UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2023
or
☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ___________ 

Commission File Number: 000-52831

NATE’S FOOD CO.

(Exact name of registrant as specified in its charter)

Colorado	46-3403755
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
15151 Springdale Street, Huntington Beach, California	92649
(Address of principal executive offices)	(Zip Code)

(650) 222-5141

(Registrant’s telephone number, including area code)

N/A

(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) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes     ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes     ☐ No

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes     ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

2,883,024,616 common shares issued and outstanding as of October 13, 2023. 

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition or Plan of Operation	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
SIGNATURES		26

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Nate’s Food Co.

 Condensed Balance Sheets

(Unaudited)

	August 31,			May 31,
	2023			2023
ASSETS
Current Assets
Cash	$	3,734		$	930
Total Current Assets		3,734			930
Digital currency		72			16,903
Equipment, net		114,515			123,194
TOTAL ASSETS	$	118,321		$	141,027
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	45,331		$	46,239
Accrued interest		121,129			107,263
Accrued interest - related party		120,632			102,054
Accrued management fees - related party		41,000			32,000
Loans payable		943			943
Notes payable - related party		-			397,935
Convertible notes, net of discount		237,818			254,693
Derivative liability		156,885			153,849
Total Current liabilities		723,738			1,094,976
Promissory notes, net of discount - noncurrent		162,791			159,168
Note payable - related party- noncurrent		403,935			-
Total liabilities		1,290,464			1,254,144
Commitments		-			-
Stockholders’ Deficit
Series A Preferred Stock, Par Value $0.0001, 2,000,000 shares authorized, 1,915,153 issued and outstanding, respectively		191			191
Series B Preferred Stock, Par Value $0.0001, 150,000 shares authorized, 150,000 issued and outstanding		15			15
Series C Preferred Stock, Par Value $1.00, 250,000 shares authorized, 250,000 issued and outstanding		250,000			250,000
Series D Preferred Stock, Par Value $0.0001, 10,000,000 shares authorized, 6,000,000 issued and outstanding		600			600
Series E Preferred Stock, Par Value $0.0001, 15,000,000 shares authorized,14,989,491 and 14,989,500 issued and outstanding, respectively		1,499			1,499
Common Stock, Par Value $0.001, 6,500,000,000 shares authorized, and 3,383,024,616 and 3,208,024,616 issued and outstanding, respectively		3,383,024			3,208,024
Additional paid-in capital		423,839			581,964
Accumulated deficit		(5,231,311	)		(5,155,410	)
Total stockholders’ deficit	$	(1,172,143	)	$	(1,113,117	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	118,321		$	141,027

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

3

Nate’s Food Co.

Condensed Statements of Operations

(Unaudited)

	Three Months Ended
	August 31,
	2023			2022
Revenue
Digital currency mining	$	8,431		$	5,203
Cost of revenue		24,157			16,391
Gross loss		(15,726	)		(11,188	)
Operating Expenses
General and administrative		24,373			28,478
Total operating expenses		24,373			28,478
Operating Loss		(40,099	)		(39,666	)
Other Income (Expense)
(loss) gain on change in fair value of derivative liability		(3,036	)		29,920
Gain (loss) on sale of digital currency		133			(5,742	)
Interest expense		(33,067	)		(43,789	)
Gain on settlement of debts		168			-
Impairment loss on digital currency		-			(1,960	)
Total other expenses		(35,802	)		(21,571	)
Net Loss	$	(75,901	)	$	(61,237	)
Net income (loss) per common share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding:
Basic		3,445,796,355			560,948,529
Diluted		5,284,176,900			672,360,865

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

4

Nate’s Food Co.

Condensed Statements of Changes in Stockholders’ Deficit

(Unaudited)

For the Three Months Ended August 31, 2023

	Preferred Stock																											Additional						Total
	Series A				Series B				Series C				Series D				Series E					Common Stock						Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount		Shares			Amount			Capital			Deficit			Deficit
Balances May 31,2023		1,915,153	$	191		150,000	$	15		250,000	$	250,000		6,000,000	$	600		14,989,500		$	1,499		3,208,024,616		$	3,208,024		$	581,964		$	(5,155,410	)	$	(1,113,117	)
Cancelled common stock		-		-		-		-		-		-		-		-		-			-		(500,000,000	)		(500,000	)		500,000			-			-
Cancelled Series E Preferred stock		-		-		-		-		-		-		-		-		(9	)		-		-			-			-			-			-
Issuance of common stock for conversion of convertible note		-		-		-		-		-		-		-		-		-			-		675,000,000			675,000			(658,125	)		-			16,875
Net loss		-		-		-		-		-		-		-		-		-			-		-			-			-			(75,901	)		(75,901	)
Balances August 31,2023		1,915,153	$	191		150,000	$	15		250,000	$	250,000		6,000,000	$	600		14,989,491		$	1,499		3,383,024,616		$	3,383,024		$	423,839		$	(5,231,311	)	$	(1,172,143	)

 For the Three Months Ended August 31, 2022

	Preferred Stock																								Additional						Total
	Series A				Series B				Series C				Series D				Series E				Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balances May 31, 2022		1,940,153	$	194		150,000	$	15		250,000	$	250,000		6,000,000	$	600		14,989,500	$	1,499		553,024,616	$	553,024	$	3,179,836		$	(4,898,026	)	$	(912,858	)
Issuance of common stock for conversion of convertible note		-		-		-		-		-		-		-		-		-		-		27,000,000		27,000		(20,250	)		-			6,750
Finance fee for warrants issued in connection with license agreement		-		-		-		-		-		-		-		-		-		-		-		-		37,800			-			37,800
Net loss		-		-		-		-		-		-		-		-		-		-		-		-		-			(61,237	)		(61,237	)
Balances August 31, 2022		1,940,153	$	194		150,000	$	15		250,000	$	250,000		6,000,000	$	600		14,989,500	$	1,499		580,024,616	$	580,024	$	3,197,386		$	(4,959,263	)	$	(929,545	)

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

5

Nate’s Food Co.

