UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from __________ to __________.
Commission file number:
(Exact name of registrant as specified in its charter) |
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(State or Other Jurisdiction of Incorporation or Organization) |
| (IRS Employer Identification No.) |
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Address of Principal Executive Offices |
| Zip Code |
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Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
N/A |
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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 ☐
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 ☐
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 | ☐ |
☐ | Smaller reporting company | ||
Emerging growth company |
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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
The number of shares outstanding of the registrant’s common stock, $0.001 par value per share, as of March 31, 2022, was
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q, references to “Freedom Holdings, Inc.,” “Freedom,” “FHLD,” the “Company,” “we,” “us,” and “our” refer to Freedom Holdings, Inc. Also, any reference to “common shares or common stock” refers to our $0.0001 par value common stock.
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to our business development plans, timing strategies, expectations, anticipated expense levels, business prospects, business outlook, technology spending and various other matters (including contingent liabilities and obligations and changes in accounting policies, standards, and interpretations). These statements express our current intentions, beliefs, expectations, strategies, or predictions as well as historical information. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “could,” “continue,” 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 Quarterly Report. Additionally, statements concerning future matters are forward-looking statements.
Although forward-looking statements in this Quarterly 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. These statements are no guarantee of future performance and involve risks and uncertainties that are difficult to predict. Our future operating results are dependent upon many factors which are outside our control. You should not place undue reliance on forward-looking statements. Forward-looking statements may not be realized due to a variety of factors, including, without limitation, our ability to:
| ● | manage our business given continuing operating losses and negative cash flows; |
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| ● | obtain sufficient capital to fund our operations, development, and expansion plans; |
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| ● | manage competitive factors and developments beyond our control; |
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| ● | maintain and protect our intellectual property; |
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| ● | obtain patents based on our current and/or future patent applications; |
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| ● | obtain and maintain other rights to technology required or desirable to conduct or expand our business; and |
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| ● | manage any other factors, if any, discussed in in this report and in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K. |
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 Quarterly Report, except as required by federal securities laws. 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.
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Freedom Holdings, Inc.
QUARTERLY REPORT ON FORM 10-Q
Fiscal Period Ended March 31, 2022
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 1. Financial Statements.
Freedom Holdings, Inc.
Index to the Consolidated Condensed Unaudited Financial Statements
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Notes to the Consolidated Condensed Financial Statements (unaudited) |
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| Table of Contents |
FREEDOM HOLDINGS, INC. Consolidated Condensed Balance Sheets | ||||||||
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| September 30, |
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ASSETS |
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Current Assets: |
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Cash |
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Total Current Assets |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities |
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Accounts payable |
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Accrued interest |
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Accrued expenses |
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Note payable – related party |
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Total Current Liabilities |
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Non-Current Liabilities |
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Notes payable |
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TOTAL LIABILITIES |
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Stockholders’ Equity |
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Preferred Stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total Stockholders’ Equity (Deficit) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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The accompanying notes are an integral part of these consolidated condensed financial statements. | ||||||||
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| Table of Contents |
FREEDOM HOLDINGS, INC.
Consolidated Condensed Statements of Operations
(Unaudited)
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Revenues |
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Consulting services – related party |
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Cost of goods |
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Gross Profit |
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Operating Expenses |
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Professional fees |
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Selling, general and administrative expenses |
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Total operating expenses |
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Net loss from operations |
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Other income (expenses) |
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Loss on related party acquisition |
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Interest expense |
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Income taxes |
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Net loss |
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Basic and diluted loss per share |
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Weighted average number of shares outstanding |
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The accompanying notes are an integral part of these consolidated condensed financial statements. | ||||||||||||||||
| 6 |
| Table of Contents |
FREEDOM HOLDINGS, INC.
