10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

[ ]

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

For the transition period __________ to __________

Commission File Number: 333-198435

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		46-3892319
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)

3550 Lenox Road NE. 21st Floor Atlanta GA 30326

(Address and telephone number of principal executive offices)

Mr. Delray Wannemacher, CEO, (833) 682-2428

3550 Lenox Road NE. 21st Floor Atlanta GA 30326

(Name, address and telephone number of agent for service)

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 [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ] (Do not check if a smaller reporting company)	Smaller reporting company	[X]
		Emerging growth company	[X]

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

As of November 14, 2019, there were outstanding 5,601,217 shares of our common stock, par value $0.0001 per share, 7,000,000 shares of the Company’s Class A Super Voting preferred stock, par value $0.001 per share, and 7,000,000 shares of the Company’s Class C preferred stock, par value $0.001 per share

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC.

FORM 10-Q for the Quarter Ended September 30, 2019

INDEX

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4.	Controls and Procedures	19

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	19

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	20

Item 4.	Mine Safety Disclosures	20

Item 5.	Other Information	20

Item 6.	Exhibits	20

Signatures		21

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Blockchain Holdings Capital Ventures, Inc. (Formerly Southeastern Holdings, Inc.)

A Delaware Corporation

Financial Statements

As of September 30, 2019 (Unaudited) and for the Three and Nine months Then Ended (Unaudited)

Blockchain Holdings Capital Ventures, Inc. (Formerly Southeastern Holdings, Inc.)

TABLE OF CONTENTS

	Page
Condensed Financial Statements as of September 30, 2019 and December 31, 2018 and for the Three and Nine months then Ended (Unaudited):
Balance Sheets (Unaudited)	5
Statements of Operations (Unaudited)	6
Statements of Cash Flows (Unaudited)	7
Statement of Stockholders’ Deficiency – for the Nine months Ended September 30, 2019 (Unaudited)	8
Statement of Stockholders’ Deficiency – for the Nine months Ended September 30, 2018 (Unaudited)	9
Notes to Financial Statements (Unaudited)	10

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

BALANCE SHEETS

	As of
	September 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	489		$	6,293
Total Current Assets		489			6,293

TOTAL ASSETS	$	489		$	6,293

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable	$	193,865		$	109,572
Convertible notes payable, short-term		100,000			-
Accrued compensation - related party		35,000			82,500
Advances from related parties		18,426			-
Accrued expenses		7,079			1,914
Total Current Liabilities		354,370			193,986

Total Liabilities		354,370			193,986

Commitments and Contingencies (Note 7)		-			-

Stockholders’ Deficiency:
Class A super majority voting preferred stock, $0.001 par value; 10,000,000 shares authorized, 7,000,000 issued and outstanding with liquidation preference of $26,317 as of each, September 30, 2019 and December 31, 2018.		7,000			26,317
Class C convertible preferred non-voting stock, $0.001 par value, 10,000,000 shares authorized, 7,000,000 issued and outstanding with liquidation preference of $3,500 as of each, September 30, 2019 and December 31, 2018.		7,000			3,500
Common stock, $0.0001 par value; 150,000,000 shares authorized, 5,601,217 and 4,386,217 issued and outstanding as of September 30, 2019 and December 31, 2018, respectively.		560			438
Additional paid-in capital		55,817			40,000
Accumulated deficit		(424,258	)		(257,948	)
Total Stockholders’ Deficiency		(353,881	)		(187,693	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	489		$	6,293

See accompanying notes, which are an integral part of these financial statements.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

STATEMENTS OF OPERATIONS

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine months Ended September 30, 2019			Period from February 5, 2018 (inception) Through September 30, 2018
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Equipment sales - related party	$	-		$	-		$	-		$	153,064
Consulting and management fee revenue - related party		-			-			-			18,954
Equipment sales		-			-			-			69,060
Consulting and management fee revenue		-			-			-			44,380
Mining commission revenue - related party		-			745			-			19,892
Total Revenue		-			745			-			305,350

Cost of goods sold - related party		-			(69	)		-			(159,450	)
Cost of goods sold		-			-			-			(71,822	)
Total Cost of Goods Sold		-			(69	)		-			(231,272	)

Gross Margin		-			676			-			74,078

Operating Expenses:
Sales and marketing		15			-			13,385			31,945
General and administrative		65,051			32,464			142,072			37,166
Total Operating Expenses		65,066			32,464			155,457			69,111

