GROOVE BOTANICALS INC. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Quarterly Report on Form 10-Q contains predictions, estimates and other forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “intends,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors including the risks set forth in the section entitled “Risk Factors” in our Amendment No. 2 to our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on August 25, 2025, that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Report. You should read this Report with the understanding that our actual future results may be materially different from what we expect. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law. The management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The following discussion of our financial condition and results of operations should be read in conjunction with the notes to the consolidated unaudited financial statements appearing elsewhere in this Report and the Company’s audited financial statements for the fiscal year ended March 31, 2025, as filed with the SEC in its Annual Report on Form 10-K on July 16, 2025, and its Amendment No. 1 on Form 10-K/A on August 14, 2025, along with the accompanying notes. As used in this Quarterly Report, the terms “we,” “us,” “our” and the “Company” means Groove Botanicals, Inc. The Company relies primarily on its current sole officer and director, Kent Rodriguez to manage its day-to-day business and has outsourced professional services to third parties in an effort to maintain lower operational costs. Mr. Rodriguez, as the holder of the Company’s issued and outstanding shares of the Company’s Series A Preferred Stock, holds 51% of the voting rights of the Company. He will be able to influence the outcome of all corporate actions requiring the approval of our stockholders. Plan of Operations On September 14, 2023, we filed a registration statement on Form 10-12g which was deemed effective by the Securities and Exchange Commission (“SEC”) on November 8, 2023. We plan to assemble a portfolio of early-stage EV Battery Technologies developed from Universities in Norway, Sweden and Finland, and seek grants from the State of Minnesota Department of Economic Development to find and identify corporate partners to commercialize these technologies and ultimately produce revenues for the Company. We do not currently have any products. We are working to assemble a portfolio of early-stage EV Battery Technologies. As the Company continues its business development and asset acquisitions, the Company anticipates our capital needs to be between $500,000 and $5,000,000 (varying based on growth strategies). 12 Table of Contents Results of Operations Three Months Ended September 30, 2025, and September 30, 2024 Revenue We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future. Net Loss We reported a net loss attributable to common stockholders of $87,001 in the three months ending September 30, 2025 as compared to a loss of $84,451 in the three months ended September 30, 2024, including accrued dividends on our Series A and B Preferred stock of $54,618 in each of the three months ended September 30, 2025 and 2024, respectively. Three Months ended September 30, 2025 2024 Net sales $ — $ — Operating expenses: Selling, General and Administrative Expenses 16,518 18,332 Rent 3,600 3,591 Legal and Professional Expenses 10,765 7,410 Consulting Expense 1,500 500 Total operating expenses 32,383 29,833 Income (loss) from operations (32,383 ) (29,833 ) Net income (loss) $ (32,383 ) $ (29,833 ) Dividends on Preferred Stock (54,618 ) (54,618 ) Net (loss) attributable to common stockholders $ (87,001 ) $ (84,451 ) Operating Expenses Total operating expenses for the three months ending September 30, 2025 of $32,383 were increased by approximately 8% as compared to the total operating expenses recorded for the three months ended September 30, 2024 of $29,833. General and administrative expenses decreased from $18,332 (2024) to $16,518 (2025) mainly due to a decrease in transfer agent fees and a decrease in operational overhead. The decrease to general and administrative fees was offset by an increase in professional and accounting fees of 45% from $7,410 (2024) to $10,765 (2025), and was predominantly the result of an increase to filing fees from $2,935 (2024) to $6,484 (2025) as the Company refiled some of its prior SEC filings during the current three-month period. Rent expense remained constant period over period and consulting fees increased slightly from $500 (2024) to $1,500 (2025). Dividends on Preferred Stock Dividends on Preferred Stock for the three-month period ended September 30, 2025, and 2024 remained constant, at $54,618 for each period. These dividends on preferred stock are required subject to the designation of the preferred stock and contribute to the net loss attributable to our common stockholders. 13 Table of Contents Six Months Ended September 30, 2025, and September 30, 2024 Revenue We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future. Net Loss We reported a net loss attributable to common stockholders of $179,788 in six months ending September 30, 2025, as compared to a loss of $175,607 in the six months ended September 30, 2024, which includes accrued dividends on our Series A and B Preferred stock of $109,235 in each of the six months ended September 30, 2025 and 2024, respectively. Six Months ended September 30, 2025 2024 Net sales $ — $ — Operating expenses: Selling, General and Administrative Expenses 35,483 34,931 Rent 7,200 8,235 Legal and Professional Expenses 26,370 21,956 Consulting Expense 1,500 1,250 Total operating expenses 70,553 66,372 Income (loss) from operations (70,553 ) (66,372 ) Net income (loss) $ (70,553 ) $ (66,372 ) Dividends on Preferred Stock (109,235 ) (109,235 ) Net (loss) attributable to common stockholders $ (179,788 ) $ (175,607 ) Operating Expenses Total operating expenses for the six months ended September 30, 2025of $70,553 increased by approximately 6% as compared to the total operating expenses recorded for the six months ended September 30, 2024 of $66,372. General and administrative expenses remained constant at $34,931 (2024) and $35,483 (2025). Legal and professional expenses increased in the comparative six month periods by 20% from $21,956 (2024) to $26,370 (2025), mainly due to an increase in filing fees from $2,935 (2024) to $6,484 (2025) as the Company refiled some of its prior SEC filings during the current six month period. Rent expense reflected a small decrease of $1,000 or 12% from 2024 to 2025. Consulting fees increased slightly from $1,250 (2024) to $1,500 (2025) in the comparative three-month periods. Dividends on Preferred Stock Dividends on Preferred Stock for the six-month periods ended September 30, 2025 and 2024 remained constant, at $109,235 for each period. These dividends on preferred stock are required subject to the designation of the preferred stock and contribute to the net loss attributable to our common stockholders. 