UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
or
For the transition period from ___________ to ___________
(Name of Registrant As Specified In Its Charter)
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTCPINK |
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of July 10, 2025, there were shares of common stock, par value $ per share and 1,000 shares of Series A Preferred Stock, $0.0001 par value per share of the registrant outstanding.
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements”. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Quarterly Report on Form 10-Q and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements concerning other matters addressed in this Quarterly Report on Form 10-Q and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Quarterly Report on Form 10-Q.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
| 3 |
Webstar Technology Group, Inc.
Unaudited Condensed Balance Sheets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest – related party | ||||||||
| Short term loans payable | ||||||||
| Advance from related party | ||||||||
| Convertible note payable – related party | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Commitments (Note 8) | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $ par value; Authorized shares; designated Series A Preferred, issued and outstanding as of March 31, 2025 and December 31, 2024 | ||||||||
| Common stock, $ par value; Authorized shares; and issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
Webstar Technology Group, Inc.
Unaudited Condensed Statements of Operations
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Salaries and related expenses | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other expense | ||||||||
| Interest expense – related party | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Net loss before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share-basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding – basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
Webstar Technology Group, Inc.
Unaudited Condensed Statements of Stockholders’ Deficit
| Preferred Stock | Common Stock | Additional Paid-in- | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance at December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Cancellation of common stock | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Conversion of convertible notes payable to common stock | - | |||||||||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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Webstar Technology Group, Inc.
Unaudited Condensed Statements of Cash Flows
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Expenses paid on behalf of company - related party | ||||||||
| Change in assets and liabilities | - | |||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued salaries and related expenses | ||||||||
| Accrued interest – related party | ||||||||
| Other current liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Proceeds from short term loans payable | ||||||||
| Advances from stockholders | ||||||||
| Repayments against advances from related parties | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash | ||||||||
| Cash at beginning of the year | ||||||||
| Cash at end of the year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Schedule of non-cash financing activities | ||||||||
| Conversion of convertible notes payable to common stock | $ | $ | ||||||
| Cancellation of common stock | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 7 |
WEBSTAR TECHNOLOGY GROUP, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS
Webstar Technology Group, Inc. (the “Company”) was incorporated in Wyoming on March 10, 2015. The Company was previously established for the operation of certain licensed and purchased software solutions. Since inception, the Company signed two license agreements with a related party to license proprietary software technology solutions, i.e., Gigabyte Slayer and WARP-G.
During the year ended December 31, 2024, the Company entered into several material definitive agreements as summarized below:
| 1) | On
June 14, 2024 (“Closing”), Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer,
each as an individual (the “Purchasers”) personally acquired % of the issued and outstanding shares of the Series
A Preferred Stock (the “Preferred Stock”) of the Company from the Frank T. Perone Irrevocable Trust (“Trust”),
a Florida trust (the “Seller”), a Trust controlled by Mr. James Owens the Company’s former CEO, founder and majority
stockholder. | |
| 2) | On June 21, 2024, the Company entered into a material definitive agreement with Electrical and Compression Optimization, Inc. (“ECO”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of contracts, with a net book value of zero, from the Company. In exchange for the acquisition of the contracts, ECO issued common shares directly to the stockholders of record of the Company at the close of business June 21, 2024 on a one-to-one basis. | |
| 3) | One
June 21, 2024, the Company entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”),
a Wyoming corporation owned and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization
of Gigabyte Slayer and WARP-G software. As consideration for the licenses, Webnet assumed liabilities of the Company, specifically
related to accrued salaries and related expenses of $ and a cash payment of $ | |
| 4) | On June 24, 2024, the Company agreed to acquire the assets and intellectual property associated with the Bear Village, Inc. family resort developments from Thunder Energies Corporation, an entity owned and controlled by the Purchasers of the Company’s Preferred Stock. An asset sale agreement was executed on July 15, 2024 between the Company and the selling entity. Pursuant to the agreement, the Company agreed to issue the selling entity shares of common as consideration for the assets acquired related to Bear Village, Inc. These shares were issued to the sellers on October 1, 2024. On March 6, 2025, the Company cancelled shares of the Company’s common stock in conjunction with the Asset Purchase Agreement (see Note 3). |
As a result of the sale of the Preferred Stock, discussed above, the existing officers and directors of the Company, Mr. James Owens, Mr. Michael Hendrickson, Mr. Sanford Simon, and Mr. Don Roberts, were removed and replaced by the below as of June 14, 2024.
| 8 |
Under the terms of the Preferred Stock purchase agreement, the Purchases were permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors and as new officers as follows:
President, CEO - Mr. Ricardo Haynes
Independent Director – Ms. Marilyn Karpoff
Independent Director – Mr. Gordon Clinkscale
Chairman – Mr. Eric Collins
Interim Chief Financial Officer (CFO) – Ms. Adrienne Anderson (1)
Secretary – Mr. Donald R. Keer
Chief Operating Officer – Mr. Lance Lehr
| (1) | Ms. Anderson submitted her resignation as interim CFO on February 19, 2025. |
Since execution of the above material definitive agreements, the Company is currently an early-stage specialty real estate development company devoted to the identification, partnership and development of specialty real estate projects in the United States with a focus on multitenant buildings that can be upgraded to green/energy efficient status and entertainment and resort real estate development.
The Company will operate under the brand name “Webstar Technology Group” with the consideration given to future name changes due to a diversification of operations outside of the former business.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented.
The Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of businesses or separate business entities.
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.
Liquidity, Going Concern and Uncertainties
These
financial statements have been prepared in conformity with US GAAP, which contemplates continuation of the Company as a going concern.
To date, the Company’s commercial operations have not generated sufficient revenues to enable profitability. As of March 31, 2025,
the Company had an accumulated deficit of $
The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as future equity offerings and/or debt financings, strategic relationships, and to successfully execute its business plans. The Company has relied upon advances from its former Chairman and former majority stockholder, Mr. James Owens, to fund operations since inception. Management is actively pursuing financing but can provide no assurances that such financing will be available on acceptable terms, or at all. Without this funding, the Company could be required to delay, scale back or eliminate some or all of its business plans which would likely have a material adverse effect on the Company.
| 9 |
The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
Use of Estimates
The preparation of the financial statements in conformity with US 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 date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain of the Company’s estimates, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Significant estimates made by management include the valuation of deferred tax assets and the fair value of stock issued to settle liabilities.
Fair Value Measurements
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement.
The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
| ● | Level 1: Quoted market prices in active markets for identical assets or liabilities. | |
| ● | Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. | |
| ● | Level 3: Unobservable inputs that are not corroborated by market data. |
The carrying amounts reported in the balance sheet for cash, accounts payable, accrued expenses, and due to stockholder approximate their fair value based on the short-term maturity of these instruments. The Company did not have any non-financial assets or liabilities that are measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024. There have been no transfers between levels.
Cash
The
Company considers cash and cash equivalents to include all stable, highly liquid investments with maturities of three months or less.
The Company had cash on hand of $
Leases
The Company accounts for leases under ASU 2016-02. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the balance sheets.
Operating lease ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the statements of operations.
| 10 |
At March 31, 2025 and December 31, 2024, the Company has no leased assets.
Revenue Recognition
The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The Company anticipates receiving revenue from licensing its software to customers. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.
The Company intends to generate revenue through the following activities:
| ● | individual and corporate membership sales, | |
| ● | fractional ownership and timeshare sales, | |
| ● | food and beverage sales, | |
| ● | coaching and instruction services, | |
| ● | suite rentals, | |
| ● | retail sales, | |
| ● | sponsorships, advertising and naming rights, and | |
| ● | contest and qualifier fees and ticket purchases. |
The
Company had
Stock Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under ASU 2016-09 Improvements to Employee Share-Based Payment. During the three months ended March 31, 2025 and 2024, the Company did not grant any stock options.
Income Taxes
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. At March 31, 2025 and December 31, 2024, the Company does not believe it has any uncertain tax positions that would require either recognition or disclosure in the accompanying financial statements.
| 11 |
The Company reports net loss per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic loss per share is computed by dividing loss available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive.
At March 31, 2025 and December 31, 2024, the Company had a convertible note payable outstanding with a related party. For the three months ended March 31, 2025 and 2024, the note was convertible into shares of common stock (see Note 3). The dilutive securities have been excluded from loss per share as the inclusion would be anti-dilutive.
Debt
The Company issues debt that may have separate warrants, conversion features, or equity-linked attributes.
Embedded Conversion Features
The Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging, to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20, Debt with Conversion and Other Options, for consideration of any beneficial conversion feature.
Derivative Financial Instruments
The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income.
For
option-based simple derivative financial instruments, the Company uses the Monte Carlo simulations to value the derivative instruments
at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should
be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. There were
Debt Issue Costs and Debt Discount
The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. Any unamortized debt issue costs and debt discount are presented net of the related debt on the unaudited condensed balance sheets.
Recently Issued Accounting Pronouncements – Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which is intended to improve disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. Such information should allow investors to better understand an entity’s performance, assess future cash flows, and compare performance over time and with other entities. The amendments will require public business entities to disclose in the notes to the financial statements, at each interim and annual reporting period, specific information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement, and the total amount of an entity’s selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance on the financial statements.
| 12 |
Recently Issued Accounting Pronouncements –Adopted
In December 2023 FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 did not have an impact on the Company’s financial statements.