Consolidated Condensed Statement of Changes in Shareholders’ Equity
For The Periods Ended March 31, 2022 and September 30, 2021
(Unaudited)
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Balance, September 30, 2019 |
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Issued shares of Preferred D for compensation |
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Net loss |
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Balance, September 30, 2020 |
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Fractional shares adjustment |
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Reclass related party revenue |
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Net loss |
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Balance, September 30, 2021 |
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Converted Preferred Stock into Common |
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Acquisition of subsidiary, Carbon Zero |
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Net loss |
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Balance, March 31, 2022 |
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The accompanying notes are an integral part of these consolidated condensed financial statements. | ||||||||||||||||||||||||||||
| 7 |
| Table of Contents |
FREEDOM HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
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Adjustment to reconcile net loss to net cash provided in operations: |
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Change in assets and liabilities |
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Accounts payable and accruals |
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Accrued interest |
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Net Cash (used in) provided by operations |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds (payments) of notes payable |
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Proceeds (payments) of notes payable-related party |
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Cash and cash equivalents, End of period |
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Supplemental cash flow information |
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Cash paid for interest |
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Cash paid for taxes |
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The accompanying notes are an integral part of these consolidated condensed financial statements. | ||||||||
| 8 |
| Table of Contents |
FREEDOM HOLDINGS, INC
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Freedom Holdings, Inc. (the “Company”) is a for profit corporation established under the corporation laws in the State of Maryland, United States of America on June 15, 2005.
Since inception the Company has devoted substantially all its efforts to establishing a new business. The Company has generated expenses and limited revenue from the efforts.
The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the company’s business plan.
The Company has adopted September 30 fiscal year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and Consolidation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries Carbon Zero Asset Management, Inc. (“Carbon Zero”). All intercompany transactions have been eliminated. Subsidiaries are consolidated from the date of acquisition, that being the date on which the Company has the power to govern financial and operating policies of the entities acquired. The financial statements of the subsidiaries are reported for the same reporting period as the parent, using consistent accounting policies in all material respects.
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 could differ from those estimates.
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. We believe we are not exposed to any significant credit risk on cash.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the six months ended March 31, 2022, and September 30, 2021. Cash was $
Recently issued accounting pronouncements
The Company has reviewed the FASB issued ASU accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and do not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company’s financial management.
Accounting for Acquisitions
Business acquisitions are recorded using the acquisition method of accounting and, accordingly, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. After the purchase price has been allocated, goodwill is recorded to the extent the total consideration paid for the acquisition, including the acquisition date fair value of contingent consideration, if any, exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Acquisition costs for business combinations are expensed when incurred.
| 9 |
| Table of Contents |
FREEDOM HOLDINGS, INC
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Acquisitions not meeting the accounting criteria to be accounted for as a business combination are accounted for as an asset acquisition. An asset acquisition is recorded at its purchase price, inclusive of acquisition costs, which is allocated among the acquired assets and assumed liabilities based upon their relative fair values at the date of acquisition.
The operating results of an acquisition are included in the consolidated statements of operations from the date of acquisition.
The allocation of the purchase consideration for acquisitions can require extensive use of accounting estimates and judgments to allocate the purchase consideration to the assets acquired and liabilities assumed based on their respective fair values. Judgment is required in determining which valuation technique should be applied. Critical estimates in valuing certain identifiable assets include but are not limited to market comparables, expected long-term revenues; future expected operating expenses; cost of capital; assumed attrition rates; and discount rates.
Intangible Assets
Intangible asset amounts are initially recognized at the acquisition date fair values of intangible assets acquired.
Finite-lived intangible assets are amortized over their useful lives. The carrying amounts of finite-lived intangible assets are evaluated for recoverability whenever events or changes in circumstances indicate that the Company may be unable to recover the asset’s carrying amount.
When there is no foreseeable limit on the period of time over which an intangible asset is expected to contribute to the cash flows of the Company, an intangible asset is determined to have an indefinite life. Indefinite life intangible assets are not amortized but tested for impairment annually or more frequently when indicators of impairment exist.
Determination of acquisition date fair values and intangible asset impairment tests require judgment. Significant judgments required to estimate the fair value of intangible assets include determining the appropriate valuation method, identifying market prices for similar type items, estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding, and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. There are no potentially dilutive shares of common stock.
Share-based expense
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
Share-based expense was $
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FREEDOM HOLDINGS, INC
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2022 and September 30, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31, 2022 and September 30, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
Revenue recognition
Effective October 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, which is effective for public business entities with annual reporting periods beginning after December 15, 2017. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures and there was no cumulative effect of the adoption of ASC 606.
