EDGAR 10-K Filing

Company CIK: 1922981
Filing Year: 2023
Filename: 1922981_10-K_2023_0001477932-23-002550.json

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ITEM 1. BUSINESS
Item 1. Financial Statements
Notes to Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Exhibits
Signatures
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
DILIGENT CAPITAL HOLDINGS, INC.
FINANCIAL STATEMENTS
(Audited)
FOR THE PERIOD ENDED DECEMBER 31, 2022
Contents
FINANCIAL STATEMENTS
PAGE
Report of Independent Registered Public Accounting Firm
Balance Sheet as of December 31, 2022.
Statement of Operations for the period ended December 31, 2021 and December 31, 2022.
Statement of Cash Flows for the period ended December 31, 2021 and December 31, 2022.
Statement of Changes in Stockholder’s Equity (Deficit) for the period from inception (February 21, 2022) through December 31, 2022.
MICHAEL GILLESPIE & ASSOCIATES, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
VANCOUVER, WA 98666
206.353.5736
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors & Audit Committee:
Diligent Capital Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Diligent Capital Holdings, Inc. as of December 31, 2022 and the related statements of operations, changes in stockholders’ (deficit)/equity and cash flows for the year then ended and the related notes (collectively referred to as “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and the results of its operations and its cash flows for the year then ended, 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, although the Company has limited operations it has yet to attain profitability. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is 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 audit. 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 audit 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 audit, 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 audit 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 audit 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 audit provide a reasonable basis for our opinion.
/S/ MICHAEL GILLESPIE & ASSOCIATES, PLLC
We have served as the Company’s auditor since 2022.
PCAOB ID: 6108
Vancouver, Washington
March 31, 2023
DILIGENT CAPITAL HOLDINGS, INC.
Balance Sheets
As of
December 31, 2022
(Audited)
As of
December 31, 2021
(Unaudited)
ASSETS
Current Assets
Cash
$ 226
$ -
Total Current Assets
-
TOTAL ASSETS
$ 226
$ -
LIABILITIES & STOCKHOLDER’S EQUITY (DEFICIT)
Long Term Liabilities
Shareholder Loans Payable
9,314
-
Total Long Term Liabilities
9,314
-
TOTAL LIABILITIES
9,314
-
Stockholder’s Equity (Deficit)
Preferred stock, ($0.0001 par value, 20,000,000 shares authorized; none issued and outstanding.)
$ -
-
Common stock ($0.0001 par value, 180,000,000 shares authorized; 1,000,000 shares issued and outstanding as of December 31, 2022)
-
Paid in Capital
-
Accumulated Deficit
(9,188 )
-
Total Stockholder’s Equity (Deficit)
(9,088 )
-
TOTAL LIABILITIES & STOCKHOLDER’S EQUITY (DEFICIT)
$ 226
$ -
See Notes to Financial Statements
These Notes are Integral to these Financial Statements
DILIGENT CAPITAL HOLDINGS, INC.
Statements of Operations
(Audited)
The Year
Ended
December 31, 2022
(Audited)
The Year
Ended
December 31, 2021
(Unaudited)
Revenues
Revenues
$ -
-
Total Revenues
-
-
Operating Expenses
Accounting Fees & Expenses
6,450
Bank Fees & Charges
SEC Filing Fees & Expenses
2,645
-
Total Operating Expenses
9,188
-
Net Earnings (Loss)
$ (9,188 )
-
Basic loss per share
-
Weighted average number of common shares outstanding
1,000,000
-
See Notes to Financial Statements
These Notes are Integral to these Financial Statements
DILIGENT CAPITAL HOLDINGS, INC.
Statement of Cash Flows
(Audited)
The Year
Ended
December 31, 2022
(Audited)
The Year
Ended
December 31, 2021
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income(loss)
$ (9,188 )
-
Changes in assets and liabilities
-
-
Net cash provided by (used in) operating activities
-
-
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities
-
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock
-
Increase in Shareholder loans
9,314
-
Capital in Excess of Par
-
Net cash provided by (used in) financing activities
9,414
-
Net increase (decrease) in cash
-
Cash at beginning of period
-
Cash at end of period
-
NONCASH INVESTING AND FINANCING ACTIVITIES:
-
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid
-
Income taxes paid
-
See Notes to Financial Statements
These Notes are Integral to these Financial Statements
DILIGENT CAPITAL HOLDINGS, INC.
Statement of Changes in Stockholder’s Equity (Deficit)
From March 31, 2022 through December 31, 2022
Common
stock
Shares
Common
stock
Amount
Additional
Paid-in
Capital
Deficit
Accumulated
Total
Balance As Of February 21, 2022 (inception) Issuance of Common Stock
1,000,000
$ 100
$ 0
-
$ 100
Balance As of March 31, 2022
1,000,000
$ 100
$ 0
-
$ 100
Balance As of June 30, 2022
1,000,000
$ 100
$ 0
(3,126 )
$ (3,026 )
Balance As Of September 30, 2022
1,000,000
$ 100
$ 0
(6,470 )
$ (6,370 )
Net Income (loss)
-
-
-
(9,188 )
(9,088 )
Balance As Of December 31, 2022
1,000,000
$ 100
$ 0
(9,188 )
$ (9,088 )
See Notes to Financial Statements
These Notes are Integral to these Financial Statements
Diligent Capital Holdings, Inc.
Notes to Financial Statements
December 31, 2022
