Coyni, Inc. - Quarter Report: 2023 June (Form 10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-22711

COYNI, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

Nevada

(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

76-0640970

(IRS EMPLOYEE IDENTIFICATION NO.)

3131 Camino Del Rio N, Suite 1400, San Diego, CA 92108
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(855) 201-1613

(ISSUER TELEPHONE NUMBER)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Exchange on Which Registered
N/A		N/A		N/A

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

On August 14, 2023, the registrant had outstanding 100,301,968 shares of Common Stock, $0.001 par value per share.

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION	1

Item 1.	Financial Statements	1
	Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	1
	Statements of Operations for Three and Six months ended June 30, 2023 and 2022 (Unaudited)	2
	Statements of Changes in Stockholders’ Equity for Three and Six months ended June 30, 2023 and 2022 (Unaudited)	3
	Statements of Cash Flows for Six months ended June 30, 2023 and 2022 (Unaudited)	4
	Notes to Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	11
Item 4.	Controls and Procedures	12

PART II

Item 1.	Legal Proceedings	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Mine Safety Disclosures	13
Item 5.	Other Information	13
Item 6.	Exhibits	15
	Signatures	16

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PART I. FINANCIAL INFORMATION

Item 1. Financial statements

COYNI, INC.

BALANCE SHEETS

	June 30,			December 31,
	2023			2022
	(Unaudited)

ASSETS
Current assets:
Prepaid expenses and other current assets	$	511		$	511
Total current assets		511			511
Total assets	$	511		$	511

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	16,919		$	-
Accrued liabilities and other payable		77,906			28,962
Total current liabilities		94,825			28,962

Stockholders' equity (deficit):
Undesignated preferred stock, $0.001 par value, 9,999,942 shares authorized, none issued and outstanding		-			-
Series C convertible non-redeemable preferred stock, $0.001 par value, 48 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022; $12,500 per share liquidation preference ($600,000 aggregate liquidation preference at June 30, 2023)		-			-
Series D convertible non-redeemable preferred stock, $0.001 par value, 10 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022; $8,725 per share liquidation preference ($87,250 aggregate liquidation preference at June 30, 2023)		-			-
Common stock, $0.001 par value, 200,000,000 shares authorized, 100,301,968 and 2,301,968 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		100,302			2,302
Additional paid-in capital		29,322,475			29,198,773
Accumulated deficit		(29,517,091	)		(29,229,526	)
Total stockholders' deficit		(94,314	)		(28,451	)
Total liabilities and stockholders' deficit	$	511		$	511

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

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COYNI, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Six Months Ended June 30,						For the Three Months Ended June 30,
	2023			2022			2023			2022

Operating expenses
Stock Compensation expense	$	221,702		$	-		$	-		$	-
General and administrative expenses		65,863			40,816			11,339			20,892
Loss from operations		(287,565	)		(40,816	)		(11,339	)		(20,892	)

Non-operating income
Other Income		-			-			-			-
Interest expense		-			(133,004	)		-			(53,531	)
Total non-operating income, net		-			(133,004	)		-			(53,531	)


Net loss	$	(287,565	)	$	(173,820	)	$	(11,339	)	$	(74,423	)

Net loss per share – basic and diluted	$	(0.00	)	$	(0.08	)	$	(0.00	)	$	(0.03	)

Basic and diluted weighted average shares outstanding		69,449,206			2,301,968			100,301,968			2,301,968

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

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COYNI, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

					PREFERRED STOCK								ADDITIONAL
					SERIES C				SERIES D				PAID-IN		ACCUMULATED
	SHARES		CAPITAL		SHARES		CAPITAL		SHARES		CAPITAL		CAPITAL		DEFICIT			TOTAL
Balance at December 31, 2022		2,301,968	$	2,302		48	$	-		10	$	-	$	29,198,773	$	(29,229,526	)	$	(28,451	)
Net loss		-		-		-		-		-		-		-		(276,226	)		(276,226	)
Stock Compensation expense		98,000,000		98,000		-		-		-		-		123,702		-			221,702
Balance at March 31, 2023		100,301,968		100,302		48		-		10		-		29,322,475		(29,505,752	)		(82,975	)
Net loss		-		-		-		-		-		-		-		(11,339	)		(11,339	)
Balance at June 30, 2023		100,301,968	$	100,302		48	$	-		10	$	-	$	29,322,475	$	(29,517,091	)	$	(94,314	)

