Sparx Holdings Group, Inc. 10-K

Item 9A Controls and Procedures. Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15e and Rule 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, which at this time consists of our officer and director, Cassandra DeNunzio, and our director, Jeffrey DeNunzio. As of June 30, 2022, the end of the year covered by this Report, we carried out an evaluation, under the supervision of Ms. Cassandra DeNunzio, our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and the operation of our disclosure controls and procedures. Ms. DeNunzio concluded that the disclosure controls and procedures were not effective as of the end of the year covered by this Report due to material weaknesses identified below. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Our management assessed our internal control over financial reporting using the criteria in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). A system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Based on our evaluation under the framework in COSO, our management concluded that our internal control over financial reporting was ineffective as of June 30, 2022 based on such criteria. Deficiencies existed in the design or operation of our internal control over financial reporting that adversely affect our internal controls and that may be considered material weaknesses. A material weakness is a significant deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. As a result of the determination that there was a lack of resources to provide segregation of duties consistent with control objectives, the lack of a formal audit committee, and the lack of a formal review process that includes multiple levels of review over financial disclosure and reporting processes, management has determined that material weaknesses existed as of June 30, 2022. The weaknesses and the related risks are not uncommon in a company of our size because of the limitations in the size and number of our staff. To address these material weaknesses, and subject to the receipt of additional financing or cash flows, we intend to undertake remediation measures to address the material weaknesses described in this Report, including implementing procedures pursuant to which we can ensure segregation of duties and hire additional resources to ensure appropriate review and oversight. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Auditor’s Report on Internal Control Over Financial Reporting This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this Report. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Exchange Act) that have occurred during the fourth quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. - 7 - Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. Each of our directors holds office until the next annual meeting of our stockholders or until his successor has been elected and qualified, or until his death, resignation, or removal. Our executive officers are appointed by our board of directors and hold office until their death, resignation, or removal from office. Our current executive officers and directors and additional information concerning them are as follows: Name Age Position Cassandra DeNunzio 30 Chief Financial Officer, Chief Financial Officer, President, Secretary, Treasurer and Director Jeffrey DeNunzio 31 Director Ms. Cassandra DeNunzio , age 30, attended the University of New Hampshire on a full merit-based scholarship and graduated Summa cum Laude with her Bachelor of Science Degree in Electrical Engineering (BSEE) in 2014. In 2016, she received her Master of Science Degree in Electrical Engineering (MSEE) from Columbia University in the City of New York, and in 2019 she received her Master of Business Administration (MBA) Degree from Arkansas State University. In February of 2016, she took a position as an Electrical Engineer for Johnson Controls International Plc (JCI), formerly Tyco Fire Protection Products. During her tenure at JCI, Ms. DeNunzio designed and developed new technology products, worked alongside approval agencies to test ground-breaking ideas, and assisted customers in implementing solutions. Her accolades include presenting and winning awards for her works at internal research conferences and receiving recognition as an inventor on seven patent applications filed with the United States Patent and Trademark Office (USPTO). Cassandra left her position at JCI in October of 2020 and worked for Science Applications International Corporation (SAIC) as a defense contractor. She held the position of Senior Electrical Engineer for SAIC for about 9 months while working on projects and contracts for the U.S. Navy. On August 22, 2021, Ms. DeNunzio founded Sparx Technologies, LLC, an emerging fire protection technology company committed to developing innovative products to protect businesses and building owners against highly challenging fires. Ms. DeNunzio filed a provisional patent application on January 28, 2022 with Sparx Technologies, LLC to protect the company's commercial vision to employ software and electronics in fire sprinkler design. Mr. Jeffrey DeNunzio , age 31, graduated Cum Laude from Roger Williams University in 2012, with a double major in Legal Studies and Psychology. Prior to his graduation, and to the present day, he has acted as a research specialist and consultant for numerous publicly traded companies as well as private developmental stage companies. His experience spans from small start up stage companies, to multi million dollar publicly listed companies. His business acumen and customized consultation strategies have spanned across various industries, including, but not limited to, hemp, crypto currency, real estate and healthcare. He has resurrected defunct corporate charters, originated Form 10 Shell Companies, written and filed S-1 Registration Statements, Form 1-A Registration Statements and also prepared the ongoing SEC filings necessary for companies to remain in good standing with the Securities and Exchange Commission. Mr. DeNunzio has vast experience in corporate structuring, reverse triangular mergers and spearheading the business operations and trading processes of various companies of both domestic and foreign origin. - 8 - Table of Contents Committees of the Board We currently do not have nominating, compensation, or audit committees, or committees performing similar functions, nor do we have a written nominating, compensation, or audit committee charter. Our board of directors believes that it is not necessary to have such committees given our current size and the limited scope of our business. Currently, our board of directors is performing