EDGAR 10-K Filing

Company CIK: 1976663
Filing Year: 2024
Filename: 1976663_10-K_2024_0001477932-24-006074.json

---

ITEM 1. BUSINESS
Item 1.
Business

---

ITEM 1A. RISK FACTORS
Item 1A.
Risk Factors

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B.
Unresolved Staff Comments

---

ITEM 2. PROPERTIES
Item 2. Properties
Our executive offices are located at 2029 Century Park East, Suite 400, Los Angeles, CA 90067. We signed an office service agreement with Regus Management Group, LLC for mailbox plus virtual office and a single executive suite office. However, once we expand our business to a significant degree, we will have to lease office space. We do not foresee any significant difficulties in obtaining any required office space. We do not currently own any real property.

---

ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Common Stock and Preferred Stock
Our Amended and Restated Articles of Incorporation authorize us to issue up to eighty-five million (85,000,000) shares, consisting of: (i) seventy-five million (75,000,000) shares of common stock, par value $0.001 per share (the “Common Stock”); and (ii) 10,000,000 shares of blank check preferred stock, par value $0.001 per share (the “Preferred Stock”).
Our articles of incorporation authorize our board, without stockholder approval, to issue up to 10,000,000 shares of Preferred Stock in one or more series, to determine the designations and the powers, preferences and rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our board of directors has the discretion to issue Preferred Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of Common Stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.
The following statements relating to the capital stock set forth the material terms of the securities of the Company. Reference is also made to the more detailed provisions of the certificate of incorporation and the by-laws, copies of which are filed as exhibits to this registration statement.
Voting Rights
Except as otherwise required by law or as may be provided by the resolutions of the board of directors authorizing the issuance of Common Stock, all rights to vote and all voting power shall be vested in the holders of Common Stock. Each share of Common Stock shall entitle the holder thereof to one vote.
No Cumulative Voting
Except as may be provided by the resolutions of the board of directors authorizing the issuance of Common Stock, cumulative voting by any shareholder is expressly denied.
No Preemptive Rights
Preemptive rights shall not exist with respect to shares of Common Stock or securities convertible into shares of Common Stock of the Company.
Dividends
We have not paid any cash dividends on our Common Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our Common Stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our Common Stock will be paid in the future.
Rights upon Liquidation, Dissolution or Winding-Up of the Company
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the remaining net assets of the Company shall be distributed pro rata to the holders of the Common Stock.
Holders
As of September 30, 2024, we have 20,421,312 issued and outstanding shares of Common Stock, which are held by 87 shareholders of record.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Transfer Agent and Registrar
Nexscient, Inc. has appointed VStock Transfer, LLC as its transfer agent. VStock’s address is 18 Lafayette Place, Woodmere, NY 11598. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares.
No Public Market for Common Stock
There is currently no public trading market for our Common Stock and no such market may ever develop. While we intend to seek and obtain quotation of our Common Stock for trading on the OTC Markets (“OTCQB”), there is no assurance that our application will be approved. An application for quotation on the OTCQB must be submitted by one or more market makers who: 1) are approved by the Financial Industry Regulatory Authority (“FINRA”); 2) who agree to sponsor the security; and 3) who demonstrate compliance with SEC Rule 15(c)2-11 before initiating a quote in a security on the OTCQB. In order for a security to be eligible for quotation by a market maker on the OTCQB, the security must be registered with the SEC and the company must be current in its required filings with the SEC. There are no listing requirements for the OTCQB and accordingly no financial or minimum bid price requirements. We have submitted through our market maker an application for quotation to the OTCQB. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize.
On August 2, 2024, we received approval from FINRA that the Company has satisfied the requirements of Rule 15c2-11 to quote and trade the Company’s securities on the OTC Markets and has been assigned the trading symbol “NXNT.” As of September 30, 2024, our common stock has not yet commenced trading.
Admission to Quotation on the OTC Bulletin Board
If the Company meets the qualifications, it intends to apply for quotation of its securities on the OTC Bulletin Board. The OTC Bulletin Board differs from national and regional stock exchanges in that it (1) is not situated in a single location but operates through communication of bids, offers and confirmations between broker-dealers and (2) securities admitted to quotation are offered by one or more broker-dealers rather than the "specialist" common to stock exchanges. To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. In addition, the Company must make available adequate current public information as required by applicable rules and regulations.
In certain cases, the Company may elect to have its securities initially quoted in the Pink Sheets published by Pink OTC Markets Inc. In general, there is greater liquidity for traded securities on the OTC Bulletin Board, and less through quotation on the Pink Sheets. It is not possible to predict where, if at all, the securities of the Company will be traded.
Penny Stock Regulation
Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on national securities exchanges or listed on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities are provided by the exchange or system. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Because of these penny stock rules, broker-dealers may be restricted in their ability to sell the Company’s common stock. The foregoing required penny stock restrictions will not apply to the Company’s common stock if such stock reaches and maintains a market price of $5.00 per share or greater.
Additional Information
We refer you to our Articles of Incorporation, Bylaws, and the applicable provisions of the Delaware Revised Statues for a more complete description of the rights and liabilities of holders of our securities.

