Metavesco, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS METAVESCO, INC. CONDENSED BALANCE SHEETS September 30, 2022 June 30, 2022 (Unaudited) Assets Current assets: Cash and cash equivalents $ 5,510 $ 35,151 Prepaid expenses 11,691 13,847 Digital assets held, net of impairment 462,420 434,642 Total current assets 479,621 483,640 Deposit on equipment 72,095 - Total assets $ 551,716 $ 483,640 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued liabilities $ 54,394 $ 26,549 Promissory note (net of debt discount of $ 6,853 and $ 0 , respectively) 18,314 Promissory notes - related parties (net of debt discount of $ 8,306 and $ 0 , respectively) 182,469 100,000 Convertible promissory note (net of debt discount of $ 18,433 and $ 19,441 , respectively) 1,822 559 Convertible promissory notes - related party (net of debt discount of $ 273,523 and $ 328,658 , respectively) 31,782 12,202 Total current liabilities 288,781 139,310 Stockholders’ Equity: Preferred stock; $ 0.0001 par value; 20,000,000 shares authorized - - Series A Convertible Preferred Stock: 22 and 0 shares issued and outstanding at September 30, 2022 and June 30, 2022 - - Preferred stock, value Common stock; $ 0.0001 par value; 100,000,000 shares authorized; 6,082,214 shares issued and outstanding at September30, 2022 and June 30, 2022 608 608 Additional paid-in capital 19,357,840 19,389,924 Shares to be issued 9,000 - Accumulated deficit ( 19,104,513 ) ( 19,046,202 ) Total stockholders’ equity 262,935 344,330 Total liabilities and stockholders’ equity $ 551,716 $ 483,640 The accompanying notes are an integral part of these unaudited condensed financial statements. 3 METAVESCO, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) 2022 2021 Three months ended September 30, 2022 2021 Revenue: Liquidity pool fees 40,430 - Total Revenue 40,430 - Expense Administrative expenses 125,010 21,825 Interest expense 23,542 2,997 Impairment of digital assets held 25,299 - Total Expense 173,851 24,822 Other income (expense) Realized gain (loss) on sales/ exchange digital assets held 75,110 - Total Other income (expense) 75,110 - Net loss $ ( 58,311 ) $ ( 24,822 ) Net loss per share - basic and diluted $ ( 0.01 ) $ ( 0.00 ) Weighted average number of common shares outstanding - basic and diluted 6,082,214 6,082,214 The accompanying notes are an integral part of these unaudited condensed financial statements. 4 METAVESCO, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY For the three months ended September 30, 2022 and 2021 (Unaudited) Shares Par Value Shares Par Value capital issued deficit equity Series A Convertible Preferred Stock ($0.0001 par value) Common Stock ($0.0001 par value) Additional paid-in Shares to be Accumulated Total stockholders’ Shares Par Value Shares Par Value capital issued deficit equity Balance at June 30, 2022 22 $ - 6,082,214 $ 608 $ 19,389,924 $ - $ ( 19,046,202 ) $ 344,330 Warrants - - - - 7,916 - - 7,916 Shares to be issued - - - - - 9,000 - 9,000 Beneficial conversion feature - - - - ( 40,000 ) - - ( 40,000 ) Net loss - - - - - - ( 58,311 ) ( 58,311 ) Balance at September 30, 2022 22 $ - 6,082,214 $ 608 $ 19,357,840 $ 9,000 $ ( 19,104,513 ) $ 262,935 Series A Convertible Preferred Stock ($0.0001 par value) Common Stock ($0.0001 par value) Additional paid-in Shares to be Accumulated Total stockholders’ Shares Par Value Shares Par Value capital issued deficit equity Balance at June 30, 2021 - $ - 6,082,214 $ 608 $ 17,721,420 $ - $ ( 17,930,352 ) $ ( 208,324 ) Beginning balance - $ - 6,082,214 $ 608 $ 17,721,420 $ - $ ( 17,930,352 ) $ ( 208,324 ) Forgiveness of convertible note payable, accrued interest and advances - related party - - - - 207,644 - - 207,644 Net loss - - - - - - ( 24,822 ) ( 24,822 ) Net income (loss) - - - - - - ( 24,822 ) ( 24,822 ) Balance at September 30, 2021 - $ - 6,082,214 $ 608 $ 17,929,064 $ - $ ( 17,955,174 ) $ ( 25,502 ) Ending balance - $ - 6,082,214 $ 608 $ 17,929,064 $ - $ ( 17,955,174 ) $ ( 25,502 ) The accompanying notes are an integral part of these unaudited condensed financial statements. 