UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Mark One)
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterquarterly period ended June 30, 2021March 31, 2022
or
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________________ to ________________________to________
Commission File Number: 000-54872No. 000-51185
SIGNET INTERNATIONAL HOLDINGS, INC.Signet International Holdings, Inc.
(Exactexact name of small business issuerregistrant as specified in its charter)
| 16-1732674 | |||
(State or other jurisdiction of incorporation or organization) | ( Identification |
205 Worth Avenue, 901 S. Mopack Exp Building 1, Suite 316, Palm Beach, Florida 33480300, Austin, TX78746
(Address of principal executive offices) (zip code)
(561) 832-2000(512)430-1553
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Not applicable
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
(Former name, former address and former fiscal year, if changed since last report)
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 and posted 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 registrationregistrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | Accelerated | ☐ | |||||
| 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 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Exchange Act:
As of September 24, 2021, May 20, 2022, the registrant had shares of common stock par value $0.001 per share, were outstanding.
Table of Contents
SIGNET INTERNATIONAL HOLDINGS, INC.
FORM 10-Q
JUNE 30, 2021
TABLE OF CONTENTS
i
| 2 |
FORWARD-LOOKING STATEMENTS
Statements in this Quarterly Report on Form 10-Q may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and “would.” These statements are based on current expectations, estimates and projections about our business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K, and our other filings with the U.S. Securities and Exchange Commission.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Any forward-looking statements speak only as of the date on which they are made, and we disclaim any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as required by applicable law.
ii
PART I - FINANCIAL INFORMATION
ITEM
Item 1. FINANCIAL STATEMENTSFinancial Statements.
SIGNET INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIESGolden Ally Lifetech Group, Inc.
CONSOLIDATED BALANCE SHEETSCondensed Balance Sheets
March 31, 2022
(Unaudited)
| June 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 137,247 | $ | 123,493 | ||||
| Prepaid expenses and other current assets | 382 | 382 | ||||||
| Total Current Assets | 137,629 | 123,875 | ||||||
| NON-CURRENT ASSETS: | ||||||||
| Operating lease right-of-use asset, net | 19,380 | 25,277 | ||||||
| TOTAL ASSETS | $ | 157,009 | $ | 149,152 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 36,265 | $ | 19,087 | ||||
| Operating lease obligation - current portion | 12,894 | 12,007 | ||||||
| Total Current Liabilities | 49,159 | 31,094 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Operating lease obligation - long-term portion | 7,124 | 13,836 | ||||||
| Total Liabilities | 56,283 | 44,930 | ||||||
| Commitments and Contingencies (see Note 5) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $0.001 par value; 50,000,000 shares authorized; Convertible Series A Preferred stock ($0.001 Par Value; 5,000,000 Shares Designated; 5,000,000 issued and outstanding) | 5,000 | 5,000 | ||||||
| Common stock, $0.001 par value: 100,000,000 shares authorized; 20,385,982 and 19,913,982 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 20,386 | 19,914 | ||||||
| Common stock issuable (214,018 and 0 shares as of June 30, 2021 and December 31, 2020, respectively) | 214 | - | ||||||
| Additional paid in capital | 7,985,277 | 7,933,832 | ||||||
| Accumulated deficit | (7,910,151 | ) | (7,854,524 | ) | ||||
| Total Stockholders’ Equity | 100,726 | 104,222 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 157,009 | $ | 149,152 | ||||
| March 31, 2022 | December 31, 2021 | |||||||
| Assets | ||||||||
| Current | ||||||||
| Cash | $ | 5,709,666 | $ | 2,999,370 | ||||
| Prepaids | 389,876 | - | ||||||
| Total Current Assets | 6,099,542 | 2,999,370 | ||||||
| Goodwill | 1,777,204 | - | ||||||
| Total Assets | $ | 7,876,746 | $ | 2,999,370 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 19,862 | $ | - | ||||
| Due to related parties | 5,000 | 5,000 | ||||||
| Total Current liabilities | 24,862 | 5,000 | ||||||
| Total Liabilities | 24,862 | 5,000 | ||||||
| Stockholders’ Equity | ||||||||
| Convertible Series A Preferred Stock, par value $: issued and outstanding | 5,000 | 5,000 | ||||||
| Common Stock, par value $; issued and outstanding | 20,536 | 20,536 | ||||||
| Additional paid-in capital | 9,845,668 | 3,026,404 | ||||||
| Accumulated deficit | (2,019,320 | ) | (57,570 | ) | ||||
| Total Stockholders’ Equity | 7,851,884 | 2,994,370 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 7,876,746 | $ | 2,999,370 | ||||
SeeThe accompanying condensed notes toare an integral part of these unaudited consolidatedcondensed financial statements.
| 3 |
SIGNET INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| NET REVENUES | $ | - | $ | - | $ | - | $ | - | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Professional and consulting fees | 5,450 | 10,008 | 33,307 | 250,837 | ||||||||||||
| General and administrative | 4,908 | 15,404 | 22,320 | 31,601 | ||||||||||||
| Total Operating Expenses | 10,358 | 25,412 | 55,627 | 282,438 | ||||||||||||
| LOSS FROM OPERATIONS | (10,358 | ) | (25,412 | ) | (55,627 | ) | (282,438 | ) | ||||||||
| LOSS BEFORE PROVISION FOR INCOME TAXES | (10,358 | ) | (25,412 | ) | (55,627 | ) | (282,438 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| NET LOSS | $ | (10,358 | ) | $ | (25,412 | ) | $ | (55,627 | ) | $ | (282,438 | ) | ||||
| NET LOSS PER COMMON SHARE - Basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.02 | ) | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic and diluted | 20,590,488 | 19,225,272 | 20,327,557 | 18,769,671 | ||||||||||||
See accompanying condensed notes to unaudited consolidated financial statements.
SIGNET INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIESGolden Ally Lifetech Group, Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)Condensed Statements of Operations and Loss
For the Three and Sixthree Months Ended June 30,March 31, 2022 and 2021 and 2020
(Unaudited)
| For the three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Operating Expenses | ||||||||
| General and administrative | $ | 156,546 | $ | - | ||||
| Professional fees | 1,393,883 | - | ||||||
| Wages and salaries | 411,321 | - | ||||||
| Total Operating Expenses | 1,961,750 | - | ||||||
| Net operating loss | (1,961,750 | ) | - | |||||
| Income tax | - | - | ||||||
| Net Loss | $ | (1,961,750 | ) | $ | - | |||
| Loss per Common Share | $ | (0.10 | ) | $ | 0.00 | |||
| Weighted Average Common Shares Outstanding | 20,535,982 | 9,317,447 | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
(Unaudited)
Golden Ally Lifetech Group, Inc.
