Elektros Inc.
08/20/2024 | Press release | Distributed by Public on 08/20/2024 11:44
Special Semiannual Financial Report under Regulation A Form 1 SA
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-SA
SEMIANNUAL REPORT PURSUANT TO REGULATION A
For the fiscal semiannual period ended:
June 30, 2024
ELEKTROS, INC.
(Exact name of issuer as specified in its charter)
Commission File Number: 024-11500
| Nevada | 85-4235616 |
|
State of other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) |
1626 South 17th Avenue,
Hollywood, Florida
(Full mailing address of principal executive offices)
347-885-9734
(Issuer's telephone number, including area code)
You should read the following, "Management's Discussion and Analysis of Financial Condition and Results of Operations" with our financial statements and the related notes. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.
Item 1. Management's Discussion and Analysis of Financial Condition and Results of Operations
Elektros, Inc., a Nevada corporation:
Our cash balance is $200.00 as of June 30, 2024. Our cash balance may not be sufficient to fund our operations for any period of time. We have been utilizing, and may continue to utilize, investor share purchases pursuant to our Regulation A offering qualified by the Commission on September 28, 2021. For the semi annual period ending June 30, 2024, we have not sold any common shares. Shlomo Bleier, our sole director and officer has informally agreed to supply funds to allow us to pay for professional fees and related operating costs in the event that the Company has insufficient funds. Our director has no formal commitment, arrangement or legal obligation to advance and/or loan funds to the company. In order to implement our plan of operations for the next twelve-month period, we believe that we will require a minimum of $1,000,000.
The Company has begun operations to design, develop and manufacture and sell fully electric sport utility vehicles. However, all the Agreements as described below are at a standstill. The Company launched a new clean energy technology brand known as "Elektros Energy". The Company has begun a feasibility study on lithium mining project in Sierra Leon, Africa. The Company plans to explore prospects of developing the mine as a lithium supplier.
Effective May 3, 2024, the Company dismissed BF Borgers CPA PC as its independent registered public accounting firm.
On June 4, 2024, the Board of Directors approved, and the Company engaged Michael Gillespie & Associates, PLLC (PCAOB ID: 6108) as the Company's new independent registered public accounting firm to perform independent audit services for the calendar year ended December 31, 2023, and calendar year ending December 31, 2024.
Reverse Stock Split
On May 23, 2023, the Company's Board of Directors unanimously approved a one-for-6,000 (1:6000) reverse split of the Company's common stock (the "Reverse Stock Split"). The recording date for the Reverse Stock Split with Nevada Secretary of State is May 31, 2023. The market effective date will be upon approval by the Financial Industry Regulatory Authority (FINRA). The Company's corporate action pursuant to the reverse split has not been completed and processed by FINRA as of the date of this report. FINRA may not approve the Reverse Stock Split. Management is weighing options at this time to postpone or cancel the Reverse Stock Split.
AGREEMENTS
On March 1, 2021, we entered into an Agreement with Technicon Design Corporation DBA Segula Technologies, Inc. to create a high level development road-map for us and they will work to identify companies with a developed EV Chassis which can be used to jump-start the vehicle development process for us. Segula will design and develop with production intent for a single design theme Electric SUV.
STATUS: As of today, the agreement is at a standstill. Technicon Design Corporation DBA Segula Technologies, Inc. has requested a sum of money from us to move forward. We do not have the financial means to pay at this time.
On March 1, 2022, Elektros, Inc. (the "Company") entered into an agreement with with Jiangsu Jinpeng Group Co., Ltd. of China to produce and deliver the Company's first batch of Elektros Sonic branded vehicles to the United States. The agreement calls for the shipment of electric car parts by JJG to the Company. Eight electric vehicles are estimated to be built in Florida at a projected cost of $66,000.
STATUS: As of today, the agreement is at a standstill. The reason being that we attempted to hire IDIADA, a company that provides certification services to electric car manufactures with the goal of achieving necessary vehicle identification numbers from the Department of Transporation ("DOT"). However, Jiangsu Jinpeng Group Co., Ltd. of China refuses to provide IDIADA and DOT with standard corporate required information. We are working to resolve the issue at hand.