Income/(Loss) from operations		(65,066	)		(31,788	)		(155,457	)		4,967

Other Income and Expense
Interest expense		(6,359	)		-			(10,853	)		-
Impairment of long-lived assets		-			(26,550	)		-			(26,550	)
Total Other Income (Expense)		(6,359	)		(26,550	)		(10,853	)		(26,550	)

Net Income/(Loss)	$	(71,425	)	$	(58,338	)	$	(166,310	)	$	(21,583	)

Net Income/(Loss) per share (basic and diluted)	$	(0.01	)	$	(0.02	)	$	(0.03	)	$	(0.01	)

Weighted average number of common shares outstanding (basic and diluted)		5,559,642			3,806,613			5,270,594			4,159,186

See accompanying notes, which are an integral part of these financial statements.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

STATEMENTS OF CASH FLOWS

	Nine months Ended September 30, 2019			Period from February 5, 2018 (inception) Through September 30, 2018
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net Income/(Loss)	$	(166,310	)	$	(21,583	)
Adjustments to reconcile net income/(loss) to net cash (used for) operating activities:
Stock-based compensation		122			-
Impairment of long-lived assets		-			26,550
Changes in operating assets and liabilities:
Change in accounts payable		84,293			-
Change in accrued compensation - related party		(47,500	)		-
Change in accrued expenses		5,165			-
Net Cash Provided by/(Used in) Operating Activities		(124,230	)		4,967

Cash Flows from Investing Activities
Purchase of property and equipment		-			(26,550	)
Net Cash Used in Investing Activities		-			(26,550	)

Cash Flows from Financing Activities
Proceeds from issuance of short-term convertible debt		100,000			-
Advances from related parties		18,426			-
Sale of common stock		-			40,000
Net Cash Provided by Financing Activities		118,426			40,000

Net Change In Cash		(5,804	)		18,417

Cash at Beginning of Period		6,293			-
Cash at End of Period	$	489		$	18,417

Supplemental Disclosure of Cash Flow Information:
Accounts payable and accrued liabilities assumed in connection with reverse acquisition	$	-		$	74,434

See accompanying notes, which are an integral part of these financial statements.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

STATEMENT OF STOCKHOLDERS’ DEFICIENCY

For the Nine months Ended September 30, 2019 (Unaudited)

	Common Stock						Class A Preferred					Class C Convertible Preferred				Additional
	Shares															Paid-in		Accumulated			Stockholders’
	Pre-Split		Post-Split		Amount		Shares		Amount			Shares		Amount		Capital		Deficit			Deficiency

Balance, December 31, 2018		438,621,667		4,386,217	$	438		7,000,000	$	26,317			7,000,000	$	3,500	$	40,000	$	(257,948	)	$	(187,693	)
Issuance of common stock for compensation		121,500,000		1,215,000		122											-					122
Reclassification allocating preferred stock value between par value and additional paid-in capital										(19,317	)				3,500		15,817					-
Net loss																			(166,310	)		(166,310	)
Balance, September 30, 2019		560,121,667		5,601,217	$	560		7,000,000	$	7,000			7,000,000	$	7,000	$	55,817	$	(424,258	)	$	(353,881	)

See accompanying notes, which are an integral part of these financial statements.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

STATEMENT OF STOCKHOLDERS’ DEFICIENCY

For the Nine months Ended September 30, 2018 (Unaudited)

	Common Stock						Class A Preferred						Class C Convertible Preferred				Additional
	Shares																Paid-in			Accumulated			Stockholders’
	Pre-Split		Post-Split		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Deficiency

Balance, December 31, 2017		40,000,000		400,000	$	40		10,000,000		$	1,000			-	$	-	$	4,761		$	(49,259	)	$	(43,458	)
Issuance of common stock for compensation (pre- reverse recapitalization)		125,000		1,250		-												-						-
Issuance of common stock to satisfy debt (pre-reverse recapitalization)		98,230,000		982,300		98																		98
Recapitalization, August 23, 2018		300,000,000		3,000,000		300		(10,000,000	)		(1,000	)						(81,444	)		49,259			(32,885	)
Sale of common stock		266,667		2,667		-												40,000						40,000
Net loss																					(21,583	)		(21,583	)
Balance, September 30, 2018		438,621,667		4,386,217	$	438		-		$	-			-	$	-	$	(36,683	)	$	(21,583	)	$	(57,828	)

