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GKIN Guskin Gold

Filed: 21 May 21, 12:45pm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED:  March 31, 2021

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 

For the transition period from __________ to __________

 

Commission File Number: ________________

 

GUSKIN GOLD CORP.

(Exact name of registrant as specified in its charter)

 

Nevada 27-1989147
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)

 

4500 Great America Parkway, PMB 38, Ste 100

Santa Clara, CA 95054

 (Address of principal executive offices, Zip Code)

 

(408) 766-1511

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 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 (§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 

 

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 Exchange Act).  Yes No

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
     

 

The number of shares of registrant’s common stock outstanding as of May 14, 2021 was 50,211,265.

 

 

 

 

 

FORM 10-Q

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

 

March 31, 2021

TABLE OF CONTENTS

 

  Page No.
PART I. - FINANCIAL INFORMATION
   
Item 1.Condensed Consolidated Financial Statements
 Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and September 30, 20201
 Condensed Consolidated Statement of Operations for the Three and Six Months ended March 31, 2021 (Unaudited)2
 Condensed Consolidated Statement of Stockholder’s Deficit for the Six Months ended March 31, 2021 (Unaudited)
 Condensed Consolidated Statement of Cash Flows for the Six Months ended March 31, 2021 (Unaudited)4
 Notes to Condensed Consolidated Financial Statements (Unaudited)5
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations12
Item 3.Quantitative and Qualitative Disclosures About Market Risk14
Item 4.Controls and Procedures14
   
PART II - OTHER INFORMATION
Item 1.Legal Proceedings15
Item 1ARisk Factors15
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds15
Item 3.Defaults Upon Senior Securities15
Item 4.Mine Safety Disclosures15
Item 5.Other Information15
Item 6.Exhibits16
 Signature17

 

i

 

 

FORWARD LOOKING STATEMENTS

 

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

 

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risks Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our report on Form 10-K which was filed with the SEC on January 8, 2021 (the “10-K”), in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

 

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

 

ii

 

 

 

PART I. FINANCIAL INFORMATION

 

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

  March 31,
2021
(Unaudited)
  September 30,
2020
 
ASSETS      
CURRENT ASSETS:      
Cash $5,513  $13,767 
         
TOTAL ASSETS $5,513  $13,767 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT        
         
CURRENT LIABILITIES:        
Accounts payable and Accrued Expenses $88,968  $22,549 
Loan payable – Related Party  76,057   30,390 
Convertible notes payable (net of unamortized discount)  108,959   45,764 
Notes payable  7,500   7,500 
Derivative liability  2,125,002   2,125,113 
TOTAL LIABILITIES  2,406,486   2,231,316 
         
Commitments and Contingencies (See Note 9)  -   - 
STOCKHOLDERS’ DEFICIT        
Preferred stock, par value $0.001 per share; 5,000,000 shares authorized; none shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively  -   - 
Common stock, par value $0.001 per share; 250,000,000 shares authorized; 42,211,265 and 29,211,265 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively  42,211   29,211 
Additional paid in capital  171,390   (2,175,610)
Accumulated deficit  (2,614,574)  (71,150)
TOTAL STOCKHOLDERS’ DEFICIT  (2,400,973)  (2,217,549)
         
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $5,513  $13,767 

 

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

 

1

 

 

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

  For Three Months Ended  For Six Months Ended 
  March 31,  March 31, 
  2021  2020  2021  2020 
             
Operating Expenses:            
Stock based compensation $2,340,000  $-  $2,340,000  $- 
Professional fees  61,242   -   93,831   - 
General and administrative expenses  32,564   -   39,978   - 
Total Operating Expenses  2,433,806   -   2,473,809   - 
                 
Loss from operations  (2,433,806)  -   (2,473,809)  - 
                 
Other Income (Expense)                
Change in fair value of derivative  42   -   111   - 
Interest expense  (34,421)  -   (69,726)  - 
Total other (expense)  (34,379)  -   (69,615)  - 
                 