The Company did not have any revenues for the six months ended March 31, 2022. The Company recognized revenues from a related party for the six months ended March 31, 2021, in the amount of $
Fair Value Measurements
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritize the inputs used to measure fair value into three levels and bases the categorization with the hierarchy upon the lowest level of input that is available and significant to the fair value measurement.
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FREEDOM HOLDINGS, INC
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 - Inputs, other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or 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); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
The Company’s cash and cash equivalents and short-term investments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The carrying amounts of accounts payable, advances payable and short-term loans approximate their fair value due to short term maturities.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company has limited revenue, and an accumulated deficit of $
NOTE 4 – NOTE PAYABLE
On August 7th, 2017, the company obtained an unsecured, nonrecourse and open-ended loan of $
The following sets forth the principal and interest loan balance:
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| September 30, |
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Note payable |
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Accrued interest |
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Total note payable and accrued interest |
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FREEDOM HOLDINGS, INC
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
(Unaudited)
NOTE 5 – ACCRUED EXPENSES
On September 30, 2021, the Company recognized expenses of $
On September 30, 2021, the Company recognized expenses of $
Accrued expenses were $
NOTE 6 – RELATED PARTY TRANSACTIONS
On September 1, 2020, the Company authorized
On September 30, 2021, the Company recognized expenses of $
The Company recognized revenues for the six months ended March 31, 2022, and 2021 from New Opportunity Business Solutions, Inc., a related party in the amount of $
On December 30, 2021, Freedom Holdings, Inc. (the “Company”) acquired
NOTE 7 – EQUITY
Preferred Stock
On September 1, 2020, the Company authorized
On September 1, 2020, the Company authorized
The number of preferred shares outstanding on March 31, 2022 and September 30, 2021 was
Common Stock
On December 30, 2021, Freedom Holdings, Inc. (the “Company”) acquired
Total common shares outstanding on March 31, 2022, and September 30, 2021, were
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 statement was available to be issued and has determined that there are no material subsequent events that require disclosure in these financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements that involve risks and uncertainties. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this report. The management’s discussion, analysis of financial condition, and results of operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this report
On December 30, 2021, Freedom Holdings, Inc. (the “Company”) acquired 100% of the issued and outstanding capital stock of Carbon Zero Asset Management, Inc. (“Carbon Zero”) from the seven (7) shareholders of Carbon Zero (the “Shareholders”) in exchange for 311,672,730 shares of the Company’s common stock, valued on December 30, 2021, at $1.00 per share.
Carbon-Zero is a fintech company driven by Ethereum based block chain technology to the carbon credit markets using fungible tokens and smart contracts. Carbon-Zero aims to bring carbon credits more fidelity, transparency, accessibility, liquidity, and standardization. Carbon-Zero is building a programmable carbon ecosystem that will allow carbon credit market participants a tokenization process to digitize carbon credits securely. The ecosystem will include the minting and burning protocols, a transparent mechanism for validating and distributing tokens, a trading venue for tokens, and tools to engage all stakeholders, including the carbon credit originators, off setters, project verifiers, liquidity providers, NGOs, concerned citizens, and governments.
The results of operations are based on preparation of financial statements in conformity with accounting principles generally accepted in the United States. The preparation of financial statements requires management to select accounting policies for critical accounting areas as well as estimates and assumptions that affect the amounts reported in the financial statements. The Company’s accounting policies are more fully described in Note 3 to the Notes of Financial Statements.
Results of Operations for the three months ended March 31, 2022 and 2021
Revenues.
All revenues were derived from New Opportunity Business Solutions, Inc. a related party. Mr. Kistler, our CEO is the President and CEO of both Freedom Holdings, Inc. and New Opportunity Business Solutions, Inc.
Total Revenue. Total revenues for the three months ended March 31, 2022 and 2021 were $0 and $7,200, respectively. Revenues increased by approximately 100%.