(Audited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
DILIGENT CAPITAL HOLDINGS, INC. (the “Company”) was incorporated under the laws of the State of Florida on February 21, 2022 and has been inactive since inception. The Company’s current address is: 302 Perimeter Center N. #1260, Atlanta, GA 30346. The Company intends to serve as a vehicle to effect a merger or acquisition, or similar business combination with an entity actively engaged in business which generates revenues. The Company will not restrict its potential candidate Target Businesses to any specific business, industry or geographical location and, thus, may acquire any type of business in any geographical location.
The Company has not established any source of revenue to cover its operating costs. The Company will engage in very limited activities, without incurring any liabilities that must be satisfied in cash, until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.
The results for the year ended December 31, 2022 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Registration Statement dated July 27, 2022, filed with the Securities and Exchange Commission.
The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2022 and for the related periods presented.
NOTE 2. GOING CONCERN
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company 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 currently has no business or recurring income which raises substantial doubt about its ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company’s ability to merger with or acquire profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Accounting
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America. The Company has elected a fiscal year ending on December 31.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments, with maturity of three months or less when purchased, to be cash equivalents.
Income Taxes
Income taxes are provided in accordance with current accounting requirements. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will be not realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. There were no current or deferred income tax expenses or benefits are reflected in the financial statements due to the Company not being in operations prior to February 21, 2022. Generally, all periods since inception are open to tax examination by taxing authorities.
Impact of New Accounting Standards
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow, except for the expected change in financial reporting for development stage companies. A recent FASB proposal will reduce the complexity of reporting for these companies by eliminating the “inception to date” information.
Accounting Standard update 2014-10 issued in June 2014, removes the financial reporting distinction between development stage companies and other reporting entities. The Amendment is for public business entities is effective with an annual reporting period beginning after December 15, 2014. Early implementation was available to the company and it has elected early implementation.
NOTE 4. RELATED PARTY TRANSACTIONS
SX Capital Management, LLC (SX), the Company’s sole shareholder (its original incorporator), has paid all expenses incurred by the Company, which includes resident agent fees, basic state and local fees, audit fees and taxes, and expenses related to the formation of the Company and the professional fees and expenses associated with the preparation and filing of the Company’s registration of its Common Stock on Form 10. On a going forward basis, SX has committed to funding all expenses incurred by the Company through the date of completion of a business combination. These payments for expenses are advances and the terms of repayment to SX are not fixed. The Company is indebted to SX in the amount of $9,314 related to such expenses as of December 31, 2022.
We utilize the office space and equipment of our stockholder at no cost. Management estimates such amounts to be immaterial.
Steven Mitcham, the Company’s chief executive officer and Chairman is also a managing partner of SX, the Company’s sole shareholder.
NOTE 5. STOCKHOLDER’S EQUITY
Upon formation, the Board of Directors issued 1,000,000 shares of common stock for $100 to open the Company’s bank account.
The stockholders’ equity section of the Company contains the following classes of capital stock as of December 31, 2022:
•
Common stock, $ 0.0001 par value: 180,000,000 shares authorized; 1,000,000 shares issued and outstanding
•
Preferred stock, $ 0.0001 par value: 20,000,000 shares authorized; none issued and outstanding. Rights and Provisions of said preferred shares will be determined at a later date; prior to issuance.
NOTE 6. SUBSEQUENT EVENTS
The Company evaluated subsequent events from December 31, 2022 through the date these financial statements were issued and has noted no subsequent events after December 31, 2022 for which disclosure is required.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
PLAN OF OPERATION
The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire or merge with a Target Business. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate Target Businesses to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with additional capital contributed by SX, our sole stockholder.
During the next 12 months, we anticipate incurring costs related to:
