What changed in this filing

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Item 1. Financial Statements

2021-05-12 compared with 2021-02-16 · 541 added, 584 removed, 156 unchanged (88% of the section changed)

FINANCIAL STATEMENTS

WATERSIDE CAPITAL CORPORATION

BALANCE SHEETS

As of June 30, 2020 and December 31, 2020 (Unaudited)

June 30, 2020

December 31, 2020

LIABILITIES & EQUITY

CAPITAL CORPORATION

of March 31, 2021 (Unaudited) and June 30, 2020

Note Payable - Roran, net of debt discount

Interest Payable

Other Current Liabilities

Current Liabilities

Accounts Payable

Convertible Note Payable - Roran, net of debt discount

Accrued Interest Payable

Total Other Current Liabilities

Total Current Liabilities

Total Liabilities

Common Stock $1.00 par value, 10,000,000 authorized, 6,082,214 shares issued and outstanding

Additional Paid-In Capital

Acccumulated Deficit

Stock $1.00 par value, 10,000,000 authorized, 6,082,214 shares issued and outstanding

Paid-In Capital

(17,901,949 )

(17,813,690 )

TOTAL LIABILITIES & EQUITY

LIABILITIES & EQUITY

the accompanying Notes, which are an integral part of these unaudited Financial Statements

WATERSIDE CAPITAL CORPORATION

STATEMENTS OF OPERATIONS

For the Three and Six Months Ended December 31, 2020 and 2019

Three Months Periods Ended

Six Months Periods Ended

Interest - Other

Administrative Expenses

Interest Expense

Total Expense

Weighted Average Number of Common Shares Outstanding- Basic and Diluted

Net Loss Per Share- Basic and Diluted

CAPITAL CORPORATION

OF OPERATIONS

the Three and Nine Months Ended March 31, 2021 and 2020

Months Periods Ended

Administrative

Average Number of Common Shares Outstanding- Basic and Diluted

Loss Per Share- Basic and Diluted

the accompanying Notes, which are an integral part of these unaudited Financial Statements

WATERSIDE CAPITAL CORPORATION

CAPITAL CORPORATION

of Stockholders’

For the three and six months ended December 31, 2020 and 2019 (Unaudited)

($1 Par Value)

Balance at June 30, 2020

the Three and Nine Months Ended March 31, 2021 and 2020 (Unaudited)

at June 30, 2020

$ (17,813,690 )

Beneficial conversion feature

Net Loss for the period

Balance at September 30, 2020

conversion feature

Loss for the period

at September 30, 2020

(17,848,939 )

Beneficial conversion feature

Net Loss for the period

Balance at December 31, 2020

conversion feature

Loss for the period

at December 31, 2020

(17,887,624 )

Balance at June 30, 2019

conversion feature

Loss for the period

at March 31, 2021

$ (17,901,948 )

Beneficial conversion feature

Net Loss for the period

Balance at September 30, 2019

at June 30, 2019

$ (17,685,223 )

Beneficial conversion feature

Net Loss for the period

Balance at December 31, 2019

conversion feature

Loss for the period

at September 30, 2019

(17,720,680 )

conversion feature

Loss for the period

at December 31, 2019

(17,747,575 )

conversion feature

Loss for the period

at March 31, 2020

$ (17,772,365 )

the accompanying Notes, which are an integral part of these unaudited Financial Statements

WATERSIDE CAPITAL CORPORATION

STATEMENTS OF CASH FLOWS

For the Six Months Ended December 31, 2020 and 2019

OPERATING ACTIVITIES

Adjustments to reconcile Net Loss to net cash used by operations:

Changes in assets and liabilities

Debt Discount

Accounts Payable

Accrued Interest Payable

Net cash used by Operating Activities

FINANCING ACTIVITIES

Proceeds from note payable from Roran Capital

Net cash provided by Financing Activities

Net cash (decrease) increase for period

Cash at beginning of period

Cash at end of period

Supplemental Non-Cash Investing and Financing Activities:

Intrinsic value of embedded beneficial conversion feature on convertible note payable

CAPITAL CORPORATION

OF CASH FLOWS

the Nine Months Ended March 31, 2021 and 2020

to reconcile Net Loss to net cash used in operations to net cash used by operations:

in assets and liabilities

Interest Payable

cash used by Operating Activities

from note payable from Roran Capital

cash provided by Financing Activities

cash (decrease) increase for period

at beginning of period

at end of period

Non-Cash Investing and Financing Activities

value of embedded beneficial conversion feature on convertible note payable

the accompanying Notes, which are an integral part of these unaudited Financial Statements

3 unchanged sentences

Capital Corporation (the “Company”) was incorporated in the Commonwealth of Virginia on July 13, 1993 and was a closed-end

investment company licensed by the Small Business Administration (the “SBA”) as a Small Business Investment Company

(“SBIC”).

The Company previously made equity investments in, and provided loans to, small businesses to finance their

growth, expansion, and development.

Under applicable SBA regulations, the Company was restricted to investing only in qualified

small businesses as contemplated by the Small Business Investment Act of 1958.

As a registered investment company under the Investment

Company Act of 1940, as amended (the “Investment Company Act”), the Company’s investment objective was to provide

its shareholders with a high level of income, with capital appreciation as a secondary objective.

The Company made its first investment

in a small business in October 1996.

May 28, 2014, with the Company’s consent, the United States District Court for the Eastern District of Virginia, having

jurisdiction over an action filed by the SBA (the “

Court ”), entered a Consent Order and Judgment Dismissing

Counterclaim, Appointing Receiver, Granting Permanent Injunctive Relief and Granting Money Judgment (the “

investment company licensed by the Small Business Administration (the “SBA”) as a Small Business Investment Company (“SBIC”).

The Company previously made equity investments in, and provided loans to, small businesses to finance their growth, expansion, and development.

Under applicable SBA regulations, the Company was restricted to investing only in qualified small businesses as contemplated by the Small

Business Investment Act of 1958.

As a registered investment company under the Investment Company Act of 1940, as amended (the “Investment

Company Act”), the Company’s investment objective was to provide its shareholders with a high level of income, with capital

appreciation as a secondary objective.

The Company made its first investment in a small business in October 1996.

May 28, 2014, with the Company’s consent, the United States District Court for the Eastern District of Virginia, having jurisdiction

over an action filed by the SBA (the “

Court ”), entered a Consent Order and Judgment Dismissing Counterclaim, Appointing

Receiver, Granting Permanent Injunctive Relief and Granting Money Judgment (the “

Order ”).

The Order appointed the SBA receiver of the Company for the purpose of marshaling and liquidating in an orderly manner all of

the Company’s assets and entered judgment in favor of the United States of America, on behalf of the SBA, against the Company

in the amount of $11,770,722.

The Court assumed jurisdiction over the Company and the SBA was appointed receiver effective May

Company effectively stopped conducting an active business upon the appointment of the SBA as the receiver and the commencement

of the court-ordered receivership (the “

The Order appointed the

SBA receiver of the Company for the purpose of marshaling and liquidating in an orderly manner all of the Company’s assets and

entered judgment in favor of the United States of America, on behalf of the SBA, against the Company in the amount of $11,770,722.