					PREFERRED STOCK								ADDITIONAL
					SERIES C				SERIES D				PAID-IN		ACCUMULATED
	SHARES		CAPITAL		SHARES		CAPITAL		SHARES		CAPITAL		CAPITAL		DEFICIT			TOTAL
Balance at December 31, 2021		2,301,968	$	2,302		48	$	-		10	$	-	$	22,487,937	$	(29,002,430	)	$	(6,512,191	)
Net loss		-		-		-		-		-		-		-		(99,397	)		(99,397	)
Balance at March 31, 2022		2,301,968		2,302		48		-		10		-		22,487,937		(29,101,827	)		(6,611,588	)
Net loss		-		-		-		-		-		-		-		(74,423	)		(74,423	)
Settlement of liabilities with a related party		-		-		-		-		-		-		5,577,937		-			5,577,937
Balance at June 30, 2022		2,301,968	$	2,302		48	$	-		10	$	-	$	28,065,874	$	(29,176,250	)	$	(1,108,074	)

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

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COYNI, INC.

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

	2023			2022

Cash flows from operating activities:
Net loss	$	(287,565	)	$	(173,820	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock Compensation expense		221,702			-
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		-			980
Accounts payable		16,919
Accrued liabilities and other payable		48,944			172,840
Net cash used in operating activities		-			-

Net decrease in cash and cash equivalents		-			-
Cash and cash equivalents at beginning of period		-			-
Cash and cash equivalents at end of period	$	-		$	-

Supplemental disclosure of cash flows Information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

Non-cash transactions:
Assignment of third-party liabilities to a related party	$	-		$	5,577,937
Settlement of liabilities with a related party	$	-		$	5,577,937
Operating expenses directly paid by a related party	$	-		$	45,964

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

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COYNI, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Coyni, Inc. (“we”, “our”, the “Company” or “Coyni”) is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value-added provider until it ceased operations effective June 30, 2014.

The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001. On March 19, 2015, the Company changed its name to Logicquest Technology, Inc. (“Logicquest”) from Bluegate Corporation. On June 23, 2023, the Company changed its name to Coyni, Inc. (“Coyni”).

The Company currently has no operations and the Company’s Board of Directors is currently seeking investment opportunities. Effective on April 7, 2023, the selling shareholder of our Company, who owned 99.16% equity ownership of the Company and also held a control position in the Company sold all of his equity interest in the Company (consisting of 99,457,724 shares of restricted common stock, 48 shares of Series C convertible non-redeemable preferred stock and 10 shares of Series D convertible non-redeemable preferred stock) to RYVYL, Inc. for a total purchase price of $225,000. After giving effect to the purchases, RYVYL, Inc. will become the major and controlling shareholder of the Company and the transaction has not consummated as of June 30, 2023.

Following is a summary of the Company’s significant accounting policies:

BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Coyni’s Annual Report filed with the SEC on Form 10-K. 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.

SIGNIFICANT ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our financial statements as of June 30, 2023 and December 31, 2022, and for the six and three months ended June 30, 2023 and 2022. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.

RELATED PARTY TRANSACTIONS

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of the Company’s financial instruments, including prepaid expenses and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.

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Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

It is not, however, practical to determine the fair value of amounts due to related parties and lease and management arrangement with related parties, if any, due to their related party nature.

INCOME TAXES

The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

LOSS PER SHARE

Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. The Company does not have any potentially dilutive instruments for the six and three months ended June 30, 2023 and 2022. Accordingly, basic and diluted losses per share were identical for the six and three months ended June 30, 2023 and 2022.

STOCK BASED COMPENSATION

The Company accounts for share-based compensation awards in accordance with ASC 718, “Compensation – Stock Compensation”. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the statement of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted.

2. GOING CONCERN CONSIDERATIONS

During the six months ended June 30, 2023 and 2022, and as of June 30, 2023 and December 31, 2022, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from a related party. We experienced negative financial results as follows:

		2023				2022
Net loss for the six months ended June 30, 2023 and 2022		$	(287,565	)		$	(173,820	)

Negative working capital as of June 30, 2023 and December 31, 2022			(94,314	)			(28,451	)
Stockholders’ deficit as of June 30, 2023 and December 31, 2022			(94,314	)			(28,451	)

These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.

