UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended:
For the transition period from __________ to __________
Commission File Number:
| (Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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| (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)
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| None | N/A | N/A |
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, 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 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of October 16, 2024, there were shares of the registrant’s common stock outstanding.
GROOVE BOTANICALS, INC.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Groove Botanicals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| September 30, 2024 | March 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts Receivable | ||||||||
| Prepaid Expenses | ||||||||
| Total Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable and Accrued Liabilities | $ | $ | ||||||
| Interest Payable | ||||||||
| Related Party Payable | ||||||||
| Convertible Notes Payable | ||||||||
| Dividends payable | ||||||||
| Dividends payable, related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred Stock, Series A, $ par value, shares authorized; shares issued and outstanding as of September 30, 2024, and March 31, 2024 | ||||||||
| Preferred Stock, Series B, $ par value, shares authorized; shares issued and outstanding as of September 30, 2024, and March 31, 2023 | ||||||||
| Common Stock, $ par value, shares authorized. and shares issued and outstanding as of September 30, 2024, and March 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholder’s equity | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Groove Botanicals, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months ended | Six Months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | $ | $ | $ | $ | ||||||||||||
| Rent | ||||||||||||||||
| Legal and Professional Expenses | ||||||||||||||||
| Consulting Expense | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest Expense | ( | ) | ( | ) | ||||||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ||||||||||||
| Net (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Dividends on Preferred Stock | ||||||||||||||||
| Loss attributed to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and Diluted Earnings (Loss) per Common Share | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Common Shares Outstanding – Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
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Groove Botanicals, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
| Series A Preferred Stock |
Series B Preferred Stock |
Common Stock | Additional Paid In Capital |
Accumulated Deficit |
Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
| Accrued dividend to related party | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net (loss) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
| Accrued dividend to related party, Series A Preferred Stock | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Accrued dividend to Series B Preferred Stock | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net (loss) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance September 30, 2024 | $ | $ | $ | $ | $ | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Series A Preferred Stock |
Series B Preferred Stock |
Common Stock | Additional Paid In Capital |
Accumulated Deficit |
Total | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Amount | ||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
| Issuance of Stock for Consulting | — | — | ||||||||||||||||||||||||||||||||||
| Accrued dividend to related party | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Net (loss) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
| Accrued dividend to related party, Series A Preferred Stock | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Accrued dividend to Series B Preferred Stock | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net (loss) | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance September 30, 2023 | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Groove Botanicals, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Six Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash Flow From Operating Activities | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock Issued for Outside Services | ||||||||
| Accrued Interest | ||||||||
| Accrued Payroll | ||||||||
| Changes in working capital | ||||||||
| Increase (Decrease) in Prepaid Expenses | ( | ) | ||||||
| Increase (Decrease) in Accounts Payable and Accrued Liabilities | ( | ) | ( | ) | ||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flow From Investing Activities | — | — | ||||||
| Net Cash From Investing Activities | ||||||||
| Cash Flow From Financing Activities | ||||||||
| Funds received from Related Party | ||||||||
| Net Cash From Financing Activities | ||||||||
| Net Change in Cash | ( | ) | ||||||
| Cash at Beginning of Period | ||||||||
| Cash at End of Period | $ | $ | ||||||
| Net cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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GROOVE BOTANICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
NOTE 1 - ORGANIZATION AND OPERATIONS
Current Operations
Groove Botanicals, Inc. (the “Company”), (formerly known as Avalon Oil & Gas, Inc.), was originally incorporated in Colorado on April 25, 1991, under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name “Sled Dogs” which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On May 25, 1999, we filed articles of merger with Xdogs.com Inc., changing our state of domicile to Nevada. On June 22, 2005, the Corporation changed our name from XDOGS.com, Inc. to Avalon Oil and Gas, Inc. On May 14, 2018, the Corporation changed our name from Avalon Oil and Gas, Inc., to Groove Botanicals, Inc. Until August 2, 2021, when we filed a 15-12B to suspend duty to file reports under sections 13 and 15(d) of the securities exchange act of 1934, we were a reporting company. Subsequently, on September 14, 2023 we filed a Form 10 with the Securities and Exchange Commission, which became effective 60 days later.
Since inception we have operated, unsuccessfully, in various different industries. Currently, we plan to assemble a portfolio of early-stage EV Battery Technologies developed from Universities in Norway, Sweden and Finland, and seek grants from the State of Minnesota Department of Economic Development to find and identify corporate partners to commercialize these technologies and ultimately produce revenues for the Company. The Company does not currently own any patents or technologies related to the EV battery industry, and the process to acquire patents and technologies can be costly, and as such, the Company is not guaranteed to acquire any such patents.
Management believes that the technologies available in the specialized energy industry present a stable business model with high growth potential and we are actively working towards an impactful acquisition in this space.
On July 29, 2024, Mr. Douglas Barton resigned as a director of the Company. Mr. Barton did not resign due to any dispute or disagreement with the Company or its practices.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for financial information. Accordingly, they include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated balance sheets as of June 30, 2024 and 2023, were derived from the Company’s consolidated financial statements at that date.
Basis of Consolidation
The Company’s consolidated financial statements include the accounts of Groove Botanicals, Inc., and its two 100% controlled non-operating subsidiaries formed in Wyoming, Biotrex, Inc., and Maxidyne, Inc. Intercompany accounts and transactions have been eliminated in consolidation.
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Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates.
The Company computes net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As the Company has continued to report operating losses for the periods covered by this report, the impact of potentially dilutive securities would be antidilutive and therefore is not presented.
Income Taxes
The Company is taxed as a C corporation for income tax purposes. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company records tax positions taken or expected to be taken in a tax return based upon the amount that is more likely than not to be realized or paid, including in connection with the resolution of any related appeals or other legal processes. Accordingly, the Company recognizes liabilities for certain unrecognized tax benefits based on the amounts that are more likely than not to be settled with the relevant taxing authority. The Company recognizes interest and/or penalties related to unrecognized tax benefits as a component of income tax expense.