(i)
filing of Exchange Act reports, and
(ii)
investigating, analyzing and consummating an acquisition.
We anticipate that these costs may be in the range of ten to fifteen thousand dollars, and that we will be able to meet these costs as necessary, to be loaned to or invested in us by our sole stockholder, SX. We anticipate allocating the entire amount towards the filing of Exchange Act reports. The foregoing notwithstanding, SX has not committed to a maximum amount of financial contribution to the Company.
The Company, does not intend to but, may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.
SX is continually in discussion with various entities who are considering mergers and acquisition, however, our management has not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any Target Business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.
Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
We anticipate that the consummation of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital that we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.
Revenues
For the year ended December 31, 2022 revenues were $0. This was attributable to having been formed on February 21, 2022 and the Company’s business plan.
Cost of Revenue
For the three months ended December 31, 2022 Cost of Revenues were $0. This was attributable to having been formed on February 21, 2022 and the Company’s business plan.
Cash Flow
Cash at the end of the year ended December 31, 2022 was $226. A $226 increase from the previous period February 21, 2022 (inception). This was attributable to paid in capital.
Officer Compensation
Officer Compensation was $0 for the year ended December 31, 2022.
Professional Fees
Professional Fees were $0 for the year ended December 31, 2022.
Selling, General and Operating Expenses
Selling, General and Administrative Expenses were ($9,188) for the year ended December 31, 2022.
Other Expense
Other Expense were $0 for the year ended December 31, 2022.
Net Loss
Net Loss for the year ended December 31, 2022 was ($9,188)
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working capital at December 31, 2022.
December 31, 2022
Current Assets
$ 226
Current Liabilities
$ 0
Working Capital (Deficit)
$ 226
Quantitative and Qualitative Disclosures about Market Risk.
We have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. We believe that adequate controls are in place to monitor any hedging activities. We do not have any borrowings and, consequently, we are not affected by changes in market interest rates. We do not currently have any sales or own assets and operate facilities in countries outside the United States and, consequently, we are not effected by foreign currency fluctuations or exchange rate changes. Overall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations.
Our Auditors Have Raised Substantial Doubts as to Our Ability to Continue as a Going Concern
Our financial statements have been prepared assuming we will continue as a going concern. The Company has experienced recurring losses from operations which have not caused a deficit as of December 31, 2022.
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements.
We have not entered into any 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 and would be considered material to investors.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
As of the date of this Report, there have been no material changes from the risk factors previously disclosed in the Company’s (i) most recent Form 10 filing as filed with the SEC 10-12G/A on July 27, 2022.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

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ITEM 2. PROPERTIES
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
As of December 31, 2022, we have issued no additional equity securities in any form to anyone inside or outside the Company.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Defaults Upon Senior Securities
None.

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

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Other Information.
None.
(balance of page left blank intentionally)
Exhibits.
Incorporated by reference
Exhibit
Exhibit Description
Filed herewith
Form
Period ending
Exhibit
Filing date
31.1
Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
101.INS*
Inline XBRL Instance Document
X
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.LAB*
Inline XBRL Taxonomy Extension Label Document
X
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
101.DEF*
Inline XBRL Taxonomy Extension Linkbase Definition
X
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
X
* In accordance with Regulation S-T, the XBRL-related information on Exhibit No. 101 to this Annual Report on Form 10-K shall be deemed “furnished” herewith and not “filed.”

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ITEM 6. SELECTED FINANCIAL DATA

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

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ITEM 9A. CONTROLS AND PROCEDURES

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ITEM 9B. OTHER INFORMATION

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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ITEM 11. EXECUTIVE COMPENSATION

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES