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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2024

 

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File Number: 000-23476

 

GROOVE BOTANICALS, INC.
(Exact name of registrant as specified in its charter)

 

Nevada   84-1168832

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

     

310 Fourth Avenue South, Suite 7000

Minneapolis, MN

  55415
(Address of principal executive offices)   (Zip Code)

 

(612)-315-5068

(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. Yes ☒ No ☐

 

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). Yes ☒ No ☐

 

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  ☐
Non-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 ☐ No ☒

 

As of August 16, 2024, there were 59,643,062 shares of the registrant’s common stock outstanding.

 

 

1 

 

 

GROOVE BOTANICALS, INC.

TABLE OF CONTENTS

 

      Page  
  PART I – FINANCIAL INFORMATION        
           
Item 1. Financial Statements (Unaudited)     3  
           
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations     13  
           
Item 3. Quantitative and Qualitative Disclosures About Market Risk     17  
           
Item 4. Controls and Procedures     18  
           
  PART II – OTHER INFORMATION        
           
Item 1. Legal Proceedings     19  
           
Item 1A. Risk Factors     19  
           
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds     19  
           
Item 3. Defaults Upon Senior Securities     19  
           
Item 4. Mine Safety Disclosures     19  
           
Item 5. Other Information     19  
           
Item 6. Exhibits     20  
           
  SIGNATURES     21  

 

2 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Groove Botanicals, Inc.
Consolidated Balance Sheets

 

           
   June 30,
2024		   March 31,
2024		 
ASSETS          
Current Assets:          
Cash  $2,638   $1,688 
Accounts Receivable   —    — 
Prepaid Expenses   416    454 
Total Current Assets   3,054    2,142 
TOTAL ASSETS  $3,054   $2,142 
           
LIABILITIES & STOCKHOLDERS’ EQUITY          
Current Liabilities:          
Accounts Payable and Accrued Liabilities  $94,929   $91,172 
Interest Payable   —    — 
Related Party Payable   486,751    453,057 
Convertible Notes Payable   —    — 
Dividend payable, related parties   273,087    218,470 
Total Current Liabilities   854,767    762,699 
Total Liabilities   854,767    762,699 
           
Stockholders’ Equity          
Preferred Stock, Series A, $0.10 par value, 100 shares authorized; 100 shares issued and outstanding as of June 30, 2024, and March 31, 2024   10    10 
Preferred Stock, Series B, $0.10 par value, 2,000 shares authorized; 1,983 shares issued and outstanding as of June 30, 2024, and March 31, 2024   198    198 
Common Stock, $0.001 par value, 200,000,000 shares authorized.
and 59,643,062 shares issued and outstanding as of June 30, 2024, and March 31, 2024		   59,643    59,643 
Additional paid-in capital   34,026,869    34,026,869 
Accumulated deficit   (34,938,433)   (34,847,277)
Total stockholder’s equity   (851,713)   (760,557)
TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT  $3,054   $2,142 

 

The accompanying notes are an integral part of these consolidated financial statements.

3 

 

Groove Botanicals, Inc.
Consolidated Statements of Operations

 

           
   For the Three Months Ended
June 30,		 
   2024   2023 
         
Expenses:          
Selling, General and Administrative Expenses  $16,599   $16,963 
Rent   4,644    4,644 
Legal and Professional Expenses   14,546    24,070 
Consulting Expense   750    78,300 
Total operating expenses   36,539    123,977 
           
Operating loss   (36,539)   (123,977)
           
Other Income (Expense)          
Interest Income (Expense)   —    (2,250)
Total Other Income (Expense)   —    (2,250)
           
Net (loss)  $(36,539)  $(126,227)
           
Dividend on Preferred Stock   54,617    54,618 
Net (loss) attributable to common shareholders  $(91,156)  $(180,845)
           
Basic and diluted loss per common share  $(0.00)  $0.00)
           
Weighted average common shares outstanding – Basic and diluted   59,643,062    58,478,227 
           

 

The accompanying notes are an integral part of these consolidated financial statements.