Court assumed jurisdiction over the Company and the SBA was appointed receiver effective May 28, 2014.

Company effectively stopped conducting an active business upon the appointment of the SBA as the receiver and the commencement of the

court-ordered receivership (the “

Receivership ”).

Over the course of the Receivership, the activity of

the Company was limited to the liquidation of the Company’s assets by the receiver and the payment of the proceeds therefrom

to the SBA and for the expenses of the Receivership.

On June 28, 2017, the Receivership was terminated with the entry of a Final

Order by the Court.

The Final Order specifically stated that “Control of Waterside shall be unconditionally transferred

and returned to its shareholders c/o Roran Capital, LLC (“Roran”) upon notification of entry of this Order”.

Upon termination of the Receivership, Roran took possession of all books and records made available to it by the SBA.

Over the course of the Receivership, the activity of the Company

was limited to the liquidation of the Company’s assets by the receiver and the payment of the proceeds therefrom to the SBA and

for the expenses of the Receivership.

On June 28, 2017, the Receivership was terminated with the entry of a Final Order by the Court.

The Final Order specifically stated that “Control of Waterside shall be unconditionally transferred and returned to its shareholders

c/o Roran Capital, LLC (“Roran”) upon notification of entry of this Order”.

Upon termination of the Receivership, Roran

took possession of all books and records made available to it by the SBA.

Company has no operating assets of any value, and the Company no longer has the SBIC license from the SBA.

The Company is no longer

operating as a registered investment company under the Investment Company Act.

The Company will now seek to either (i) enter into

a new business;

or, (ii) merge with, or otherwise acquire, an active business which would benefit from operating as a public entity,

and has undertaken a search to identify the best possible candidate(s) in order to provide value to the shareholders of the Company.

Company filed with the SEC an application pursuant to Section 8(f) of the Investment Company Act of 1940 for an order declaring

that the Company has ceased to be a registered investment company.

On April 22, 2020, the SEC issued an order under Section 8(f)

of the Investment Company Act of 1940, as amended, declaring that the Company has ceased to be an investment company.

the Company is now a reporting company under the Securities Exchange Act of 1934, as amended.

unaudited financial statements herein have been prepared by the Company pursuant to the rules and regulations of the United States

Securities and Exchange Commission (“SEC”).

The accompanying interim unaudited financial statements have been prepared

under the presumption that users of the interim financial information have either read or have access to the audited financial

statements for the latest year ended June 30, 2020.

Accordingly, note disclosures which would substantially duplicate the disclosures

contained on June 30, 2020, audited financial statements have been omitted from these interim unaudited financial statements.

The Company evaluated all subsequent events and transactions through the date of filing this report.

information and note disclosures normally included in financial statements prepared in accordance with the United States generally

accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

the opinion of management, all adjustments considered necessary for a fair presentation have been included.

Operating results

for the three and six months ended December 31, 2020, are not necessarily indicative of the results that may be expected for the

year ending June 30, 2021.

For further information, refer to the audited financial statements and notes for the year ended June

30, 2020, included in the Company’s Annual Report on Form 10-K filed with the SEC on September 25, 2020.

accompanying financial statements of our Company have been prepared in accordance with accounting principles generally accepted

in the United States.

The Company effectively ceased operations, has no significant liquid assets and continues to have net losses

through the date of these financial statements.

Our financial statements have been presented on the basis that our business is

a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We are subject to the risks and uncertainties associated with a business with no operating business or assets and no revenue,

as well as limitations on our capital resources.

We have incurred losses and negative operating cash flows since the Receivership,

and we expect to continue to incur losses and negative operating cash flows at least through the near future.

Roran, which is

a related party to the Company, has agreed to advance our Company a limited amount of funding in order to partially meet our most

critical cash requirements.

The Company’s note payable to Roran, and related accrued interest, was due upon maturity on

December 31, 2020 and no maturity extension has been granted to date.

The Company does not presently possess sufficient resources

to satisfy its obligations.

For further discussion of the advances made by Roran, see Notes 3 and 4.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health

Organization characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy

as a result of the continued increase in the number of cases and affected countries and actions by public health and governmental

authorities, businesses, other organizations, and individuals to address the outbreak, including travel bans and restrictions,

quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns.

The ultimate impact

of the COVID-19 pandemic on our business is unknown and will depend on future developments, which are highly uncertain and cannot

be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and

protective actions that governments may direct.

Management believes the capital markets have been negatively impacted by COVID-19,

which negatively impacts the Company’s ability to consummate a merger transaction.

The Company is no longer operating

as a registered investment company under the Investment Company Act.

The Company will now seek to either (i) enter into a new business;

or, (ii) merge with, or otherwise acquire, an active business which would benefit from operating as a public entity, and has undertaken

a search to identify the best possible candidate(s) in order to provide value to the shareholders of the Company.

Company filed with the SEC an application pursuant to Section 8(f) of the Investment Company Act of 1940 for an order declaring that

the Company has ceased to be a registered investment company.

On April 22, 2020, the SEC issued an order under Section 8(f) of the Investment

Company Act of 1940, as amended, declaring that the Company has ceased to be an investment company.

As a result, the Company is now a

reporting company under the Securities Exchange Act of 1934, as amended.

unaudited financial statements herein have been prepared by the Company pursuant to the rules and regulations of the United States Securities

and Exchange Commission (“SEC”).

The accompanying interim unaudited financial statements have been prepared under the presumption

that users of the interim financial information have either read or have access to the audited financial statements for the latest fiscal

year ended June 30, 2020.

Accordingly, note disclosures which would substantially duplicate the disclosures contained on June 30,

2020, audited financial statements have been omitted from these interim unaudited financial statements.

The Company evaluated all subsequent

events and transactions through the date of filing this report.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

information and note disclosures normally included in financial statements prepared in accordance with the United States generally accepted

accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management,

all adjustments considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended

March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending June 30, 2021.

For further information,

refer to the audited financial statements and notes for the year ended June 30, 2020, included in the Company’s Annual Report on

Form 10-K filed with the SEC on September 25, 2020.

accompanying financial statements of our Company have been prepared in accordance with accounting principles generally accepted in the

United States.

The Company effectively ceased operations, has no significant liquid assets and continues to have net losses through the

date of these financial statements.

Our financial statements have been presented on the basis that our business is a going concern, which

contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We are subject to the risks

and uncertainties associated with a business with no operating business or assets and no revenue, as well as limitations on our capital

We have incurred losses and negative operating cash flows since the Receivership, and we expect to continue to incur losses

and negative operating cash flows at least through the near future.

Roran, which is a related party to the Company, has agreed to advance

our Company a limited amount of funding in order to partially meet our most critical cash requirements.

The Company’s note payable

to Roran, and related accrued interest, was due upon maturity on June 19, 2020 and no maturity extension has been granted to date.