See accompanying notes, which are an integral part of these financial statements.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2019 (Unaudited) and for the Three and Nine months then Ended (Unaudited)

NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (the “Company”), formerly Southeastern Holdings, Inc. (formerly Safe Lane Systems, Inc.) was incorporated in the State of Colorado on September 10, 2013. Safe Lane Systems, Inc. redomiciled to become a Delaware holding corporation in September of 2016. On September 22, 2016, Safe Lane Systems, Inc. formed two wholly owned subsidiaries, SLS Industrial, Inc and Southeastern Holdings, Inc. (both Delaware corporations) and on September 30, 2016 completed a merger and reorganization in which Southeastern Holdings, Inc. (now Blockchain Holdings Capital Ventures, Inc.) became the holding company. On December 1, 2016, the Company spun off its wholly owned subsidiary, SLS Industrial, Inc., along with its assets and liabilities, leaving Southeastern Holdings, Inc. as the only surviving entity.

On August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”) pursuant to which the Company purchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 (equivalent to 3,000,000 after the reverse split) shares of its common stock, par value $.0001 to the members of Blockchain in exchange for the assets of Blockchain.

On August 30, 2018 the Company changed its name to Blockchain Holdings Capital Ventures, Inc.

Business description

Blockchain Holdings Capital Ventures, Inc. is a holding company with a foundation on building out a network of next generation, decentralized data centers in support of the rapid growth driven by advanced computing technologies, including blockchain. Centralized infrastructure facilities servicing multiple geographical areas encounter many issues such as data congestion and weak network connections. To address this, data processing is moving closer to the customer. BHCV offers low-cost, secure colocation and private data hosting to meet this demand for Edge and micro data centers. Technologies that are driving the movement range from cloud or information services, communications, networking, blockchain mining, disaster recovery solutions, AI, IoT, Big data, rendering, 5G, retail, healthcare, financial services, Smart Cities and self-driving cars. BHCV’s data centers will generate revenue immediately after being deployed with a blockchain mining solution. These will be strategically placed to support both Edge customers and blockchain mining simultaneously. The modular design and ability to add additional data centers as needed, preserves up front capital allowing for rapid deployment and scalability as business demand increases.

After further evaluation of the market the Company has made the decision to lease properties for the data center deployment rather than purchase at this time.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the interim reporting 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 latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the 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.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents and Concentration of Cash Balance

The Company considers all highly liquid securities with an original maturity of less than three months to be cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits. As of September 30, 2019 and December 31, 2018, the Company’s cash balances did not exceed federally insured limits.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2019 (Unaudited) and for the Three and Nine months then Ended (Unaudited)

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities inactive markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the balance sheets approximate their fair value.

Revenue Recognition

The Company recognizes revenue under ASC 606, using the following five-step model, which requires that the Company: (1) identify a contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to performance obligations and (5) recognize revenue as performance obligations are satisfied. The Company’s revenue streams historically consisted of three components:

	1.	Equipment sales – The Company purchases and resells equipment, recognizing the equipment’s original costs and costs to deliver such to the customer as costs of goods sold.
	2.	Consulting and management fees – These fees consist of various services provided to companies entering the blockchain space and range from equipment setup to facility management to general consulting.
	3.	Coin mining commissions – On an ongoing basis, the Company collects a 5% commission on coins processed by its management clients.

While the Company generated early revenue from the aforementioned sources, the Company has shifted its focus to finding, building, vetting and acquiring assets to support computing demands including the blockchain space and is not currently pursuing operations that historically have generated revenue. There can be no assurances that these efforts will generate future revenue.

Stock-Based Compensation

The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model.

Stock compensation expense for stock options is recognized over the vesting period of the award or expensed immediately when stock or options are awarded for previous or current service without further recourse.

In February and March 2019, the Company granted advisors and consultants 915,000 shares of common stock in connection with services provided. 875,000 of these shares vested immediately, and 40,000 vested in June 2019. In April and May 2019, the Company issued 250,000 fully-vested shares of common stock to advisors and consultants in connection for services provided. In August 2019, the Company issued 50,000 shares of common stock to an advisor for services rendered. The Company recognized stock-based compensation expense of $5 and $122 during the three and nine months ended September 30, 2019.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2019 (Unaudited) and for the Three and Nine months then Ended (Unaudited)

Income Taxes

The Company is subject to taxation in various jurisdictions and may be subject to examination by various authorities.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns.