Beneficial Conversion Feature
The Company measures certain convertible debt using a nondetachable conversion feature known as a beneficial conversion feature, or BCF. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Debt Issuance Cost
Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet.
8
In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company has yet to adopt ASC 2020-06. The accounting impact will be a reclassification from Additional Paid-In Capital to Retained Earnings. The Company adopted ASC 2020-06 as of April 1, 2023.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of ASU 2023-07 will have any impact on our financial statements.
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. We are evaluating the impact of adopting ASU 2023-09 on our financial statements.
In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, may have on our financial statements.
NOTE 3 - GOING CONCERN
The accompanying consolidated
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. As shown in the consolidated financial statements, the Company has incurred recurring
net losses since its inception and has raised limited capital. The Company had a net loss of $
NOTE 4 – CASH
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2024, the Company’s cash consisted of non-restricted cash.
9
NOTE 5 – RELATED PARTY TRANSACTIONS
The Company had related party
payables of $
During each of the three-and
six-month periods ended September 30, 2024, and 2023, the Company accrued $
NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable consists of a $
On July 18, 2022, a Letter
Agreement was drafted between the Company and the debtholder, which establishes the settlement of these debts once the Company’s
Form 10 goes effective. On January 23, 2023 the Company and the convertible note holder mutually agreed to settle any and all amounts
owed pursuant to 1) the Consulting Agreement and Convertible Promissory Note in the amount of $
$
As of September 30, 2024 and
March 31, 2024, the balance of the convertible note was $
NOTE 7 – PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of Preferred Stock. We have authorized shares of Series A Preferred Stock and shares of Series B Preferred Stock, respectively, both with a par value of $. As of September 30, 2024, and March 31, 2024, there were and shares issued and outstanding for Series A Preferred Stock and Series B Preferred Stock, respectively.
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Series A Preferred Stock holds
designations of cash dividends at the rate of 8% of the amount per share of Series A Preferred Stock per annum in the form of “Preferred
Dividends”, voting rights on an as-converted to Common Stock basis, liquidation preferences, and conversion rights in which each
share of Series A Preferred Stock shall, upon conversion, represent 0.51% of the then “Fully-Diluted Shares Outstanding” of
the Company. On January 12, 2018, our Board of Directors agreed to amend Designation of the Series A Convertible Preferred Stock be amended
by changing the ratio for conversion, in Article IV, subparagraph (a), from 0.4% to 0.51% so that upon conversion the number of shares
of common stock to be exchanged shall equal 51% of then issued and outstanding common stock. In addition, on January 12, 2018, the Company
and the Series A Holder agreed to forgive all accrued interest to date on the Series A, and to pause any accruals until April 1, 2023.
The Series A Convertible Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for
the stock plus any unpaid dividends. Currently the value of the liquidation preference is $
Series B Preferred Stock holds
designations of being ranked junior to the Series A Preferred Stock, cash dividends at the rate of 9% of the amount per share of Series
B Preferred Stock per annum in the form of “Preferred Dividends”, a dividend received deduction for federal income tax purposes,
liquidation preferences ranked junior to the Series A Preferred Stock, redemption of the Series B Preferred Stock by the Company at 105%
of the Stated Value, plus accrued and unpaid Dividends, if prior to the two year anniversary of the Issuance Date, or at 100% of the State
Value, plus accrued and unpaid Dividends, if on or after the two year anniversary of the Issuance Date, no voting rights, and right to
notice of certain corporate action. All accrued dividends on the Series B were settled through March 31, 2023, and none remained outstanding
at March 31, 2023. Dividends began to accrue on the Series B Preferred Stock as of April 1, 2023. During each of the three and six-month
periods ended September 30, 2024 and 2023, the holders of the Series B preferred shares accrued $
NOTE 8 – COMMON STOCK
The Company is authorized to issue shares of Common Stock, with a par value of $.
The Company had shares of common stock issued and outstanding as of September 30, 2024, and March 31, 2024.
Shares issued in the six months ended September 30, 2024:
There were no shares issued during the six-month period ended September 30, 2024.
Shares issued in the six months ended September 30, 2023:
On April 15, 2023, the Company issued shares of common stock in exchange for consulting services. These shares were valued at $ per share, the fair market value on the date of issuance.
NOTE 9: COMMITMENTS AND CONTINGENCIES
As of September 30, 2024,
the
11
NOTE 10 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist through the date of this filing other than as set out below.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains predictions, estimates and other forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “intends,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors including the risks set forth in the section entitled “Risk Factors” in our registration statement on Form 10-12G/A, as filed with the Securities and Exchange Commission (the “SEC”) on November 6, 2023, that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.
Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Report. You should read this Report with the understanding that our actual future results may be materially different from what we expect.
All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.
The management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated unaudited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The following discussion of our financial condition and results of operations should be read in conjunction with the notes to the consolidated unaudited financial statements appearing elsewhere in this Report and the Company’s audited financial statements for the fiscal year ended March 31, 2024, as filed with the SEC in its Annual Report on Form 10-K/A on August 15, 2024, along with the accompanying notes. As used in this Quarterly Report, the terms “we,” “us,” “our” and the “Company” means Groove Botanicals, Inc.
The Company relies primarily on its current sole officer and director, Kent Rodriguez to manage its day-to-day business and has outsourced professional services to third parties in an effort to maintain lower operational costs.
Mr. Rodriguez, as the holder of the Company’s issued and outstanding shares of the Company’s Series A Preferred Stock, holds 51% of the voting rights of the Company. He will be able to influence the outcome of all corporate actions requiring the approval of our stockholders.
Plan of Operations
On September 14, 2023, we filed a registration statement on Form 10-12g which was deemed effective by the Securities and Exchange Commission (“SEC”) on November 8, 2023.
We plan to assemble a portfolio of early-stage EV Battery Technologies developed from Universities in Norway, Sweden and Finland, and seek grants from the State of Minnesota Department of Economic Development to find and identify corporate partners to commercialize these technologies and ultimately produce revenues for the Company.
We do not currently have any products. We are working to assemble a portfolio of early-stage EV Battery Technologies.
As the Company continues its business development and asset acquisitions, the Company anticipates our capital needs to be between $500,000 and $5,000,000 (varying based on growth strategies).
12
Results of Operations
Three Months Ended September 30, 2024, and September 30, 2023
Revenue
We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future.
Net Loss
We reported a net loss of $29,833 in the three months ended September 30, 2024 as compared to a net loss of $30,045 in the three months ended September 30, 2023 and a net loss attributable to our common stockholders of $84,452 in the three months ended September 30, 2024 as compared to a net loss attributable to our common stockholders of $84,663 as of September 30, 2023 which is reflective of a dividend on our Preferred Stock of $54,618 at September 30, 2024 and September 30, 2023, respectively as follows:
| Three Months ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Net sales | $ | — | $ | — | ||||
| Operating expenses: | ||||||||
| Selling, General and Administrative Expenses | 18,332 | 21,852 | ||||||
| Rent | 3,591 | 4,644 | ||||||
| Legal and Professional Expenses | 7,410 | 1,298 | ||||||
| Consulting Expense | 500 | — | ||||||
| Total operating expenses | 29,833 | 27,795 | ||||||
| Income (loss) from operations | (29,833 | ) | (27,795 | ) | ||||
| Other income (expense) | ||||||||
| Interest Income (expense) | — | (2,250 | ) | |||||
| Total other income (expense) | — | (2,250 | ) | |||||
| Net income (loss) | $ | (29,833 | ) | $ | (30,045 | ) | ||
| Dividends on Preferred Stock | 54,618 | 54,618 | ||||||
| Net (loss) attributable to common stockholders | $ | (84,452 | ) | $ | (84,663 | ) | ||
Operating Expenses
Total operating expenses for the three months ended September 30, 2024, and September 30, 2023, remained relatively constant with $29,833 at September 30, 2024 compared to total operating expenses of $30,045 at September 30, 2023. The increase in operating expenses during the three months ended September 30, 2024, is mainly due to an increase in legal and professional fees from $1,298 (September 30, 2023) to $7,410 (September 30, 2024) offset by a reduction in general and administrative expenses from $21,852 in the three months ended September 30, 2023, to $18,332 for the three months ended September 30, 2024. Rent remained relatively constant. The increase in legal and professional expenses was largely due to an increase in audit and accounting fees, filing fees and tax services from $1,298 for the period ended September 30, 2023 to $7,410 for the period ended September 30, 2024 due to continuing costs related to the audit of our interim financial statements following notice of effect for our Form 10 in November 2023. Consulting fees increased by $500 from $0 in the three months ended September 30, 2023, to $500 in the three months ended September 30, 2024.
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Other Income (Expense)
Other income in the three months ended September 30, 2024, was nil, as compared to other income in the three months ended September 30, 2023, of $2,250, related to interest expense of $2,250 with no comparable expense in the three months ended September 30, 2024.
Dividends on Preferred Stock
Dividends on Preferred Stock for the period ended September 30, 2024, and 2023 remained constant, at $54,618 for each period. These dividends on preferred stock are required subject to the designation of the preferred stock and contribute to the net loss attributable to our common stockholders.
Six Months Ended September 30, 2024, and September 30, 2023
Revenue
We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future.
Net Loss
We reported a net loss of $66,372 in the six months ended September 30, 2024 as compared to a net loss of $156,272 in the six months ended September 30, 2023 and a net loss attributable to our common stockholders of $175,607 in the six months ended September 30, 2024 as compared to a net loss attributable to our common stockholders of $265,507 as of September 30, 2023 which is reflective of a dividend on our Preferred Stock of $109,235 at September 30, 2024 and September 30, 2023 as follows:
| Six Months ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Net sales | $ | — | $ | — | ||||
| Operating expenses: | ||||||||
| Selling, General and Administrative Expenses | 34,931 | 38,816 | ||||||
| Rent | 8,235 | 9,288 | ||||||
| Legal and Professional Expenses | 21,956 | 25,368 | ||||||
| Consulting Expense | 1,250 | 78,300 | ||||||
| Total operating expenses | 66,372 | 151,772 | ||||||
| Income (loss) from operations | (66,372 | ) | (151,772 | ) | ||||
| Other income (expense) | ||||||||
| Interest Income (expense) | — | (4,500 | ) | |||||
| Total other income (expense) | — | (4,500 | ) | |||||
| Net income (loss) | $ | 66,372 | ) | $ | (156,272 | ) | ||
| Dividends on Preferred Stock | 109,235 | 109,235 | ||||||
| Net (loss) attributable to common stockholders | $ | (175,607 | ) | $ | (265,507 | ) | ||
14
Operating Expenses
Total operating expenses for the six months ended September 30, 2024, were $66,372 compared to total operating expenses of $151,772 for the six months ended September 30, 2023. The decrease in operating expenses during the six months ended September 30, 2024, is mainly due to reduction in consulting expenses from $78,300 (September 30, 2023) to $1,250 (September 30, 2024) and a slight reduction in general and administrative expenses from $38,816 in the six months ended September 30, 2023, to $34,931 for the six months ended September 30, 2024. Rent, legal and professional expenses remained relatively constant for the six months ended September 30, 2024, and 2023 with a slight decrease of $3,412 in the six months ended September 30, 2024. Consulting fees decreased from $78,300 in the six months ended September 30, 2023, to $1,250 in the six months ended September 30, 2024, due to a consulting agreement with an independent third party settled by shares valued at $78,300 which terminated in the period ended September 30, 2023.
Other Income (Expense)
Other income in the six months ended September 30, 2024, was nil, as compared to other income in the six months ended September 30, 2023, of $4500, related to interest expense of $4,500 with no comparable expense in the six months ended September 30, 2024, due to the payment of outstanding loans with no outstanding loans for the six months ended September 30, 2024.
Dividends on Preferred Stock
Dividends on Preferred Stock for the period ended September 30, 2024, and 2023 remained constant, $109,235 for each of the six month periods ended September 30, 2024, and 2023. These dividends on preferred stock are required subject to the designation of the preferred stock and contribute to the net loss attributable to our common stockholders.