5 METAVESCO, INC. CONDENSED STATEMENTS OF CASH FLOW (Unaudited) 2022 2021 Three months ended September 30, 2022 2021 Cash Flows from Operating Activities: Net loss $ ( 58,311 ) $ ( 24,822 ) Adjustments to reconcile net loss to net cash used in operating activities Impairment of digital assets held 25,299 - Realized (gain) loss on sales/ exchange digital assets held ( 75,110 ) - Digital assets received as revenue ( 40,430 ) - Digital assets paid as expense 25,249 - Non-cash interest expense 23,542 - Forgiveness of interest – related party - 2,998 Changes in operating assets and liabilities: Increase in prepaid 8,412 - (Decrease) increase in accounts payable and accrued liabilities 27,845 3,413 Net cash used in operating activities ( 63,504 ) ( 18,411 ) Cash Flows from Investing Activities: Purchase of digital assets held ( 55,000 ) - Sale of digital assets held 13,863 - Net cash provided by investing activities ( 41,137 ) - Cash Flows from Financing Activities: Advances from related party - 18,367 Proceeds from issuance of promissory note payable 25,000 - Proceeds from issuance of convertible notes payable - related party 50,000 - Net cash provided by financing activities 75,000 18,367 Net change in cash and cash equivalents ( 29,641 ) ( 44 ) Cash and cash equivalents, beginning of period 35,151 44 Cash and cash equivalents, end of period $ 5,510 $ - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during period for: Interest paid $ - $ - Income taxes paid $ - $ - Non-cash Investing and Financing Activities Purchase of digital assets held with other digital assets $ 1,842,200 $ - Proceeds from sale of digital assets for other digital assets $ 1,842,200 $ - Intrinsic value of embedded beneficial conversion feature on convertible note payable - related party $ 40,000 $ - Deposit on equipment $ 72,095 $ - Warrants issued in conjunction with promissory note $ 7,916 $ - Shares to be issued in conjunction with the amendment of terms of promissory note - related party $ 9,000 $ - Forgiveness of convertible note payable, accrued interest and advances - related party $ - $ 207,644 The accompanying notes are an integral part of these unaudited condensed financial statements. 6 METAVESCO, INC. NOTES TO UNAUDITED FINANCIAL STATEMENTS September 30, 2022 NOTE 1 – ORGANIZATION AND OPERATIONS Metavesco, Inc. (formerly Waterside 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. On 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 28, 2014. The 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. The 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. On September 2, 2021, the Company entered into a Stock Purchase Agreement (the “SPA”) by and between (i) the Company (ii) Ryan Schadel (“Buyer”) and (iii) Roran. Roran agreed to sell to the Buyer 4,247,666 shares of common stock of the Company held by Roran for a total purchase price of $ 385,000 . In conjunction with the SPA, Roran agreed to forgive all amounts due to Roran by the Company totaling $ 207,644 , which is comprised of convertible note payable – related party, accrued interest payable – related party, and advances from related party. The Buyer acquired 4,247,666 shares of the Company’s Common Stock, representing 69.7 % of the issued and outstanding shares of Common Stock. As such, the SPA resulted in a change of control of the Company. Effective November 29, 2021, the Company converted from a Virginia corporation to a Nevada corporation. On December 15, 2021, the Company filed with the Nevada Secretary of State amended and restated articles of incorporation. The amended and restated articles had the effect of (i) increasing the Company’s authorized common stock to 100 million shares, (ii) increasing the Company’s authorized preferred stock to 20 million shares, and (iii) reducing the par value of each of the Company’s common stock and preferred stock to $ 0.0001 per share. Common stock and additional paid-in capital for all periods presented in these financial statements have been adjusted retroactively to reflect the reduction in par value. On December 17, 2021, the majority shareholder and board of directors approved an amendment to the amended and restated articles of incorporation that would change the Company’s name from Waterside Capital Corporation to Metavesco, Inc. The name change was approved by Financial Industry Regulatory Authority (“FINRA”) and was effective June 3, 2022. In March 2022, the Company commenced operations as a web3 enterprise. The Company generates income as a liquidity provider, via decentralized exchanges such as Uniswap. Additionally, the company farms tokens via Proof of Stake protocols on decentralized exchanges as well as centralized exchanges including Coinbase exchange. The Company also invests in promising NFT projects and virtual land, primarily on EVM protocols. The interim 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, 2022. Accordingly, note disclosures which would substantially duplicate the disclosures contained on June 30, 2022, 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. 