Company does not presently possess sufficient resources to satisfy its obligations.

For further discussion of the advances made by Roran,

see Notes 3 and 4.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health Organization

characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued

increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations,

and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total

lock-down orders and business limitations and shutdowns.

The ultimate impact of the COVID-19 pandemic on our business is unknown and

will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity

of the COVID-19 pandemic and any additional preventative and protective actions that governments may direct.

Management believes the

capital markets have been negatively impacted by COVID-19, which negatively impacts the Company’s ability to consummate a merger

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

2 - SIGNIFICANT ACCOUNTING POLICIES

4 unchanged sentences

of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses

during the reporting periods.

significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached

to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the

financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about

the carrying values of assets and liabilities that are not readily apparent from other sources.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting

significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these

estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial

statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values

of assets and liabilities that are not readily apparent from other sources.

regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes

in facts and circumstances, historical experience, and reasonable assumptions.

After such evaluations, if deemed appropriate,

those estimates are adjusted accordingly.

After such evaluations, if deemed appropriate, those estimates

are adjusted accordingly.

results could differ from those estimates.

Financial Instruments

Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial

instruments if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks

of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured

at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings

as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under

applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts

are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the

fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded

in the instrument.

Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments

if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative

instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument

that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable

generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument

with the same terms as the embedded derivative instrument would be considered a derivative instrument.

An exception to this rule is when

the host instrument is deemed to be conventional, as that term is described under applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts are recorded

for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying

common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

CAPITAL CORPORATION

1 unchanged sentence

conversion feature –

The issuance of the convertible debt described in Note 3 generated a beneficial conversion feature

(“BCF”), which arises when a debt or equity security is issued with a non-separated embedded conversion option that

is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is

less than the market price of the underlying stock at the commitment date.

The Company recognized the BCF by allocating the intrinsic

value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference

between the effective conversion price per share and the fair value of common stock per share on the commitment date, resulting

in a discount on the convertible debt (recorded as a component of additional paid-in capital).

The BCF is amortized into interest

expense over the life of the related debt.

Company follows subtopic 850-10 of the FASB Accounting Standards Codification (“ASC”) for the identification of related

parties and disclosure of related party transactions.

The issuance of the convertible debt described in Note 3 generated a beneficial conversion feature (“BCF”),

which arises when a debt or equity security is issued with a non-separated embedded conversion option that is beneficial to the investor

or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying

stock at the commitment date.

The Company recognized the BCF by allocating the intrinsic value of the conversion option, which is the

number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share

and the fair value of common stock per share on the commitment date, resulting in a discount on the convertible debt (recorded as a component

of additional paid-in capital).

The BCF is amortized into interest expense over the life of the related debt.

Company follows subtopic 850-10 of the FASB Accounting Standards Codification (“ASC”) for the identification of related parties

and disclosure of related party transactions.

to ASC 850-10-20 related parties include (a) affiliates (“Affiliate”

means, with respect to any specified Person,

any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common

control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company;

entities for which investments in their equity securities would be required, absent the election of the fair value option under

the Fair Value Option Subsection of ASC 825–10–15, to be accounted for by the equity method by the investing entity;

(c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship

of management;

means, with respect to any specified Person, any other

Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such

Person, as such terms are used in and construed under Rule 405 under the Securities Act) of the Company;

(b) entities for which investments

in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of

ASC 825–10–15, to be accounted for by the equity method by the investing entity;

such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;

(d) principal owners of the Company;

(e) management of the Company;

(f) other parties with which the Company may

deal if one party controls or can significantly influence the management or operating policies of the other to an extent that

one of the transacting parties might be prevented from fully pursuing its own separate interests;

and (g) other parties that can

significantly influence the management or operating policies of the transacting parties or that have an ownership interest in

one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties

might be prevented from fully pursuing its own separate interests.

(f) other parties with which the Company may deal if one party controls or can significantly influence

the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing

its own separate interests;

and (g) other parties that can significantly influence the management or operating policies of the transacting

parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that

one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense

allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated

in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall

(a) the nature of the relationship(s) involved;

(b) a description of the transactions, including transactions to which

no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other

information deemed necessary to an understanding of the effects of the transactions on the financial statements;

amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the

method of establishing the terms from that used in the preceding period;

and, (d) amounts due from or to related parties as of

the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

However, disclosure of transactions that are eliminated in the

preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include:

the nature of the relationship(s) involved;

(b) a description of the transactions, including transactions to which no amounts or nominal

amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary

to an understanding of the effects of the transactions on the financial statements;

the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that

used in the preceding period;

and, (d) amounts due from or to related parties as of the date of each balance sheet presented and, if

not otherwise apparent, the terms and manner of settlement.

and Contingencies

1 unchanged sentence

Certain conditions may exist as of the date the financial statements

are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or

fail to occur.

are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to

Management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may

result in such proceedings, management evaluates the perceived merits of any legal proceedings or un-asserted claims as well as

the perceived merits of the amount of relief sought or expected to be sought therein.

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment

indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be

estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material,

would be disclosed.

loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings,

management evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount

of relief sought or expected to be sought therein.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would

be disclosed.

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

can be estimated, then the estimated liability would be accrued in the Company’s financial statements.

If the assessment indicates

that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then

the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Tax Assets and Income Taxes Provision

Company adopted the provisions of ASC 740-10-25-13.

ASC 740-10-25-13 which addresses the determination of whether tax benefits

claimed or expected to be claimed on a tax return should be recorded in the financial statements.

Under ASC 740-10-25-13, the

Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position

will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized

in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty

percent (50%) likelihood of being realized upon ultimate settlement.

ASC 740-10-25-13 also provides guidance on de-recognition,

classification, interest, and penalties on income taxes, accounting in interim periods and requires increased disclosures.

Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC

740-10-25-13.

Company follows the provisions of ASC 740-10-25-13, which addresses the determination of whether tax benefits claimed or

expected to be claimed on a tax return should be recorded in the financial statements.

Under ASC 740-10-25-13, the Company may recognize

the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination

by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from

such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized

upon ultimate settlement.

ASC 740-10-25-13 also provides guidance on de-recognition, classification, interest, and penalties on income

taxes, accounting in interim periods and requires increased disclosures.

The Company had no material adjustments to its liabilities for

unrecognized income tax benefits.

estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying

2 unchanged sentences

tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous

estimates of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in

these jurisdictions.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates

of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.

In management’s opinion, adequate provisions for income taxes have been made for all years.

taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

years that remain subject to examination by major tax jurisdictions are generally the prior three (3) years for federal purposes,

and the prior four (4) years for state purposes;

however, as a result of the Company’s operating losses, all tax years remain

subject to examination by tax authorities.

If actual taxable income by tax jurisdiction

varies from estimates, additional allowances or reversals of reserves may be necessary.

years that remain subject to examination by major tax jurisdictions are generally the prior three (3) years for federal purposes, and

the prior four (4) years for state purposes;

however, as a result of the Company’s operating losses, all tax years remain subject

to examination by tax authorities.