Operating Activities
| For the Six Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Net Cash Used in Operating Activities | $ | (63,468 | ) | $ | (50,822 | ) | ||
| Net Cash From Investing Activities | — | — | ||||||
| Net Cash From Financing Activities | 67,913 | 49,102 | ||||||
| Net Change in Cash | 4,445 | (1,720 | ) | |||||
| Cash at End of Period | $ | 6,133 | $ | 2,846 | ||||
Net cash used by operating activities was $63,468 for the six months ended September 30, 2024, compared to $50,822 for the six months ended September 30, 2023.
Net cash used in operating activities for the six months ended September 30, 2024, was primarily the result of a net loss of $66,372, offset by non-cash items including accrued payroll of $24,000, an increase in prepaid expenses of $4,538 and a decrease in accounts payable and accrued liabilities of $16,558.
Net cash used in operating activities for the six months ended September 30, 2023, was primarily the result of a net loss of $156,272, offset by non-cash items, including stock issued for outside services of $78,300, accrued interest of $4,500 and accrued payroll of $24,000, and changes in working capital including a decrease to accounts payable and accrued liabilities of $1,438 and a decrease in prepaid expenses of $88.
15
Investing Activities
There was no investing activity during the six months ended September 30, 2024, and 2023.
Financing Activities
Net cash provided by financing activities was $67,913 for the six months ended September 30, 2024, compared to $49,102 for the six months ended September 30, 2023. During the six months ended September 30, 2024, the Company received $67,913 in proceeds from a related party in the form of unsecured advances. During the six months ended September 30, 2023, the Company received net proceeds of $49,102 from a related party in the form of unsecured advances.
Liquidity and Capital Resources
We are in need of additional cash resources to maintain our operations. As of September 30, 2024, we had cash of $6,133 and prepaid expenses of $4,992. We are in the early stage of development and have experienced net losses to date and have not generated revenue from operations which raises substantial doubt about our ability to continue as a going concern. There are a number of conditions that we must satisfy before we will be able to acquire, license and acquire products and intellectual property, not the least of which is negotiating and financing any acquisitions. We are in the process of identifying and establishing strategic partners and technologies in order to establish a market and generate commercial orders by customers and licensing which will include effective marketing and sales capabilities for any products. We do not currently have sufficient resources to accomplish any of these conditions necessary for us to generate revenue and expect to incur increasing operating expenses. We will require substantial additional funds for operations, the service of debt and to fund our business objectives. There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any particular period or, if available, that it can be obtained on terms favorable to us. If additional funds are raised by the issuance of equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing stockholders. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources.
Going Concern
The accompanying consolidated 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. As shown in the consolidated financial statements, the Company has incurred recurring net losses since its inception and has raised limited capital. The Company had a net loss of $66,372 and $156,272 for the six month periods ended September 30, 2024, and 2023, respectively. The Company’s accumulated deficit was $35,022,884 and $34,847,277 as of September 30, 2024, and March 31, 2024, respectively. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company is taking certain steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) focus on our new business model and 2) raising equity or debt financing. Our auditors express substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
16
Critical Accounting Estimates
The financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on historical experience, as appropriate, and on various other assumptions that we believe are reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our significant accounting policies are more fully discussed in Note 2 to our unaudited condensed financial statements contained herein.
Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of ASU 2023-07 will have any impact on our financial statements.
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. We are evaluating the impact of adopting ASU 2023-09 on our financial statements.
In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, may have on our financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company and are not required to provide this information.
17
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of September 30, 2024, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Our internal controls and procedures are not effective for the following reasons: (i) there is an inadequate segregation of duties consistent with control objectives as management is comprised of only one person, who is the Company’s principal executive officer and principal financial officer and, (ii) the Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.
In order to mitigate the foregoing material weakness, we have engaged an outside accounting consultant with significant experience in the preparation of financial statements in conformity with GAAP to assist us in the preparation of our financial statements to ensure that these financial statements are prepared in conformity with GAAP. We will continue to monitor the effectiveness of this action and make any changes that our management deems appropriate.
We would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties. Management will continue to reassess this matter to determine whether improvement in segregation of duty is feasible. In addition, we would need to expand our board to include independent members.
Going forward, we intend to evaluate our processes and procedures and, where practicable and resources permit, implement changes in order to have more effective controls over financial reporting.
Changes in Internal Control over Financial Reporting
During the period covered by this report, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
18
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
ITEM 1A. RISK FACTORS
The Company is a smaller reporting company and is not required to provide this information.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no shares issued during the six-month periods ended September 30, 2024.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5.
On July 29, 2024, Mr. Douglas Barton resigned as a director of the Company. Mr. Barton did not resign due to any dispute or disagreement with the Company or its practices.