14 Table of Contents Operating Activities For the Six Months Ended September 30, 2025 2024 Net Cash Used in Operating Activities $ (55,674 ) (63,468 ) Net Cash From Investing Activities — — Net Cash From Financing Activities 55,124 67,913 Net Change in Cash (550 ) 4,445 Cash at End of Period $ 1,492 $ 6,133 Net cash used by operating activities was $55,674 for the six months ended September 30, 2025, compared to $63,468 for the six months ended September 30, 2024. Net cash used in operating activities for the six months ending September 30, 2025, was primarily the result of a net loss of $70,553, offset by non-cash items including accrued payroll of $24,000, and changes in working capital related to an increase in prepaid expenses of $4,194 and a decrease in accounts payable and accrued liabilities of $4,927. Net cash used in operating activities for the six months ending September 30, 2024, was primarily the result of a net loss of $66,372 offset by non-cash items including accrued payroll of $24,000, and changes in working capital related to an increase in prepaid expenses of $4,538 and a decrease to accounts payable and accrued liabilities of $16,558. Investing Activities There was no investing activity during each of the six months ended September 30, 2025 and 2024. Financing Activities Net cash provided by financing activities was $55,124 for the six months ended September 30, 2025, compared to $67,913 for the six months ended September 30, 2024 all of which related to advances from a related party in the form of unsecured advances. Liquidity and Capital Resources We are in need of additional cash resources to maintain our operations. As of September 30, 2025, we had cash of $1,492 and prepaid expenses of $6,672. We are in the early stage of development and have experienced net losses to date and have not generated revenue from operations, which raises substantial doubt about our ability to continue as a going concern. There are a number of conditions that we must satisfy before we will be able to acquire, license and acquire products and intellectual property, not the least of which is negotiating and financing any acquisitions. We are in the process of identifying and establishing strategic partners and technologies in order to establish a market and generate commercial orders by customers and licensing which will include effective marketing and sales capabilities for any products. We do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue and expect to incur increasing operating expenses. We will require substantial additional funds for operations, the service of debt and to fund our business objectives. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms favorable to us. If additional funds are raised by the issuance of equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing stockholders. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources. 15 Table of Contents Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements, the Company has incurred recurring net losses since its inception and has raised limited capital. The Company had a net loss of $70,553 and $66,372 for the six months ended September 30, 2025, and September 30, 2024, respectively. The Company’s accumulated deficit was $35,376,369 and $35,196,581 as of June 30, 2025, and March 31, 2025, respectively. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company is taking certain steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) focus on our new business model and 2) raising equity or debt financing. Our auditors express substantial doubt about our ability to continue as a going concern. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. Critical Accounting Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on historical experience, as appropriate, and on various other assumptions that we believe are reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our significant accounting policies are more fully discussed in Note 2 to our unaudited condensed financial statements contained herein. Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates. Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07 – Improvements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and interim financial statements, including additional, more detailed information about a reportable segment’s expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 for the year ended March 31, 2025 retrospectively to all periods presented in the financial statements. The adoption of this ASU had no impact on reportable segments identified and had no effect on the Company’s financial position, results of operations, or cash flows. Recent Accounting Standard Not Yet Adopted: In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09 – Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The standard is effective for public companies for annual periods beginning after December 15, 2024. Early adoption is available. The Company is still evaluating the full extent of the potential impact of the adoption of ASU 2023-09, but believes it will not have a material impact on its financial statements and disclosures. 16 Table of Contents In November 2024, the FASB issued ASU 2024-03, – Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). This ASU requires disclosures about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as disclosures about selling expenses. The standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company will evaluate the full extent of the adoption of ASU 2024-03, but believes it will not have a material impact on its consolidated financial statements and disclosures. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company and are not required to provide this information.