Condensed Statements of Cash Flows

(Unaudited)

	Three Months Ended
	August 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)	$	(75,901	)	$	(61,237	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Gain (loss) on change in fair value of derivative liability		3,036			(29,920	)
Amortization of discount on convertible note		-			31,885
Amortization of license		-			83
Amortization of discount on promissory note		623			-
Amortization of Crypto equipment		8,679			803
Impairment loss on digital currency		-			1,960
Gain on settlement of debts		(168	)		-
Realized gain on sale of digital currency		(133	)		5,742
Changes in operating assets and liabilities:
Prepaid expenses		-			9,900
Digital currency		17,132			484
Accounts payable		(908	)		2,201
Accrued management fees -related party		9,000			6,000
Accrued interest - related party		18,578			3,249
Accrued interest		13,866			8,572
Net cash used in operating activities		(6,196	)		(20,278	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from promissory notes payable		3,000			-
Proceeds from notes payable - related party		6,000			9,500
Repayment of notes payable -related party		-			(2,500	)
Net cash provided by financing activities		9,000			7,000
Net cash increase (decrease) for the period		2,804			(13,278	)
Cash at beginning of period		930			13,788
Cash at end of period	$	3,734		$	510
Supplemental Cash Flow Disclosures
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
Non-Cash Investing and Financing Activity:
Exchanged related party notes payable with new note	$	397,935		$	-
Issuance of common stock for conversion of convertible note	$	16,875		$	6,750
Finance fee for warrants issued in connection with license agreement	$	-		$	37,800
Cancelled common stock	$	500,000		$	-

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

6

NATE’S FOOD CO.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

August 31, 2023

 (UNAUDITED)

Note 1 –Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-K, on September 13, 2023. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2023 as reported in Form 10-K, have been omitted.

Use of Estimates

The preparation of financial statements 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 revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on Nate’s Food Co.’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Nate’s Food Co.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all short-term marketable securities purchased with original maturities of three months or less to be cash equivalents.

Digital Currencies

We currently account for all digital currencies held as a result of these transactions as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. We have ownership of and control over our digital currencies and we may use third-party custodial services to secure it. The digital currencies are initially recorded at cost and are subsequently remeasured on the balance sheet date at cost, net of any impairment losses incurred since acquisition.

We determine the fair value of our digital currencies on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that we have determined is the principal market for such assets (Level 1 inputs). We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted prices on active exchanges, indicate that it is more likely than not that our digital currencies are impaired. In determining if an impairment has occurred, we consider the lowest market price of one unit of digital currency quoted on the active exchange since acquiring the digital currency. If the then current carrying value of a digital currency exceeds the fair value so determined, an impairment loss has occurred with respect to those digital currencies in the amount equal to the difference between their carrying values and the price determined.

7

Impairment losses are recognized within other income (expense) on the statements of operations in the period in which the impairment is identified. The impaired digital currencies are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains are not recorded until realized upon sale(s), at which point they are presented net of any impairment losses for the same digital assets held within other income (expense). In determining the gain to be recognized upon sale, we calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.

As of August 31, 2023, the market value of digital currencies was higher than the Company’s cost basis by $38, which the Company recognized the digital currency balance at cost basis. During the three months ended August 31, 2023, the Company recorded a gain on sale of digital currency of $133.

Fair Value of Financial Instruments

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value. The three tiers are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets, liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following table summarizes fair value measurements by level at August 31, 2023 and May 31, 2023, measured at fair value on a recurring basis:

August 31, 2023	Level 1		Level 2		Level 3		Total
Assets
Digital currency	$	72		-		-	$	72
Liabilities
Derivative liabilities		-		-	$	156,885	$	156,885
May 31, 2023	Level 1		Level 2		Level 3		Total
Assets
Digital currency	$	16,903		-		-	$	16,903
Liabilities
Derivative liabilities		-		-	$	153,849	$	153,849

Earnings per Share

The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for outstanding warrants and options and using the if-converted method for convertible debt and convertible preferred stock. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

8

For the three months ended August 31, 2023 and 2022, respectively, the following convertible notes and convertible preferred stock were potentially dilutive.

	Three Months Ended
	August 31,
	2023		2022
	(Shares)		(Shares)
Warrants		-		27,000,000
Convertible notes payable		1,838,380,545		111,412,336
Series B convertible preferred stock		150,000,000		150,000,000
Series C convertible preferred stock		16,500,000		16,500,000
Series D convertible preferred stock		90,000,000		90,000,000
Series E convertible preferred stock		149,894,910		149,895,000
		2,244,775,455		544,807,336

Potential dilution from the convertible preferred stock and warrant was not included in the calculation of the dilutive earnings per share calculation for the three months ended August 31,2023 and 2022.

