NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and 2021
NOTE 1 – ORGANIZATION AND BUSINESS
Aqua Power Systems, Inc. (APSI), (the "Company")
was incorporated in the State of Nevada on December 9, 2010. The last reporting date on the Company’s activity was for the
quarter ended June 30, 2015.
On December 1, 2020, the Eight Judicial District
Court of Nevada entered an order appointing Small Cap Compliance, LLC as custodian of the Company, authorizing and directing it to, among
other things, take any action reasonable, prudent and for the benefit of the Company, including reinstating the Company under Nevada law,
appointing officers and convening a meeting of stockholders. Small Cap Compliance, LLC was not a shareholder of the Company on the date
that it applied to serve as a custodian of the Company.
On December 7, 2020, Small Cap Compliance, LLC
filed the Certificate of Reinstatement for the Company, thereby reinstating the Company, appointed Stephen Carnes as the sole officer
and director of the Company and amended the Company’s Certificate of Incorporation to authorize the issuance of up to one million
shares of Series B Preferred Stock.
On March 3, 2021, the Eight Judicial District
Court of Nevada entered an order approving Small Cap Compliance, LLC’s actions, without prejudice to the claims of interested parties
as to dilution of their interest, terminated Small Cap Compliance, LLC’s custodianship of the Company, and discharged Small Cap
Compliance as the custodian of the Company.
The Company is a shell company in that it has
no or nominal operations with either no or nominal assets. The Company’s business purpose is to identify, research and if determined
to meet the Company’s criteria, acquire an interest in business opportunities available for the Company to leverage. The Company
is not restricting its business development criteria to any specific business, industry, or geographical location. The Company may
in fact participate in a business venture of virtually any kind or nature so long that it is in the best interest of the Company and its
shareholders in an effort to build long-term shareholder value.
NOTE 2 – GOING CONCERN
The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has generated no revenues for the year ending March 31, 2022. The Company reported net income of $554,911
due solely to the gain on extinguishment of debt, has an accumulated deficit of ($563,702) and used cash for operations of $69,222. These
factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s continuation
as a going concern is dependent upon, among other things, the Company’s ability to execute its plans by acquiring assets and begin
generating revenue. The Company currently relies on its ability to obtain financing through the sale of securities and funding from related
parties. No assurance can be given that the Company will be successful in these efforts in the future.
Management plans to identify adequate sources
of funding to provide operating capital for continued growth.
The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The Company’s financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Management further acknowledges that it is solely
responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and
preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that
(1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in
a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows
of the Company for the respective periods being presented.
Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Principals of Consolidation
The consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company accounts for cash and cash equivalents
under FASB ASC 305, “Cash and Cash Equivalents”, and considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents. The Company had no cash equivalents as of March 31, 2022 and 2021, respectively.
Deferred Income Taxes and Valuation Allowance
The Company accounts for income taxes under ASC
740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets
or liabilities were recognized at March 31, 2022.
Financial Instruments
The Company’s balance sheet is limited to
organizational startup costs due to the Acquisition was in December 2020. ASC 820, “Fair Value Measurements and Disclosures,”
defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market
data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three
broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| Level 1 – | Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or liabilities. |
| Level 2 – | Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices
that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by
observable market data by correlation or other means. |
| Level 3 – | Inputs that are both significant to the fair value measurement
and unobservable. |
Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management as of March 31, 2021. The respective carrying value
of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
The Company does not have any assets or liabilities
measured at fair value on a recurring basis.
Long-lived Assets
Long-lived assets such as property, equipment
and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be
recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair
value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals,
if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is
recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company
estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery
of the assets. We did not recognize any impairment losses for any periods presented. As of March 31, 2022, the Company does not have any
Long-Lived Assets and we did not recognize any impairment losses for any periods presented.
Property and Equipment
The Company follows ASC 360, Property, Plant,
and Equipment, for its fixed assets. Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on
a straight-line basis over the estimated useful lives of the assets (3 years). As of March 31, 2022, the Company did not have any Fixed
Assets.
Related Parties
The Company follows ASC 850, “Related
Party Disclosures,” for the identification of related parties and disclosure of related party transactions. The Company leases
office space from an entity that is controlled by the CEO and a Director of the Company.