---

ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this document. Some of the statements under “Management’s Discussion and Analysis,” “Description of Business” and elsewhere herein may include forward-looking statements which reflect our current views with respect to future events and financial performance. These statements include forward-looking statements both with respect to us specifically and the renewable energy industry in general. Statements which include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. The safe harbor provisions of the federal securities laws do not apply to any forward-looking statements contained in this document. All forward-looking statements address such matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read herein reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our written and oral forward-looking statements attributable to us or individuals acting on our behalf and such statements are expressly qualified in their entirety by this paragraph.
Overview
Nexscient, Inc. (the “Company”) is early-stage company engaged in the business of developing a Software as a Service (SaaS) platform for commercialization that intends to exploit Industrial Internet-of-Things (IIoT), Artificial Intelligence (AI), and Cloud-computing technologies to deliver an innovative solution for manufacturers and continuous production facilities in the industrial automation sector that helps reduce equipment failures, avoid unscheduled downtimes, decrease equipment maintenance costs, and improve overall equipment efficiencies. The platform is currently under development.
Addressing the shortcomings of most existing condition-based monitoring products on the market today, Nexscient is taking a unique approach by developing a remote, continuous monitoring solution as a subscription-based service -- one that not only will offer all of the benefits of condition-based monitoring diagnostic system through vibration and acoustic analysis, but also will offer those benefits with (i) no upfront capital expense of equipment and software purchases; (ii) no need to update and maintain and update purchased diagnostic equipment and software, (iii) no requirement for specialized training of maintenance personnel; and (iv) no need for licensing, maintaining, and updating software. From a financial perspective, our solution is more affordable because it does not require upfront investment and shifts what would be a capital expenditure to an operating expense for the customer. For the Company, our business model provides a pathway to profitability through recurring stream of revenues that can be realized through a growing base of subscribers and subscriptions.
Results of operations for fiscal year ended June 30, 2024 compared to period March 14, 2023 (inception) to June 30, 2023.
Revenue
We are in our development stage and have not generated any revenue for the fiscal year ended June 30, 2024 and for the period March 14, 2023 (inception) to June 30, 2023.
Operating Expenses
During the fiscal year ended June 30, 2024 and for the period March 14, 2023 (inception) to June 30, 2023, we incurred total operating expenses of $937,952 and $93,766, respectively, an increase of $843,826, or 900%. Operating expenses consisted of the following:
For the Year Ended
June 30, 2024
For March 14, 2023 (inception) to
June 30, 2023
Research and development expenses
205,286
3,141
General and administrative expenses
732,306
90,625
Total general and administrative expenses
$ 937,592
$ 93,766
Research and development fees
We enter into agreements with third-party developers that require us to make payments for software development services upon reaching the application development stage. During the preliminary project stage and prior to the application development stage of the product, we record any costs incurred by third-party developers as research and development expenses.
During the fiscal year ended June 30, 2024 and for the period March 14, 2023 (inception) to June 30, 2023, we reported research and development fees of $205,286 and $3,141, respectively, an increase of $202,145, or 6,436%, primarily due to an increase in labor and outside development costs incurred in connection with the development of our platform. Of this total, for the fiscal year ended June 30, 2024 and the period March 14, 2023 (inception) to June 30, 2023, $75,000 and $0, respectively, was accounted as a non-cash expense related to the issuance of shares paid to consultants in lieu of cash for services rendered related to the software development.
General and administrative expenses
During the fiscal year ended June 30, 2024 and for the period March 14, 2023 (inception) to June 30, 2023, general and administrative expenses amounted to $732,306 and $90,625, respectively, an increase of $641,681, or 708%, primarily attributed to expenses related to legal and accounting, professional and management fees, computer and Internet, travel and lodging, office rent and other general business expenses. Of this total, for the fiscal year ended June 30, 2024 and the period March 14, 2023 (inception) to June 30, 2023, $228,000 and $48,525, respectively, was accounted as a non-cash expense related to the issuance of founder shares and stock issued as payment of professional fees to advisors and consultants in lieu of cash.
Net loss
During the fiscal year ended June 30, 2024 and for the period March 14, 2023 (inception) to June 30, 2023, we reported a net loss of $937,952 and $93,766, respectively, an increase of $843,826, or 900%. The increase in net loss was due to the increases in research and development and general and administrative expenses discussed above.
Liquidity, Capital Resources and Plan of Operations
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis.
During July 2023, the Company concluded a private placement offering whereby a total of 1,927,980 shares of common stock were issued at a price of $0.10 per share for a total value of $192,798. The Company uses the proceeds received from the private placement offering for general corporate purposes and working capital.
On April 30, 2024, we completed our initial public offering (“IPO”) and sold 229,332 shares of its common stock at a price to the public of $0.75 per share for proceeds of $172,000. The Company uses the proceeds received from the IPO for general corporate purposes and working capital.
On June 30, 2024, we had a cash balance of $75,804, prepaid expenses of $24,000, net working capital of $81,804, a net loss of $937,592, and has no revenues to cover our operating costs.
The ability of the Company to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these requirements, management intends to raise additional funds through private placement and public offerings. Until such time that the Company implements its growth strategy, we expect to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead, research and development, and costs of being a public company. We believe that our existing working capital and cash on hand will provide sufficient cash to enable the Company to meet its operating needs and debt requirements for the next three months from the issuance date of this report.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash Flows from Operating Activities