4 

 

Groove Botanicals, Inc.
Consolidated Statements of Stockholders’ Equity
For the Three Months Ended June 30, 2024, and 2023

 

                                           
   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  100   $10   1,983   $198   57,643,062   $57,643   $33,930,569   $(34,426,718)  $(438,298)
Issuance of Stock for Consulting                    1,000,000    1,000    77,300         78,300 
Accrued dividend to related party                                   (54,618)   (54,618)
Net (loss)       -         -                   (126,227)   (126,227)
Balance, June 30, 2023  100   $10   1,983   $198   58,643,062   $58,643   $34,007,869   $(34,607,563)  $(540,843)

 

 

   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  100   $10   1,983   $198   59,643,062   $59,643   $34,026,869   $(34,847,277)  $(760,557)
Accrued dividend to related party                                   (54,617)   (54,617)
Net (loss)       -         -         -     -     (36,539)   (36,539)
Balance, June 30, 2024  100   $10   1,983   $198   59,643,062   $59,643   $34,026,869   $(34,938,433)  $(851,713)

 

The accompanying notes are an integral part of these consolidated financial statements.

5 

 

Groove Botanicals, Inc.
Consolidated Statements of Cash Flows

 

           
   For the Three Months Ended
June 30,		 
   2024   2023 
Cash Flow From Operating Activities          
Net Loss  $(36,539)  $(126,227)
Adjustments to reconcile net loss to net cash used in operating activities:          
  Stock Issued for Outside Services   —    78,300 
  Accrued Interest   —    2,250 
  Accrued Payroll   12,000    12,000 
Changes in working capital          
  Decrease in Prepaid Expenses   38    41 
  Increase in Accounts Payable and Accrued Liabilities   3,757    878 
Net Cash Used in Operating Activities   (20,744)   (32,758)
           
Cash Flow From Investing Activities          
Net Cash From Investing Activities   —    — 
           
Cash Flow From Financing Activities          
  Funds received from Related Party   21,694    30,558 
Net Cash From Financing Activities   21,694    30,558 
           
Net Change in Cash   950    (2,200)
           
Cash at Beginning of Period   1,688    4,566 
           
Cash at End of Period  $2,638   $2,366 
           
Net cash paid for:          
Interest  $—   $— 
Income Taxes  $—   $— 
           

 

The accompanying notes are an integral part of these consolidated financial statements.

6 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 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.

 

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.

7 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

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.

Financial Instruments

 

The Company's financial instruments primarily consist of cash and cash equivalents, accounts payable and accrued liabilities, related party payables, dividends payable and other debt. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2—Significant other observable inputs that can be corroborated by observable market data; and Level 3—Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, related party payables, accrued dividends and debt approximate fair value based on either their short-term nature or on terms currently available to the Company in financial markets.

 

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.

 

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.

 

8 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

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.

 

9 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

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 $36,539 and $126,227 for the three-month periods ended June 30, 2024, and 2023, respectively. The Company’s accumulated deficit was $34,938,433 and $34,847,277 as of June 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.

 

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 June 30, 2024, the Company’s cash consisted of non-restricted cash.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

The Company had a related party payable of $486,751 and $453,057 outstanding as of June 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 an employment agreement with its CEO entered into April 1, 2020, which designates monthly payments due to CEO Kent Rodriguez in the amount of $4,000. On July 30, 2024, the Company and Mr. Kent Rodriguez, CEO and sole director, agreed to extend the term of an Employment Contract originally entered into on April 1, 2020 expiring March 31, 2024, for a further two year term to March 31, 2026, retroactive to April 1, 2024. The agreement designates monthly payments to Kent Rodriguez in the amount of $4,000 or $48,000 per year. These payables accrue no interest and have no maturity date.

 

On June 3, 2022, the Company received a loan from the Company’s CEO in the amount of $125,000. These funds were wired to the Company in order to reach a settlement of the debts during the fiscal year ended March 31, 2023.

 

During the three months period ended June 30, 2024 and 2023, the Company accrued $10,000 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.

 

10 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

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 June 30, 2024 and March 31, 2024, the balance of the convertible note was $0.

 

NOTE 7 – PREFERRED STOCK

 

The Company is authorized to issue 1,000,000 shares of Preferred Stock. We have authorized 100 shares of Series A Preferred Stock and 2,000 shares of Series B Preferred Stock, respectively, both with a par value of $0.10. As of June 30, 2024 and March 31, 2024, there were 100 and 1,983 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 the three months period ended June 30, 2024 and 2023, the holder of the Series A preferred shares accrued $10,000 in preferred dividends from the Series A preferred shares.