Stock-Based Compensation
FASB ASC 718 “Compensation – Stock
Compensation,” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee
stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities.
The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present
obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance
or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists,
the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation
issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to
Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is
more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based
payment transaction is determined at the earlier of performance commitment date or performance completion date. As of March 31, 2022,
the company did not have any stock-based transactions.
Earnings (loss) per share
Basic income (loss) per share is computed by dividing
net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income
(loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of
incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes. In periods in which a net
loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.
As of March 31, 2022 and 2021 there were 500,000,000 shares issuable upon conversion of preferred shares.
Recently Issued Accounting Pronouncements
We have reviewed the FASB issued Accounting Standards
Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported
and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles
and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position
or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain
standards are under consideration.
NOTE 4 – LEGAL PROCEEDINGS
Aqua Power Systems Inc. v. Silverton SA, Inc.
On May 4, 2021, the Company filed a lawsuit for
declaratory relief, seeking an order declaring void 6,330,138 shares of common stock of the Company held by Silverton SA, Inc., which
was administratively dissolved July 9, 2018, in book entry with the Company’s transfer agent, which were not acquired by any consideration.
On August 23, 2021, the Company moved for an entry
of default for Silverton SA, Inc.’s failure to appear or serve any papers as required by law. On September 15, 2021, the Company
filed a Motion for Entry of Default Final Judgement for failure to appear, file any responsive pleading or paper in this action, or otherwise
assert any defense to this action as required by law.
On September 22, 2021, the Court ruled
that the Motion for Entry of Default Final Judgement was granted and the Court declared the 6,330,138 shares of common stock in the Company
issued to [Silverton SA, Inc.] on or about October 7, 2015, held in Book Entry, void and cancelled.
Aqua Power Systems Inc. v. Paramount Trading
Company Inc.
On May 4, 2021, the Company filed a lawsuit for
declaratory relief, seeking an order declaring void 2,690,000 shares of common stock of the Company held by Paramount Trading Company
(“PTC”), a defunct company, in book entry with the Company’s transfer agent, which were not acquired by any consideration.
On August 23, 2021, the Company moved for an entry
of default for failure to appear or serve any papers as required by law. On September 15, 2021, the Company filed a Motion for Entry of
Default Final Judgement for failure to appear, file any responsive pleading or paper in this action, or otherwise assert any defense to
this action as required by law.
On September 24, 2021, the Court ruled
that the Motion for Entry of Default Final Judgement was granted and the Court declared the 2,690,000 shares of common stock in APSI issued
to PTC, over two transactions, on or about October 1, 2015 and on or about July 14, 2017, held in Book Entry, void and cancelled.
Court order barring asserted & unasserted
claims
Effective August 5, 2021, the Eighth Judicial
District Court of Clark County, Nevada granted a motion to bar any asserted and unasserted claims against the assets of the Company prior
to the date of judgment. In connection with the judgment, management has determined it is appropriate to write-off certain accounts payable
and accrued expenses due by the Company to third parties with the exception of the payables current management has authorized since its
appointment.
Aqua Power Systems Inc. v. Tadashi Ishikawa
On November 4, 2021, the Company filed a lawsuit
for declaratory relief, seeking an order declaring void 32,942,624 shares of its common stock, representing 65.7% of the current issued
and outstanding shares, that were held Mr. Tadashi Ishikawa, the former CEO of the Company. As disclosed in the Subsequent Events Note,
on May 19, 2022, the Court ruled that the Motion for Entry of Default Final Judgement was granted and the Court declared the 32,942,624
shares of common stock in APSI issued to Tadashi Ishikawa, held in Book Entry, void and cancelled.
NOTE 5 – NOTES PAYABLE
On March 31, 2015, the Company issued a convertible
promissory note in the principal amount of $55,000 to an investor. Pursuant to the terms of the note, the note is bearing interest rate
of 10% and is due on March 31, 2016. Subsequent to March 31, 2015, this convertible note may be converted into shares of the Company’s
common stock at a conversion price of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below
market value at the time of issuance. As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized
prior to March 31, 2019 and therefore, no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest
expense incurred during the years ended March 31, 2022 and 2021 was $1,914 and $5,500 respectively. In connection with the court’s
ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest related to this note
has been recorded as a gain on extinguishment of debt on the income statement.
On April 20, 2015, the Company issued an unsecured
promissory note in the amount of $7,500 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest and is due
on demand. Interest expense incurred during the years ended March 31, 2022 and 2021 was $261 and $750 respectively. In connection with the court’s ruling on August 5, 2021, relieving the
Company of its obligations on past debts, the principal and accrued interest related to this note has been recorded as a gain on extinguishment
of debt on the income statement,
On April 28, 2015, the Company issued a
convertible promissory note in the principal amount of $6,000
to an investor. Pursuant to the terms of the note, the note is bearing 10%
interest and is due on April 26, 2016. This convertible note may be converted into shares of the Company’s common stock at a
conversion price of $0.20.
For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As
a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and
therefore, no
amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years
ended March 31, 2022 and 2021 was $209
and $600
respectively. In connection with the
court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest
related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On April 30, 2015, the Company issued a convertible
promissory note in the principal amount of $18,000 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on April 30, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $626 and $1,800 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On May 7, 2015, the Company issued a convertible
promissory note in the principal amount of $74,000 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on May 7, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $2,575 and $7,400 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On May 18, 2015, the Company issued a convertible
promissory note in the principal amount of $105,000 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on May 18, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $3,653 and $10,500 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On May 22, 2015, the Company issued a
convertible promissory note in the principal amount of $40,000
to an investor. Pursuant to the terms of the note, the note is bearing 10%
interest and is due on May 22, 2016. This convertible note may be converted into shares of the Company’s common stock at a
conversion price of $0.20.
For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As
a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and
therefore, no
amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years
ended March 31, 2022 and 2021 was $1,392
and $4,000
respectively. In connection with the
court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest
related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On May 27, 2015, the Company issued a convertible
promissory note in the principal amount of $61,000 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on May 27, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $2,122 and $6,100 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a gain on extinguishment of debt on the income statement,
On June 8, 2015, the Company issued a convertible
promissory note in the principal amount of $50,000 to an investor. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on June 8, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $1,740 and $5,000 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a gain on extinguishment of debt on the income statement,
NOTE 6 – RELATED PARTY TRANSACTIONS
On June 6, 2014, the Company issued an unsecured
promissory note in the amount of $3,500 to a related party. Pursuant to the terms of the note, the note was non-interest bearing and was
due on the earlier of December 31, 2014, or within 10 business days upon the closing of any definitive agreement. The Company is currently
in default of this note at March 31, 2015, and expects to make the necessary payments whenever the Company is able to make such payment.
Subsequent to March 31, 2015, the Company amended the original note in exchange for a promissory bearing interest rate of 10% and was
due on June 6, 2015 and may be converted into shares of the Company’s common stock at a conversion price of $0.20. For convertible
debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As a result, the Company
recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore, no amortization
expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended March 31, 2022
and 2021 was $121 and $350 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations
on past debts, the principal and accrued interest related to this note has been recorded as a contribution of capital in equity due to
the prior related party nature of the note.
On July 4, 2014, the Company issued an unsecured
promissory note in the amount of $2,500 to a related party. Pursuant to the terms of the note, the note was non-interest bearing and was
due on the earlier of December 31, 2014, or within 10 business days upon the closing of any definitive agreement. The Company is currently
in default of this note at March 31, 2015, and expects to make the necessary payments whenever the Company is able to make such payment.
Subsequent to March 31, 2015, the Company amended the original note in exchange for a promissory bearing interest rate of 10% and was
due on July 4, 2015, and may be converted into shares of the Company’s common stock at a conversion price of $0.20. For convertible
debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As a result, the Company
recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore, no amortization
expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended March 31, 2022
and 2021 was $87 and $250 respectively. In connection
with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest
related to this note has been recorded as a contribution of capital in equity due to the prior related party nature of the note.
