOK VALUE |
| FURNITURE | 110,049 | - | 29,105 | 81,354 | 110,459 |
|  | $110,049 | $ - | $29,105 | $81,354 | $110,459 |

#### 4. Trade and other payables

|  | 2021 | 2020 |
| --- | --- | --- |
| TRADE PAYABLES | 32,619 | 22,409 |
|  | $22,409 | $45,371 |

#### 5. Loan Payable

The loan payable is to the Director of the Company and bears interest at 2% monthly and is not currently due.

#### 6. Obligation Under Rights of Use Assets

Monthly interest and capital payments of $1,848 due in 2025.

Capital Payments for the next 4 years

| 2022 | $22,180 |
| --- | --- |
| 2023 | $22,180 |
| 2024 | $22,180 |
| 2025 | $15,543 |
| Less: Current Portion | (22,180) |
|  | 59,903 |

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

15

## NEXT DYNAMICS INC.

### Notes to Financial Statements For the Year Ended December 31, 2021 (in United States dollars)

#### 7. Share Capital

During the period ended December 31, 2021 and December 31, 2020, nil and 1,673,000 common shares were issued for a consideration of $nil and $1,532,333 in cash respectively.

#### 8. Concentrations

##### **Concentration of credit risk**

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $25,000. As of December 31, 2021 and 2020, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, The Company evaluated at least annually the rating of the financial institution in which it holds deposits.

#### 9. Income taxes

The Company has incurred aggregate net operating losses of approximately $1,827,538 and $1,271,504 for income tax purposes as of December 31, 2021 and December 31, 2020 respectively. The net operating loss carries forward for United States income taxes, which may be available to reduce future years’ taxable income. Management believes that the realization of the benefits from these losses appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance periodically and make adjustments as necessary.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act decreases the U.S. corporate federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The Act also includes a number of other provisions including, among others, the elimination of net operating loss carry-backs and limitations on the use of future losses, the repeal of the Alternative Minimum Tax regime and the repeal of the domestic production activities deduction. These provisions are not expected to have a material effect on the Corporations.

Given the significant complexity of the Act and anticipated additional implementation guidance from the Internal Revenue Service, further implications of the Act may be identified in future periods.

#### 10. Comparative Figures

Certain prior years figures have been reclassified to conform to current years presentation.

---

8530 CHAMP D'EAU, SUITE 202  
MONTREAL, QUEBEC H1P 1Y3  
Tel: 514-328-9711 Cell: 514-983-8499  
Email: frapost@gmail.com

**Attachment 4:** `exhibitd2.pdf`

![img-0.jpeg](img-0.jpeg)

# NEXT GENERATION DEFENSE TECHNOLOGY

INVESTMENT OVERVIEW

February 2023

# Safe Harbor Statement

This document contains statements related to our future business and financial performance and future events or developments involving Next Dynamics, Inc., that may constitute forward-looking statements. These statements may be identified by words such as 'expect,' 'look forward to,' 'anticipate,' 'intend,' 'plan,' 'believe,' 'seek,' 'estimate,' 'will,' 'project' or words of similar meaning.

We may also make forward-looking statements in other reports, presentations, materials delivered to shareholders and/or press releases. In addition, our representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and certain assumptions of Next Dynamics, Inc.'s management, many of which are beyond Next Dynamics, Inc.'s control. These are subject to a number of risks, uncertainties and factors, including, but not limited to those described in disclosures, in particular in the 'Risks' section in our Annual Report.

Should one or more of these risks or uncertainties materialize or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of Next Dynamics, Inc. may (negatively or positively) vary materially from those described explicitly or implicitly in the relevant forward-looking statements. Next Dynamics, Inc., neither intends nor assumes any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

---

**NEXT**  
DYNAMICS

# Executive Summary

## Organization Overview

**Ticker:** OTC: NEXD

**Industry:** Defense

**Shares Out:** 23,147,500

**Est Public Float:** 134,222

## Business Overview

- Next Dynamics Corp is a next-generation defense company with an innovative portfolio of ballistic technologies that will disrupt military and civilian firearms markets.
- NEXD has developed, and is near to market with, the Nemesis ASAP round, a revolutionary new projectile that has already proven superior to existing stagnant ammunition technology - and revitalizing the moribund military munitions space.