7 Certain 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 months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the year ending June 30, 2022. For further information, refer to the audited financial statements and notes for the year ended June 30, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on October 7, 2022. Going Concern The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the three months ended September 30, 2022, the Company incurred a net loss of $ 58,311 and used cash in operating activities of $ 63,504 , and on September 30, 2022, had an accumulated deficit of $ 19,104,513 . These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a period one year from the date that the financial statements are issued. The Company will be dependent upon the raising of additional capital through placement of debt and its common stock in order to implement its business plan. There can be no assurance that the Company will be successful in this situation. The Company expects over the next twelve months, cash held at a financial institution will be expended on professional fees, transfer agent, Edgar agent and other administrative costs. The cash held at Coinbase Inc. will be deployed to purchase crypto assets to generate staking rewards and liquidity pool fees. We hope to start paying some of our suppliers and contractors in crypto assets in the coming months. However, there can be no assurance we will be able to pay any of our suppliers and contractors in digital assets. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s June 30, 2022 financial statements included in its 2021 Annual Report on Form 10-K. Fiscal Year-End The Company elected June 30 as its fiscal year-end date. Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with GAAP 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. These 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. Management 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. Management 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. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents include cash and interest-bearing highly liquid investments held at financial institutions, cash on hand that is not restricted as to withdrawal or use with an initial maturity of three months or less, and cash held in accounts at crypto trading venues. At September 30, 2022, $ 5,439 of cash was at held a financial institution which is a member of the Federal Deposit Insurance Corporation (“FDIC”) and $ 71 was held at Coinbase, Inc. (“Coinbase”). The contract with Coinbase, Inc. requires USD balances in a client’s fiat wallet be held in an omnibus custodial account for the benefit of Coinbase’s customers. These accounts are either omnibus bank accounts insured by the FDIC (currently up to $ 250,000 per entity) or trust accounts holding short term U.S. treasuries. Intangible Assets Digital assets held by the Company are accounted for as intangible assets with indefinite useful lives, and are initially measured at cost. The Company assigns costs to transactions on a first-in, first-out basis (FIFO). An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value, which is measured using the quoted price of the digital assets at the time its fair value is being measured. Tokens are subject to impairment losses if the fair value a tokens decreases below the carrying value at any time during the period. The fair value is measured using the quoted price in the principal market of the tokens. The Company currently obtains the quoted price of tokens from www.cryptocompare.com . Liquidity pool tokens and non-fungible tokens are subject to impairment losses if the fair value a token decreases below the carrying value at the end of each quarterly accounting period. The fair value of liquidity pool tokens is based on the quoted price on the last day of the quarter at 4PM Eastern Time. The fair value of NFTs is based on the average trading price on the last day of each quarter. 8 Impairment for liquidity pool tokens and non-fungible tokens is assessed quarterly due to each token being a unique asset and due to the illiquid markets in which these tokens trade. The Company is continuously reviewing available markets and information and its methodology when determining the fair value of digital assets. The Company currently reviews quoted prices of its liquidity pool tokens, non-fungible tokens and comparable tokens at https://uniswap.org / and https://opensea.io . Impairment expense is reflected in total expense in the statements of operations. Subsequent reversal of impairment losses is not permitted. The sales of digital assets held are included within investing activities in the accompanying statements of cash flows and any realized gains or losses from such sales are included in other income (expense) in the statements of operations. Revenue recognition There is currently no definitive guidance under GAAP or alternative