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3. ACCRUED LIABILITIES AND OTHER PAYABLE

The accrued liabilities are summarized below:

	June 30, 2023		December 31, 2022
Accrued general and administrative expenses	$	38,483	$	28,962
Other payable		39,423		-
Accrued liabilities and other payable	$	77,906	$	28,962

As of June 30, 2023 and December 31, 2022, accrued liabilities mainly consists of unpaid professional fee such as legal and audit fee and unpaid rent expense, other payable mainly consist of due to ex-shareholder.

4. INCOME TAXES

On December 22, 2017 U.S. tax reform legislation known as the Tax Cuts and Jobs Act (the “2017 Act”) was signed into law. The 2017 Act made substantial changes to U.S. tax law, including a reduction in the corporate tax rate from 34% to 21%, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate expensing of capital expenditures, deemed repatriation of foreign earnings through a transition tax and significant changes to the taxation of foreign earnings going forward. As a result of the 2017 Act, NOL carryforwards generated in years beginning after December 31, 2017 would carryforward indefinitely, and would apply to 80% of future taxable income. Under the Act, carrybacks of NOLs were disallowed. In March 2021, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted providing a five-year carryback for losses incurred in 2018, 2019, 2020 or 2021, which allows companies to modify tax returns up to five years prior to offset taxable income from those tax years. The CARES Act also suspended the NOL limit of 80% of taxable income, but the NOLs generated in 2018 and forward will still carryforward indefinitely.

The composition of deferred tax assets at June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023			December 31, 2022
Deferred tax assets
Benefit from carryforward of net operating loss	$	2,347,327		$	2,333,496
Less valuation allowance		(2,347,327	)		(2,333,496	)
Net deferred tax asset	$	-		$	-

The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 21% were applied to pre-tax loss for 2023 and 2022, is attributable to the valuation allowance.

At June 30, 2023, for federal income tax reporting purposes, the Company has $9,108,809 in unused net operating losses available for carryforward to future years which will expire in various years through 2037, and $2,068,941 that will carryforward indefinitely.

5. SHAREHOLDERS’ EQUITY

On February 24, 2023, the Board of Directors agreed to issue 98,000,000 shares of the Company’s to Ang Woon Han (the former major shareholder of the Company) to serve as the Company’s director. The fair value of the shares issued to Ang Woon Han was $221,702, which was fully recognized as stock-based compensation expense during the six months ended June 30, 2023.

6. COMMITMENTS AND CONTINGENCIES

On May 27, 2016, the Company entered into an agreement for the lease of a virtual office in Princeton, NJ for monthly rental of $200. The lease began on May 12, 2016 on monthly basis and can be cancelled at either party’s discretion with a three-month notice.

7. SUBSEQUENT EVENTS

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has no material subsequent event that needs to be disclosed.

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

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”). All references to “common shares” refer to the common shares in our capital stock.

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

As used in this quarterly report, the terms “we”, “us”, “our”, “our company” and “Coyni” mean Coyni, Inc., unless otherwise indicated.

OVERVIEW

Our company was formed on July 23, 2001 when Solis Communications, Inc., a company incorporated in the State of Texas on February 26, 2001, completed the acquisition of Berens Industries, Inc., a company originally incorporated in the State of Nevada on January 9, 1985. On September 17, 2001, we changed our name to Crescent Communications Inc. d.b.a Crescent Broadband. On November 15, 2004, we changed our name to Bluegate Corporation. On March 19, 2015, we changed our name to Logicquest Technology, Inc. On June 23, 2023, the Company changed its name to Coyni, Inc. (“Coyni”).

We are a Nevada corporation that previously operated as a broadband network service provider, providing internet connectivity to corporate clients on a subscription basis. During May 2014 our board of directors authorized an orderly wind-down of our Company’s internet connectivity business which ceased effective June 30, 2014.

We are currently a company with no operations. To sustain our company’s operation, our board is currently seeking investment opportunities. At this stage, we can provide no assurance that we will be able to locate compatible business opportunities, what additional financing we will require to complete a business opportunity, or whether the opportunity’s operations will be profitable. If we are unable to secure adequate capital to continue our business, our shareholders will lose some or all of their investment and our business will likely fail.

Effective on April 7, 2023, the selling shareholder of our Company, who owns 99.16% equity ownership of the Company and also holds a control position in the Company sold all of his equity interest in the Company (consisting of 99,457,724 shares of restricted common stock, 48 shares of Series C convertible non-redeemable preferred stock and 10 shares of Series D convertible non-redeemable preferred stock) to RYVYL, Inc. for a total purchase price of $225,000. After giving effect to the purchases, RYVYL, Inc. became the major and controlling shareholder of the Company.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2023 compared to the Three Months Ended June 30, 2022

We had a net loss of $11,339 for the three months ended June 30, 2023 which was $63,084 less than the net loss of $74,423 for the six months ended June 30, 2022. The decrease in our net loss was mainly due to decreased professional fee, and decreased interest expenses resulting from clearing up of all the outstanding notes by the Company in June 2022.