On August 1, 2014, the Company issued an unsecured
promissory note in the amount of $3,000 to a related party. Pursuant to the terms of the note, the note was non-interest bearing and was
due on the earlier of December 31, 2014, or within 10 business days upon the closing of any definitive agreement. The Company is currently
in default of this note at March 31, 2015, and expects to make the necessary payments whenever the Company is able to make such payment.
Subsequent to March 31, 2015, the Company amended the original note in exchange for a promissory bearing interest rate of 10% and is due
on August 1, 2015, and may be converted into shares of the Company’s common stock at a conversion price of $0.20. For convertible
debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As a result, the Company
recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore, no amortization
expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended March 31, 2022
and 2021 was $104 and $300 respectively. In connection
with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest
related to this note has been recorded as a contribution of capital in equity due to the prior related party nature of the note.
On August 11, 2014, the Company issued an unsecured
promissory note in the amount of $14,000 to a related party. Pursuant to the terms of the note, the note was non-interest bearing and
was due on the earlier of December 31, 2014, or within 10 business days upon the closing of any definitive agreement. The Company is currently
in default of this note at March 31, 2015, and expects to make the necessary payments whenever the Company is able to make such payment.
Subsequent to March 31, 2015, the Company amended the original note in exchange for a promissory bearing interest rate of 10% and is due
on August 11, 2015, and may be converted into shares of the Company’s common stock at a conversion price of $0.20. For convertible
debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As a result, the Company
recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore, no amortization
expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended March 31, 2022
and 2021 was $487 and $1,400 respectively. In connection
with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and accrued interest
related to this note has been recorded as a contribution of capital in equity due to the prior related party nature of the note.
On May 1, 2015, the Company memorialized an unsecured
promissory note in the amount of $7,500 to a related party for the payment of expenses during the year ended March 31, 2015. Pursuant
to the terms of the note, the note is bearing interest rate of 10% and is due by May 1, 2016. Interest expense incurred during the years
ended March 31, 2022 and 2021 was $261 and $750 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a contribution of capital in equity due to the prior related party nature
of the note.
On November 10, 2014, the Company issued an unsecured
promissory note in the amount of $9,113 to a related party. Pursuant to the terms of the note, the note is bearing 10% interest, and is
due on November 10, 2015. Interest expense incurred during the years ended March 31, 2022 and 2021 was $317 and $911 respectively. In connection with the court’s ruling on August 5,
2021, relieving the Company of its obligations on past debts, the principal and accrued interest related to this note has been recorded
as a contribution of capital in equity due to the prior related party nature of the note.
On December 22, 2014, the Company issued an unsecured
promissory note in the amount of $2,050, respectively, to a related party. Pursuant to the terms of the note, the note was bearing 10%
interest, and was due on the earlier of December 31, 2014, or within 10 business days upon the closing of any definitive agreement. The
Company is currently in default of this note at March 31, 2015, and expects to make the necessary payments whenever the Company is able
to make such payment. Subsequent to March 31, 2015, the Company amended the original note in exchange for a promissory bearing interest
rate of 10% and is due on December 22, 2015 and may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $71 and $205 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and
accrued interest related to this note has been recorded as a contribution of capital in equity due to the prior related party nature of
the note.
On January 19, 2015, the Company issued a convertible
promissory note in the principal amount of $550 to a related party. Pursuant to the terms of the note, the note is bearing interest rate
of 10% and is due on January 19, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion
price of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of
issuance. As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31,
2019 and therefore, no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred
during the years ended March 31, 2022 and 2021 was $19 and $55 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on
past debts, the principal and accrued interest related to this note has been recorded as a contribution of capital in equity due to the
prior related party nature of the note.
On February 12, 2015, the Company issued a convertible
promissory note in the principal amount of $11,634 to a related party. Pursuant to the terms of the note, the note is bearing interest
rate of 10% and is due on February 12, 2016. Subsequent to March 31, 2015, this convertible note may be converted into shares of the Company’s
common stock at a conversion price of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below
market value at the time of issuance. As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized
prior to March 31, 2019 and therefore, no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest
expense incurred during the years ended March 31, 2022 and 2021 was $405 and $1,163 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations
on past debts, the principal and accrued interest related to this note has been recorded as a contribution of capital in equity due to
the prior related party nature of the note.
