UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended June 30, 2023 | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended | |
| |
Commission File Number 000-214815
ZEUUS, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 37-1830331 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
9thFloor, 31 West 27th Street New York, NY, 10001
(Address of principal executive offices, including zip code)
(888) 469-3887
(Registrant’s telephone number, including area code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | None | None |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| 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 Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of MayAugust 12, 2023, issuer had outstanding shares of common stock, par value $0.001.
ZEUUS, INC.
FORM 10-Q
For the Quarterly Period Ended March 31,June 30, 2023
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
ZEUUS, INC.
| 3 |
ZEUUS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2023 | September 30, 2022 | June 30, 2023 | September 30, 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: | ||||||||||||||||
| Cash | $ | 38,585 | $ | 42,949 | $ | 28,422 | $ | 42,949 | ||||||||
| Prepaids | 4,494 | — | ||||||||||||||
| Deposit and other assets | 66,337 | 15,674 | 40,627 | 15,674 | ||||||||||||
| Total current assets | 109,416 | 58,623 | 69,049 | 58,623 | ||||||||||||
| Property and equipment, net | 166,766 | 83,191 | 89,759 | 83,191 | ||||||||||||
| Intangible assets | 810,000 | 900,000 | 765,000 | 900,000 | ||||||||||||
| Total other assets | 976,766 | 983,191 | 854,759 | 983,191 | ||||||||||||
| Total Assets | $ | 1,086,182 | $ | 1,041,814 | $ | 923,808 | $ | 1,041,814 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable | $ | 11,173 | $ | 45,846 | $ | 13,915 | $ | 45,846 | ||||||||
| Accrued interest– related party | 102,033 | 49,107 | 135,366 | 49,107 | ||||||||||||
| Other current liabilities | 145,316 | 60,197 | 3,724 | 60,197 | ||||||||||||
| Due to related parties | 1,459,315 | 1,159,584 | 1,600,663 | 1,159,584 | ||||||||||||
| Other current liabilities | 1,459,315 | 1,159,584 | 1,600,663 | 1,159,584 | ||||||||||||
| Total Current Liabilities | 1,717,837 | 1,314,734 | 1,753,668 | 1,314,734 | ||||||||||||
| Total Liabilities | 1,717,837 | 1,314,734 | 1,753,668 | 1,314,734 | ||||||||||||
| Commitments and contingencies | — | — | — | — | ||||||||||||
| Stockholders’ Equity (Deficit): | ||||||||||||||||
| Common Stock, par value $, shares authorized; and shares issued and outstanding, respectively | 105,515 | 105,515 | 105,515 | 105,515 | ||||||||||||
| Additional paid-in capital | 889,435 | 888,061 | 889,435 | 888,061 | ||||||||||||
| Accumulated other comprehensive income | 436 | 17,060 | 2,120 | 17,060 | ||||||||||||
| Accumulated deficit | (1,627,041 | ) | (1,283,556 | ) | (1,826,930 | ) | (1,283,556 | ) | ||||||||
| Total Stockholders’ Equity (Deficit) | (631,655 | ) | (272,920 | ) | (829,860 | ) | (272,920 | ) | ||||||||
| Total Liabilities and Stockholders’ Deficit | $ | 1,086,182 | $ | 1,041,814 | $ | 923,808 | $ | 1,041,814 | ||||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 4 |
ZEUUS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| For the Three Months Ended March 31, | For the Six Months Ended March 31, | For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||||||
| General and administrative | $ | 135,077 | $ | 146,538 | $ | 207,827 | $ | 343,593 | $ | 133,216 | $ | 105,309 | $ | 341,043 | $ | 448,902 | ||||||||||||||||
| Director compensation | — | — | — | 34,650 | — | — | — | 34,650 | ||||||||||||||||||||||||
| Professional fees | 7,400 | 31,777 | 82,732 | 62,495 | 32,183 | 83,398 | 114,915 | 145,893 | ||||||||||||||||||||||||
| Total operating expenses | 142,477 | 178,315 | 290,559 | 440,738 | 165,399 | 188,707 | 455,958 | 629,445 | ||||||||||||||||||||||||
| Loss from operations | (142,477 | ) | (178,315 | ) | (290,559 | ) | (440,738 | ) | (165,399 | ) | (188,707 | ) | (455,958 | ) | (629,445 | ) | ||||||||||||||||
| Other expense: | ||||||||||||||||||||||||||||||||
| Interest expense | (27,236 | ) | (2,564 | ) | (52,926 | ) | (5,170 | ) | (34,490 | ) | (23,320 | ) | (87,416 | ) | (28,490 | ) | ||||||||||||||||
| Total other expense | (27,236 | ) | (2,564 | ) | (52,926 | ) | (5,170 | ) | (34,490 | ) | (23,320 | ) | (87,416 | ) | (28,490 | ) | ||||||||||||||||
| Loss before provision for income taxes | (169,713 | ) | (180,879 | ) | (343,485 | ) | (445,908 | ) | (199,889 | ) | (212,027 | ) | (543,374 | ) | (657,935 | ) | ||||||||||||||||
| Provision for income taxes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Net Loss | $ | (169,713 | ) | $ | (180,879 | ) | $ | (343,485 | ) | $ | (445,908 | ) | $ | (199,889 | ) | $ | (212,027 | ) | $ | (543,374 | ) | $ | (657,935 | ) | ||||||||
| Other comprehensive income: | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | 717 | 518 | (16,624 | ) | (2,637 | ) | 1,684 | (2,416 | ) | (14,940 | ) | (5,053 | ) | |||||||||||||||||||
| Comprehensive Loss | (168,996 | ) | (180,361 | ) | (360,109 | ) | (448,545 | ) | (198,205 | ) | (214,443 | ) | (558,314 | ) | (662,988 | ) | ||||||||||||||||
| Loss per share, basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
| Loss per share, basic | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||||||||||||||
| Weighted average common shares outstanding, basic and diluted | 105,515,460 | 105,523,200 | 105,515,460 | 105,496,790 | 105,515,460 | 105,506,163 | 105,515,460 | 105,500,757 | ||||||||||||||||||||||||
| Weighted average common shares outstanding, basic | 105,515,460 | 105,506,163 | 105,515,460 | 105,500,757 | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 5 |
ZEUUS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIXNINE MONTHS ENDED MARCH 31,JUNE 30, 2022 AND 2023
(Unaudited)
| Shares | Amount | Capital | Deficit | Income | (Deficit) | |||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid in | Accumulated | Other Comprehensive | Total Stockholders’ Equity | Common Stock | Additional Paid in | Accumulated | Other Comprehensive | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income | (Deficit) | Shares | Amount | Capital | Deficit | Income | (Deficit) | |||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2021 | 105,442,890 | $ | 105,443 | $ | 727,857 | $ | (449,634 | ) | $ | 2,062 | $ | 385,728 | 105,442,890 | $ | 105,443 | $ | 727,857 | $ | (449,634 | ) | $ | 2,062 | $ | 385,728 | ||||||||||||||||||||||||
| Common stock issued for director services | 23,100 | 23 | 34,627 | — | — | 34,650 | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | 33,730 | 23 | 34,627 | — | — | 34,650 | 33,730 | 34 | 51,966 | — | — | 52,000 | ||||||||||||||||||||||||||||||||||||
| Common stock issued for director services | 34 | 51,966 | — | — | 52,000 | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (265,029 | ) | (3,155 | ) | (268,184 | ) | — | — | — | (265,029 | ) | (3,155 | ) | (268,184 | ) | ||||||||||||||||||||||||||||||
| Balance, December 31, 2021 | 105,499,720 | 105,500 | 814,450 | (714,663 | ) | (1,093 | ) | 204,194 | 105,499,720 | 105,500 | 814,450 | (714,663 | ) | (1,093 | ) | 204,194 | ||||||||||||||||||||||||||||||||
| Common stock issued for cash | 644 | 1 | 32,199 | — | — | 32,200 | 6,440 | 6 | 32,194 | — | — | 32,200 | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (180,879 | ) | 518 | (180,361 | ) | — | — | — | (180,879 | ) | 518 | (180,361 | ) | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | 105,500,364 | $ | 105,501 | $ | 846,649 | $ | (895,542 | ) | $ | (575 | ) | $ | 56,033 | 105,506,160 | 105,506 | 846,644 | (895,542 | ) | (575 | ) | 56,033 | |||||||||||||||||||||||||||
| Common stock issued for cash | 3,500 | 4 | 17,496 | — | — | 17,500 | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (212,027 | ) | (2,416 | ) | (214,443 | ) | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | 105,509,660 | $ | 105,510 | $ | 864,140 | $ | (1,107,569 | ) | $ | (2,991 | ) | $ | (140,910 | ) | ||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid in | Accumulated | Other Comprehensive | Total Stockholders’ Equity | Common Stock | Additional Paid in | Accumulated | Other Comprehensive | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income | (Deficit) | Shares | Amount | Capital | Deficit | Income | (Deficit) | |||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2022 | 105,515,460 | $ | 105,515 | $ | 888,061 | $ | (1,283,556 | ) | $ | 17,060 | $ | (272,920 | ) | 105,515,460 | $ | 105,515 | $ | 888,061 | $ | (1,283,556 | ) | $ | 17,060 | $ | (272,920 | ) | ||||||||||||||||||||||