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The following table summarizes key items of comparison and their related increase (decrease) for the three months ended June 30, 2023 and 2022:

							Increase (Decrease)
	2023			2022			2023 from 2022
Revenue	$	-		$	-		$	-
Stock-based compensation		-			-			-
General and administrative expenses		11,339			20,892			(9,553	)
Loss from operations		(11,339	)		(20,892	)		(9,553	)
Interest expense		-			(53,531	)		(53,531	)
Net loss	$	(11,339	)	$	(74,423	)	$	(63,084	)

Revenue

We did not earn any revenues during the three months ended June 30, 2023 or 2022.

Operating expenses

We had $11,339 general and administrative expenses for the three months ended June 30, 2023, a decrease of $9,553 from $20,892 general and administrative expenses for the three months ended June 30, 2022, the decrease was mainly due to decreased professional fees of $9,553.

Six Months Ended June 30, 2023 compared to the Six Months Ended June 30, 2022

We had a net loss of $287,565 for the six months ended June 30, 2023, which was $113,745 more than the net loss of $173,820 for the six months ended June 30, 2022. The increase in our net loss was mainly due to the increase in stock-based compensation expense and professional fee which was partly offset by a decrease in interest expenses resulting from clearing up of all the outstanding notes by the Company in June 2022.

The following table summarizes key items of comparison and their related increase (decrease) for the six months ended June 30, 2023 and 2022:

							Increase (Decrease)
	2023			2022			2023 from 2022
Revenue	$	-		$	-		$	-
Stock-based compensation		221,702			-			221,702
General and administrative expenses		65,863			40,816			25,047
Loss from operations		(287,565	)		(40,816	)		246,749
Interest expense		-			(133,004	)		(133,004	)
Net loss	$	(287,565	)	$	(173,820	)	$	113,745

Revenue

We did not earn any revenues during the six months ended June 30, 2023 or 2022.

Operating expenses

We had $65,863 general and administrative expenses for the six months ended June 30, 2023, an increase of $25,047 from $40,816 general and administrative expenses for the six months ended June 30, 2022, the increase was mainly due to increased professional fees of $25,047. For the six months ended June 30, 2023, the Company had stock-based compensation expense of $221,702 paid to the Company’s former major shareholder and the director.

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LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2023, our cash and cash equivalents were $0; total current liabilities were $94,825 and total stockholders’ deficit was $94,314.

Working Capital

	At June 30, 2023			At December 31, 2022
Current assets	$	511		$	511
Current liabilities		94,825			28,962
Working capital deficit	$	(94,314	)	$	(28,451	)

We anticipate generating losses and, therefore, may be unable to continue operations further in the future.

FINANCIAL CONDITION

Increase (Decrease)

2023

2022

2023 from 2022

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net increase (decrease) in cash

Cash balance at end of period

We did not generate any revenues nor have any cash activities during the six months ended June 30, 2023 and 2022; however, we had professional fees of $65,863 and stock compensation expense of $221,702 during the six months ended June 30, 2023.

We did not have any investing activities during the six months ended June 30, 2023 and 2022.

We did not have any financing activities during the six months ended June 30, 2023 and 2022.

To date we have relied on proceeds from the sale of our shares and on loans from officers and directors, related companies and an independent third party in order to sustain our basic, minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares or that our officers and directors, related companies or the independent third party will provide us with any future loans. We intend to use debt to cover the anticipated negative cash flows until we can operate at a break-even cash flow mode. We may seek additional capital to fund potential costs associated with possible expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings of equity securities, debt or convertible debt securities, or other sources. Stockholders should assume that any additional funding will likely be dilutive.

We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed to be reasonable. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material. See Note 1 of the Notes to Financial Statements included in this quarterly report for a summary of significant accounting policies and the effect on our unaudited financial statements.