NOTE 3: GOING CONCERN

As shown in the accompanying financial statements as of September 30, 2019, the Company had $489 of cash, as compared to total current liabilities of $354,370, has incurred substantial operating losses, and had an accumulated deficit of $424,258. Furthermore, the Company’s revenue history has been limited and unstable, and there can be no assurances of future revenues.

Given these factors, the Company is dependent on financing from outside parties, and management intends to pursue outside capital through debt and equity vehicles. There is no assurance that these efforts will materialize or be successful or sufficient to fund operations and meet obligations as they come due.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

NOTE 4: STOCKHOLDERS’ DEFICIENCY

The Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class A Preferred Super Majority Voting Stock (“Class A”). The Class A shares have the right to vote upon matters submitted to the holders of common stock, par value $0.0001 of the Company. Class A shares have a vote equal to the number of shares of common stock of the Company which would give the holders of the Class A shares a vote equal to sixty percent (60%) of the common stock. This vote shall be exercised pro-rata by the holders of the Class A. The Company shall have the right to redeem, in its sole and absolute discretion, at any time one (1) year after the date of issuance of such Class A shares, all or any portion of the shares of Class A at a price of one cent ($0.01) per share. On October 4, 2018, the Company issued a total of 7,000,000 Class A shares to its CEO and COO as stock-based compensation for services rendered.

The Company has not currently authorized a Class B designation of Preferred Stock.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2019 (Unaudited) and for the Three and Nine months then Ended (Unaudited)

The Company has designated ten million (10,000,000) shares of its preferred stock, par value $0.001 as Class C Convertible Preferred Non-Voting Stock (“Class C”). Each share of Class C shall be convertible into five (5) shares of common stock. The holders of Class C shall be entitled to receive the same dividend as the holders of the common stock and such dividend shall be paid pro rata per share on a fully converted basis. The holders of Class C shall have piggyback registration rights. The Company shall have the right to redeem, in its sole and absolute discretion, at any time after five (5) years, all or any portion of the shares of Class C at a price of five dollars ($5.00) per share. The Class C shares shall be considered to have a junior liquidation preference to Class A shares and a senior dividend preference to Class A shares. On October 4, 2018, the Company issued a total of 7,000,000 Class C shares to its CEO and COO as stock-based compensation for services rendered. Subsequently, in April 2019, the Company filed an amended and restated certificate of designation, which restricts the CEO and COO from converting the 7,000,000 shares into common stock for 36 months from the issuance date.

On September 30, 2019, the Company re-allocated its preferred stock value between par value and additional paid-in capital, resulting in a net reclassification of $15,817 from Class A and Class C preferred stock to additional paid-in capital during the three months ended September 30, 2019.

As of September 30, 2019, the Company was authorized to issue 150,000,000 shares of common stock. All common stock shares have full dividend and voting rights. However, it is not anticipated that the Company will be declaring dividends in the foreseeable future.

As of September 30, 2019, the Company had 5,601,217 common shares outstanding.

As of September 30, 2019, 7,000,000 shares of Class A Preferred Stock and 7,000,000 shares of Class C Preferred Stock were issued and outstanding.

NOTE 5: RELATED PARTY TRANSACTIONS

As of September 30, 2019 and December 31, 2018, accrued consulting fees due to the CEO and COO totaled $35,000 and $82,500, respectively. During the nine months ended September 30, 2019, the Company paid $37,500 and $25,000 to entities owned by the CEO and COO, respectively, as payment for $62,500 of the accrued consulting fees.

The Company does not currently have consulting or employment agreements with these individuals, and as a result, these fees may fluctuate from time to time. While the Company believes these individuals were appropriately classified as contractors and has accordingly neither paid nor accrued payroll taxes, these payments may result in future tax liabilities should the Internal Revenue Service deem these individuals to be employees.

During the nine months ended September 30, 2019, the Company’s CEO advanced $9,656, and the COO advanced $8,770 to fund operations. These advances bear no interest, are unsecured, and are due on demand.

During the period from February 5, 2018 (Inception) through September 30, 2018, The Company paid out an estimated $474 in cryptocurrency as commissions to its CEO and COO from the Company’s mining operations and included this in sales and marketing expense. These commissions are included in sales and marketing expense on the statement of operations.

During the period from February 5, 2018 (Inception) through September 30, 2018, the Company’s revenues and costs of goods sold included the following related party transactions:

	Management and Consulting Fees		Equipment Sales			Mining Commissions
Customer	February 5, 2018 (Inception) through September 30, 2018		February 5, 2018 (Inception) through September 30, 2018			February 5, 2018 (Inception) through September 30, 2018
ChineseInvestors.com, Inc. (1)	$	18,954	$	141,263		$	-
Paul Dickman (2)		-		6,450			-
Delray Wannemacher (3)		-		2,391			-
Total related party revenue	$	18,954	$	150,104		$	-
Cost of goods sold		-		(159,450	)		-
Gross margin	$	18,954	$	(9,346	)	$	-

(1) Paul Dickman, the Company’s former CEO, is the CFO of ChineseInvestors.com, Inc. and is therefore deemed to exercise significant influence.

(2) Paul Dickman is the Company’s former CEO.

(3) Delray Wannemacher is the Company’s current CEO.

BLOCKCHAIN HOLDINGS CAPITAL VENTURES, INC. (Formerly Southeastern Holdings, Inc.)

NOTES TO FINANCIAL STATEMENTS

As of September 30, 2019 (Unaudited) and for the Three and Nine months then Ended (Unaudited)

NOTE 6: CONVERTIBLE NOTES

In May 2019, the Company issued short-term convertible notes for total proceeds of $100,000. These notes mature one year from execution and accrue interest at a rate of 10% per annum. Conversion terms call for conversion of principal and accrued interest at 70% of the stock price upon closing any offering resulting in aggregate financing of at least $1,000,000.

The Company evaluated the convertible notes in light of ASC 470 and determined that a beneficial conversion feature exists. However, given the lack of a market for the Company’s stock, the Company concluded that such a feature would be trivial in value and allocated the full principal amount to the convertible note liability.

During the nine months ended September 30, 2019, the Company recorded interest expense of $3,842, resulting in accrued interest of $3,842 as of September 30, 2019.

NOTE 7: CONCENTRATIONS, COMMITMENTS AND CONTINGENCIES

During the period from February 5, 2018 (Inception) through September 30, 2018, the Company identified a 57% concentration in overall revenue from one customer, which concentration it deemed significant. The Company identified no significant concentrations for the three months ended September 30, 2019.

NOTE 8: RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company has adopted this accounting policy on January 1, 2019 and has determined that it currently does not impact the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as “believes”, “expects”, “anticipates”, “intends”, “plans”, “estimates”, “should”, “likely” or similar expressions, indicates a forward-looking statement. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.

The identification in this report of factors that may affect our future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein.

General

On August 23, 2018, the Company entered into a Bill of Sale and Assignment and Assumption Agreement with Blockchain Holdings, LLC (“Blockchain”) pursuant to which the Company purchased all of the assets of Blockchain which are used in the business of sourcing of blockchain mining equipment from various suppliers for their customers and also providing management of the equipment hosted, mining pools and tech work on such equipment. The Company issued 300,000,000 shares of its common stock, par value $.0001 valued at $300,000 to the members of Blockchain in exchange for the assets of Blockchain.

The Company has accounted for this transaction as a reverse recapitalization under ASC 805, under which the operating entity, Blockchain Holdings, LLC, adopted the assets, liabilities and equity structure of Blockchain Holdings Capital Ventures, Inc. on August 23, 2018, while retaining its historical activity.

On August 30, 2018 the Company changed its name to Blockchain Holdings Capital Ventures, Inc.

After further evaluation of the market the Company has made the decision to lease properties for the data center deployment rather than purchase at this time.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the above conditions raise substantial doubt about the Company’s ability to do so. New business opportunities may never emerge, and we may not be able to sufficiently fund the pursuit of new business opportunities should they arise.

As of September 30, 2019, we had $489 in cash on hand. Our current monthly cash burn rate is approximately $35,000, and it is expected that burn rate will continue and is expected to continue at $35,000 until significant additional capital is raised and our marketing plan is executed. Our trade creditors may call debts at any time, and our cash reserves would not be sufficient to satisfy all balances. We are currently dependent on minimal expenses to be covered by a loan or other cash infusion from the Company’s CEO and Director Delray Wannemacher, and COO and Director, Daniel Wong. There is no guarantee that this cash infusion will continue to be made.