Loss Per Common Share

Company computes net income or loss per share in accordance with ASC 260 Earnings Per Share.

Under the provisions of the Earnings

per Share Topic ASC, basic net loss per share is computed by dividing the net loss available to common stockholders for the period

by the weighted average number of shares of common stock outstanding during the period.

The calculation of diluted net loss per

share gives effect to common stock equivalents;

Under the provisions of the Earnings per

Share Topic ASC, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the

weighted average number of shares of common stock outstanding during the period.

The calculation of diluted net loss per share gives

effect to common stock equivalents;

however, potential common shares are excluded if their effect is anti-dilutive.

Issued Accounting Pronouncements

time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company

as of the specified effective date.

Unless otherwise discussed, we believe that the impact of recently issued standards that are

not yet effective will not have a material impact on our financial position or results of operations upon adoption.

time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies that are adopted by the Company as

of the specified effective date.

Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet

effective will not have a material impact on our financial position or results of operations upon adoption.

CAPITAL CORPORATION

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March 30, 2010, the SBA notified the Company that its account had been transferred to liquidation status and that the then outstanding

debentures of $16.1 million-plus accrued interest (the “Debentures”) were due and payable within fifteen days of the

date of the letter.

debentures of $16.1 million-plus accrued interest (the “Debentures”) were due and payable within fifteen days of the date

of the letter.

The Company did not possess adequate liquid assets to make this payment.

The Company negotiated terms of a

settlement agreement with the SBA effective September 1, 2010, which allowed the Company’s management to liquidate the portfolio

so long as there are no events of default.

The Debentures were repurchased by the SBA in September 2010, represented by a Note

Agreement between the SBA and the Company.

The Company negotiated terms of a settlement

agreement with the SBA effective September 1, 2010, which allowed the Company’s management to liquidate the portfolio so long as

there are no events of default.

The Debentures were repurchased by the SBA in September 2010, represented by a Note Agreement between

the SBA and the Company.

The Note Agreement had a maturity of March 31, 2013.

In the event of a default, the

SBA had the ability to seek receivership.

May 24, 2012 the SBA delivered to the Company a notice of an event of default for failure to meet the principal repayment schedule

under the Note Agreement (the “

In the event of a default, the SBA had the ability to seek

receivership.

May 24, 2012 the SBA delivered to the Company a notice of an event of default for failure to meet the principal repayment schedule under

the Note Agreement (the “

Notice ”).

Under the terms of the Notice and the Note Agreement, the SBA maintained

a continuing right to terminate the Note Agreement and appoint a receiver to manage the Company’s assets.

November 20, 2013, the SBA filed a complaint in the United States District Court for the Eastern District of Virginia seeking,

among other things, receivership for the Company and judgment in the amount outstanding under the Note Agreement plus continuing

The complaint alleged that as of October 31, 2013, there remained an outstanding balance of $11,762,634 under the Note

Agreement, including interest, which continued to accrue at the rate of $2,021 per day.

The SBA, in filing the complaint, requested

that the court take exclusive jurisdiction of the Company and all of its assets wherever located and appoint the SBA as permanent

receiver of the Company to liquidate all of the Company’s assets and satisfy the claims of its creditors in the order of

priority as determined by the court.

Under the terms of the Notice and the Note Agreement, the SBA maintained a continuing

right to terminate the Note Agreement and appoint a receiver to manage the Company’s assets.

November 20, 2013, the SBA filed a complaint in the United States District Court for the Eastern District of Virginia seeking, among

other things, receivership for the Company and judgment in the amount outstanding under the Note Agreement plus continuing interest.

The complaint alleged that as of October 31, 2013, there remained an outstanding balance of $11,762,634 under the Note Agreement, including

interest, which continued to accrue at the rate of $2,021 per day.

The SBA, in filing the complaint, requested that the court take exclusive

jurisdiction of the Company and all of its assets wherever located and appoint the SBA as permanent receiver of the Company to liquidate

all of the Company’s assets and satisfy the claims of its creditors in the order of priority as determined by the court.

Company initially took steps to contest the legal action initiated by the SBA and to oppose the receivership action.

On April 29, 2014,

the Board of Directors of the Company, as then constituted (the “

Board ”), met to reconsider the decision

to contest the SBA’s legal action.

In light of developments occurring since December of 2013, including projections of its

portfolio companies and discussions with the SBA, the Board determined, after consultation with and advice of its counsel, that

it was not in the best interests of the Company and its shareholders to continue to contest the legal action.

The SBA was informed

of this determination.

The Board also decided to consent to the receivership process.

Board ”), met to reconsider the decision to contest

the SBA’s legal action.

In light of developments occurring since December of 2013, including projections of its portfolio companies

and discussions with the SBA, the Board determined, after consultation with and advice of its counsel, that it was not in the best interests

of the Company and its shareholders to continue to contest the legal action.

The SBA was informed of this determination.

The Board also

decided to consent to the receivership process.

May 28, 2014, with the Company’s consent, the court having jurisdiction over the action filed by the SBA (the “

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Order ”).

The Order appointed the SBA receiver of the Company to marshal and liquidate

in an orderly manner all of the Company’s assets and entered judgment in favor of the United States of America, on behalf

of the SBA, against the Company in the amount of $11,770,722.

Such amount represents $11,700,000 in principal and $70,722 in accrued

The Court assumed jurisdiction over the Company and the SBA was appointed receiver effective May 28, 2014.

The Order appointed the SBA receiver of the Company to marshal and liquidate in an orderly

manner all of the Company’s assets and entered judgment in favor of the United States of America, on behalf of the SBA, against

the Company in the amount of $11,770,722.

Such amount represents $11,700,000 in principal and $70,722 in accrued interest.

assumed jurisdiction over the Company and the SBA was appointed receiver effective May 28, 2014.

June 28, 2017, the Receivership was terminated and a final order entered by the Court provided Roran with control of the Company.

As of June 30, 2019, the Company’s outstanding judgment payable totaled $0, as the judgment had been satisfied in full.

of June 30, 2019, the Company’s outstanding judgment payable totaled $0, as the judgment had been satisfied in full.

purchased the Company’s outstanding judgment payable owed to the SBA from the SBA in July 2017.

As such, all amounts due

under the outstanding judgment payable were owed to Roran rather than the SBA.

Upon purchase, the Company began to accrue interest

that was due under the original terms of the judgment payable.

On May 16, 2019, Roran forgave the entire principal amount and

interest due thereon of $10,609,635.

As such, all amounts due under

the outstanding judgment payable were owed to Roran rather than the SBA.

Upon purchase, the Company began to accrue interest that was

due under the original terms of the judgment payable.

On May 16, 2019, Roran forgave the entire principal amount and interest due thereon

of $10,609,635.