## Highlights

### Nemesis ASAP Validated & Proven

The Company is entering its third round of testing and validation with the Nemesis projectile, and, thus far, results have been nothing short of groundbreaking, exceeding expectations. The Company is engaged in ongoing testing of its ammunition of various calibers and plans to begin testing with a US DoD vendor in Q1/Q2 2023.

### Initial Distribution & Licensing Opportunities

Next Dynamics has been aggressively pursued by major players in the defense space, introduced by members of the Board and Advisory Board, with potential licensing and distribution partners including major US defense contractors, foreign militaries, and international distributors as well as senior US military and DoD personnel.

### Broad IP Portfolio of Defense Technology

NEXD holds patents from ballistic tech to military engineering upgrades. The Company's next near-to-market IP is the Star Chaser, an innovative A2G, G2A projectile for air defense and airborne assault. The full patent was completed in June. Other offerings planned near term include artillery modernizations and precision guided mortar munitions.

## Key Target Markets

**$452B**

Aggregate Global Defense Market

**$15.4B**

Total Addressable Small Caliber Ammunition Market (2025 est)

**$18.5B**

Global Military & Law Enforcement Ammunition

NEXT

# Next Dynamics is a technology development and licensing company focused on small + medium caliber ammunition.

Our team is comprised of some of the brightest minds in the field of small arms ammunitions, field armaments, weapons and global marketing strategy.

Led by our chief engineer, Antoni 'Tony' Binek, a legendary figure in the defense engineering and ballistics space with over a half century of groundbreaking technical achievements, the development pipeline on the core Nemesis ASAP technology has been nearly seven years from conception to validation and represents the single greatest advancement in ballistic projectile technology in more than 60 years.

## A Revolutionary New Ammunition Focused on Small & Medium Caliber

Our patented Advanced Small Arms Projectile (A.S.A.P.®) munitions cover the full spectrum of ground force applications across small and medium NATO calibers and weapons platforms.

## Next Dynamic's ancillary product and technology offerings include:

Weapons (Barges, Drones, & Tactical Weapons)

Engineering (Customization / Retrofits / Upgrades)

Other Projects & Services (Munitions / Armaments)

## Our defense technologies are patented, tested and proven.

**NEXT**  
DYNAMICS

# Executive Team + Advisors

![img-1.jpeg](img-1.jpeg)

**Andre Beauchesne**
Chairman

An experienced entrepreneur and senior manager, Mr. Beauchesne has over 35 years of leadership experience. In addition to serving as head of Beauchesne Capital, he is Chairman of the cryptocurrency & fintech platform AltS Sigma, and is also Chairman of translation services player OXO Innovations.

![img-2.jpeg](img-2.jpeg)

**Jacob Salk**
President, CEO & Director

Mr. Salk is a seasoned financial executive, venture capitalist and investment banker with over $11B in transactions over his career at Houlihan Lokey and other firms. A lifelong firearms aficionado, he is also a partner at M&A focused strategic advisory firm Zukin Partners. He is a founder, co-founder or advisor of several other enterprises.

![img-3.jpeg](img-3.jpeg)

**Tony Binek**
Principal Inventor
Chief Engineer & Director

Mr. Binek has over 50 years of experience in defense engineering, and holds numerous patents in innovative ballistics technologies. His accomplishments include developing the largest gun in the world for the USAF in 1970 and serving as Chief Engineer at the renowned HARP project in Barbados. Mr. Binek has been instrumental in the creation of the Company's technologies.

![img-4.jpeg](img-4.jpeg)

**Jerome Cliché**
Director & Senior Advisor

Jerome is a seasoned finance professional, skilled in investor relations, M&A, valuation, and financial communications. He is President of LMC Communications, Inc., an integrated marketing and investor relations company, and the co-founder of Renmark Financial Communications, where his clients included NYSE, Nasdaq, and TSE listed companies.