For the year ended June 30, 2024, net cash used in operations was $645,452, which primarily resulted from a net loss of $937,952, adjusted for the stock-based compensation to employees and consultants of $303,000, and an decrease in accounts payable and accrued liabilities of $10,860.
For the period March 14, 2023 (inception) to June 30, 2023, net cash used in operations was $16,381, which primarily resulted from our net loss of $93,766, adjusted for the stock-based compensation to consultants of $48,525 and an increase in accounts payable-related party of $28,860.
Cash Flows from Financing Activities
For the year ended June 30, 2024, net cash provided by financing activities was $518,797. During the fiscal year ended 2024, we received net proceeds of $519,297 related to our private placement and IPO and repaid a $500 advance.
For the period March 14, 2023 (inception) to June 30, 2023, net cash provided by financing activities was $218,840, resulting from proceeds of a private placement offering.
Our ultimate success is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan to pursue our plans with respect to the research and development of our products and service which will require resources beyond those that we currently have, ultimately requiring additional capital from third party sources.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. Accordingly, management believes substantial doubt about the company’s ability to continue as a going concern exists. For these reasons, our auditors stated in their report on our audited financial statements that there is substantial doubt about the Company’s ability to continue as a going concern.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Future Financings
We will continue to rely on equity sales of our common shares and debt proceeds in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
Expected Purchase or Sale of Significant Equipment
We do not anticipate the purchase or sale of any significant equipment, as such items are not required by us at this time or in the next twelve months.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Disagreements with Accountants on Accounting and Financial Disclosure
Other than the disclosure of uncertainty regarding the ability for us to continue as a going concern which was included in our accountant’s report on the financial statements for the year ended June 30, 2024; dbbmckennon’s report on the financial statements of the Company for the years ended June 30, 2024 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
In connection with the audit and review of the financial statements of the Company for year ended June 30, 2024, there were no disagreements on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with dbbmckennon’s opinion to the subject matter of the disagreement.
In connection with the audited financial statements of the Company for year ended June 30, 2024, there have been no reportable events with the Company as set forth in Item 304(a)(1)(v) of Regulation S-K.
Critical Accounting Policies
See Note 2 - Summary of Significant Accounting Policies, in the notes of the financial statements.
.
Item 7.A Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
Report of Independent Registered Public Accounting Firm (PCAOB ID: #3501)
FINANCIAL STATEMENTS
Balance Sheets
Statements of Operations and Comprehensive Loss
Statements of Shareholders’ Equity
Statements of Cash Flows
Notes to the Financial Statements
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Nexscient Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Nexscient Inc. (the “Company”) as of June 30, 2024 and 2023, and the related statements of operations, stockholders’ equity, and cash flows for the year ended June 30, 2024, and the period from March 14, 2023 (Inception) to June 30, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for the year ended June 30, 2024, and the period from March 14, 2023 (Inception) to June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has not generated revenues and incurred losses from Inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ dbbmckennon
We have served as the Company’s auditor since 2023.
Newport Beach, California
September 30, 2024
NEXSCIENT, INC.
BALANCE SHEETS
ASSETS
June 30, 2024
June 30, 2023
Current assets
Cash
$ 75,804
$ 202,459
Prepaid expenses
24,000
-
Total current assets
99,804
202,459
Right of use asset
24,579
-
TOTAL ASSETS
$ 124,383
$ 202,459
LIABILITIES AND STOCKOLDERS’ EQUITY
Current liabilities
Accounts payable
$ 18,000
$ -
Accounts payable - related party
-
28,860
Right of use liability, current portion
18,203
-
Advances from related party
-
Total current liabilities
36,203
29,360
Right of use liability
6,376
-
TOTAL LIABILITIES
$ 42,579
$ 29,360
STOCKHOLDERS’ EQUITY
Preferred Stock
10,000,000 shares authorized, $0.001 par value, no shares issued and outstanding at June 30, 2024 and 2023
-
-
Common Stock
75,000,000 shares authorized, $0.001 par value, 20,421,312 and 16,528,000 shares issued and outstanding at June 30, 2024 and 2023, respectively
20,421
16,528
Additional paid-in capital
1,092,741
404,837
Subscriptions receivable
-
(154,500 )
Accumulated deficit
(1,031,358 )
(93,766 )
TOTAL STOCKHOLDERS’ EQUITY
$ 81,804
$ 173,099
TOTAL LIABILITIES ADN STOCKHOLDERS’ EQUITY
$ 124,383
$ 202,459
The accompanying notes are an integral part of these financial statements
NEXSCIENT, INC.
STATEMENTS OF OPERATIONS
Fiscal Year Ended
June 30, 2024
March 14, 2023 (inception) to
June 30, 2023
REVENUE
Revenues
$ -
$ -
OPERATING EXPENSES
Research and development
205,286
3,141
General and administrative
732,306
90,625
TOTAL OPERATING EXPENSES
937,592
93,766
NET LOSS
$ (937,592 )
$ (93,766 )
BASIC AND DILUTED LOSS PER COMMON SHARE
$ (0.05 )
$ (0.01 )
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
20,025,253
12,220,670
The accompanying notes are an integral part of these financial statements
NEXSCIENT, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY
Preferred Stock Shares
Preferred Stock
Common Stock Shares
Common
Stock
Additional
Paid-In
Capital
Subscriptions
Receivable
Accumulated
Deficit
Total
Stockholders'
Equity
Balance, March 14, 2023 (inception)
-
$ -
-
$ -
$ -
$ -
$ -
$ -
Stock issued to founders
-
-
10,525,000
10,525
-
-
-
10,525
Stock issued for services
-
-
1,350,000
1,350
36,650
-
-
38,000
Stock issued for cash
-
-
4,653,000
4,653
368,187
(154,500 )
-
218,340
Net loss
-
-
-
-
-
-
(93,766 )
(93,766 )
Balance, June 30, 2023
-
$ -
16,528,000
$ 16,528
$ 404,837
$ (154,500 )
$ (93,766 )
$ 173,099
Stock issued for services
-
-
1,736,000
1,736
325,264
-
-
327,000
Stock issued for cash
-
-
2,157,312
2,157
362,640
154,500
-
519,297
Net loss
-
-
-
-
-
-
(937,592 )
(937,592 )
Balance, June 30, 2024
-
$ -
20,421,312
$ 20,421
$ 1,092,741
$ -
$ (1,031,358 )
$ 81,804
The accompanying notes are an integral part of these financial statements
NEXSCIENT, INC.
STATEMENTS OF CASH FLOWS
Fiscal Year Ended
June 30, 2024
March 14, 2023 (inception) to
June 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year
$ (937,592 )
$ (93,766 )
Adjustments to reconcile net loss to net cash used in operating activities