accounting framework for the accounting for digital assets recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s financial position and results from operations. Revenue is recognized when the award is claimed and deposited in the Company wallet. The transaction consideration the Company receives is noncash in the form of digital assets. Revenue is measured at the fair value of the digital assets awards received using the quoted price Airdrop Airdrop is the distribution of tokens without compensation generally undertaken with a view of increasing awareness of a new token, to encourage adoption of new token and to increase liquidity in the early stages of a token project. Liquidity Pools The Company earns fees by providing liquidity on Uniswap V2 and Uniswap V3. The Company earns fees proportionate to the liquidity they have supplied to the exchange. The fee for each trade is set at 0.05% for stable coins, 0.3% for most pairs and 1.0% for exotic pairs. The fees earned by the Company depends on the risk characteristics of each pair of tokens selected and the price range liquidity is provided. Uniswap V2 requires users to provide liquidity over the entire price curve, whereas Uniswap V3 provides users with the provide liquidity over a price range. Staking Rewards The Company earns rewards for agreeing to lock up tokens for a fixed period of time to participate in running the blockchain and maintaining security. Rewards are typically calculated in percentage yields. Convertible Financial Instruments The 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. When 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. Beneficial conversion feature – The issuance of the convertible debt 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. Related Parties The Company follows subtopic 850-10 of the ASC for the identification of related parties and disclosure of related party transactions. The 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. The disclosures shall include: (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; (c) the dollar 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. 9 Commitments and Contingencies The Company follows ASC 450-20 to report accounting for contingencies. 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. 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. If 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 considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Deferred Tax Assets and Income Taxes Provision The 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. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management 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. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Tax 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. Net Loss Per Common Share The 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; however, potential common shares are excluded if their effect is anti-dilutive. Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of ASC for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of ASC (“Paragraph 820-10-35-37”) 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: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: 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. Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial 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. The 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. Transactions 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. 10 Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This update amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related EPS guidance for both Subtopics. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2023, which means it will be effective for our fiscal year beginning July 1, 2024. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of ASU 2020-06 on our financial statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. NOTE 3 – DIGITAL ASSETS HELD, NET OF IMPAIRMENT Digital assets held, net of impairment have consisted of: SCHEDULE OF DIGITAL ASSETS HELD NET OF IMPAIRMENT Digital Assets Balance, June 30, 2022 $ 434,642 Beginning balance $ 434,642 Purchase of digital assets 1,883,337 Proceeds from sale of digital assets ( 1,842,200 ) Realized gain loss on sales/ exchange digital assets 75,110 Acquired digital assets by Liquidity Pools 40,430 Digital assets used to pay prepaid, deposit and expenses ( 103,600 ) Impairment charges ( 25,299 ) Balance, September 30, 2022 $ 462,420 Ending balance $ 462,420 As at September 30, 2022, the Company’s holdings of digital assets held, net of impairment consists of: SCHEDULE OF ASSETS DIGITAL HOLDING IMPAIRMENTS