![img-5.jpeg](img-5.jpeg)

**Sam Mouallem**
Director

Mr. Mouallem is an engineer with 30 years experience in defense supply chain integration and procurement. He is Co-Founder & President of Simex Defense, Inc., the leading supplier of military and defense products to the Canadian military, with more than 1,500 contracts per annum with Canadian Department of National Defence.

Our executive team has a combined 200+ years of experience in engineering, ballistics, defense technology, finance & global marketing strategy & our Advisory Board has over 60 combined years of military service.

NEXT
MEMBER

## Executive Team + Advisors (Cont.)

![img-6.jpeg](img-6.jpeg)

**Philippe Vintila**

VP, Business Development

A professional engineer by trade, Mr. Vintila helms the Company's strategic relationships, which will become increasingly important as the ASAP technology is licensed to manufacturers and distributors. He also serves as the Company's Canadian Controlled Goods official. Prior to joining Next Dynamics, Mr. Vintila worked for one of Canada's largest construction / engineering companies where he coordinated infrastructure projects, including a CAD$7B light rail installation in the Greater Montreal region.

![img-7.jpeg](img-7.jpeg)

**Adm. Greg Slavonic**

Military Advisory Board Chair

Admiral Slavonic has spent nearly 40 years in leadership positions in public, political, and military affairs, with wartime naval service including the Vietnam, Gulf War, and Iraq War conflicts. Most recently he served as acting Undersecretary of the Navy, and Assistant Secretary of the Navy. Admiral Slavonic brings a wealth of military and political connections and insights, having served as Chief of Staff for Sen. James Lankford (R-OK), and as President of Flagbridge Strategic Communications.

![img-8.jpeg](img-8.jpeg)

**Lindsay Kough**

Military Advisor

Commander Kough served more than twenty years as a US Navy SEAL and naval officer, and has an extensive background as a start-up CEO and senior banking/ financial services executive, most recently as CEO of a government contractor. He also served as Chief of Staff to the Undersecretary of the Navy, where he helped oversee a budget of $211 billion and 900,000 personnel. Commander Kough brings integral relationships within the special forces community and a wealth of experience in monetizing government contracts.

![img-9.jpeg](img-9.jpeg)

**Bill Coultrup**

Military Advisor

Col (ret) Bill Coultrup served 30 years in the US Army, with 24 years in multiple Special Operations units, commanding troops in various continents and combat zones. Most recently, Bill served as US SOCOM Legislative Affairs Director interacting with Congress on all matters pertaining to SOCOM. After the military, he worked in the Aerospace & Defense field continuing to support US and Allied forces in critical overseas missions. Bill currently serves as president of Republic Mission Systems, where he consults heavily with the Department of Defense.

**NEXT**  
DYNAMICS

# Investment Highlights

![img-10.jpeg](img-10.jpeg)

NEXD has created, tested and proven the ASAP Nemesis round, a revolutionary projectile that will fundamentally transform a stagnant military ammunition space.

![img-11.jpeg](img-11.jpeg)

Next Dynamics has built an innovative portfolio of defense technology that will address substantial and underserved military requirements in an evolving and increasingly hostile global environment.

![img-12.jpeg](img-12.jpeg)

NEXD has initiated promising licensing and sales efforts for its Nemesis ASAP round, with substantial interest from major defense contractors, foreign militaries, potential foreign licensing partners, and US military personnel.

![img-13.jpeg](img-13.jpeg)

Ukraine tailwinds are driving a renewed defense industry investment cycle, with a focus upon many of the heretofore overlooked military technologies where NEXD specializes, notably artillery and ballistics.