On February 25, 2015, the Company issued a convertible
promissory note in the principal amount of $117,000 to a related party. Pursuant to the terms of the note, the note is bearing interest
rate of 10% and is due on February 25, 2016. Subsequent to March 31, 2015, this convertible note may be converted into shares of the Company’s
common stock at a conversion price of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below
market value at the time of issuance. As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized
prior to March 31, 2019 and therefore, no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest
expense incurred during the years ended March 31, 2022 and 2021 was $4,071 and $11,700 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company
of its obligations on past debts, the principal and accrued interest related to this note has been recorded as a contribution of capital
in equity due to the prior related party nature of the note.
On March 31, 2015, the Company issued a convertible
promissory note in the principal amount of $20,000
to a related party. Pursuant to the terms of the note, the note is bearing interest rate of 10%
and is due on March 31, 2016. Subsequent to March 31, 2015, this convertible note may be converted into shares of the Company’s
common stock at a conversion price of $0.20.
For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance. As
a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no
amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years
ended March 31, 2022 and 2021 was $696
and $2,000
respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past
debts, the principal and accrued interest related to this note has been recorded as a contribution of capital in equity due to the prior
related party nature of the note.
On March 31, 2015, the Company issued a convertible
promissory note in the principal amount of $75,000 to a related party. Pursuant to the terms of the note, the note is bearing interest
rate of 10% and is due on March 31, 2016. Subsequent to March 31, 2015, this convertible note may be converted into shares of the Company’s
common stock at a conversion price of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below
market value at the time of issuance. As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized
prior to March 31, 2019 and therefore, no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest
expense incurred during the years ended March 31, 2022 and 2021 was $2,610 and $7,500 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations
on past debts, the principal and accrued interest related to this note has been recorded as a contribution of capital in equity due to
the prior related party nature of the note.
On May 4, 2015, the Company issued a convertible
promissory note in the principal amount of $12,100 to a related party. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on May 4, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $421 and $1,210 respectively. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal
and accrued interest related to this note has been recorded as a contribution of capital in equity due to the prior related party nature
of the note.
On April 16, 2015, the Company issued a convertible
promissory note in the principal amount of $1,824 to a related party. Pursuant to the terms of the note, the note is bearing 10% interest
and is due on April 16, 2016. This convertible note may be converted into shares of the Company’s common stock at a conversion price
of $0.20. For convertible debt, the convertible feature indicated a rate of conversion that was below market value at the time of issuance.
As a result, the Company recorded a BCF and related debt discount. The debt discount was fully amortized prior to March 31, 2019 and therefore,
no amortization expense was recognized during fiscal years ended March 31, 2022 and 2021. Interest expense incurred during the years ended
March 31, 2022 and 2021 was $63 and $182 respectively.
In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past debts, the principal and
accrued interest related to this note has been recorded as a contribution of capital in equity due to the prior related party nature of
the note.
On December 16, 2020, the Company issued an unsecured
promissory note in principal amount of $5,100 to an officer of the Company. The note is non-interest bearing and due on demand.
On February 14, 2022, an officer of the
Company transferred 8.5 Ethereum cryptocurrency (ETH) from a personal digital wallet to the Company’s digital wallet. The ETH
transferred was valued at $24,955
on the date of the transaction and recorded as a note payable. The note is unsecured, non-interest bearing note and due on
demand.
NOTE 7 – INTANGIBLE
ASSETS
On February 14, 2022, the Company acquired a digital
asset commonly referred to as “land” within the Sandbox metaverse. The Sandbox is a decentralized, community-driven gaming
ecosystem where creators can share and monetize voxel assets and gaming experiences on the Ethereum blockchain. The purchase price was
7.9 Ether (ETH). The digital asset (“land”) is an ERC-721 token on the Ethereum network commonly referred to as Sandbox Lands.
The asset was valued based on the market rate of ETH on the date of transaction for a value of $23,229. Management evaluated the asset
for impairment and determined that no impairment was necessary.
NOTE 8 – SHAREHOLDERS’ EQUITY
Common Stock
The Company has 200,000,000 authorized common
shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter
on which action of the stockholders of the corporation is sought.