On March 16, 2022, Elektros, Inc. ("ELEK") entered into an Exclusive Agency Framework agreement, ("Agreement") with Jinshun Import and Export Xuzhou Co., LTD ("JIEX") of China to exclusively sell and distribute JIEX electric vehicles. The Agreement calls for at least 2,000 units to be produced by JIEX and distributed by ELEK with unit increases of 30% every 12 months, (the "Annual Plan"). ELEK is required to guarantee the orders or continuous in every season. ELEK shall pay 30% of the full amount of the committed sales volume to JIEX as a total advanced payment. During the term of the Agreement, for each unit ordered, $3,900 will be deducted from the advance payment as payment for the current order until all advanced payments are deducted. If, in the event ELEK fails to have annual sales volume of less than 80% of the Annual Plan, JIEX will have the automatic unconditional right to terminate or modify the agreement. Any remaining advanced payments will be kept by JIEX and considered liquidated damages. ELEK will have the right of first refusal to distributing/marketing/selling any new models manufactured by JIEX in the United States notwithstanding ELEK must maintain good standing under the Agreement. The term of the Agreement is three years. The Agreement may be renewed at the end of the term if mutually agreed upon.
STATUS: As of today, the agreement with JIEX is at a standstill. The electric cars are not street legal here in the US. However, Jinshun Import and Export Xuzhou Co., LTD of China refuses to provide IDIADA and DOT with standard corporate required information. We are working to resolve the issue at hand.
On March 24, 2022, ELEK entered into a Regulatory Consulting Agreement ("Consulting Agreement") with IDIADA Automotive Technology USA LLC based in California to crash test and certify Elektros Sonic vehicles directly from China. IDADA provides a renowned certification program that closely examines vehicle production from overseas and performs a high level gap analysis to assess what is needed for National Highway Traffic Safety Administration (NHTSA) and Federal Motor Vehicle Safety Standards (FMVSS) compliance. The IDIADA team plans to visit Elektros Sonic point of production site in China to ensure that all aspects of the electric vehicle comply with U.S. standards before issuing official certification. The approximate cost is estimated to be approximately $45,000.
STATUS: As of today, the agreement with IDIADA is at a standstill. Jinshun Import and Export Xuzhou Co., LTD of China and Jiangsu Jinpeng Group Co., Ltd. of China refuse to provide IDIADA and DOT with standard corporate required information. Therefore, we cannot achieve vehicle identification numbers so the electric cars can be street legal in the U.S. We are working to resolve the issue at hand.
On February 8, 2023, we announced and entered into Memorandum of Understanding with Next Realm AI, a wholly owned subsidiary of AI Venturetech, Inc. to explore data applications for electric vehicle sector.
On March 13, 2023, we announced that we have begun discussions for an equity interest or development agreement with the the owners of a lithium mine in Sierra Leon, Africa. We initiated a mining feasibility study of the lithium mine and plan to explore prospects of developing the mine as a lithium supplier to select processing partners, or battery manufacturer.
On March 27, 2023, we launched a new clean technology brand, Elektros Energy. Elektros Energy brand will better reflect its focus on such areas as Lithium mining, EV charging, solar energy, and innovative solutions to help accelerate the world's transition to a cleaner and more sustainable energy future.
Our URL for our website is https://elektrosenergy.com
Our auditors have raised substantial doubt about or ability to continue as a going concern.
The Six Months Ended June 30, 2024 and June 30, 2023
Revenue: Revenue for the six months ended June 30, 2024 and June 30, 2023 was $0.
Operating Expenses: Operating expenses for the six months ended June 30, 2024 and June 30, 2023 were $28,311 and $115,680 respectively. Operating expenses for both periods were comprised of general and and administrative expenses.
Net Loss: Net loss for the six months ended June 30, 2024 and June 30, 2023 was ($28,311) and ($115,680), respectively. The net loss for both periods were the result of general and administrative expenses.
Liquidity and Capital Resources
We had a cash balance of $200 at June 30, 2024 and $71 at June 30, 2023. Our capital needs have been met by and through our qualified offering statement on September 28, 2021 and our sole director. We will have additional capital requirements during 2024 and 2025. We do not expect to be able to satisfy our cash requirements in the near term as we have no current revenue stream. We cannot assure that we will have sufficient capital to finance our growth and business operations or that such capital will be available on terms that are favorable to us or at all. We are currently incurring an operating deficit and net capital deficiency that are expected to continue for the foreseeable future.
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Off-Balance Sheet Arrangements
We do not have any 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 are material to investors.
Critical Accounting Policies
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout management's Discussion and Analysis or Plan of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
Revenue Recognition
Revenue includes product sales. The Company recognizes revenue from product sales in accordance with Topic 605 "Revenue Recognition in Financial Statements" which is at the time customers are invoiced at shipping point, provided title and risk of loss has passed to the customer, evidence of an arrangement exists, fees are contractually fixed or determinable, collection is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance.