CAPITAL CORPORATION

TO UNAUDITED FINANCIAL STATEMENTS

September 19, 2017, the Company entered into a Convertible Loan Agreement with Roran (the “Loan Agreement”).

to the Loan Agreement, Roran agreed to loan the Company an amount not to exceed a total of $150,000 in principal over 18 months.

On June 17, 2019, the Company amended the Loan Agreement increasing the loan amount to $200,000 and extending the maturity date

to September 19, 2019.

Each advance under the Loan Agreement will be documented under a Convertible Promissory Note issued by

the Company in favor of Roran (the “Note”).

the Loan Agreement, Roran agreed to loan the Company an amount not to exceed a total of $150,000 in principal over 18 months.

June 17, 2019, the Company amended the Loan Agreement increasing the loan amount to $200,000 and extending the maturity date to

September 19, 2019.

Each advance under the Loan Agreement will be documented under a Convertible Promissory Note issued by the

Company in favor of Roran (the “Note”).

The Note bears interest at the rate of 12% per annum.

Roran has the right

to convert all or any portion of the Note into shares of the Company’s common stock at a conversion price equal to 60% of

the share price.

Roran has the right to

convert all or any portion of the Note into shares of the Company’s common stock at a conversion price equal to 60% of the

The Company recorded a BCF due to the conversion option of $116,800, which has been fully amortized as of September 30,

The debt discount has been amortized as interest expense through September 30, 2019.

On December 13, 2019, the Company

amended its Loan Agreement Note with Roran as follows:

(i) the total amount to be loaned was increased to $250,000, and (ii) the

maturity date was extended to June 19, 2020.

Roran has agreed to extend the loan and advance additional funds until further

negotiations have been concluded.

On June 8, 2020, Roran converted $124,500 principal amount of its promissory note with the

Company and $25,500 of accrued and unpaid interest thereon, totaling $150,000, into 4,166,666 shares of Company Common Stock at

the stated conversion price per share of $0.036.

The remaining balance due on the promissory note, as of the conversion date,

was $104,838 in principal and $19,988 in interest.

As a result of the advances made pursuant to the Loan Agreement, the Company

has incurred total obligations of $137,338 as of December 31, 2020 (net of debt discounts and exclusive of accrued interest).

On December 13, 2019, the Company amended

its Loan Agreement Note with Roran as follows:

(i) the total amount to be loaned was increased to $250,000, and (ii) the maturity

date was extended to June 19, 2020.

Although the maturity

date has passed, Roran has agreed to extend the loan and advance additional funds until further negotiations have

been concluded.

On June 8, 2020, Roran converted $124,500 principal amount of its promissory note with the Company and $25,500 of

accrued and unpaid interest thereon, totaling $150,000, into 4,166,666 shares of Company Common Stock at the stated conversion price

per share of $0.036.

The remaining balance due on the promissory note, as of the conversion date, was $104,838 in principal and

$19,988 in interest.

As a result of the advances made pursuant to the Loan Agreement, the Company has incurred total obligations of

$142,338 as of March 31, 2021 (net of debt discounts and exclusive of accrued interest).

CAPITAL CORPORATION

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4 - RELATED PARTY TRANSACTIONS

following individuals and entities have been identified as related parties based on their family affiliation with our Chairman

of the Board:

following individuals and entities have been identified as related parties based on their family affiliation with our Chairman of the

following amounts were owed to related parties affiliated with the CEO and Chairman of the Board, at the dates indicated:

December 31, 2020

Convertible Note Payable (See Note 3)

Interest on Convertible Note Payable

Note Payable (See Note 3)

on Convertible Note Payable

SUBSEQUENT EVENTS

Company has evaluated all events that occurred after the balance sheet date through the date of the filing of this Quarterly Report

on Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported except that the Company

has been deregistered as an investment company as referenced in these financial statements.

Company has evaluated all events that occurred after the balance sheet date through the date of the filing of this Quarterly Report on

Form 10-Q to determine if they must be reported, and there are no subsequent events to be reported.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking

Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results

of Operations”

Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

in Item 2 of Part I of this report, include forward-looking statements.

Information in this report contains

“forward-looking statements”

which may be identified by the use of forward-looking terminology, such as “may”,

“shall”, “will”, “could”, “expect”, “estimate”, “anticipate”,

“predict”, “probable”, “possible”, “should”, “continue”, “believes”,

“estimates”, “projects”, “targets”, or similar terms, variations of those terms or the negative

of those terms.

Our management has compiled the forward-looking statements specified in the following information based on assumptions

made by management and considered by management to be reasonable.

Our future operating results, however, are impossible to predict

and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

Statements in this report

concerning the following, without limitation, are forward-looking statements:

Information in this report contains “forward-looking statements”

which may be identified by the use of forward-looking terminology, such as “may”, “shall”, “will”,

“could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”,

“possible”, “should”, “continue”, “believes”, “estimates”, “projects”,

“targets”, or similar terms, variations of those terms or the negative of those terms.

Our management has compiled the forward-looking

statements specified in the following information based on assumptions made by management and considered by management to be reasonable.

Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from

those forward-looking statements.

Statements in this report concerning the following, without limitation, are forward-looking statements:

financial and operating results;

ability to fund operations and business plans, and the timing of any funding or corporate development transactions we may

ability to fund operations and business plans, and the timing of any funding or corporate development transactions we may pursue;

ability to either (i) enter into a new business;

or, (ii) merge with, or otherwise acquire, an active business which would

benefit from operating as a public entity;

or, (ii) merge with, or otherwise acquire, an active business which would benefit

from operating as a public entity;

and future economic and political conditions;

6 unchanged sentences

and the “Company”

this Item 2 refer to Waterside Capital Corporation.

2 refer to Waterside Capital Corporation.

discussion in this section contains forward-looking statements.

These statements relate to future events or our future financial

These statements relate to future events or our future financial performance.

We have attempted to identify forward-looking statements by terminology such as “anticipate,”

13 unchanged sentences

or “will”

or the negative of these terms or other comparable terminology, but their absence does not mean that a statement

is not forward-looking.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors,

which could cause our actual results to differ from those projected in any forward-looking statements we make.

You should understand

that it is not possible to predict or identify all risks and uncertainties and you should not consider the risks and uncertainties

identified by us to be a complete set of all potential risks or uncertainties that could materially affect us.

You should not

place undue reliance on the forward-looking statements we make herein because some or all of them may turn out to be wrong.

undertake no obligation to update any of the forward-looking statements contained herein to reflect future events and developments,

except as required by law.

following discussion of the results of operations for the three and six months ended December 31, 2020, and 2019, respectively,

should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere

in this Quarterly Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that

involve risks and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of

events could differ materially from those anticipated in these forward-looking statements because of a number of factors.

An investment

in our common stock involves a high degree of risk.

Readers of this Quarterly Report on Form 10-Q should carefully consider the

risks set forth in the Risk Factors and Business sections of our Annual Report on Form 10-K for the year ended June 30, 2020,

filed with the SEC on September 25, 2020.

Our management has compiled the forward-looking statements specified in the following

information based on assumptions made by management and considered by management to be reasonable.

