UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| (Mark One) | |
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For
the quarterly period ended | |
| or | |
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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) | (Zip Code) |
Registrant’s telephone number, including area
code:
(Former name, former address and former fiscal year, if changed since last report): N/A
Securities registered pursuant to Section 12(b) of the Act: None
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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: common shares issued and outstanding as of May 22, 2025.
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition or Plan of Operation | 4 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 5 |
| Item 4. | Controls and Procedures | 5 |
| PART II - OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 6 |
| Item 1A. | Risk Factors | 6 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
| Item 3. | Defaults Upon Senior Securities | 10 |
| Item 4. | Mine Safety Disclosures | 10 |
| Item 5. | Other Information | 10 |
| Item 6. | Exhibits | 11 |
| SIGNATURES | 12 | |
| 2 |
BLUE CHIP CAPITAL GROUP, INC.
CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2025
(UNAUDITED)
| 3 |
BLUE CHIP CAPITAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| February 28, 2025 | May 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Total Current Assets | ||||||||
| Other Assets | ||||||||
| Software application | ||||||||
| Total Other Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | ||||||||
| Accrued interest payable | ||||||||
| Due to related parties | ||||||||
| Convertible notes payable, net of discount of $ | ||||||||
| Total Liabilities | ||||||||
| Stockholders ‘Deficit | ||||||||
| Preferred A Stock, $ par value; shares authorized, issued and outstanding on November 30, 2024, and on May 31, 2024, respectively | ||||||||
| Common stock, $ par value; shares authorized, issued and outstanding, on February 28, 2025, and on May 31, 2024. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ||||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
See accompanying notes to the consolidated unaudited financial statements.
| F-1 |
BLUE CHIP CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| February 28, | February 29, | February 28, | February 29, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues: | $ | $ | $ | $ | ||||||||||||
| Operating Expenses: | ||||||||||||||||
Stock-based compensation | ||||||||||||||||
| General & Administrative expenses | ||||||||||||||||
| Total Operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income/(expenses): | ||||||||||||||||
| Interest | ( | ) | ( | ) | ||||||||||||
| Total Other income/(expenses) | ( | ) | ( | ) | ||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net Loss Share Basic and Diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Number of Common Shares Outstanding during the year Basic and Diluted | , | |||||||||||||||
See accompanying notes to consolidated financial statements.
| F-2 |
BLUE CHIP CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
For the Three and Nine months ended February 28, 2025
| Shares | Amounts | Shares | Amount ($) | Additional Paid-In Capital ($) | Accumulated Deficit ($) | Stockholders’ Equity (Deficit) ($) | ||||||||||||||||||||||
| Balance May 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of Common Shares for cash | - | |||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance August 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance November 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of Common Shares for Convertible Notes | - | |||||||||||||||||||||||||||
Issuance of Common Shares for Services | - | |||||||||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance February 28, 2025 | ( | ) | ||||||||||||||||||||||||||
For the Three and Nine months ended February 29, 2024
| Shares | Amounts | Shares | Amount ($) | Additional Paid-In Capital ($) | Accumulated Deficit ($) | Stockholders’ Equity (Deficit) ($) | ||||||||||||||||||||||
| Balance May 31, 2023** Restated | ( | ) | ||||||||||||||||||||||||||
| Issuance of Common Shares for cash | - | |||||||||||||||||||||||||||
| Cancel Founders shares | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance August 31, 2023 | ( | ) | ||||||||||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance November 30, 2023 | ( | ) | ||||||||||||||||||||||||||
| Issuance of Common Shares for services | - | |||||||||||||||||||||||||||
| Issuance of Common Shares for cash | - | |||||||||||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balance February 29, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
See accompanying notes to the consolidated unaudited financial statements.
