10-Q 1 NexeJun201810Q.txt NEXE10QJUNE2018REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2018. [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to _ Commission File Number: 000-55814 NEXE BLOCKCHAIN, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 82-1615867 (I.R.S. Employer Identification No.) 3709 Promontory Point Drive, Suite 129, Austin, TX Address of principal executive offices) 78744 (Zip Code) (512) 717-7769 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has fled 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 fling requirements for the past 90 days. Yes X 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 emerging growth company. See the definitions of "large accelerated filer," "accelerated ,i;iler," "smaller reporting company," and "emerging growth company " in Rule 12b-2 of lth e Exchange Act. Large accelerated filer Non -accelerated filer (Do not check if a smaller reporting company) Accelerated filer Smaller reporting X company Emerging growth company Indicate bycheck mark whe t he r the registrant is a shell company { a s defined in Rule 12b - 2 of the Ex c ha nge Act) . Yes X No I ndi ca t e t he number of s har e s ou t s t a ndi ng of e a ch of t he i s s uer ' s classes of st ock, as of the latest practicable date. Class Common St o c k , par v a l u e $ 0 . 00 01 Do annent s incorporate by r eferenc e Outstanding at August 14 , 2018 5,500,000 None FINANCIAL STATEMENTS Condens ed Balance Sheets as of June 30 , 2 01 8 {unaudited) March 31 , 2018 2 Statement of Ope r a t i ons for the Three Months End e d June 30, 2018 { una udi t ed ) Statement of Cash Flows for the Three Months Ended June 30 , 2 01 8 { u n a u d i t e d ) Notes to Co n d e n s e d Financial Statements (unaudited) 3 4 5-8 NEXE BLOCKCHAIN, INC. CONDENSED BALANCE SHEETS ASSETS June 30, 2018 March 31, 2018 (U naudi t ed ) Current assets Cash $ $ Total assets $ $ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accrued liabilities $ 0 $1,250 Total liabilities 0 1,250 Stockholder's Equity Preferred stock, $0.0001 par value 20,000,000 shares authorized; none issued and outstanding at June 30, 2018 and March 31, 2018, respectively. Common Stock, $0.0001 parvalue, 100,000,000 shares authorized; 20,000,000 shares issued and outstanding at June 30, 2018 and March 31, 2018, respectively 0 2,000 Additional paid-in capital 0 1,712 Accumulated deficit ( 4/962) (4,962) Total stockholders' deficit 0 (1 , 2 50 ) Total liabilities and stockholders' deficit $ $ The accompanying notes are an integral part of these unaudited condensed financial statements. NEXE BLOCKCHAIN, INC. STATEMENT OF OPERATIONS {UNAUDITED) For the Three Months Ended June 30, 2018 Re v e nue $ Cost of revenues Gross profit Operating expenses 0 Loss before income taxes 0 Income t ax e xpe n s e -Ne-t-l-o-s--s---------- $ (650) The accompanying notes are an integral part of these unaudited financial statements. NEXE BLOCKCHAIN, INC. STATEMENT OF CASH FLOWS (UNAUDITED) For the Three Months Ended June 30, 2018 OPERATING ACTIVITIES Net loss $ 0 Non- cas h adjustments to reconcile net loss to net cash: Expe ns e s pai d for by stockholder and contributed as capital 0 Changes in Operating Assets and Liabilities: Accrued liabilities 0 Nectash provided by (used in) operating activities Netincrease in cash Cash, beginning of period Cash, end of period $ SUPPLEMENTAL DISCLOSURES: Cash paid during the period for: Income t ax $ Interest $ The accompanying notes are an integral part of these unaudited condensed financial statements. NEXE BLOCKCHAIN, INC. Notes to Unaudited Condensed Financial Statements NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Ne xe Blockchain, Inc. wasincorporated onMa y 17, 2017 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. TheCompany has been in the developmental stage since inception andits operations to date have been limited to issuing shares to shareholders andeffecting a change in control. The Compan y anticipates that it may effect a business combination in order to develop its business plan. It may, however, choose to develop such business plan without effecting a business combination if it determines that anysuc h proposed transaction is notsuitable. An y combination will nor ma l l y take the form of a merger, stock-for-stock excha nge or stock-for-assets excha nge . In most instances the target company will wish to structure the business combination to be within the definition of a t ax- f r e e reorganization under Section 351or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Company will besuccessful in locating or negotiating with any target comp a ny . The Page6 Company has been formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934. BASIS OF PRESENTATION The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited condensed financial statements. Such unaudited condensed financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity andobjectivity. These accounting policies conform to account i ng pr i nc i