Shares issued for services
303,000
48,525
Changes in operating assets and liabilities:
Accounts payable
(10,860 )
28,860
NET CASH USED IN OPERATING ACTIVITIES
(645,452 )
(16,381 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from shares issued for cash
519,297
218,340
Advance (repayment) from related party
(500 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
518,797
218,840
NET (DECREASE) INCREASE IN CASH
(126,655 )
202,459
CASH AT BEGINNING OF THE PERIOD
202,459
-
CASH AT END OF THE PERIOD
$ 75,804
$ 202,459
Supplemental disclosure of non-cash investing and financing activities:
Shares issued included in subscriptions receivable
$ -
$ 154,500
Right of use asset and liability
$ 27,482
$ -
The accompanying notes are an integral part of these audited financial statements.
NEXSCIENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Nexscient, Inc. (the “Company”) was incorporated in the State of Delaware on March 14, 2023. The Company is developing a subscription-based, condition monitoring solution for maintaining and protecting industrial equipment. The Company’s objective is to exploit Industrial Internet-of-Things (IIoT), artificial intelligence (AI), and Cloud-computing technologies to offer a continuous, remote machine health monitoring service that provides actionable insights to manufacturers and continuous process facilities seeking an effective yet affordable predictive maintenance solution to help reduce equipment failures, avoid unscheduled downtimes, decrease equipment maintenance costs, and improve overall equipment efficiencies. The Company’s head office is at 2029 Century Park East, Suite 400, Los Angeles, CA 90067.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to the United States of America (“US GAAP”) and have been consistently applied in the preparation of the financial statements.
Use of Estimates
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable. As at June 30, 2024, substantially all of the Company’s cash was held by major financial institutions located in the United States, which management believes are of high credit quality.
Cash
The Company considers all highly liquid investments with original or remaining maturities of three months or less on the purchase date to be cash equivalents. Cash and cash equivalents carrying value approximate fair value and consist primarily of bank deposits and money market funds.
Leases
The Company determines if an arrangement is a lease at inception. Operating and financing right-of-use assets and lease liabilities are included on the balance sheet. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate, based on the information available at the commencement date, in determining the present value of future lease payments. Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred.
Operating lease expenses are recognized on a straight-line basis over the term of the lease, consisting of interest accrued on the lease liability and depreciation of the right-of-use asset. The lease terms may include options to extend or terminate the lease is it is reasonably certain the Company will exercise that option. The initial lease term is for 18 months commencing on May 1, 2024 after which the term is on a month-to-month basis. After the initial term, the Company may cancel the lease agreement at any time by providing 30 days written notice.
Fair Value of Financial Instruments
Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The Company’s financial instruments include cash, current receivables and payables. These financial instruments are measured at their respective fair values. The three levels are defined as follows:
·
Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
·
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
·
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.
For cash, accounts payable, and due to related parties, it is management’s opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available.
Revenue Recognition
The Company expects to generate revenue primarily from two sources: (1) subscription services which is comprised of revenue from subscription fees from customers accessing the Company’s cloud-based software and (2) professional services and other revenue, which consists primarily of fees from consultation services to support business process configuration, data migration, integration, and training. Subscription services revenue will be recognized on a ratable basis over the related subscription period beginning on the date the customer is first given access to the system (i.e., provision date). The Company's professional service revenue contracts will generally be time and material based and revenue will be recognized as the service is provided.
The Company expects to commence revenue recognition and determine revenue recognition through the following steps:
·
Identification of a contract with a customer
·
Identification of the performance obligations in the contract
·
Determination of the transaction price
·
Allocation of the transaction price to the performance obligations in the contract, and.
·
Recognition of revenue when or as the performance obligations are satisfied
Revenue from new customers may be generated under subscription agreements with multiple elements, comprised of subscription services fees from customers accessing its real-time monitoring service and professional fees associated with implementation services. The Company plans to evaluate each element in a multiple-element arrangement to determine whether it represents a separate unit of accounting. An element constitutes a separate unit of accounting when the delivered item has stand-alone value and delivery of the undelivered element is probable and within the Company’s control.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation. The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense for using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified.
The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.
Earnings (Loss) per Share
Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted earnings (loss) per share assume the conversion, exercise or issuance of all common stock instruments unless the effect is to reduce a loss or increase earnings (loss) per share. The Company had no dilutive securities for the period ended June 30, 2024.
Recently Issued Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
NOTE 3 - GOING CONCERN UNCERTAINTY
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
The Company has generated no revenues since inception and incurred losses since inception resulting in an accumulated deficit of $1,031,358 as of June 30, 2024 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next three months with existing cash on hand and loans from directors, private placement of common stock, and/or a registered offering of its common stock.
NOTE 4 - RELATED PARTY TRANSACTIONS
Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
See Note 5 for stock issued for services to an officer and director of the Company.
On January 12, 2024, the Company issued a loan to our Chief Financial Officer in the amount of $15,000. The term of the loan is three months, with an annual interest rate of 8% on the principal amount, paid at maturity. The loan was evidenced with a Promissory Note issued by the borrowing officer. The loan was repaid in full on March 19, 2024.