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GOING CONCERN

During the six months ended June 30, 2023 and 2022, and as of June 30, 2023 and December 31, 2022, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from related parties and independent third parties. We experienced negative financial results as follows:

	2023			2022
Net loss for the six months ended June 30, 2023 and 2022	$	(287,565	)	$	(173,820	)
Negative working capital as of June 30, 2023 and December 31, 2022		(94,314	)		(28,451	)
Stockholders’ deficit as of June 30, 2023 and December 31, 2022		(94,314	)		(28,451	)

Prior to April 7, 2023, our operations was primarily funded by Logicquest Technology Limited, a company controlled by the Company’s former Chief Financial Officer, Mr. Cheng Yew Siong. Effective on April 7, 2023, the selling shareholder of the Company, who owns 99.16% equity ownership of the Company and also holds a control position in the Company sold all of his equity interest in the Company (consisting of 99,457,724 shares of restricted common stock, 48 shares of Series C convertible non-redeemable preferred stock and 10 shares of Series D convertible non-redeemable preferred stock) to RYVYL, Inc. for a total purchase price of $225,000.

These steps have provided us with the cash flows to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include:

	●	Raising capital through additional sale of our common stock and/or debt securities.
	●	Reducing cash operating expenses to levels that are in line with current revenues.

These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following:

	●	Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements.
	●	Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations.

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, and capital expenditures or capital resources that are material to stockholders.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, as defined in 17 CFR § 229.10(f)(1), we are not required to provide the information requested by this Item.

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Item 4. Controls and Procedures.

The Company’s Chief Executive, Ben Errez, is responsible for establishing and maintaining disclosure controls and procedures for the Company.

Evaluation of Disclosure Controls and Procedures

We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluation as of the end of the period covered by this report, our principal accounting officer has concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, who until such time the Company hires a Chief Financial Officer/Treasurer will be serving as our principal accounting officer, to allow timely decisions regarding required disclosure as a result of continuing weaknesses in our internal control over financial reporting.

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, based on management’s assessment of the effectiveness of our internal controls over financial reporting, management concluded that our internal controls over financial reporting were not effective as of December 31, 2022, due to insufficiently qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience, to effectively address the U.S. GAAP accounting financial reporting, internal control, and other regulatory compliance requirements and lack of segregation of duties. Management believes that our lack of experience with U.S. GAAP and lack of segregation of duties constitutes material weaknesses in our internal control over financial reporting, which also resulted in the restatement contained in this Form 10-Q/A. Until such time, if ever, that we remediate the material weakness in our internal control over financial reporting we expect that the material weaknesses in our disclosure controls and procedures will continue.

Report of Management

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”), as defined in Exchange Act Rule 13a-15. Our ICFR is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. Management conducted an assessment of our ICFR based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on the assessment, management concluded that, as of June 30, 2023, our ICFR was not effective at the reasonable assurance level based on those criteria.

Our independent public accountant has not conducted an audit of our controls and procedures regarding ICFR and therefore expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to ICFR.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended June 30, 2023, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

The Company’s management does not expect that its disclosure controls or its ICFR will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

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.

On March 6, 2023, the Company issued 98,000,000 shares of its common stock to Ang Woon Han as compensation under an Employment Agreement for Director between the Company and Mr. Han dated February 24, 2023. The shares were issued in consideration of past services rendered by Mr. Han as a Director of the Company and for future services. Mr. Han paid no cash consideration for the shares. The Company relied on Section 4(a)(2) of the Securities Act as an available exemption to registration, and the shares were issued as restricted securities under Rule 144 of the Securities Act.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On April 17, 2023, in a private transaction consented to by the Company, Ang Woon Han sold 99,457,724 shares of restricted common stock to RYVYL, Inc., a Nevada corporation (NASDAQ:RVYL), along with 48 shares of Series C Convertible Non-Redeemable Preferred Stock (“Series C”) and 10 shares of Series D Convertible Non-Redeemable Preferred Stock (“Series D”), for $225,000 resulting in the change in control of the Company. The Company is holding in escrow, however, 1,457,724 shares of the common stock sold, and $50,000 of the purchase price, pending a lost certificate replacement, which the Company expects to close in the third quarter. The Series C converts into 1,250 shares of common stock, and each share votes at the equivalence of 18,750 per share, and Series D converts into 1,250 shares of common stock, and each share votes at the equivalence of 187,500 shares of common stock. As a result of this transaction, RYVL holds title to 99.16% of the Company’s common stock, and all issued and outstanding shares of preferred stock in the Company. The source of the funds used for the purchase was general operating revenue of RYVL. There are no arrangements or understandings between RYVL and Mr. Han, or their respective associates, with respect to election of directors or other matters.