pl e s generally accepted in the United States of America ( "GAAP") in all material respects, and have been consistently applied in pr e pa r .:hg the accompanying unaudited condensed financial statements. Ce r t ai n information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" ) were omitted pursuant to such rules and regulations. The results for the three months ended March 31, 2 01 8 are not necessarily indicative of the results to beexpe c t ed for the year ending December 31, 2018. USE OF ESTIMATES The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the condensed financial statements, andthe repor t e d amounts of revenues and expens e s during the reporting periods. Actual results could differ from those estimates. CASH Cash and cas h equival ents include cash on hand and on deposit at banki ng institutions as well as all highly liquid short-term investments with or i gi na l maturities of 90 days or less. The Compa ny did not have cash equivalents as of June 30, 2018 andMarch31, 2018, r es pe c t i ve l y . CONCENTRATION OF RISK Page? Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company did not have cash balances in excess of the Federal Deposit Insurance Corporation limit as of June 30, 2018 and March 31, 2018, respectively. NEXE BLOCKCHAIN, INC. Notes to Unaudited Condensed Financial Statements INCOME TAXES Under ASC 7 40, "Income Ta xes , " deferred t ax assets and liabilities are recognized for the future t ax consequences attributable to temporary differences between the financial statement carrying amounts of exi s ti ng assets andliabilities and their respective tax bases. Deferred t ax assets and liabilities aremeasured using enacted t ax rates expe ct ed to apply to t axabl e income in the years in which those temporary differences are expected to be r ecove r ed or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred t ax assets will notber e a li ze d . As of June 30, 20 1 8 and Nlrb.31., 2018, there were no deferred t axes due to the uncertainty of the realization of net operating l os s or carry f or war d prior to expi r at i on . LOSS PER COMMON SHARE Basic loss percommon share excl udes dilution andis computed by dividing net loss bythe weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities orother contracts to issue common s t o c k were exe r ci s ed or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. As of Jre30, 2018 andMn:h31, 2018, there are nooutstanding dilutive securities. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities andfor fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the unaudited condensed financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial i terns that are recognized and disclosed at fair value in the unaudited condensed financial statements on a nonrecurring basis. Theguidance establishes a fair value hierarchy that prioritizes theinputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities ( Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs ( Level 3measurements) . The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices ( un ad j us t e d ) inactive markets for identical assets or liabilities that theCompany has the ability to access at the measurementdate. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 inputs are unobservable inputs for the asset or liability The carrying amounts off inancial assets such as cash appr oxi ma t e their fair values because of the short maturity of these instruments. RECENT ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issuedASUNo. 2017-01, "BusinessCombinations ( Topic 805) : Clarifying the Definition of a Business". The amendments in t hi s ASU c l ar i f y the de f i ni t i on of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions ( or disposals) of assets or businesses. Basically these amendments provide a screen to determine when a set is not a business. If the screen is not met, the amendments in this ASU first, require that to be considered a business, a set must includ at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second, remove the evaluation of whether a market participant could replace missing elements. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interimperiods within those periods, andall other entities should apply these amendments for fiscal years beginning after December 15, 201 and interim periods within annual periods beginning after December 15, 2019 The Company does not expect that the adoption of this guidance will have a material impact on its condensed financial statements. In May 2017, the FASB issued ASU 2017-09, "Scope of Modification Accounting", which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, theASU is effective for annual reporting periods, including interim periods within those annual reporting period beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not expect that adoption of this guidance will have a material impact on its condensed financial statements and related disclosures. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, "Statement of Cash Flows (Tcpic 230: Restricted Casli' ("ASU 2016-18"). The new guidance is intended to reduce diversity in practice byadding or clarifying guidance on classification andpresentation of changes in restrictde cash on the statement of cash flows. ASU 2 016-18 is effective for annual and interim periods beginning after December 15, 2017 Early adoption is permitted. Theamendments in this update should be applied retrospectively to all periods presented. Managementbelieves that this ASUwill only impact the Company if it has restricted cash in the future. InAugust 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016- 15"). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classifiE!!i inthe statement of cash flows ASU 2016-15 is effective for fiscal years beginning after December 15, 2017. The new standard will require adoption ona retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. Management believes that the impact of this ASU to the Compa n y ' s condensed financial statements would be insignificant. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the United States Securities andExchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements. NOTE2 - GOING CONCERN The Company has not yet generated anyrevenue since inception to date and hasmaintained a1operating loss of $0for the three months ended June 30, 2018. The Company had a working capital deficit of$0 and an accumulated deficit of$4,962 as of June 30, 2018 and a working capital deficit of $1,250and an accumulated deficit of$4,962 as of March 31, 2018. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required. The accompanying unaudited condensed financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability todoso.The unaudited condensedfinancial statements donotinclude anyadjustments to reflect the possible future effects on the recoverability andclassification of assets or the amounts and classifications ofliabilities that may result should the Company be unable to continue as a going concern. In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity. If the Company is unable to acquire additional working capital, it will be required to significatly reduce its current level of operations. NOTE3 - ACCRUED LIABILITIES As of June 30, 2018 and March 31, 2018, the Company had accrued professional fees of $ 0 and $1,250, respectively. NOTE 4 - STOCKHOLDERS' DEFICIT On May 17, 2017, the Company issued 20,000,000 founders common stock to twodirectors andofficers for legal services provided to the Company. The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of June 30, 2018, 5,500,000 shares of common stock andnopref erred stock were issued and outstanding. NOTE 5 -SUBSEQUENT EVENT Management has evaluated subsequent events through August 1, 2018, the date which the financial statements were available to beissued. Exc ept for the events disclosed above, all subsequent events requiring recognition have been incorporated into these financial statements in accordance with FASB ASC Topic 855, "Subsequent Events." ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDI TI ON AND RESULTS OF OPERATIONS Ne xe Bl oc kchain, Inc. (fo rmerl y Shamrock Grove Acquisition Corporation) ( the " Compa ny" ) was incorporated on May 1 7 , 2017 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions The Compan y is a blank check company and qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Actwhich became law in April, 2012. Since inception, the Company's operations to date of the period cove r e d by this report were limited to issuing shares of common stock to its original shareholders andfiling a registration statement on For m 10 on July 7 , 201 7 with the Securities and Excha nge Commission pursuant to the Securities Excha nge Act of 1934 as amended to register its class of common stock. Subsequent to the balance sheet date covered by this report the Company effected a change in control Prior to the change in control, the Company had no operations nor does it engage in a ny business act i vi t i e s generating revenues. Subsequent to the balance sheet date covered by this report, and pursuant to the change in control, the Compa ny is focused on developing andma r ke t i ng the Fintech and Blockchaintechnologies. As of June 30, 2018 the Company had not generated revenues and had no income or cash flows from operations since inception. The Company had sustained net loss of $0 and an accumulated deficit of$4,962 for the three months ended and as of June 30, 2018. The Company's independent auditors have issued a report raising substantial doubt about the Companys abi l i t y to continue as a going oncern. At present, the Company has no operations andthe continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability toobtain necessary equity financing to continue operations and/or to successfully locate andnegotiate with a business entity for the combination of that target company with it. Subsequent Event None. ITEM 3. Quan