| F-3 |
BLUE CHIP CAPITAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended | For the Nine Months Ended | |||||||
| February 28, 2025 | February 29, 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operations | ||||||||
| Shares in lieu of compensation | ||||||||
| Restricted cash | ( | ) | ||||||
| Discount amortization | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable | ||||||||
| Accrued Interest payable | ||||||||
| Due to related parties | ( | ) | ||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from sale of common stock | ||||||||
| Note Payable borrowings | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net Increase (Decrease) in Cash | ( | ) | ( | ) | ||||
| Cash at Beginning of Period | ||||||||
| Cash at End of Period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Founders’ shares cancelled | $ | $ | ||||||
| Shares issued with convertible notes | $ | $ | ||||||
The accompanying notes to the consolidated unaudited financial statements.
| F-4 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND BUSINESS
Blue Chip Capital Group, Inc., (the “Company”)
was incorporated in the State of Delaware on November 27, 2019, under the name of Blue-Chip Financial Group Corp. It was subsequently
re-domiciled to the State of Nevada on December 17, 2020, with a name change to Blue Chip Capital Group, Inc. Blue Chip Capital Group,
Inc (the “Company”) owns
The Company’s Raisewise USA platform will be
operating through several wholly or majority owned subsidiaries in Morocco, Sweden and Brazil which will conduct business, when and if
operational, in various U.S. and international jurisdictions, as follows: Raisewise USA, Inc., a New York corporation (
The first established, Raisewise USA, has been registered and authorized as a Crowdfunding entity by the United States Securities and Exchange Commission (“SEC”). Raisewise Sweden and Raisewise Morocco have received requisite licenses from the respective securities/regulatory authorities in Sweden and Morocco, respectively, and Raisewise Brazil was recently organized and is in the process for applying for licenses in Brazil, the timing of which cannot be determined at present. Raisewise Brazil will own its own platform and have license and management agreements.
On January 8, 2021, the Company created Raisewise
Morocco L.L.C under the laws of Morocco. No assets or liabilities have been recorded on its balance sheet, nor has the subsidiary had
any transactions since inception. This subsidiary’s purpose is to create a Crowdfunding platform in Morocco that provides individual
investors with access to investment opportunities. The Company owns
On May 21, 2020, the Company established Raisewise
Sweden AB, a Swedish limited liability company, having a Crowdfunding platform. Raisewise Sweden AB was initially formed as a
NOTE 2 – GOING CONCERN
The accompanying financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company generated
revenue for the nine months ended February 28, 2025. The Company had a net loss of $
Management plans to identify adequate sources of funding to provide operating capital for continued growth.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
| F-5 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Principals of Consolidation
The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), and the rules and regulations of the Securities and Exchange Commission (SEC). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company accounts for cash and cash equivalents under Accounting Standards Codification (“ASC”) 305, Cash and Cash Equivalents (“ASC 305”) and considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Software Application
Software consists of an internally developed information system for use by the Company to allow individuals to invest in various opportunities as well as present individuals to provide opportunities for potential Investors and accounted for in accordance with ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software (“ASC 350-40”). Costs incurred up to and including the feasibility stage of development as well as maintenance costs are expensed as incurred. As of February 28, 2025, the software is within the application development phase and all costs are currently capitalized.
Revenue Recognition
The Company recognizes revenue pursuant to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts With Customers. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The impact of the Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures and there was no cumulative effect of the adoption of ASC 606.
The Raisewise platform operates as a traditional crowdfunding platform with debt, equity, rewards and donations. Revenues from operations are recognized when payment is tendered. Amounts paid with a credit card are recorded in accounts and other receivables until payment is collected from the credit card processor.
| F-6 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Deferred Income Taxes and Valuation Allowance
The Company accounts for
income taxes under ASC 740 Income Taxes (“ASC 740”). Under the asset and liability method of ASC 740, deferred tax
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that
the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at, 2021.
Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in
its financial statements. The Company’s evaluation was performed for nine months ended February 28, 2025 and the tax years
ended May 31, 2024, 2023, 2022 and 2021 for U.S. Federal Income Tax and for the State of Nevada. The Company has net operating loss
carry forwards in the amount of approximately $
Financial Instruments
ASC 820, Fair Value Measurements and Disclosures (ASC “820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 28, 2025. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring basis.
| F-7 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Warrants
For accounting purposes, the Company accounts for the Private Placement Warrants (i) in accordance with the guidance contained in ASC 815-40 and (ii) classified as an equity instrument. The fair values of the Private Placement Warrants were accounted for as stock purchases. Since the entries recognize the fair value of the Private Placement Warrants offset within additional paid-in capital, there is no inherent impact to the condensed consolidated financial statements.