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DYNAMICS

## Growth Catalysts

![img-14.jpeg](img-14.jpeg)

Near term distribution / licensing wins expected for the Nemesis ASAP in FY 2023

![img-15.jpeg](img-15.jpeg)

Broad product offering of close to market defense technologies

![img-16.jpeg](img-16.jpeg)

World class research team with extensive industry acumen & proven record of success

![img-17.jpeg](img-17.jpeg)

Additional suite of innovative products beginning with the Star Chaser round in Q1 '23

![img-18.jpeg](img-18.jpeg)

BoD and Military Advisory Board offer best-in-breed market access to US / NATO militaries

![img-19.jpeg](img-19.jpeg)

**NEXT**  
AIRBORNE

# Proven + Disruptive Ballistics

Once the bullet exits the barrel, captured gas is released, thereby reducing base drag.

![img-20.jpeg](img-20.jpeg)

BARNES
150gr VOR-TX

![img-21.jpeg](img-21.jpeg)

BARNES
150gr VOR-TX

![img-22.jpeg](img-22.jpeg)

BARNES
150gr VOR-TX

Extended Maximum
Effective Range

Reduced Drag &
Extreme Precision

Increased Terminal
Velocity & Lethality

Outstanding Armor
Penetration Capabilities

Improved Gyroscopic
Stability & Ballistics

![img-23.jpeg](img-23.jpeg)

NEMESIS 150gr
GEN1 - NO Booster

![img-24.jpeg](img-24.jpeg)

NEMESIS 150gr
GEN1 - WITH Booster

Projectiles
recovered in sand @
100 meters (328ft)
NEMESIS with Booster
destroyed the target

![img-25.jpeg](img-25.jpeg)

A.S.A.P. Bow Shock
Wave Angle 25.20°

![img-26.jpeg](img-26.jpeg)

Federal Bow Shock
Wave Angle 26.42°

NEXT

# Existing Projectile Technology Is Outdated and Archaic.

1. **A Complacent & Stagnant Industry**

There have been few real advancements in projectile technology over the last 60 years.

2. **Velocity Not a Focus**

Most advancements focus on load size, tracers and new calibers.

3. **Unharnessed Energy**

Roughly 70% of gun gas generated at propellant ignition is wasted with typical projectiles.

4. **Low-Impact Innovation at Competitive Price Point**

Novel cartridge materials may offer lower weight or reduced heat transfer, but don't provide tangible ballistics improvement. The ASAP round provides superior performance at an appropriate price point.

![img-27.jpeg](img-27.jpeg)

![img-28.jpeg](img-28.jpeg)

**NEXT**  
A SERVICE

# Groundbreaking Projectile Design

Our A.S.A.P.® projectiles exploit gun gas generated at combustion of gun powder in the barrel by storing it inside the projectile.

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

Our patented designs result in significantly increased velocity, range and lethality.

NEXT

## Groundbreaking Projectile Design (Cont.)

Managing the flow of gas inside the bullet requires chambers and orifices of various geometries.

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

The entire projectile assembly is locked together by the “G” forces of acceleration in flight.

NEXT

# Outstanding Test Results

Our Nemesis A.S.A.P.® projectiles achieve superior ballistics results versus traditional munitions.

| 7.62 Round | Velocity (f/s) |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Muzzle | 100 yds | 200 yds | 300 yds | 400 yds | 500 yds |
| Fiocchi 150 Gr. FMJBT | 2,890 | 2,658 | 2,439 | 2,229 | 2,030 | 1,842 |
| Hornady Custom - 150Gr. SST | 2,820 | 2,601 | 2,392 | 2,192 | 2,003 | 1,823 |
| Federal American Eagle 150 Gr. FMJBT | 2,820 | 2,597 | 2,385 | 2,183 | 1,990 | 1,808 |
| Federal (Lake City) - 149 Gr. FMJ XM80CS | 2,790 | 2,591 | 2,401 | 2,219 | 2,045 | 1,878 |
| PMC 147 Gr. FMJBT | 2,780 | 2,575 | 2,380 | 2,194 | 2,018 | 1,851 |
| Winchester White Box 147 Gr. FMJ Q3130 | 2,750 | 2,534 | 2,329 | 2,132 | 1,946 | 1,770 |
| Remington UMC 150 Gr. FMJ | 2,820 | 2,533 | 2,263 | 2,009 | 1,774 | - |
| Federal Power Shok - 150 Gr. JSP | 2,820 | 2,532 | 2,261 | 2,007 | 1,771 | 1,557 |
| Winchester Super-X 150 Gr. PP | 2,820 | 2,513 | 2,227 | 1,960 | 1,713 | 1,492 |
| Hornady Critical Defense - 155 Gr. FTX | 2,785 | 2,499 | 2,231 | 1,980 | - | - |
| COMPETITORS AVERAGE (fps) | 2,810 | 2,563 | 2,331 | 2,111 | 1,921 | 1,753 |
| Average Change in Velocity - Muzzle to Noted Distance (fps) |  | (246) | (479) | (699) | (888) | (1,056) |

