Edgemode, Inc. - Quarter Report: 2019 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 March 31, 2019

 o  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period _____________to______________

Commission File Number 333-207047

	PIERRE CORP.
	(Exact name of registrant as specified in its charter)

Nevada		467-4046237
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

750 N. San Vicente, Suite 800 West
West Hollywood, CA		90069
(Address of principal executive offices)		(Postal or Zip Code)

Registrant’s telephone number, including area code:		(818) 855-8199

	(Former name, former address and former fiscal year,  if changed since last report

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 q

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 ☒     No ☐

 

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

Large accelerated filer

q

Accelerated filer

q

Non-accelerated filer

x

Smaller reporting company

x

Emerging growth company

q

 

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

 

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

State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 29,051,800 shares of $0.001 par value common stock outstanding as of May 1, 2019.

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PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

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PIERRE CORP.

BALANCE SHEETS

(UNAUDITED)

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

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PIERRE CORP.

STATEMENTS OF OPERATIONS

For the three months ended March 31, 2019 and 2018

(UNAUDITED)

	Three months ended	Three months ended
	March 31, 2019	March 31, 2018
Operating expenses:
Depreciation	$                         -	$                   386
General and administration	47,655	18,959
Total operating expenses	47,655	19,345
Net loss	$            (47,655)	$           (19,345)
Net loss per share:
Basic and diluted	$                ( 0.00)	$              ( 0.00)
Weighted average shares  outstanding:
Basic and diluted	29,051,800	29,051,800

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

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PIERRE CORP.

STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2019 and 2018

(UNAUDITED)

	Three months ended	Three months ended
	March 31, 2019	March 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$            (47,655)	$         (19,345)
Adjustment to reconcile net loss to
cash used in operating activities:
Depreciation expense	-	386
Net change in:
Accounts payable	89	2,381
Accounts payable - related party	8,500	6,000
CASH FLOWS USED IN OPERATING ACTIVITIES	(39,066)	(10,578)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable, related party	47,900	12,912
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	47,900	12,912
NET CHANGE IN CASH	8,834	2,334
Cash, beginning of period	1,285	-
Cash, end of period	$           10,119	$         2,334
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid on interest expenses	$                       -	$                 -
Cash paid for income taxes	$                       -	$                  -

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

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PIERRE CORP.
NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2019

(UNAUDITED)

Note 1

Basis of Presentation

The accompanying unaudited interim financial statements of Pierre Corp. (“Pierre” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. 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 our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2018, as reported in the Form 10-K of the Company, have been omitted.

Note 2

 General

Pierre Corp. (the “Company”) was incorporated in Nevada on January 21, 2011.  Since its incorporation, the Company has attempted to become involved in a number of business ventures, all of which were unsuccessful and which it has abandoned.

In February 2018, the Company decided to become involved in the marijuana industry.

The Company now plans to own and operate medical and adult marijuana cultivation facilities, manufacturing facilities and dispensaries in California.  The first step in the Company’s business plan is to acquire licenses to cultivate, manufacture and sell marijuana.  

The Company will attempt to acquire licenses from persons who have either applied for or been granted marijuana licenses in California.  

The Company does not intend to acquire a license associated with a facility or dispensary which is in operation.

The Company may also apply for a marijuana cultivation, manufacturing or dispensary license in its own name.

The Company’s activities are subject to significant risks and uncertainties including the failure to secure the funding needed to properly execute the Company’s business plan.

We do not anticipate receiving cash flow from operations in the near future to satisfy our ongoing capital requirements. We are seeking financing in the form of equity capital in order to provide the necessary working capital. Our ability to meet our obligations and continue to operate as a going concern is highly dependent on our ability to obtain additional financing. We cannot predict whether this additional financing will be in the form of equity or debt or be in another form. We may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In any of these events, we may be unable to implement our current plans which circumstances would have a material adverse effect on our business, prospects, financial conditions and results of operations.

On August 7, 2018 the Company entered into agreements with LGM, Org and Lean Green Machine, Inc. (collectively “LGM”) to acquire licenses LGM may be awarded by the state of California in Long Beach and the City of Commerce.   These agreements were terminated in February 2019.

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On March 12, 2019 Pierre Corp entered into a Letter of Intent to acquire licenses in Lynwood, California where Pierre Corp would pay $850,000 to the vender to purchase the right to cultivate marijuana in that local.  At this time the agreement is not legally binding until the definitive agreement is signed at a later date.  The Seller must deliver to Pierre Corp in this agreement the updated and renewed licenses.

On October 15, 2018 a shareholder owning a majority of the Company’s outstanding shares of common stock amended the Company’s Articles of Incorporation to:

·

change the name of the Company from Wadena Corp. to Pierre Corp.