NOTE 5 - CAPITAL STOCK
At June 30, 2024, the Company’s authorized capital consists of eighty-five million (85,000,000) shares, comprised of: (i) seventy-five million (75,000,000) shares of Common Stock, par value $0.001 per share (the “Common Stock”); and (ii) 10,000,000 shares of blank check Preferred Stock, par value $0.001 per share (the “Preferred Stock”). As of the date of the Offering there are 20,421,312 shares of Common Stock issued and outstanding, and no shares of preferred stock have been designated.
During the year ended June 30, 2024, the Company completed its private placement offering whereby 1,927,980 shares of common stock were issued at a price of $0.10 per share for a total of $192,798 in cash proceeds.
On July 12, 2023, at a special meeting of the Board of Directors, the Board appointed Michael J. Portera as a Director and Chief Financial Officer, and Company issued 1,500,000 shares of its restricted common stock, having a fair value of $150,000, based on its latest private placement offering price at $0.10 per share. A total of $150,000 stock-based compensation was recognized during the fiscal year ended June 30, 2024 and is included in general and administrative in the accompanying statement of operations.
During the fiscal year ended June 30, 2024, and subsequent to the Company’s registration statement being declared effective on November 13, 2023 by the Securities and Exchange Commission, the Company sold 229,332 shares of its common stock at the offering price of $0.75 per share for a total of $172,000 in cash proceeds.
Effective January 1, 2024, the Company establish a Board of Advisors (the “Advisory Board”), whereby appointed members would provide beneficial tasks to the Company and its management, including but not limited to, participating in quarterly meetings, providing guidance on development, marketing and overall strategy, and other issues on as-needed basis. Compensation included a one-time grant of 16,000 shares of the Company’s common stock per member, which would equally vest over a one-year term. Inaugural members of the Advisory Board included four individuals.
On January 14, 2024, the Company entered into a Consulting Agreement with a third-party for consulting services. Pursuant to the agreement, compensation is based on a combination of cash and stock. The cash component consists of $5,000 paid monthly over six months ($30,000); and the stock component consists of a one-time stock grant of 72,000 shares that vest quarterly over the term of the agreement. The value of the stock portion is estimated at $54,000, based on the latest offering price of the Company’s common stock at $0.75 per share.
On April 1, 2024, the Company entered into an Agreement for Interface Design and Brand Development with a third party for services related to user interface and brand development of the Company’s technology platform. Pursuant to the agreement, compensation is paid in 100,000 shares of the Company’s common stock. The value of the stock is estimated at $75,000, based on the latest offering price of the Company’s common stock at $0.75 per share.
The Company recorded stock-based compensation of $228,000 and 75,000 to general and administrative and research and development, respectively, in the accompanying statement of operations.
NOTE 6 - INCOME TAXES
Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to capitalization of research and development costs for tax purposes, stock compensation and net operating loss carryforwards. As of June 30, 2024 and 2023, the Company had net deferred tax assets before valuation allowance of approximately $169,000 and $15,000, respectively.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due to cumulative losses through June 30, 2024. Therefore, a valuation allowance of $169,000 and $15,000 was recorded as of June 30, 2024 and 2023, respectively. Valuation allowance increased by $154,000 and $15,000 during fiscal 2024 and 2023, respectively. Deferred tax assets were calculated using the Company’s combined effective tax rate, which it estimated to be approximately 28%. The effective rate is reduced to 0% due to the full valuation allowance on its net deferred tax assets.
The Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At June 30, 2024, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $604,000, which can be carried forward indefinitely. Certain changes in ownership can result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year. As of June 30, 2024, management has not determined the extent of any such limitations, if any.
The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.
The Company is subject to taxation in the U.S. and state jurisdictions. The Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from Inception remain open to examination.
NOTE 7 - COMMITMENTS & CONTINGENCIES
Lease Commitments
In May 2024, the Company entered into a lease agreement for office space. The lease commenced on May 1, 2024 and expires on October 31, 2025 with monthly of $1,609 throughout the lease term. The recognized a right of use asset and liability of $27,482 using a discount rate of 7.5%.
The following is a summary of future annual minimum lease payments as of June 30, 2024:
19,309
6,436
Total minimum lease payments
25,744
Less: Imputed interest
(1,165 )
Total lease obligations
24,579
Less: current portion
18,203
Long-term portion of lease obligations
6,376
Contingencies
The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.
NOTE 8 - SUBSEQUENT EVENTS
On July 1, 2024, the Board authorized a private placement offering to accredited investors of an unsecured 9% Convertible Debenture with a twenty-four month maturity in the principal amount of up to $5,000,000 (the “Debentures”), which Debentures will be convertible into shares of the Company’s common stock at the lower price of $0.75 per share or 20% below the average VWAP (Volume Weighted Average Price) per share of common stock for the ten (10) days prior to the date of conversion, with a minimum conversion price of $0.50 per share. The Debenture is subject to certain lock-up and leak-out provisions.
As of September 30, 2024, the Company has received a total principal amount of $180,000 in cash proceeds from the issuance of Debentures.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9.A Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2024.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting subsequent to the fiscal year ended June 30, 2024, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.
Limitations of the Effectiveness of Disclosure Controls and Internal Controls
Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Item 9.B Other Information
During the fiscal year ended June 30, 2024, the Company completed a private placement and registered offering whereby a total of 2,157,312 common shares were issued for a total of cash proceeds of $364,797. The Company also issued 1,736,000 common shares for services valued at $327,000.
Item 9.C Disclosure Regarding Foreign Jurisdiction the Prevent Inspection
Not applicable.
PART III

---

ITEM 9A. CONTROLS AND PROCEDURES

---

ITEM 9B. OTHER INFORMATION

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Identification of Directors and Executive Officers
The following table sets forth the names and ages of our current directors and executive officers as of September 30, 2024:
Name and Age
Position(s) Held
Date of Appointment
Other Public Company Directorships
Fred E. Tannous, 58
Director, President & Chief Executive Officer, Treasurer, Secretary
March 14, 2023
None
Tarek Shoufani, 44
Director, Chief Operating Officer
March 14, 2023
None
Michael Portera, 66
Director, Chief Financial Officer
July 12, 2023
None
Eric Manlunas, 56
Director
April 19, 2023
None
Term of Office
Should a vacancy exist, the Company’s Board of Directors has the power to nominate and appoint a director or directors to fill such vacancy, and each shall hold office until the next annual meeting of stockholders and until his/her successor shall have been duly elected and qualified.
Background and Business Experience
Fred E. Tannous, MSEE, MBA - Director, President & Chief Executive Officer, Treasurer and Secretary
As President and Chief Executive Officer, Mr. Tannous is responsible for overseeing all aspects of Nexscient’s vision, strategy, and product development. Mr. Tannous has over thirty-five years of experience in finance, engineering and new business development and previously held senior level positions at Fortune 500 companies and several start-ups. Over the past fifteen years, he has worked extensively with development stage and emerging companies to improve performance, enhance enterprise value and maximize returns. Mr. Tannous has also helped effect transactions valued at more than $1.2 billion as well as launching several of his own start-ups in several industries, including mobile and wireless communications and networking technologies. One of his previous start-up companies partnered with Los Alamos National Laboratories to commercialize a declassified military technology for continuous remote sensing and monitoring applications. Previously, from 2000 to 2005, Mr. Tannous co-founded and was the Chief Executive Officer of Health Sciences Group, an innovative life sciences company, where he was instrumental in successfully taking it public by effecting a self-underwritten public offering (IPO) of its equity securities and growing its market value to more than $100 million. Prior, Mr. Tannous held the position of Senior Analyst at corporate treasury for Hughes Aircraft Company, a government contractor, before transitioning to the position of Manager of Investments & Acquisitions at DIRECTV, where he worked with the CFO in financial operations and was responsible for valuing, structuring and executing strategic investments and overseeing the company’s portfolio having a market valuation of over $1 billion. From 1996 to 1999, as CFO of Colorado Casino Resorts, a gaming and hospitality concern, Mr. Tannous was instrumental in obtaining its listing and trading on NASDAQ and raising over $65 million in combined private equity and debt financing to expand its operations. Mr. Tannous started his career as an electrical engineer at Hughes Aircraft, where he worked on advanced radar signal and data processing techniques for electronic counter-counter-measures used in radar systems onboard, and/A fighter aircraft. He has co-authored several papers on proprietary and unconventional methods for detecting and countering radar jamming. Mr. Tannous holds a Master of Business Administration (MBA) in Finance and Banking from the University of Chicago (Booth) Graduate School of Business (1994) as well as a Master of Science (1990) and a Bachelor of Science (1988) in Electrical Engineering from the University of Southern California.
Tarek N. Shoufani - Director, Chief Operating Officer
Mr. Shoufani has over twenty-five years of experience at the forefront of new and innovative technology sectors where he has focused on implementing corporate strategy into daily operations to meet key objectives. Since 2010, as Managing Director of SinoAmerican Global Fund, Mr. Shoufani is involved in various stages of the Fund’s portfolio companies spanning across a broad spectrum of industries globally. Mr. Shoufani brings extensive management experience in the technology industry as well as valuable know-how and expertise in market development and finance structuring within various industry sectors throughout the Americas, Asia, Europe, and Middle East. While working with IZP (2012-2015), a leading global big data company in Shenzhen, China, Mr. Shoufani was instrumental in helping expand their financial and logistical transactions segment across Asia-Pacific, Latin America, Europe and Middle East. As a key liaison with MPR Tech (2010-2012), China’s equivalent to eBay, Mr. Shoufani worked with management to streamline online auction management operations and improve top line revenues while helping realize savings in operating expenses. As a key member of 4PX (2008-2010), an e-commerce solutions provider based in Shanghai, China, Mr. Shoufani worked with designers and engineers to implement custom supply chain systems and software services that delivered efficiencies across multiple levels including installation, training, maintenance, and security. Mr. Shoufani holds a Bachelor of Arts (BA) from University of California in Business Economics and Marketing, and is fluent in English, Arabic and French.
Michael J. Portera - Director, Chief Financial Officer
Mr. Portera joined the Company as a Director and Chief Financial Officer on July 12, 2023. With over forty years of experience in finance, sales, and business development, he is responsible for overseeing the financial operations of the Company, liaising with investment banks and financial institutions on fundraising initiatives, advising on merger and acquisition transactions, and implementing industry best practices for the Company’s finances and overall financial health. Over the past fifteen years, Mr. Portera has worked with seasoned executives, entrepreneurs, and start-up businesses to successfully consummate thousands of transactions on a global basis. As a former Managing Director with NYPPEX Private Markets (2000-2011), he assisted accredited investors achieve liquidity for over half a billion dollars in illiquid securities in secondary markets with venture capital and private equity funds and was instrumental in raising capital for founders and management teams of early-stage startups. Previously, as Senior Vice President of Investments at Gilford Securities (1995-1999), Mr. Portera worked with Fortune 500 CEOs, Forbes 400 members, and high-net-worth individuals and institutions in various financings and investment-related initiatives. Over the course of his early career as a registered representative, Mr. Portera held senior-level positions at several investment banking firms, including Smith Barney (1992-1995), UBS (1988-1992), and Drexel Burnham Lambert (1983-1987). Early in his career, as a Certified Public Accountant (CPA), Mr. Portera served as a senior auditor at Deloitte & Touche in New York City. Mr. Portera holds a Bachelor of Science (BS) in Economics with a concentration in Accounting from the Wharton School at the University of Pennsylvania.
Eric Manlunas - Director
Mr. Manlunas has over thirty years of experience in various aspects of financing and building new enterprise. He is a valuable member of our Board due to his depth of operating, strategic, and transactional experience. As a recognized business leader, Mr. Manlunas excels in demanding and fluid environments, often across multiple markets, continents, and cultures. Over the past twenty years, as founder and Managing Partner of Wavemaker Partners (2003 - Present), a cross-border venture capital firm with offices in Los Angeles and Singapore, Mr. Manlunas has been part of over 450 investments in early-stage businesses. He is adept at assimilating high levels of complexity, balancing competing factors, and quickly forming sensible and workable strategies to achieve stability and deliver sustainable outcomes. Prior to becoming a venture capitalist, from 1999 to 2003, Mr. Manlunas founded, built and successfully sold two businesses, an e-commerce and Internet Service Provider, to strategic buyers. During the early part of his career, he started as a consultant with Arthur Andersen’s Retail Management Group. Mr. Manlunas holds a Master of Business Administration (MBA) from Pepperdine University (1995) and earned a Bachelor of Arts (BA) in Communications from Florida International University (1990).
Term of Office
Each director serves for a term of one year and until his successor is elected at the Annual Shareholders’ Meeting and is qualified, subject to removal by the shareholders. Each officer serves for a term of one year and until his successor is elected at a meeting of the Board of Directors and is qualified.
Employees
We have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary to our affairs. Our officers are devoted full time to the Company; the amount of time they will devote in any time period will vary based on the stage of the business and progress the company is making. Accordingly, once we are beyond the developmental phase our management will spend more time on our affairs.
Limitation of Liability and Indemnification Matters
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
Identification of Significant Employees
We have no significant employees other than the aforementioned Officers and Directors.
Family Relationship
Tarek N. Shoufani is the brother-in-law of Fred E. Tannous. Other than the foregoing, we currently do not have any officers or directors of our Company who are related to each other.
Involvement in Certain Legal Proceedings
During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:
(1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.
Engaging in any type of business practice; or
iii.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.
Any Federal or State securities or commodities law or regulation; or
ii.
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Independence of Directors
The Board of Directors is currently composed of four members. Mr. Fred E. Tannous, Mr. Tarek N. Shoufani, Mr. Michael J. Portera, and Mr. Eric Manlunas. Messrs. Tannous, Shoufani and Portera do not qualify as independent Directors in accordance with the published listing requirements of the NASDAQ Global Market as they each hold officer positions. Mr. Eric Manlunas does qualify as an independent director as he is not an officer of the Company. The NASDAQ independence definition includes a series of objective tests, such as that the Director is not, and has not been for at least three years, one of the Company’s employees and that neither the Director, nor any of his family members has engaged in various types of business dealings with us. In addition, the Board of Directors has not made a subjective determination as to each Director that no relationships exist which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director, though such subjective determination is required by the NASDAQ rules. Had the Board of Directors made these determinations, the Board of Directors would have reviewed and discussed information provided by the Directors and the Company with regard to each Director’s business and personal activities and relationships as they may relate to the Company and its management.
Committees
We do not currently have an audit, compensation or nominating committee. The Board of Directors as a whole currently acts as our audit, compensation and nominating committees. We intend to establish an audit, compensation and nominating committee of our Board of Directors once we expand the Board to include one or more independent directors and intend to adopt a charter for each committee.
Our audit committee shall be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. Our compensation committee shall assist the Board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers and periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements. Our nominating committee shall assist the Board in selecting individuals qualified to become our directors and in determining the composition of the Board and its committees.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of our common stock and other equity securities. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Since inception, we have not had a class of equity securities registered under the Securities Exchange Act of 1934, as amended. Hence, compliance with Section 16(a) thereof by our officers and directors is not required.
Risk Oversight
Effective risk oversight is an important priority of the Board of Directors. Because risks are considered in virtually every business decision, the Board of Directors discusses risk throughout the year generally or in connection with specific proposed actions. The Board of Directors’ approach to risk oversight includes understanding the critical risks in the Company’s business and strategy, evaluating the Company’s risk management processes, allocating responsibilities for risk oversight among the full Board of Directors, and fostering an appropriate culture of integrity and compliance with legal responsibilities.
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the SEC and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
In lieu of an Audit Committee, the Company’s Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors reviews the Company's internal accounting controls, practices and policies.
Code of Ethics
Our Board of Directors has not adopted a code of ethics. We anticipate that we will adopt a code of ethics when we increase either the number of our directors or the number of our employees.