In November 2023 the FASB issued ASU 2023-07 (ASU 2023-07), Segment Reporting – Improvements to Reportable Segment Disclosures. The ASU will now require public entities to disclose its significant segment expenses categories and amounts for each reportable segment. Under the ASU, a significant segment expense is an expense that is:
| ● | significant to the segment, | |
| ● | regularly provided to or easily computed from information regularly provided to the chief operating decision maker (CODM), and | |
| ● | included in the reported measure of segment profit or loss. |
The ASU is effective for public entities for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024 (calendar year public entity will adopt the ASU in its 2024 Form 10 K). The ASU should be adopted retrospectively unless it’s impracticable to do so. Early adoption of the ASU is permitted, including in an interim period. The adoption of ASU 2023-07 did not have an impact on the Company’s financial statements since it operates in one reportable segment and has yet to generate revenues.
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.
NOTE 3 – RELATED PARTY TRANSACTIONS
Asset Purchase Agreement
On
October 1, 2024, the Company acquired all of the intellectual property of Bear Village, Inc. (“Bear Village”) in exchange
for from Thunder Energies Corporation (“TEC”)., an entity controlled by the Purchasers discussed in Note 1. Since
the Company shares common ownership with TEC, the Company treated this transaction in accordance with ASC 805-50-30-5 and has recognized
the purchased intellectual property at the carrying value recognized by TEC $
| 13 |
Advances from Related Party
During
the three months ended March 31, 2025 and 2024, the Company received
Due to Stockholders
The
Trust, controlled by Mr. James Owens, the founder, stockholder, and former chairman of the board of directors of the Company, advanced
the Company money as needed for working capital needs. During the three months ended March 31, 2025 and 2024, the Trust loaned the Company
for working capital needs of $
On
June 3, 2024, the Board of Directors approved, and Mr. Owens agreed, to settle the agreement amount due to the Trust for working capital
advances and consulting services totaling $
At
March 31, 2025 and December 31, 2024, the balance remaining on the due to stockholder was $
Convertible Note Payable
On
June 3, 2022 (the “Issue Date”), the Company entered into a settlement agreement with Mr. Owens whereby Mr. Owens was issued
a two-year convertible note payable (the “Note”) in the amount of $
On
June 3, 2024 the Board of Directors approved, and Mr. Owens agreed, to settle certain liabilities owed to the Trust with shares of common
stock (see below for further details). Included in this settlement was $
During
the three months ended March 31, 2025 and 2024, interest expense on the Note was $
At
March 31, 2025 and December 31, 2024, $
On March 20, 2024, Mr. Owens transferred the Note to Mr. Hendrickson, a former director of the Company.
| 14 |
Liabilities Settled with Shares of Common Stock
On
June 3, 2024, the Board of Directors approved and Mr. Owens, as Trustee of the Trust, agreed to settle $ of outstanding liabilities
due to the Trust for working capital advances, consulting services and accrued interest on the Note with shares of common
stock. The fair value of the stock was $ on the settlement date based on the stock’s market price. Therefore, a loss on
extinguishment of $
Liabilities Assumed by Related Party
On
June 21, 2024, the Company entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”),
a Wyoming corporation owned and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization
of Gigabyte Slayer and WARP-G software. The licenses have no net book value. As consideration for the licenses, Webnet assumed liabilities
of the Company, specifically related to accrued salaries and related expenses of $
License Agreement
On
April 21, 2020, the Company entered into a license agreement with Soft Tech Development Corporation (“Soft Tech”) to exclusively
license, market and distribute Soft Tech’s Gigabyte Slayer and WARP-G software (the “Licensed Technology”) and further
develop and commercialize these softwares throughout the world. James Owens, our controlling stockholder, owns Soft Tech. Pursuant to
the terms of the license agreement, we agreed to pay a contingent licensing fee of $
NOTE 4 – SHORT TERM LOANS PAYABLE
During
the three months ended March 31, 2025 and 2024, the Company received working capital advances of $
NOTE 5 – CONVERTIBLE NOTES PAYABLE
In
January 2025, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July
2025 for aggregate gross proceeds of $
The Company analyzed the conversion option in the notes for derivative accounting treatment under ASC Topic 815, “Derivatives and Hedging,” and determined that the instrument does not qualify for derivative accounting.
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NOTE 6 – STOCKHOLDERS’ DEFICIT
Series A Preferred Stock
On
March 16, 2020, the Company filed a Certificate of Designations (the “Certificate”) with the Secretary of State of Wyoming
to amend its Articles of Incorporation to designate the Series A Preferred Stock as a series of preferred stock of the Company.
shares of Series A Preferred Stock are authorized in the Certificate.
Common Stock
On March 6, 2025, the Company cancelled shares of the Company’s common stock in conjunction with the Asset Purchase Agreement (see Note 3).
On August 27, 2024, the Company amended its articles of incorporation with the State of Wyoming and increased its authorized shares of common stock from to shares.
At March 31, 2025 and December 31, 2024, the Company had and issued and outstanding shares of common stock, respectively.
During the year ended December 31, 2024, the Company issued shares of common stock to settle liabilities owed to a related party (see Note 3).
During the year ended December 31, 2024, the Company issued shares of common stock to related parties in exchange for intellectual property (see Note 3).
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.
Basic earnings (loss) per share are computed by dividing net earnings available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
The following potentially dilutive securities were excluded from the calculation of diluted net loss per share because the effects were anti-dilutive based on the application of the treasury stock method and because the Company incurred net losses during the period:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Convertible note payable | ||||||||
| Total potentially dilutive shares | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net loss attributable to the common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic weighted average outstanding shares of common stock | ||||||||
| Dilutive effect of options and warrants | ||||||||
| Diluted weighted average common stock and common stock equivalents | ||||||||
| Loss per share: | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| 16 |
NOTE 8 – COMMITMENTS
Executive Employment Agreements
On
February 21, 2020, effective January 1, 2020, the Company entered into executive employment agreements with Don D. Roberts its former
President and Chief Executive Officer, Harold E. Hutchins its former Chief Financial Officer, and James Owens as its former Chief Technology
Officer. The details of these agreements are found in Note 6 below (Commitments). The agreements provide for salaries of $
At March 31, 2025 and December 31, 2024, had no accrued salaries, payroll taxes, or auto allowances included in accrued salaries and related expenses on the accompanying unaudited balance sheets resulting from these employment agreements.
The
salaries and related expenses related to these agreements for the three months ended March 31, 2025 and 2024 were $
In June 2024, the accrued liabilities associated with these employment agreements were assumed by Webnet, an entity owned and controlled by Mr. Owens (see Note 3).
NOTE 9 – SUBSEQUENT EVENTS
The Company evaluated all events or transactions that occurred after March 31, 2025 up through the date the financial statements were available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed as of and for the period ended March 31, 2025, except for the following:
Convertible Note Payable
In
May 2025, the Company authorized a convertible promissory note bearing no interest and is due and payable on December 31, 2025 for aggregate
gross proceeds of $
Advance from Related Party
Subsequent
to March 31, 2025, the Company made repayments totaling $
Forge Atlanta Subsidiary
On
April 29, 2025, the Company entered into an Agreement with Urbantec Development Partners, LLC (“Urbantec”) to form a Special
Purpose Vehicle (“SPV”), named Forge Atlanta Asset Management LLC. (“Forge Atlanta”), a 10-acre mixed-use real
estate development in Downtown Atlanta’s Castleberry Hill district. The Company and Urbantec will hold ownerships in Forge Atlanta
of
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Forge Atlanta, a Georgia limited liability corporation was formed on August 19, 2024 and intends to acquire land, secure financing, manage the development, and revitalize the Forge Atlanta project. The Managing Partner of Forge Atlanta is the Company’s Chief Executive Officer, Mr. Ricardo Haynes.
On
May 1, 2025, Forge Atlanta signed a non-binding Letter of Intent to acquire and redevelop Forge Atlanta for a purchase price of $
Regulation A Offering
The
Company filed a Regulation A Offering on March 17, 2025 with the Securities and Exchange Commission (“SEC”) for an offering
up to $
| 18 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our financial condition and results of operations in conjunction with our financial statements and the notes included elsewhere in this Form 10-Q. The following discussion contains forward-looking statements that involve certain risks and uncertainties. Our actual results could differ materially from those discussed in these statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 particularly under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements and Risk Factors Summary” sections.
The Company
Webstar Technology Group, Inc. (the “Company”) was incorporated in Wyoming on March 10, 2015. The Company was originally established for the operation of certain licensed and purchased software solutions. Since inception, the Company signed two license agreements with a related party to license proprietary software technology solutions, i.e., Gigabyte Slayer and WARP-G.
During the year ended December 31, 2024, the Company entered into several material definitive agreements as summarized below:
| 1) | On June 14, 2024 (“Closing”), Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual (the “Purchasers”) personally acquired 100% of the issued and outstanding shares of the Series A Preferred Stock (the “Preferred Stock”) of the Company from the Frank T. Perone Irrevocable Trust (“Trust”), a Florida trust (the “Seller”), a Trust controlled by Mr. James Owens the Company’s former CEO, founder and majority stockholder. The Purchasers have agreed to purchase the Preferred Stock for $500,000 due as follows: $50,000 at the execution of the letter of intent, $125,000 at the Closing, and the remaining $325,000 ninety days after the Closing. The Preferred Stock will remain held in escrow until the final payment is remitted to the Seller. Further, the Seller retains the voting rights of the Preferred Stock while in escrow. Therefore, Mr. James Owens is referred to as the controlling stockholder in this filing as the Preferred Stock remains in escrow as of the date of this filing. As of the date of this filing, the remaining $325,000 had not been remitted to Mr. Owens by the Purchasers. |
| 2) | On June 21, 2024, the Company entered into a material definitive agreement with Electrical and Compression Optimization, Inc. (“ECO”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of contracts, with a net book value of zero, from the Company. In exchange for the acquisition of the contracts, ECO issued 201,057,278 common shares directly to the stockholders of record of the Company at the close of business June 21, 2024 on a one-to-one basis. |
| 3) | One June 21, 2024, the Company entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization of Gigabyte Slayer and WARP-G software. As consideration for the licenses, Webnet assumed liabilities of the Company, specifically related to accrued salaries and related expenses of $3,317,472 and a cash payment of $22,869 which was applied to Webstar’s accounts payable at the time of the same amount. Due to the related party nature of the transaction, the assumption of the liabilities has been recorded as an increase to additional paid in capital of $3,340,341. |
| 4) | On June 24, 2024, the Company agreed to acquire the assets and intellectual property associated with the Bear Village, Inc. family resort developments from Thunder Energies Corporation, an entity owned and controlled by the Purchasers of the Company’s Preferred Stock. An asset sale agreement was executed on July 15, 2024 between the Company and the selling entity. Pursuant to the agreement, the Company agreed to issue the selling entity 201,057,278 shares of common as consideration for the assets acquired related to Bear Village, Inc. These shares were issued to the sellers on October 1, 2024. On March 6, 2025, the Company cancelled 2,000,000 shares of the Company’s common stock in conjunction with the Asset Purchase Agreement (see Note 3). |
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As a result of the sale of the Preferred Stock, discussed above, the existing officers and directors of the Company, Mr. James Owens, Mr. Michael Hendrickson, Mr. Sanford Simon, and Mr. Don Roberts, were removed and replaced by the below as of June 14, 2024.
Under the terms of the Preferred Stock purchase agreement, the Purchases were permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors and as new officers as follows:
Chairman/Chief Executive Officer - Mr. Ricardo Haynes
Independent Director – Ms. Marilyn Karpoff
Independent Director – Mr. Gordon Clinkscale
President – Mr. Eric Collins
Interim Chief Financial Officer (CFO) – Ms. Adrienne Anderson (1)
Secretary – Mr. Donald R. Keer
Chief Operating Officer – Mr. Lance Lehr
| (1) | Ms. Anderson submitted her resignation as interim CFO on February 19, 2025. |
Our principal office is located at 1100 Peachtree St NE, Suite 200, Atlanta, GA 30309. Our corporate website address is www.webstartechnologygroup.com. Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this report.
Recent Developments
Financing Transactions
Short Term Loans Payable
During the three months ended March 31, 2025 and 2024, the Company received working capital advances of $49,800 and $0, respectively, and made no repayments from a third party entity.
Convertible Notes Payable
In January 2025, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July 2025 for aggregate gross proceeds of $8,000. The Notes allow for the Company to convert the outstanding principal amount into shares of the Company’s common stock should the Securities and Exchange Commission grant approval of the Company’s Regulation A Tier II offering of $7.00 per share. The holders of the Notes have the right, at the holder’s option, to convert the principal amount of these notes, in whole or in part, into fully paid and nonassessable shares at a conversion price of $0.07 per share into the Company’s common stock before any public offering. In January 2025, the Notes were converted into 114,286 of the Company’s common shares.
In May 2025, the Company authorized a convertible promissory note bearing no interest and is due and payable on December 31, 2025 for aggregate gross proceeds of $100,000. The Note allow for the Company to convert the outstanding principal amount into shares of the Company’s common stock should the Securities and Exchange Commission grant approval of the Company’s Regulation A Tier II offering of $7.00 per share. The holder of the Note has the right, at the holder’s option, to convert the principal amount of this note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $0.025 per share into the Company’s common stock before any public offering. The Note includes customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holder of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note. On May 20, 2025, the Note was converted into 4,000,000 of the Company’s common shares.
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Common Stock
On March 6, 2025, the Company cancelled 2,000,000 shares of the Company’s common stock in conjunction with the Asset Purchase Agreement
Advance from Related Party
In fiscal year 2025, the Company made repayments totaling $76,210 against the advances from related party.
Forge Atlanta Subsidiary
On April 29, 2025, the Company entered into an Agreement with Urbantec Development Partners, LLC (“Urbantec”) to form a Special Purpose Vehicle (“SPV”), named Forge Atlanta Asset Management LLC. (“Forge Atlanta”), a 10-acre mixed-use real estate development in Downtown Atlanta’s Castleberry Hill district. The Company and Urbantec will hold ownerships in Forge Atlanta of 80% and 20%, respectively. Upon acceptance of the Purchase and Sale Agreement (“PSA”) by the current land owner (“Seller”), Forge Atlanta will pay Urbatec the sum of $3,000,000.
Forge Atlanta, a Georgia limited liability corporation was formed on August 19, 2024 and intends to acquire land, secure financing, manage the development, and revitalize the Forge Atlanta project. The Managing Partner of Forge Atlanta is the Company’s Chief Executive Officer, Mr. Ricardo Haynes.
On May 1, 2025, Forge Atlanta signed a non-binding Letter of Intent to acquire and redevelop Forge Atlanta for a purchase price of $33,000,000. The property is being sold subject to a non-refundable earnest money payment of $50,000 due on or before May 5, 2025 (“LOI Fee”), an earnest money payment of $50,000 due at execution of the PSA, and an earnest money payment of $400,000 due 90 days from the PSA date. The scheduled closing date of the land purchase is November 25, 2025. Forge Atlanta shall have the right to extend the closing date to February 6, 2026 by giving written notice to Seller on or before December 15, 2025 and paying a non-refundable fee of $150,000, which shall not be applied to the purchase price. On May 2, 2025, the Company paid the LOI Fee of $50,000.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to increases in the cost of services. To become profitable and competitive, we must receive additional capital. We have no assurance that future financing will materialize. If that financing is not available, we may be unable to continue operations.
Overview
Webstar Technology Group, was incorporated in Wyoming on March 10, 2015. The Company was established for the operation of certain licensed and purchased software solutions. However, in June 2024 the new management team of Webstar Technology Group Inc. chose to expand the company’s footprint into the commercial real estate development & acquisitions space.
Plan of Operations
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
The following discussion represents a comparison of our results of operations for the three months ended March 31, 2025 and 2024. The results of operations for the periods shown in our audited condensed financial statements are not necessarily indicative of operating results for the entire period. In the opinion of management, the audited condensed financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented.
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net revenues | $ | - | $ | - | ||||
| Cost of sales | - | - | ||||||
| Gross Profit | - | - | ||||||
| Operating expenses | 41,378 | 204,941 | ||||||
| Other expense | 20,000 | 20,000 | ||||||
| Net loss before income taxes | $ | (61,378 | ) | $ | (224,941 | ) | ||
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Net Revenues
For the three months ended March 31, 2025 and 2024, we had no revenues.
Cost of Sales
For the three months ended March 31, 2025 and 2024, we had no cost of sales as we had no revenues.
Operating expenses
Operating expenses decreased by $163,563, or 79.8%, to $41,378 for three months ended March 31, 2025 from $204,941 for the three months ended March 31, 2024 primarily due to decreases in compensation costs of $158,194, consulting fees of $30,150, and travel costs of $5,000, offset primarily by increases in professional fees of $26,085, investor relations costs of $2,359, rent of $585, and general and administration costs of $752, as a result of adding administrative infrastructure for our anticipated business development.
For the three months ended March 31, 2025, we had general and administrative expenses of $41,378 primarily due to professional fees of $32,682, rent expense of $585, investor relations costs of $2,359, consulting fees of $5,000, and general and administration costs of $752, as a result of adding administrative infrastructure for our anticipated business development.
For the three months ended March 31, 2024, we had salaries and related expenses of $158,194, and general and administrative expenses of $46,747 primarily due to professional fees of $6,597, consulting fees of $35,150, and travel costs of $5,000, as a result of adding administrative infrastructure for our anticipated business development.
Other Expense
Other expense for the three months ended March 31, 2025 totaled $20,000 primarily due to interest expense, compared to other expense of $20,000 for the three months ended March 31, 2024 primarily due to interest expense.
Net loss before income taxes
Net loss before income taxes for the three months ended March 31, 2025 totaled $61,378 primarily due to (increases/decreases) in professional fees, investor relations costs, consulting fees, rent, and general and administration costs compared to a loss of $224,941 for the three months ended March 31, 2024 primarily due to (increases/decreases) in compensation costs, professional fees, consulting fees, and travel costs.
Assets and Liabilities
Assets were $15,358 as of March 31, 2025. Assets consisted primarily of cash of $259, and prepaid expenses of $15,099. Liabilities were $1,149,972 as of March 31, 2025. Liabilities consisted primarily of advance from related party of $14,998, short term loans payable of $49,800, convertible note payable – related party of $1,000,000, accrued interest – related party of $75,358, and other current liabilities of $9,816.
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Liquidity and Capital Resources
Going Concern
The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $47,698,762 at March 31, 2025, had a working capital deficit of $1,134,614 and $1,081,236 at March 31, 2025 and December 31, 2024, respectively, had a net loss of $61,378 and $224,941 for the three months ended March 31, 2025 and 2024, respectively, and net cash used in operating activities of $31,341 and $2,110 for the three months ended March 31, 2025 and 2024, respectively, with no revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s ability to continue as a going concern.
While the Company is attempting to expand operations and increase revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering or an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The condensed financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
General – Overall, we had an increase in cash flows for the three months ended March 31, 2025 of $239 resulting from cash provided by financing activities of $31,580, offset partially by cash used in operating activities of $31,341.
The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (31,341 | ) | $ | (2,110 | ) | ||
| Investing activities | - | - | ||||||
| Financing activities | 31,580 | 2,110 | ||||||
| $ | 239 | $ | - | |||||
Cash Flows from Operating Activities – For the three months ended March 31, 2025, net cash used in operations was $31,341 compared to net cash used in operations of $2,110 for the three months ended March 31, 2024. Net cash used in operations was primarily due to a net loss of $61,378 for three months ended March 31, 2025 and the changes in operating assets and liabilities of $30,037, primarily due to the changes in prepaid expenses of $5,250, other current liabilities of $9,816, and accrued interest – related party of $20,000, offset primarily by accounts payable of $5,029.
For the three months ended March 31, 2024, net cash used in operations was primarily due to a net loss of $224,941 and the changes in operating assets and liabilities of $169,383, primarily due to the changes in accrued payroll of $163,194, and accrued interest – related party of $20,000, offset partially by the change in prepaid expenses of $11,701 and accounts payable of $2,110. In addition, net cash used in operating activities includes adjustments to reconcile net profit from expenses paid on behalf of company – related party of $53,448.
Cash Flows from Investing Activities – For the three months ended March 31, 2025 and 2024, the Company had no cash flows from investing activities.
Cash Flows from Financing Activities – For the three months ended March 31, 2025, net cash provided by financing was $31,580, due to proceeds from short term convertible notes of $8,000, proceeds from short term loans payable of $49,800, and repayments of advance from related party of $26,220 compared to cash provided by financing activities of $2,110 for the three months ended March 31, 2024 due to advances from stockholders.
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Financing – We expect that our current working capital position, together with our expected future cash flows from operations will be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. As stated above, Management intends to raise additional funds by way of a public offering or an asset sale transaction, however there can be no assurance that we will be successful in completing such transactions.
We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.
Short Term Loans Payable
During the three months ended March 31, 2025 and 2024, the Company received working capital advances of $49,800 and $0, respectively, and made no repayments from a third party entity.
Convertible Notes Payable
In January 2025, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July 2025 for aggregate gross proceeds of $8,000. The Notes allow for the Company to convert the outstanding principal amount into shares of the Company’s common stock should the Securities and Exchange Commission grant approval of the Company’s Regulation A Tier II offering of $7.00 per share. The holders of the Notes have the right, at the holder’s option, to convert the principal amount of these notes, in whole or in part, into fully paid and nonassessable shares at a conversion price of $0.07 per share into the Company’s common stock before any public offering. In January 2025, the Notes were converted into 114,286 of the Company’s common shares.
In May 2025, the Company authorized a convertible promissory note bearing no interest and is due and payable on December 31, 2025 for aggregate gross proceeds of $100,000. The Note allow for the Company to convert the outstanding principal amount into shares of the Company’s common stock should the Securities and Exchange Commission grant approval of the Company’s Regulation A Tier II offering of $7.00 per share. The holder of the Note has the right, at the holder’s option, to convert the principal amount of this note, in whole or in part, into fully paid and nonassessable shares at a conversion price of $0.025 per share into the Company’s common stock before any public offering. The Note includes customary events of default, including, among other things, payment defaults and certain events of bankruptcy. If such an event of default occurs, the holder of the Note may be entitled to take various actions, which may include the acceleration of amounts due under the Note. On May 20, 2025, the Note was converted into 4,000,000 of the Company’s common shares.
Advance from Related Party
In fiscal year 2025, the Company made repayments totaling $76,210 against the advances from related party.
Income taxes
We are a corporation for U.S. federal income tax purposes. As such we are subject to U.S. federal, state and local income taxes and are taxed at the prevailing corporate tax rates. We recognize the effect of income tax positions only if these positions are more likely than not to be sustained. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The financial statements included in this annual report do not include a provision for federal income taxes since each of our statements of operations have a net loss. In the future, if we determine that such tax benefits are likely to be realized by us, we will record a deferred tax asset based on the then effective income tax rate.
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JOBS Act
We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced disclosure obligations relating to the presentation of financial statements in Management’s discussion and analysis of financial condition and results of operations and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and stockholder advisory votes on golden parachute compensation. We have availed ourselves of the reduced reporting obligations and executive compensation disclosure in this annual report and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings.
In addition, an emerging growth company can delay its adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to take advantage of such extended transition period, and as a result, we may not comply with any new or revised accounting standards on the relevant dates on which non-emerging growth companies must adopt such standards.
We will continue to qualify as an emerging growth company until the earliest of:
| ● | The last day of our fiscal year following the fifth anniversary of the date of our IPO; | |
| ● | The last day of our fiscal year in which we have annual gross revenues of $1.0 billion or more; |
| ● | The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; | |
| ● | The date on which we are deemed to be a “large accelerated filer”, which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our most recently completed second quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (3) have filed at least one annual report pursuant to the Exchange Act. |
Capital Expenditures
We expect to purchase approximately $50,000 of equipment in connection with the expansion of our business during the next twelve months.
Fiscal year end
Our fiscal year end is December 31.
Critical Accounting Policies
We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.
Pursuant to the JOBS Act, as an emerging growth company, we can elect to opt out of the extended transition period for adopting any new or revised accounting standards. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we may adopt the standard for the private company. This may make comparison of our financial statements with any other public company that is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
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We have elected to take advantage of the scaled disclosures and other relief under the JOBS Act described above in this annual report (see “Implications of Being an Emerging Growth Company”), and we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Future Contractual Obligations and Commitments
Refer to Note 3 in the accompanying notes to the financial statements for future contractual obligations and commitments. Future contractual obligations and commitments are based on the terms of the relevant agreements and appropriate classification of items under GAAP as currently in effect. Future events could cause actual payments to differ from these amounts.
We incur contractual obligations and financial commitments in the normal course of our operations and financing activities. Contractual obligations include future cash payments required under existing contracts, such as debt and lease agreements. These obligations may result from both general financing activities and from commercial arrangements that are directly supported by related operating activities.
Off-Balance Sheet Arrangements
As of March 31, 2025, we have not entered into any transaction, agreement or other contractual arrangement with an entity under which it has:
| ● | a retained or contingent interest in assets transferred to the entity or similar arrangement that serves as credit; | |
| ● | liquidity or market risk support to such entity for such assets; | |
| ● | an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument; or | |
| ● | an obligation, including a contingent obligation, arising out of a variable interest in an entity that is held by, and material to us, where such entity provides financing, liquidity, market risk or credit risk support to or engages in leasing, hedging, or research and development services with us. |
Inflation
We do not believe that inflation has had a material effect on our results of operations.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-l5(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, under the supervision and with the participation of our CEO and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures as defined in SEC Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report. Based on such evaluation, management identified deficiencies that were determined to be a material weakness.
Management’s Report on Internal Controls over Financial Reporting
The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a-l5(f) of the Securities Exchange Act). Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013). Based on that assessment, management believes that, as of March 31, 2025, the Company’s internal control over financial reporting was ineffective based on the COSO criteria, due to the following material weaknesses listed below.
The specific material weaknesses identified by the company’s management as of end of the period covered by this report include the following:
| ● | we have not performed a risk assessment and mapped our processes to control objectives; | |
| ● | we have not implemented comprehensive entity-level internal controls; | |
| ● | we have not implemented adequate system and manual controls; and | |
| ● | we do not have sufficient segregation of duties. As such, the officers approve their own related business expense reimbursements |
Despite the material weaknesses reported above, our management believes that our condensed financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Commission that permit us to provide only management’s report in this report.
Management’s Remediation Plan
The weaknesses and their related risks are not uncommon in a company of our size because of the limitations in the size and number of staff. Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible.
However, we plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes in the current fiscal year as resources allow:
| (i) | Appoint additional qualified personnel to address inadequate segregation of duties and implement modifications to our financial controls to address such inadequacies; |
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The remediation efforts set out herein will be implemented in the 2024 fiscal year. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our 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 simple error or mistake.
Management believes that despite our material weaknesses set forth above, our condensed financial statements for the three months ended March 31, 2025 are fairly stated, in all material respects, in accordance with U.S. GAAP.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ending March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. To the best our knowledge, none of our directors, officers or affiliates is involved in a legal proceeding adverse to our business or has a material interest adverse to our business.
ITEM 1A. RISK FACTORS.
We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
In January 2025, the Company authorized convertible promissory notes bearing no interest and are due and payable on various dates in July 2025 for aggregate gross proceeds of $8,000. The Notes allow for the Company to convert the outstanding principal amount into shares of the Company’s common stock should the Securities and Exchange Commission grant approval of the Company’s Regulation A Tier II offering of $7.00 per share. The holders of the Notes have the right, at the holder’s option, to convert the principal amount of these notes, in whole or in part, into fully paid and nonassessable shares at a conversion price of $0.07 per share into the Company’s common stock before any public offering. In January 2025, the Notes were converted into 114,286 of the Company’s common shares.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURE.
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities from the Federal Mine Safety and Health Administration, or MSHA, under the Federal Mine Safety and Health Act of 1977, or the Mine Act. During the quarter ended March 31, 2025, we did not have any projects that were in production and as such, were not subject to regulation by MSHA under the Mine Act.
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ITEM 5. OTHER INFORMATION.
During
the quarter ended March 31, 2025, no director or officer of the Company
ITEM 6. EXHIBITS.
The following exhibits are filed or “furnished” herewith:
EXHIBIT INDEX
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| 30 |
| * | Filed herewith. |
| + | Management contract or compensatory plan or arrangement. |
| 31 |
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.
| Webstar Technology Group, Inc. | ||
| Dated: July 11, 2025 | By: | /s/ Ricardo H. Haynes |
| Ricardo H. Haynes | ||
Chief Executive Officer and Principal Financial and Accounting Officer (principal executive officer) | ||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Name | Title and Date | |
| /s/ Ricardo H. Haynes | Director Dated: July 11, 2025 | |
| Ricardo H. Haynes |
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