Cost of goods sold. Cost of goods sold for the three months ended March 31, 2022, and 2021 were $0 and $7,200, respectively. Cost of goods sold increased by 100% due to the Company allocating Mr. Kistler’s time at fair market value.
Gross profit. Gross profit for the three months ended March 31, 2022, and 2021 were $0 and $0, respectively.
Expenses.
Total Operating Expenses. Total operating expenses for the three months ended March 31, 2022 and March 31, 2021 were $65,013 and $359, respectively. Total operating expenses consisted of professional fees of $61,747 and $0, respectively and selling, general and administrative expenses of $3,266 and $359, respectively. Professional fees increased by approximately 100% due to the process of becoming up-listing to a full reporting company. Selling, general and administrative expenses increased by approximately 810%.
Other Income (Expense): Total other income (expense) for the three months ended March 31, 2022 and 2021 was ($311,678,734) and ($2,273), respectively. Other income (expense) consisted of interest expense of ($6,005) and ($2,273), respectively and loss on related party acquisition of ($311,672,729) and $0, respectively.
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Results of Operations for the six months ended March 31, 2022 and 2021
Revenues.
All revenues were derived from New Opportunity Business Solutions, Inc. a related party. Mr. Kistler, our CEO is the President and CEO of both Freedom Holdings, Inc. and New Opportunity Business Solutions, Inc.
Total Revenue. Total revenues for the six months ended March 31, 2022 and 2021 were $0 and $12,600, respectively. Revenues increased by approximately 100%.
Cost of goods sold. Cost of goods sold for the six months ended March 31, 2022, and 2021 were $0 and $12,600, respectively. Cost of goods sold increased by 100% due to the Company allocating Mr. Kistler’s time at fair market value.
Gross profit. Gross profit for the six months ended March 31, 2022, and 2021 were $0 and $0, respectively.
Expenses.
Total Operating Expenses. Total operating expenses for the six months ended March 31, 2022 and March 31, 2021 were $72,714 and $714, respectively. Total operating expenses consisted of professional fees of $68,870 and $0, respectively and selling, general and administrative expenses of $3,844 and $714, respectively. Professional fees increased by approximately 100% due to the process of becoming up-listing to a full reporting company. Selling, general and administrative expenses increased by approximately 438%.
Other Income (Expense): Total other income (expense) for the six months ended March 31, 2022 and 2021 was ($311,682,329) and ($6,094), respectively. Other income (expense) consisted of interest expense of ($9,600) and ($6,094), respectively and loss on related party acquisition of ($311,672,729) and $0, respectively.
Financial Condition.
Total Assets. Total assets at March 31, 2022 and September 30, 2021 were $489 and $2,132, respectively. Total assets consist of cash of $227 and $2,132, respectively.
Total Liabilities. Total liabilities at March 31, 2022 and September 30, 2021 were $432,595 and $351,924, respectively. Total liabilities consist of accounts payable of $68,926 and $7,861, respectively; accrued interest of $361 and $922, respectively; accrued expenses of $244,978 and $246,208, respectively; note payable-related party of $23,530 and $0, respectively and note payable of $94,800 and $96,933, respectively. Total liabilities increased by approximately 23%. Accounts payable increased by approximately 777% due to the Company up-listing and becoming full reporting. Accrued interest decreased by approximately 61% due to principal reduction.
Liquidity and Capital Resources.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.
The Company sustained a loss of $311,755,043 for the six months ended March 31, 2022 and $6,808 for the six months ended March 31, 2022. The Company has accumulated losses totaling $321,471,175 at March 31, 2022. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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We are presently able to meet our obligations as they come due through the support of our CEO. At March 31, 2022 we had a working capital deficit of $432,106. Our working capital deficit is due to the results of operations.
Net cash used in operating activities for the six months ended March 31, 2022 and 2021 were ($311,695,769) and ($7,894), respectively. Net cash used in operating activities includes our net loss, accounts payable and accrued expenses and accrued interest.