Our future operating results,

however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of

future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances.

As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions

from and among reasonable alternatives require the exercise of judgment.

To the extent that the assumed events do not occur, the

outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability

of those forward-looking statements.

No assurance can be given that any of the assumptions relating to the forward-looking statements

specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

Company was formed in the Commonwealth of Virginia on July 13, 1993 and was a closed-end investment company licensed by the SBA

The Company previously made equity investments in and provided loans to, small businesses to finance their growth,

expansion, and development.

Under applicable SBA regulations, the Company was restricted to investing only in qualified small

businesses as contemplated by the Small Business Investment Act of 1958.

As a registered investment company under the Investment

Company Act, the Company’s investment objective was to provide its shareholders with a high level of income, with capital

appreciation as a secondary objective.

or the negative of these

terms or other comparable terminology, but their absence does not mean that a statement is not forward-looking.

These statements are

only predictions and involve known and unknown risks, uncertainties and other factors, which could cause our actual results to differ

from those projected in any forward-looking statements we make.

You should understand that it is not possible to predict or identify

all risks and uncertainties and you should not consider the risks and uncertainties identified by us to be a complete set of all potential

risks or uncertainties that could materially affect us.

You should not place undue reliance on the forward-looking statements we make

herein because some or all of them may turn out to be wrong.

We undertake no obligation to update any of the forward-looking statements

contained herein to reflect future events and developments, except as required by law.

following discussion of the results of operations for the three and nine months ended March 31, 2021, and 2020, respectively, should

be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this

Quarterly Report on Form 10-Q.

Our discussion includes forward-looking statements based upon current expectations that involve risks

and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially

from those anticipated in these forward-looking statements because of a number of factors.

An investment in our common stock involves

a high degree of risk.

Readers of this Quarterly Report on Form 10-Q should carefully consider the risks set forth in the Risk Factors

and Business sections of our Annual Report on Form 10-K for the year ended June 30, 2020, filed with the SEC on September 25, 2020.

management has compiled the forward-looking statements specified in the following information based on assumptions made by management

and considered by management to be reasonable.

Our future operating results, however, are impossible to predict and no representation,

guaranty, or warranty is to be inferred from those forward-looking statements.

assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future

events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances.

the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among

reasonable alternatives require the exercise of judgment.

To the extent that the assumed events do not occur, the outcome may vary substantially

from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements.

No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information

are accurate, and we assume no obligation to update any such forward-looking statements.

Company was formed in the Commonwealth of Virginia on July 13, 1993 and was a closed-end investment company licensed by the SBA as an

The Company previously made equity investments in and provided loans to, small businesses to finance their growth, expansion, and

Under applicable SBA regulations, the Company was restricted to investing only in qualified small businesses as contemplated

by the Small Business Investment Act of 1958.

As a registered investment company under the Investment Company Act, the Company’s

investment objective was to provide its shareholders with a high level of income, with capital appreciation as a secondary objective.

The Company made its first investment in a small business in October 1996.

May 2014, the Company effectively ceased operations.

The Company consented to a court order appointing the SBA as receiver of

the Company to marshal and liquidate in an orderly manner all of the Company’s assets.

That order also entered judgment

in favor of the United States of America, on behalf of the SBA, against the Company in the amount of $11,770,722.

appointed receiver effective May 28, 2014.

the course of the Receivership, the activity of the Company was limited to the liquidation of the Company’s assets by the

receiver and the payment of the proceeds therefrom to the SBA and for the expenses of the Receivership.

The SBIC license granted

to the Company by the SBA was revoked by the SBA effective March 20, 2017.

The Company consented to a court order appointing the SBA as receiver of the Company

to marshal and liquidate in an orderly manner all of the Company’s assets.

That order also entered judgment in favor of the United

States of America, on behalf of the SBA, against the Company in the amount of $11,770,722.

The SBA was appointed receiver effective May

the course of the Receivership, the activity of the Company was limited to the liquidation of the Company’s assets by the receiver

and the payment of the proceeds therefrom to the SBA and for the expenses of the Receivership.

The SBIC license granted to the Company

by the SBA was revoked by the SBA effective March 20, 2017.

On June 28, 2017, the Receivership was terminated.

The Final Order specifically stated that “Control of Waterside shall be unconditionally transferred and returned to its

shareholders c/o Roran Capital, LLC (“Roran”) upon notification of entry of this Order.

The Final Order specifically

stated that “Control of Waterside shall be unconditionally transferred and returned to its shareholders c/o Roran Capital, LLC

(“Roran”) upon notification of entry of this Order.

termination of the Receivership, Roran took possession of all books and records made available to it by the SBA.

With no assets

and no SBIC license from the SBA, no income, and liabilities, at that time, in excess of $10,000,000, it became clear to the Company

that continuing to operate as a registered investment company was impossible.

The Company and Roran entered into a Convertible

Loan Agreement on September 19, 2017, as amended, to fund the Company’s expenses while it sought a new business to undertake

or to merge with an existing business.

With no assets and no

SBIC license from the SBA, no income, and liabilities, at that time, in excess of $10,000,000, it became clear to the Company that continuing

to operate as a registered investment company was impossible.

The Company and Roran entered into a Convertible Loan Agreement on September

19, 2017, as amended, to fund the Company’s expenses while it sought a new business to undertake or to merge with an existing business.

The New Board has continued to work toward achieving that goal.

April 22, 2020, the SEC issued an order under Section 8(t) of the Investment Company Act 1940, as amended, declaring that the

Company has ceased to be an investment company.

As a result the Company is now a reporting company under the Securities Exchange

Act of 1934, as amended.

time-to-time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other

standard-setting bodies, relating to the treatment and recording of certain accounting transactions.

Unless otherwise discussed

herein, the management of the Company has determined that these recent accounting pronouncements will not have a material impact

on the financial position or results of operations of the Company.

April 22, 2020, the SEC issued an order under Section 8(t) of the Investment Company Act 1940, as amended, declaring that the Company

has ceased to be an investment company.

As a result the Company is now a reporting company under the Securities Exchange Act of 1934,

Accounting Policies

4 unchanged sentences

In preparing our financial statements,

we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of

contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting periods.

accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and

judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact

of the estimate on financial condition or operating performance is material.

significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached

to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the

financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about

the carrying values of assets and liabilities that are not readily apparent from other sources.

we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment

necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate

on financial condition or operating performance is material.

significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these

estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial

statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values

of assets and liabilities that are not readily apparent from other sources.

regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes

in facts and circumstances, historical experience and reasonable assumptions.

After such evaluations, if deemed appropriate, those

estimates are adjusted accordingly.