## NEMESIS 7.62 TESTING DATA - STERLING CROSS & BORNEA DYNAMICS

| Nemesis Test Load | Average Velocity (fps) |  |  |
| --- | --- | --- | --- |
|  | Muzzle | 100 Yds | 300 Yds |
| 145 gr 7.62 Projectile w/ 42.3gr 4895 Propellant (Sterling Cross) | 2,792 | 2,611 | N/A |
| 145gr 7.62 Projectile w/ 42.1gr 4350 Propellant (Bornea Dynamics) | 2,795 | N/A | 2,389 |
| 150gr Winchester Super-X 7.62 Projectile (Bornea Dynamics) | 2,815 | N/A | 1,971 |
| Average Change in Velocity - Nemesis (fps) |  | (181) | (406) |
| Average Change in Velocity - Competitors (fps) |  | (246) | (699) |
| Improvement in Change in Velocity - Nemesis vs. Comps Average |  | 26.5% | 41.9% |
| Change in Velocity - Winchester Super-X 150gr (fps) |  | N/A | 845 |
| Improvement in Change in Velocity - Nemesis vs. Winchester Super-X |  | N/A | 51.9% |
| Absolute Improvement in Velocity - Nemesis vs. Winchester Super-X |  |  | 21.2% |

![img-4.jpeg](img-4.jpeg)

The top 10 competitors have a 246 fps average reduction in velocity from muzzle to 100 yds down range, and a 699 fps average velocity reduction at 300 yards. Next Dynamics' Nemesis 7.62 projectile has achieved an average reduction in velocity of 181 fps from muzzle to 100 yards down range, representing a 26.5% improvement over the average of the competitors' rounds. At 300 yards, the most common battlefield range, the Nemesis projectile had a 41.9% improvement over competitors' average performance. In testing completed by Bornea Dynamics, Nemesis achieved nearly 52% improvement in reduction in velocity between muzzle and 300 yards versus the Winchester Super-X round.

Note: Sterling Cross in-field (non-laboratory) testing completed June 2022.

**NEXT**  
DYNAMICS

## Outstanding Test Results (Cont.)

### Nemesis 7mm Remington Test Results

Banco Nazionale di Prova, Italy - February 2020

![img-5.jpeg](img-5.jpeg)

Figure 1 -
Sierra Match King 175gr

![img-6.jpeg](img-6.jpeg)

Figure 2 -
NEMESIS 7MMG1A1 155gr

Figure 1 shows a Sierra Match King (175gr) projectile in 7mm Remington at muzzle. The measured retardation of this projectile was 1153m/sec/m.

Figure 2 shows a Next Nemesis A.S.A.P. (155gr) projectile in 7mm Remington at muzzle. The measured retardation of this projectile was 0.564m/sec/m. Note the unique plume effect created by the booster.

Drag reduction of A.S.A.P. vs. the Sierra projectile was anticipated to be ~30%.

The test provided for an astounding 51% improvement in drag reduction (peak measurement) relative to the Sierra 7mm reference projectile.

Note: The images above are stills from video captured during testing of Next A.S.A.P. projectiles against Sierra brand reference projectiles. Testing completed February 2020.

NEXT

# Intellectual Property

Next Dynamics holds numerous global patents (continuation patents pending) on its projectile technology, with a priority date of March 2017.