Net cash provided by financing activities for the six months ended March 31, 2022 and March 31, 2021 were $311,694,126 and $9,694, respectively. Net cash provided by financing activities includes paid-in capital from a related party, Mr. Brian Kistler our CEO of $0 and $12,600, respectively, proceeds (payments) made on notes payable-related party of $23,530 and $0, respectively; proceeds (payments) made on notes payable of $2,133 and ($2,906) respectively and issuance of common stock for acquisition of Carbon Zero of $311,672,729 and $0, respectively.
We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to implement our strategy. We do not have the necessary cash and revenue to satisfy our cash requirements for the next twelve months. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then we may not be able to expand our operations. If adequate funds are not available, we believe that our officers and directors will contribute funds to pay for some of our expenses. However, we have not made any arrangements or agreements with our officers and directors regarding such advancement of funds. We do not know whether we will issue stock for the loans or whether we will merely prepare and sign promissory notes. If we are forced to seek funds from our officers or directors, we will negotiate the specific terms and conditions of such loan when made, if ever. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933. See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”
We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.
Capital Resources.
We had no material commitments for capital expenditures as of March 31, 2022.
Off-Balance Sheet Arrangements
We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are not required to provide the information required by this item as we are considered a smaller reporting company, as defined by Rule 229.10(f)(1).
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), such as this Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Internal controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized, recorded and reported; and (2) our assets are safeguarded against unauthorized or improper use, to permit the preparation of our condensed consolidated financial statements in conformity with GAAP. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
In connection with the preparation of this Form 10-Q, our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this Form 10-Q, our disclosure controls and procedures were not effective.
Limitations on Controls
Management does not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions are being performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties in all of our financially significant processes and have concluded that this control deficiency represented a material weakness. We plan to remediate this weakness over the next 12 months..
Notwithstanding the assessment that our disclosure controls and procedures and our internal controls over financial reporting were not effective and that there are material weaknesses as identified herein, we believe that our condensed consolidated financial statements contained in this Form 10-Q fairly present our financial position, results of operations and cash flows for the periods covered thereby in all material respects.
Changes in Internal Controls
During the six months ended March 31, 2022, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our business. We do not know of any material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.
ITEM 1A. RISK FACTORS
As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On December 30, 2021, Freedom Holdings, Inc. (the “Company”) acquired 100% of the issued and outstanding capital stock of Carbon Zero Asset Management, Inc. (“Carbon Zero”) from the seven (7) shareholders of Carbon Zero (the “Shareholders”) in exchange for 311,672,730 shares of the Company’s common stock, valued on December 30, 2021, at $1.00 per share.
On December 30, 2021, simultaneously with the Closing, the Company converted all of the 710,676 shares of issued and outstanding preferred stock consisting of Series A, B, C and D preferred stock, into 15,920,945 shares of common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable
ITEM 5. OTHER INFORMATION.
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ITEM 6. EXHIBITS
INDEX TO EXHIBITS
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| Filed or Furnished |
| Incorporated by Reference | ||||
Exhibit No. |
| Description |
| Herewith |
| Form |
| Exhibit No. |
| Filing Date |
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| 10-12G |
| 3.1 |
| 07/27/21 | ||
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| 10-12G |
| 3.2 |
| 07/27/21 | ||
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| 10-12G |
| 3.3 |
| 07/27/21 | ||
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| Securities Purchase Agreement-Carbon Zero dated December 31, 2021 |
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| 8-K |
| 10.1 |
| 01/07/2022 | |
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| X |
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101.INS |
| XBRL Instance Document |
| X |
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101.SCH |
| XBRL Taxonomy Extension Schema Document |
| X |
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101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document |
| X |
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101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
| X |
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101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document |
| X |
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101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document |
| X |
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104 |
| Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
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Exhibit Key
3.1 |
| Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on September 29, 2015. |
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3.2 |
| Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on September 29, 2015. |
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FREEDOM HOLDINGS, INC.
NAME |
| TITLE |
| DATE |
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/s/ Brian Kistler |
| President, Directors |
| March 9, 2023 |
Brian Kistler |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
NAME |
| TITLE |
| DATE |
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/s/ Brian Kistler |
| President, Directors |
| March 9, 2023 |
Brian Kistler |
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Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants
Which Have Not Registered Securities Pursuant to Section 12 of the Act. None.
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