After such evaluations, if deemed appropriate, those estimates

are adjusted accordingly.

results could differ from those estimates.

our significant accounting policies are described in more detail in Note 2 of our quarterly financial statements included in this

Quarterly Report, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation

of our financial statements:

our significant accounting policies are described in more detail in Note 2 of our quarterly financial statements included in this Quarterly

Report, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial

as a Going Concern

1 unchanged sentence

continuity of operations, the realization of assets, and liquidation of liabilities in the normal course of business.

given our current financial position and lack of liquidity, there is substantial doubt about our ability to continue as a going

However, given

our current financial position and lack of liquidity, there is substantial doubt about our ability to continue as a going concern.

Financial Instruments

Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial

instruments if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks

of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host

contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured

at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings

as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative

An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under

applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts

are recorded for the intrinsic value of conversion options embedded in the instruments based upon the differences between the

fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded

in the instrument.

Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments

if certain criteria are met.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative

instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument

that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable

generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument

with the same terms as the embedded derivative instrument would be considered a derivative instrument.

An exception to this rule is when

the host instrument is deemed to be conventional, as that term is described under applicable GAAP.

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, discounts are recorded

for the intrinsic value of conversion options embedded in the instruments based upon the differences between the fair value of the underlying

common stock at the commitment date of the transaction and the effective conversion price embedded in the instrument.

Conversion Feature

issuance of the convertible debt issued by the Company (described in Note 3 to the Financial Statements) generated a beneficial

conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option

that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that

is less than the market price of the underlying stock at the commitment date.

The Company recognized the BCF by allocating the

intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by

the difference between the effective conversion price per share and the fair value of common stock per share on the commitment

date, resulting in a discount on the convertible debt (recorded as a component of additional paid-in capital).

issuance of the convertible debt issued by the Company (described in Note 3 to the Financial Statements) generated a beneficial conversion

feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial

to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market

price of the underlying stock at the commitment date.

The Company recognized the BCF by allocating the intrinsic value of the conversion

option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion

price per share and the fair value of common stock per share on the commitment date, resulting in a discount on the convertible debt

(recorded as a component of additional paid-in capital).

Value of Financial Instruments

2 unchanged sentences

to measure the fair value of its financial instruments.

Paragraph 820-10-35-37 establishes a framework for measuring fair value

in accounting principles generally accepted in the United States of America (U.S.

GAAP), and expands disclosures about fair value

measurements.

To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37

establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three

(3) broad levels.

The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting

principles generally accepted in the United States of America (U.S.

GAAP), and expands disclosures about fair value measurements.

increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair

value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.

(3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly

observable as of the reporting date.

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable

as of the reporting date.

Pricing inputs that are generally unobservable inputs and not corroborated by market data.

assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or

similar techniques and at least one significant model assumption or input is unobservable.

fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities

and the lowest priority to unobservable inputs.

If the inputs used to measure the financial assets and liabilities fall within

more than one level described above, the categorization is based on the lowest level input that is significant to the fair value

measurement of the instrument.

involving related parties cannot be presumed to be carried out on an arms-length basis, as the requisite conditions of competitive,

free-market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the

related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless

such representations can be substantiated.

assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar

techniques and at least one significant model assumption or input is unobservable.

fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and

the lowest priority to unobservable inputs.

If the inputs used to measure the financial assets and liabilities fall within more than

one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of

the instrument.

involving related parties cannot be presumed to be carried out on an arms-length basis, as the requisite conditions of competitive, free-market

dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the related party transactions

were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Tax Assets and Income Taxes Provision

Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification.

Paragraph 740-10-25-13

which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded

in the financial statements.

Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position

only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on

the technical merits of the position.

The tax benefits recognized in the financial statements from such a position should be measured

based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.

Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest, and penalties on income taxes, accounting

in interim periods and requires increased disclosures.

The Company had no material adjustments to its liabilities for unrecognized

income tax benefits according to the provisions of paragraph 740-10-25-13.

Paragraph 740-10-25-13 which

addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial

Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more

likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the

The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit

that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.

Paragraph 740-10-25-13 also provides

guidance on de-recognition, classification, interest, and penalties on income taxes, accounting in interim periods and requires increased

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions

of paragraph 740-10-25-13.

estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying

2 unchanged sentences

tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous

estimates of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in

these jurisdictions.

makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates

of tax liability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.

In management’s opinion, adequate provisions for income taxes have been made for all years.

taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

If actual taxable income by tax jurisdiction

varies from estimates, additional allowances or reversals of reserves may be necessary.

assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”)

carryforwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely

than not and accordingly, a full valuation allowance offsets the potential tax benefits of the net loss carry-forwards.

made this assumption based on (a) the Company has incurred recurring losses and presently has no revenue-producing business, (b)

general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public

or private offering, among other factors.

of Three and Six Months Ended December 31, 2020, and 2019

the three and six months periods ended December 31, 2020, and 2019, the Company did not have any operations, and therefore, there

were no revenues.

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its

filing obligations with the SEC.

carryforwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not

and accordingly, a full valuation allowance offsets the potential tax benefits of the net loss carry-forwards.

Management made this assumption

based on (a) the Company has incurred recurring losses and presently has no revenue-producing business, (b) general economic conditions,

and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

of Three and Nine Months Ended March 31, 2021, and 2020

the three and nine months periods ended March 31, 2021, and 2020, the Company did not have any operations, and therefore, there were

Expenses were limited to maintaining the Company in good standing and staying current, respectively, in its filing obligations

with the SEC.

Administrative

fees totaled $23,162 and $19,655 for the three months ended December 31, 2020, and 2019.

The increase was primarily due to more

activity in the current period as the prior comparable period required less work to keep the Company current in its SEC filings.

fees totaled $45,141 and $32,452 for the six months ended December 31, 2020, and 2019.

The increase was primarily due to more

activity in the current period as the prior comparable period required less work to keep the Company current in its SEC filings.

expense totaled $15,523 and $7,239 for the three months ended December 31, 2020, and 2019.

The increase in interest expense was

due to the immediate expensing of interest resulting from the maturity of the Roran Note in June 2020.

expense totaled $28,793 and $29,900 for the six months ended December 31, 2020, and 2019.

The decrease in interest expense was

due to the immediate expensing of interest resulting from the maturity of the Roran Note in June 2020, offset by a decrease in

the amount due under the Note.

reported a net loss of $38,685 and $26,895 during the three months ended December 31, 2020, and 2019.

The increase in net loss

was directly attributable to the increase in professional fees and interest expense.

reported a net loss of $73,934 and $62,352 during the six months ended December 31, 2020, and 2019.

The increase in net loss was

directly attributable to the increase in professional fees offset somewhat by a slight decrease in interest expense.

fees totaled $6,764 and $11,747 for the three months ended March 31, 2021, and 2020.

The decrease was primarily due to less activity

and increase efficiencies in the current period as the prior comparable period required more work to keep the Company current

in its SEC filings.

fees totaled $51,905 and $44,198 for the nine months ended March 31, 2021, and 2020.

The increase was primarily due to more activity

in the current period as the prior comparable period required less work to keep the Company current in its SEC filings.

expense totaled $7,560 and $13,043 for the three months ended March 31, 2021, and 2020.