Condensed Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2022 and 2021
(Unaudited)
| Convertible Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance December 31, 2021 | 5,000,000 | $ | 5,000 | 20,535,982 | $ | 20,536 | $ | 3,026,404 | $ | (57,570 | ) | $ | 2,994,370 | |||||||||||||||
| Stock subscription received | 5,042,060 | 5,042,060 | ||||||||||||||||||||||||||
| Recapitalization (reverse merger) | - | - | - | - | 1,777,204 | - | 1,777,204 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (1,961,750 | ) | (1,961,750 | ) | |||||||||||||||||||
| Balance March 31, 2022 | 5,000,000.00 | $ | 5,000.00 | 20,535,982 | $ | 20,536 | $ | 9,845,668 | $ | (2,019,320 | ) | $ | 7,851,884 | |||||||||||||||
| Convertible Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance December 31, 2020 | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
| Net loss | - | - | - | - | - | - | - | |||||||||||||||||||||
| Balance March 31, 2021 | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
| Preferred Stock - Series A | Common Stock | Common Stock Issuable | Additional | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2020 | 5,000,000 | $ | 5,000 | 19,913,982 | $ | 19,914 | - | $ | - | $ | 7,933,832 | $ | (7,854,524 | ) | $ | 104,222 | ||||||||||||||||||||
| Sale of common stock for cash | - | - | 450,000 | 450 | - | - | 33,300 | - | 33,750 | |||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | 22,000 | 22 | - | - | 3,378 | - | 3,400 | |||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | (45,269 | ) | (45,269 | ) | |||||||||||||||||||||||||
| Balance, March 31, 2021 | 5,000,000 | 5,000 | 20,385,982 | 20,386 | - | - | 7,970,510 | (7,899,793 | ) | 96,103 | ||||||||||||||||||||||||||
| Sale of common stock for cash | - | - | - | - | 214,018 | 214 | 14,767 | - | 14,981 | |||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | (10,358 | ) | (10,358 | ) | |||||||||||||||||||||||||
| Balance, June 30, 2021 | 5,000,000 | $ | 5,000 | 20,385,982 | $ | 20,386 | 214,018 | $ | 214 | $ | 7,985,277 | $ | (7,910,151 | ) | $ | 100,726 | ||||||||||||||||||||
| Preferred Stock - Series A | Common Stock | Common Stock Issuable | Additional | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||
| Balance, December 31, 2019 | 5,000,000 | $ | 5,000 | 15,954,358 | $ | 15,954 | - | $ | - | $ | 7,146,319 | $ | (7,499,747 | ) | $ | (332,474 | ) | |||||||||||||||||||
| Sale of common stock for cash | - | - | 981,500 | 982 | - | - | 105,035 | - | 106,017 | |||||||||||||||||||||||||||
| Issuance of common stock for accrued salaries | - | - | 829,721 | 830 | - | - | 93,592 | - | 94,422 | |||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | 1,453,478 | 1,453 | - | - | 163,447 | - | 164,900 | |||||||||||||||||||||||||||
| Contributed capital by an officer through forgiveness of accrued salaries | - | - | - | - | - | - | 366,530 | - | 366,530 | |||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | (257,026 | ) | (257,026 | ) | |||||||||||||||||||||||||
| Balance, March 31, 2020 | 5,000,000 | 5,000 | 19,219,057 | 19,219 | - | - | 7,874,923 | (7,756,773 | ) | 142,369 | ||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | 9,375 | 9 | - | - | 1,803 | - | 1,812 | |||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | (25,412 | ) | (25,412 | ) | |||||||||||||||||||||||||
| Balance, June 30, 2020 | 5,000,000 | $ | 5,000 | 19,228,432 | $ | 19,228 | - | $ | - | $ | 7,876,726 | $ | (7,782,185 | ) | $ | 118,769 | ||||||||||||||||||||
Golden Ally Lifetech Group, Inc.
Condensed Statements of Cash Flows
(Unaudited)
| 2022 | 2021 | |||||||
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (1,961,750 | ) | $ | - | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Prepaids | (389,876 | ) | - | |||||
| Accounts payable and accrued liabilities | 19,862 | - | ||||||
| Goodwill | (1,777,204 | ) | ||||||
| Net cash used in Operating Activities | (4,108,968 | ) | - | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of common shares | 5,042,060 | |||||||
| Reverse recapitalization | 1,777,204 | |||||||
| Net cash provided by Financing Activities | 6,819,264 | - | ||||||
| Inflow of Cash | 2,710,296 | - | ||||||
| Cash - Beginning of period | 2,999,370 | - | ||||||
| Cash - End of period | $ | 5,709,666 | $ | - | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Cash paid for interest | $ | - | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 6 |
See accompanying condensed notes to unaudited consolidated financial statements.Golden Ally Lifetech Group, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2022
NOTE 1 – BUSINESS
Golden Ally Lifetech Group Inc. (“Golden Ally”) is a Delaware corporation incorporated on December 1, 2020, and operates out of Austin, Texas.
SIGNET INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (55,627 | ) | $ | (282,438 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock issued for services | 3,400 | 166,712 | ||||||
| Rent expense | 72 | 72 | ||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | - | 16,250 | ||||||
| Accounts payable and accrued expenses | 17,178 | 3,076 | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | (34,977 | ) | (96,328 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Issuance of common stock for cash | 48,731 | 106,017 | ||||||
| Collection of subscription receivable | - | 25,000 | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 48,731 | 131,017 | ||||||
| NET CHANGE IN CASH | 13,754 | 34,689 | ||||||
| CASH, beginning of year | 123,493 | 106,661 | ||||||
| CASH, end of period | $ | 137,247 | $ | 141,350 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income taxes | $ | - | $ | - | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Issuance of common stock for accrued salaries | $ | - | $ | 94,422 | ||||
| Contributed capital by an officer through forgiveness of accrued salary | $ | - | $ | 366,530 | ||||
See accompanying condensed notesGolden Ally is a high-tech start-up Signet focusing on a unique product offering. Golden Ally activities to unaudited consolidated financial statements.date have focused on the development and exploration of water filtration technology and consumer products with Aquaporin (“AQP”) Active Water. Golden Ally has been working with field experts and research institutions to apply and explore the ability to enhance water filtration for improved body cell absorption in commercialized water products.
On April 06, 2022, Golden Ally closed on the Share Purchase and Exchange Agreement (“SPA”) with Signet International Holdings, Inc. (“Signet”), a Delaware corporation formed on February 2, 2005, and Subsidiaries
Condensed Notesthe Signet Controlling Shareholders. Under generally accepted accounting principles, the acquisition by Signet of Golden Ally is considered to Unaudited Consolidated Financial Statements
June 30, 2021
Note 1 - Organizationbe a capital transaction in substance, rather than a business combination. That is, the acquisition is equivalent to the acquisition by Golden Ally of Signet with the issuance of stock by Golden Ally for the net assets of Signet. This transaction is reflected as a recapitalization and Descriptionis accounted for as a change in capital structure. Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition. Under reverse merger accounting, the comparative historical financial statements of BusinessSignet, as the legal acquirer, are those of the accounting acquirer, Golden Ally. Accordingly, Golden Ally’s financial statements prior to the closing of the reverse acquisition, reflect only the business of Golden Ally. As part of the agreement, Golden Ally paid $375,000 cash and exchanged all of its shares with shares of Signet.
SignetIn March 2022 Signet’s Board of Directors approved, among other things, an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, subject to stockholder approval. Stockholder approval was obtained through written consent. Upon approval of all regulating authorities, Signet’s name will be changed from “Signet International Holdings, Inc. (the “Company”) was incorporated in the State of Delaware and redomiciled in Nevada in February 2018. The Company’s current principal business plan is” to focus in developing advanced technologies, energy solutions and medical devices. The Company has no operating history as of yet. “Golden Ally Lifetech Group, Inc.”
NoteNOTE 2 - Going Concern– GOING CONCERN
The accompanying unaudited consolidated financial statements arehave been prepared on a going concern basis which contemplates the realization ofassumes Golden Ally will be able to realize its assets and satisfaction ofdischarge its liabilities and commitments in the normal course of business.business for the foreseeable future. Golden Ally has not yet established a source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. As reflected in the accompanying unaudited consolidatedcondensed financial statements, the CompanyGolden Ally had a net loss of $1,961,750and used net cash used in operations of $55,627 and $34,977, respectively,$4,108,968 for the sixthree months ended June 30, 2021 and had no revenues during the six months ended June 30, 2021 and 2020. Additionally, the Company hadMarch 31, 2022. Golden Ally has an accumulated deficit of $7,910,151$2,019,320 as of June 30, 2021.March 31, 2022. These mattersfactors raise substantial doubt about the Company’s ability of Signet to continue as a going concern.