Share-Based Compensation
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 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.
The Company had no stock-based compensation plans as of June 30, 2024.
The Company's stock-based compensation was $0 for the six months ended June 30, 2024 and June 30, 2023.
Item 2. Other Information
Transfer Agent
Securities Transfer Corporation is our transfer agent. Their address is 2901 N. Dallas Parkway, Suite 380, Plano, Texas. Their phone number is 469-633-0101.
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Item 3. Financial Statements
INDEX TO UNAUDITED FINANCIAL STATEMENTS OF Elektros, Inc.
| Unaudited Balance Sheets as of June 30, 2024 and December 31, 2023 | 4 |
| Unaudited Statements of Operations for the Six Months Ended June 30, 2024 and June 30, 2023 | 5 |
| Unaudited Statements of Changes in Stockholders' Equity (Deficit) For the period ended June 30, 2024 | 6 |
| Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 30, 2023 | 7 |
| Notes to Unaudited Financial Statements | 8 to 10 |
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Elektros, Inc.
Balance Sheets
(Unaudited)
|
June 30, 2024 |
December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 200 | $ | 39 | ||||
| Prepaid leases | 579,271 | 602,108 | ||||||
| Total Current Assets | 579,271 | 602,147 | ||||||
| Company vehicles | 35,382 | 41,016 | ||||||
| TOTAL ASSETS | $ | 614,853 | $ | 643,163 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | - | $ | - | ||||
| Accrued expenses | - | - | ||||||
| Loan to the company, net accumulated interest | 10,000 | 10,000 | ||||||
| Total Current Liabilities | 10,000 | 10,000 | ||||||
| TOTAL LIABILITIES | 10,000 | 10,000 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, $.001 par value, 200,000,000 shares authorized; 50,000 issued and outstanding as of June 30, 2024 and December 31, 2023 | 50 | 50 | ||||||
| Common stock, $.001 par value, 500,000,000 shares authorized, 437,840,718 and 432,840,315 issued and outstanding as of June 30, 2024 and December 31 2023 | 447,441 | 447,441 | ||||||
| Additional paid in capital | 96,897,665 | 96,897,665 | ||||||
| Accumulated deficit | (96,740,303 | ) | (96,711,993 | ) | ||||
| Total Stockholders' Deficit | $ | 604,853 | $ | 633,163 | ||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 614,853 | $ | 643,163 |
The balance sheet of the Company at June 30, 2024 has been prepared by management and has not been audited or reviewed by an independent certified public accounting firm. The accompanying notes are an integral part of these financial statements.
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|
Elektros, Inc. Statement of Operations (Unaudited) |
||||||||
|
Six Months Ended June 30, 2024 |
Six Months Ended June 30, 2023 |
|||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | 28,311 | $ | 115,680 | ||||
| Total operating expenses | 28,311 | 115,680 | ||||||
| Operating loss | $ | (28,311 | ) | $ | (115,680 | ) | ||
| Other Income/(Expense) | ||||||||
| Interest | $ | - | $ | (733 | ) | |||
| Loss on the disposal of asset | - | - | ||||||
| Total Other Income(Expense) | - | (733 | ) | |||||
| Net loss | $ | (28,311 | ) | $ | (116,413 | ) | ||
| Basic and Diluted net loss per common share | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average number of common shares outstanding - Basic and Diluted | 447,440,718 | 426,868,383 |
The financial statements in regards to the six-month period ending June 30, 2024 and June 30, 2023 have been prepared by management and have not been audited or reviewed by an independent certified public accounting firm. The accompanying notes are an integral part of these financial statements.
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Elektros, Inc.
Statement of Changes is Stockholder (Deficit)
For the Period December 31, 2022 to June 30, 2024
(Unaudited)
| Common Shares | Par Value Common Shares |
Series A Preferred Shares |
Par Value Preferred Shares |
Additional Paid-in Capital |
Shares Payable |
Accumulated Deficit | Total | ||||||||||||
| Balances, December 31, 2022 | 432,340,815 | $ | 432,341 | - |
$ |
- |
$ | 96,686,261 |
$ |
68,471 |
$ | (96,540,971) | $ | 646,103 | |||||
| Series A preferred shares issued as compensation | - | - |
50,000 |
50 |
4,800 |
- |
- | 4,850 | |||||||||||
| Common shares sold | 15,099,903 | 15,100 | - | - | 206,604 | - | - | 221,704 | |||||||||||
| Common shares payable | - | - | - | (68,471) | - | (68,471) | |||||||||||||
| Net loss | - | - | - | - | - | - | (171,022) | (171,022) | |||||||||||
| Balances, December 31, 2023 | 447,440,718 | $ | 447,441 | 50,000 | $ | 50 | $ | 96,897,665 | $ | - | $ | (96,711,993) | $ | 633,164 | |||||
| Net loss | - | - | (28,311) | (28,311) | |||||||||||||||
| Balances, June 30, 2024 | $ | 447,440,718 | $ | 447,441 |
50,000 |
$ |
50 |
$ | 96,897,665 |
$ |
- |
$ | (96,740,303) | $ | 604,853 | ||||
The financial statements in regards to the six-month period ending June 30, 2024 and June 30, 2023 have been prepared by management and have not been audited or reviewed by an independent certified public accounting firm. The accompanying notes are an integral part of these financial statements.