 

11 

 

GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023

 

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 have been 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 the three months period ended June 30, 2024 and 2023, the holder of the Series B preferred shares accrued $54,617 and $54,618, respectively, in preferred dividends from the Series B preferred shares.

 

NOTE 8 – COMMON STOCK

 

The Company is authorized to issue 200,000,000 shares of Common Stock, with a par value of $0.001.

 

The Company had 59,643,062 shares of common stock issued and outstanding as of June 30, 2024 and March 31, 2024.

 

Shares issued in the three months ended June 30, 2024:

 

There were no shares issued during the three month period ended June 30, 2024.

 

Shares issued in the three months ended June 30, 2023:

 

On April 15, 2023, the Company issued 1,000,000 shares of common stock in exchange for consulting services. These shares were valued at $0.0783 per share, the fair market value on the date of issuance.

 

NOTE 9: COMMITMENTS AND CONTINGENCIES

 

As of June 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.

 

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.

 

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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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 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.

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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).

 

Results of Operations

 

Three Months Ended June 30, 2024 and June 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 $36,539 in the three months ended June 30, 2024 as compared to a net loss of $123,977 in the three months ended June 30, 2023 as follows and a net loss attributable to our common stockholders of $91,156 in the three months ended June 30, 2024 as compared to a net loss attributable to our common stockholders of $180,845 as of June 30, 2023 which is reflective of a dividend on our Preferred Stock of $54,617 (June 30, 2024) and $54,618 (June 30, 2023) as follows:  

 

   Three Months ended 
   June 30, 
   2024   2023 
         
Net sales  $—   $— 
           
Operating expenses:          
Selling, General and Administrative Expenses   16,599    16,963 
Rent   4,644    4,644 
Legal and Professional Expenses   14,546    24,070 
Consulting Expense   750    78,300 
Total operating expenses   36,539    123,977 
           
Income (loss) from operations   (36,539)   (123,977)
           
Other income (expense)          
Interest  Income (expense)   —    (2,250)
Total other income  (expense)   —    (2,250)
           
Net income (loss)  $(36,539)  $(126,227)
           
Dividend on Preferred Stock   54,617    54,618 
Net loss attributable to common stockholders  $(91,156)  $(180,845)

 

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Operating Expenses

 

Total operating expenses for the three months ended June 30, 2024 were $36,539 compared to total operating expenses of $123,977 for the three months ended June 30, 2023. The decrease in operating expenses during the three months ended June 30, 2024 is mainly due to reduction in consulting expenses from $78,300 (June 30, 2023) to $750 (June 30, 2024) and a reduction in legal and professional expenses of $24,070 in the three months ended June 30, 2023 to $14,546 for the three months ended June 30, 2024. The reduction to legal and professional fees over the comparative three month periods was a direct result of a decrease in audit costs over the comparative periods. Rent and selling, and general and administrative expenses remained relatively constant. Consulting fees decreased from $78,300 in the three months ended June 30, 2023 to $750 in the three months ended June 30, 2024 as a result of a consulting agreement with an independent third party settled by shares valued at $78,300 which was not renewed in the current year.

 

Other Income (Expense)

 

Other income in the three months ended June 30, 2024 was nil, as compared to other income in the three months ended June 30, 2023 of $2,250, related to interest expense of $2,250 with no comparable expense in the three months ended June 30, 2024.

 

Dividends on Preferred Stock

 

Dividends on Preferred Stock for the period ended June 30, 2024 and 2023 remained relatively constant, totaling $54,617 (2024) and $54,618 (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

 

Net cash used by operating activities was $20,744 for the three months ended June 30, 2024 compared to $32,758 for the three months ended June 30, 2023.  Net cash used in operating activities for the three months ended June 30, 2024, was primarily the result of net loss of $36,539, offset by non-cash items including accrued payroll of $12,000. Changes in working capital accounts include a decrease in prepaid expenses of $38 and an increase in accounts payable and accrued liabilities of $3,757.

 

Net cash used in operating activities for the three months ended June 30, 2023 was primarily the result of net loss of $126,227, offset by non-cash items, including stock issued for outside services of $78,300, accrued interest of $2,250 and accrued payroll of $12,000. Changes in working capital include an increase to accounts payable and accrued liabilities of $878 and a decrease in prepaid expenses of $41.