Net loss before income tax provision  (2,468,185)  -   (2,543,424)  - 
Provision for income tax                
                 
Net loss $(2,468,185) $-  $(2,543,424) $- 
                 
Net loss per common share                
Basic and diluted $(0.06) $-  $(0.07) $- 
                 
Weighted average common shares outstanding                
Basic and diluted  40,477,932   -   34,894,325   - 

 

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

 

2

 

 

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

(Unaudited)

 

  Common Stock:
Shares
  Common Stock:
Par Value
  Additional
paid in
capital
  Accumulated
Deficit
  Totals 
Balance – September 30, 2020  29,211,265  $29,211  $(2,175,610) $(71,150) $(2,217,549)
                     
In-kind service contribution  -   -   5,000   -   5,000 
Net loss  -   -   -   (75,239)  (75,239)
Balance December 31, 2020 (Unaudited)  29,211,265  $29,211  $(2,170,610) $(146,389) $(2,287,788)
                     
In-kind service contribution  -   -   15,000   -   15,000 
Common stock issued for services – related party  13,000,000   13,000   2,327,000   -   2,340,000 
Net loss  -   -   -   (2,468,185)  (2,468,185)
Balance March 31, 2021 (Unaudited)  42,211,265  $42,211  $171,390  $(2,614,574) $(2,400,973)

 

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

 

3

 

 

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

 

CASH FLOWS FROM OPERATING ACTIVITIES: For Six Months Ended
March 31,
2021
 
Net loss $(2,543,424)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization of debt discount  63,195 
Change in fair value of derivative  (111)
In-kind service contribution  20,000 
Common stock issued for services  2,340,000 
Changes in net operating assets and liabilities:    
Accounts payable and accrued expenses  66,419 
NET CASH USED IN OPERATING ACTIVITIES  (53,921)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from related party debt, net of repayment  45,667 
NET CASH PROVIDED BY FINANCING ACTIVITIES  45,667 
     
NET DECREASE IN CASH  (8,254)
     
CASH – BEGINNING OF PERIOD  13,767 
CASH – END OF PERIOD $5,513 
     
SUPPLEMENTAL CASHFLOW INFORMATION:    
Cash paid for:    
Income tax     $- 
Interest $- 

 

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

 

4

 

 

GUSKIN GOLD CORP.

FKA INSPIRED BUILDERS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2021

(Unaudited)

 

Note 1 – Organization and Overview

  

Inspired Builders, Inc. (the “Company”,“Guskin”, “We”, and “Us”) was incorporated in the State of Nevada in February 2010. Until August 15, 2017 the Company was directing its focus on acquiring, investing in, developing and managing real estate properties and related investments. On August 15, 2017, pursuant to a change in control transaction, we relocated to Miami, Florida and ceased all operations as a real estate company.

 

On January 16, 2020, Santa Alba, LLC sold the 956,440 shares of common stock to Custodian Ventures, LLC for an aggregate purchase price of $145,000. At this point there was a change of control of the Company and Kai Ming Zhao resigned as President, Secretary, Treasurer and Director and David Lazar was appointed as President, Secretary, Treasurer and Director.

 

On April 30, 2020, Custodian Ventures, LLC, a Wyoming limited liability company (“CVL”) and the Company entered into a Stock Purchase Agreement (the “Agreement”) with U Green Enterprise, a Ghana corporation (the “Purchaser”). The Agreement closed upon execution on April 30, 2020 (“Closing”). Pursuant to the Agreement, CVL agreed to sell and Purchaser agreed to purchase 956,440 restricted common stock shares of the Company (the “Shares”), representing approximately 94.6% of the Company’s outstanding shares of common stock. Pursuant to the Agreement, Purchaser agreed to pay CVL as follows: (i) $157,640 payable at the Closing in exchange for the Shares, and (ii) to repay the note outstanding to CVL in amount of $67,360 immediately following the Closing. The Agreement resulted in a change of control of the Company and David Lazar resigned effective immediately as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director and Edward Somuah was appointed as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole director.