Equipment

Bitcoin mining equipment is stated at cost less accumulated amortization.  Amortization is computed on the straight-line method over the useful life of four years and is included in the cost of revenue.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, ASC 606 includes provisions within a five-step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when, or as, an entity satisfies a performance obligation.

Our revenues currently consist of cryptocurrency mining revenues, which we began generating in September 2021. The Company earns its cryptocurrency mining revenues by providing transaction verification services within the digital currency networks of cryptocurrencies, for Bitcoin. The Company satisfies its performance obligation at the point in time that the Company is awarded a unit of digital currency through its participation in the applicable network and network participants benefit from the Company’s verification service. In consideration for these services, the Company receives Bitcoin, net of applicable network fees, which are recorded as revenue using the closing U.S. dollar price of Bitcoin on the date of receipt. Expenses associated with running the cryptocurrency mining operations, which are currently utilities, depreciation and monitoring services are recorded as cost of revenues.  During the three months ended August 31, 2023, and 2022, the Company generated Bitcoin mining revenue of $8,431and $5,203, respectively, with cost of revenue of $24,157 and $16,391, respectively.

There is currently no specific definitive guidance in GAAP or alternative accounting frameworks for the accounting for the production and mining of digital currencies and management has exercised significant judgment in determining appropriate accounting treatment for the recognition of revenue for mining of digital currencies. Management has examined various factors surrounding the substance of the Company’s operations and the guidance in ASC 606, including identifying the transaction price, when performance obligations are satisfied, and collectability is reasonably assured being the completion and addition of a block to a blockchain and the award of a unit of digital currency to the Company. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies which could result in a change in the Company’s financial statements.

9

Recently Issued Accounting Pronouncements

The Company has determined that there are no applicable recently issued accounting pronouncements that are expected to have a material impact on these financial statements.

Note 2 – Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses, and does not have an established source of revenue sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the succeeding paragraphs and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital.

Historically, it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

Note 3 – Related Party Transactions

Notes Payable – Related Party

On September 28, 2023, the Company entered into a promissory note agreement with a former officer to exchange the outstanding principal of $397,935 and accrued interest of 102,054 notes payable at May 31,2023 with following new terms and condition:

Principal	$	397,935
Accrued interest	$	102,054
Maturity date		September 28,2025
Interest rate		18%
Default rate		24%
Effective date of note		June 1,2023
Conversion right		At event of default
Conversion price		If no event default has occurred, the conversion price ix Fixed at $0.000025 per share

The new note shall replace any and all previous promissory notes and due between the Company and former officer at May 31, 2023 and any previous notes by signing the new note shall be considered null and void except for any payment made from June 1, 2023 through the date of new note (September 28, 2023).

During the three months ended August 31,2023, the former office paid operating expenses of $6,000 on behalf of the Company and recognized as a part of new note. During the three months ended August 31,2023 and 2022, the Company accrued interest of $18,578 and $3,249, respectively.

10

As of August 31,2023, and May 31,2023, the Company owned to a former officer a principal of $403,935 and $397,935 and accrued interest of $120,632 and $102,054, respectively.

Management Fees

During the three months ended August 31,2023 and 2022, the Company recognized $9,000 and $9,000 management fees for the Company’s officer, respectively. As of August 31, 2023, and May 31, 2023, the Company owed the Company’s officer for amount of $41,000 and $32,000, respectively.  

Consulting Fees

During the three months ended August 31,2023 and 2022, the Company paid $3,000 and $0 consulting fees to a former officer.

Note 4 – Convertible Notes

The Company had the following convertible notes payable as of August 31,2023 and May 31,2023:

	August 31,			May 31,
	2023			2023
Convertible note payable	$	254,693		$	311,818
Additions		-			-
Conversion		(16,875	)		(57,125	)
		237,818			254,693
Less: current portion of convertible notes payable		(237,818	)		(254,693	)
Long-term convertible notes payable	$	-		$	-

On October 13, 2016, the Company received financing from an unrelated party in the amount of $85,500 with $5,000 original issue discount and incurred $8,000 in financing costs. On December 29, 2017, the principal balance along with the related default penalties, accrued and unpaid interest, and the conversion rights were sold to another unrelated party. The original issue discount and financing costs were amortized over the original life of the note using the effective interest method. The $85,500 note bears 10% interest and matured on July 13, 2017. The note is currently in default and bears 18% interest rate while in default on the outstanding balance of $36,818 after $48,682 of conversions in prior years. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount into fully paid and non-assessable shares of common stock. The conversion price is the 45% discount to the lowest traded price during the previous 20 trading days to the date of a conversion notice. The Company may redeem the note at rates ranging from 125% to 150% depending on the redemption date. The note derivative is revalued at each period end with gains or losses included in the statement of operations (see Note 6 for details).

During the three months ended August 31,2023, and 2022, the Company recognized interest expenses of $1,670 and $1,670, respectively. As of August 31,2023, and May 31,2023, the Company had accrued interest of $49,469 and $47,799, respectively. As of August 31, 2023, and May 31, 2023, the principal balance was $36,818, respectively.