19
ITEM 6. EXHIBITS
| Exhibit Number | Exhibit | |
| 31 | Certification of the Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32 | Certification of the Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) | |
| 101 | Inline XBRL (Extensible Business Reporting Language). The following materials from this Quarterly Report on Form 10-Q for the period ended September 30, 2024, are formatted in Inline XBRL: (i) condensed balance sheets of Groove Botanicals, Inc., (ii) condensed statements of operations of Groove Botanicals, Inc., (iii) condensed statements of operations and comprehensive income/(loss) of Groove Botanicals, Inc., (iv) condensed statements of changes in equity of Groove Botanicals, Inc., (v) consolidated statements of cash flows of Groove Botanicals, Inc. and (vi) notes to condensed financial statements of Groove Botanicals, Inc. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL. |
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GROOVE BOTANICALS, INC. | |||
| Date: November 14, 2024 | By: | /s/ Kent Rodriguez | |
| Ken Rodriguez | |||
|
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
|||
21
EXHIBIT 31
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
I, Kent Rodriguez (Principal Executive Officer and Principal Financial and Accounting Officer), certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Groove Botanicals, 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 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 15-d-15 (f) for the registrant and I have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | As the registrant’s 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 registrant’s board of directors (or persons performing the equivalent function): |
| 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. |
| Date: November 14, 2024 | By: | /s/ Kent Rodriguez | |
| Kent Rodriguez | |||
| Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
EXHIBIT 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, Kent Rodriguez, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) of Groove Botanicals, Inc. (the “Company”), certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350) that, to his knowledge, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the “Report”):
| (1) | 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 result of operations of the Company. |
| /s/ Kent Rodriguez | |
| Kent Rodriguez | |
|
Chief Executive Officer and Chief Financial Officer |
|
| Date: November 14, 2024 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2024 |
Mar. 31, 2024 |
|---|---|---|
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 200,000,000 | 200,000,000 |
| Common stock, shares issued | 59,643,062 | 59,643,062 |
| Common stock, shares outstanding | 59,643,062 | 59,643,062 |
| Series A Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.10 | $ 0.10 |
| Preferred stock, shares authorized | 100 | 100 |
| Preferred stock, shares issued | 100 | 100 |
| Preferred stock, shares outstanding | 100 | 100 |
| Series B Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.10 | $ 0.10 |
| Preferred stock, shares authorized | 2,000 | 2,000 |
| Preferred stock, shares issued | 1,983 | 1,983 |
| Preferred stock, shares outstanding | 1,983 | 1,983 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Expenses: | ||||
| Selling, General and Administrative Expenses | $ 18,332 | $ 21,852 | $ 34,931 | $ 38,816 |
| Rent | 3,591 | 4,644 | 8,235 | 9,288 |
| Legal and Professional Expenses | 7,410 | 1,298 | 21,956 | 25,368 |
| Consulting Expense | 500 | 1,250 | 78,300 | |
| Total Operating Expenses | 29,833 | 27,795 | 66,372 | 151,772 |
| Operating Loss | (29,833) | (27,795) | (66,372) | (151,772) |
| Other Income (Expense) | ||||
| Interest Expense | (2,250) | (4,500) | ||
| Total Other Income (Expense) | (2,250) | (4,500) | ||
| Net (Loss) | (29,833) | (30,045) | (66,372) | (156,272) |
| Dividends on Preferred Stock | 54,618 | 54,618 | 109,235 | 109,235 |
| Loss attributed to common stockholders | $ (84,452) | $ (84,663) | $ (175,607) | $ (265,507) |
| Basic loss per common share | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| Diluted loss per common share | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| Weighted average common shares outstanding Basic | 59,643,062 | 58,643,062 | 59,643,062 | 58,561,905 |
| Weighted average common shares outstanding diluted | 59,643,062 | 58,643,062 | 59,643,062 | 58,561,905 |
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) |
Preferred Stock Series A Stock [Member] |
Preferred Stock Series B Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|---|
| Beginning balance, value at Mar. 31, 2023 | $ 10 | $ 198 | $ 57,643 | $ 33,930,569 | $ (34,426,718) | $ (438,298) |
| Beginning balance, shares at Mar. 31, 2023 | 100 | 1,983 | 57,643,062 | |||
| Issuance of Stock for Consulting | $ 1,000 | 77,300 | 78,300 | |||
| Issuance of Stock for Consulting, shares | 1,000,000 | |||||
| Accrued dividend to related party | (54,618) | (54,618) | ||||
| Net (loss) | (126,227) | (126,227) | ||||
| Ending balance, value at Jun. 30, 2023 | $ 10 | $ 198 | $ 58,643 | 34,007,869 | (34,607,563) | (540,843) |
| Ending balance, shares at Jun. 30, 2023 | 100 | 1,983 | 58,643,062 | |||
| Accrued dividend to related party, Series A Preferred Stock | (10,000) | (10,000) | ||||
| Accrued dividend to Series B Preferred Stock | (44,617) | (44,617) | ||||
| Net (loss) | (30,045) | (30,045) | ||||
| Ending balance, value at Sep. 30, 2023 | $ 10 | $ 198 | $ 58,643 | 34,007,869 | (34,692,225) | (625,505) |
| Ending balance, shares at Sep. 30, 2023 | 100 | 1,983 | 58,643,062 | |||
| Beginning balance, value at Mar. 31, 2024 | $ 10 | $ 198 | $ 59,643 | 34,026,869 | (34,847,277) | (760,557) |
| Beginning balance, shares at Mar. 31, 2024 | 100 | 1,983 | 59,643,062 | |||
| Accrued dividend to related party | (54,617) | (54,617) | ||||
| Net (loss) | (36,539) | (36,539) | ||||
| Ending balance, value at Jun. 30, 2024 | $ 10 | $ 198 | $ 59,643 | 34,026,869 | (34,938,433) | (851,713) |
| Ending balance, shares at Jun. 30, 2024 | 100 | 1,983 | 59,643,062 | |||
| Accrued dividend to related party, Series A Preferred Stock | (10,000) | (10,000) | ||||
| Accrued dividend to Series B Preferred Stock | (44,618) | (44,618) | ||||
| Net (loss) | (29,833) | (29,833) | ||||
| Ending balance, value at Sep. 30, 2024 | $ 10 | $ 198 | $ 59,643 | $ 34,026,869 | $ (35,022,884) | $ (936,164) |
| Ending balance, shares at Sep. 30, 2024 | 100 | 1,983 | 59,643,062 |
Consolidated Statements of Cash Flows (Unaudited) - USD ($) |
6 Months Ended | |
|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Cash Flow From Operating Activities | ||
| Net Loss | $ (66,372) | $ (156,272) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Stock Issued for Outside Services | 78,300 | |
| Accrued Interest | 4,500 | |
| Accrued Payroll | 24,000 | 24,000 |
| Changes in working capital | ||
| Increase (Decrease) in Prepaid Expenses | (4,538) | 88 |
| Increase (Decrease) in Accounts Payable and Accrued Liabilities | (16,558) | (1,438) |
| Net Cash Used in Operating Activities | (63,468) | (50,822) |
| Cash Flow From Investing Activities | ||
| Net Cash From Investing Activities | ||
| Cash Flow From Financing Activities | ||
| Funds received from Related Party | 67,913 | 49,102 |
| Net Cash From Financing Activities | 67,913 | 49,102 |
| Net Change in Cash | 4,445 | (1,720) |
| Cash at Beginning of Period | 1,688 | 4,566 |
| Cash at End of Period | 6,133 | 2,846 |
| Net cash paid for: | ||
| Interest | ||
| Income Taxes | ||
Pay vs Performance Disclosure - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
|
| Pay vs Performance Disclosure [Table] | ||||
| Net Income (Loss) | $ (29,833) | $ (30,045) | $ (66,372) | $ (156,272) |
Insider Trading Arrangements |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Insider Trading Arrangements [Line Items] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
ORGANIZATION AND OPERATIONS |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Accounting Policies [Abstract] | |
| ORGANIZATION AND OPERATIONS | NOTE 1 - ORGANIZATION AND OPERATIONS
Current Operations
Groove Botanicals, Inc. (the “Company”), (formerly known as Avalon Oil & Gas, Inc.), was originally incorporated in Colorado on April 25, 1991, under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name “Sled Dogs” which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On May 25, 1999, we filed articles of merger with Xdogs.com Inc., changing our state of domicile to Nevada. On June 22, 2005, the Corporation changed our name from XDOGS.com, Inc. to Avalon Oil and Gas, Inc. On May 14, 2018, the Corporation changed our name from Avalon Oil and Gas, Inc., to Groove Botanicals, Inc. Until August 2, 2021, when we filed a 15-12B to suspend duty to file reports under sections 13 and 15(d) of the securities exchange act of 1934, we were a reporting company. Subsequently, on September 14, 2023 we filed a Form 10 with the Securities and Exchange Commission, which became effective 60 days later.