Units held Carrying value, at cost less impairment Cryptocurrency ETH 104.97 $ 131,365 APE 8,914.49 34,236 MATIC 17,125.71 8,978 Other 111 Cryptocurrency Total $ 174,690 Liquidity Pool Tokens Uniswap V3 3.1 $ 192,382 mooEmp 275.77 12,402 CAKE 4,570.35 11,472 Liquidity Pool Tokens Total $ 216,256 Non-Fungible Tokens Other Deed 10 $ 44,111 Mutant Ape Yacht Club 1 19,573 Meebits 2 7,790 Non-Fungible Tokens Total $ 71,474 Total digital assets, net of impairment $ 462,420 NOTE 4 – DEPOSIT ON EQUIPMENT On August 22, 2022, the Company made a deposit of $ 72,095 with USDC to purchase 18 Antminer S19j Pro 100 TH Bitcoin mining machines. The Company expects to receive delivery of the machines in December 2022. NOTE 5 – NOTES PAYABLE – RELATED PARTIES Demand Promissory Note On October 18, 2021, the Company issued a Promissory Note in the principal amount of $ 100,000 (the “Promissory Note”) for cash to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Promissory Note bears interest at the rate of 0.01 % per annum. Any unpaid principal amount and any accrued interest is due on October 18, 2022. On August 29, 2022, the Company entered into an Amendment to Promissory Note, dated August 29, 2022 with the Holder. Pursuant to the terms of the note amendment, the maturity date of the Promissory Note was extended to October 23, 2023, and the interest rate of the Note was increased to 5 % as of and following August 29, 2022. As consideration for extension of the maturity date, the Company agreed to issue to Mr. Schadel 15,000 shares of the Company’s common stock with a fair value of $ 9,000 . These shares were payable and reported as shares to be issued as of the date of this Report. The note amendment resulted in a change in the cash flows of less than 10%. Therefore, the Note is not considered to be substantially different in accordance with ASC 470-50-10-10 and applied the modification accounting model in accordance with ASC-50-40-17 (b). During the three months ended September 30, 2022, $ 694 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 8,306 and $ 0 , respectively, to be amortized through October 2023 and accrued interest payable of $ 438 and $ 0 , respectively. 11 On June 29, 2022, the Company issued a Promissory Note in the principal amount of $ 40,000 (the “Promissory Note”) for cash to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Promissory Note bears interest at the rate of 0.01 % per annum. Any unpaid principal amount and any accrued interest is due on June 29, 2023. The Holder may demand payment of all or any portion of the outstanding principal and interest at any time. The Promissory Note is unsecured and there is no prepayment penalty. At September 30, 2022 and June 30, 2022, there was accrued interest payable of $ 1 and $ 0 , respectively. On August 12, 2022, the Company issued a Promissory Note in the principal amount of $ 50,000 (the “Promissory Note”) for cash to Laborsmart Inc. (the “Holder”). The Holder is owned by the Company’s Chief Executive Officer, sole director and majority stockholder. The Promissory Note bears interest at the rate of 5.00 % per annum. Any unpaid principal amount and any accrued interest is due on August 12, 2023 . The Holder may demand payment of all or any portion of the outstanding principal and interest at any time. The Promissory Note is unsecured and there is no prepayment penalty. In event the Note is not paid when due, any outstanding principal and interest will accrue interest of 12 % per annum. At September 30, 2022 and June 30, 2022, there was accrued interest payable of $ 336 and $ 0 , respectively. Demand Promissory Note and Common Stock Purchase Warrant On August 12, 2022, the Company issued a Promissory Note in the principal amount of $ 25,000 (the “Promissory Note”) for cash to Tom Zarro (the “Holder”). The Promissory Note bears interest at the rate of 5.00 % per annum. Any unpaid principal amount and any accrued interest is due on August 12, 2023 . The Holder may demand payment of all or any portion of the outstanding principal and interest at any time. The Promissory Note is unsecured and there is no prepayment penalty. In event the Note is not paid when due, any outstanding principal and interest will accrue interest of 12 % per annum. In conjunction with the issue of the Promissory Note, the Company issued Mr. Zarro a common stock purchase warrant (the “Warrant”). The terms of the Warrant state that, Mr. Zarro may, at any time on or after August 12, 2022 and until August 12, 2025, exercise the Warrant to purchase 20,000 shares of the Company’s common stock for an exercise price per share of $ 0.75 , subject to adjustment as provided in the Warrant. The fair