On June 29, 2021, the Company entered into a subscription
agreement with a third party who agreed to purchase shares of common stock for $
On July 3, 2021, the Company entered into a subscription
agreement with a third party who agreed to purchase shares of common stock for $
During the year ended May 31, 2024, the Company entered
into several subscription agreements with third parties who agreed to purchase a total of shares of common stock for $
In consideration for an investor
who had purchased on February 7, 2025 a $
As of February 28,2025, there were
| F-8 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Long-lived Assets
Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on
estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented. On February 28, 2025, and May 31, 2024, the Company does not have any long-lived assets.
Property and Equipment
The Company follows ASC 360, Property, Plant, and
Equipment, for its fixed assets. Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line
basis over the estimated useful lives of the assets (
Related Parties
The Company follows ASC 850, Related Party Disclosures
(ASC 850”) for the identification of related parties and disclosure of related party transactions. On February 28, 2025, and May
31, 2024, the amounts due for related party transactions were $
ASC 718 Compensation – Stock Compensation (“ASC 718”) prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability, otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 Equity – Based Payments to Non-Employees (“ASC 505-50”). Measurement of share-based payment transactions with non-employees are based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier performance commitment date or performance completion date. For stock-based transactions, February 28, 2025, the Company issued shares for services at par value since the stock has no established market price at this time.
| F-9 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Recently Issued Accounting Pronouncements
We have reviewed the issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully
Considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term.
The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of prior operations.
NOTE 4 – WHOLLY OWNED SUBSIDIARY
On May 21, 2020, the Company established Raisewise
Sweden AB, a Swedish limited liability, having a Crowdfunding platform. Raisewise Sweden AB was initially formed as a
On January 8, 2021, the Company created an additional
wholly subsidiary, Raisewise Morocco L.L.C. No assets or liabilities have been recorded on its balance sheet, nor has the subsidiary had
any transactions since inception. The subsidiary’s purpose is to create a Crowdfunding platform that provides individual investors
in Morocco with access to investment opportunities. The Company owns
NOTE 5 – STOCKHOLDERS’ EQUITY
Series A Preferred Stock
Based upon Board resolutions at the time the Company was re-domiciled in Nevada, the Company is authorized to issue shares of Preferred Stock, at a par value of $ of which shares of common stock were issued to our founders. Our Board has the authority, without further action by the stockholders, to issue up to shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our Board. As of February 28, 2025, there are shares of Series A Preferred Stock authorized, of which shares are outstanding.
| F-10 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
Unless otherwise declared from time to time by the Board of Directors, out of funds legally available thereof, the holders of shares of the outstanding shares of Series A Preferred Stock shall not be entitled to receive dividends. Holders of Series A Preferred Stock shall not be entitled, as a matter of right, to subscribe for, purchase or receive any part of any stock of the Corporation of any class whatsoever, or of securities convertible into or exchangeable for any stock of any class whatsoever, whether now or hereafter authorized and whether issued for cash or other consideration or by way of dividend by virtue of the Series A Preferred Stock nor shall the shares of Series A Preferred Stock be convertible into shares of the Corporation’s common stock. The shares of Series A Voting Preferred Stock being issued to the Holders are not transferable.
Common Stock
The Company is authorized to issue shares of common stock, par value of $, of which shares of common stock were initially issued to our founders. On July17, 2023 the Board of Directors approved a resolution to cancel shares of common stock that had originally been issued to the founders.
During the nine months ended February, 28, 2025,
the Company sold shares of common stock for a total of $
During the nine months ended February 28, 2025, the Company issued shares of common stock as an inducement to investors of convertible notes.
During the nine months ended February 28, 2025, the Company issued 2,100,000 shares of common stock for services rendered. The shares were valued at $0.50 per share based on recent stock sales to unrelated parties which is the best evidence of fair market value given there is currently no open market for these shares.
NOTE 6– NOTES PAYABLE
During the period from November 19, 2024 through
February 28, 2025, the Company issued and sold to 5 investors convertible notes bearing interest at
1: 11/19/2024 in the principal amount of $
2. 11/27/2024 in the principal amount of $
3: 12/12/2024 in the principal amount of $
4: 12/12/2024 in the principal amount $
5: 12/30/2024 in the principal amount of $
The Company has determined that it has not made a derivative liability calculation since those shares are not tradable as no market price has been established.
In addition, the Company issued and sold to a single investor convertible notes as follows:
1: 12/18/2024 in the principal amount of $
2: 1/6/2025 in the principal amount of $
3: 2/7/2025 in the principal amount of $
| F-11 |
BLUE CHIP CAPITAL GROUP, INC.
NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
The Convertible Notes are convertible
into shares of the Issuer’s Common Stock from and after a date six (6) months from the Issue Date, at a conversion price of $
In connection with these notes, the Company agreed
to issue shares per dollar invested resulting in a total of shares for these notes. The value of the shares were discounted
against the note to be amortized over the terms of the notes. The total discount recorded for these shares related to these notes was
$
The Company recorded interest expense of $
The Company recognized amortization of debt discounts
in interest expense totaling $
NOTE 7– SUBSEQUENT EVENTS
Subsequent events were evaluated through April 28, 2025, which is the date the financial statements were available to be issued.
On
March 26, 2025, in consideration for this investor agreeing to authorize the release to the Company of the second tranche of $
| F-12 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management’s Plan of Operation.
The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “expect,” “plan,” “project,” “estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the Securities and Exchange Commission (“SEC”). The forward-looking statements included in this report are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.
Blue Chip Capital Group, Inc., a Nevada corporation (the “Company”) owns subsidiaries that operate independently but are accretive to one another under the name Raisewise USA, Inc., a New York corporation. We are establishing a portfolio of wholly and majority owned subsidiaries in different foreign jurisdictions to provide crowdfunding services in their respective markets.
The Company has yet to generate revenue from its operations during the fiscal year ended May 31, 2024, nor through the three-month period ended February 28, 2025, and it has not had any revenue since inception November 27, 2019. In order for the Company to maintain and expand its operations through the next 12 months, it may be required to: (1) successfully raise capital from its pending Registration Statement, if and when it is declared effective by the SEC; and/or (2) continue to raise through capital infusions through the issuance of other equity or debt securities, of a minimum of $1 million and up to $5 million.
The Company incurred net losses for the three months ending February 28, 2025, and February 29, 2024, of ($1,377,044) and ($58,578), respectively. Cumulative losses from inception through February 28, 2025, are ($3,156,783). The Company has net positive working capital for the nine months ended February 28, 2025, of ($17,313).
During the three months ended February 28, 2025, the Company raised $300,000 from private offering of convertible notes to single, third-party accredited investor (as that term is defined under Rule 501 of Regulation D promulgated by the Commission under the Act), as compared to $0 during the same three month period of the prior year, which sales were made in reliance upon Regulation S promulgated by the Commission under the Act.
While the Company reasonably believes that it will be able to continue to raise capital from sales to third-party investors as well as from advances from related parties, the Company has no current arrangements or commitments from third-party investors or related parties nor can there be any assurance that the Company will be able to continue to support its operations through private offerings of its debt or equity securities or advances from related parties on a long term basis.
The Company believes that it possesses the ability to meet requirements in the short term (the next 12 months from the most recent quarterly period ended February 28, 2025) as well as in the long-term (beyond the next 12 months).
Results of Operations for the Nine Months Ended February 28, 2025, compared to the Nine Months Ended February 29, 2024.
Operating Expenses
Operating expenses incurred for the nine months ended February 28, 2025, were $1,413,680 compared to operating expenses of $281,261 for the nine months ended February 29, 2024, an increase of $1,132,419, which is principally due to the increased legal and accounting fees related to this Registration Statement and stock-based compensation.
| 4 |
Liquidity and Capital Resources
On February 28, 2025, the Company had a working capital surplus of $17,313 compared to a working capital deficit of $71,951 at February 29, 2024.
The Company used $5567,993 in operating activities for the nine months ended February 28, 2025, compared to $567,993 during the same period of the prior fiscal year. The increase is due to general and administrative expenses related to legal and accounting fees during the nine months ended February 28, 2025, as discussed under Operating Expenses above.
The Company received $566,000 provided by financing activities during the nine months ended February 28, 2025, compared to $257,324 provided by financing activities during the nine months ended February 29, 2024. The increase is due to the sale of shares of equity and issuance of convertible debt during the nine months ended February 28, 2025.
Off-Balance Sheet Arrangements.
The Company does not have any off-balance sheet arrangements at this time.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a emerging growth company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information necessary under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing periods specified in the SEC’s rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s certifying officer, its Principal Executive Officer, its Principal Financial Officer and Principal Accounting Officer, has concluded that the Company’s disclosure controls and procedures are effective in reaching that level of assurance.
Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Based on the evaluation, he concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us required to be included in our periodic SEC filings. The Company hired a financial expert with the experience necessary in creating and managing internal control systems as well as to continue to improve the effectiveness of our internal controls and financial disclosure controls.
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Limitations on the Effectiveness of Controls
Management has confidence in its internal controls and procedures. The Company’s management believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud, if any, within the Company have been detected.
Changes in Internal Controls
There were no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended November 30, 2024, that have materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 1A – RISK FACTORS
The following risk factors should be considered in connection with an evaluation of our business as described above and our Plan of Operations as described in our Registration Statement:
In addition to other information in this Quarterly Report, the following risk factors should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. As a result of the risk factors set forth below, actual results could differ materially from those projected in any forward-looking statements. Additional risks and uncertainties not presently known to us, or that we currently consider to be immaterial, may also impact our business, result of operations, liquidity and financial condition. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, if and when a trading market for our securities is established, the trading price of our securities could decline, and you may lose all or part of your investment.
Risks Related to our Financial Condition
The Company’s IPO is a best effort Offering, investors who invest initially will be subject to more risk than later investors.
We were seeking to raise gross proceeds of up to $20,000,000 from the sale of the Units pursuant to our registered IPO under a registration statement on Form S-1 that was declared effective by the SEC on December 1, 2023, not including an additional $25,000,000 if all of the Warrants were exercised at the warrant exercise price of $2.50, of which there was no assurance. In order to raise these proceeds under our registered IPO registration statement, we will have to file a post-effective amendment to this IPO registration statement declared effective on December 1, 2023 (or in the alternative, file a new registration statement that must be reviewed by the SEC prior to its being declared effective), in order to raise monies under this offering. Our net proceeds from the IPO offering will be used principally to: (i) expand our crowdfunding operations, including opening in new markets, in addition to the United States, Sweden, Morocco and recently in Brazil (pending Brazil’s license application/approval process) and elsewhere in Europe; (ii) pay the expenses of the Unit Offering including any placement agent fees; (iii) for working capital and general corporate purposes; (iv) fund the $7 million acquisition of US Petrochemical pursuant to a letter of intent dated August 24, 2024, as reported in the Company’s Form 8-K/A filed with the SEC on September 11, 2024, subject to the mutual agreement between the Company and US Petrochemical to waive the January 31, 2025 termination date; and (v) fund growth initiatives, including other potential future acquisitions.
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Our Independent Registered Public Accounting Firm has expressed substantial doubt as to our ability to continue as a going concern.
The audited financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern. We believe that to continue as a going concern we will need at least $500,000 per year simply to cover the administrative, legal and accounting fees, based upon our general and administrative expenses of approximately $220,000 for the quarter ended February 28, 2025. We plan to fund these expenses primarily through cash flow from operations, if and when we generate positive cash flow, of which there can be no assurance, the sale of restricted shares of our Common Stock, and the issuance of convertible notes, as well as funds raised from the offering, if successful, subject to our filing of a post-effective amendment, of which there can be no assurance.
Based on our audited financial statements for the fiscal years ended May 31, 2024, and 2023, and our interim financial statements for the period ended February 28, 2025, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern. To date we have not generated any revenue from operations and have had to rely on the infusion of capital from our founders as well as the sale of debt and equity securities. There can be no assurance that we will, in fact, generate revenue in the near term, if ever, notwithstanding our expectations, nor can there be any assurance that we will be able to continue to raise funds from the sale of debt or equity securities to private investors.
We may need to raise additional capital to fund continuing operations and an inability to raise the necessary capital or to do so on acceptable terms could threaten the success of our business.
To date, our operations have been funded entirely from the proceeds from the sale of debt and equity to private accredited investors and from loans from our management and founders. We currently anticipate that our available capital resources will be insufficient to meet our expected working capital and capital expenditure requirements for the near future. We anticipate that we will require an additional $2,000,000 during the next twelve months to fulfill our business plan, not including the $7,000,000 in funds necessary close the acquisition of US Petrochemical. However, such resources may not be sufficient to fund the long-term growth of our business. If we determine that it is necessary to raise additional funds, we may choose to do so through strategic collaborations, licensing arrangements through our “White Labeling” (defined herein as our source code and intellectual property) strategy, public or private equity or debt financing, a bank line of credit, or other arrangements, none of which can there be any assurance.
The Company is a holding company that owns intellectual property developed by Raisewise USA and held nominally by its wholly owned and majority owned subsidiaries, Raisewise Sweden, Raisewise Morocco and Raisewise Brazil. This intellectual property consists primarily of source code, maintenance contracts, the Raisewise brand and trademark and associated technologies. The Company hopes to monetize its intellectual property, potentially through franchise contracts, but has not established any franchise relationships nor is it in any negotiations to that end. By owning the source code, the Company hopes to be able to develop new platforms and opportunities, including White Labeling opportunities, worldwide but there is no assurance that the Company will have sufficient capital resources to pursue such efforts.
We have a very limited operating history; it is difficult to evaluate our business and future prospects and increases the risks associated with investment in our securities.
We only have a very limited history, having been organized under the laws of Nevada on November 27, 2019, and only limited business operations to date, principally related to start-up and formation of our Raisewise USA subsidiary’s operations as well as our subsidiaries in Sweden, Morocco and Brazil. We also have prepared our formal documentation for our planned filings with FINRA, a prerequisite for our Raisewise USA crowdfunding subsidiary and similar filings are required for filing for Sweden, Morocco and Brazil with these countries’ respective regulatory authorities. Because of our limited operating history, any potential investors in our IPO, which is subject to a post-effective filing requirement, may not have adequate information on which they can base an evaluation of our business and prospects. Investors should be aware of the difficulties, delays, and expenses normally encountered by an enterprise in its early stage, many of which are beyond our control, including unanticipated research and development expenses, employment costs, and administrative expenses. We cannot assure any potential investors that our proposed business plans will materialize or prove successful. Given our limited operating history, we may be unable to effectively implement our business plan which could materially harm our business or cause us to scale down or cease our operations.
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Risks Related to our Business
Based on our recurring losses incurred during our startup and early development stage, and limited operating history, we may not be able to successfully implement our business plan; our auditors have included an explanatory paragraph in their opinion as to the substantial doubt about our ability to continue as a going concern.
We are a development stage company and since inception, have suffered losses from development stage activities to date, are dependent upon the success of our capital raise from our IPO to hope to fulfill our business plan, which is subject to the requirement of filing a post-effective amendment to our registration statement. We have experienced net losses in each fiscal quarter since our inception and as of the quarterly period ended February 28, 2025, have an accumulated deficit of $2,006,997. As a result of these factors, our independent auditors have included an explanatory paragraph in their opinion in their respective Reports for the fiscal years ended May 31, 2024, and 2023, as to the substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which contemplate that we will continue to operate as a going concern. Our financial statements do not contain any adjustments that might result if we are unable to continue as a going concern.
We have only very limited operations, will not generate any revenue unless we are successful in the IPO offering, which is subject to filing a post-effective amendment, and in implementing our business plan and may need additional capital to fund our activities.
We currently have not commenced any significant active operations in any of our subsidiaries and expect to continue to incur losses for the foreseeable future. Unless we can be successful in starting Crowdfunding operations and raise the capital necessary to complete the acquisition of US Petrochemical, assuming we successfully negotiate an extension of our letter of intent with US Petrochemical, of which there can be no assurance notwithstanding any positive communications to that end that we have had with representatives of US Petrochemical, we will not generate any revenues in the near term and we will continue to incur expenses related to our reporting obligations under the Securities Exchange Act of 1934 (the “Exchange Act”). We will need to raise additional funds and such funds may not be available on commercially acceptable terms, if at all. If we cannot raise funds on acceptable terms, we may not be able to continue to execute our plan to acquire an operating company and in the extreme case, liquidate the Company.
We are dependent upon ability to successfully negotiate an extension of our binding letter of intent with US Petrochemical because we did not close the acquisition by January 31, 2025.
On August 28, 2024, the Company and US Petrochemical entered into a Binding Letter of Intent providing for the acquisition by the Company of 100% of the capital stock of US Petrochemical for cash consideration of $7,000,000 payable by January 31, 2025. The Binding Letter of Intent further provided that the closing of the acquisition was subject to the review and approval by the Company of the audited and interim financial statements of US Petrochemical as well as receipt by the Company of necessary documentation and information to conduct its due diligence.
The Company did not complete the acquisition by January 31, 2025, and the Company received a letter from US Petrochemical of this failure. However, the Company did not receive the financial statements and other information to conduct and conclude the agreed due diligence. The Company has had communications with representatives of US Petrochemical with respect to the Company’s continued interest to close the acquisition, upon conclusion of due diligence and subject to the Company’s ability to fund the acquisition either from the proceeds of the IPO offering or other funding, of which there can be no assurance.
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We operate in a regulatory environment that is evolving and uncertain.
The regulatory framework for online capital formation or crowdfunding is relatively new. The regulations that govern our operations have been in existence for a very few years. Further, there are constant discussions among legislators and regulators with respect to changing the regulatory environment. New laws and regulations could be adopted in the United States and abroad. Further, existing laws and regulations may be interpreted in ways that would impact our operations, including how we communicate and work with investors and the companies that use our platforms’ services. For instance, over the past year, there have been several attempts to modify the current regulatory regime. Some of those suggested reforms could make it easier for anyone to sell securities (without using our services), or could increase our regulatory burden, including requiring us to register as a broker-dealer. Any such changes would have a negative impact on our business.
We operate in a highly regulated industry.
We are subject to extensive regulation and failure to comply with such regulation could have an adverse effect on our business. Further our subsidiary, Raisewise US, is expected to be registered as a funding portal and regulated entities such as us are often subject to FINRA fines. In addition, some of the restriction and rules on our subsidiary could adversely affect and limit some of our business plans.
In the event we are required to register as a broker-dealer, our business model could be harmed.
Under our current structure, we believe we are not required to register as a broker-dealer under federal and state laws. We must comply with the rules surrounding crowdfunding portals and restrict our activities and services so as to not be deemed a broker-dealer under state and federal regulations. However, if we were deemed by a relevant authority to be acting as a broker-dealer, we could be subject to a variety of penalties, including fines and rescission offers. Further, we may be required to register as a broker-dealer, which would increase our costs, especially our compliance costs. If in those circumstances we decided not to register as a broker-dealer or act in association with a broker-dealer in our transactions, we may not be able to continue to operate under our current business model.
Our compliance is focused on U.S. laws and we have not analyzed foreign laws regarding the participation of non-U.S. residents.
Some of the investment opportunities posted on our platform are open to non-U.S. residents. We have not researched all the applicable foreign laws and regulations, and therefore we have not set up our structure to be compliant with all those laws. It is possible that we may be deemed in violation of those laws, which could result in fines or penalties as well as reputational harm. This may limit our ability in the future to assist companies in accessing money from those investors, and compliance with those laws and regulation may limit our business operations and plans for future expansion.
Raisewise’s Crowdfunding products and services are relatively new in an industry that is still quickly evolving.
The principal securities regulations that our Crowdfunding operations will be subject to, Regulation A and Regulation Crowdfunding, have only been in effect in their current form since 2015 and 2016, respectively. Raisewise’s ability to continue to penetrate the market remains uncertain as potential issuer companies may choose to use different platforms or providers (including, in the case of Regulation A, using their own online platform), or determine alternative methods of financing. Investors may decide to invest their money elsewhere. Further, our potential market may not be as large, or our industry may not grow as rapidly, as anticipated. With a smaller market than expected, we may have fewer customers. Success will likely be a factor of investing in the development and implementation of marketing campaigns, subsequent adoption by issuer companies as well as investors, and favorable changes in the regulatory environment.
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Our future success is largely dependent on our current management.
Our business was built by the vision, dedication, and expertise of our executive officers and board of directors, who are responsible for our day-to-day operations and creative development. Our success is dependent upon the continued efforts of these people. If it became necessary to replace them, it is unlikely new management could be found that would have the same level of knowledge and dedication to our success. The loss of the services of these professionals, especially in the development of future proprietary software, patents, or applications, would adversely affect our business.
We are a controlled company; Our COO will be a “Control Person” and the Company will be a “Controlled Company.”
A “controlled company” refers to a company controlled by another entity or another person by owning more than 50% of the total voting shares. A “Control Person” means any Person or Persons (as defined under Section 2(a)2 of the Act) that possesses directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or contract or otherwise. Joseph Richard Moran, our Chief Operating Officer and a founder, and who is married to Shani Moran, a Director, is the control person of NM & RM Corp. and Titan Ventures, Inc., which respectively own 28,125,000 shares and 25,000,000 shares (or a combined total of 53,125,000 shares) of the Company’s 84,039,400 presently outstanding shares of Common Stock, representing approximately 63% of the outstanding Common Stock. In addition, RN & NM Corp. and Titan Ventures, Inc. each owns 333,333 shares of Series A Voting Preferred Stock, representing 66 and 2/3% of the 999,999 outstanding shares of Series A Voting Preferred Stock. The holders of the shares of Series A Voting Preferred Stock are entitled to sixty-eight (68%) percent of the total votes on all such matters subject to stockholder vote, regardless of the actual number of shares of Series A Voting Preferred Stock then outstanding. As a result. Mr. Moran is deemed to be a “Control Person” of the Company, as defined under Section 2(a)2 of the Act.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the period from December 1, 2024 through February 28, 2025, the Company issued and sold to a single accredited investor convertible notes as follows:
1: 12/18/2024 in the principal amount of $100,000;
2: 1/6/2025 in the principal amount of $100,000; and
3: 2/7/2025 in the principal amount of $300,000, of which $250,000 was held in escrow pending certain events or upon authorization of the investor.
In connection with the issuance of these three convertible notes, the Company agreed to issue to this investor restricted inducement shares equal to 2 shares of common stock per each dollar of the principal amount of these convertible notes. At February 28, 2025, $250,000 continued to be held in escrow, which escrow proceeds were released to the Company in late March and late April 2025.
See the complete disclosure contained in Note 7-Subsequent Events to the Notes to Consolidated Unaudited Financial Statements, above.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - MINE SAFETY DISCLOSURES
None
ITEM 5 - OTHER INFORMATION
None
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ITEM 6 - EXHIBITS
The following exhibits are filed with this Report or incorporated by reference:
| 3.1 | Articles of Incorporation * | |
| 3.2 | By-Laws * | |
| 31.1 | Certification of Chief Executive Officer | |
| 31.2 | Certification of Chief Financial Officer | |
| 32.1 | Certifications of Chief Executive Officer | |
| 32.2 | Certifications of Chief Financial Officer | |
| 101.INS | Inline XBRL Instance Document# | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema# | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase# | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase# | |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase# | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase# | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document) |
* - Previously filed with our Form S-1 registration statement submitted to the SEC on August 7, 2023.
# The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BLUE CHIP CAPITAL GROUP, INC. | ||
| (Registrant) | ||
| By: | /s/: James Charles DiPrima | |
| Name: | James Charles DiPrima | |
| Title: | CEO, Principal Executive Officer and | |
| Principal Financial Officer | ||
Dated: May 22, 2025
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