On October 14, 2021, the Company received financing from an unrelated party in the amount of $275,000 with $25,000 original issue discount and $9,500 in financing costs, for net proceeds to the Company of $240,500. The original issue discount and financing costs are being amortized over the original life of the note using the effective interest method. The $275,000 bears 10% interest and matures on October 14, 2022. The note is currently in default and bears 20% interest rate. The conversion price was initially set at $0.002 per share (Fixed Conversion Price) at any time after 180 days from the issue date, if an event of default, the conversion price shall be $0.001 per share. On October 14, 2021, the Company agreed, in connection with the authorization and issuance of convertible note of $275,000, to issue an additional 10,000,000 shares of common stock in accordance with the securities purchase agreement dated October 14, 2021, to the convertible note holder. The Company determined the fair value of 10,000,000 shares of common stock of $92,000 (according to market price on October 14, 2021) and shall amortize this cost over the life of the convertible note. On February 8, 2022, the Company issued 10,000,000 shares of common stock to note holder. On July 5,2022, the principal balance along with the related default penalties, accrued and unpaid interest, and the conversion rights were sold to another unrelated party.

11

During the three months ended August 31, 2023, and 2022, the Company converted the principal of $16,875 and $6,750 into 675,000,000 and 27,000,000 shares at $0.000025 and $0.00025 per share based on contract stock price re-set requirements.

On December 19, 2022, the Company’s Board of Directors approved the modification of the current conversion price of $0.00025 to $0.000025 per share.

During the three months ended August 31, 2023 and 2022, the Company recognized interest expenses of $10,501 and $6,902, an amortization of debt discount of $0 and $31,885, respectively.

As of August 31, 2023, and May 31, 2023, the Company had accrued interest of $68,526 and $58,025 and unamortized debt discount of $0 and $0, respectively. As of August 31,2023, and May 31, 2023, the principal balance was $201,000 and $217,875, respectively.

Note 5 – Derivative Liability

The Company analysed the variable discounted conversion options on its convertible note (Note 4) for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the embedded conversion option should be classified as a liability due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for warrants as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.

The following table summarizes the derivative liabilities included in the balance sheets at August 31, 2023 and May 31, 2023:

Balance - May 31, 2022	$	163,615
Gain on change in fair value of the derivative		(9,766	)
Balance - May 31, 2023	$	153,849
Loss on change in fair value of the derivative		3,036
Balance - August 31, 2023	$	156,885

The Company also recorded a loss of $3,036 and gain of $29,920 on change in fair value of the derivative during the three months ended August 31, 2023 and 2022, respectively.

As of August 31, 2023, and May 31,2023, the note was in default, therefore the Black-Scholes option-pricing model inputs was not used by the Company to value the derivative liability, as well as the determined value of the option liability at each measurement date.

12

Note 6 – Promissory Notes

The components of promissory notes payable as of August 31, 2023 and May 31, 2023 were as follows:

Issuance date	Principal Amount		Maturity date	Interest rate	August 31,2023		May 31,2023
January 17,2023	$	5,000	January 17.2025	2%	$	5,000	$	5,000
January 23,2023	$	5,500	January 23,2025	2%		5,500		5,500
January 23,2023	$	125,000	January 23,2025	2%		125,000		125,000
February 14,2023	$	10,000	January 23,2025	2%		10,000		10,000
April 7,2023	$	21,457	April 7,2025	10%		21,457		18,125
Total notes payable						166,957		163,625
Less: debt discount and deferred financing cost						(4,166)		(4,457)
Total notes payable						162,791		159,168
Current portion						-		-
Long-term portion					$	162,791	$	159,168

During the year ended May 31, 2023, the Company entered into four promissory notes agreements with a investor for $20,500 cash received and settlement of $125,000 due related to purchase of digital equipment. According to the terms and conditions of the agreement, in the event of default the interest rate shall increase to 5% and the lender has the right to convert the unpaid principal and interest into common stock at a conversion rate of $0.000025 per share.

On April 7, 2023, the Company entered into a promissory note agreement with an investor for the principal amount of $250,000, with net cash of $225,000 to be paid in one or more tranches. According to the terms and conditions of the agreement, in the event of default the interest rate shall increase to 24% and the lender has the right to convert the unpaid principal and interest into common stock at a conversion rate of $0.000025 per share.

During the year ended May 31, 2023, the Company received the amount of $18,125 with $1,812 original issue discount and $3,000 in financing costs for net proceeds to the Company of $13,313. During the three months ended August 31,2023, the Company received the amount of $3,332 with $332 original issue discount for net proceeds to the Company of $3,000. The original issue discount and financing costs are being amortized over the original life of the note using the effective interest method.

During the three months ended May 31, 2023, the Company recognized interest expense of $1,695 and amortization of debt discount of $623.

As of August 31, 2023, the outstanding balances of promissory notes, accrued interest and debt discount were $166,957, $3,134 and $4,466, respectively. As of May 31,2023, the outstanding balances of promissory notes, accrued interest and debt discount were $163,625, $1,439 and $4,457, respectively.

Note 7 – Loans Payable

On December 1, 2022, the Company obtained $1,885 loan, due on demand, free interest and unsecured. During the year ended May 31, 2023, the Company repaid $942. As of August 31, 2023, and May 31, 2023, the outstanding balance of the loan was $943.