the functions of such committees. In lieu of an Audit Committee, our board of directors is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results, and effectiveness of the annual audit of our financial statements and other services provided by our independent registered public accounting firm. Our board of directors review our internal accounting controls, practices, and policies. Audit Committee Financial Expert Our board of directors have determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K . We believe that given our current size and the limited scope of our business, retaining an independent director who would qualify as an audit committee financial expert would be overly costly and burdensome. We will consider establishing an Audit Committee, and identifying an individual to serve as an independent director and as the audit committee financial expert when so required. Involvement in Certain Legal Proceedings None of our executive officers and directors have been involved in or a party to any of the following events or actions during the past ten years: 1. Any petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal agent, or similar officer by a court for the business or property of such person, a partnership in which such person was a general partner at or within two years before the time of such filing, or any corporation or business association of which such person was an executive officer either at or within two years prior to the time of such filing; 2. Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); 3. Being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, such person from, or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director, or employee of any investment company, bank, savings and loan association, or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; 4. Being the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity; 5. Being found by a court of competent jurisdiction (in a civil action) or the SEC to have violated a Federal or State securities law, and the judgment has not been subsequently reversed, suspended, or vacated; 6. Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated; 7. Being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of :(i) any Federal or State securities or commodities law or regulation; (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or 8. Being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. Code of Ethics We have not adopted a formal Code of Ethics. We have no employees, one officer, and only two total directors, one of which is also our sole officer. In the event we commence substantive operations, or the number of employees, number of officers, and/or number of directors increases in the future, we may take actions to adopt a formal Code of Ethics. Nomination of Directors As of August 1, 2022, we had not effected any material changes to the procedures by which our stockholders may recommend nominees to our board of directors. We do not have any defined policy or procedural requirements for stockholders to submit recommendations or nominations for directors. Our board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. We do not currently have any specific or minimum criteria for the election of nominees to our board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors will assess all candidates, whether submitted by management or stockholders, and make recommendations for election or appointment. A stockholder who wishes to communicate with our board of directors may do so by directing a written request addressed to the Company with the address appearing on the first page of this Report. Compliance with Section 16(A) of the Exchange Act. Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a). Based solely on our review of certain reports filed with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, the reports required to be filed with respect to transactions in our common stock during the fiscal year ended June 30, 2022 have not been filed and have been brought to the attention of management. Family Relationships We have one officer, Cassandra DeNunzio. We also have two directors which consists of Cassandra DeNunzio and Jeffrey DeNunzio. Cassandra DeNunzio and Jeffrey DeNunzio are siblings. Our controlling shareholder, NVC Holdings, LLC is owned and controlled by its members Jeffrey DeNunzio and Thomas DeNunzio. Thomas DeNunzio is the father of Jeffrey DeNunzio and Cassandra DeNunzio. Arrangements There are no arrangements or understandings between an executive officer or director and any other person pursuant to which he or she was selected as an executive officer or director. - 9 - Table of Contents Item 11. Executive Compensation. The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers, which is defined as follows: (i) all individuals serving as our principal executive officer during the year ended June 30, 2021 and or June 30, 2022; (ii) each of our two most highly compensated executive officers who were serving as executive officers at the end of the year ended June 30, 2021 and or June 30, 2022; and (iii) up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer as of the end of the year ended June 30, 2021 and or June 30, 2022. Name and principal position Fiscal Year Ended December 31, Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Cassandra DeNunzio, President, CEO, CFO, Treasurer, Secretary, and Director 2021 0 0 0 0 0 0 0 0 2022 0 0 0 0 0 0 0 0 Jeffrey DeNunzio, Director 2021 0 0 0 0 0 0 0 0 2022 0 0 0 0 0 0 0 0 Outstanding Equity Awards at Fiscal Year-End We had no outstanding equity awards at the year ended June 30, 2022. Potential Payments Upon Termination or Change-of-Control None of our named executive officers or directors are entitled to any payments upon termination or change-of-control. Retirement or Similar Benefit Plans There are no arrangements or plans in which we provide retirement or similar benefits for our directors or executive officers. Employment Agreements We have no employment agreements with any of our named executive officers or directors. Compensation of Directors We did not pay any of our directors any compensation during the fiscal year ended June 30, 2022, whether in their capacity as a named executive officer or as a director. - 10 - Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth, as of August 1, 2022, the number of shares of common stock owned of record and beneficially by (i) each of our current directors, (ii) each of our named executive officers, (iii) our directors and executive officers as a group, and (iv) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding common stock. Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to shares. Unless otherwise indicated, the persons named in the table have sole voting and investment power with respect to the number of shares indicated as beneficial owned by them. The percentage of voting control held by each listed party is based on 178,750,031 shares of Common Stock, $0.0001 par value, issued and outstanding as of the date of thi s report. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (Common Shares) Approximate Percentage of Class (Common) Amount and Nature of Beneficial Ownership (Preferred Shares) Approximate Percentage of Class (Preferred) Approximate Total Voting Percentage Officers and Directors Jeffrey DeNunzio (1) 17,500 0.01% - - 0.01% Cassandra DeNunzio (2) 100,000 0.06% - - 0.06% 5% or Greater Shareholders NVC Holdings, LLC (3) 150,000,000 83.92% - - 83.92% Total Voting Percentage (5% or greater shareholders and Officers/ Directors as a group) 150,117,500 83.99% - - 83.99% _________________________________________ (1) Jeffrey DeNunzio serves as our Director. Jeffrey DeNunzio’s personally owns 17,500 shares of our Common Stock. These shares were acquired in open market transactions. It should be noted that Jeffrey DeNunzio also shares equal ownership of NVC Holdings, LLC, a Wyoming Limited Liability Company, with his father, Thomas DeNunzio. NVC Holdings, LLC is our majority shareholder. (2) Ms. Cassandra DeNunzio serves as our Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director. Ms. Cassandra Denunzio personally owns 100,000 shares of our Common Stock. These shares were acquired in open market transactions. (3) Ownership of NVC Holdings, LLC, a Wyoming Limited Liability Company, is shared equally between Jeffrey DeNunzio and his father, Thomas DeNunzio. NVC Holdings, LLC is the beneficial owner of 150,000,000 shares of Common Stock. Changes in Control We do not know of any arrangements that may, at a subsequent date, result in a change in control. Item 13. Certain Relationships and Related Transactions. Related Party Transactions Other than the transactions described below, since June 30, 2021, the date of our incorporation, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party: · In which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end; and · In which any director, executive officer, stockholders who beneficially own more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest. Office Space and Equipment We utilize the home office space and equipment of our management at no cost. Additional information On September 17, 2021, the Company completed a Nevada holding company reorganization pursuant to NRS. Our common stock previously traded in the OTC Markets under our former ticker symbol “CHSO” under which the common stock previously listed and traded until the new ticker symbol “PRTM” was announced on September 20, 2021, on the Financial Industry Regulatory Authority’s daily list with a market effective date of September 21, 2021. Currently, NVC Holdings, LLC, a Wyoming LLC owned and controlled by Jeffrey DeNunzio and Thomas DeNunzio, is our controlling shareholder, owning 150,000,000 common shares. Jeffrey DeNunzio is the brother of Cassandra DeNunzio. Thomas DeNunzio is the father of Cassandra DeNunzio and Jeffrey DeNunzio. Jeffrey DeNunzio and Cassandra DeNunzio are currently are only directors and Cassandra DeNunzio is our sole officer. The Company’s director, Jeffrey DeNunzio, paid expenses on behalf of the company totaling $9,453 during the period ended June 30, 2022. The Company’s director, Jeffrey DeNunzio, also paid expenses on behalf of the company totaling $960 during the period ended June 30, 2021. - 11 - Table of Contents Director Independence We are not listed on any exchange that requires directors to be independent. We have not: · Established our own definition for determining whether our directors or nominees for directors are “independent,” nor have we adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current directors would not be deemed to be “independent” under any applicable definition given that they are officers of the Company; nor · Established any committees of our board of directors. Item 14. Principal Accounting Fees and Services. Below is the approximate aggregate amount of fees billed for professional services rendered by our principal accountants with respect to the year ended June 30, 2022, and June 30, 2021 respectively. BF Borgers CPA PC 2022 2021 Audit fees $ 3,575 $ 3,250 Review fees $ 4,500 $ 0 Audit-related fees - - Tax fees - - All other fees - - Total $ 8,075 3,250 Pre-Approval Policies and Procedures Currently, we do not have a separately designed Audit Committee. Instead, our entire board of directors performs those functions. Accordingly, our board of directors was responsible for pre-approving all services provided by our independent registered public accounting firm. The above fees were reviewed and approved by our board of directors before the services were rendered. - 12 - Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules. (a) Financial Statements 1. Our financial statements are listed in the index under Item 8 of this document; and 2. All financial statement schedules are omitted beca use they are not applicable, not material or the required information is shown in the financial statements or notes thereto. (b) Exhibits required by Item 601 of Regulation S-K. Exhibit No. Description 3.1 Certificate of Incorporation (1) 3.12 Certificate of Amendment (2) 3.2 By-laws (1) 31 Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-K for the year ended June 30, 2022 (3) 32 Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3) 101.INS XBRL Instance Document (4) 101.SCH XBRL Taxonomy Extension Schema (4) 101.CAL XBRL Taxonomy Extension Calculation Linkbase (4) 101.DEF XBRL Taxonomy Extension Definition Linkbase (4) 101.LAB XBRL Taxonomy Extension Label Linkbase (4) 101.PRE XBRL Taxonomy Extension Presentation Linkbase (4) (1) Filed as an exhibit to the Company's Form 10-12G, as filed with the SEC on July 26, 2021, and incorporated herein by this reference. (2) Filed as an exhibit to the Company's Form 8-K, as filed with the SEC on July 22, 2022, and incorporated herein by this reference. (3) Filed herewith. (4) In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Annual Report on Form 10-K shall be deemed “furnished” and not “filed”. Item 16. Form 10-K Summary. None. Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Sparx Holdings Group, Inc. By: /s/ Cassandra DeNunzio Cassandra DeNunzio Chief Executive Officer and Chief Financial Officer, (Principal Executive Officer and Principal Financial Officer) Dated: August 1, 2022 - 13 -