value of Warrant was calculated using volatility of 157 %, interest-free rate of 3.18 %, nil expected dividend yield and expected life of 3 years. The fair value of the debt and warrant is allocated based on their relative fair values. During the three months ended September 30, 2022, $ 1,063 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 6,853 and $ 0 , respectively, to be amortized through May 2027 and accrued interest payable of $ 167 and $ 0 , respectively. Convertible Promissory Notes On May 10, 2022, the Company issued a Convertible Promissory Note in the principal amount of $ 20,000 (the “Promissory Convertible Note”), for cash, to Timothy Hackbart (the “Holder”). The Convertible Promissory Note bears interest at the rate of 3.25 % per annum. Any unpaid principal amount and any accrued interest is due on May 10, 2027. The Promissory Note is unsecured and there is no prepayment penalty. At the option of the Holder, the Promissory Convertible Note is convertible into shares of the Company’s common stock at a conversion price of $ 0.50 per share. The closing price of the Company’s common stock was $ 1.40 per share on the date the Promissory Convertible Note was issued. As a result of the conversion price being lower than the market price of the Company’s common stock on the date of issuance, the Company recognized a beneficial conversion feature of $ 20,000 upon issuance. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three months ended September 30, 2022, $ 1,008 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 18,434 and $ 19,441 , respectively, to be amortized through May 2027 and accrued interest payable of $ 255 and $ 0 , respectively. Convertible Promissory Notes – Related Party On March 4, 2022, the Company issued a Convertible Promissory Note in the principal amount of $ 40,874 (the “Promissory Convertible Note”), for value received being comprised of 1 (one) bitcoin, to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Convertible Promissory Note bears interest at the rate of 3.5 % per annum. Any unpaid principal amount and any accrued interest is due on March 4, 2027. The Promissory Note is unsecured and there is no prepayment penalty. At the option of the Holder, the Promissory Convertible Note is convertible into shares of the Company’s common stock at a conversion price of $ 0.50 per share. The closing price of the Company’s common stock was $ 1.25 per share on the date the Promissory Convertible Note was issued. As a result of the conversion price being lower than the market price of the Company’s common stock on the date of issuance, the Company recognized a beneficial conversion feature of $ 40,874 upon issuance. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three months ended September 30, 2022, $ 2,059 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 36,173 and $ 38,233 , respectively, to be amortized through March 2027 and accrued interest payable of $ 764 and $ 0 , respectively. On March 10, 2022, the Company issued a Convertible Promissory Note in the principal amount of $ 59,986 (the “Promissory Convertible Note”), for value received being comprised of 22.86012412 Ether, to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Convertible Promissory Note bears interest at the rate of 3.25 % per annum. Any unpaid principal amount and any accrued interest is due on March 10, 2027. The Promissory Note is unsecured and there is no prepayment penalty. At the option of the Holder, the Promissory Convertible Note is convertible into shares of the Company’s common stock at a conversion price of $ 0.50 per share. The closing price of the Company’s common stock was $ 1.42 per share on the date the Promissory Convertible Note was issued. As a result of the conversion price being lower than the market price of the Company’s common stock on the date of issuance, the Company recognized a beneficial conversion feature of $ 59,986 upon issuance. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three months ended September 30, 2022, $ 3,022 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 53,285 and $ 56,307 , to be amortized through March 2027 and accrued interest payable of $ 1,090 and $ 0 , respectively. On May 6, 2022, the Company issued a Convertible Promissory Note in the principal amount of $ 100,000 (the “Promissory Convertible Note”), for cash, to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Convertible Promissory Note bears interest at the rate of 3.25 % per annum. Any unpaid principal amount and any accrued interest is due on May 6, 2027. The Promissory Note is unsecured and there is no prepayment penalty. At the option of the Holder, the Promissory Convertible Note is convertible into shares of the Company’s common stock at a conversion price of $ 0.50 per share. The closing price of the Company’s common stock was $ 1.45 per share on the date the Promissory Convertible Note was issued. As a result of the conversion price being lower than the market price of the Company’s common stock on the date of issuance, the Company recognized a beneficial conversion feature of $ 100,000 upon issuance. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three months ended September 30, 2022, $ 5,038 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 91,950 and $ 96,988 , respectively, to be amortized through May 2027 and accrued interest payable of $ 1,309 and $ 0 , respectively. 12 On May 9, 2022, the Company issued a Convertible Promissory Note in the principal amount of $ 100,000 (the “Promissory Convertible Note”), for cash, to Ryan Schadel (the “Holder”), the Company’s Chief Executive Officer, sole director and majority stockholder. The Convertible Promissory Note bears interest at the rate of 3.25 % per annum. Any unpaid principal amount and any accrued interest is due on May 9, 2027. The Promissory Note is unsecured and there is no prepayment penalty. At the option of the Holder, the Promissory Convertible Note is convertible into shares of the Company’s common stock at a conversion price of $ 0.50 per share. The closing price of the Company’s common stock was $ 1.415 per share on the date the Promissory Convertible Note was issued. As a result of the conversion price being lower than the market price of the Company’s common stock on the date of issuance, the Company recognized a beneficial conversion feature of $ 100,0000 upon issuance. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three months ended September 30, 2022, $ 5,038 of discount amortization is included in interest expense. At September 30, 2022 and June 30, 2022, there was an unamortized discount balance of $ 92,114 and $ 97,152 , respectively, to be amortized through May 2027 and accrued interest payable of $ 1,282 and $ 0 , respectively. NOTE 6 – SHAREHOLDER DEFICIT On December 15, 2021, the Company filed with the Nevada Secretary of State amended and restated articles of incorporation. The amended and restated articles had the effect of (i) increasing the Company’s authorized common stock to 100 million shares, (ii) increasing the Company’s authorized preferred stock to 20 million shares, and (iii) reducing the par value of each of the Company’s common stock and preferred stock to $ 0.0001 per share. Common stock and additional paid-in capital for all periods presented in these financial statements have been adjusted retroactively to reflect the reduction in par value. On March 11, 2022, the Company filed with the State of Nevada a certificate of designations for the Company’s Series A Convertible Preferred Stock (“Series A Stock”). The Series A Certificate of Designations provides (i) t he number of authorized shares will be 100 (ii) each share will have a stated value of $ 50,000 (iii) each share is convertible into 100,000 shares of Company common stock, subject to a 9.99 % equity blocker (iv) shares are non-voting and (v) shares are not entitled to receive dividends or distributions. Warrants On March 16, 2022, the Company entered into Stock Purchases Agreements whereby the Company issued 22 shares to Series A Stock and various Warrants for $ 1,100,000 in cash. The Warrants comprise of 2,200,000 Company common stock issuable at $ 1.30 per share, 2,200,000 Company common stock issuable at $ 1.50 per share and 2,200,000 Company common stock issuable at $ 1.75 per share, Upon issuance on March 16, 2022, the Warrant remain exercisable for a period of five years . On August 12, 2022, the Company issued a common stock purchase warrant in conjunction with a Promissory Note. The Warrant comprise of 20,000 Company common stock issuable at $ 0.75 per share Upon issuance on August 12, 2022, the Warrant remain exercisable for a period of three years . The weighted average remaining legal life of the warrants outstanding at September 30, 2022 is 4.45 years. Forward Stock Split On July 15, 2022, the Company’s director and shareholders approved an amendment of the Company’s Articles of Incorporation that, if filed, would effect a 10-for-1 forward stock split of the Company’s common stock (the “Forward Split”). The Forward Split is subject to clearance by the Financial Industry Regulatory Authority (“FINRA”), and the Company will not effect the Forward Split until it is cleared by FINRA. The Board retains authority to abandon the Forward Split for any reason at any time prior to effecting the Forward Split. 13