Investing Activities 

There were no investing activities during the three months ended June 30, 2024, and 2023.

Financing Activities

Net cash provided by financing activities was $21,694 for the three months ended June 30, 2024, compared to $30,558 for the three months ended June 30, 2023. During the three months ended June 30, 2024, the Company received $21,694 in proceeds from a related party in the form of unsecured advances. During the three months ended June 30, 2023, the Company received net proceeds of $30,558 from a related party in the form of unsecured advances. 

15 

 

 

Liquidity and Capital Resources

We are in need of additional cash resources to maintain our operations. As of June 30, 2024 we had cash of $2,638 and prepaid expenses of $416. 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 $36,539 and $126,227 for the three months period ended June 30, 2024, and 2023, respectively. The Company’s accumulated deficit was $34,938,433 and $34,847,277 as of June 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.

 

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.

 

16 

 

 

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 June 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 three month period ended June 30, 2024.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not Applicable

 

ITEM 5. OTHER INFORMATION

 

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 June 30, 2024, are formatted in Inline XBRL: (i) condensed balance sheets of Qrons, Inc., (ii) condensed statements of operations of Qrons, Inc., (iii) condensed statements of operations and comprehensive income/(loss) of Qrons, Inc., (iv) condensed statements of changes in equity of Qrons, Inc., (v) consolidated statements of cash flows of Qrons, Inc. and (vi) notes to condensed financial statements of Qrons, 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: August 22, 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: August 22, 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 June 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

(Principal Executive Officer and Principal Financial and Accounting Officer)

  
   
Date: August 22, 2024  
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Entity Registrant Name GROOVE BOTANICALS, INC.  
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Entity Address, Address Line One 310 Fourth Avenue South  
Entity Address, Address Line Two Suite 7000  
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Jun. 30, 2024
Mar. 31, 2024
Current Assets:    
Cash $ 2,638 $ 1,688
Accounts Receivable
Prepaid Expenses 416 454
Total Current Assets 3,054 2,142
TOTAL ASSETS 3,054 2,142
Current Liabilities:    
Accounts Payable and Accrued Liabilities 94,929 91,172
Interest Payable
Related Party Payable 486,751 453,057
Convertible Notes Payable
Dividend payable, related parties 273,087 218,470
Total Current Liabilities 854,767 762,699
Total Liabilities 854,767 762,699
Stockholders’ Equity    
Common Stock, $0.001 par value, 200,000,000 shares authorized. and 59,643,062 shares issued and outstanding as of June 30, 2024, and March 31, 2024 59,643 59,643
Additional paid-in capital 34,026,869 34,026,869
Accumulated deficit (34,938,433) (34,847,277)
Total stockholder’s equity (851,713) (760,557)
TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT 3,054 2,142
Series A Preferred Stock [Member]    
Stockholders’ Equity    
Preferred stock, value 10 10
Series B Preferred Stock [Member]    
Stockholders’ Equity    
Preferred stock, value $ 198 $ 198
v3.24.2.u1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Jun. 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
v3.24.2.u1
Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Expenses:    
Selling, General and Administrative Expenses $ 16,599 $ 16,963
Rent 4,644 4,644
Legal and Professional Expenses 14,546 24,070
Consulting Expense 750 78,300
Total operating expenses 36,539 123,977
Operating loss (36,539) (123,977)
Other Income (Expense)    
Interest Income (Expense) (2,250)
Total Other Income (Expense) (2,250)
Net (loss) (36,539) (126,227)
Dividend on Preferred Stock 54,617 54,618
Net (loss) attributable to common shareholders $ (91,156) $ (180,845)
Basic loss per common share $ (0.00) $ 0.00
Diluted loss per common share $ (0.00) $ 0.00
Weighted average common shares outstanding Basic 59,643,062 58,478,227
Weighted average common shares outstanding diluted 59,643,062 58,478,227
v3.24.2.u1
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
Series A Preferred Stock [Member]
Series B Preferred 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)
Shares, Outstanding, Beginning Balance at Mar. 31, 2023 100 1,983 57,643,062      
Issuance of Stock for Consulting     $ 1,000 77,300   78,300
[custom:IssuanceOfStockForConsultingShares]     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)
Shares, Outstanding, Ending Balance at Jun. 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)
Shares, Outstanding, Beginning Balance 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)
Shares, Outstanding, Ending Balance at Jun. 30, 2024 100 1,983 59,643,062      
v3.24.2.u1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash Flow From Operating Activities    
Net Loss $ (36,539) $ (126,227)
Adjustments to reconcile net loss to net cash used in operating activities:    
  Stock Issued for Outside Services 78,300
  Accrued Interest 2,250
  Accrued Payroll 12,000 12,000
Changes in working capital    
  Decrease in Prepaid Expenses 38 41
  Increase in Accounts Payable and Accrued Liabilities 3,757 878
Net Cash Used in Operating Activities (20,744) (32,758)
Cash Flow From Investing Activities    
Net Cash From Investing Activities
Cash Flow From Financing Activities    
  Funds received from Related Party 21,694 30,558
Net Cash From Financing Activities 21,694 30,558
Net Change in Cash 950 (2,200)
Cash at Beginning of Period 1,688 4,566
Cash at End of Period 2,638 2,366
Net cash paid for:    
Interest
Income Taxes
v3.24.2.u1
ORGANIZATION AND OPERATIONS
 3 Months Ended
Jun. 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.