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Elektros, Inc.
Statement of Cash Flows
(Unaudited)
|
Six Months Ended June 30, 2024 |
Six Months Ended June 30, 2023 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (28,311 | ) | $ | (116,413 | ) | ||
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 5,634 | - | ||||||
| Preferred shares issued as compensation | - | 4,850 | ||||||
| Changes in current assets and liabilities: | ||||||||
| Company vehicles | - | 65,000 | ||||||
| Deposits | - | (23,140 | ) | |||||
| Accounts payable | - | (41,860 | ) | |||||
| Accrued expenses | - | (5,000 | ) | |||||
| Prepaid expenses | 22,838 | 20,425 | ||||||
| Net cash used in operating activities | 161 | (96,138 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Common shares sold | - | 173,705 | ||||||
| Cash received for shares payable | - | (68,471 | ) | |||||
| Loans to company | - | (56,500 | ) | |||||
| Net cash provided by financing activities | - | 48,734 | ||||||
| Net change in cash | $ | 161 | $ | (47,404 | ) | |||
| Beginning cash balance | 39 | 47,475 | ||||||
| Ending cash balance | $ | 200 | $ | 71 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | - | $ | 733 | ||||
| Income taxes paid | $ | - | $ | - |
The financial statements in regards to the six-month period ending June 30, 2024 and June 30, 2023 have been prepared by management and have not been audited or reviewed by an independent certified public accounting firm. The accompanying notes are an integral part of these financial statements.
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Elektros, Inc.
Notes to the Unaudited Financial Statements
Note 1 - Organization and Description of Business
Elektros, Inc. (we, us, our, or the "Company") was incorporated on December 1, 2020 in the State of Nevada.
The Company's focus is to develop the Company's patent pending EV Multi-Port Charging Assembly that will allow users to utilize multiple charging features on electric vehicles. Further, the Company plans to expand its new brand known as Elektros Energy with discussions regarding a potential stake or development agreement for mining lithium in Sierra Leon, Africa pending the completion of a feasibility study.
The Company has elected December 31st as its year end.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.
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. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at June 30, 2024, and December 31, 2023, were $200 and $39, respectively.
Income Taxes
The Company accounts for income taxes under ASC 740, "Income Taxes." Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at June 30, 2024.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of June 30, 2024 and, thus, anti-dilution issues are not applicable.
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Fair Value of Financial Instruments
The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). 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 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.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2024. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.
Related Parties
The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Convertible Instruments
The Company has opted for early adoption of the revised FASB guidance, ASU 2020-06, for accounting for conversion options embedded in convertible instruments. A debt with an embedded conversion feature shall be accounted for in its entirety as a liability and no portion of the proceeds from the issuance of convertible debt instrument instruments shall be accounted for as attributable to the conversion feature unless the conversion feature is required to be accounted for separately as an embedded derivative under Subtopic 815-15 or the conversion feature results in a premium that is subject to the guidance in paragraph 470-20-25-13.
Share-Based Compensation
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 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.
The Company had no stock-based compensation plans as of June 30, 2024.
The Company's stock-based compensation for the periods ended June 30, 2024 and June 30, 2023 was $0 and $4,850, respectively.
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Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively (collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02, which includes a number of optional practical expedients that entities may elect to apply.
We have no finance leases, only two prepaid leases, and do not believe we will be impacted in the foreseeable future by the newly adopted accounting standard(s) mentioned above.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Note 3 - Going Concern
The Company's financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.