13

Note 8 – Digital Currency

During the three months ended August 31, 2023 and 2022, the Company mined Bitcoin with a total aggregate value of $8,431 and 5,203, respectively. The Company has accounted for these coins as indefinite life intangible assets. The Company recorded the mining of the coins as revenue from digital currency mining in its result of operations, along with cost of sales (electricity, depreciation and other hosting fees) remitted to the co-location host in Bitcoin, and equipment lease costs. During the three months ended August 31,2023 and 2022, the Company recognized gain of $133 and loss of $5,742 on disposal of digital currency and impairment loss of $0 and $1,960, respectively. The Company’s digital currency asset consists of the following as of August 31, 2023 and 2022:

	Three Months Ended
	August 31,
Bitcoin Held	2023			2022
Opening balance	$	16,903		$	21,465
Additions earned		8,431			5,203
Sales		(5,866	)		-
Remittance as cost of operating expenses		(19,396	)		(7,641	)
Impairment		-			(1,960	)
Dispositions		-			(3,788	)
Ending balance	$	72		$	13,279

Note 9 – Equity

Series A Preferred Stock

The Company is authorized to issue 2,000,000 shares of series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series A Preferred Stock.  The Series A Preferred Stock initially had voting rights equal to 1,000 votes for each 1 share of common stock owned. On December 18, 2022, the Company’s Board of Directors approved an increase to the Series A voting rights equal to 20,000 votes for each 1 share of common stock owned, and resolved that each Series A Preferred Stock cannot convert into Common Stock unless it is approved by the Board of Directors

There were no issuances of the Series A Preferred Stock during the three months ended August 31, 2023 and 2022.

On December 19, 2022, the Company’s Board of Director approved the issuance of 1,000,000,000 shares of common stock to two its officers in exchange for 25,000 shares of Series A Preferred Stock.

As of August 31, 2023, and May 31, 2023, 1,915,153 shares of series A Preferred Stock were issued and outstanding, respectively.

Series B Convertible Preferred Stock

The Company is authorized to issue 150,000 shares of Series B Convertible Preferred Stock at a par value of $0.0001. The Series B Convertible Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock converts into common stock at a ratio of 1:1,000. However, the Series B Convertible Preferred Stock may not be converted for a period of 12 months from the date of issue.

There were no issuances of the Series B Convertible Preferred Stock during the three months ended August 31,2023 and 2022.

As of August 31,2023, and May 31,2023, 150,000 shares of Series B Convertible Preferred Stock were issued and outstanding.

Series C Convertible Preferred Stock

The Company is authorized to issue 250,000 shares of Series C Convertible Preferred Stock at a par value of $1.00. The Series C Convertible Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series C Convertible Preferred Stock. The Series C Convertible Preferred Stock can be converted to common stock, at a conversion rate of 66 common shares for each preferred stock.

14

There were no issuances of the Series C Convertible Preferred Stock during the three months ended August 31, 2023 and 2022.

As of August 31, 2023, and May 31, 2023, 250,000 shares of Series C Convertible Preferred Stock were issued and outstanding.

Series D Convertible Preferred Stock

The Company is authorized to issue 10,000,000 shares of Series D Convertible Preferred Stock at a par value of $0.0001. The Series D Convertible Preferred Stock is convertible at a rate of 1 share of Series D Convertible Preferred Stock for 15 shares of common stock.

There were no issuances of the Series D Convertible Preferred Stock during the three months ended August 31,2023 and 2022.

As of August 31, 2023, and May 31, 2022, 6,000,000 shares of Series D Convertible Preferred Stock were issued and outstanding.

Series E Convertible Preferred Stock

The Company is authorized to issue 15,000,000 shares of series E Convertible Preferred Stock at a par value of $0.0001. The Series E Convertible Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series E Convertible Preferred Stock. Beginning October 1, 2016, each share of Series E Convertible Preferred Stock is convertible into ten (10) shares of common stock. From October 1, 2016 to October 1, 2018, holders of Series E Convertible Preferred Stock may at any time convert to shares of common stock, thereafter, the Company may elect to convert any outstanding stock at any time without notice to the shareholders.

During the three months ended August 31, 2023, The Company cancelled 9 shares of Series E Convertible Preferred Stock which were issued a part of Series E Convertible Preferred Stock dividend that was payable on October 10, 2015. On October 4,2022, the Company’s board of directors determined that the shares were erroneously issued and should be cancelled.

There were no issuances of the Series E Convertible Preferred Stock during the three months ended August 31, 2023 and 2022.

As of August 31, 2023, and May 31, 2023, 14,989,491 and 14,989,500 shares of Series E Convertible Preferred Stock were issued and outstanding, respectively.

Common Stock

The Company is authorized to issue 6,500,000,000 shares of common stock at a par value of $0.001.

On December 19, 2022, the Company’s Board of Director approved the issuance of 1,000,000,000 shares of common stock to two its officers in exchange for 25,000 shares of Series A Preferred Stock.

During the three months ended August 31,2023 and 2022, the Company issued 675,000,000 and 27,000,000 shares on conversion of $16,875 and $6,750 of principal of a convertible note.