| Net loss | — | — | — | (173,772 | ) | (17,341 | ) | (191,113 | ) | — | — | — | (173,772 | ) | (17,341 | ) | (191,113 | ) | ||||||||||||||||||||||||||||||
| Balance, December 31, 2022 | 105,515,460 | 105,515 | 888,061 | (1,457,328 | ) | (281 | ) | (464,033 | ) | 105,515,460 | 105,515 | 888,061 | (1,457,328 | ) | (281 | ) | (464,033 | ) | ||||||||||||||||||||||||||||||
| Shareholder contribution | — | — | 1,374 | — | — | 1,374 | ||||||||||||||||||||||||||||||||||||||||||
| Cash from prior sale of stock | — | — | 1,374 | — | — | 1,374 | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (169,713 | ) | 717 | (168,996 | ) | — | — | — | (169,713 | ) | 717 | (168,996 | ) | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | 105,515,460 | $ | 105,515 | $ | 889,435 | $ | (1,627,041 | ) | $ | 436 | $ | (631,655 | ) | 105,515,460 | 105,515 | 889,435 | (1,627,041 | ) | 436 | (631,655 | ) | |||||||||||||||||||||||||||
| Balance | 105,515,460 | 105,515 | 889,435 | (1,627,041 | ) | 436 | (631,655 | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | (199,889 | ) | 1,684 | (198,205 | ) | ||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2023 | 105,515,460 | $ | 105,515 | $ | 889,435 | $ | (1,826,930 | ) | $ | 2,120 | $ | (829,860 | ) | |||||||||||||||||||||||||||||||||||
| Balance | 105,515,460 | $ | 105,515 | $ | 889,435 | $ | (1,826,930 | ) | $ | 2,120 | $ | (829,860 | ) | |||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 6 |
ZEUUS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2023 | 2022 | |||||||
For the Six Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Loss | $ | (343,485 | ) | $ | (445,908 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 97,404 | 5,525 | ||||||
| Stock issued for director services | — | 34,650 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid | (4,494 | ) | — | |||||
| Deposit and other assets | (50,663 | ) | 454 | |||||
| Accounts payable | (34,673 | ) | (21,381 | ) | ||||
| Accrued interest– related party | 52,926 | 5,171 | ||||||
| Other current liabilities | 85,119 | (931 | ) | |||||
| Net cash used in operating activities | (197,866 | ) | (422,420 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of equipment | (90,980 | ) | (23,085 | ) | ||||
| Net cash used in investing activities | (90,980 | ) | (23,085 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from related party loans | 299,732 | 294,948 | ||||||
| Shareholder contribution | 1,374 | 84,200 | ||||||
| Net cash provided by financing activities | 301,106 | 379,148 | ||||||
| Net change in cash | 12,260 | (66,357 | ) | |||||
| Effects of currency translation | (16,624 | ) | (2,637 | ) | ||||
| Cash, beginning of period | 42,949 | 90,006 | ||||||
| Cash, end of period | $ | 38,585 | $ | 21,012 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for taxes | $ | — | $ | — | ||||
| Cash paid for interest | $ | — | $ | — | ||||
| 2023 | 2022 | |||||||
| For the Nine Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Loss | $ | (543,374 | ) | $ | (657,935 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 150,715 | 9,228 | ||||||
| Stock issued for director services | — | 34,650 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Deposit and other assets | (24,953 | ) | 17,480 | |||||
| Accounts payable | (31,931 | ) | (8,063 | ) | ||||
| Accrued interest– related party | 86,259 | 28,491 | ||||||
| Other current liabilities | (56,473 | ) | (1,784 | ) | ||||
| Net cash used in operating activities | (419,757 | ) | (577,933 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of equipment | (22,284 | ) | (21,800 | ) | ||||
| Net cash used in investing activities | (22,284 | ) | (21,800 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from related party loans | 441,080 | 424,900 | ||||||
| Proceeds from sale of stock | 1,374 | 101,700 | ||||||
| Net cash provided by financing activities | 442,454 | 526,600 | ||||||
| Net change in cash | 413 | (73,133 | ) | |||||
| Effects of currency translation | (14,940 | ) | (5,053 | ) | ||||
| Cash, beginning of period | 42,949 | 90,006 | ||||||
| Cash, end of period | $ | 28,422 | $ | 11,820 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for taxes | $ | — | $ | — | ||||
| Cash paid for interest | $ | — | $ | — | ||||
The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.