Since inception we have operated, unsuccessfully, in various different industries. Currently, we plan to assemble a portfolio of early-stage EV Battery Technologies developed from Universities in Norway, Sweden and Finland, and seek grants from the State of Minnesota Department of Economic Development to find and identify corporate partners to commercialize these technologies and ultimately produce revenues for the Company. The Company does not currently own any patents or technologies related to the EV battery industry, and the process to acquire patents and technologies can be costly, and as such, the Company is not guaranteed to acquire any such patents.
Management believes that the technologies available in the specialized energy industry present a stable business model with high growth potential and we are actively working towards an impactful acquisition in this space.
On July 29, 2024, Mr. Douglas Barton resigned as a director of the Company. Mr. Barton did not resign due to any dispute or disagreement with the Company or its practices.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Accounting Policies [Abstract] | |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for financial information. Accordingly, they include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated balance sheets as of June 30, 2024 and 2023, were derived from the Company’s consolidated financial statements at that date.
Basis of Consolidation
The Company’s consolidated financial statements include the accounts of Groove Botanicals, Inc., and its two 100% controlled non-operating subsidiaries formed in Wyoming, Biotrex, Inc., and Maxidyne, Inc. Intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates.
The Company computes net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As the Company has continued to report operating losses for the periods covered by this report, the impact of potentially dilutive securities would be antidilutive and therefore is not presented.
Income Taxes
The Company is taxed as a C corporation for income tax purposes. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company records tax positions taken or expected to be taken in a tax return based upon the amount that is more likely than not to be realized or paid, including in connection with the resolution of any related appeals or other legal processes. Accordingly, the Company recognizes liabilities for certain unrecognized tax benefits based on the amounts that are more likely than not to be settled with the relevant taxing authority. The Company recognizes interest and/or penalties related to unrecognized tax benefits as a component of income tax expense.
Beneficial Conversion Feature
The Company measures certain convertible debt using a nondetachable conversion feature known as a beneficial conversion feature, or BCF. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Debt Issuance Cost
Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet.
In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company has yet to adopt ASC 2020-06. The accounting impact will be a reclassification from Additional Paid-In Capital to Retained Earnings. The Company adopted ASC 2020-06 as of April 1, 2023.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of ASU 2023-07 will have any impact on our financial statements.
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. We are evaluating the impact of adopting ASU 2023-09 on our financial statements.
In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, may have on our financial statements.
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GOING CONCERN |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| GOING CONCERN | NOTE 3 - GOING CONCERN
The accompanying consolidated 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. As shown in the consolidated financial statements, the Company has incurred recurring net losses since its inception and has raised limited capital. The Company had a net loss of $66,372 and $156,272 for the six-month periods ended September 30, 2024, and 2023, respectively. The Company’s accumulated deficit was $35,022,884 and $34,847,277 as of September 30, 2024, and March 31, 2024, respectively. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company is taking certain steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) focus on our new business model and 2) raising equity or debt financing. Our auditors express substantial doubt about our ability to continue as a going concern.
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CASH |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Cash and Cash Equivalents [Abstract] | |
| CASH | NOTE 4 – CASH
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of September 30, 2024, the Company’s cash consisted of non-restricted cash.
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RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS | NOTE 5 – RELATED PARTY TRANSACTIONS
The Company had related party payables of $544,970 and $453,057 as of September 30, 2024 and March 31, 2024, respectively. These amounts consist of funds contributed by the management for the purpose of providing financing during periods of low or negative cashflow in order to cover essential costs of continuing operations, as well as funds payable to management as compensation. On an annual basis the Company accrues $48,000 of wages payable to its CEO, Kent Rodriguez, under the terms of a four-year employment agreement entered into April 1, 2020, which designates monthly payments due Mr. Rodriguez in the amount of $4,000. On July 30, 2024, the Company and Mr. Kent Rodriguez agreed to extend the term of this Employment Contract, which expired on March 31, 2024, for a further two-year term to March 31, 2026, retroactive to April 1, 2024, on the same terms and conditions. These payables and cash advances accrue no interest and have no maturity date. During each of the three and six months ended September 30, 2024 and 2023 salary of $12,000 and $24,000, respectively were accrued for Mr. Rodriquez.
During each of the three-and six-month periods ended September 30, 2024, and 2023, the Company accrued $10,000 and $20,000, respectively in preferred dividends from the Series A preferred shares to Mr. Kent Rodriguez, the holder of the Series A Preferred shares. Upon conversion the number of shares of common stock to be exchanged shall equal 51% of the then fully diluted issued and outstanding common stock.