 
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Jun. 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.

Financial Instruments

 

The Company's financial instruments primarily consist of cash and cash equivalents, accounts payable and accrued liabilities, related party payables, dividends payable and other debt. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2—Significant other observable inputs that can be corroborated by observable market data; and Level 3—Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, related party payables, accrued dividends and debt approximate fair value based on either their short-term nature or on terms currently available to the Company in financial markets.

 

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.

 

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.

 
v3.24.2.u1
GOING CONCERN
 3 Months Ended
Jun. 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 $36,539 and $126,227 for the three-month periods ended June 30, 2024, and 2023, respectively. The Company’s accumulated deficit was $34,938,433 and $34,847,277 as of June 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.

 
v3.24.2.u1
CASH
 3 Months Ended
Jun. 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 June 30, 2024, the Company’s cash consisted of non-restricted cash.

 
v3.24.2.u1
RELATED PARTY TRANSACTIONS
 3 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY TRANSACTIONS

 

The Company had a related party payable of $486,751 and $453,057 outstanding as of June 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 an employment agreement with its CEO entered into April 1, 2020, which designates monthly payments due to CEO Kent Rodriguez in the amount of $4,000. On July 30, 2024, the Company and Mr. Kent Rodriguez, CEO and sole director, agreed to extend the term of an Employment Contract originally entered into on April 1, 2020 expiring March 31, 2024, for a further two year term to March 31, 2026, retroactive to April 1, 2024. The agreement designates monthly payments to Kent Rodriguez in the amount of $4,000 or $48,000 per year. These payables accrue no interest and have no maturity date.

 

On June 3, 2022, the Company received a loan from the Company’s CEO in the amount of $125,000. These funds were wired to the Company in order to reach a settlement of the debts during the fiscal year ended March 31, 2023.

 

During the three months period ended June 30, 2024 and 2023, the Company accrued $10,000 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.

 
v3.24.2.u1
CONVERTIBLE NOTES PAYABLE
 3 Months Ended
Jun. 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 June 30, 2024 and March 31, 2024, the balance of the convertible note was $0.

 
v3.24.2.u1
PREFERRED STOCK
 3 Months Ended
Jun. 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 100 shares of Series A Preferred Stock and 2,000 shares of Series B Preferred Stock, respectively, both with a par value of $0.10. As of June 30, 2024 and March 31, 2024, there were 100 and 1,983 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 the three months period ended June 30, 2024 and 2023, the holder of the Series A preferred shares accrued $10,000 in preferred dividends from the Series A preferred shares.

 

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 have been 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 the three months period ended June 30, 2024 and 2023, the holder of the Series B preferred shares accrued $54,617 and $54,618, respectively, in preferred dividends from the Series B preferred shares.

 
v3.24.2.u1
COMMON STOCK
 3 Months Ended
Jun. 30, 2024
Equity [Abstract]  
COMMON STOCK

NOTE 8 – COMMON STOCK

 

The Company is authorized to issue 200,000,000 shares of Common Stock, with a par value of $0.001.