![img-7.jpeg](img-7.jpeg)

Next Dynamics recently completed the full patent application filing for its Star Chaser projectile technology (ref 020091-0014) on June 29, 2022.

| Internal Reference Number | Country / Territory | Assigned Serial Number | Documentation Received |
| --- | --- | --- | --- |
| 018250-0006 | Canada | 3,057,865 | Notice of National Entry |
| 018250-0007 | United States | 16/497,861 | Certificate Received |
| 018250-0008 | Israel | Not Yet Received | Not Yet Received |
| 018250-0009 | South Africa | 2019 / 06592 | Filing Particulars |
| 018250-0010 | Europe | 18,777,452 | Acknowledgement of Receipt |
| 018250-0011 | South Korea | 10-2019-7031773 | Filing Certificate |
| 020091-0014 | International | Not Yet Received | Application Filed |

NEXT

# Product Roadmap

A-1.7mm Remington - reduction of base drag & improved penetration
(Production Completed)

A-X 5.56mm - reduction of base drag, improved penetration
A-P 5.56mm - standard bullet, high penetration power
(Production Completed; Testing in Progress)

12.7mm Star Chaser - frontal/skin drag reduction
7.62mm Star Chaser - frontal/skin drag reduction
(Full Patent Filed; Dev comp Nov; Prod starting Dec/Jan)

![img-8.jpeg](img-8.jpeg)

A-X 140gr 7.62mm - standard weight, improved penetration
A-P 140gr 7.62mm - standard weight, high penetration
A-X 170gr 7.62mm - heavy weight, improved penetration
A-P 170gr 7.62mm - heavy weight, high penetration
(Production & Testing Nearing Completion)

A-X 12.7mm (.50 cal) - reduction of base drag, improved penetration
(Production Started November)

NEXT
BRANDS

## Other Engineering Services + Projects

Next Dynamics is developing incremental ammunitions technology, and also offers modernization + customization for existing artillery weapons of various classes which improve performance and longevity, at significantly reduced cost versus replacement.

![img-9.jpeg](img-9.jpeg)

### Star Chaser Ammunition

- Star Chaser projectiles developed with additive digital manufacturing (gas flow inside bullet) or standard machining
- Offered in 7.62mm + 12.7mm (.50 cal)
- Designed for very short flight time, suitable to be launched from and attack airborne targets

![img-10.jpeg](img-10.jpeg)

### M101-R2/C3 Howitzer Modernization

#### Next Dynamics' Howitzer Upgrades Include:

- Address catastrophic structural failure
- Enhanced range (11.0-18.5 km, same as M119)
- Increased ammunition choices
- Cost reduction of 25%-50% vs. unit replacement

![img-11.jpeg](img-11.jpeg)

### Other Projects

#### Apache Hybrid Power Drone

- Armed With 19.5mm Recoil-less Rifle

#### Precision Guided Mortar Munition

- Retrofit For 120mm + 105/155mm Mortar

#### B5 Barge W/ .45 Mark45 Naval Gun

- Total suppression of air, water, or land targets

NEXT

# Manufacturing, Testing, Licensing & Distribution

Next Dynamics has partnered with best-in-class defense companies for the manufacturing, testing, licensing & distribution of our products.

## Projectile Manufacturing

![img-12.jpeg](img-12.jpeg)

## Cartridge Loading & Testing

![img-13.jpeg](img-13.jpeg)

Bornea Dynamics

![img-14.jpeg](img-14.jpeg)

## Licensing & Distribution*

![img-15.jpeg](img-15.jpeg)

We seek to leverage our intellectual property, manufacturing relationships & distribution network to deliver trail-blazing technology to major target global defense groups.

From a technology development standpoint, we have accomplished the heavy lifting, and we look forward to custom-tailoring our technology to any client's desired specifications.

*As of November 1, 2021, Next Dynamics and Simex Defence have formed a non-exclusive joint venture, Next Dynamics Simex Consortium ('NDS'), for the purpose of achieving licensing and distribution of Next Dynamics' products.