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CONVERTIBLE NOTES PAYABLE |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Disclosure Convertible Notes Payable Abstract | |
| CONVERTIBLE NOTES PAYABLE | NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable consists of a $40,000 Convertible Promissory Note issued on March 5, 2021, by management to a third party in exchange for professional services. Beginning on the issuance date of this note, the outstanding principal balance of this note shall bear annual interest at 10%, with interest commencing on the sixth month anniversary of the Issuance Date. The note has a maturity date of June 30, 2022. Additionally, the note has a fixed conversion feature of $0.02 per share, and therefore the Convertible Note is measured at the net of Debt Discount, calculated based off its Beneficial Conversion Features. The note was booked with a debt discount of the full principal balance of $40,000. As of June 30, 2022, this entire debt discount had been amortized. Further, on March 7, 2022, the Company issued additional convertible promissory note in the amount of $60,000, with a maturity date of March 7, 2023, an annual interest rate of 10% and a fixed conversion price of $0.02 per share, in exchange for consulting services. The convertible amount is accounted for based off the outstanding principal and related interest pertaining to the portion convertible debt instrument being converted, multiplied by the previously specified conversion rate.
On July 18, 2022, a Letter Agreement was drafted between the Company and the debtholder, which establishes the settlement of these debts once the Company’s Form 10 goes effective. On January 23, 2023 the Company and the convertible note holder mutually agreed to settle any and all amounts owed pursuant to 1) the Consulting Agreement and Convertible Promissory Note in the amount of $40,000 dated March 5, 2021; and 2) the Consulting Agreement and a Convertible Promissory Note in the amount of $60,000 dated March 7, 2022; 3) all interest accrued through settlement date, as follows: $10,000.00 to be paid to Hymers upon execution of this Agreement, with an additional payment of $40,000 30 days after GRVE’s Form 10 has gone effective.
$10,000 was paid on January 24, 2023. $40,000 was paid on December 31, 2023. This resulted in a gain on the settlement of debt in the amount of $71,242, including interest forgiven of $21,242, during the fiscal year ended March 31, 2024.
As of September 30, 2024 and March 31, 2024, the balance of the convertible note was $0.
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PREFERRED STOCK |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Equity [Abstract] | |
| PREFERRED STOCK | NOTE 7 – PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of Preferred Stock. We have authorized shares of Series A Preferred Stock and shares of Series B Preferred Stock, respectively, both with a par value of $. As of September 30, 2024, and March 31, 2024, there were and shares issued and outstanding for Series A Preferred Stock and Series B Preferred Stock, respectively.
Series A Preferred Stock holds designations of cash dividends at the rate of 8% of the amount per share of Series A Preferred Stock per annum in the form of “Preferred Dividends”, voting rights on an as-converted to Common Stock basis, liquidation preferences, and conversion rights in which each share of Series A Preferred Stock shall, upon conversion, represent 0.51% of the then “Fully-Diluted Shares Outstanding” of the Company. On January 12, 2018, our Board of Directors agreed to amend Designation of the Series A Convertible Preferred Stock be amended by changing the ratio for conversion, in Article IV, subparagraph (a), from 0.4% to 0.51% so that upon conversion the number of shares of common stock to be exchanged shall equal 51% of then issued and outstanding common stock. In addition, on January 12, 2018, the Company and the Series A Holder agreed to forgive all accrued interest to date on the Series A, and to pause any accruals until April 1, 2023. The Series A Convertible Preferred Stock carries liquidating preference, over all other classes of stock, equal to the amount paid for the stock plus any unpaid dividends. Currently the value of the liquidation preference is $500,000, the amount of debt that the related party converted into the preferred stock. If this Preferred Stock were to be redeemed by the holder, it would result in an aggregate of the $500,000 liquidation preference, on a per share basis, this would equal $5,000 per share. The Company and Series A Preferred Holder agreed to forgive all accrued interest and arrearages in preferred share dividends of Series A Preferred Stock through March 31, 2023. Dividends began to accrue on the Series A Preferred Stock as of April 1, 2023. During each of the three- and six-month periods ended September 30, 2024 and 2023, the holder of the Series A preferred shares accrued $10,000 and $20,000 in preferred dividends from the Series A preferred shares. A total of $60,000 and $40,000 in dividends was outstanding at September 30, 2024 and March 31, 2024, respectively.
Series B Preferred Stock holds designations of being ranked junior to the Series A Preferred Stock, cash dividends at the rate of 9% of the amount per share of Series B Preferred Stock per annum in the form of “Preferred Dividends”, a dividend received deduction for federal income tax purposes, liquidation preferences ranked junior to the Series A Preferred Stock, redemption of the Series B Preferred Stock by the Company at 105% of the Stated Value, plus accrued and unpaid Dividends, if prior to the two year anniversary of the Issuance Date, or at 100% of the State Value, plus accrued and unpaid Dividends, if on or after the two year anniversary of the Issuance Date, no voting rights, and right to notice of certain corporate action. All accrued dividends on the Series B were settled through March 31, 2023, and none remained outstanding at March 31, 2023. Dividends began to accrue on the Series B Preferred Stock as of April 1, 2023. During each of the three and six-month periods ended September 30, 2024 and 2023, the holders of the Series B preferred shares accrued $44,617.50 and $89,235, respectively, in preferred dividends from the Series B preferred shares. A total of $267,705 and $178,470 in dividends was outstanding at September 30, 2024 and March 31, 2024, respectively.
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COMMON STOCK |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Equity [Abstract] | |
| COMMON STOCK | NOTE 8 – COMMON STOCK
The Company is authorized to issue shares of Common Stock, with a par value of $.
The Company had shares of common stock issued and outstanding as of September 30, 2024, and March 31, 2024.
Shares issued in the six months ended September 30, 2024:
There were no shares issued during the six-month period ended September 30, 2024.
Shares issued in the six months ended September 30, 2023:
On April 15, 2023, the Company issued shares of common stock in exchange for consulting services. These shares were valued at $ per share, the fair market value on the date of issuance.