 

The Company had 59,643,062 shares of common stock issued and outstanding as of June 30, 2024 and March 31, 2024.

 

Shares issued in the three months ended June 30, 2024:

 

There were no shares issued during the three month period ended June 30, 2024.

 

Shares issued in the three months ended June 30, 2023:

 

On April 15, 2023, the Company issued 1,000,000 shares of common stock in exchange for consulting services. These shares were valued at $0.0783 per share, the fair market value on the date of issuance.

 
v3.24.2.u1
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 9: COMMITMENTS AND CONTINGENCIES

 

As of June 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.

 
v3.24.2.u1
SUBSEQUENT EVENTS
 3 Months Ended
Jun. 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.

 

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.
v3.24.2.u1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Jun. 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.

 
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.

 
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.

Financial Instruments

 

The Company's financial instruments primarily consist of cash and cash equivalents, accounts payable and accrued liabilities, related party payables, dividends payable and other debt. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2—Significant other observable inputs that can be corroborated by observable market data; and Level 3—Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, related party payables, accrued dividends and debt approximate fair value based on either their short-term nature or on terms currently available to the Company in financial markets.

 
Net Loss Per Share

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.

 
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.

 
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.

 
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.

 
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.

 
v3.24.2.u1
GOING CONCERN (Details Narrative) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Net loss $ 36,539 $ 126,227  
Accumulated deficit $ 34,938,433   $ 34,847,277
v3.24.2.u1
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 3 Months Ended 24 Months Ended
Apr. 02, 2020
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2026
Mar. 31, 2024
Jun. 03, 2022
Related Party Transaction [Line Items]            
Related party payment outstanding   $ 486,751     $ 453,057  
Related party debt           $ 125,000
Accrued preferred dividends   54,617 $ 54,618      
Series A Preferred Stock [Member]            
Related Party Transaction [Line Items]            
Accrued preferred dividends   10,000 $ 10,000      
Chief Executive Officer [Member] | Kent Rodriguez [Member]            
Related Party Transaction [Line Items]            
Description of employment agreement Kent Rodriguez under the terms of an employment agreement with its CEO entered into April 1, 2020, which designates monthly payments due to CEO Kent Rodriguez in the amount of $4,000. On July 30, 2024, the Company and Mr. Kent Rodriguez, CEO and sole director, agreed to extend the term of an Employment Contract originally entered into on April 1, 2020 expiring March 31, 2024, for a further two year term to March 31, 2026, retroactive to April 1, 2024. The agreement designates monthly payments to Kent Rodriguez in the amount of $4,000 or $48,000 per year. These payables accrue no interest and have no maturity date.          
Monthly wages payment   $ 4,000   $ 48,000    
v3.24.2.u1
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
Jun. 30, 2024
Convertible Promissory Note [Member]            
Short-Term Debt [Line Items]            
Debt interest rate   10.00%        
Maturity date   Jun. 30, 2022        
Debt instrument conversion price   $ 0.02        
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  
v3.24.2.u1
PREFERRED STOCK (Details Narrative) - USD ($)
 3 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Class of Stock [Line Items]      
Liquidation preference, value $ 500,000    
Liquidation preference per share $ 5,000    
Accrued preferred dividends $ 54,617 $ 54,618  
Series A Preferred Stock [Member]      
Class of Stock [Line Items]      
Preferred stock, shares authorized 100   100
Preferred stock, par value $ 0.10   $ 0.10
Preferred stock, shares issued 100   100
Preferred stock, shares outstanding 100   100
Accrued preferred dividends $ 10,000 10,000  
Series B Preferred Stock [Member]      
Class of Stock [Line Items]      
Preferred stock, shares authorized 2,000   2,000
Preferred stock, par value $ 0.10   $ 0.10
Preferred stock, shares issued 1,983   1,983
Preferred stock, shares outstanding 1,983   1,983
Accrued preferred dividends $ 54,617 $ 54,618  
v3.24.2.u1
COMMON STOCK (Details Narrative) - $ / shares
 1 Months Ended
Apr. 15, 2023
Jun. 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    
v3.24.2.u1
COMMITMENTS AND CONTINGENCIES (Details Narrative)
 3 Months Ended
Jun. 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.
Groove Botanicals (PK) (USOTC:GRVE)
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