In order to continue as a going concern, Golden Ally will need, among other things, additional capital resources. Management’s plan is to obtain such resources for twelve monthsGolden Ally by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing.
Management has held preliminary discussions with potential investors to secure significant capital for Golden Ally in 2022. Management is confident that the issuance date of this report. The ability of the Companydiversified options for financing available to continue as a going concern is dependent on the Company’s abilityGolden Ally in 2022, along with support from significant shareholders, will allow it to implementachieve its business plan, raiseobjectives and satisfy its capital and generate revenues. The unaudited consolidatedrequirements.
These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if the Company isshould Golden Ally be unable to continue as a going concern.
| 7 |
COVID-19
In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely. Although the Company has had occasion to travel overseas for meetings, expos, and demonstrations, the Company experienced similar restrictions. The outcome of the Company’s business meeting is indeterminate. However, the Company continues to maintain a dialogue with its European counterparts. The Company’s operations have not been affected by the COVID-19 outbreak to date, however, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. As of the date of this report, the Company’s business remains open. At this time, the Company does not foresee any material changes to its operations from COVID-19. While the Company does not anticipate an impact on its operations, the Company cannot estimate the duration of the pandemic and potential impact on its business if the Company’s business must close. In addition, a severe or prolonged economic downturn could result in a variety of risks to its business, including weakened demand for the Company’s products and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations
Note
NOTE 3 - Summary of Significant Accounting Policies– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidationPresentation
The accompanying unaudited consolidatedcondensed financial statements have been prepared in accordance with GAAP and applicable rules and regulations of the U.S. generally accepted accounting principlesSecurities and Exchange Commission (“GAAP”SEC”) for interim financial information.quarterly reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of thecertain information and footnotes required by U.S. GAAP for completein annual financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentationstatements have been included. Operating results for the six months ended June 30, 2021 are not indicative of the results that may be expected for the year ending December 31, 2021omitted or for any other future period. These unaudited consolidatedcondensed and these interim financial statements and the unaudited condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K, for the year ended December 31, 2020,Signet’s Information Statement on Schedule 14C, filed with the Securities and Exchange Commission (the “SEC”)SEC on March 26, 2021. The Company’s unaudited consolidated financial statements include the16, 2022. These condensed financial statements of Golden Ally include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair statement of the Golden Ally’s financial position as of March 31, 2022, and results of its operations and its cash flows for the interim periods presented. The results of operations for the three wholly-owned subsidiaries. All inter-company balances and transactionsmonths ended March 31, 2022, are not necessarily indicative of the results to be expected for the entire year. There have been eliminatedno significant changes in consolidation. All wholly-owned subsidiaries were inactive subsidiaries at June 30, 2021the Golden Ally’s accounting policies from those described in the Golden Ally’s audited financial statements and December 31, 2020the related notes to those statements.
Pursuant to the SPA, the Business Combination was accounted for as a recapitalization in accordance with US GAAP. Under this method of accounting, of Signet International Holdings, Inc., was treated as the acquired company and Golden Ally Lifetech Group, Inc., was treated as the acquirer for eachfinancial statement reporting purposes.
Golden Ally Lifetech Group, Inc. was determined to be the accounting acquirer based on evaluation of the six months ended June 30, 2021following facts and 2020.circumstances:
| ● | Golden Ally Lifetech Group, Inc., through their ownership of the Convertible Series A Preferred stock and Common Stock, has a 77% of the voting interest; | |
| ● | Golden Ally Lifetech Group, Inc., selected all of the new board of directors of Signet; | |
| ● | Golden Ally Lifetech Group, Inc., senior management is the senior management of Signet; and | |
| ● | Golden Ally Lifetech Group, Inc., is the larger entity based on historical operating activity. |
Use of estimatesEstimates
The preparation of the unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S.GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the related disclosuresdisclosure at the date of the financial statements and during the reporting period.statements. Actual results could materially differ from thesethose estimates. SignificantManagement periodically evaluates estimates includeused in the valuation of equity-based instruments issued for other than cash, valuation of right-of-use assets and liabilities and the valuation allowance on deferred tax assets.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
Risks and uncertainties for development stage company
The Company is considered to be in an early stage since we have not commenced planned principal operations. Our activities since inception include devoting substantially allpreparation of the Company’s efforts to business planningfinancial statements for continued reasonableness. Actual results and development. Additionally, the Company has allocated a substantial portion of its timeoutcomes may differ from management’s estimates and investment to the completion of the Company’s development activities to launch its marketing plan and generate revenues and to raising capital. The Company has not generated revenue from operations and is currently in the development stage. The Company’s activities during this early stage are subject to significant risks and uncertainties.assumptions.
Cash and cash equivalents
The CompanyFor purposes of the statement of cash flows, Golden Ally considers all highly liquid investmentsinstruments purchased with aan original maturity of three months or less when acquired to be cash equivalents. The Company did not have cash equivalents ascash.
As of June 30, 2021March 31, 2022, and December 31, 2020. The Company places2021, Golden Ally had cash of $5,709,666 and $2,999,370.
Concentrations of Credit Risk
Golden Ally maintains its cash with high credit quality financial institutions. The Company’sin bank deposit accounts, the balances of which at these institutions aretimes may exceed federally insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of June 30, 2021, the Company had not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reducelimits. Golden Ally continually monitors its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits.
Fair value measurementsbanking relationships and fair value of financial instruments
The Company follows Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
These inputs are prioritized below:
|
The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The estimated fair value of certain financial instruments, including prepaid expense, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
Property
Property is carried at cost which made up of office equipment. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. The Company shall capitalize cost of property over $1,500.
Stock-based compensation
The Company accounts for stock-based compensation in accordance with ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to non-employees for goods and services, and to employees and directors including employee stock options, restricted stock awards, and employee stock purchases based on estimated fair values.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
Determining Fair Value Under ASC 718-10
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables.
The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.
Income taxes
The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.
The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more likely than not recognition threshold is measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Companyconsequently has not recorded a liability for uncertain tax benefits.
The federal and state income tax returns of the Company are subjectexperienced any losses in its accounts. Management believes Golden Ally is not exposed to examination by the IRS and state taxing authorities, generally for three years after they are filed.
Research and developmentany significant credit risk on cash.
In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. During the six months ended June 30, 2021 and 2020, research and development costs were $500 and $2,000, respectively, and are included in general and administrative expenses on the accompanying consolidated statements of operations.
Net loss per share of common stock
Basic net lossLoss per share is computed by dividing the net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentiallyGolden Ally had no dilutive securitiesinstruments outstanding during the period. At June 30, 2021 and December 31, 2020, the Company had 50,000,000 potentially dilutive securities outstanding related to Series A Preferred Stock, for both periods. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss.
Impairment of long-lived assetsperiods presented.
In accordance with ASC 360-10, “Long-lived assets,” which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
| 8 |
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
Leases
In February 2016, the FinancialRecent Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requiresPronouncements
Golden Ally has implemented all new accounting pronouncements that lessors separate lease and non-lease componentsare in a contract in accordance with the new revenue guidance in ASC 606. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance effective January 1, 2019.
On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected toeffect. These pronouncements did not reassess the following: (i) whetherhave any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.
Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized basedmaterial impact on the present value of future minimum lease payments over the lease term at commencement date. As most leases dofinancial statements unless otherwise disclosed, and Golden Ally does not provide an implicit rate, the Company use an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations.
Recentbelieve that there are any other new accounting pronouncements
Accounting standards which are not yet effective are not expected to that have been issued that might have a material impact on the Company’sits financial position or results of operations.