In July 2023, the Company’s officers and directors agreed to cancel one billion shares of their own issued and outstanding common stock reducing the number of common shares outstanding. On August 4, 2023, 500,000,000 shares of common stock owned by one director were cancelled.

As of August 31, 2023, and May 31, 2023, 3,383,024,616 and 3,208,024,616 shares of common stock were issued and outstanding, respectively.

15

Note 10 – Commitments

On July 8, 2022, the Company entered into an Exclusive Intellectual Property License Agreement (“License Agreement”) with Kenny B, LLC. (“Licensor”) for a period of 20 years and that may be extended for an additional 20 years at the mutual consent of both parties.

The Licensor is the exclusive owner of all the rights, title and interest in and to (i) the trademark of Sh’mallow (Serial Number 5302806), (ii) all rights in and to the name of Sh’mallow, and (iii) designs of Sh’mallow marshmallow topping product, and (iv) all common law and statuary rights in the foregoing (collectively, the “Property”). The Company obtained an exclusive license to use such Intellectual Property.

In conjunction with the License Agreement, the Company granted warrants to Licensor to acquire 27,000,000 shares of common stock of the Company at a price of $0.00025 per share for total value of $37,800 to be amortized over the life of the agreement on a straight-line basis, recorded as an intangible asset with the offset to additional paid in capital (Note 6). The Licensor had a right to exercise the warrants six months after the August 15, 2022, effective date of the License Agreement.

During the year ended May 31, 2023, the Company amortized $553 of license.

On January 2, 2023, the Company entered into a termination agreement with Licensor and both parties mutually terminated and cancelled the License Agreement date July 8,2022 and released each other from any and all claims, causes of action, demands and liabilities and obligations effective December 30,2022.

During the year ended May 31, 2023, pursuant to the termination agreement, the Company reversed and cancelled warrants of 27,000,000 shares of common stock, licenses of $37,800, royalty payable of $17,500 and $553 amortization of License.

Note 11 – Subsequent Events

Management has evaluated subsequent events through the date these financial statements were available to be issued.

Based on our evaluation no material events have occurred that require disclosure, except as follows:

(1) On July 11, 2023, the Company’s Board of Directors approved a quarterly dividend payment to its shareholders equal to $0.000002 from the Company’s Bitcoin mining. The record date is August 31, 2023, with an expected payment date of September 30, 2023. The dividend payment is subject to the Company’s corporation action being processed by FINRA. As of the date of filing these financial statements, the Company did not pay approved dividend.

(2) On September 19, 2023, the Company finalized an agreement with JP Energy Group. As an integral part of this transaction, all current members of the board of directors and officers will resign. Effective September 20, 2023, Marc Kassoff resigned from his position as an officer and director of the Company. Nate Steck will continue to serve as an officer and director, playing a pivotal role in facilitating the smooth transition between the Company and JP Energy Group and will resign upon closing on the agreement.

On May 31, 2023, JP Energy Partners entered into a contract for the supply of up to 600,000 metric tons of sugar to be delivered to China comprising of two shipments. Ther first shipment is to be up to 250,000 metric tons and the second shipment consists of up to 350,000 metric tons. The contract has a maximum payment of approximately $268,140,000 including all fees and discounts. It’s important to note that, to date, no shipments have taken place under this contract and JP energy Group is in the process of finalizing the bank financing for the transaction which is contingent to close on the transaction above.

As part of the overarching agreement, JP Energy Partners will be transferring the rights and obligations of this contract to JP Energy Group. A crucial condition for finalizing this agreement is the securing of the necessary financing agreements by JP Energy Group, which are a necessary step to fulfil the terms of the sugar contract mentioned above.

16

The agreement between Nate’s Food Co. and JP Energy Group will not close until the following conditions have been met:

1.	JP Energy Partners has transferred all rights to the sale of the sugar mentioned above to JP Energy Group, and
2.	JP Energy Group has secured the necessary financing for the sugar contract.

The Company currently has no information as to when, or if, those two conditions will be completed.

As part of the transaction listed above, the Company will issue 18,000,000 shares of Series A Preferred Stock and a change of control will occur upon the issuance of the 18,000,000 shares of Series A Preferred Stock.

On September 19, 2023, as part of the agreement, Marc Kassoff resigned as an officer and director which was effective September 20, 2023.

(3) During October 2023, the remaining balance of 500,000,000 shares of common stock related to another officer and director were cancelled.

17

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation

FORWARD-LOOKING STATEMENTS

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained herein involve risks and uncertainties, including statements as to:

· our future operating results;

· our business prospects;

· our contractual arrangements and relationships with third parties;

· the dependence of our future success on the general economy;

· our possible financings; and

· the adequacy of our cash resources and working capital.

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements, and which could cause actual results to differ materially from those anticipated as of the date of this report. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this report, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

General Overview

We were incorporated under the laws of the State of Colorado on January 12, 2000, under the name Capital Resources Alliance, Inc. At inception, we were a development stage company in the business of mining and exploration. On May 19, 2014, our company completed a reverse merger with Nate’s Pancakes, Inc., an Indiana company, with Nate’s Pancakes being the surviving entity. In May 2014, we changed our name from Capital Resource Alliance, Inc. to Nate’s Food Co.