**NEXT**  
DYNAMICS

# Large & Growing Defense Market

## Global Ammunition Market

![img-16.jpeg](img-16.jpeg)

### SMALL ARMS MARKET

|  | Type | 2017 | 2018 | 2019 | 2025 | CAGR (2019-2025) |
| --- | --- | --- | --- | --- | --- | --- |
| 5.56mm |  | 5.43 | 5.69 | 5.96 | 7.83 | 4.66% |
| 7.62mm |  | 3.09 | 3.21 | 3.34 | 4.19 | 3.87% |
| 12.7mm |  | 1.75 | 1.82 | 1.89 | 2.38 | 3.91% |
| 14.5mm |  | 0.79 | 0.81 | 0.84 | 1.04 | 3.52% |
| Total |  | 11.05 | 11.54 | 12.03 | 15.44 | 4.24% |

Target market, in billions $ USD

Source: Secondary Research, Expert Interviews, Markets & Markets Analysis

## Military & Law Enforcement Market

![img-17.jpeg](img-17.jpeg)

**NEXT**  
A MEMBER

# Global Defense Market Analysis

## Market Drivers

- Strategic challenges posed by rising competitors to US/NATO unipolarity, notably Chinese military expansion and Russian adventurism in Ukraine and the Caucasus, has spurred a new Cold War that is expected to drive a wave of post GWOT military budgets and technology
- Notable lessons of the Ukraine conflict have been the importance of previously overlooked technology and tactical products, the renewed importance of artillery support, the pivotal role of UAV's in spotting and identification, and the superior ballistic weapons and optics technology of Western forces, some of which are particularly relevant for NEXD.
- Investment in the ammo space has been primarily focused on ancillary developments, such as authorized biometric/ RFID sensors, smart locking, new polymer manufactures, and 3D printing, while the core tech, which the Nemesis ASAP has targeted, is still untapped.
- Attractive M&A environment with highly fragmented industry - from both sell and buy side

## Highlights

- The US and global defense industries are in the midst of a generational change, the most notable period since the fall of the Berlin Wall. The defense industry is realigning itself and changing the focus of their technology investments in the wake of new geopolitical dynamics, and anticipated reinvestment in military capabilities - while the pre-Ukraine trend was towards increasing consolidation of defense industry players with commercial technology interests (notably the Raytheon-United Technologies merger), but major defense contractors such as Boeing, General Dynamics, Airbus, and Thales provide further examples.
- Post-Ukraine, however, we foresee a far more diverse and responsive market with a plethora of M&A opportunities for smaller and more nimble players, especially those that are more attuned to military technology improvements with more tangible implementation cycles.

Global Defense Market
US$513.6 billion (2022)
Predicted to Reach
$604 B by 2026

Global Defense Market Size 2022 -2026

![img-18.jpeg](img-18.jpeg)

NEXT

# Competitive Landscape

## Premium Products

![img-0.jpeg](img-0.jpeg)

OEM / Manufacturing

Technology Licensing

NEXT
SPECIALTY

# Company History + Roadmap

![img-1.jpeg](img-1.jpeg)

NEXT

# Capitalization & Use Of Proceeds

| Shareholder | Shares Held | % Fully Diluted |
| --- | --- | --- |
| Officers & Directors | 9,690,074 | 41.9% |
| All Others | 13,457,161 | 58.1% |
| Total Shares | 23,147,535 | 100.0% |

| Use of Proceeds Analysis |  |  |  |
| --- | --- | --- | --- |
| Sources of Cash | Amount | Uses of Cash | Amount |
| New Financing | $1,500,000 | General & Administrative | $665,662 |
|  |  | Manufacturing & Testing | 532,529 |
|  |  | Sales & Marketing | 133,132 |
|  |  | Loan Repayment | 56,177 |
|  |  | Illustrative Transaction Fee | 112,500 |
| Total Cash Sources | $1,500,000 | Total Cash Uses | $1,500,000 |