Operating results for the three months ended September 30, 2019 and 2018:

For the three months ended September 30, 2019, the Company generated revenues of $0 from operations, compared to $745 for the three months ended September 30, 2018, a decrease of $745 or 100%. The decrease in revenues were a result of isolated non-recurring sales during the period and a subsequent shift in the Company’s business plans.

For the three months ended September 30, 2019, costs of net revenues were $0, compared to $69 for the three months ended September 30, 2018, a change of $69 or 100%. The change in costs was directly attributable to a lack of revenues for the three months ended September 30, 2019 and direct costs associated with revenues during the three months ended September 30, 2018.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross margin decreased from $676 or 91% of revenue, for the three months ended September 30, 2018 to $0, or 0% of revenue for the three months ended September 30, 2019.

For the three months ended September 30, 2019, selling, general and administrative expenses were $65,066, compared to $32,464 during the three months ended September 30, 2018, an increase of $32,602, or 100%. The increase in these expenses are attributable to increased legal, accounting and other professional fees.

During the three months ended September 30, 2019, the Company recognized $0 of impairment expense and $26,550 during the three months ended September 30, 2018, as a result of equipment that was deemed worthless.

During the three months ended September 30, 2019, the Company recognized $6,359 of interest expense, as compared to $0 for the three months ended September 30, 2018. The increase of $6,359 (or 100%) is attributable to the accrual of interest on convertible debt and certain balances due to our vendors.

As a result of the changes in revenues, costs and expenses, the Company incurred a net loss of $71,425 for the three months ended September 30, 2019, compared to a net loss of $58,338 for the three months ended September 30, 2018, a change of $13,087, or 22%.

The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans. Furthermore, the Company’s ability to continue to fund operating expenses will depend on its ability to raise capital. There can be no assurance that the Company will be successful in doing so.

Operating results for the nine months ended September 30, 2019 and for the period from February 5, 2018 (Inception) through September 30, 2018:

For the nine months ended September 30, 2019, the Company generated revenues of $0 from operations, compared to $305,350 for the period from February 5, 2018 (Inception) through September 30, 2018, a decrease of $305,350 or 100%. The decrease in revenues were a result of isolated non-recurring sales during the period and a subsequent shift in the Company’s business plans.

For the nine months ended September 30, 2019, costs of net revenues were $0, compared to $231,272 for the period from February 5, 2018 (Inception) through September 30, 2018, a decrease of $231,272 or 100%. The decrease in costs was directly attributable to a lack of revenues for the nine months ended September 30, 2019.

As a result of the changes in revenues and cost of net revenues discussed above, the Company’s gross profit decreased from $74,078, or 24% of revenue, for the period from February 5, 2018 (Inception) through September 30, 2018 to $0, or 0% of revenue for the nine months ended September 30, 2019.

For the nine months ended September 30, 2019, selling, general and administrative expenses were $155,457, compared to $69,111 during the period from February 5, 2018 (Inception) through September 30, 2018, an increase of $86,346, or 125%. The increase in these expenses are attributable to increased legal, accounting and other professional fees.

During the nine months ended September 30, 2019, the Company recognized $0 of impairment expense and $26,550 during the period from February 5, 2018 (Inception) through September 30, 2018, as a result of equipment that was deemed worthless.

During the nine months ended September 30, 2019, the Company recognized $10,853 of interest expense, as compared to $0 for the period from February 5, 2018 (Inception) through September 30, 2018. The increase of $10,853 (or 100%) is attributable to the accrual of interest on convertible debt and certain balances due to our vendors.

As a result of the changes in revenues, costs and expenses, the Company incurred a net loss of $166,310 for the nine months ended September 30, 2019, compared to a net loss of $21,583 for the period from February 5, 2018 (Inception) through September 30, 2018, a change of $144,727, or 671%.

Liquidity and Capital Resources

The Company’s cash position at September 30, 2019 decreased by $5,804 to $489, as compared to a balance of $6,293, as of December 31, 2018. The decrease in cash for the nine months ended September 30, 2019 was attributable to net cash used in operating activities of $124,230 and net cash provided by financing activities of $118,426.