As a result of the above-referenced transaction, Cheng Yew Siong resigned as Director, Chief Financial Officer and Principal Accounting Officer, and Ang Woon Han resigned as Director effective April 7, 2023. In turn, RVYL voted its shares to appoint Ben Errez, as Chairman of the Board of Directors, and Ezra Laniado and Genevieve Baer, both of whom are deemed independent under Rule 5605(a)(2) of the Nasdaq Capital Markets, as directors. In turn, the Board appointed Errez as President and Chief Executive Officer, and Jasmine Farrington as Secretary. Farrington has no policy-making authority as Secretary. The Board has elected to appoint Ben Errez as Chief Financial Officer on July 10,2023.

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Business Experience of Directors and Executive Officer

Ben Errez, age 62, is our Chairman of the Board, and President and Chief Executive Officer (and principal accounting officer). He has acted as Chairman of the Board of Directors, Executive Vice President, Principal Financial Officer and Principal Accounting Officer for RVYL since July 2017. Since 2017, Errez has been a principal of the GreenBox Business. From August 2004 until August 2015, Errez formed the start-up IHC Capital, where he held the position of Principal Consultant from founding to the present date, through which he advises clients in the South Pacific region with market capitalizations ranging from $50M to $150M on matters such as commerce, security, reliability and privacy. From January 1991 to August 2004, he served as Software Development Lead for the Microsoft International Product Group. He led the International Microsoft Office Components team (Word, Excel, PowerPoint) in design, engineering, development and successful deployment. He also served as Executive Representative of Microsoft Office and was a founding member of the Microsoft Trustworthy Computing Forum, both within the company, and internationally. Errez co-authored the first Microsoft Trustworthy Computing Paper on Reliability. At Microsoft, Mr. Errez was responsible for the development of the first Microsoft software translation Software Development Kit (“SDK”) in Hebrew, Arabic, Thai and Simplified Chinese, as well as the development of the first bidirectional extensions to Rich Text Format (“RTF”) file format, all bidirectional extensions in text converters for Microsoft Office, and contributed to the development of the international extensions to the Unicode standard to include bidirectional requirements under the World Wide Web Consortium (“W3C”). He received his Bachelor Degree in Mathematics and Computer Science from the Hebrew University.

Ezra Laniado, age 39, is a director. He is an accomplished leader with a diverse background in both business and nonprofit sectors. Currently serving as a Director for RYVYL Inc. since February 2021, Laniado brings valuable insights and strategic acumen to the board. In May 2023, he assumed the role of Executive Director of the Southwest at StandWithUs, showcasing his commitment to promoting educational initiatives. Laniado's impact extends through various roles. From 2018 to 2023, he steered the San Diego chapter of Friends of Israel Defense Forces as its Executive Director, raising over $15 million in donations and overseeing 150 volunteers. Notably, he founded and established the Israeli American Council's San Diego chapter from 2017 to 2018. Laniado's entrepreneurial prowess shines as the co-Founder of the highly successful real estate firm, Stoz Group. He previously co-founded and directed Shonglulu Group, a prominent fashion brand, where he orchestrated funding efforts, devised marketing strategies, and executed business plans. Laniado's legal background as an attorney in Israel for four years before 2014 adds depth to his skill set. He holds a B.A. and an L.L.B. from the esteemed Interdisciplinary Center Herzliya (Reichman University). With a remarkable track record, Laniado continues to drive growth, innovation, and philanthropy across diverse sectors.

Genevieve Baer, age 46, is a director. She has served as a Director for RVYL since February 2021 and has been chief executive officer of JKH Consulting since 2009. JKH Consulting is a real estate finance consulting firm that has advised on transactions with a collective value of over $10 billion. Prior to her work with JKH Consulting, Baer worked at Magnet Industrial Bank for 6 years at the end of which tenure she was a Senior Vice President. Baer also worked at US Bancorp Piper Jaffray for 9 years as a Vice President working on equity and debt real estate financings. Baer earned a B.S. in chemistry as well as an MBA from the University of Utah.

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Item 6. Exhibits.

Incorporated by reference

Exhibit

Exhibit Description

Filed herewith

Form

Period ending

Exhibit

Filing date

31.1

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

COYNI, INC.

/s/ Ben Errez
By: Ben Errez
Its: Director, Chief Executive Officer, and
Chief Financial Officer

Date: August 14, 2023