NoteNOTE 4 – Stockholders’ EquityPREPAID EXPENSE
During the three months ended March 31, 2022, Golden Ally entered into an agreement with a company owned by a related party to develop and implement marketing strategies for the Golden Ally’s products. Golden Ally paid $1,200,000 per the terms of the agreement for services to be provided. As of March 31, 2022, $1,000,000 of the retainer was expensed and $200,000 was recorded as a prepaid expense.
During the three months ended March 31, 2022, Golden Ally entered into an agreement for legal services and paid $500,000 as a retainer to the legal service provider. As of March 31, 2022, $310,124 of the retainer was expensed and the $189,876 was recorded as a prepaid expense.
NOTE 5 – GOODWILL
Under generally accepted accounting principles, the acquisition by Signet of Golden Ally is considered to be a capital transaction in substance, rather than a business combination. That is, the acquisition is equivalent to the acquisition by Golden Ally of Signet with the issuance of stock by Golden Ally for the net assets of Signet. This transaction is reflected as a recapitalization and is accounted for as a change in capital structure. Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition. Under reverse merger accounting, the comparative historical financial statements of Signet, as the legal acquirer, are those of the accounting acquirer, Golden Ally. As part of the agreement, Golden Ally exchanged 100% of its shares for 77% of Signet shares, representing a premium for the 23% of Signet stock not acquired. Golden Ally recorded $1,777,204 in Goodwill for the shares not acquired and $375,000 cash paid.
NOTE 6 – INVESTMENT – RELATED PARTY, AND ITS SUBSEQUENT RECISSION
On December 1, 2021, Golden Ally entered into an agreement to purchase 20% of the issued and outstanding shares of Asia Hybrid Cryptocurrency Limited (“Asia Hybrid”) for $2,000,000. As part of the agreement, Asia Hybrid was to develop and maintain a digital platform for use by Golden Ally. Golden Ally made the payment of $2,000,000 in accordance with the agreement in December 2021.
On March 7, 2022, Golden Ally entered a recission agreement with Asia Hybrid, and a related party, whereby the original agreement between Golden Ally and Asia Hybrid was rescinded effective December 1, 2021, and both party’s obligations of the agreement were terminated.
NOTE 7 – CAPITAL STOCK
Common Stock
Subsequent to December 31, 2021, Golden Ally received $5,042,060 for stock subscriptions related to common stock.
The authorized capital stock consists of shares of common stock and 50,000,000stock. There were common shares outstanding as of preferred stock. March 31, 2022.
Preferred stock
The Board of Directors has the authority, without further action by the shareholders, to issue, from time to time, preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights of the holders of common stock.
| 9 |
On March 14, 2007, the CompanySignet formally designated a series of Super Voting Convertible Preferred Stock (the “Series A Super Voting Preferred Stock”) of the Company’s Signet’s authorized shares of the capital preferred stock of the Corporation. The designated Series A Super Voting Convertible Preferred Stock, consists of shares, par value $.001$ per share, which shall have the following preferences, powers, designations and other special rights:
Holders of the Series A Super Voting Convertible Preferred Shall have ten votes per share held on all matters submitted to the shareholders of |
Dividends: Shall be entitled to receive dividends or distributions on a pro rata basis with the holders of common stock when and if declared by the Board of Directors |
Liquidation Preference: | Upon the liquidation, dissolution and winding up of |
There were shares of Series A convertible preferred stock issued and outstanding as of June 30, 2021March 31, 2022 and December 31, 2020.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
Common stock2021.
NOTE 8 – RELATED PARTIES
During the Sixyear ended December 31, 2021, a related party paid expenses on behalf of Golden Ally of $5,000. As of March 31, 2022, the related party owed $5,000.
During the three months ended June 30, 2021:March 31, 2022 and 2021, Golden Ally paid $411,321 and $0 in wages and salaries to related parties.
NOTE 9 – COMMITMENTS
Operating lease
During the three months ended March 31, 2022, Golden Ally entered into an agreement for office space in Texas. The agreement term is from January 19, 2022, to January 31, 2023, at a rate of $332 per month. The lease has been accounted for as a short-term lease and rental payments expensed.
During the three months ended March 31, 2022, Golden Ally entered into a lease for a location in California. The term of the lease is four months ending on May 31, 2022. The base rent is $5,970 per month. The lease has been accounted for as a short-term lease and rental payments expensed.
NOTE 10 – SUBSEQUENT EVENTS
Golden Ally evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed financial statements were issued for potential recognition or disclosure. Golden Ally did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
END OF FINANCIAL STATEMENTS
Note 5 – Commitments and Contingencies
Operating lease
In January 2018, the Company entered into a one-year sub-lease agreement related to its leased office facilities in Palm Beach, FL with the CEO of the Company. The lease shall automatically be extended for successive one-year renewal terms not to exceed 5 annual renewal terms in total unless the landlord or tenant gives a written notice of non-renewal on or before 30 days prior to expiration of the term. The lease currently requires monthly payments of approximately $1,136 plus sales tax and the Company is not responsible for any additional charges for common area maintenance. The monthly rent will increase by 2% at the end of each year.
In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. On January 1, 2019, upon adoption of ASC Topic 842, the Company recorded right-of-use assets of $45,645 and total lease liabilities of $45,645 based on an incremental borrowing rate of 12%. For the respective three months ended June 30, 2021 and 2020, we paid an aggregate of $3,775 and $3,775 for rent under this agreement, respectively. For the respective six months ended June 30, 2021 and 2020, we paid an aggregate of $7,550 and $7,550 for rent under this agreement, respectively.
Right of Use (“ROU”) Asset is summarized below:
| As of June 30, 2021 | As of | |||||||
| (Unaudited) | ||||||||
| Office lease, ROU Asset | $ | 45,645 | $ | 45,645 | ||||
| Less: Accumulated amortization | (26,265 | ) | (20,368 | ) | ||||
| Balance of ROU asset | $ | 19,380 | $ | 25,277 | ||||
Operating lease liability related to the ROU asset is summarized below:
| As of June 30, 2021 | As of | |||||||
| (Unaudited) | ||||||||
| Office lease liability | $ | 45,645 | $ | 45,645 | ||||
| Reduction of lease liability | (25,627 | ) | (19,802 | ) | ||||
| Total | 20,018 | 25,843 | ||||||
| Less: current portion | (12,894 | ) | (12,007 | ) | ||||
| Long term portion of lease liability | $ | 7,124 | $ | 13,836 | ||||
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
Future minimum lease payments under non-cancelable operating lease at June 30, 2021 are as follows:
| Balance of year 2021 | $ | 7,089 | ||
| Year 2022 | 14,462 | |||
| Total | 21,551 | |||
| Imputed interest | (1,533 | ) | ||
| Total operating lease liability | $ | 20,018 |
Option agreements
In November 2018, the Company entered into an Option Agreement (the “November 2018 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for graphene foam coating and deicing. The option period commenced on the effective date of this November 2018 Option Agreement and expired 6 months from the effective date unless terminated by either party by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,500 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2018. In May 2019, the Company entered into an amendment agreement to extend the option period to August 2019. In October 2020, the Company entered into an exclusive licensing agreement with this licensor (see discussion below).
In March 2019, the Company entered into an Option Agreement (the “March 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for rechargeable battery device. The option period commenced on the effective date of this March 2019 Option Agreement and expires 12 months from the effective date unless terminated by either party by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $5,000 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In October 2020, the Company entered into an exclusive licensing agreement with this licensor (see discussion below).
In August 2019, the Company entered into an Option Agreement (the “August 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for detecting melanoma cancer. The option period commenced on the effective date of this August 2019 Option Agreement and expires in August 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In August 2020, the Company entered into an amendment agreement to extend the option period to August 31, 2021 unless sooner terminated by the execution of a license agreement between the parties. All other provision of this option agreement shall remain in full force and effect and unmodified by this amendment.