ti tative and Qualitative Disclosures About Market Risk. Information not required to befiled by Smaller Reporting Companies. ITEM 4. Controls andProcedures. Disclosures andProcedures Management is responsible for maintaining a system of internal control ove r financial reporting ( " I CFR" ) that pr ovi de s reasonable assurance regarding the rel i abi l i t y of such reporting and the accuracy and r el i abi li t y of the preparation of financial statements of such. Management is responsible to maintain records accurately and f a i r l y to reflect transactions andtransactions are recorded as necess a r y. The controls should providereasonable assurance regarding the prevention of unauthorized acquisition or use of assets. In the present case of the Company, management at the period cover e d by this report, consisted sol e l y of the president andvice president. As such, management maintained sole control of all financial transactions and all assets. Since the president of the Company was in s ol e control of the financial transactions and assets management be l i eve s that its controlr ea s ona bl y and adequately addresses the ri s k of a misstatement in the financial reporting. Based up on that eva l uat i on , the principal officer at that time believes that the Compan y ' s disclosure controls and procedures were effective in gathering, ana l yz i ng an d di s cl os i ng i nf or mat i on neede d t o ens ur e t ha t t he information required to bedisclosed by the Compa ny in its per i odi c reports is recor ded , summarized and processed t i me l y . The principal exe cut i ve officer was di r e c t l y involved in the day-to-day operations of the Company. Since the change in control, management consists of a single officer anddirector who is in control of the da y- t o- da y operations of the Company and its financial reporting. This Qua r t e r l y Report does not i nc l ud e an attestation report of the Company ' s registered public accounting firm regarding internal cont r ol over f inanci al reporting Management's report was not s ubject to attestation by the Compa ny ' s registered public accounting firm pursuant to t empo r a r y rules of the Securities andExcha nge Commission that permit the Company to provide only management's report in t hi s Qua r t e r l y Report. Changes in Internal Control Over Financial Reporting There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, theCompany's internal control over financial reporting. PART II -- OTHER INFORMATION ITEM 1. PROCEEDINGS LEGAL There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it. Management is aware that certain current andprior blank check companies of which Messrs. Cassidy and McKillop, the officers and directors during the period covered by this report, were the farmer off icers and directors have received subpoenas for documents in regard to an inquiry by the Securities andE:{change Commission requesting documentation regarding the transactions andfilings for thepast five years and farmer share ownership of certain blank check companies. The former management of the Company has also received subpoenas from the Securities andExchange Commission in regard to certain of the transactions andfilings for the past five years of certain of its blank check companies. Management has no independent knowledge or information as to the intent or purpose of such subpoenas but believes the SEC is investigating whether the change in control transaction is considered a sale of a security andif so whether a broker needs to be used to effect the transaction. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS During the past three years, the Company has issued 20,000,000 common shares pursuant to Section 4 (a) ( 2) of the Securities Actof1933 at par as follows: On May 17, 2017 the Company issued the following shares of its common stock for services rendered to the Company: Name Number of Shares James Cassidy James McKillop 10,000,000 10,000,000 On April 24, 2018, 19,500, 000of those shares were redeemed by the two shareholders pro rata. On April 25 , 2018, the Company issued the following shares of common stock for no consideration: Victor Wong 5,000,000 ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHERINFORMATION (a) Not applicable. (b) Item 407 (c) (3) of Regulation S-K: During the quarter covered bythis Report, there have not been any material changes to the procedures bywhich security holders may recommend nominees to the Board of Directors. ITEM 6. EXHI BI TS (a) Exhibits 31 Certification of the Chief Execu t i ve Officer pursuant to Section 302 of the Sar ba ne s - Oxl ey Act of 2002 32 Certification of the Chief Exe cu t i ve Officer pursuant to Section 906of the Sa r ba nes - 0:d e y Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exc ha n ge Act of 1934, the registrant hasduly caused this report to besigned on its behalf by the undersigned thereuni;i':,P l horized. President, Chief Executiv.e Officer /s/Victor Wong Dated: August 14, 2018