As of September 30, 2019, the Company had a deficit in working capital of $353,881 compared to a deficit in working capital of $187,693, at December 31, 2018, representing a decrease in working capital of $166,188, attributable to cash used in operations and increased liabilities as a result of additional accrued compensation and professional fees.

Net cash used in operating activities of $124,230 during the nine months ended September 30, 2019, as compared to net cash provided by operating activities during the period from February 5, 2018 (Inception) through September 30, 2018 of $4,967, was primarily attributable to a significant net loss, which was offset by stock-based compensation and decreases in accounts payable and increased by payment of accrued liabilities.

Net cash used by investing activities was $0 for the nine months ended September 30, 2019 decreased by $26,550 from $26,550 of cash used by investing activities for the period from February 5, 2018 (Inception) through September 30, 2018. This is attributable to the Company making no purchases meeting the fixed asset capitalization threshold during the nine months ended September 30, 2019.

Net cash provided by financing activities of $118,426 during the nine months ended September 30, 2019 increased by $118,426, as compared to $40,000 during the period from February 5, 2018 (Inception) through September 30, 2018. The difference was a result of the issuance of convertible debt and advances from related parties during the nine months ended September 30, 2019.

As reported in the accompanying consolidated financial statements, for the nine months ended September 30, 2019 and for the period from February 5, 2018 (Inception) through September 30, 2018, the Company incurred net losses of $166,310 and $21,583, respectively. The Company produced revenues during the 2018 period and did not produce revenues during the 2019 period. The Company’s ability to continue as a going concern is dependent upon its ability to generate additional revenue, reach consistent profitability and raise additional capital. To date, the Company has raised funds from related party advances, convertible debt and the sale of common stock to its former CEO. It intends to finance its future operating activities and its working capital needs largely from proceeds from the sale of equity securities, if any. The sale of equity and entry into other future financing arrangements may result in dilution to stockholders and those securities may have rights senior to those of common shares. If the Company raises additional funds through the issuance of convertible notes or other debt financing, these activities or other debt could contain covenants that would restrict the Company’s operations. Any other third-party funding arrangements could require the Company to relinquish valuable rights. The Company will require additional capital beyond its currently anticipated needs. Additional capital, if available, may not be available on reasonable terms or at all.

While the Company has historically generated revenues, it has not generated any revenues or profits from its current operations. The Company expects to continue to incur operating losses as it incurs professional fees and other expenses related to implementing its business plan. The future trends of all expenses are expected to be primarily driven by the Company’s ability to execute its business plans and continue to generate revenue. Furthermore, the Company’s ability to continue to fund operating expenses will depend on its ability to raise capital. There can be no assurance that the Company will be successful in doing so.

Financial Condition

The Company’s total assets as of September 30, 2019 and December 31, 2018 were $489 and $6,293, respectively, representing a decrease of $5,804, or 92%. Total liabilities as of September 30, 2019 and December 31, 2018 were $354,370 and $193,986, respectively, for an increase of $160,384, or 83%. The significant change in the Company’s financial condition is attributable to convertible debt issued, cash burn from operations and increases in accounts payable and repayment of accrued expenses. As a result of these transactions, the Company’s cash position decreased from $6,293 to $489 during the nine months ended September 30, 2019.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Operating Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of September 30, 2019, our disclosure controls and procedures were not effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2019 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

Item 1. Legal Proceedings.

The Company is not a party to any legal proceeding that it believes will have a material adverse effect upon its business or financial position.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

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

During the period from July 1, 2019 through September 30, 2019, the Company issued the following unregistered securities.

On February 15, 2019, the Company agreed to issue 125,000 shares of common stock to Fisher Herman Construction, LLC in exchange for execution of a 24-month service contract with the Company. The agreement calls for 375,000 future shares to be issued over the term of the contract, so long as the contract is in full force and effect, consisting of (i) 50,000 shares every 90 days and (ii) 75,000 shares due upon completion of the contract. On August 15, 2019, the Company issued 50,000 shares, per the terms of this agreement.

The Company generated no proceeds from this transaction.

Item 3. Defaults Upon Senior Securities.

There have been no defaults upon senior securities.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

a. Exhibits

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Blockchain Holdings Capital Ventures, Inc.

Date: November 14, 2019	By:	/s/ Delray Wannemacher
		Delray Wannemacher, CEO

Date: November 14, 2019	By:	/s/ Daniel Wong
		Daniel Wong, COO &
		Acting Principal Financial Officer