**NEXT**  
A LIFESTYLE

# Outlook

## Near Term Operations

- Next Dynamics Corp is currently finalizing testing and validation of the Nemesis ASAP projectile, with testing being conducted at Bornea Dynamics; following which it will undertake testing with a US DoD contractor in North Carolina, a process that is expected to commence early Q2 2023. All testing thus far has exceeded expectations. This will serve to validate the ASAP with exposure to early adoption markets in the US DoD / military and other NATO forces.
- The Company's Board of Directors and Military Advisory Board have been instrumental in developing and exploring these potential relationships. In addition to interest from one of the USA's largest primary defense industry contractors, the Company has been in active discussions with US military officials, as well as foreign militaries. The Company is working diligently toward closing its first license / distribution arrangement by the end of 2023.

## Financing Efforts

- $1.5 million Regulation CF offering is now underway, with intent of providing financing to fully complete testing and validation of the Nemesis ASAP projectile concurrent with licensing / distribution efforts.
- The Company intends to follow the Reg CF with a $5+ million Regulation A round later in the year, which will focus on post-market engineering and development of the Company's Star Chaser round, other engineering projects and facilitate additional IP and administrative efforts in order to bring the Company into reporting compliance for up-listing.
- Focus on the fully-reporting public vehicle up-listing to a senior US market by year end 2023, where the intrinsic value of the Company's defense technology suite will receive more concerted investor attention, with commensurately higher and more appropriate valuation levels, for acquisitions or additional development projects.

![img-2.jpeg](img-2.jpeg)

NEXT

# THANK YOU

**NEXT**

DYNAMICS

**JACOB SALK**

President & CEO

jacob@nextdynamicscorp.com

![img-3.jpeg](img-3.jpeg)

(510) 520-6063

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Is this an amendment?** Yes

**Nature of Amendment:** Updated Target & Maximum Offering Amounts

**Name of Issuer:** Next Dynamics, Inc.

**Legal Status:** Corporation

**Jurisdiction of Incorporation/Organization:** TX

**Date of Organization:** 09-03-2003

**Physical Address:** 226 N. FRONT ST., WILMINGTON, NC, 28401

**Issuer Website:** www.nextdynamicscorp.com

**Is there a Co-Issuer?:** No

**Intermediary Name:** CASTLE PLACEMENT, LLC

**Intermediary CIK:** 0001638202

**Intermediary File Number:** 008-69612

**Intermediary CRD Number:** 000189511

### Offering Information

**Compensation to Intermediary:** 7.5% of all capital raised from investors

**Financial Interest in Issuer:** Equity in the company in the amount of 2% multiplied by the capital raise divided by the post-money valuation at closing

**Type of Security Offered:** Common Stock

**Number of Securities Offered:** 25000

**Price per Security:** $1.00

**Target Offering Amount:** $25,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** First-come, first-served basis

**Maximum Offering Amount:** $5,000,000.00

**Deadline to Reach Target Amount:** 03-20-2024

### Annual Report Disclosure Requirements

**Current Number of Employees:** 3.00

**Total Assets (Most Recent Fiscal Year):** $373,158.00

**Total Assets (Prior Fiscal Year):** $777,424.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $255,192.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $504,740.00

**Accounts Receivable (Most Recent Fiscal Year):** $0.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $54,799.00

**Short-Term Debt (Prior Fiscal Year):** $44,589.00

**Long-Term Debt (Most Recent Fiscal Year):** $55,216.00

**Long-Term Debt (Prior Fiscal Year):** $47,850.00

**Revenues/Sales (Most Recent Fiscal Year):** $0.00

**Revenues/Sales (Prior Fiscal Year):** $0.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $0.00

**Cost of Goods Sold (Prior Fiscal Year):** $0.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $556,034.00

**Net Income (Prior Fiscal Year):** $952,954.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, PR, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING

### Signatures

**Issuer:** Next Dynamics, Inc.

**Signature:** /s/ Jacob Salk

**Title:** President & CEO

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**Signature:** /s/ Jacob Salk

**Title:** President & CEO

**Date:** 03-21-2023