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES
As of September 30, 2024, the Company has a month-to-month verbal lease agreement with the landlord, in which the Company pays $1,200 on a monthly basis.
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SUBSEQUENT EVENTS |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist through the date of this filing other than as set out below. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) for financial information. Accordingly, they include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated balance sheets as of June 30, 2024 and 2023, were derived from the Company’s consolidated financial statements at that date.
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| Basis of Consolidation | Basis of Consolidation
The Company’s consolidated financial statements include the accounts of Groove Botanicals, Inc., and its two 100% controlled non-operating subsidiaries formed in Wyoming, Biotrex, Inc., and Maxidyne, Inc. Intercompany accounts and transactions have been eliminated in consolidation.
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| Use of Estimates | Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, such estimates were made by the Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates.
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| Net Loss Per Share |
The Company computes net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As the Company has continued to report operating losses for the periods covered by this report, the impact of potentially dilutive securities would be antidilutive and therefore is not presented.
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| Income Taxes | Income Taxes
The Company is taxed as a C corporation for income tax purposes. The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest, net of any applicable related income tax benefit, on potential income tax contingencies as a component of income tax expense. The Company records tax positions taken or expected to be taken in a tax return based upon the amount that is more likely than not to be realized or paid, including in connection with the resolution of any related appeals or other legal processes. Accordingly, the Company recognizes liabilities for certain unrecognized tax benefits based on the amounts that are more likely than not to be settled with the relevant taxing authority. The Company recognizes interest and/or penalties related to unrecognized tax benefits as a component of income tax expense.
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| Beneficial Conversion Feature | Beneficial Conversion Feature
The Company measures certain convertible debt using a nondetachable conversion feature known as a beneficial conversion feature, or BCF. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
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| Debt Issuance Cost | Debt Issuance Cost
Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet.
In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. Two methods of transition were permitted upon adoption: full retrospective and modified retrospective. The Company has yet to adopt ASC 2020-06. The accounting impact will be a reclassification from Additional Paid-In Capital to Retained Earnings. The Company adopted ASC 2020-06 as of April 1, 2023.
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| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires incremental disclosures related to a public entity’s reportable segments. Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not believe the adoption of ASU 2023-07 will have any impact on our financial statements.
In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities on an annual basis to (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. We are evaluating the impact of adopting ASU 2023-09 on our financial statements.
In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors, which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, may have on our financial statements.
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GOING CONCERN (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Mar. 31, 2024 |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
| Net loss | $ 29,833 | $ 30,045 | $ 66,372 | $ 156,272 | |
| Accumulated deficit | $ 35,022,884 | $ 35,022,884 | $ 34,847,277 | ||
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|---|
Jul. 30, 2024 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Sep. 30, 2024 |
Sep. 30, 2023 |
Mar. 31, 2024 |
|
| Related Party Transaction [Line Items] | ||||||
| Related party payment outstanding | $ 544,970 | $ 544,970 | $ 453,057 | |||
| Accrued preferred dividends | 54,618 | $ 54,618 | 109,235 | $ 109,235 | ||
| Series A Preferred Stock [Member] | ||||||
| Related Party Transaction [Line Items] | ||||||
| Accrued preferred dividends | 10,000 | 10,000 | 20,000 | 20,000 | ||
| Chief Executive Officer [Member] | Kent Rodriguez [Member] | ||||||
| Related Party Transaction [Line Items] | ||||||
| Description of employment agreement | Mr. Kent Rodriguez agreed to extend the term of this Employment Contract, which expired on March 31, 2024, for a further two-year term to March 31, 2026, retroactive to April 1, 2024, on the same terms and conditions. These payables and cash advances accrue no interest and have no maturity date. | |||||
| Accrued salary | $ 12,000 | $ 24,000 | $ 12,000 | $ 24,000 | ||
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) |
1 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Mar. 07, 2022 |
Mar. 05, 2021 |
Dec. 31, 2023 |
Jan. 24, 2023 |
Mar. 31, 2024 |
Sep. 30, 2024 |
|
| Convertible Promissory Note [Member] | ||||||
| Short-Term Debt [Line Items] | ||||||
| Debt interest rate | 10.00% | |||||
| Maturity date | Jun. 30, 2022 | |||||
| Debt instrument principal amount | $ 40,000 | |||||
| Convertible Promissory Note [Member] | Third Party [Member] | ||||||
| Short-Term Debt [Line Items] | ||||||
| Convertible promissory note | $ 40,000 | |||||
| Convertible Promissory Note 2 [Member] | ||||||
| Short-Term Debt [Line Items] | ||||||
| Convertible promissory note | $ 60,000 | |||||
| Debt interest rate | 10.00% | |||||
| Maturity date | Mar. 07, 2023 | |||||
| Debt instrument conversion price | $ 0.02 | |||||
| Convertible note | $ 0 | $ 0 | ||||
| Convertible Promissory Note 2 [Member] | Settlement Agreement [Member] | ||||||
| Short-Term Debt [Line Items] | ||||||
| Settlement payment | $ 40,000 | $ 10,000 | ||||
| Gain on settlement of debt | 71,242 | |||||
| Interest forgiven | $ 21,242 | |||||
COMMON STOCK (Details Narrative) - $ / shares |
1 Months Ended | ||
|---|---|---|---|
Apr. 15, 2023 |
Sep. 30, 2024 |
Mar. 31, 2024 |
|
| Offsetting Assets [Line Items] | |||
| Common stock, shares authorized | 200,000,000 | 200,000,000 | |
| Common stock, par value | $ 0.001 | $ 0.001 | |
| Common stock, shares issued | 59,643,062 | 59,643,062 | |
| Common stock, shares outstanding | 59,643,062 | 59,643,062 | |
| Consulting Agreement [Member] | |||
| Offsetting Assets [Line Items] | |||
| Stock issued in exchange for services | 1,000,000 | ||
| Share Price | $ 0.0783 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
6 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Verbal lease agreement description | Company has a month-to-month verbal lease agreement with the landlord, in which the Company pays $1,200 on a monthly basis. |
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