 

Guskin Gold Corporation (“GGC”) was incorporated in May 28, 2020 in the state of Nevada. GGC’s business activity is the early-stage development of a business focusing on the acquisition of gold properties, and the exploration and potential development of small-scale gold mining operations in the Republic of Ghana, West Africa.

 

On September 3, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with GGC, and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company.

 

The Share Exchange is accounted for as a reverse recapitalization under U.S. GAAP as the Share Exchange results in a change of control of the Company. GGC was determined to be the accounting acquirer based upon the terms of the Share Exchange and other factors including: (i) GGC’s shareholders are expected to own approximately 96.54% of the Company issued and outstanding common stock immediately following the effective time of the Share Exchange (the “Closing”), and (ii) GGC’s management will hold all key positions in the management of the combined company.

 

As of September 22, 2020 (the “Closing Date”), GGC provided us with valid and accepted audited financial statements, accordingly the transactions contemplated by the Share Exchange Agreement have been satisfied, accordingly the Share Exchange Agreement is closed (“Closing”).

 

The Company filed the Amended Articles of Incorporation effecting the Name Change with the Nevada Secretary of State, effective November 30, 2020. As previously reported, shareholders approved the Name Change and Symbol Change on September 22, 2020 in connection with the Closing of the Share Exchange Agreement between the Company and Guskin Gold Corp.

 

On December 3, 2020, the Financial Industry Regulatory Authority (“FINRA”) announced the effectiveness of a change in the Company’s name from “Inspired Builders, Inc.” to “Guskin Gold Corp.” (the “Name Change”) and a change in the Company’s ticker symbol from “ISRB” to the new trading symbol “GKIN” (the “Symbol Change”). Trading under the new ticker symbol began at market opening December 4, 2020. The Company’s CUSIP also changed to 40330L100.

 

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Note 2 – Summary of significant accounting policies

 

Basis of Presentation

 

The Company’s interim unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly our results of operations for the three and six months ended March 31, 2021 and cash flows for the six months ended March 31, 2021 and our financial position at March 31, 2021 have been made. The Company’s results of operations for the three and six months ended March 31, 2021 are not necessarily indicative of the operating results to be expected for the full fiscal year ending September 30, 2021.

 

Certain information and disclosures normally included in the notes to the Company’s annual audited consolidated financial statements have been condensed or omitted from the Company’s interim unaudited condensed consolidated financial statements included in this Quarterly Report. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended September 30, 2020. The September 30, 2020 balance sheet is derived from those statements.

 

Principles of Consolidation

 

The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and GGC, its wholly owned subsidiary. All intercompany accounts, balances and transactions have been eliminated in the consolidation.

 

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Earnings (Loss) per Share

 

In accordance with accounting guidance now codified as FASB ASC Topic 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. As of March 31, 2021, the Company had 12,500,000 shares of common stock issuable upon conversion of convertible notes which are excluded from loss per share calculation as their effect are anti-dilutive.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Fair Value of Financial Investments

 

ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2021 and September 30, 2020.

 

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Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:

 

Level 1 - Quoted market prices available in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts payable, accrued liabilities, convertible notes, loans payable, and notes payable. Fair values were assumed to approximate carrying values for these financial instruments due to their short-term maturities.

 

We account for derivative liability at fair value on a recurring basis under level 3 at March 31, 2021 and September 30, 2020 (see Note 7).

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation - Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations.

 

Derivative Instrument Liability

 

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedging relationships and the types of relationships designated are based on the exposures hedged. At March 31, 2021 and September 30, 2020, the Company had a derivative liability of $2,125,002 and $2,125,113, respectively.

 

Recent Accounting Pronouncements

 

Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or in management’s opinion will not have a material impact on the Company’s present or future consolidated financial statements.

 

Note 3 – Going Concern

 

As reflected in the accompanying condensed consolidated financial statements, the Company has a net loss of $2,543,424 for the six months ended March 31, 2021. In addition, the Company has an accumulated deficit of $2,614,574 and a working capital deficit of $2,400,973 as of March 31, 2021.

 

The accompanying consolidated financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

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Note 4 – Loans Payable - Related Party and Related Party Transactions

 

On June 1, 2020, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $1,630 for expenses paid for on behalf of the company. On June 18, 2020, the Company received an additional $4,500 from Naana Asante for expenses paid on behalf of the Company. The unsecured loans mature on June 1, 2021 and bears an interest rate of 2.5%. During the six months ended March 31, 2021, the Company repaid $3,097 of this loan.

 

On February 5, 2021, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $17,000 for expenses paid for on behalf of the company. The unsecured loan bears an interest rate of 2.5% and is payable one year from the date of signing.

 

On February 22, 2021, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $12,500 for expenses paid for on behalf of the company. The unsecured loan bears an interest rate of 2.5% and is payable one year from the date of signing.

 

During the period from May 28, 2020 (inception) to September 30, 2020, the Company received $354 of payments toward company related expenses, which were paid on its behalf by Naana Asante, the Chief Executive Officer. During the six months ended March 31, 2021, the Company received an additional $2,264 of payments toward company related expenses, which were paid on its behalf by Naana Asante, the Chief Executive Officer. The loan is non-interest bearing and due on demand. As of March 31, 2021, the loan balance outstanding is $2,618.

 

As of March 31, 2021, the total loans outstanding due to Naana Asante, our Chief Executive Officer is $35,151 and accrued interest balance is $238.

 

On June 1, 2020, the Company entered into a loan agreement with an entity controlled by a shareholder in the amount of $3,500 for expenses paid for on behalf of the Company. On June 26, 2020, the Company received an additional $5,910 for expenses paid on behalf of the Company. The unsecured loans mature one year from the date of the loan and bears an interest rate of 2.5%. As of March 31, 2021, the accrued interest was $196.

 

On September 22, 2020, the Company assumed, as part of the reverse merger and share exchange agreement a related party loan payable dated April 30, 2020, owed to U Green Enterprise, a Ghana corporation controlled by our Chief Financial Officer. As of March 31, 2021, the Company had a loan payable of $14,496 owed to U Green Enterprises. The loan payable is non-interest bearing and due on demand.

 

On January 4, 2021, the Company entered into a loan agreement with an entity controlled by a shareholder in the amount of $17,000. The loan is unsecured and bears an interest rate of 2.5% and is payable one year from the date of signing. As of March 31, 2021, the accrued interest was $98.

 

Note 5 – Note payable

 

On September 22, 2020, the Company entered into a loan agreement with a third party in the amount of $7,500 for expenses paid for on behalf of the Company. This unsecured loan matures one year from the date of the loan and bears an interest rate of 2.5%.

 

As of March 31, 2021, $7,500 of note payable remains outstanding. As of March 31, 2021, the accrued interest was $98.

 

Note 6 – Convertible notes

 

On September 22, 2020, the Company assumed a convertible note offering of up to $3,000,000 under regulation S as part of the reverse merger with Inspired Builders, Inc. The note offering calls for a minimum investment of $10,000. The note bears an interest rate equal to 10% per annum and matures after one year from the date of subscription. The note is convertible at the rate equivalent to the lessor of $0.01 per share or a 20% discount to market based upon the 10-day Volume Weighted Average Price (VWAP) prior to Maturity. The Company intends to regularly issues notes payable which are convertible at a discount of the trading price of the Company’s common stock. Due to these provisions, the embedded conversion option qualified for derivative accounting under ASC 815-15, Derivatives and Hedging. The company assumed seven convertible note subscriptions totaling $125,000 with unrelated parties. The convertible notes have an original issuance cost of $7,360, and a debt discount of $117,640 for the fair value of the embedded conversion feature on issuance dates. Amortization of debt discount for the six months ended March 31, 2021 totaled to $63,195. As of March 31, 2021, accrued interest on these notes totaled to $10,896.

  

Carrying value of Convertible Notes as of March 31, 2021 (Unaudited) $125,000 
Less: debt discount  (16,041)
Carrying value of Convertible Notes, net as of March 31, 2021 (Unaudited) $108,959 

 

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Note 7 – Derivative liability

 

The Company has determined that the variable conversion prices under its convertible notes caused the embedded conversion feature to be a financial derivative. The derivative instruments were valued at loan origination date, date of debt conversion and at March 31, 2021. The fair values of the derivative liabilities related to the conversion options of these notes was estimated on the transaction dates (loan original date and reporting date) using the Black Scholes option pricing model, under the following assumptions:

 

  March 31, 
  2021
(Unaudited)
 
Shares of common stock issuable upon exercise of debt  12,500,000 
Estimated market value of common stock on measurement date $0.18 
Exercise price $0.01 
Risk free interest rate (1)  0.01%
Expected dividend yield (2)  0.00%
Expected volatility (3)    60.71 – 65%
Expected exercise term in years (4)    0.09 - 0.2 

 

(1)The risk –free interest rate was determined by management using the one-month Treasury bill yield as of the valuation dates.
(2)The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.
(3)The volatility was determined by referring to the average historical volatility of a peer group of public companies because we do not have sufficient trade history to determine our historical volatility.
(4)The exercise term is the remaining contractual term of the convertible instrument at the valuation date.

  

The change in fair values of the derivative liabilities related to the Convertible Notes for the six months ended March 31, 2021 is summarized as:

 

  Fair value at
March 31,
2021
  Quoted
market prices
for identical
assets/liabilities
  Significant
other observable inputs
  Significant
unobservable
inputs
 
  (Unaudited)  (Level 1)  (Level 2)  (Level 3) 
Derivative Liability $2,125,002  $          -  $     -  $2,125,002 

 

  Derivative
Liability
 
Derivative liability as of September 30, 2020 $2,125,113 
Change in fair value of derivative liability  (111)
Reclassification to additional paid-in capital for financial instruments that ceased to be a derivative liability  - 
Derivative liability as of March 31, 2021 (Unaudited) $2,125,002 

 

  Change in
Fair Value of
Derivative Liability**
 
Change in fair value of derivative liability at the beginning of period $- 
Day one gains/(losses) on valuation  - 
Gains/(losses) from the change in fair value of derivative liability  111 
Change in fair value of derivative liability at the end of the period $111 

  

**The fair value at the remeasurement date is equal to the carrying value on the balance sheet.

 

9

 

  

Note 8 – Concentration of Credit Risk

 

The Company relies heavily on the support of its president, majority shareholder and unrelated third parties. A withdrawal of this support, for any reason, will have a material adverse effect on the Company’s financial position and its operations.

  

Note 9 – Commitment and Contingencies

 

In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States and the rest of the world with different geographical locations impacted more than others. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have had a minimal impact on our day to day operations. However, this could impact our efforts to enter into a business combination as other businesses have had to adjust, reduce or suspend their operating activities. The extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company is unable to predict the ultimate impact at this time.

 

On June 1, 2020, (the “commencement date”) the Company entered into a consulting agreement with Dr. Kweku Ainuson to provide consulting services on as needed basis. The consultant shall be responsible for advising the Chief Executive Officer, President, Chief Geologist, and Chairman of the Board of Directors on all legal matters of the Company. In addition, the consultant is to provide legal advice on areas including but not limited to business contracts or any other legal documentation that requires legal expertise; assisting in the management of internal and external legal resources; reading and reviewing legal documents that the Client receives and making sure that they are properly drafted and any other legal services. As compensation for the services provided by Consultant, the Consultant should vest 50,000 shares common shares valued at $0.001 every quarter for total compensation value of 200,000 shares. In addition, every 90 days, from the commencement date, the Company shall pay the consultant $5,000 plus additional fees per quarter.

 

On August 31, 2020, (the “commencement date”) the Company entered into a three-month term consulting agreement with a consultant to provide consulting services on as needed basis. The consultant shall be responsible to perform business development and general consulting services on a non -exclusive basis for and on behalf of the Client in relation to business development, developing and creating operation documents, and will consult with and advise, as necessary and requested, The Client on matters pertaining to its general business operations. As compensation for the services provided by Consultant, the company shall pay the consultant $7,500 in month one, $2,500 in month two and $2,500 in month three. On December 15, 2020, the Company amended the consulting contract for an additional six months from the amendment date. As compensation for the services provided, the Company shall pay the consultant $2,500 per month.

 

On January 12, 2021, the Company, entered into a Consulting Agreement with Edward Somuah, (“Mr. Somuah”) an individual, to memorialize and formalize Mr. Somuah’s commitment and services to the Company. Mr. Somuah is currently a member of the Company’s Board of Directors, the Chief Financial Officer, and Secretary, and shall continue on a full-time basis under this Agreement. Mr. Somuah’s leadership role entails being responsible for day-to-day management decisions and for implementing the Company’s long- and short-term plans, including, but not limited to, Business Development and creation of long-term value for the Company’s organization from customers, markets and relationships; advising and consulting on potential growth opportunities for presentation to management and or to fellow Board of Directors as well as the subsequent support and monitoring of project-by-project implementation; consult and lend experience on potential properties/projects, marketing, financial and or management services, investment banking, mergers and acquisitions, legal, strategic human resources, and or management consulting and other matters from time to time as required for the execution of the Company’s exploration and mining business (collectively, the “Services”). This Agreement shall commence on the Effective Date and terminate upon the 2-year anniversary of the Effective Date of this Agreement. Upon, termination any and all Base Salary accrued and unpaid shall be paid and or converted into restricted shares of the Company’s common stock, to be calculated at the then current fair market value of the Company common stock. Thereafter, this Agreement shall be null and void and Consultant shall no longer be entitled to compensation hereunder. Additionally, this Agreement may be terminated by Consultant upon 30 days prior written notice to the Company. At the time of termination, Consultant agrees to return all Company property used in performance of the Services, including but not limited to computers, cell phones, keys, reports and other equipment and documents. Consultant shall reimburse the Company for any Company property lost or damaged in an amount equal to the market price of such property. The Company shall pay Mr. Somuah a monthly salary in the total amount $4,500 per month on a ongoing basis. In addition, the Company issued 13,000,000 restricted common shares valued at $2,340,000 to Mr. Somuah in recognition of his services. 

 

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From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.

 

Note 10 – Common stock

 

On January 11, 2021, the Company issued 13,000,000 shares of common stock for services valued at $2,340,000 to Edward Somuah, a member of the Company’s Board of Directors, the Chief Financial Officer, and Secretary as compensation for services rendered. The shares are deemed to be fully earned and vested on the issuance date.

 

During the six month ended March 31, 2021, the Company received in kind services from the Chief Executive Officer for time spent. The Company recorded in kind service contributions valued at $20,000. This is recorded in additional paid in capital. 

 

Note 11 – Subsequent Events

 

On March 26, 2021, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $40,000 for expenses paid for on behalf of the company. The Company received the fund on April 1, 2021. The unsecured loan bears an interest rate of 2.5% and is payable one year from the date of signing.

 

On April 10, 2021, the Company entered into a loan agreement with Naana Asante, our Chief Executive Officer, in the amount of $10,000 for expenses paid for on behalf of the company. The Company received the fund on April 14, 2021. The unsecured loan bears an interest rate of 2.5% and is payable one year from the date of signing.

 

Subsequent to March 31, 2021, the Company received notices of conversion from the noteholders of convertible notes payable. On May 7, 2021, the Company approved the issuance of 8,000,000 shares of common stock pursuant to the conversion of $80,000 of its outstanding convertible notes payable to unrelated parties.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Business Development

 

This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the six month ended March 31, 2021. The discussion and analysis that follows should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.

 

Overview

 

On September 22, 2020, Guskin Gold Corp. fka Inspired Builders, Inc., a Nevada corporation (the “Company”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Guskin Gold Corporation, a Nevada limited liability company (“GGC”), and the controlling stockholders of GGC (the “GGC Shareholders”). Pursuant to the Share Exchange Agreement, the Company acquired One Hundred Percent (100%) the issued and outstanding equity interest of GGC from the GGC Shareholders (the “GGC Shares”) and in exchange the Company issued to GGC an aggregate of Twenty-Eight Million Two Hundred Thousand (28,200,000) shares of restricted common stock of the Company.

 

On December 3, 2020, the Financial Industry Regulatory Authority (“FINRA”) announced the effectiveness of a change in the Company’s name from “Inspired Builders, Inc.” to “Guskin Gold Corp.” (the “Name Change”) and a change in the Company’s ticker symbol from “ISRB” to the new trading symbol “GKIN” (the “Symbol Change”). Trading under the new ticker symbol began at market opening December 4, 2020. The Company’s CUSIP also changed to 40330L100.

 

As a result of the acquisition, we acquired all of the business operations and will continue the existing business operations of GGC as a wholly-owned subsidiary of our publicly-traded company.

 

As the result of this acquisition and the change in business and operations of the Company, a discussion of the past financial results of the Company is not pertinent, and under applicable accounting principles the historical financial results of GGC, the accounting acquirer, prior to the acquisition are considered the historical financial results of the Company.

 

The Company’s fiscal year end is September 30.

 

The following discussion highlights GGC’s results of operations and the principal factors that have affected its financial condition as well as its liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s audited consolidated financial statements contained in this report, which were prepared in accordance with United States generally accepted accounting principles. You should read the discussion and analysis together with such consolidated financial statements and the related notes thereto.

 

Results of Operations

 

For the three months ended March 31, 2021

 

For the three months ended March 31, 2021, we incurred operating expenses of $2,433,806. The operating expenses consisted of legal, accounting, consulting and general and administrative fees. In addition, the operating expenses also include the stock-based compensation of $2,340,000 for the fair value of 13,000,000 shares of common stock issued to the Company’s member of Board of Directors, Chief Financial Officer, and Secretary as compensation for services rendered.

 

Net Loss

 

For the three months ended March 31, 2021, we incurred a net loss of $2,468,185. This is attributable to operating expenses described above as well as amortization of debt discount of $31,250 as well as interest expense of $3,171.

 

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For the six months ended March 31, 2021

 

For the six months ended March 31, 2021, we incurred operating expenses of $2,473,809. The operating expenses consisted of legal, accounting, consulting and general and administrative fees. In addition, the operating expenses also include the stock-based compensation of $2,340,000 for the fair value of 13,000,000 shares of common stock issued to the Company’s member of Board of Directors, Chief Financial Officer, and Secretary as compensation for services rendered.

 

Net Loss

 

For the six months ended March 31, 2021, we incurred a net loss of $2,543,424. This is attributable to operating expenses described above as well as amortization of debt discount of $63,195 as well as interest expense of $6,531.

 

Liquidity and Capital Resources

 

As of March 31, 2021, we have $5,513 in current assets and $2,406,486 in current liabilities. We had $5,513 in cash and our working capital deficit was $2,400,973.

 

Cash Flows:

 

  For the Six Months Ended
March 31, 2021
 
Cash Flows Used in Operating Activities $(53,921)
Cash Flows Used in Investing Activities  - 
Cash Flows Provided by Financing Activities  45,667 
Net decrease in cash $(8,254)

 

The Company has not had revenues since its inception and to date, has relied on the support of its president and majority shareholder. A withdrawal of this support, for any reason, will have a material adverse effect on the Company’s financial position and its operations. If the Company does not begin to generate revenue or raise additional funds through a financing, the Company may need to incur additional liabilities with certain related parties to sustain the Company’s existence. There are currently no plans or agreements in place to provide such funding. The Company will require additional funding to finance the growth of its future operations as well as to achieve its strategic objectives. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and generate revenue. Our unaudited condensed consolidated financial statements have been prepared on the basis that we will continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Our independent registered public accounting firm has included its audit report to the audited financial statements for the year ended September 30, 2020 stating substantial doubt about our ability to continue as a going concern.