In September 2019, the Company entered into an Option Agreement (the “September 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for self-sterilizing device using plasma fields. The option period commenced on the effective date of this September 2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In July 2020, the Company entered into an amendment agreement to extend the option period to September 30, 2021 unless sooner terminated by the execution of a license agreement between the parties. All other provision of this option agreement shall remain in full force and effect and unmodified by this amendment.
In September 2019, the Company entered into an Option Agreement (the “September 11, 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for low-cost disposable medical sensor for heart-attack. The option period commenced on the effective date of this September 11, 2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In July 2020, the Company requested the licensor to grant the Company an extension for this option agreement. After the Company’s initial request, the Company notified the licensor of exercising the option and request for a licensing agreement. Despite the repeated efforts from the Company, the licensor did not respond. As a result, such option agreement is considered expired.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
In September 2019, the Company entered into an Option Agreement (the “September 13, 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for multifunctional oral prosthetic system. The option period commenced on the effective date of this September 13, 2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In July 2020, the Company requested the licensor to grant the Company an extension for this option agreement. After the Company’s initial request, the Company notified the licensor of exercising the option and request for a licensing agreement. Despite the repeated efforts from the Company, the licensor did not respond. As a result, such option agreement is considered expired.
In October 2019, the Company entered into an Option Agreement (the “October 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are related to technology for arc melted glass piles for structural foundations. The option period commenced on the effective date of this October 2019 Option Agreement and expires in October 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining the patent rights up to a maximum of $3,500. The Company paid an option fee of $1,500 on the date of this agreement which was recorded in professional and consulting fees during calendar year 2019. In October 2020, the Company entered into an amendment agreement to extend the option period to October 15, 2021. Upon exercise of this option, the Company shall pay $1,500 no later than October 15, 2021.
Exclusive licensing agreements
On October 30, 2020, the (“Effective Date”) the Company entered into an exclusive licensing agreement with a University for the licensed patents related to the technology for graphene foam coating and deicing. The term of this license shall continue until licensee permanently discontinue the sale of any licensed products or unless terminated pursuant to the terms of this agreement. Licensee may grant written sublicenses to third parties. However, the licensee shall notify the University of the initiation of the license negotiation. Licensee may terminate this agreement by giving at least sixty days written notice to University. The University may terminate this agreement by giving the licensee at least thirty days written notice upon the occurrence of certain events as defined in the agreement.
The Company agreed to pay license issue fee of $5,000 in two separate installments. The first installment of $1,500 shall be made within thirty days of the Effective Date and the second installment of $3,500 at the first anniversary of the effective date. The Company paid the $1,500 first installment in November 2020.
Additionally, the Company agreed to pay certain royalty payments as follows:
(i) 5.5% for Net Revenues of licensed products; and
(ii) 5.5% for Net Revenues of licensed processes.
Furthermore, the Company agrees to pay Licensor minimum royalty payments, as follows:
| Payment | Year | |||
| $ | 2,000 | 2021 | ||
| $ | 3,000 | 2022 | ||
| $ | 5,000 | 2023 | ||
| $ | 10,000 | 2024 and every year thereafter on the same date, for the life of this License Agreement. | ||
The first minimum royalty payment shall be due on December 31, 2021 for calendar year 2021.
On October 30, 2020, the (“Effective Date”) the Company entered into an exclusive licensing agreement with a University for the licensed patents related to the technology for rechargeable battery device. The term of this license shall continue until licensee permanently discontinue the sale of any licensed products or unless terminated pursuant to the terms of this agreement. Licensee may grant written sublicenses to third parties. However, the licensee shall notify the University of the initiation of the license negotiation. Licensee may terminate this agreement by giving at least sixty days written notice to University. The University may terminate this agreement by giving the licensee at least thirty days written notice upon the occurrence of certain events as defined in the agreement.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial Statements
June 30, 2021
The Company agreed to pay license issue fee of $5,000 in two separate installments. The first installment of $1,418 shall be made within thirty days of the Effective Date and the second installment of $3,582 at the first anniversary of the effective date. The Company paid the $1,418 first installment in November 2020.
Additionally, the Company agreed to pay certain royalty payments as follows:
(i) 5.5% for Net Revenues of licensed products; and
(ii) 5.5% for Net Revenues of licensed processes.
Furthermore, the Company agrees to pay Licensor minimum royalty payments, as follows:
| Payment | Year | |||
| $ | 2,000 | 2021 | ||
| $ | 3,000 | 2022 | ||
| $ | 5,000 | 2023 | ||
| $ | 10,000 | 2024 and every year thereafter on the same date, for the life of this License Agreement. | ||
The first minimum royalty payment shall be due on December 31, 2021 for calendar year 2021.
Distributor agreement
The Company has executed an Exclusive Distributor Agreement with Jarada, Inc. Ltd (“Jarada”) of Seoul Korea The Agreement appoints Jarada an exclusive South Korean territorial distribution rights to all of the Company’s Graphene products that will be developed and made available for worldwide commercialization. The Company shall pay Jarada 15% commission on all sales made by Jarada of the Company’s Graphene products. The term of this agreement is for two years from the date of execution and shall automatically renewed unless either party provides notice of termination.
Note 6 – Related Party Transactions
The Company paid rental fees for personal housing of $2,100 and $6,300 during the six months ended June 30, 2021 and 2020, respectively, to an affiliated company owned by the CEO of the Company which was recorded as compensation to the CEO and included in general and administrative expenses as reflected in the accompanying consolidated statements of operations.
In January 2018, the Company entered into a one-year sub-lease agreement related to its leased office facilities in Palm Beach, FL with the previous CEO of the Company. The lease shall automatically be extended for successive one-year renewal term not to exceed 5 annual renewal terms in total unless the landlord or tenant gives a written notice of non-renewal on or before 30 days prior to expiration of the term. The lease currently requires monthly payments of approximately $1,136 plus sales tax and the Company is not responsible for any additional charges for common area maintenance. The monthly rent will increase by 2% at the end of each year (see Note 5). On July 1, 2021, the Company entered into a one-year lease agreement with the landlord which replaces the sub-lease agreement with the previous CEO of the Company (see Note 7).
On May 21, 2021, a majority of the shareholders of the Company, voted to appoint Alysia WolfsKeil, Esq. as the Interim Chief Executive Officer and Interim Chief Financial Officer, in order to fulfill the positions within the Company left vacant by the recent passing of Ernesto W. Letiziano, the previous CEO and CFO of the Company. Ms. WolfsKeil, Esq. shall have limited powers in her positions, specifically she shall be empowered to direct all relevant services providers of the Company as they relate to any and all such filings with the SEC, gain access and be provided banking authority over any and all bank accounts or other trade accounts in the name of the Company, and enter into negotiations with potential third parties who may be considered potential acquisition targets of the Company. Ms. WolfsKeil, Esq. shall serve the shorter of a) her termination by the shareholders or b) six months from the May 21, 2021. Ms. WolfsKeil is the daughter of Ernesto W. Letiziano, the previous CEO and CFO of the Company.
Note 7 - Subsequent Events
On July 1, 2021, the Company entered into a one-year lease agreement related to its leased office facilities in West Palm Beach, FL. The lease shall automatically be extended for successive one-year renewal term not to exceed 5 annual renewal terms in total unless the landlord or tenant gives a written notice of non-renewal on or before 30 days prior to expiration of the term. The lease currently requires monthly payments of approximately $1,500 plus sales tax and the Company is not responsible for any additional charges for common area maintenance. The period beginning July 1, 2021 and ending August 31, 2021 will be a rent free period. The monthly rent will increase by 4% at the end of each year.
