UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q10-Q/A

Amendment No. 1 

Commission File Number 000-30675

EnXnet, Inc.

(Name of issuer in its charter)

7450 S Winston Ave - Tulsa, Ok 74136

(Address of principal executive offices & zip code)

(918) 494 - 6663

Registrant’s telephone number, including area code:

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 90 days.   YES [X]     NO [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES [ ]     NO [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [ ]     NO [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 13, 2018, there were outstanding 58,376,518 shares of the registrant’s common stock, $0.00005 par value.

Table of Contents

PART I.  FINANCIAL INFORMATION

ENXNET, INC

CONSOLIDATED BALANCE SHEETS

(Unaudited)

Explanatory Note

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

ENXNET, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

ENXNET, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

ENXNET, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTEthis Amendment No. 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of EnXnet, Inc. (“EnXnet” or “the Company”)to our Quarterly Report on Form 10-Q for the three monthsperiod ended June 30, 2018, have been prepared in accordanceas filed with generally accepted accounting principles in the United States of America, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial information. Accordingly,on August 14, 2018, is to furnish the financial statements do not include all information and footnotes required by generally accepted accounting principles in the United States for complete annual financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2018 Annual Report on Form 10-K.

Reclassification

Certain amounts in the 2017 financial statements have been reclassified to conforminteractive data files as Exhibit 101 to the 2018 financial presentation. These reclassifications have no impact on net loss.

Cash, Cash Equivalents and Restricted Cash

Recent Accounting Pronouncements

In November 2016,Form 10-Q. Exhibit 101 to this Amendment No. 1 provides the FASB issued ASU No. 2016-18, Statementfollowing items from the Form 10-Q formatted in XBRL (Extensible Business Reporting Language): (i) our consolidated balance sheets, (ii) our consolidated statements of Cash Flows (Topic 230): Restricted Cash (a consensusincome, (iii) our consolidated statements of the FASB Emerging Issues Task Force). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for all interim and annual reporting periods beginning after December 15, 2017. The attached financial statements include the adoption of ASU 2016-18 which was adopted by the Company on April 1, 2018. The adoption did not have a material impact on the Company’s Consolidated Financial Statements “, other than certain reclassifications have been made in the Company’sstockholders equity (iv) our consolidated statements of cash flows, (v) the notes to conform with the current period presentation.

The Company does not expect the adoption of other recently issued accounting pronouncements to have a significant impact on the Company's results of operation, financial position or cash flows.

NOTE 2 – GOING CONCERN

The Company has a working capital deficit and has incurred losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Management of the Company has undertaken certain actions to address these conditions.    Funds required to carry out management’s plans are expected to be derived from future stock sales and borrowings from outside parties. There can be no assurances that the Company will be successful in executing its plans.

NOTE 3 – NOTES PAYABLE

On April 1, 2018, the Company converted $15,000 of the advances from an officer into a convertible note payable. The note bears interest of 2% and is convertible with the accrued interest into common shares of the Company at a rate of $0.025 per share.

In April 2018, our CEO and President acquired a $50,000 interest in a note payable-stockholder that is due May 17, 2018, and at June 30, 2018 was in default. on August 13, 2018 the Company paid this note with the issuance of 1,250,000 shares of stock.

NOTE 4 – RELATED PARTY TRANSACTIONS

Advances from Stockholder:

Advances from a stockholder at June 30, 2018 and March 31, 2018 was $31,000.

Advances from Officer:

Our CEO, Ryan Corley, has made advances to the Company in prior years. During the three months ended June 30, 2018 and the year ended March 31, 2018, respectively, the CEO made additional unsecured advances totaling $-0- and $15,500. During the three months ended June 30, 2018 and the year ended March 31, 2018, the Company made payments on these advances of $-0- and $500, respectively. At June 30, 2018 and March 31, 2018, respectively, advances from the CEO were $-0- and $15,000, respectively.

Accrued Interest - officer

The Company has notes payable to the CEO in the aggregate amount of $764,455 and $749,455 as of June 30, 2018 and March 31, 2018, respectively. Accrued interest owed on these notes at June 30, 2018 and March 31, 2018 is $208,684 and $204,861, respectively. These notes and accrued interest are convertible into 40,783,799 and 41,411,316 shares of restricted common stock of the Company, as of June 30, 2018 and March 31, 2018 respectively.

Advances from officer - related party

At June 30, 2018 and March 31, 2018, advances from the entity controlled by the CEO was $10,500 and notes payable totaled $160,250. Accrued interest owed on these notes at June 30, 2018 and March 31, 2018 is $35,873 and $35,188, respectively. These notes and accrued interest are convertible into 3,168,016 and 3,155,917 shares of restricted common stock of the Company, as of June 30, 2018 and March 31, 2018, respectively.

Oil and Gas Leases

During the three months ended June 30, 2018, the Company paid $100 in transfer fees to acquire a lease on an additional 640 acres in the Rocky Mountain range located in the state of Colorado for a 4-year term. The lease was acquired from our President and CEO. Each year, the Company is responsible for making additional lease payments of $2.50 per acre to keep the lease

The Company conducts its business from the office of its CEO, Ryan Corley, rent free.

NOTE 5 – STOCK OPTIONS

On July 24, 2001, the Company filed with the SEC Form S-8, for its 2002 Stock Option Plan, (the Plan). An aggregate amount of common stock that may be awarded and purchased under the Plan is 3,000,000 shares of the Company’s common stock.

A summary of the status of the Company’s stock options as of June 30, 2018 is presented below:

The following table summarizes the information about the stock options as of June 30, 2018:

NOTE 6 – SUBSEQUENT EVENTS

On July 10, 2018, the Company extended and repriced options that were expiring. A total of 100,000 options of the 150,000 options expiring were extended for one year at a price of $0.25 per option.

On August 13, 2018, the Company issued 600,000 shares of common stock in exchange for $30,000.

On August 13, 2018, the Company issued 2,500,000 common shares to retire two note payable in the aggregate amount of $100,000. These notes were in default. Prior to retiring the note, our CEO acquired a one-half interest in the note. Of these shares, 1,250,000 were issued to the CEO as payment of the note

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Exchange Act which represent the expectations or beliefs concerning future events that involve risks and uncertainties, including but not limited to the demand for Company products and services and the costs associated with such goods and services. All other statements other than statements of historical fact included in this Quarterly Report including, without limitation, the statements under “Management’s Discussion and Analysis or Plan of Operations” and elsewhere in the Quarterly Report, are forward-looking statements.  While the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

The following discussion of the results of operations and financial conditions should be read in conjunction with theconsolidated financial statements and related notes appearing in this report.

EnXnet, Inc. (the “Company”) was formed under(vi) the laws of the State of Oklahoma on March 30, 1999. On August 7, 2015, the Company incorporated EnXnet Energy Company LLC. in the State of Colorado as a wholly owned subsidiary. EnXnet Inc. and its wholly owned subsidiary, EnXnet Energy Company, LLC. (“the Company”) is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region. The Company’s principal business strategy isschedule to enhance stockholder value by generating and developing high-potential exploitation resources in these areas. The Company’s principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. The Company has leased property in Colorado and is currently searching for additional opportunities in the natural gas and petroleum industry. Our goal is to lease the oil and gas properties of acreage that has a high likelihood of becoming a producing property. We will require additional funding to drill and complete a producing natural gas and petroleum well.

The Company currently can satisfy its current cash requirements for approximately 90 days and will raise additional working capital by the sale of shares of the Company common stock to select perspective individuals and from additional borrowings. This plan should provide the additional necessary funds required to enable the Company to initiate its drilling program on the oil and gas lease properties.

The Company does not anticipate any significant cash requirements for the purchase of any facilities.

The Company currently has no full-time employee on the payroll. 

Results of Operations – Three months ended June 30, 2018 and 2017.

The Company incurred operating expenses of $35,848 and $ 10,227 for the three months ended June 30, 2018 and 2017, respectively, an increase of $25,621. The increase in operating expenses for the three months ended June 30, 2018 when compared to the three-month period ended June 30, 2017 consist of:

·   Impairment of oil and gas properties, unproved increased $17,128 for the three months ended June 30, 2018 from the previous year. In the current period the Company determined that carrying value of the unproved oil and gas properties was not supported as we have not been able to raise funds to complete a drilling program on these properties.

·   Professional services in the three months ended June 30, 2018 includes fees for our year end reporting cycle. Similar fees for the prior year’s annual reporting cycle were not recorded until the following quarter when the annual report was filed.

During the three months ended June 30, 2018 and 2017 we incurred net losses of $46,731 and $23,596, respectively.

Liquidity and Capital Resources.

From inception through June 30, 2018, the Company has issued 55,276,518 shares of its Common Stock to officers, directors and outside shareholders.  The Company has little operating history and no material assets other than the oil and gas cash bond and 22,507 acres of mineral lease properties. The Company has $11,726 of unrestricted cash and $2,489 of restricted cash as of June 30, 2018.

The Company has incurred operating losses each year since its inception and has a working capital deficit at June 30, 2018. At June 30, 2018 and March 31, 2018, the working capital deficit was $2,055,147 and $2,008,416, respectively. The working capital deficit and operating losses raise substantial doubt about the Company’s ability to continue as a going concern.  As a result of these factors, the Company’s independent certified public accountants have included an explanatory paragraph in their reports on the Company’s March 31, 2018 financial statements which expressed substantial doubt about the Company’s ability to continue as a going concern.

Contractual Obligations.

At the present time, the Company has no material commitments for capital expenditures.  If capital expenditures are required after operations commence, the Company will pay for the same through the sale of common stock, or through loans from third parties.  There is no assurance, however, that such financing will be available and in the event such financing is not available, the Company may have to cease operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES.

Management’s discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements. These statements have been prepared in accordance with generally accepted accounting principles in the United States of America.

Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates, judgments and assumptions 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 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. The following critical accounting policies rely upon assumptions, judgments and estimates and were used in the preparation of our consolidated financial statements:

Cash and cash equivalents

Cash equivalents are highly liquid investments with an original maturity of three months or less.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily requires management to make estimates and assumptions that affect the amounts reported in the financial statements. We regularly evaluate estimates and judgments based on historical experience and other relevant facts and circumstances. Actual results could differ from those estimates.

Fair Value of Financial Instruments

Under FASB ASC 825 the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value.

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and debt.  The Company believes that the carrying amounts approximate fair value for all such instruments.

FASB ASC 820 defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurements.  Topic No. 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 (exit price).  Topic No. 820 classifies the inputs used to measure fair value into the following hierarchy:

Stock Based Compensation

FASB ASC 718 requires that measurement of the cost of employee services received in exchange for an award of equity instruments be based on the grant-date fair value of the award. Such costs are recorded over the periods employees are required to render services in exchange for the awards.

Income taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.

We have net operating loss carryforwards available to reduce future taxable income. Future tax benefits for these net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. To the extent that we will not realize a future tax benefit, a valuation allowance is established.

Basic and diluted net loss per share

Basic loss per share is computed using the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the dilutive effects of common stock equivalents on an “as if converted” basis. For the periods ended June 30, 2018 and 2017, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share

Recent Accounting Pronouncements

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for all interim and annual reporting periods beginning after December 15, 2017. The attached financial statements include the adoption of ASU 2016-18. The adoption did not have a material impact on the Company’s Consolidated Financial Statements “, other than certain reclassifications have been made in the Company’s consolidated statements of cash flows to conform with the current period presentation.

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operation, financial position or cash flows.

Unaudited Financial Statements

The accompanying unaudited financial statements for the three months ended June 30, 2018 have been prepared in accordance with generally accepted accounting principles for interim financia1 information.  In the opinion of management all adjustments considered necessary for a fair presentation, which consist of normal recurring adjustments, have been included.  The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2018 Annual Report on Form 10-K.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CURRENT TRADING MARKET FOR THE COMPANY’S SECURITIES.

Currently the Company’s stock is traded under the symbol “EXNT” on the OTC PINK. There can be no assurance that an active or regular trading market for the common stock will develop or that, if developed, will be sustained. Various factors, such as operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates by securities analysts and other factors may have a significant impact on the market of the Company securities. The market price for the securities of public companies often experience wide fluctuations that are not necessarily related to the operating performance of such public companies such as high interest rates or impact of overseas markets.

Not Applicable

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this report, that our disclosure controls and procedures (as defined in Rules 13(a)-15(e) under the Securities Act of 1934, as amended) are not effective to ensure that all information required to be disclosed by us in the reports filed or submitted by us under the Securities and Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to the management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate and allow timely decisions regarding required disclosure.

Changes in Internal Controls.In connection with the above-referenced evaluation, no change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

The Company is not involved in litigation at this time.  We may from time to time be a party to various legal actions in the ordinary course of business.  There can be no assurance that the Company will not be a party to litigation in the future that could have an adverse effect on the Company.

There have been no material changes with regard to the risk factors previously disclosed in our most recent Annual Report on Form 10-K.

ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds

On August 13, 2018, the Company issued 2,500,000 common stock shares in payment of a $100,000 note that matured on May 31, 2018. Prior to this payment, our CEO and President had acquired one half interest in the loan.

On August 13, 2018, the Company issued 600,000 shares of common stock in exchange for $30,000.

The following are included herein: The following are included herein:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 1411^th day of AugustSeptember 2018.

EXHIBIT INDEX