---

ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
Name and
Principal Position
Fiscal Year
Ended June 30
Management Fees
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
All Other Compensation
($)
Total
($)
Fred E. Tannous(1)
85,500
-
-
-
-
85,500
Director, President & Chief Executive
Officer, Treasurer, Secretary
Tarek N. Shoufani(1)
67,500
-
-
-
-
67,500
Director, Chief Operating Officer
Michael J. Portera(1)(2)
58,500
-
150,000
-
-
208,500
Director, Chief Financial Officer
Eric Manlunas
-
-
-
-
-
-
Director
(1) Officers do not receive a salary at this time, however, receive a management fee for services rendered and expenses incurred on behalf of the Company; there are no formal employment contracts in place for their employment.
(2) Michael Portera was appointed as Director and Chief Financial Officer by the Board on July 12, 2023. He received a stock award in the amount of 1,500,000 shares, having a fair value of $150,000, as part of his appointment as an officer and director of the Company. There are no arrangements for any future awards to be earned or issued.
Narrative Disclosure to Summary Compensation Table
There are no formal contracts in place for employment of any officers. In addition to the foregoing, there are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
Outstanding Equity Awards at Fiscal Year-End
There are no current outstanding equity awards to our executive officers.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.
Compensation of Directors
Our directors receive no annual salary or bonus for their service as members of the Company’s board of directors.
Security Holders Recommendations to Board of Directors
Shareholders can direct communications to our Chief Executive Officer, Fred E. Tannous, at our executive offices. However, while we appreciate all comments from shareholders, we may not be able to individually respond to all communications. We attempt to address shareholder questions and concerns in our press releases and documents filed with the SEC so that all shareholders have access to information about us at the same time. Mr. Tannous collects and evaluates all shareholder communications. All communications addressed to our directors and executive officers will be reviewed by those parties unless the communication is clearly frivolous.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 30, 2024, by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock, par value $0.001 per share. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. Unless otherwise specified, the address of each of the persons set forth below is care of the Company at the address 2029 Century Park East, Suite 400, Los Angeles, CA 90067.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.
Name and Address of Beneficial Owner
Title of Class
Amount and Nature
of Beneficial
Ownership(1)
Percent (%) of Class(2)
Fred E. Tannous(3)
Common
6,000,000
29.4 %
Tarek N. Shoufani(4)
Common
3,000,000
14.7 %
Eric Manlunas(5)
Common
1,773,000
8.7 %
Michael J. Portera(6)
Common
1,500,000
7.3 %
All Officers, Directors and
Beneficial Owners as a Group (4 persons)
Common
12,273,000
60.1 %
(1) The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.
(2) Based on 20,421,312 issued and outstanding shares of common stock as of June 30, 2024.
(3) Fred E. Tannous is a Director and the Company's President, CEO, Secretary, and Treasurer. His beneficial ownership includes 6,000,000 common shares.
(4) Tarek Shoufani is a Director and the Company’s Chief Operating Officer. His beneficial ownership includes 3,000,000 common shares.
(5) Eric Manlunas is member of the Company’s Board of Directors. His beneficial ownership includes 1,773,000 common shares directly owned.
(6) Michael J. Portera is a Director and the Company’s Chief Financial Officer. His beneficial ownership includes 1,500,000 common shares directly owned.
Changes in Control
There are no present arrangements or pledges of the Company’s securities, which may result in a change in control of the Company.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Related Party Transactions
Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Related parties are natural persons or other entities that have the ability, directly, or indirectly, to control another party or exercise significant influence over the party in making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences.
On January 12, 2024, the Company issued a loan to our Chief Financial Officer in the amount of $15,000. The term of the loan is three months, with an annual interest rate of 8% on the principal amount, paid at maturity. The loan was evidenced with a Promissory Note issued by the borrowing officer. The loan was repaid in full on March 19, 2024.
During the year ended June 30, 2024, there were transactions incurred between the Company and Fred E. Tannous, Director, Chief Executive Officer, Secretary and Treasurer for management fees of $85,500 and reimbursement of expenses incurred on behalf of the Company.
During the year ended June 30, 2024, there were transactions incurred between the Company and Tarek Shoufani, Director and Chief Operating Officer, for management fees of $67,500 and reimbursement of expenses incurred on behalf of the Company.
During the year ended June 30, 2024, there were transactions incurred between the Company and Michael J. Portera, Director and Chief Financial Officer, for management fees of $58,500 and reimbursement of expenses incurred on behalf of the Company.
Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.
With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:
·
Disclosing such transactions in reports where required;
·
Disclosing in any and all filings with the SEC, where required;
·
Obtaining disinterested directors’ consent; and
·
Obtaining shareholder consent where required.
Review, Approval or Ratification of Transactions with Related Persons
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officers, Directors and significant stockholders. However, all of the transactions described above were approved and ratified by our Board of Directors. In connection with the approval of the transactions described above, our Board of Directors, took into account several factors, including their fiduciary duties to the Company; the relationships of the related parties described above to the Company; the material facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available; and the terms the Company could receive from an unrelated third party.
We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:
·
Disclosing such transactions in reports where required;
·
Disclosing in any and all filings with the SEC, where required;
·
Obtaining disinterested directors’ consent; and
·
Obtaining shareholder consent where required.
Director Independence
Quotations for the Company’s common stock are entered on the Over-the-Counter Bulletin Board inter-dealer quotation system, which does not have director independence requirements. For purposes of determining director independence, the Company applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. As a result, the Company has one independent director, Eric Manlunas, as our other directors, Fred E. Tannous, Michael Portera, and Tarek Shoufani, are each also an executive officer of the Company.

---

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
Year Ended
June 30, 2024
Year Ended
June 30, 2023
Audit Fees
$
54,075
$ 12,500
Tax Preparation
-
-
Other
-
-
Total
$
54,075
$ 12,500
Audit Fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by the above auditors in connection with statutory and regulatory fillings or engagements.
Audit-Related Fees are fees for assurance and related services by the principal accountant that are traditionally performed by the principal accountant and which are reasonably related to the performance of the audit or review of the registrant's financial statements and fees attributed to the audit.
In the absence of a formal audit committee, the full Board of Directors pre-approves all audit and non-audit services to be performed by the independent registered public accounting firm in accordance with the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended. The Board of Directors pre-approved 100% of the audit, audit-related and tax services performed by the independent registered public accounting firm for the fiscal periods ended June 30, 2024 and June 30, 2023.
PART IV

---

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statements.
Exhibit
Number
Description
3.1
Certificate of Incorporation filed with the Delaware Secretary of State on March 14, 2023 (1)
3.2
Amended and Restated Certificate of Incorporation dated May 9, 2023 (1)
3.3
Bylaws (1)
10.1
Bookkeeping Services Agreement with David E. Tannous, dated March 23, 2023 (2)
10.2
Board Member Consulting Agreement Eric Manlunas, dated May 17, 2023 (2)
10.3
Consulting Agreement with MJP Consulting, LLC, dated June 1, 2023 (2)
10.4
Software Development Agreement with CORSAC Technologies dated October 2, 2023 (2)
10.5
Consulting Agreement with Craig Truempi, dated January 10, 2024 (*)
31.1
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (¥)
31.2
Certification of the Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (¥)
32.1
Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (¥)
32.2
Certification of the Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (¥)
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(1)
Previously filed as an exhibit to Registration Statement on Form S-1 filed with SEC on September 21, 2023, incorporated herein by reference.
(2)
Previously filed as an exhibit to Registration Statement, as amended, on Form S-1/A filed with the SEC on October 19, 2023, incorporated herein by reference.
(*)
Filed herewith.
(¥)
This exhibit is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in such filing.