In July 2021, the Company issued 150,000 shares in conjunction with the proceeds of $14,981 received in April 2021 for the sale of 214,018 shares of the Company’s common stock for an average of approximately $0.07 per share (see Note 4). The balance of 64,018 shares remains to be issued.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations.
As used in this Form 10-Q, references to “Uppercut Brands”, “Company”, “we”, “our” or “us” refer to Uppercut Brands, Inc. unlessYou should read the context otherwise indicates.
Forward-Looking Statements
The following discussion should be read in conjunctionand analysis together with our condensed financial statements which areand the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q (the “Report”).and other reports we filed with the Securities and Exchange Commission. This Quarterly Report on Form 10-Q contains forward-looking statements which relate tothat discuss future events or expectations, projections of results of operations or financial condition, trends in our future financial performance.business, business prospects and strategies and other “forward-looking” information. In some cases, you can identify forward-looking statements“forward-looking statements” by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,words like “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential”, or “continue” or the negative of these terms orthose words and other comparable terminology.words. These statements are only predictionsmay relate to, among other things, our ability to implement and involve known and unknown risks, uncertainties,fund our business plan; expectations for our financial results, revenue, operating expenses and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from anyfinancial measures in future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements,periods; and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the directionadequacy of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions orsources of liquidity to satisfy our working capital needs, capital expenditures, and other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.liquidity requirements.
OverviewApril 2022 Transaction; Recent Developments
On February 28, 2022, Signet International Holdings, Inc. (the “Company”“Signet”), Estate of Ernest W. Letiziano, Ms. Hope Hillabrand, and Mr. Thomas Donaldson (collectively, the “Controlling Shareholders”) was incorporatedand Golden Ally Lifetech Group Co., Ltd., a Delaware corporation (“Golden Ally”) entered into a Share Purchase and Exchange Agreement (the “SPA”).
The transactions contemplated by the SPA were consummated on February 2, 2005April 6, 2022. Under the SPA, the Controlling Shareholders agreed to sell to Golden Ally their capital stock of Signet, consisting of 5,000,000 shares of Series A Convertible Super Preferred Stock (convertible into 50,000,000 common shares) and 4,474,080 common shares for $375,000 in accordance withcash (the “Purchase”). Immediately after the Lawscompletion of the StatePurchase, at the closing (the “Closing”) and subject to the terms and conditions of Delaware as 51142, Inc. The Company changedthe SPA, Golden Ally caused its corporate nameshareholders to sell, assign and transfer to Signet International Holdings, Inc. in conjunction with the September 8, 2005 transaction discussed below.
On September 8, 2005, pursuant to a Stock Purchase Agreement and Share Exchange (Agreement) by and among Signet International Holdings, Inc. (Signet); Signet Entertainment Corporation (SIG) and the shareholders of SIG (Shareholders) (collectively SIG and the SIG shareholders shall be known as the “SIG Group”), Signet acquired 100.0%all of the thenGolden Ally shares. The former stockholders of Golden Ally collectively hold beneficially and of record over 77% of the total issued and outstanding preferredequity securities and common stockvoting power of SIG for a totalSignet.
In March 2022 Signet’s Board of 3,421,000 common sharesDirectors approved, among other things, an Amended and 5,000,000 preferred sharesRestated Certificate of Signet’s stock issuedIncorporation and Amended and Restated Bylaws, subject to stockholder approval. Stockholder approval was obtained through written consent. Upon the SIG Group. Pursuant to the agreement, SIG became a wholly owned subsidiaryAmended and Restated Certificate of Signet.
Signet Entertainment Corporation was incorporated on October 17, 2003 in accordanceIncorporation being filed with the LawsDelaware Secretary of State Signet’s name will be changed from “Signet International Holdings, Inc.” to “Golden Ally Lifetech Group, Inc.”
Our Business
As a result of the State of Florida. SIG was formed to establish a television network “The Gaming and Entertainment Network”. To date, this effort has been incomplete. The Company has abandoned pursuant of any gaming or entertainment operations. The Company’s current principal business plan is to focus in developing advanced technologies, energy solutions and medical devices. By utilizing sub licensing arrangements for the intellectual property licenses, we acquire, our strategyTransactions, Signet’s operations will be conducted through its subsidiary Golden Ally. Golden Ally is focused on identifying strategic partnersits Aquaporin (“AQP”) Active Water project, which is a derivative of an academic inspiration from the 2003 Nobel Laureates in Chemistry, Dr. Peter Agre and Dr. Roderick MacKinnon jointly, “for discoveries concerning channels in cell membranes”. Golden Ally has been working closely with experienced field experts and top scientific research institutions to apply the famous Nobel Prize theory of aquaporins into its commercialized products, i.e., the AQP Active Water.
AQP Active Water is the product of a unique water filtration technology derived from raw materials with exclusive access by Golden Ally. The advanced technology can enhance water filtration for better body cell absorption to improve health. All AQP Active Water products are expected to be produced through OEM arrangements and their distribution logistics will also be supported by the OEM partners.
AQP Active Water is an epoch-making product. Consumption for a prolonged period is foreseen to possibly extend human body cells’ lifespan. Golden Ally has been running laboratory tests on its products at the David Geffen School of Medicine at University of California, Los Angeles.
High-income households are Golden Ally’s targeted consumers due to a strong correlation between income level and health spending. The global consumer pool for AQP Active Water is estimated at 17.61 million households. These households represent the portion that has an annual household income of over $150,000 USD, a level that can develop and market products basedpotentially support annual household spending on healthcare products.
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Results of Operations
Overview
Golden Ally is a developmental stage company that is currently implementing its business plan, which is to be a high-tech start-up focused on a unique product offering. Our activities to date have focused on the underlying technologies.development and exploration of water filtration technology and consumer products with AQP Active Water. We do not claimhave been working with field experts and research institutions to apply and explore the ability to enhance water filtration for improved body cell absorption in commercialized water products.
Limited Operating History; Need for Additional Capital
We have expertise inhad limited operations and have been issued a “going concern” opinion by our auditor for the various intellectual properties we seek to acquire. Instead, our value isyear ended December 31, 2021, based on our abilitylack of an established source of revenues sufficient to assess technologiescover our operating costs and appropriate partners for the commercialization of products and process based on the underlying intellectual property. Research and development of the underly technologies is being performed at major universities in Florida. The development of a commercial products will be conducted by our strategic partners.
On February 28, 2018, the Company redomiciled in the state of Nevada.
Generally, the option fee ranges from $1,200 to $5,000. We have exercise two of our options related to the graphene technology and battery technology. On October 30, 2020, we have entered into exclusive licensing agreements with the licensor related to the graphene technology and battery technology.
Since all of the technologies we have options to license are trending, unique, and further advanced than any others we know of on the market today, we must maintain our edge and seek constant improvement to stay viable—and we are doing just that.
Because of our efforts, we have our path laid out before us. Last year´s strategy allowedallow us to take the proper steps to arrive at this juncture. We are now proudly holding ourselves out to the world as a viable and worthy consortium from which multinationals can acquire advanced, patented technology. Although our technologies may necessitate some retooling and possibly an avant-garde approach in implementing, we feel that in considering the alternative technologies presently available, ours is the superior choice.
We have completed these efforts to identify and locate a niche, function, and purpose for all our potential products. Inasmuch as our potential products are ‘green’ in nature and innovative in design, we feel these technologies can easily be integrated into daily life to the benefit of all. We all will see great progress and never to look back.