The decrease in interest expense was due to the

immediate expensing of interest resulting from the maturity of the Roran Note in June 2020, offset by a decrease in the amount due under

expense totaled $36,353 and $42,944 for the nine months ended March 31, 2021, and 2020.

The decrease in interest expense was due to the

immediate expensing of interest resulting from the maturity of the Roran Note in June 2020, offset by a decrease in the amount due under

reported a net loss of $14,324 and $24,790 during the three months ended March 31, 2021, and 2020.

The decrease in net loss was directly

attributable to the decrease in professional fees and interest expense.

reported a net loss of $88,258 and $87,142 during the nine months ended March 31, 2021, and 2020.

The increase in net loss was directly

attributable to the increase in professional fees offset somewhat by a decrease in interest expense.

and Capital Resources

have incurred recurring operating losses and negative operating cash flows through December 31, 2020, and we expect to continue

to incur losses and negative operating cash flows at least through the near future.

We have obtained funding through a convertible

loan facility of up to $250,000 to meet our most critical cash requirements, and of this amount, approximately $112,662 remains

available to be drawn as of December 31, 2020.

The loan facility matured on June 19, 2020 and Roran has agreed to extend the

loan and advance additional funds until negotiations have concluded.

The Company does not presently possess resources

to repay related borrowings and accrued interest.

a result of the aforementioned factors, management has concluded that there is substantial doubt about our ability to continue

as a going concern.

Our independent registered public accounting firm, in its report on our fiscal 2020 financial statements,

expressed substantial doubt about our ability to continue as a going concern.

Our financial statements as of and for the

period ended December 31, 2020, do not contain any adjustments for this uncertainty.

In response to our Company’s cash needs,

we raised funding as described in Note 3 to our financial statements.

Any additional amounts raised will be used for our future

investing and operating cash flow needs.

However, there can be no assurance that we will be successful in raising additional amounts

of financing.

have incurred recurring operating losses and negative operating cash flows through March 31, 2021, and we expect to continue to incur

losses and negative operating cash flows at least through the near future.

We have obtained funding through a convertible loan facility

of up to $250,000 to meet our most critical cash requirements, and of this amount, approximately $107,662 remains available to be drawn

as of March 31, 2021.

The loan facility matured on June 19, 2020 and Roran has agreed to extend the loan and advance additional funds

until negotiations have concluded.

The Company does not presently possess resources to repay related borrowings and accrued interest

and there is no assurance that the Company will be able to borrow additional funds.

a result of the aforementioned factors, management has concluded that there is substantial doubt about our ability to continue as a going

Our independent registered public accounting firm, in its report on our fiscal 2020 financial statements, expressed substantial

doubt about our ability to continue as a going concern.

Our financial statements as of and for the period ended March 31, 2021, do not

contain any adjustments for this uncertainty.

In response to our Company’s cash needs, we raised funding as described in Note 3

to our financial statements.

Any additional amounts raised will be used for our future investing and operating cash flow needs.

there can be no assurance that we will be successful in raising additional amounts of financing.

Management’s

plan to seek, investigate, and consummate a merger or other business combination, purchase of assets or other strategic transaction

(i.e., a merger) with a corporation, partnership, limited liability company or other operating business entity, or enter into

a new business (collectively, a “Business Target”) desiring the perceived advantages of becoming a publicly reporting

and publicly held corporation.

plan to seek, investigate, and consummate a merger or other business combination, purchase of assets or other strategic transaction (i.e.,

a merger) with a corporation, partnership, limited liability company or other operating business entity, or enter into a new business

(collectively, a “Business Target”) desiring the perceived advantages of becoming a publicly reporting and publicly held

We have no operating business and conduct minimal operations necessary to meet regulatory requirements.

Our ability to commence any operations is contingent upon obtaining adequate financial resources.

Our ability to commence

any operations is contingent upon obtaining adequate financial resources.

are not currently engaged 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 money borrowed from Roran or other sources.

The costs of investigating and analyzing business combinations

for the next 12 months and beyond such time will be paid with money borrowed from Roran or other sources.

the next 12 months, we anticipate incurring costs related to (i) filing of Exchange Act reports;

and, (ii) identifying

and consummating a transaction with a Business Target.

We believe we will be able to meet these costs through the use of funds

borrowed from Roran, or other amounts to be loaned to or invested in us by other investors.

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 needs additional capital.

In the alternative, a business combination may involve the acquisition

of, or merger with, a company which does not require 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.

and, (ii) identifying and consummating

a transaction with a Business Target.

We believe we will be able to meet these costs through the use of funds borrowed from Roran, or

other amounts to be loaned to or invested in us by other investors.

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 needs additional capital.

In the alternative, a business combination may involve the acquisition of, or

merger with, a company which does not require 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.

Zelmanovitch is our president, secretary, and our chief financial officer.

Zelmanovitch is only required to devote a small

portion of his time to our affairs on a part-time or as-needed basis.

Zelmanovitch is only required to devote a small portion

of his time to our affairs on a part-time or as-needed basis.

No compensation has been paid to Mr.

Zelmanovitch for his

services as an officer and director.

We do not anticipate hiring any full-time employees as long as we are seeking and evaluating

Business Targets.

December 31, 2020, we had only $1,783 cash on hand.

Since we have no revenue or plans to generate any revenue, we will be dependent

upon loans to fund expenses incurred in excess of our cash.

Also, related party obligations totaling $165,212, which includes

convertible note outstanding and accrued interest payable, are outstanding as of December 31, 2020.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health

Organization characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy

as a result of the continued increase in the number of cases and affected countries and actions by public health and governmental

authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions,

quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns.

The ultimate impact

of the COVID-19 pandemic on our business is unknown and will depend on future developments, which are highly uncertain and cannot

be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and

protective actions that governments may direct.

Management believes the capital markets have been negatively impacted by COVID-19,

which negatively impacts the Company’s ability to consummate a merger transaction.

Zelmanovitch for his services as an

officer and director.

We do not anticipate hiring any full-time employees as long as we are seeking and evaluating Business Targets.

March 31, 2021, we had only $1,519 cash on hand.

Since we have no revenue or plans to generate any revenue, we will be dependent upon

loans to fund expenses incurred in excess of our cash.

Also, related party obligations totaling $174,440, which includes convertible

note outstanding and accrued interest payable, are outstanding as of March 31, 2021.

December 2019, a novel coronavirus disease (“COVID-19”) was initially reported, and in March 2020, the World Health Organization

characterized COVID-19 as a pandemic.

COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued

increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations

and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total

lock-down orders and business limitations and shutdowns.

The ultimate impact of the COVID-19 pandemic on our business is unknown and

will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity

of the COVID-19 pandemic and any additional preventative and protective actions that governments may direct.

Management believes the

capital markets have been negatively impacted by COVID-19, which negatively impacts the Company’s ability to consummate a merger

Sheet Arrangements

are no 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 investors.

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that

are material to investors.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements