UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
or
For the transition period from _____________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices with Zip Code)
Registrant’s
telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 every Interactive Data File required to be submitted 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 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 Exchange Act). Yes ☐ No
As of November 5, 2024, there were shares of the issuer’s common stock outstanding.
TABLE OF CONTENTS
| Page No. | ||
| PART I. - FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements. | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Plan of Operations. | 16 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 18 |
| Item 4 | Controls and Procedures. | 19 |
| PART II - OTHER INFORMATION | 19 | |
| Item 1. | Legal Proceedings. | 19 |
| Item 1A. | Risk Factors. | 19 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 19 |
| Item 3. | Defaults Upon Senior Securities. | 19 |
| Item 4. | Mine Safety Disclosures | 19 |
| Item 5. | Other Information. | 19 |
| Item 6. | Exhibits. | 20 |
| Signatures | 21 | |
| 2 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HALLMARK VENTURE GROUP, INC.
| 3 |
HALLMARK
VENTURE GROUP, INC.
BALANCE SHEETS
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Note receivable | $ | $ | ||||||
| Interest receivable | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties | ||||||||
| Convertible note payable – related party, net of debt discount of $ | ||||||||
| Accrued interest - related party | ||||||||
| Accrued interest | ||||||||
| Notes payable - net of debt discount of $ | ||||||||
| Derivative liability | ||||||||
| Stock payable | ||||||||
| Settlement liability | ||||||||
| Settlement liability - related party | ||||||||
| Total Current Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Deficit: | ||||||||
| Series A Preferred stock, shares authorized, $ par value; and issued and outstanding, respectively | ||||||||
| Common stock, shares authorized, $ par value; and issued and outstanding, 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 financial statements.
| 4 |
HALLMARK VENTURE GROUP INC.
STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Expenses: | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income | ||||||||||||||||
| Imputed interest expense | ( | ) | ( | ) | ||||||||||||
| Amortization of debt discount | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of derivative | ( | ) | ( | ) | ||||||||||||
| Gain on extinguishment of debt | ||||||||||||||||
| Loss on issuance of convertible note | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ||||||||||||
| Net income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Provision for income tax | ||||||||||||||||
| Net Income (Loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Income (loss) per share – basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Income (loss) per share –diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average shares outstanding – basic | ||||||||||||||||
| Weighted average shares outstanding –diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 5 |
HALLMARK VENTURE GROUP, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024, AND 2023
(Unaudited)
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholder’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common stock issued for payment on settlement liability | — | |||||||||||||||||||||||||||
| Common stock issued for payment on settlement liability - related party | — | |||||||||||||||||||||||||||
| Shares cancelled | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Imputed interest on amounts due to related party | — | — | ||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance, March 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Common stock issued for payment on settlement liability - related party | — | ( | ) | |||||||||||||||||||||||||
| Imputed interest on amounts due to related party | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Common stock issued for payment on settlement liability - related party | — | ( | ) | |||||||||||||||||||||||||
| Imputed interest on amounts due to related party | — | — | ||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholder’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common stock issued for payment on settlement liability | — | ( | ) | |||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance, March 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, June 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Forgiveness of debt related party | — | — | ||||||||||||||||||||||||||
| Cancellation of shares | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 6 |
HALLMARK
VENTURE GROUP, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used by operating activities: | ||||||||
| Imputed interest on amounts due to related party | ||||||||
| Amortization of debt discount | ||||||||
| Change in fair value of derivative | ( | ) | ||||||
| Loss on issuance of convertible debt | ||||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Interest receivable | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued interest – related party | ||||||||
| Accrued interest | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Issuance of note receivable | ( | ) | ||||||
| Net cash used by investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from convertible note payable - related party | ||||||||
| Proceeds from note payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net Change in Cash | ||||||||
| Cash beginning of period | ||||||||
| Cash end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| NON-CASH TRANSACTIONS: | ||||||||
| Common stock issued for payment on settlement liability - related party | $ | $ | ||||||
| Forgiveness of debt – related party | $ | $ | ||||||
| Common stock issued for payment of debt | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 7 |
HALLMARK VENTURE GROUP, INC.
Notes to Unaudited Financial Statements
September 30, 2024
NOTE 1 — ORGANIZATION AND OPERATIONS
Hallmark Venture Group, Inc., was originally incorporated in the state of Colorado on July 14, 1995, with the name CPC Office Systems, Inc. On July 12, 1999, the Company changed its name to Homesmart USA, Inc. On March 6, 2008, the Company changed its name to Speech Phone, Inc. On March 3, 2006, the Company moved its domicile to Nevada. On March 8, 2006, the Company changed its name to Smart Truck Systems, Inc. On July 16, 2008, the Company changed its name to Hallmark Venture Group, Inc.
On May 4, 2020, Living Waters, LLC (“LWLLC”) obtained management control of the Company from its previous CEO and Director, Robert Cashman (“Cashman”), pursuant to a contingent Share Purchase Agreement (the “SPA”), dated as of May 4, 2020, by and among LWLLC and Cashman, whereby certain preferred shares (the “Preferred Shares”) that represent the voting control interest in the Company were to be issued to LWLLC (the “Transaction”).
On May 27, 2020, in connection with the Transaction and in accordance with provisions of the SPA, LWLLC assigned the SPA to Medical Southern, LLC (“MSLLC”). On August 13, 2020, all issued and outstanding Preferred Shares were issued to a designee of MSLLC, Top Knot, Inc. USA (“TKIU”).
On August 17, 2020, in connection with the Transaction and in accordance with provisions of the SPA, MSLLC assigned the SPA to Stonecrest Acquisition, LLC (“SALLC”). As a consequence of the Transaction, a change of control of the Company occurred. As a result of the Transaction TKIU obtained voting control of the Company. Subsequently, on October 19, 2020, TKIU assigned % of the Preferred Shares it held to Endicott Holdings Group, LLC (“Endicott”).
On June 20, 2022, Endicott transferred % of the preferred shares, and of the shares of common stock it held, to Beartooth Asset Holdings, LLC, an entity controlled by the Company’s Secretary, Paul Strickland, resulting in a change of control of the Company.
On July 7, 2022, Beartooth Asset Holdings, LLC (an entity controlled by Paul Strickland, the Company’s secretary and a member of its board of directors) transferred Series A Preferred Shares to JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr., President CEO of the Company and a Member of the Board of Directors, resulting in a change of control of the Company.
On July 12, 2022, Paul Strickland, the Company’s Principal Financial Officer, became a director of the Company.
On
January 11, 2024, the Company entered into a Change of Control Agreement (the “CoC Agreement”) by and between John D. Murphy,
Jr., the Company’s Director and CEO and JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr. (“Murphy”),
and Paul Strickland, the Company’s Director and Secretary, and Selkirk Global Holdings, LLC, and Beartooth Asset Holdings, LLC,
both entities controlled by Paul Stirckland (“Strickland”), and Steven Arenal and Aurum International Ltd., an entity controlled
by Steven Arenal (“Aurum”) and, pursuant to which Murphy, Strickland, and their respective control entities will assign the
Series A preferred shares controlled by each to Aurum. Strickland will transfer in restricted common shares to Aurum. In exchange,
Murphy and Strickland will each retain
| 8 |
On January 11, 2024, John D. Murphy, Jr. resigned as Director and Officer of the Company and all other positions he may hold with the Company.
On January 11, 2024, Paul Strickland resigned as Director and Officer of the Company and all other positions he may hold with the Company.
On January 11, 2024, Steven Arenal was elected as Director of the Company and appointed Chief Executive Officer, President, and Secretary of the Company.
On February 27, 2024, Steve Arenal and Aurum International Ltd. were given notice of default and failure to perform on the agreements they had signed, and Strickland and Murphy also gave notice of cancellation of all the foregoing agreements.
On February 28, 2024, a special meeting of shareholders was held removing Arenal and reinstating Murphy and Strickland and reversing & canceling all of the foregoing Aurum International Ltd / Arenal agreements.
On February 28, 2024, the Company filed an 8-K disclosing the cancellation, termination, and failure to perform on the aforementioned Arenal / Aurum agreements.
On
March 4, 2024: The Company and its Board of Directors approved a
On March 4, 2024: The shareholders required to vote approved the Board’s of the Company’s common stock.
On
March 7, 2024: The Company filed the Amended and Restated Articles of Incorporation with Florida Secretary of State reflecting the
On September 26, 2024, the Company and its Board of Directors approved the following; i) Agreement and Plan of Reorganization; ii) Change of Control Agreement; iii) Escrow Agreement, iv) Anti-Dilution Agreement; v) Cancellation of the October 6, 2022 Selkirk Global Holdings, LLC Note; vi) Cancellation of the April 6, 2023 Selkirk Global Holdings, LLC Note, vii) Cancellation of the December 12, 2023 Strickland Convertible Exchange Note; viii); and the Company authorized its Secretary to open a bank account in the name of the Company.
On
September 26, 2024, the Company and Jubilee Intel, LLC (“Jubilee”) entered into that certain Agreement and Plan of Reorganization
(the “Merger”) whereby the Company acquired
Pursuant to the Change of Control Agreement, Evan Bloomberg was assigned shares of Series A Preferred Stock. By virtue of this stock assignment, Mr. Bloomberg assumed full voting control of the Company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
| 9 |
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have 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 in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America under U.S. GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
| Level 1: | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| Level 2: | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3: | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:
September 30, 2024:
| Description | Level 1 | Level 2 | Level 3 | |||||||||
| Derivative | $ | $ | $ | |||||||||
| Total | $ | $ | $ | |||||||||
December 31, 2023:
| Description | Level 1 | Level 2 | Level 3 | |||||||||
| Derivative | $ | $ | $ | |||||||||
| Total | $ | $ | $ | |||||||||
| 10 |
The Company computes income (loss) per share in accordance with FASB ASC 260. Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. As of September 30, 2024, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. As of September 30, 2023, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. Diluted amounts are not presented when the effect of the computations are anti-dilutive due to the losses incurred.
Recently Issued Accounting Pronouncements
The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 - GOING CONCERN
The Company’s financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As
of September 30, 2024, the Company had an accumulated deficit of $
These factors and uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might incur in the event the Company cannot continue in existence. Management intends to seek additional capital from new equity securities offerings, debt financing and debt restructuring to provide funds needed to increase liquidity, fund internal growth and fully implement its business plan. However, management can give no assurance that these funds will be available in adequate amounts, or if available, on terms that would be satisfactory to the Company.
The timing and amount of the Company’s capital requirements will depend on a number of factors, including maintaining its status as a public company and supporting shareholder and investor relations.
NOTE 4 – NOTE RECEIVABLE
On
May 2, 2024, the Company made a strategic loan to an independent privately-held non-affiliated third party by entering into a $
NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
On
September 20, 2024, Hallmark Venture Group, Inc. entered into a Debt Cancellation Agreement with Archer & Greiner, P.C., and a total
of $
As of September 30, 2024, and December 31, 2023, accounts payable and accrued liabilities consist of the following:
| Description | September 30, 2024 | December 31, 2023 | ||||||
| Legal fees | $ | $ | ||||||
| Accounting fees | ||||||||
| Total | $ | $ | ||||||
| 11 |
NOTE 6 – CONVERTIBLE NOTE PAYABLE – RELATED PARTY
On
October 5, 2022, the Company issued a $
On
April 6, 2023, the Company issued a $
As
of December 31, 2023, the above Notes are disclosed as $
As
of December 31, 2023, the total due on the above notes for principal and interest is $
On
December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for $
NOTE 7 – SETTLEMENT LIABILITY
On September 15, 2022, the Company was informed through its counsel in regard to a past due note payable, with an unrelated third party, from 2017 in the amount of $ along with calculated past due interest of $ resulting in a total amount due of $. On September 24, 2022, the Company entered into a 90-day Standstill Agreement relating to the claim against the Company. The Company has acknowledged the liability and has booked $ (includes additional interest of $) as a Settlement Liability as of December 31, 2022.
On
March 7, 2023, the Company, Phase I Operations, Inc, and The Robert Papiri Defined Benefit Plan entered into an Assignment of Debt Agreement
(the “Agreement”), whereby, the note payable for $
On
March 15, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
April 20, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
June 12, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
July 12, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
| 12 |
On
September 15, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
September 18, 2023, the Company issued shares of its common stock to DACE Marketing Consulting, LLC for conversion of $
On
September 18, 2023, the Company issued shares of its common stock to John Milardovic for conversion of $
On
September 18, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
January 5, 2024, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On
April 5, 2024, $
NOTE 8 – SETTLEMENT LIABILITY – RELATED PARTY
On
September 17, 2020, the Company entered into a settlement agreement with Green Horseshoe, LLC., Inc. on its past due notes payable with
a principal balance of $
The
agreement calls for the Company’s transfer agent to issue free-trading common shares to Green Horseshoe, LLC. at a conversion rate
of
For
the years ended December 31, 2023 and 2022, the Company issued
On March 28, 2024, Green Horseshoe, LLC assigned the Settlement Agreement, Court Order, and balance of debt owed to it by the Company to Alpha Strategies Trading Software, Inc.
On May 6, 2024, this liability was assigned to Nicosel, LLC, a non-affiliate of the Company (Note 9).
As
of September 30, 2024 and December 31, 2023, the balance of the settlement liability is $
NOTE 9 – NOTES PAYABLE
On
March 1, 2024, the Company issued a $
On
May 1, 2024, the Company issued a $
| 13 |
As
of September 30, 2024, the total amount due to Nicosel, LLC is $
NOTE 10 – DERIVATIVE LIABILITY
The Company currently has derivative liabilities for its convertible promissory notes with John Murphy and Nicosel, LLC.
A summary of the activity of the derivative liability for these notes is as follows:
| Balance at December 31, 2022 | $ | |||
| Increase to derivative due to new issuances | ||||
| Derivative gain due to mark to market adjustment | ( | ) | ||
| Balance at December 31, 2023 | ||||
| Decrease to derivative due to repayments | ( | ) | ||
| increase to derivative due to new issuances | ||||
| Derivative gain due to mark to market adjustment | ( | ) | ||
| Balance at September 30, 2024 | $ |
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy is as follows:
| Inputs | September 30, 2024 | Initial Valuation | ||||||
| Stock price | $ | $ | - | |||||
| Conversion price | $ | - | $ | - | ||||
| Volatility (annual) | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Dividend rate | ||||||||
| Years to maturity | ||||||||
NOTE 11 – STOCK PAYABLE
The
Company’s related party settlement liability (Note 7) included the requirement to issue shares of the Company’s
common stock in order to cover litigation and legal expenses associated with the settlement agreement. The value of the shares at the
settlement date was $ resulting in a total value of $. The Company issued shares of common stock on November 5, 2020,
at a value of $
NOTE 12 – COMMON STOCK
On
January 5, 2024, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $
On September 26, 2024, Beartooth Asset Holding, LLC, an entity controlled by Paul Strickland, agreed to cancel shares of common stock as part of the merger agreement.
NOTE 13 – PREFERRED STOCK
The
Company is authorized to issue shares of $ par value Series A preferred stock. The Company increased the number of authorized
shares of the Series A preferred stock from to on January 19, 2021. Each share of the Series A Preferred Stock is convertible
at the option of the holder into shares of common stock. The holder has
| 14 |
The Company has shares of Series A Preferred Stock issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. Beartooth Asset Holdings, LLC, an entity controlled by Paul Strickland, the Company’s Secretary and a member of the board of directors, acquired the Series A Preferred Stock on June 20, 2022 from Endicott Holding Group, LLC.
On July 7, 2022, Beartooth Asset Holdings, LLC, transferred Series A Preferred Shares to JMJ Associates, LLC (an entity controlled by John D. Murphy, Jr., the Company’s Chief Executive Officer and President and a member of the board of directors) resulting in a change of control of the Company.
On September 27, 2024, JMJ Associates, LLC transferred Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement (Note 1).
On September 27, 2024, Beartooth Asset Holdings, LLC transferred Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement (Note 1).
NOTE 14 – OTHER RELATED PARTY TRANSACTIONS
| Name of Related Party | Related Relationship | |
| Evan Bloomberg | ||
| John D. Murphy Jr. | ||
| Paul Strickland | ||
| Selkirk Global Holdings, LLC | ||
| Green Horseshoe, LLC | ||
| Bruce Bent | ||
| OC Sparkle Inc. | ||
| Alpha Strategies Trading Software, Inc. |
Manager Promissory Note
On
February 1, 2022, the Company and its Board of Directors approved an
Loans and Cash Advances
John
D. Murphy, Jr., has at times directly paid for various company expenses. The amount was unsecured, non-interest bearing, and due on demand.
On December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for the amount due of $
Imputed
interest is assessed as an expense to the business operations and an addition to paid in capital. The imputed interest rate is
NOTE 15 — COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. Management is not aware of any pending, threatened or asserted claims.
See “Note 7 – Settlement Liability”.
See “Note 8 - Settlement Liability – Related Party”.
NOTE 16 — SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the unaudited financial statements were issued and has determined that it does not have any material subsequent events to disclose in these unaudited financial statements.
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.
Forward-looking Statements
Unless the context indicates otherwise, as used in this Quarterly Report, the terms “HLLK,” “we,” “us,” “our,” “our company” and “our business” refer, to HALLMARK VENTURE GROUP, INC., including its subsidiaries named herein. Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
General Background of the Company
Hallmark Venture Group, Inc. (“we”, “us”, “our” or the “Company”) was originally incorporated in the State of Colorado on July 14, 1995, with the name CPC Office Systems, Inc. On July 12, 1999, the Company changed its name to Homesmart USA, Inc. On March 3, 2006, the Company moved its domicile to Nevada. On March 8, 2006, the Company changed its name to Smart Truck Systems, Inc. On March 6, 2008, the Company changed its name to Speech Phone, Inc. On July 16, 2008, the Company changed its name to Hallmark Venture Group, Inc. On March 22, 2022, the Company redomiciled and became a Florida corporation.
On November 2, 2020, the Company entered into a Plan of Merger and Acquisition Agreement (the “Stonecrest Merger Agreement”), pursuant to which the Company purchased Stonecrest Owner, LLC in exchange for the issuance of 10,000,000 shares of common stock and 100,000 shares of Series A preferred stock to the members of Stonecrest Owner, LLC. On July 12, 2021, the parties agreed to cancel and unwind the transactions contemplated by the Stonecrest Merger Agreement. As a result, all of the shares of common stock and preferred stock that were issued as part of that transaction were canceled.
On September 26, 2024, the Company and Jubilee Intel, LLC (“Jubilee”) entered into that certain Agreement and Plan of Reorganization (the “Merger”) whereby the Company acquired 100% membership interests in and to Jubilee in exchange for 100,000 shares of Series A Preferred Stock. As a result of the Merger, Jubilee has become a wholly owned and operating subsidiary of the Company. The Company ceased to be a “shell company”.
Business Objectives of the Company
The Company’s wholly owned subsidiary, Jubilee Intel, LLC utilizes a proprietary Search Engine Marketing (SEM) platform to provide cutting-edge solutions for managing and scaling SEM campaigns through automation, AI, and machine learning. With access to a direct feed from Yahoo’s partner network and the ability to seamlessly integrate across platforms like Facebook, GDN, and Taboola, our system is optimized for profitability.
Our platform integrates machine learning and AI to automate the entire SEM process, from keyword research to campaign generation and optimization. This system eliminates the need for manual intervention, drastically reducing the time and resources required for effective SEM management.
We utilize a random forest regressor to process and analyze vast amounts of keyword data, often encompassing hundreds of thousands of data points. A random forest regressor is a machine learning algorithm used for predicting continuous values. It builds multiple decision trees during training, each using different subsets of the data, and averages the results to make predictions. This approach improves accuracy and reduces overfitting by leveraging the collective decision-making of several trees, which helps handle the complexity of large datasets.
For predicting profitability based on time-series data, we utilize the Support Vector Regressor (SVR). SVR is a powerful machine learning model that excels at capturing non-linear relationships in the data. By using a kernel trick, SVR can map input data into higher-dimensional spaces, allowing it to capture complex patterns and trends in campaign profitability over time.
To improve traffic quality and block underperforming sites, we use a Support Vector Machine (SVM) Classifier. SVM is a supervised learning model that finds the optimal boundary between different classes of data points. It is particularly effective in high dimensional spaces and works well when there’s a clear margin of separation between classes. We use SVM to classify traffic sources as “good” or “bad” based on various engagement and performance metrics.
All our reporting is centralized into a unified dashboard that provides real-time insights into campaign performance, keyword effectiveness, and traffic quality.
Our platform stands apart because it seamlessly integrates real-time data, machine learning models, and direct feeds from top-tier search engines. Unlike many platforms that require manual adjustments, our system automates every aspect of campaign creation, optimization, and scaling, resulting in significant efficiency gains and performance improvements for our clients.
The Company is obligated to file interim and periodic reports including an annual report with audited financial statements. This obligation will substantially increase the expenses incurred by the Company.
The Company’s common stock is subject to quotation on the OTC Markets Group Inc. Pink Market (“OTC Pink”) under the symbol HLLK. There is currently only a limited trading market in the Company’s common stock. There can be no assurance that there will be an active trading market for our common stock. If an active trading market commences, there can be no assurance as to the market price of our common stock, whether the trading market will provide liquidity to investors, or whether any trading market will be sustained.
The Company’s common stock is subject to quotation on the OTC Markets Group Inc. Pink Market (“OTC Pink”) under the symbol HLLK. There is currently only a limited trading market in the Company’s common stock. There can be no assurance that there will be an active trading market for our common stock. If an active trading market commences, there can be no assurance as to the market price of our common stock, whether the trading market will provide liquidity to investors, or whether any trading market will be sustained.
| 16 |
Corporate Information
Our Company’s headquarters is located at 1800 N Town Center Drive, Ste 100 Las Vegas, NV 89144. Our telephone number is 877-646-4833.
Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” as defined under the Securities Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
| ● | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (or the Sarbanes-Oxley Act); | |
| ● | reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration 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. |
In addition, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this extended transition period. We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1.07 billion or more in annual gross revenues; (ii) the end of fiscal year 2024; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter.
Results of Operations
The three months ended September 30, 2024 compared to the three months ended September 30, 2023
Revenues: The Company had no revenue during the three months ended September 30, 2024 or 2023.
General and Administrative expenses: The Company incurred $3,827 of general and administrative expenses during the three months ended September 30, 2024, compared to $6,500 during the same period in 2023, an increase of $2,673 or 41.1%
Other Income (Expense). The Company incurred total other income of $129,034 for the three months ended September 30, 2024, compared to total other expense of $177,348 during the three months ended September 30, 2023. In the current period we had interest expense of $7,109, expense for the amortization of debt discount of $48,605, a gain of $197,378 for the change in fair value of derivative, a $262,194 gain for forgiveness of debt, interest income of $3,332 and a loss on issuance of convertible debt of $278,156. In the prior period we had interest expense of $5,692, expense for the amortization of debt discount of $14,352, a loss of $147,246 for the change in fair value of derivative and a loss on issuance of convertible debt of $10,058.
Net Loss. The Company had net income of $125,207 for the three months ended September 30, 2024, compared to a net loss of $183,848 during the same period in 2023. The change from a net loss to net income is the result of the other income items as discussed above.
The nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Revenues: The Company had no revenue during the nine months ended September 30, 2024 or 2023.
General and Administrative expenses: The Company incurred $35,437 of general and administrative expenses during the nine months ended September 30, 2024, compared to $36,996 during the same period in 2023, a decrease of $1,559 or 4.2%.
| 17 |
Other Income (Expense). The Company incurred total other income of $53,117 for the nine months ended September 30, 2024, compared to total other expense of $233,035 during the nine months ended September 30, 2023. In the current period we had interest expense of $21,974, expense for the amortization of debt discount of $177,893, a gain of $261,984 for the change in fair value of derivative, a $265,824 gain for forgiveness of debt, interest income of $3,332 and a loss on issuance of convertible debt of $278,156. In the prior period we had interest expense of $7,629, expense for the amortization of debt discount of $35,347, a loss of $159,797 for the change in fair value of derivative and a loss on issuance of convertible debt of $21,427.
Net Loss. The Company had net income of $17,680 for the nine months ended September 30, 2024, compared to a net loss of $270,031 during the same period in 2023. The change from a net loss to net income is the result of the other income items as discussed above.
Cash Flows
Net cash used in operating activities was $32,437 and $31,305 during the nine months ended September 30, 2024 and 2023, respectively.
Net cash used in investing activities was $100,000 and $0 during the nine months ended September 30, 2024 and 2023, respectively. In the current period we issued a $100,000 note receivable to a third party.
Net cash provided by financing activities was $132,437 and $31,305 during the nine months ended September 30, 2024 and 2023, respectively. In the current period we received $1,456 from a related party and $130,981 of proceeds from notes payable.
Liquidity and Capital Resources
As of September 30, 2024, we had $103,332 assets and current liabilities totaling $833,304.
Going Concern
We have only limited capital. Additional financing is necessary for us to continue as a going concern. The report of the independent registered public accounting firm accompanying our financial statements for the years ended December 31, 2023 and 2022 contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern”, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
Refer to Note 2 to the Financial Statements for the nine months ended September 30, 2024, for a condensed discussion of our critical accounting policies and our Form 10-K for the year ended December 31, 2023, for a full discussion of our critical accounting policies and procedures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
| 18 |
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Each of our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a - 15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on their evaluation, each such person concluded that our disclosure controls and procedures were not effective as of September 30, 2024 due to a lack of segregation of duties.
In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal Control over Financial Reporting.
Our management has evaluated whether any change in our internal control over financial reporting occurred during the last fiscal quarter. Based on that evaluation, management concluded that there has been no change in our internal control over financial reporting during the relevant period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
ITEM 5. OTHER INFORMATION
On March 12, 2024, our Board of Directors received formal notice that our independent auditors, JLKZ CPA LLC (“JLKZ”), had made the decision to resign as our independent accountants effective March 12, 2024. On March 12, 2024, the Board of Directors voted unanimously to accept the resignation.
On March 12, 2024, OLAYINKA OYEBOLA & CO (“OOC”), Certified Public Accountants of Houston, Texas, & Lagos, Nigeria were appointed by the Company to audit our financial statements for the year ended December 31, 2023.
| 19 |
ITEM 6. EXHIBITS
(a) Documents furnished as exhibits hereto:
| Exhibit No. | Description | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*) | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101). |
| 20 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HALLMARK VENTURE GROUP, INC. | ||
| Date: November 14, 2024 | By: | /s/ EVAN BLOOMBERG |
| Chief Executive Officer | ||
| By: | /s/ PAUL STRICKLAND | |
| Chief Financial Officer | ||
| 21 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Evan Bloomberg, certify that:
1. I have reviewed this Form 10-Q for the period ended September 30, 2024, of Hallmark Venture Group, Inc.:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. As the registrant’s other certifying officer I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. As the registrant’s other certifying officer I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: November 14, 2024
| /s/ Evan Bloomberg | |
| Evan Bloomberg | |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul Strickland, certify that:
1. I have reviewed this Form 10-Q for the period ended September 30, 2024, of Hallmark Venture Group, Inc.:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. As the registrant’s other certifying officer I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. As the registrant’s other certifying officer I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: November 14, 2024
| /s/ Paul Strickland | |
| Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES—OXLEY ACT OF 2002
In connection with the Quarterly Report of Hallmark Venture Group, Inc. on Form 10-Q for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John D. Murphy, Jr, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
Dated: November 14, 2024
| By: | /s/ Evan Bloomberg | |
| Evan Bloomberg | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) |
In connection with the Quarterly Report of Hallmark Venture Group, Inc. on Form 10-Q for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul Strickland, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| 1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
Dated: November 14, 2024
| By: | /s/ Paul Strickland | |
| Paul Strickland | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) |
Balance Sheets (Parenthetical) - USD ($) |
Sep. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Convertible note payable, Debt discount | $ 13,875 | $ 149,889 |
| Notes payable - net of debt discount | $ 58,332 | |
| Common stock, shares authorized | 2,499,900,000 | 2,499,900,000 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares issued | 523,925,844 | 612,179,943 |
| Common stock, shares outstanding | 523,925,844 | 612,179,943 |
| Series A Preferred Stock [Member] | ||
| Preferred stock, shares authorized | 200,000 | 200,000 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares issued | 100,000 | 100,000 |
| Preferred stock, shares outstanding | 100,000 | 100,000 |
Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Income Statement [Abstract] | ||||
| Revenue | ||||
| Expenses: | ||||
| General and administrative | 3,827 | 6,500 | 35,437 | 36,996 |
| Total operating expenses | 3,827 | 6,500 | 35,437 | 36,996 |
| Loss from operations | (3,827) | (6,500) | (35,437) | (36,996) |
| Other income (expense): | ||||
| Interest expense | (7,109) | (2,746) | (21,974) | (7,629) |
| Interest income | 3,332 | 3,332 | ||
| Imputed interest expense | (2,946) | (8,835) | ||
| Amortization of debt discount | (48,605) | (14,352) | (177,893) | (35,347) |
| Change in fair value of derivative | 197,378 | (147,246) | 261,984 | (159,797) |
| Gain on extinguishment of debt | 262,194 | 265,824 | ||
| Loss on issuance of convertible note | (278,156) | (10,058) | (278,156) | (21,427) |
| Total other income (expense) | 129,034 | (177,348) | 53,117 | (233,035) |
| Net income (loss) before income taxes | 125,207 | (183,848) | 17,680 | (270,031) |
| Provision for income tax | ||||
| Net Income (Loss) | $ 125,207 | $ (183,848) | $ 17,680 | $ (270,031) |
| Income (loss) per share – basic | $ 0.00 | $ (0.00) | $ 0.00 | $ (0.00) |
| Income (loss) per share –diluted | $ 0.00 | $ (0.00) | $ 0.00 | $ (0.00) |
| Weighted average shares outstanding – basic | 616,845,323 | 364,865,224 | 620,537,988 | 295,236,204 |
| Weighted average shares outstanding –diluted | 1,419,665,586 | 364,865,224 | 1,423,358,251 | 295,236,204 |
ORGANIZATION AND OPERATIONS |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| ORGANIZATION AND OPERATIONS | NOTE 1 — ORGANIZATION AND OPERATIONS
Hallmark Venture Group, Inc., was originally incorporated in the state of Colorado on July 14, 1995, with the name CPC Office Systems, Inc. On July 12, 1999, the Company changed its name to Homesmart USA, Inc. On March 6, 2008, the Company changed its name to Speech Phone, Inc. On March 3, 2006, the Company moved its domicile to Nevada. On March 8, 2006, the Company changed its name to Smart Truck Systems, Inc. On July 16, 2008, the Company changed its name to Hallmark Venture Group, Inc.
On May 4, 2020, Living Waters, LLC (“LWLLC”) obtained management control of the Company from its previous CEO and Director, Robert Cashman (“Cashman”), pursuant to a contingent Share Purchase Agreement (the “SPA”), dated as of May 4, 2020, by and among LWLLC and Cashman, whereby certain preferred shares (the “Preferred Shares”) that represent the voting control interest in the Company were to be issued to LWLLC (the “Transaction”).
On May 27, 2020, in connection with the Transaction and in accordance with provisions of the SPA, LWLLC assigned the SPA to Medical Southern, LLC (“MSLLC”). On August 13, 2020, all issued and outstanding Preferred Shares were issued to a designee of MSLLC, Top Knot, Inc. USA (“TKIU”).
On August 17, 2020, in connection with the Transaction and in accordance with provisions of the SPA, MSLLC assigned the SPA to Stonecrest Acquisition, LLC (“SALLC”). As a consequence of the Transaction, a change of control of the Company occurred. As a result of the Transaction TKIU obtained voting control of the Company. Subsequently, on October 19, 2020, TKIU assigned % of the Preferred Shares it held to Endicott Holdings Group, LLC (“Endicott”).
On June 20, 2022, Endicott transferred % of the preferred shares, and of the shares of common stock it held, to Beartooth Asset Holdings, LLC, an entity controlled by the Company’s Secretary, Paul Strickland, resulting in a change of control of the Company.
On July 7, 2022, Beartooth Asset Holdings, LLC (an entity controlled by Paul Strickland, the Company’s secretary and a member of its board of directors) transferred Series A Preferred Shares to JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr., President CEO of the Company and a Member of the Board of Directors, resulting in a change of control of the Company.
On July 12, 2022, Paul Strickland, the Company’s Principal Financial Officer, became a director of the Company.
On January 11, 2024, the Company entered into a Change of Control Agreement (the “CoC Agreement”) by and between John D. Murphy, Jr., the Company’s Director and CEO and JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr. (“Murphy”), and Paul Strickland, the Company’s Director and Secretary, and Selkirk Global Holdings, LLC, and Beartooth Asset Holdings, LLC, both entities controlled by Paul Stirckland (“Strickland”), and Steven Arenal and Aurum International Ltd., an entity controlled by Steven Arenal (“Aurum”) and, pursuant to which Murphy, Strickland, and their respective control entities will assign the Series A preferred shares controlled by each to Aurum. Strickland will transfer in restricted common shares to Aurum. In exchange, Murphy and Strickland will each retain 5% equity in the Company, post-restructuring, and those shares will have an 18-month anti-dilution provision as described in the Anti-Dilution Agreement executed between the Parties. Murphy and Strickland will also cancel debts owed to each by the Company. Strickland will cancel $83,342.25 in debts. Murphy will cancel $74,501 in debts. Murphy will receive $70,000 from Aurum in exchange for partial debt cancellation to be delivered into Escrow on February 27, 2024. Aurum will receive a $77,000 10% convertible promissory note in exchange for partially paying the Company’s debt owed to Murphy. The Consideration outlined herein is subject to the provisions of the Escrow Agreement between the Parties. The Company officially moved its place of business to 626 Wilshire Blvd., Suite 410, Los Angeles, California 90017.
On January 11, 2024, John D. Murphy, Jr. resigned as Director and Officer of the Company and all other positions he may hold with the Company.
On January 11, 2024, Paul Strickland resigned as Director and Officer of the Company and all other positions he may hold with the Company.
On January 11, 2024, Steven Arenal was elected as Director of the Company and appointed Chief Executive Officer, President, and Secretary of the Company.
On February 27, 2024, Steve Arenal and Aurum International Ltd. were given notice of default and failure to perform on the agreements they had signed, and Strickland and Murphy also gave notice of cancellation of all the foregoing agreements.
On February 28, 2024, a special meeting of shareholders was held removing Arenal and reinstating Murphy and Strickland and reversing & canceling all of the foregoing Aurum International Ltd / Arenal agreements.
On February 28, 2024, the Company filed an 8-K disclosing the cancellation, termination, and failure to perform on the aforementioned Arenal / Aurum agreements.
On March 4, 2024: The Company and its Board of Directors approved a 1:500 reverse split of the Company’s common stock.
On March 4, 2024: The shareholders required to vote approved the Board’s of the Company’s common stock.
On March 7, 2024: The Company filed the Amended and Restated Articles of Incorporation with Florida Secretary of State reflecting the 1:500 reverse split of the Company’s common stock. The completion of the reverse split is pending final approval by FINRA.
On September 26, 2024, the Company and its Board of Directors approved the following; i) Agreement and Plan of Reorganization; ii) Change of Control Agreement; iii) Escrow Agreement, iv) Anti-Dilution Agreement; v) Cancellation of the October 6, 2022 Selkirk Global Holdings, LLC Note; vi) Cancellation of the April 6, 2023 Selkirk Global Holdings, LLC Note, vii) Cancellation of the December 12, 2023 Strickland Convertible Exchange Note; viii); and the Company authorized its Secretary to open a bank account in the name of the Company.
On September 26, 2024, the Company and Jubilee Intel, LLC (“Jubilee”) entered into that certain Agreement and Plan of Reorganization (the “Merger”) whereby the Company acquired 100% membership interests in and to Jubilee in exchange for shares of Series A Preferred Stock. As a result of the Merger, Jubilee has become a wholly owned and operating subsidiary of the Company.
Pursuant to the Change of Control Agreement, Evan Bloomberg was assigned shares of Series A Preferred Stock. By virtue of this stock assignment, Mr. Bloomberg assumed full voting control of the Company.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have 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 in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America under U.S. GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:
September 30, 2024:
December 31, 2023:
The Company computes income (loss) per share in accordance with FASB ASC 260. Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. As of September 30, 2024, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. As of September 30, 2023, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. Diluted amounts are not presented when the effect of the computations are anti-dilutive due to the losses incurred.
Recently Issued Accounting Pronouncements
The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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GOING CONCERN |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 3 - GOING CONCERN
The Company’s financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As of September 30, 2024, the Company had an accumulated deficit of $3,232,481 and requires additional funds to support its operations and to achieve its business development goals, the attainment of which are not assured.
These factors and uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might incur in the event the Company cannot continue in existence. Management intends to seek additional capital from new equity securities offerings, debt financing and debt restructuring to provide funds needed to increase liquidity, fund internal growth and fully implement its business plan. However, management can give no assurance that these funds will be available in adequate amounts, or if available, on terms that would be satisfactory to the Company.
The timing and amount of the Company’s capital requirements will depend on a number of factors, including maintaining its status as a public company and supporting shareholder and investor relations.
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NOTE RECEIVABLE |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Note Receivable | |
| NOTE RECEIVABLE | NOTE 4 – NOTE RECEIVABLE
On May 2, 2024, the Company made a strategic loan to an independent privately-held non-affiliated third party by entering into a $100,000, 180 day 8% on demand Promissory Note Agreement.
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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
On September 20, 2024, Hallmark Venture Group, Inc. entered into a Debt Cancellation Agreement with Archer & Greiner, P.C., and a total of $262,192 of legacy legal debts were canceled.
As of September 30, 2024, and December 31, 2023, accounts payable and accrued liabilities consist of the following:
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CONVERTIBLE NOTE PAYABLE – RELATED PARTY |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Debt Disclosure [Abstract] | |
| CONVERTIBLE NOTE PAYABLE – RELATED PARTY | NOTE 6 – CONVERTIBLE NOTE PAYABLE – RELATED PARTY
On October 5, 2022, the Company issued a $50,000, 10% convertible promissory note to Selkirk Global Holdings, LLC, (“Selkirk”). The Note matured October 5, 2023, had a 10% OID and was convertible into the Company’s common stock at a price equal to 55% of the average closing price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the holder elects to convert all or part of the Note. The Note was being funded through the direct payment of Company expenses. On September 26, 2024, Selkirk forgave all amounts due of $51,682 and $14,678, principal and interest, respectively. The total amount of $66,360 was credited to additional paid in capital.
On April 6, 2023, the Company issued a $50,000, 10% convertible promissory note to Selkirk Global Holdings, LLC, (the “Note”). The Note matured April 5, 2024, had a 10% OID and was convertible into the Company’s common stock at a price equal to 55% of the average closing price of the Company’s common stock during the 20 consecutive trading days prior to the date on which the holder elects to convert all or part of the Note. The Note was being funded through the direct payment of Company expenses. On September 26, 2024, Selkirk forgave all amounts due of $27,274 and $3,789, principal and interest, respectively. The total amount of $31,063 was credited to additional paid in capital.
As of December 31, 2023, the above Notes are disclosed as $59,188, net of debt discount of $17,430.
As of December 31, 2023, the total due on the above notes for principal and interest is $76,618 and $7,555, respectively.
On December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for $144,501. The Note is unsecured, non-interest bearing, and matures on December 4, 2024. The note is convertible into shares of common stock at a 50% discount to the lowest trading price for the twenty-five days prior to conversion. On March 8, 2024, the Company repaid $70,000 of the loan. As of September 30, 2024, the note is disclosed as $60,625, net of discount of $13,876. As of December 31, 2023, the note is disclosed as $12,042, net of discount of $132,459.
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SETTLEMENT LIABILITY |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Settlement Liability | |
| SETTLEMENT LIABILITY | NOTE 7 – SETTLEMENT LIABILITY
On September 15, 2022, the Company was informed through its counsel in regard to a past due note payable, with an unrelated third party, from 2017 in the amount of $ along with calculated past due interest of $ resulting in a total amount due of $. On September 24, 2022, the Company entered into a 90-day Standstill Agreement relating to the claim against the Company. The Company has acknowledged the liability and has booked $ (includes additional interest of $) as a Settlement Liability as of December 31, 2022.
On March 7, 2023, the Company, Phase I Operations, Inc, and The Robert Papiri Defined Benefit Plan entered into an Assignment of Debt Agreement (the “Agreement”), whereby, the note payable for $139,821, was purchased by and assigned to Phase I Operations, Inc.
On March 15, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $28,204 of debt.
On April 20, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $17,032 of debt.
On June 12, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $15,598 of debt.
On July 12, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $17,142 of debt.
On September 15, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $28,412 of debt.
On September 18, 2023, the Company issued shares of its common stock to DACE Marketing Consulting, LLC for conversion of $5,700 of debt.
On September 18, 2023, the Company issued shares of its common stock to John Milardovic for conversion of $5,700 of debt.
On September 18, 2023, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $12,432 of debt.
On January 5, 2024, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $5,003 of debt.
On April 5, 2024, $4,500 of the remaining principal was assigned to Alpha Strategies (Note 8). The remaining principal and interest totaling $3,630 was credited to a gain on forgiveness of debt.
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SETTLEMENT LIABILITY – RELATED PARTY |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Settlement Liability Related Party | |
| SETTLEMENT LIABILITY – RELATED PARTY | NOTE 8 – SETTLEMENT LIABILITY – RELATED PARTY
On September 17, 2020, the Company entered into a settlement agreement with Green Horseshoe, LLC., Inc. on its past due notes payable with a principal balance of $285,206 and accrued interest of $296,670 representing a total amount of the settlement of $581,876. The settlement amount is non-interest bearing.
The agreement calls for the Company’s transfer agent to issue free-trading common shares to Green Horseshoe, LLC. at a conversion rate of 50% of the average closing price of the Company’s shares for the 10 prior trading days prior to any issuance notice issued by Green Horseshoe, LLC. The Company shall issue its unrestricted common stock in one or more tranches of less than 10% of the Company’s then issued and outstanding shares until the agreed upon settlement is satisfied.
For the years ended December 31, 2023 and 2022, the Company issued 173,146,328 and 46,145,527 shares of its common stock, respectively, in payment of $101,549 and $158,528 towards the settlement with no gain or loss recorded.
On March 28, 2024, Green Horseshoe, LLC assigned the Settlement Agreement, Court Order, and balance of debt owed to it by the Company to Alpha Strategies Trading Software, Inc.
On May 6, 2024, this liability was assigned to Nicosel, LLC, a non-affiliate of the Company (Note 9).
As of September 30, 2024 and December 31, 2023, the balance of the settlement liability is $146,799 and $146,799, respectively.
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NOTES PAYABLE |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Debt Disclosure [Abstract] | |
| NOTES PAYABLE | NOTE 9 – NOTES PAYABLE
On March 1, 2024, the Company issued a $100,000, 6% Demand Promissory note (the “Note”) to Alpha Strategies Trading Software, Inc., (“Alpha Strategies”) a non-affiliate of the Company. The Note matures on August 28, 2024, 180 days from the date of the Note. The Note has been issued to Holder in exchange for having made direct payments of Company expenses. $70,000 of the $100,000 note proceeds were used to cancel debts owed to John D. Murphy, Jr., the Company’s CEO and Director. On May 6, 2024, Alpha Strategies assigned this promissory note to Nicosel, LLC, a non-affiliate of the Company.
On May 1, 2024, the Company issued a $100,000, 8% Convertible Promissory Note (the “Note”) and entered into a Warrant Subscription Agreement with Nicosel, LLC, a non-affiliate of the Company. The Note matures on April 30, 2025. The Warrant Subscription Agreement is for 100,000 warrants, exercisable within one year of the execution date of the agreement at a price of $1.00.
As of September 30, 2024, the total amount due to Nicosel, LLC is $350,785 and $4,853 of principal and interest, respectively.
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DERIVATIVE LIABILITY |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE LIABILITY | NOTE 10 – DERIVATIVE LIABILITY
The Company currently has derivative liabilities for its convertible promissory notes with John Murphy and Nicosel, LLC.
A summary of the activity of the derivative liability for these notes is as follows:
A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy is as follows:
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STOCK PAYABLE |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Stock Payable | |
| STOCK PAYABLE | NOTE 11 – STOCK PAYABLE
The Company’s related party settlement liability (Note 7) included the requirement to issue shares of the Company’s common stock in order to cover litigation and legal expenses associated with the settlement agreement. The value of the shares at the settlement date was $ resulting in a total value of $. The Company issued shares of common stock on November 5, 2020, at a value of $13,870. The balance due is $36,130 as of September 30, 2024 and December 31, 2023.
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COMMON STOCK |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Equity [Abstract] | |
| COMMON STOCK | NOTE 12 – COMMON STOCK
On January 5, 2024, the Company issued shares of its common stock to Phase I Operations, Inc. for conversion of $5,003 of debt.
On September 26, 2024, Beartooth Asset Holding, LLC, an entity controlled by Paul Strickland, agreed to cancel shares of common stock as part of the merger agreement.
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PREFERRED STOCK |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Equity [Abstract] | |
| PREFERRED STOCK | NOTE 13 – PREFERRED STOCK
The Company is authorized to issue shares of $ par value Series A preferred stock. The Company increased the number of authorized shares of the Series A preferred stock from to on January 19, 2021. Each share of the Series A Preferred Stock is convertible at the option of the holder into shares of common stock. The holder has voting rights of 100,000 votes for each share of preferred stock held and shall be paid twice the amount of dividends issued by the Company to common shareholders on a pro rata basis with the number of preferred shares held.
The Company has shares of Series A Preferred Stock issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. Beartooth Asset Holdings, LLC, an entity controlled by Paul Strickland, the Company’s Secretary and a member of the board of directors, acquired the Series A Preferred Stock on June 20, 2022 from Endicott Holding Group, LLC.
On July 7, 2022, Beartooth Asset Holdings, LLC, transferred Series A Preferred Shares to JMJ Associates, LLC (an entity controlled by John D. Murphy, Jr., the Company’s Chief Executive Officer and President and a member of the board of directors) resulting in a change of control of the Company.
On September 27, 2024, JMJ Associates, LLC transferred Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement (Note 1).
On September 27, 2024, Beartooth Asset Holdings, LLC transferred Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement (Note 1).
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OTHER RELATED PARTY TRANSACTIONS |
9 Months Ended | |||||||||||||||||||||||||||
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Sep. 30, 2024 | ||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||
| OTHER RELATED PARTY TRANSACTIONS | NOTE 14 – OTHER RELATED PARTY TRANSACTIONS
Manager Promissory Note
On February 1, 2022, the Company and its Board of Directors approved an 8% Manager Promissory Note for up to $300,000 from JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr., the Company’s Chief Executive Officer and President and member of the Board of Directors. JMJ Associates, LLC has not yet made any loans to the Company.
Loans and Cash Advances
John D. Murphy, Jr., has at times directly paid for various company expenses. The amount was unsecured, non-interest bearing, and due on demand. On December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for the amount due of $144,501. During Q1 2024, $70,000 of the note was assigned to Alpha Strategies.
Imputed interest is assessed as an expense to the business operations and an addition to paid in capital. The imputed interest rate is 8%. During the nine months ended September 30, 2024 and 2023 the imputed interest was $0 and $8,835, respectively.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 15 — COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be a defendant in pending or threatened legal proceedings arising in the normal course of its business. Management is not aware of any pending, threatened or asserted claims.
See “Note 7 – Settlement Liability”.
See “Note 8 - Settlement Liability – Related Party”.
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SUBSEQUENT EVENTS |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 16 — SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the unaudited financial statements were issued and has determined that it does not have any material subsequent events to disclose in these unaudited financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation
The Company’s unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. These unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
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| Derivative Financial Instruments | Derivative Financial Instruments
The Company evaluates its convertible notes to determine if such instruments have 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 in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America under U.S. GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments as the notes bear interest rates that are consistent with current market rates.
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:
September 30, 2024:
December 31, 2023:
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| Basic and Diluted Income (Loss) Per Share |
The Company computes income (loss) per share in accordance with FASB ASC 260. Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. As of September 30, 2024, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. As of September 30, 2023, the Company has approximately potentially dilutive shares from convertible notes payable and potentially dilutive shares from Series A preferred stock. Diluted amounts are not presented when the effect of the computations are anti-dilutive due to the losses incurred.
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| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF FAIR VALUE MEASUREMENT | The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of:
September 30, 2024:
December 31, 2023:
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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | As of September 30, 2024, and December 31, 2023, accounts payable and accrued liabilities consist of the following:
|
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DERIVATIVE LIABILITY (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ACTIVITY OF DERIVATIVE LIABILITY | A summary of the activity of the derivative liability for these notes is as follows:
|
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| SCHEDULE OF DERIVATIVE LIABILITY VALUATION | A summary of quantitative information about significant unobservable inputs (Level 3 inputs) used in measuring the Company’s derivative liability that are categorized within Level 3 of the fair value hierarchy is as follows:
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OTHER RELATED PARTY TRANSACTIONS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2024 | ||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||
| SCHEDULE OF RELATED PARTY TRANSACTIONS |
|
SCHEDULE OF FAIR VALUE MEASUREMENT (Details) - USD ($) |
Sep. 30, 2024 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|---|
| Platform Operator, Crypto Asset [Line Items] | |||
| Derivative | $ 409,792 | $ 293,621 | $ 53,967 |
| Fair Value, Inputs, Level 1 [Member] | |||
| Platform Operator, Crypto Asset [Line Items] | |||
| Derivative | |||
| Total | |||
| Fair Value, Inputs, Level 2 [Member] | |||
| Platform Operator, Crypto Asset [Line Items] | |||
| Derivative | |||
| Total | |||
| Fair Value, Inputs, Level 3 [Member] | |||
| Platform Operator, Crypto Asset [Line Items] | |||
| Derivative | 409,792 | 293,621 | |
| Total | $ 409,792 | $ 293,621 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Convertible Notes Payable [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Earnings per share, potentially dilutive securities | 712,820,263 | 148,956,000 |
| Series A Preferred Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Earnings per share, potentially dilutive securities | 90,000,000 | 90,000,000 |
GOING CONCERN (Details Narrative) - USD ($) |
Sep. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Accumulated deficit | $ 3,232,481 | $ 3,250,161 |
NOTE RECEIVABLE (Details Narrative) - Promissory Note Agreement [Member] |
May 02, 2024
USD ($)
|
|---|---|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
| Note receivable | $ 100,000 |
| Note receivable, percentage | 8.00% |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) |
Sep. 30, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Legal fees | $ 25,624 | $ 281,716 |
| Accounting fees | 3,000 | |
| Total | $ 28,624 | $ 281,716 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details Narrative) |
Sep. 20, 2024
USD ($)
|
|---|---|
| Debt Canellation Agreement [Member] | Archer & Greiner, P.C [Member] | |
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
| Legacy legal debts cancelled | $ 262,192 |
SETTLEMENT LIABILITY – RELATED PARTY (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Nov. 05, 2020 |
Sep. 17, 2020 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2024 |
|
| Defined Benefit Plan Disclosure [Line Items] | |||||||
| Issued shares of common stock | $ 13,870 | $ 5,003 | $ 28,204 | ||||
| Green Horseshoe LLC [Member] | |||||||
| Defined Benefit Plan Disclosure [Line Items] | |||||||
| Notes payable | $ 285,206 | ||||||
| Accrued interest | 296,670 | ||||||
| Settlement liabilities related party | $ 581,876 | $ 146,799 | $ 146,799 | ||||
| Conversion rate | 50.00% | ||||||
| Issued shares of common stock | 173,146,328 | $ 46,145,527 | |||||
| Repayment of debt | $ 101,549 | $ 158,528 | |||||
NOTES PAYABLE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
|---|---|---|---|---|---|---|---|
May 01, 2024 |
Mar. 01, 2024 |
Nov. 05, 2020 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Short-Term Debt [Line Items] | |||||||
| New issues | $ 13,870 | $ 5,003 | $ 28,204 | ||||
| Note proceeds | $ 130,981 | ||||||
| Alpha Strategies Trading Software Inc [Member] | |||||||
| Short-Term Debt [Line Items] | |||||||
| Payments of notes | $ 70,000 | ||||||
| Nicosel LLC [Member] | |||||||
| Short-Term Debt [Line Items] | |||||||
| Principal amount | 350,785 | ||||||
| Interest payable | $ 4,853 | ||||||
| Promissory Note [Member] | Alpha Strategies Trading Software Inc [Member] | |||||||
| Short-Term Debt [Line Items] | |||||||
| New issues | $ 100,000 | ||||||
| Interest rate | 6.00% | ||||||
| Maturity date | Aug. 28, 2024 | ||||||
| Payments of notes | $ 70,000 | ||||||
| Note proceeds | $ 100,000 | ||||||
| Promissory Note [Member] | Nicosel LLC [Member] | Warrant Subscription Agreement [Member] | |||||||
| Short-Term Debt [Line Items] | |||||||
| New issues | $ 100,000 | ||||||
| Interest rate | 8.00% | ||||||
| Maturity date | Apr. 30, 2025 | ||||||
| Number of warrants | 100,000 | ||||||
| Exercisable period | 1 year | ||||||
| Exercise price | $ 1.00 | ||||||
SCHEDULE OF ACTIVITY OF DERIVATIVE LIABILITY (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2024 |
Dec. 31, 2023 |
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Balance | $ 293,621 | $ 53,967 |
| Decrease to derivative due to repayments | (66,769) | |
| increase to derivative due to new issuances | 378,156 | 519,989 |
| Derivative gain due to mark to market adjustment | (195,216) | (280,335) |
| Balance | $ 409,792 | $ 293,621 |
STOCK PAYABLE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Nov. 05, 2020 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Sep. 30, 2024 |
Dec. 31, 2023 |
|
| Stock Payable | |||||
| Number of shares issuable for litigation and legal expenses | 5,000,000 | ||||
| Share price | $ 0.01 | ||||
| Value of shares issuable for litigation and legal expenses | $ 50,000 | ||||
| Common stock issued for payment on settlement liability, shares | 1,387,000 | ||||
| Common stock issued for payment on settlement liability | $ 13,870 | $ 5,003 | $ 28,204 | ||
| Stock payable | $ 36,130 | $ 36,130 | |||
COMMON STOCK (Details Narrative) - USD ($) |
Sep. 26, 2024 |
Jan. 05, 2024 |
Jan. 05, 2024 |
Sep. 18, 2023 |
Sep. 15, 2023 |
Jul. 12, 2023 |
Jun. 12, 2023 |
Apr. 20, 2023 |
Mar. 15, 2023 |
|---|---|---|---|---|---|---|---|---|---|
| Paul Strickland [Member] | |||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
| Number of shares cancel | 98,259,679 | ||||||||
| Common Stock [Member] | Phase I Operations [Member] | |||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
| Common stock issued to conversion of debt, shares | 10,005,580 | 10,005,580 | 41,440,699 | 25,828,853 | 34,284,530 | 31,196,115 | 28,385,910 | 23,502,934 | |
| Conversion of debt | $ 5,003 | $ 5,003 | $ 12,432 | $ 28,412 | $ 17,142 | $ 15,598 | $ 17,032 | $ 28,204 |
PREFERRED STOCK (Details Narrative) - $ / shares |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Sep. 27, 2024 |
Jul. 07, 2022 |
Jun. 20, 2022 |
Sep. 30, 2024 |
Dec. 31, 2023 |
Jan. 19, 2021 |
Jan. 18, 2021 |
|
| Beartooth Asset Holdings LLC [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Number of shares transferred | 110,646,679 | ||||||
| Series A Preferred Stock [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Preferred stock, shares authorized | 200,000 | 200,000 | 200,000 | 100,000 | |||
| Preferred stock, par value | $ 0.001 | $ 0.001 | |||||
| Shares issuable upon conversion | 900 | ||||||
| Preferred stock, voting rights | voting rights of 100,000 votes | ||||||
| Preferred stock, shares outstanding | 100,000 | 100,000 | |||||
| Series A Preferred Stock [Member] | Beartooth Asset Holdings LLC [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Number of shares transferred | 25,000 | 75,000 | |||||
| Series A Preferred Stock [Member] | JMJ Associates LLC [Member] | |||||||
| Class of Stock [Line Items] | |||||||
| Number of shares transferred | 75,000 | 75,000 |
OTHER RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Dec. 05, 2023 |
Mar. 31, 2024 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Feb. 01, 2022 |
|
| Related Party Transaction [Line Items] | |||||
| Imputed interest rate | 8.00% | ||||
| Imputed interest | $ 0 | $ 8,835 | |||
| Alpha Strategies Trading Software Inc [Member] | |||||
| Related Party Transaction [Line Items] | |||||
| Repayments of notes payable | $ 70,000 | ||||
| JMJ Associates LLC [Member] | |||||
| Related Party Transaction [Line Items] | |||||
| Notes interest rate | 8.00% | ||||
| Promissory note amount | $ 300,000 | ||||
| John D Murphy Jr [Member] | |||||
| Related Party Transaction [Line Items] | |||||
| Notes issued to related party | $ 144,501 | ||||
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