Although our business plan is highly dependent upon our usage of licensed intellectual property described herein, we have only secured 2 exclusive licenses through exercise of our options. Currently, the Company has non-exclusive options for licenses of various intellectual properties except for the two of our option agreements which are the graphene and battery technology. Five of our options may expire, and we cannot ensure that these options will be renewed. As they are non-exclusive, we also have no way to protect ourselves from other parties utilizing the underlying intellectual property before we exercise our option and move toward commercialization of the underlying technology. We further have not entered into formal negotiations on these five options regarding the terms of a formal licensing agreement, such as, but not limited to, royalty fees, minimum royalties, duration, exclusivity, funding requirements, or limitations on use. This limits our ability to determine the commercial viability of any given technology. However, we believe that we have had and continue to have good working relationships with the institutions owning the intellectual property such that our eventual use of the intellectual property will be formulated in a manner that ensures positive growth for the Company. On October 30, 2020, we have exercised our two options and entered into exclusive licensing agreements with the licensor related to the graphene technology and battery technology.
Plan of Operations
We have engaged a new scientist to help further develop out technologies and interact with the several universities with whom we have contracts. We hear from other universities on a regular basis that tells us we are welcome to the fraternity of research scientists, engineers, and inventors. We have increased efforts to create more awareness of our presence by engaging a social media specialist who will keep the public informed of all our progress and assist us with shareholders relations. Our team is growing and meeting our needs.
As a reporting company, we have engaged an SEC legal counsel to guide us through the labyrinth of compliance and the next steps to up-listing. We have also retained our patent counsel to advise and instruct us on strategy and enhancement of our patent rights, protecting us not only domestically but also worldwide.
We currently own exclusive licensing agreement rights to two of our technologies; graphene and battery technology. We have not developed any products based on said technology. Instead, we have options that provide us exclusive limited access to the intellectual properties through the option to license.
We have executed an Exclusive Distributor Agreement with Jarada, Inc. Ltd (“Jarada”) of Seoul Korea The Agreement appoints Jarada an exclusive South Korean territorial distribution rights to all of our Graphene products that will be developed and made available for worldwide commercialization. We shall pay Jarada 15% commission on all sales made by Jarada of our Graphene products. The term of this agreement is for two years from the date of execution and shall automatically renewed unless either party provides notice of termination.
COVID-19
In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. We are monitoring this closely. Although we have had occasion to travel overseas for meetings, expos, and demonstrations, we experienced similar restrictions. The outcome of our business meeting is indeterminate. However, we continue to maintain a dialogue with our European counterparts. Our operations have not been affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. As of the date of this report, our business remains open. At this time, we do not foresee any material changes to our operations from COVID-19. While we do not anticipate an impact on our operations, we cannot estimate the duration of the pandemic and potential impact on our business if our business must close. In addition, a severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our products and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations.
Recent Events
On May 21, 2021, a majority of the shareholders of the Company, voted to appoint Alysia WolfsKeil, Esq. as the Interim Chief Executive Officer and Interim Chief Financial Officer, in order to fulfill the positions within the Company left vacant by the recent passing of Ernesto W. Letiziano, the previous CEO and CFO of the Company. Ms. WolfsKeil, Esq. shall have limited powers in her positions, specifically she shall be empowered to direct all relevant services providers of the Company as they relate to any and all such filings with the SEC, gain access and be provided banking authority over any and all bank accounts or other trade accounts in the name of the Company, and enter into negotiations with potential third parties who may be considered potential acquisition targets of the Company. Ms. WolfsKeil, Esq. shall serve the shorter of a) her termination by the shareholders or b) six months from the May 21, 2021. Ms. WolfsKeil is the daughter of Ernesto W. Letiziano, the previous CEO and CFO of the Company.
Results of Operations
For the Three and Six months ended June 30, 2021 and 2020
Revenue:
The Company is in its development stage. For the three and six months ended June 30, 2021 and 2020, the Company did not have any revenue generating operations, nor did the Company has any related cost of goods sold.
Operating Expenses:
For the three months ended June 30, 2021, the Company had total operating expenses of $10,358 as compared to $25,412 for the three months ended June 30, 2020, a decrease of $15,054 or 59%. The decrease is primarily attributable to decrease in professional and consulting fees of $4,558 or 46% as a result of decrease in consulting fees and decrease in general and administrative expenses of $10,496 or 68%, primarily attributable to decrease in compensation expense, public company expenses related to our stock transfer agent fees and public company filing fees, travel, and office expenses.
For the six months ended June 30, 2021, the Company had total operating expenses of $55,627 as compared to $282,438 for the six months ended June 30, 2020, a decrease of $226,811 or 80%. The decrease is primarily attributable to decrease in professional and consulting fees of $217,530 or 87% primarily due to decrease in stock-based consulting fees $163,312 and decrease in professional fees of $24,893 primarily due to decrease in accounting and legal fees. Additionally, general and administrative expenses decreased by $9,281 or 29%, primarily attributable to decrease in compensation expense, travel, and office expenses.
Net Loss:
The Company’s net loss for the three months ended June 30, 2021 and 2020 was $10,358 and $25,412, respectively. The Company’s net loss for the six months ended June 30, 2021 and 2020 was $55,627 and $282,438, respectively.
Liquidity and Capital Resources
As of June 30, 2021, the Company had total current assets of $137,629, which primarily consisted of cash of $137,247 and prepaid expenses of $382. As of December 31, 2020, the Company had total current assets of $123,875, which primarily consisted of cash of $123,493 and prepaid expenses of $382. As of June 30, 2021, and December 31, 220 we had a working capital surpluses of $88,470 and $92,781 respectively.
The Company will have additional capital requirements during fiscal year 2021. Currently, the Company does not have any revenue generating business operations, nor does the Company currently have the capital resources required to execute its business strategy. Therefore, the Company will attempt to raise additional capital through the sale of our securities.
The Company cannot assure that we will have sufficient capital to finance our growth and/or business operations or that such capital will be available on terms that are favorable to the Company or at all. The Company is currently incurring operating losses that are expected to continue for the foreseeable future. During the six months ended June 30, 2021, we received total proceeds of $48,731 from sale of common stock which was used for working capital purposes. We have incurred legal, accounting, consulting, rent, public company expenses, and office expense during our operations.
We anticipate generating losses and, therefore, may be unable to continue operations in the future. If we require additional capital, we would have to issue debt or equity or enter into a strategic arrangement with a third party.
Going Concern Consideration
As reflected in the accompanying unaudited consolidated financial statements, the Company had a net loss and net cash used in operations of $55,627 and $34,977, respectively, for the six months ended June 30, 2021 and had no revenues during the six months ended June 30, 2021. Additionally, the Company had an accumulated deficit of $7,910,151 at June 30, 2021. These matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report.
The ability of the Company to continue as a going concern is dependent on the Company’s ability to implement its business plan, raise capital, and generate revenues. Currently, management is seeking capital to implement its business plan. Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The unaudited consolidatedWe have incurred a cumulative net loss of $2,019,320. There is no historical financial statements doinformation about us upon which to base an evaluation of our performance. We have not includegenerated any adjustmentsrevenues from operations. We cannot guarantee that mightwe will be necessary ifsuccessful in our business operations.
Our business is subject to risks inherent in the Company is unableestablishment of a new business enterprise, including limited capital resources, possible delays in developing our products and market downturns.
In the first quarter of 2022, Golden Ally received $5,042,060 for stock subscriptions receivable related to continue as a going concern.
Cash Flows
| Six months ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Net Cash Used in Operating Activities | $ | (34,977 | ) | $ | (96,328 | ) | ||
| Net Cash Provided by Financing Activities | 48,731 | 131,017 | ||||||
| Net Change in Cash | $ | 13,754 | $ | 34,689 | ||||
Net Cash Used in Operating Activities:
Net cash used in operating activities was $34,977 and $96,328 for the six months ended June 30, 2021 and 2020, respectively.