The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Note 4 - Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has incurred a net operating loss carryforward of $96,740,303 which begins expiring in 2040. The Company has adopted ASC 740, "Accounting for Income Taxes", as of its inception. Pursuant to ASC 740 the Company is required to compute tax asset benefits for non-capital losses carried forward. The potential benefit of the net operating loss has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the loss carried forward in future years.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. This legislation reduced the federal corporate tax rate from the previous 35% to 21%. Tax filings for the Company for the year 2020 is available for examination by tax authorities.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
Note 5 - Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of June 30, 2024.
Note 6 - Prepaid Expenses
During the year ended December 31, 2022, the Company prepaid a 15 year lease for office space totaling $310,125 and prepaid a 15 year lease for commercial space totaling $375,000.
Note 7- Company Vehicles
During the year ended December 31, 2022, the Company purchased two vehicles for commercial use totaling approximately $93,242. During the year ended December 31, 2023, the Company returned one vehicle to the dealership where it was purchased, due to the poor quality of the vehicle, and the loan associated with that vehicle was eliminated. There was an expense of approximately $2,899 associated with the disposal of this asset. The Company is depreciating the remaining vehicle for five years, using the straight-line depreciation method. Depreciation expense for these assets totaled $5,634 and $0 for the periods ended June 30, 2024 and 2023, respectively. Total depreciation recognized at June 30, 2024 for the two assets totaled approximately $21,111.
Note 8 - Loans to Company
On December 28, 2020, the Company entered into a loan agreement with Samuel Schlesinger for $10,000. The verbal agreement between our former sole officer, Levi Jacobson, and Mr. Schlesinger set the term of the loan as payable within 180 days from December 28, 2020, with no interest. As of June 30, 2024 this loan is still payable to Mr. Schlesinger.
Note 9 - Shareholder Equity
Preferred Stock
The authorized preferred stock of the Company consists of 200,000,000 shares with a par value of $0.001. There were 50,000 shares issued and outstanding as of June 30, 2024, and December 31, 2023.
During the period ended December 31, 2023, the Company issued 50,000 shares of Series A Preferred Stock to Jewish Enrichment Center as compensation for services to the Company.
Common Stock
The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.001. There were 447,440,718 shares of common stock issued and outstanding as of June 30, 2024, and December 31, 2023.
During the period ended December 31, 2023, 4,794,012 shares of common stock were issued to GS Capital Partners, LLC as payment for a convertible loan.
During the period ended December 31, 2023, 9,600,000 shares of common stock were issued to Chaya Goldschein as payment of a loan to the Company totaling $48,000.
During the period ended December 31, 2023, 705,891 shares of common stock were sold to Chaya Goldschein for proceeds totaling approximately $68,471.
Note 10 - Related-Party Transactions
Equity
During the period ended December 31, 2023, the Company issued 50,000 shares of Series A Preferred Stock to Jewish Enrichment Center as compensation for services to the Company. Our current sole officer and director, Shlomo Bleier, owns and controls Jewish Enrichment Enterprise.
Note 11 - Subsequent Events
On August 15, 2024, the Company entered into a ground lease agreement (Land Lease Agreement) with Mr. Daniel Selu, an individual located at Gbu-Gbu village Gawola Town in the Tinkoko chiefdom Bo District ("Landlord") in the southern part of Sierra Leone, West Africa. The purpose of the lease is for the Company to commence a lithium mining operation and management of a multi-family residential apartment for laborers of the mining operation if needed. The term of lease is for 13 years beginning on August 19, 2024 and ending August 19, 2037. Eight acres will be leased for total of twenty thousand ($20,000) U.S. dollars. The Company will remit an initial payment of $2,500 USD upon execution of the Land Lease Agreement. The remaining balance of $17,500 USD shall be due and payable no later than ninety days from the effective date of the Land Lease Agreement. The Land Lease Agreement may be terminated by the Company at any time and without recourse by providing written notice to Landlord.
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Item 4. Exhibits
| Exhibit No. | Description | |
| 1A-2A | Certificate of Incorporation, as filed with Nevada Secretary of State on November 30, 2020 * | |
| 1A-2B | Bylaws* |
*Filed as an exhibit to our Offering Statement (1-A) on September 22, 2021.
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SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Elektros, Inc. | ||||
| Date: | August 20, 2024 | By: | /s/ Shlomo Bleier | |
| Shlomo Bleier, Chief Executive Officer |
Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Shlomo Bleier | Chief Executive Officer | August 20, 2024 | ||
| Shlomo Bleier | (Principal Executive Officer) | |||
| /s/ Shlomo Bleier | Chief Financial Officer and Chief Accounting Officer | August 20, 2024 | ||
| Shlomo Bleier |
(Principal Financial Officer and Principal Accounting Officer) |
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