| 7 |
ZEUUS, INC. AND SUBSIDIARY
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31,JUNE 30, 2023
NOTE 1 – ORGANIZATION AND BUSINESS
ZEUUS, INC. (formerly Kriptech International Corp.) (the “Company”) is a corporation established under the corporation laws in the State of Nevada on March 20, 2016. The Company has adopted a September 30 fiscal year end.
On June 11, 2020, Meshal Al Mutawa, acquired control of restricted shares of the Company’s issued and outstanding common stock, representing approximately % of the Company’s total issued and outstanding common stock, from Anatolii Antontcev and Aleksandr Zausayev in exchange for $ under the terms of a Stock Purchase Agreement by and among Messrs. Al Mutawa, Zausayev and Antontcev.
On June 11, 2020, (i) Mr. Anatolii Antontcev resigned from all positions with the Company, including as President, Chief Executive Officer, Treasurer, Chief Financial Officer and as a Director, (ii) Aleksandr Zausayev resigned as the Secretary.
On June 11, 2020, Mr. Meshal Al Mutawa was appointed to the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Treasurer, Chief Financial Officer, and Secretary.
On August 31, 2020, Bassam A.I. Al-Mutawa, acquired control of eight million () restricted shares of the Company’s issued and outstanding common stock, representing approximately % of the Company’s total issued and outstanding common stock, from Meshal Al Mutawa through an Assignment by and between Mr. Meshal Al Mutawa, and Mr. Bassam A.I. Al-Mutawa.
On August 31, 2020, Mr. Bassam A.I. Al-Mutawa was appointed to the Company’s Board of Directors and as the Company’s President, Chief Executive Officer, Treasurer, Chief Financial Officer, and Secretary.
On March 9, 2021, the Financial Industry Regulatory Authority (“FINRA”) approved the Company’s name change to Zeuus, Inc. and its trading symbol to ZUUS. The market effective date of the name and trading symbol change was March 10, 2021.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited condensed financial statements reflect all adjustments, consisting of only normal recurring items, which, in the opinion of management, are necessary for a fair statement of the results of operations for the periods shown and are not necessarily indicative of the results to be expected for the full year ending September 30, 2023. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
| 8 |
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount (“FDIC”).
Principles of Consolidation
The accompanying condensed consolidated unaudited financial statements for the sixnine months ended March 31,June 30, 2023 and 2022, include the accounts of the Company and its wholly owned subsidiary, Zeuus Energy. Zeuus Energy was incorporated on July 27, 2021, inin Montenegro and is currently the only operating subsidiary.
Translation Adjustment
The accounts of the Company’s subsidiary Zeuus Energy, Inc, are maintained in Euros. According to the Codification, all assets and liabilities were translated at the current exchange rate at respective balance sheets dates, members’ capital are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of the Codification (ASC 220), as a component of members’ capital. Transaction gains and losses are reflected in the income statement.