Net Cash Provided by in Financing Activities:
Net cash provided by financing activities was $48,731 and $131,017 for the six months ended June 30, 2021 and 2020, respectively.
We currently have no external sources of liquidity, such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.its Class B Common Stock. We expect to require additional financing to fund our current operations for the remainder of fiscal 2021. There isfurther investments and have no assurance that wefuture financings will be ableavailable to obtain additional financingus on acceptable terms, or at all.
If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise the funds requiredadditional capital to fundmaintain our operations we will seek alternative financing through other means, such as borrowings from institutions or private individuals. There can be no assurance that we will be able to raise the capital we need for our operations from the sale of our securities. We have not located any sources for these funds and may not be able to do so in the future. We expect that we will seek additional financing in the future. However,future, we may not be ableunable to obtain additional capitalcarry out our business plans or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, we may be forced to cease operations.
Critical Accounting PoliciesGoing Concern
The discussion and analysis of our consolidatedOur financial condition and consolidated results of operations are based upon our consolidated financial statements which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies affect the significant judgments and estimates used in the preparation of the consolidated financial statements.
Use of Estimates
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include the valuation of equity-based instruments issued for other than cash, valuation of right-of-use assets and liabilities and the valuation allowance on deferred tax assets.
Fair value of financial instruments
The Company follows ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
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The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The estimated fair value of certain financial instruments, including prepaid expenses, accounts payable and accrued expenses are carried at historical costgoing concern basis which approximates their fair value because of the short-term nature of these instruments.
Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to non-employees for goods and services, and to employees and directors including employee stock options, restricted stock awards, and employee stock purchases based on estimated fair values,
Determining Fair Value Under ASC 718-10
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line basis over the requisite service periods of the awards. The Company’s determination of fair value using an option-pricing model is affected by the stock price as well as assumptions regarding the number of highly subjective variables.
The Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. This guidance is effective for interim and annual reporting periods beginning after December 15, 2018. The Company adopted this guidance effective January 1, 2019.
On January 1, 2019, the Company adopted ASU No. 2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.
Operating lease ROU assets represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company use an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations.
Recent Accounting Pronouncements
Accounting standards which are not yet effective are not expected to have a material impact on the Company’s financial position or results of operations.
Cash Requirements
Our management does not believe that our current capital resources will be adequate to continue operating our company and maintaining our business strategy for much more than 12 months. We require additional capital to implement our business and fund our operations.
Since inception we have funded our operations primarily through equity financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund our business by way of equity or debt financing until natural revenues can support the Company. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. We cannot assure you that weassumes Golden Ally will be able to raise the working capital as neededrealize its assets and discharge its liabilities in the futurenormal course of business for the foreseeable future. No revenues have been generated to date and we expect limited revenues.
Results of Operations
During the three months ended March 31, 2022, we did not generate any revenue. Our operating expenses were $1,961,750, consisting primarily of professional fees. As a result, we incurred a loss from operations of $1,961,750. During the three months ended March 31, 2021 we did not have any operations.
Liquidity and Capital Resources
Working Capital and Cash Flows. Golden Ally used cash flows of $4,108,968 for operating activities for the quarter ended March 31, 2022. Cash flows used for operating activities includes $1,777,204 in Goodwill for shares not acquired under the SPA.
On January 3, 2022, Golden Ally entered into an agreement with a company owned by a related party, Taucoin Asset Management LLC, to develop and implement marketing strategies for its products and paid $1,000,000 on January 12, 2022, per the terms acceptableof the agreement for services to us, if at all.be provided and subsequently another $200,000 was paid.
On January 18, 2022, Golden Alley entered into an agreement for legal services. In January 2022, Golden Ally paid $500,000 as a retainer to the legal service provider.
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If we are unable to raise capital as needed, we are required to reduce the scope
Golden Ally has a lease for an office in Texas for one year at $332 per month and a four-month lease for a property in California with a base rent of our business development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you will lose all of your investment.$5,970 per month.
Off-Balance Sheet Arrangements
We do not have noany off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures in our stockholders.financial statements. We had no critical accounting policies for the year ended December 31, 2021, or for the quarter ended March 31, 2022.
We have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are summarized in Note 3 to our financial statements. Although we believe that our estimates, judgments and assumptions are reasonable, they are based upon information presently available. Actual results may differ from those estimates.
ITEM
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKQuantitative and Qualitative Disclosures About Market Risk.
Not applicable.We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM
Item 4. CONTROLS AND PROCEDURES
Disclosure controlsControls and proceduresProcedures
We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures includeare controls and other procedures that are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms of the SEC, and that such information is accumulatedcollected and communicated to our management, including our principal executive officerChief Executive Officer and principal financial officerChief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for our Company. In designing and evaluating our disclosure controls and procedures, management recognizes that no matter how well conceived and operated, disclosure controls and procedures can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
Our management, with the participation of our principal executive officerChief Executive Officer and principal financial officer, evaluatedChief Financial Officer, carried out an evaluation of the effectiveness of our disclosure“disclosure controls and proceduresprocedures” (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly reportQuarterly Report on Form 10-Q.10-Q (the “Evaluation Date”). Based on thisupon that evaluation, our principal executive officerChief Executive Officer and principal financial officerChief Financial Officer concluded that, as of June 30, 2021,the Evaluation Date, our disclosure controls and procedures were not effective.
Oureffective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officerChief Executive Officer and principal financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as definedChief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Rule 13a-15(f) under the Exchange Act). Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness ofInternal Control Over Financial Reporting
There were no changes in our internal control over financial reporting as of June 30, 2021. Our management’s evaluation ofduring the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting was based on the framework in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that as of June 30, 2021, our internal control over financial reporting was not effective.reporting.
The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which we identified in our internal control over financial reporting:
We expect to be materially dependent upon third parties to provide us with accounting consulting services related to accounting services for the foreseeable future. We believe this will be sufficient to remediate the material weaknesses related to our accounting discussed above. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses and significant deficiencies in our disclosure controls and procedures will not result in errors in our consolidated financial statements which could lead to a restatement of those financial statements.
A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Changes in internal control over financial reporting
There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the quarter ended June 30, 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATIONII.
ITEMItem 1. LEGAL PROCEEDINGSLegal Proceedings
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.None.
ITEMItem 1A. RISK FACTORSRisk Factors
Not applicable toWe are a smaller reporting companies.company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended June 30, 2021, we issued sharesUnregistered Sales of our common stock that were not registered under theEquity Securities Act, and were not previously disclosed in a Current Report on Form 8-K as follows:
During the Three months ended June 30, 2021:
All unregistered shares were issued pursuant to conversionsUse of promissory notes pursuant to Section 3(a)(9) of the Securities Act of 1933. The underlying notes were issued pursuant to Rule 506(b) of Regulation D of the Securities Act.Proceeds
N/A
ITEM
Item 3. DEFAULTS UPON SENIOR SECURITIESDefaults Upon Senior Securities
None.
ITEM
Item 4. MINE SAFETY DISCLOSURESMine Safety Disclosures
Not applicable.
ITEM
Item 5. OTHER INFORMATIONOther Information
None.
ITEM
Item 6. EXHIBITSExhibits
| Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
* Furnished herewith.
** The certifications attached as Exhibits 32.1 and 32.2 that accompanies this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
+ Certain schedules to this agreement have been omitted pursuant to Item 601 of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the Securities and Exchange Commission upon request.
| 14 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to behas been signed on its behalfbelow by the undersigned, thereunto duly authorized.following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Date: | May 23, 2022 | Signet International Holdings, Inc. | ||
| By: | /s/ | |||
| By: | /s/ Tak Yiu Cheng | |||
| Tak Yiu Cheng, Chief Financial Officer (Principal Financial Officer and Principal Accounting | ||||
| 15 |
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