In connection with the reverse merger, we became a food manufacturing and product company, and in May 2014, we executed a licensing agreement with Nate’s Pancakes to market and sell “Nate’s Homemade,” exclusively throughout the world.

Our Current Business

In General. Historically, our food development division has licensed, developed and manufactured food products. Our Board of Directors determined that we cease product manufacturing and development of new products for our food development division. We are, however, continually exploring options to license our developed products, a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. We are also exploring options on monetizing our proprietary blend of pancake and waffle dry mix. Our current product line consists of the original flavor of pancake and waffle mix and three additional flavors, Banana, Blueberry and Strawberry. The flavors can be found at www.natesfoodco.com/brands, however, are not currently for sale.

The Company is engaged in “Bitcoin Mining” – i.e. the process by which Bitcoins are created resulting in new blocks being added to the blockchain and new Bitcoins being issued to the miners. Bitcoin Miners engage in a set of prescribed complex mathematical calculations in order to add a block to the blockchain and thereby confirm cryptocurrency transactions included in that block’s data. Miners that are successful in adding a block to the blockchain are automatically awarded a fixed number of Bitcoins for their effort. The Company will only mine Bitcoin.

18

Our Food Products

Our food products production has been halted and we are focused on licensing our developed products consisting of a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. Our current product is an original flavor of pancake and waffle batter and we have developed three flavors for our pancake and waffle mix. Once we have resumed production, we plan to continue to expand into other baked goods and other non-breakfast areas.

Food Manufacturing and Distribution

We have not entered into any agreements with a third-party manufacturer. We have not entered into any agreements with an outside distributor.

Our Bitcoin Mining Business

The Company is engaged in “Bitcoin Mining” – i.e., the process by which Bitcoins are created resulting in new blocks being added to the blockchain and new Bitcoins being issued to the miners. The Company has acquired ASIC (application-specific integrated circuit) computers - computers specifically designed for cryptocurrency mining - that are currently mining Bitcoin. The Bitcoin Mining equipment is hosted by 3rd party datacenters or farms (often referred to as a “Co-Location”) that power and operate our Bitcoin Mining equipment for a fee. We generate revenues through receiving Bitcoin from our Bitcoin Mining equipment.

Current Status

We have determined to continue our Bitcoin mining operations as a hedge against inflation and as a means to bolster our balance sheet through the accumulation of Bitcoin funds in the coming financial periods. Our management hopes that the consistent additional cash inflows from conversion of mined Bitcoin into fiat currency will permit our company to develop more products and expand our product line.

We currently own thirty-one Bitcoin computers, or miners, in operation at a co-location facility located in the State of Kentucky. We pay electricity, hosting and maintenance charges billed to us by our co-location facility provider monthly, we receive earned   Bitcoin reports each day that we earn   Bitcoin from the mining operations of our   Bitcoin minders.  

Results of Operations

The following summary of our results of operations should be read in conjunction with our unaudited condensed financial statements for the three months ended August 31,2023, and 2022, which are included herein.

Our operating results for the three months ended August 31,2023 and 2022, and the changes between those periods for the respective items are summarized as follows:

Three Months Ended August 31,2023, compared to the Three Months Ended August 31, 2022.

	Three Months Ended
	August 31,
	2023			2022			Change
Revenue	$	8,431		$	5,203		$	3,228
Cost of revenue		24,157			16,391			7,766
Gross loss		(15,726	)		(11,188	)		(4,538	)
Operating expenses		(24,373	)		(28,478	)		4,105
Operating loss		(40,099	)		(39,666	)		(433	)
(Loss) gain on change in fair market value of derivative		(3,036	)		29,920			(32,956	)
Gain on settlement of debts		168			-			168
Interest and discount amortization expense		(33,067	)		(43,789	)		10,722
Gain (loss) on disposal of digital currency		133			(5,742	)		5,875
Impairment loss on digital currency		-			(1,960	)		1,960
Net loss	$	(75,901	)	$	(61,237	)	$	(14,664	)

19

Revenue

Our Company generated $8,431 and $5,203, revenue from digital currency mining for the three months ended August 31,2023 and 2022, respectively. The Company commenced the mining of Bitcoin in September 2021.

Cost of Revenue

The cost of digital currency mining revenue was $24,157 and $16,391 for the three months ended August 31,2023 and 2022, respectively. Cost of revenue consists of depreciation, electricity and other co-location hosting fees, which are remitted in Bitcoin and cash payments for equipment leases.

Operating Expenses

During the three months ended August 31, 2023, we incurred general and administrative expenses of $24,373 compared to $28,478 incurred during the three months ended August 31, 2022. The reduction in operating expenses was predominantly from an increase in professional and other fees related to our reporting requirements of $6,183 offset by a decrease in administrative expenses of $10,288.

Other income (expense)

During the three months ended August 31,2023, we had a loss on change in fair market value of derivatives of $3,036, interest and discount amortization expense of $33,067,gain on sale of digital currency of $133 and gain on settlement of debts of $168, compared to a gain on change fair market value of derivatives of $29,920, interest and discount amortization expense of $43,789, loss on sale of digital currency of $5,742 and impairment loss on digital currency $1,960 during the three months ended August 31, 2022.