Comprehensive Income
The Company uses SFAS 130 “Reporting Comprehensive Income” (ASC Topic 220). Comprehensive income is comprised of net income and all changes to the statements of members’ capital, except those due to investments by members, changes in paid-in capital and distributions to members. Comprehensive income for the three and sixnine months ended March 31,June 30, 2023, is included in net loss and foreign currency translation adjustments.
Recently issued accounting pronouncements
The Company has implemented all new applicable accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 – GOING CONCERN
The Company’s unaudited consolidated financial statements as of March 31,June 30, 2023, were prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has an accumulated deficit at March 31,June 30, 2023 of $1,627,0411,826,930, a net loss of $343,485543,374 and $197,866419,757 of cash used in operations for the sixnine months ended March 31,June 30, 2023. The Company has not yet established a source of revenue. These factors raise substantial doubt about its ability to continue as a going concern.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. 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 should the Company be unable to continue as a going concern.
NOTE 4 – INTANGIBLE ASSET
On June 1, 2021, the Company completed the closing of the transactions under the terms of the Asset Purchase Agreement with Andrei Seleznev, Nikolay Alekseev, and Ilia Alekseev (collectively, “Sellers”), dated May 12, 2021, to purchase the assets comprising the Wind Turbine Technology. In exchange for these assets, the Company paid $100,000 in cash, and issued shares of its common stock to the Sellers. The shares were valued at $800,000 based on the average of the closing price per share of the Company’s common stock for the 30 trading days prior to the effective date of the agreement. In addition, the Company entered into employment agreements with each Seller to further develop the wind turbine technology and acquired assets. Before this transaction, the Company had no material relationship with any of the Sellers.
| 9 |
Intangible asset stated at cost, less accumulated amortization consisted of the following:
SCHEDULE OF INTANGIBLE ASSET
March 31, 2023 | September 30, 2022 | |||||||
| Wind Turbine Technology | $ | 900,000 | $ | 900,000 | ||||
| Less: accumulated amortization | (90,000 | ) | — | |||||
| Intangible asset, net | $ | 810,000 | $ | 900,000 | ||||
| June 30, 2023 | September 30, 2022 | |||||||
| Wind Turbine Technology | $ | 900,000 | $ | 900,000 | ||||
| Less: accumulated amortization | (135,000 | ) | — | |||||
| Intangible asset, net | $ | 765,000 | $ | 900,000 | ||||
Amortization expense
Amortization expense for the sixnine months ended March 31,June 30, 2023 and 2022 was $90,000135,000 and $0. respectively.
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows between three and five years.
Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.
Property and equipment stated at cost, less accumulated depreciation consisted of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
March 31, 2023 | September 30, 2022 | June 30, 2023 | September 30, 2022 | |||||||||||||
| Property and equipment | $ | 188,767 | $ | 100,293 | $ | 127,474 | $ | 100,293 | ||||||||
| Less: accumulated depreciation | (22,001 | ) | (17,102 | ) | (37,715 | ) | (17,102 | ) | ||||||||
| Property and equipment, net | $ | 166,766 | $ | 83,191 | $ | 89,759 | $ | 83,191 | ||||||||
Depreciation expense
Depreciation expense for the sixnine months ended March 31,June 30, 2023 and 2022 was $7,40415,715 and $5,5259,228. respectively.
NOTE 6 – COMMON STOCK
On July 25, 2022, the Company was advised by FINRA that the 10:1 forward stock split of the Company’s common stock was effective July 25, 2022. Immediately following the effectiveness of the forward stock split, there were shares of the Company’s common stock issued and outstanding, as compared to shares of the Company’s common stock issued and outstanding immediately prior to the forward stock split. All shares throughout these financial statements and Form 10-Q have been retroactively adjusted to reflect the forward stock split.
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NOTE 7 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
Since March 20, 2016, (inception) through March 31,June 30, 2023, Meshal Al Mutawa, the Company’s former president, treasurer and director, and son of Bassam Al-Mutawa, and Bassam Al-Mutawa, havehas loaned the Company funds to pay for incorporation costs and operating expenses. The following is summary of the loans as of March 31,June 30, 2023.
SCHEDULE OF SUMMARY OF THE LOANS
| Date | Maturity | Rate | Default Rate | Balance 9/30/2022 | Additions | Balance 3/31/2023 | Maturity | Rate | Default Rate | Balance 9/30/2022 | Additions | Balance 6/30/2023 | ||||||||||||||||||||||||||||||||||
| Meshal Al Mutawa Loans: | ||||||||||||||||||||||||||||||||||||||||||||||
| 8/30/2021 | 10/31/2022 | 8% | 16% | $ | 100,000 | $ | — | $ | 100,000 | 10/31/2022 | 8 | % | 16 | % | $ | 100,000 | $ | — | $ | 100,000 | ||||||||||||||||||||||||||
| 2020 | n/a | n/a | n/a | $ | 13,823 | $ | — | $ | 13,823 | n/a | n/a | n/a | $ | 13,823 | $ | — | $ | 13,823 | ||||||||||||||||||||||||||||
| 10/12/2021 | 10/12/2022 | 8% | 16% | $ | 100,000 | $ | — | $ | 100,000 | 10/12/2022 | 8 | % | 16 | % | $ | 100,000 | $ | — | $ | 100,000 | ||||||||||||||||||||||||||
| 10/25/2021 | 10/25/2022 | 8% | 16% | $ | 150,000 | $ | — | $ | 150,000 | 10/25/2022 | 8 | % | 16 | % | $ | 150,000 | $ | — | $ | 150,000 | ||||||||||||||||||||||||||
| 3/24/2022 | 3/24/2023 | 8% | 16% | $ | 45,000 | $ | — | $ | 45,000 | 3/24/2023 | 8 | % | 16 | % | $ | 45,000 | $ | — | $ | 45,000 | ||||||||||||||||||||||||||
| 4/11/2022 | 4/11/2023 | 8% | 16% | $ | 80,000 | $ | — | $ | 80,000 | 4/11/2023 | 8 | % | 16 | % | $ | 80,000 | $ | — | $ | 80,000 | ||||||||||||||||||||||||||
| 6/6/2022 | 6/6/2023 | 8% | 16% | $ | 50,000 | $ | — | $ | 50,000 | 6/6/2023 | 8 | % | 16 | % | $ | 50,000 | $ | — | $ | 50,000 | ||||||||||||||||||||||||||
| 7/18/2022 | 7/18/2023 | 8% | 16% | $ | 100,000 | $ | — | $ | 100,000 | 7/18/2023 | 8 | % | 16 | % | $ | 100,000 | $ | — | $ | 100,000 | ||||||||||||||||||||||||||
| 9/20/2022 | 9/20/2023 | 8% | 16% | $ | 60,000 | $ | — | $ | 60,000 | 9/20/2023 | 8 | % | 16 | % | $ | 60,000 | $ | — | $ | 60,000 | ||||||||||||||||||||||||||
| 11/22/2022 | 11/22/2022 | 8% | 16% | $ | — | $ | 151,974 | $ | 151,974 | 11/22/2022 | 8 | % | 16 | % | $ | — | $ | 151,974 | $ | 151,974 | ||||||||||||||||||||||||||
| 1/24/2023 | 1/24/2024 | 8% | 16% | $ | — | $ | 97,757 | $ | 97,757 | 1/24/2024 | 8 | % | 16 | % | $ | — | $ | 97,758 | $ | 97,758 | ||||||||||||||||||||||||||
| 3/16/2023 | 3/16/2024 | 8% | 16% | $ | — | $ | 50,000 | $ | 50,000 | 3/16/2024 | 8 | % | 16 | % | $ | — | $ | 50,000 | $ | 50,000 | ||||||||||||||||||||||||||
| Bassam Al-Mutawa Loans: | ||||||||||||||||||||||||||||||||||||||||||||||
| 1/7/2021 | Demand | n/a | $ | 240,000 | $ | — | $ | 240,000 | ||||||||||||||||||||||||||||||||||||||
| 1/8/2021 | 1/8/2022 | 5% | $ | 150,000 | $ | — | $ | 150,000 | ||||||||||||||||||||||||||||||||||||||
| Various | Demand | n/a | $ | 70,760 | $ | — | $ | 70,760 | ||||||||||||||||||||||||||||||||||||||
| Total due to related parties | $ | 1,159,584 | $ | 299,731 | $ | 1,459,315 | ||||||||||||||||||||||||||||||||||||||||
| 5/16/2023 | 5/16/2024 | 8 | % | 16 | % | $ | — | $ | 27,374 | $ | 27,374 | |||||||||||||||||||||||||||||||||||
| 6/5/2023 | 6/5/2024 | 8 | % | 16 | % | $ | — | $ | 113,974 | $ | 113,974 | |||||||||||||||||||||||||||||||||||
| Balance | $ | 698,823 | $ | 441,080 | $ | 1,139,903 | ||||||||||||||||||||||||||||||||||||||||
Total accrued interest on the above notes as of March 31,June 30, 2023 and December 31, 2022, is $102,033116,573 and $49,10736,002, respectively.