 

The COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The Company is unable to predict the ultimate impact at this time.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

We did not have any contractual obligations.

 

Critical Accounting Policies and Estimates

 

Our significant accounting policies and estimates are described in the notes to our condensed financial statements for the six months ended March 31, 2021, and are included elsewhere in this report.

 

13

 

 

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 are not required to provide the information under this item. 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure 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)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time 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.

 

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and the Company’s Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of March 31, 2021. Based upon that evaluation, the Company’s CEO concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2021 due to the Company’s limited internal resources and lack of ability to have segregation of duties and multiple levels of transaction review.

 

Management is in the process of determining how best to change our current system and implement a more effective system to insure that information required to be disclosed in the reports that we file or submit under the Exchange Act have been recorded, processed, summarized and reported accurately. Our management intends to develop procedures to address the current deficiencies to the extent possible given limitations in financial and manpower resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

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PART II

 

ITEM 1.  LEGAL PROCEEDINGS

 

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.  The Company’s property is not the subject of any pending legal proceedings.

 

ITEM 1A. RISK FACTORS 

 

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

 

Unless otherwise indicated, all of the following sales or issuances of Company securities were conducted under the exemption from registration as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the Securities Act of 1933, except as noted below). All of the shares issued were issued in transactions not involving a public offering, are considered to be restricted stock as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect. 

  

On May 7, 2021, the Company approved the issuance of 8,000,000 shares of common stock pursuant to the conversion of $80,000 of its outstanding convertible notes payable to unrelated parties. The shares were issued pursuant to the Form S-1 (file number 333-252375) deemed effective by the SEC on April 12, 2021.

  

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.  MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5.  OTHER INFORMATION

 

None.

 

15

 

 

Item 6. Exhibits

 

The following exhibits are included with this report.

 

3.1 Articles of Incorporation and Certificate of Correction(1)
   
3.2 By-Laws(1)
   
3.3 Certificate of Amendment to Articles of Incorporation, dated December 18, 2017.(1)
   
3.4 Certificate of Amendment to Articles of Incorporation, dated November 30, 2020(1)
   
10.1 Stock Purchase Agreement dated April 30, 2020 between U Green and Custodian Ventures(1)
   
10.2 Share Exchange Agreement, dated September 3, 2020
   
31.1  Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)(2)
   
 31.2  Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)(2)
   
32.1 Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2)
   
 32.2 Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2)
   
101.INS* XBRL Instance Document
   
101.SCH* XBRL Schema Document
   
101.CAL* XBRL Calculation Linkbase Document
   
101.DEF* XBRL Definition Linkbase Document
   
101.LAB* XBRL Label Linkbase Document
   
101.PRE* XBRL Presentation Linkbase Document

 

(1)Previously Filed

 

(2)Filed Herewith

 

*Filed Herewith. Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

16

 

 

SIGNATURE

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 Guskin Gold Corp.
  
 Date: May 21, 2021By:/s/ Naana Asante
 

Name:  Naana Asante

Title:    Chief (Principal) Executive Officer 

  
 Date: May 21, 2021By:/s/ Edward Somuah  
 

Name:  Edward Somuah

Title:    Chief Financial Officer (Principal

Accounting Officer)

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 Guskin Gold Corp.
  
 Date: May 21, 2021By:/s/ Naana Asante  
 

Name:  Naana Asante

Title:    Chief (Principal) Executive Officer and Director 

  
 Date: May 21, 2021By:/s/ Edward Somuah  
 

Name:  Edward Somuah

Title:    Chief Financial Officer (Principal

Accounting Officer) and Director

 

 

17