Liquidity and Capital Resources

Working Capital

	August 31,			May 31,
	2023			2023			Change
Cash	$	3,734		$	930		$	2,804
Current Assets	$	3,734		$	930		$	2,804
Current Liabilities	$	723,738		$	1,094,976		$	(371,238	)
Stockholders’ Deficit	$	(1,172,143	)	$	(1,113,117	)	$	(59,026	)

20

Cash Flows

	Three Months Ended
	August 31,
	2023			2022			Change
Cash Flows Used in Operating Activities	$	(6,196	)	$	(20,278	)	$	14,082
Cash Flows Used in Investing Activities		-			-		$	-
Cash Flows Provided by Financing Activities		9,000			7,000		$	2,000
Net change in Cash During Period	$	2,804		$	(13,278	)	$	16,082

As of August 31, 2023, our Company had $3,734 in cash. In the management’s opinion, our Company’s cash position is insufficient to maintain our operations at the current level for the next 12 months. Any expansion may cause our company to require additional capital until such expansion begins generating revenue. It is anticipated that the raising of additional funds will principally be through the sales of our securities.

As of August 31, 2023, our total current liabilities were $723,738 which consisted of $41,000 in accrued management fees – related party, $120,632 in accrued interest-related party, $121,129 in accrued interest, $156,885 in derivative liability, $45,331 in accounts payable, $943 in loans payable and $237,818 in convertible notes as compared to May 31, 2023, with total current liabilities of $1,094,976 which consisted of $153,849 in derivative liability, $397,935 in notes payable–related parties, $102,054 accrued interest-related party, $107,263 in accrued interest, $46,239 in accounts payable, $254,693 in convertible notes, $943 in loans payable and $32,000 in management fess- related party.

Operating Activities

Net cash used in operating activities was $6,196 for the three months ended August 31,2023, compared with net cash used in operating activities of $20,278 in the same period in 2022. For the three months ended August 31,2023, net cash flows used in operating activities consisted of a net loss of $75,901, increased by a gain on settlement of debt of $168, realized gain on sale of digital currency of $133 and reduced by amortization of discount on convertible note of $623, amortization of Crypto equipment of $8,679, gain on change in fair value of derivative liability of $3,036 and a net change in working capital of $57,668.

For the three months ended August 31, 2022, net cash flows used in operating activities consisted of a net loss of $61,237, increased by a gain on change in fair value of derivative liability of $29,920 and reduced by amortization of discount on convertible note of $31,885, amortization of license of $83, amortization of Crypto equipment of $803, impairment loss on digital currency of $1,960, realized gain on sale of digital currency of $5,742 and a net change in working capital of $30,406.

Investing Activities

Our Company did not have any investing activities during the three months ended August 31,2023 and 2022.

Financing Activities

Net Cash provided by financing activities was $9,000 for the three months ended August 31,2023, compared with net cash provided by financing activities of $7,000, for the same period in 2022.

During the three months ended August 31, 2023, net cash provided by financing activities were $3,000 from promissory notes payable, $6,000 from related party note payable, compared with $9,500 from related party note payable and reduced by repayment of related party loan of $2,500 for the same period in 2022.

Off-Balance Sheet Arrangements

We have 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 stockholders.

21

Critical Accounting Policies

We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact on our business operations and any associated risks related to these policies are discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”). We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

The material estimates for our Company are that of derivative liabilities and income tax valuation allowance recorded for deferred tax assets. The estimated sensitivity to change is related to the various variables of the Black-Scholes option pricing model stated below. The specific quantitative variables are included in the notes to the consolidated financial statements. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the expected life, dividend yield, expected volatility, and risk-free interest rate weighted-average assumptions used for options and warrants granted. Expected volatility for 2023 and 2022 was estimated using our common stock for convertible notes and warrants. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of options is based on the life of the instrument on grant date. 

Digital Currencies

Digital currencies consist of Bitcoin and are included in intangible assets in the balance sheet. Digital currencies are recorded at cost less impairment. The Company compares the book value of digital currencies held to the prevailing market price at each reporting period. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Realized gains or losses on the sale of digital currencies are included in other income (expense) in the statements of operations.

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for treatment as a derivative under ASC 815 “Derivatives and Hedging”, since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

22

The Black-Scholes option valuation model was used to estimate the fair value of the conversion options. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time, of other comparative securities, equal to the weighted average life of the options.

Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument.

Also, refer to Note 1 - Significant Accounting Policies and Note 5 - Derivative Liabilities in the unaudited condensed financial statements that are included in this Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company,” we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of August 31, 2023. This evaluation was carried out under supervision and with the participation of our chief executive officer and chief financial officer. Based upon that evaluation, our chief executive officer and chief financial officer concluded that, as of August 31, 2023, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of August 31, 2023, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended August 31,2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

23

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

As a “smaller reporting company,” we are not required to provide the information required by this Item.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

24

Item 6. Exhibits

The following exhibits are included as part of this report:

Exhibit Number	Description
(31)	Rule 13a-14(a)/15d-14(a) Certification
31.1	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer,
31.2	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer
(32)	Section 1350 Certification
32.1	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer
32.2	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer
101*	Inline XBRL Document Set for the condensed financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104*	Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

25

SIGNATURES

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.

	Nate’s Food Co.
	(Registrant)
Dated: October 16, 2023	/s/ Nate Steck
	Nate Steck
	President, Chief Executive Officer and Chief Financial Officer

26