On January 7, 2021, Bassam Al-Mutawa, CEO, loaned the Company $240,000. On January 8, 2021, the Company issued Mr. Al-Mutawa, a Promissory Note in the principal amount of $150,000 (the “Note”) in consideration of cash in the amount of $150,000. The Note accrues interest at the rate of 5% per annum and matures January 8, 2022. In addition to the Note, Mr. Al-Mutawa, has advanced additional funds to the Company. As of June 30, 2023, the Company owes total principal and interest of $460,761 and $18,792, respectively.
During the year ended September 30, 2022, the Company granted 23,100 shares of common stock to its directors for services. The shares were valued at $ per share for a total non-cash expense of $34,650.
NOTE 8 - SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were issued and has determined that there are no material subsequent events.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Overview of Operations
We are a Data Centric company with business activities focused three main areas:
ZEUUS Data Centers
ZEUUS Energy
ZEUUS Cyber Security
All fourthree divisions work synergistically with each other in an synergetic ecosystem which enables growth and business protection. These technologies and divisions all stem from the massive requirements in our Data Centers.
While we are currently negotiating for the purchase of three data centers, the recent acquisition by our ZEUUS Energy division of a unique, and scalable Wind Turbine technology has us very excited. We have recently opened a 500 sqm, brand new research and development facility in Montenegro where the final designs for the Wind Turbines are being tested and refined. We expect full commercial production of the Wind Turbines by the end of 4th Quarter 2023.
We are also in negotiations for the acquisition of two cyber security companies and will update the market after we enter into definitive acquisition agreements.
Our mandate and focus are to harness the Cloud and provide all aspects of Data Services from protection to facilitation, to storage, to the sustainable energy consumption at all our Data Center locations.
Results of Operation for the Three Months Ended March 31,June 30, 2023, Compared to the Three Months Ended March 31,June 30, 2022
Revenue
During the three months ended March 31,June 30, 2023 and 2022 we did not generate any revenue.
General and Administrative Expenses
For the three months ended March 31,June 30, 2023, we had $135,077$133,216 in general and administrative expenses compared to $146,538$105,309 for the three months ended March 31,June 30, 2022, respectively, a decreasean increase of $11,461$27,907 or 7.8%26.5%. Our primary expense in the prior period was for consulting, which decreased approximately $59,000$66,500 in the current period. In the prior period we were utilizing the services of a consultant to help with the day-to-day operation of the Company. Those services were not provided in the current period. We also had a decrease of investor relation expense of $14,000.$7,000. These decreases were offset by an increase of $45,000 of amortization expense.expense and $40,000 for outside services.
Professional Fees
For the three months ended March 31,June 30, 2023, we had $7,400$32,183 in professional fees compared to $31,177$83,398 for the three months ended March 31,June 30, 2022, a decrease of $24,377$51,215 or 76.7%61.4%. Professional fees consist of legal, audit and accounting fees. In the current three-month period, thewe had a decrease is almost entirelyof approximately $29,000 in legal fees as no legal services were required.and $17,400 in audit fees. Both fees decreased in conjunction with less operational activity.
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Other Expense
For the three months ended March 31,June 30, 2023, we had interest expense of $27,236$34,490 compared to $2,564$23,320 in the prior period. Our interest expense has increased due to the additional related party loans.
Net Loss
Our net loss for the three months ended March 31,June 30, 2023, was $169,713$199,889 compared to $180,879$212,027 for the three months ended March 31,June 30, 2022, a decrease of $11,166$12,138 or 6.2%5.7%.