On April 22, 2021, the Company issued 100,000
shares of its Common Stock in return for an investment of $200,000 via a Subscription Agreement.
During September 2021, as a result of a court
order, the Company canceled a total of 9,020,138
shares of its common stock. Specifically, 6,330,138
of these shares (or 10.7% of the total issued and outstanding shares) were held by Silverton SA as disclosed in prior filings
and canceled on September 22, 2021, and 2,690,000
of these shares were held by Paramount Trading Company and canceled on September 24, 2021.
Preferred Stock
The Company is authorized to a total of 10,000,000
shares of preferred stock.
There are 6,000,000 shares currently designated.
A designation for 5,000,000 Series A Preferred Stock with a par value of $0.001 was filed on September 9, 2015, and another designation
for 1,000,000 Series B Preferred Stock with a par value of $0.001 was filed on December 7, 2020.
There are currently no Series A Preferred shares
issued and outstanding.
On December 7, 2020, 500,000 Series B Preferred
shares were issued to Small Cap Compliance, LLC after the Eight Judicial District Court of Nevada entered an order appointing Small Cap
Compliance, LLC as custodian of the Company, authorizing and directing it to, among other things, take any action reasonable, prudent
and for the benefit of the Company, including reinstating the Company under Nevada law, appointing officers and convening a meeting of
stockholders. Small Cap Compliance, LLC was not a shareholder of the Company on the date that it applied to serve as a custodian of the
Company. On that same day, Small Cap Compliance, LLC filed the Certificate of Reinstatement for the Company, thereby reinstating the Company,
appointed Stephen Carnes as the sole officer and director of the Company and amended the Company’s Certificate of Incorporation
to authorize the issuance of up to one million shares of Series B Preferred Stock.
Preferred Class A Stock
Each share of Preferred Class A Stock is entitled
to one hundred (100) votes per share on all matters. Except as provided by law, the holders of shares of Preferred Class A Stock vote
together with the holders of shares of Common Stock as a single class.
In addition, so long as any shares of Preferred
Class A Stock remains outstanding, in addition to any other vote or consent of stockholders required by our certificate of incorporation,
the company will not, without first obtaining the approval (by written consent, as provided by law or otherwise) of the holders of a majority
of the then outstanding shares of Series A Preferred Stock, voting together as a class: (i) Increase or decrease (other than by redemption
or conversion) the total number of authorized shares of Series A Preferred Stock; (ii) Effect an exchange reclassification, or cancellation
of all or a part of the Series A Preferred Stock, but excluding a stock split or reverse stock split of the Company’s Common Stock
or Preferred Stock; (iii) Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into
shares of Series A Preferred Stock; or (iv) Alter or change the rights, preferences or privileges of the shares of Series A Preferred
Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation. For clarification, issuances
of additional authorized shares of Series A Preferred under the terms herein shall not require the authorization or approval of the existing
shareholders of Preferred Stock.
The Company is not required to pay dividends at
any specific rate on the Series A Preferred Stock.
In the event of any liquidation, dissolution,
or winding up of the Company, either voluntarily or involuntarily, the holders of Class A Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any assets of the Company to the holders of the junior stock by reason of their ownership
of such stock, but not prior to any holders of the Company’s senior securities, which holders shall have priority to the distribution
of any assets of the Company, an amount per share for each share of Class A Preferred Stock held by them equal to the sum of the liquidation
preference specified for each share of preferred stock. If upon the liquidation, dissolution or winding up of the Company, the assets
of the Company legally available for distribution to the holders of the Class A Preferred Stock are insufficient to permit the payment
to such holders of the full amounts of their liquidation preference, subsequent to the payment to the senior securities then the entire
remaining assets of the Company following the payment to the senior securities legally available for distribution shall be distributed
with equal priority and pro rata among holders of the Class A Preferred Stock in proportion to the full amounts they would otherwise be
entitled to receive pursuant to their liquidation preference. The liquidation preference of Class A Preferred Stock shall be equal to
the original issue price per share of Class A Preferred Stock, as adjusted for any recapitalizations.
Holders of Class A Preferred Stock shall have
the right, exercisable at any time and from time to time (unless otherwise prohibited by law, rule or regulation), to convert any or all
of their shares of the Class A Preferred Shares into Common Stock at the conversion ratio of (1) one Preferred A share to (100) one hundred
common shares.
Holders of Preferred Class A Stock have no preemptive
or subscription rights and there are no redemption or sinking fund provisions applicable to our Preferred Class A Stock.
Preferred Class B Stock
Each share of Preferred Class B Stock is entitled
to one thousand (1,000) votes per share on all matters. Except as provided by law, the holders of shares of Preferred Class B Stock vote
together with the holders of shares of Common Stock as a single class.
The Preferred Class B Stock is not entitled to
receive any dividends in any amount during which such shares are outstanding.
In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, after setting apart or paying in full the preferential amounts due to holders
of senior capital stock, if any, the holders of Preferred Class B Stock and parity capital stock, if any, shall be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of junior capital stock,
including Common Stock, an amount equal to $0.001 per share [the "Liquidation Preference"]. If upon such liquidation, dissolution
or winding up of the Company, the assets of the Company available for distribution to the holders of the Preferred Class B Stock and parity
capital stock, if any, shall be insufficient to permit in full the payment of the Liquidation Preference, then all such assets of the
Company shall be distributed ratably among the holders of the Preferred Class B Stock and parity capital stock, if any. Neither the consolidation
or merger of the Company nor the sale, lease or transfer by the Company of all or a part of its assets shall be deemed a liquidation,
dissolution or winding up of the Company.
Each share of Preferred Class B Stock shall be
convertible, at the option of the Holder, into 1,000 (One Thousand) fully paid and non-assessable shares of the Corporation's Common Stock.
The aforementioned 1 to 1,000 ratio will be adjusted by stock splits, dividends, and distributions, and that adjustment will apply to
reclassifications, consolidations, and mergers.
Holders of Preferred Class B Stock have no preemptive
or subscription rights and there are no redemption or sinking fund provisions applicable to our Preferred Class B Stock.
NOTE 9 – INCOME TAXES
Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes. A full valuation allowance is established against the remaining net deferred tax assets as of March 31,
2022 and 2021 based on estimates of recoverability. The Company determined that such a valuation allowance was necessary given the
current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its business
model. The Company's deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new
tax law.
The components of deferred tax assets consist of:
| Schedule of deferred tax assets | |
| | | |
| | |
| | |
March 31, | |
| | |
2022 | | |
2021 | |
| Net operating loss | |
$ | 162,908 | | |
$ | 717,819 | |
| Valuation allowance | |
| (162,908 | ) | |
| (717,819 | ) |
| Deferred tax assets, net of allowance | |
$ | – | | |
$ | – | |
The reconciliation of the effective income tax rate to
the federal statutory rate is as follows:
| Schedule of Reconciliation of the effective income tax rate | |
| | | |
| | |
| | |
March 31,
2022 | | |
March 31,
2021 | |
| US Federal statutory rate | |
| (21% | ) | |
| (21% | ) |
| State income tax, net of federal benefit | |
| (6% | ) | |
| (6% | ) |
| Change in valuation allowance | |
| 27% | | |
| 27% | |
| Income tax benefit | |
| -% | | |
| -% | |
The Company has recorded as of March 31, 2022
and 2021 a valuation allowance of $162,908 and $717,819, respectively, as management believes that it is more likely than not that the
deferred tax assets will not be realized in future years. Management has based its assessment on the Company's lack of profitable
operating history.
The Company has net operating loss
carry-forwards of approximately $162,908.
Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029. The tax years from 2019 to 2022 are still
subject to audit.
NOTE 10 – SUBSEQUENT EVENTS
On November 4, 2021, the Company filed a lawsuit
for declaratory relief, seeking an order declaring void 32,942,624 shares of its common stock, representing 65.7% of the current issued
and outstanding shares, that were held Mr. Tadashi Ishikawa, the former CEO of the Company. On May 19, 2022, the Court ruled that the
Motion for Entry of Default Final Judgement was granted and the Court declared the 32,942,624 shares of common stock in APSI issued to
Tadashi Ishikawa, held in Book Entry, void and cancelled.