Results of Operation for the SixNine Months Ended March 31,June 30, 2023, Comparedcompared to the SixNine Months Ended March 31,June 30, 2022
Revenue
During the sixnine months ended March 31,June 30, 2023 and 2022 we did not generate any revenue.
General and Administrative Expenses
For the sixnine months ended March 31,June 30, 2023, we had $207,827$341,043 in general and administrative expenses compared to $343,593$448,902 for the sixnine months ended March 31,June 30, 2022, a decrease of $135,766$107,859 or 39.5%24% respectively. Our primary expense in the prior period was for consulting, which decreased approximately $168,000$234,000 in the current period. Inn the prior period we issued shareswere utilizing the services of common stock for consulting services for non-cash expense of $50,000. We also paid approximately $130,000 to a consultant who was engaged to runhelp with the day to day operationsday-to-day operation of the Company. The consultant was terminatedThose services were not provided in July 2022.the current period. We also had a decrease of investor relation expense of $41,000. In the prior period we incurred additional expense related to our Reg A.$48,000. These decreases were offset by an increase of $90,000$135,000 of amortization expense.
Director Compensation
For the sixnine months ended March 31,June 30, 2023, we had $0 in director compensation compared to $34,650 for the sixnine months ended March 31,June 30, 2022, for the issuance of common stock.stock,
Professional Fees
For the sixnine months ended March 31,June 30, 2023, we had $82,732$114,915 in professional fees compared to $62,495$145,893 for the sixnine months ended March 31,June 30, 2022, an increasea decrease of $20,237$30,978 or 32.4%21.2%. Professional fees consist of legal, audit and accounting fees. In the current period our audit fees increased $56,000,$38,600, which was offset by a decrease of legal fees of approximately $44,000.$73,000. Both fees decreased in conjunction with less operational activity.
Other Expense
For the sixnine months ended March 31,June 30, 2023, we had interest expense of $52,926$87,416 compared to $5,170$28,490 in the prior period. Our interest expense has increased due to the additional related party loans.
Net Loss
Our net loss for the sixnine months ended March 31,June 30, 2023, was $343,485$543,374 compared to $445,908$657,935 for the sixnine months ended March 31,June 30, 2022, a decrease of $102,423$114,561 or 23%17.4%.
Liquidity and Capital Resources
At March 31,June 30, 2023, we had total current assets of $109,416,$69,049, consisting mostly of cash and deposits. We had total current liabilities of $1,717,837,$1,753,668 consisting mostly of loans from related parties.
Cash Flows from Operating Activities
For the sixnine months ended March 31,June 30, 2023, we used $197,866$419,757 of cash in operating activities compared to $422,420$577,933 for the sixnine months ended March 31,June 30, 2022.
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Cash Flows from Investing Activities
During the sixnine months ended March 31,June 30, 2023, Zeuus Energy used $90,980$22,284 for the purchase of property and equipment. During the sixnine months ended March 31,June 30, 2022, we purchased property and equipment for a total of $23,085.$21,800.
Cash Flows from Financing Activities
We have financed our operations primarily from loans from related parties and the sale of common stock. For the sixnine months ended March 31,June 30, 2023, net cash provided by financing activities was $301,106.$442,454. During the sixnine months ended March 31,June 30, 2022, we received $294,948$424,900 from related party loans and $84,200$101,700 from the sale of common stock.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.
The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs for the next fiscal year and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31,June 30, 2023. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three monthsperiod ended March 31,June 30, 2023, that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable to our Company.
ITEM 5. OTHER INFORMATION
On March 9, 2023, the Board of Directors (the “Board”) of the Company dismissed BF Borgers CPA PC (“Borgers”), as the Company’s independent registered public accounting firm, effective immediately. On the same day the Board approved the engagement of Fruci & Associates II, PLLC (“Fruci”) as the Company’s new independent registered public accounting firm, effective immediately.
ITEM 6. EXHIBITS
| Exhibit Number | Description | |
| 31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*) | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (*) | |
| 101.INS* | Inline XBRL Instance Document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ZEUUS, INC. | ||
| Dated: | By: | /s/ Bassam A.I. Al-Mutawa |
| Bassam A.I. Al-Mutawa, President and Chief Executive Officer and Chief Financial Officer | ||