·

reverse split the Company’s outstanding shares of common stock on a 5-for-1 basis.

The Company’s activities are subject to significant risks and uncertainties including failure to secure additional funding to properly execute the Company’s business plan.

Note 3

Going Concern

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At March 31, 2019 the Company had not yet achieved profitable operations, has accumulated losses of $688,639 and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

Note 4

Related Party Transactions

The related party advances are due to the former director and President of the Company for funds advanced.  The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of March 31, 2019, the advances totaled $6,000.

The Company was charged management fees by the former President of the Company when funds are available.  Effective March 1, 2012, the Company agreed to pay the President of the Company $4,000 per month for management services if funds are available or to accrue such amount if funds are not available.  Effective July 1, 2016, the Company agreed to pay the President of the Company $2,000 per month for management services if funds are available or to accrue such amount if funds are not available.  Effective October 1, 2018, the Company agreed to pay the President of the Company $6,000 per month for management services if funds are available or to accrue such amount if funds are not available. Accounts payable – related party are the fees earned but not yet paid of $173,341 and $164,841 at March 31, 2019 and December 31, 2018, respectively.

		Three months ended March 31, 2019	Three months ended March 31,   2018
	Management fees	$       18,000	$        6,000

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Note 5

Notes Payable

During the three-month period ended March 31, 2019, the Company received advances of $47,900 from three unrelated third parties. The advances are unsecured, non-interest bearing and have no specific terms for repayment. As of March 31, 2019 and December 31, 2018 the advances totaled $291,900 and $244,000, respectively.

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Item 2.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Overview

Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” “our company,” “Pierre” or the “Company” refer to Pierre Corp.

We were incorporated in Nevada on January 21, 2011.  Since our incorporation, we have attempted to become involved in a number of business ventures, all of which were unsuccessful and which we have abandoned.

In February 2018, we decided to become involved in the marijuana industry.

We now plan to own and operate medical and adult marijuana cultivation facilities, manufacturing facilities and dispensaries in California.  The first step in our business plan is to acquire licenses to cultivate, manufacture and dispense marijuana.  

On March 20, 2019, we entered into a Letter of Intent with an unrelated third party concerning marijuana licenses in Los Angeles County.  The Letter of Intent provides that we will pay $850,000 for licenses to cultivate, manufacture and distribute marijuana in California.  However, we will not acquire any aspects of the licenses that relate to retail delivery or store front retail.

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The acquisition of the licenses is subject to a number of conditions, including a requirement that the licenses, which expired in June 2018, to be renewed by the government authorities which issued the licenses.

If the licenses are acquired, we plan to construct a cultivation, manufacturing and distribution facility in Los Angeles County and sell marijuana throughout California.

If we acquire these licenses, we estimate that it will require 4 months and cost $145,000 to build and equip the cultivation, manufacturing and distribution facility in Los Angeles County.

We do not intend to acquire a license associated with a facility or dispensary which is, or was, in operation.

We may also apply for a marijuana cultivation, manufacturing or dispensary license in our own name.

General

On October 15, 2018 a shareholder owning a majority of our outstanding shares of common stock amended our Articles of Incorporation to:

·

change our name to Pierre Corp.; and

·

reverse split our outstanding shares of common stock on a 5-for-1 basis.

Our office is located at 750 N. San Vicente, Suite 800 West, West Hollywood, California  90069 and are rented for $1,800 per month.  

Results of Operations for the three months ended March 31, 2019, compared to three months ended March 31, 2018.

General and administrative expenses totaled $47,655 for the three months ended March 31, 2019, compared to $18,959 for the three months ended March 31, 2018. Operating expenses in 2019 and 2018 include legal and accounting costs, depreciation, and management fees.  The increase in operating expenses during the period ended March 31, 2019 is due to the change in our business plan which resulted in increased legal and consulting fees as well as increased travel costs.

Net loss for the three months ended March 31, 2019 and 2018, was $47,655 and $19,345, respectively.

Liquidity and Capital Resources

We currently have a total accumulated deficit of $688,639 and a working capital deficit of $502,177 as of March 31, 2019.

Net cash used in operating activities for the three months ended March 31, 2019 and March 31, 2018 were $39,066 and $10,578, respectively.  Net cash flows from financing activities for the three months ended March 31, 2019 and March 31, 2018 were $47,900 and $12,912, respectively, due to loans from a related and unrelated party.

As a result of the above activities, we experienced a net increase in cash of $8,834 for the three months ended March 31, 2019, compared to an increase of $2,334 or the three months ended March 31, 2018. Cash at March 31, 2019 was $10,119. Cash as of December 31, 2018 was $1,285.

We do not presently generate any revenue from our business. If we acquire the marijuana licenses, we estimate that we will $145,000 to build and equip the cultivation, manufacturing and distribution facility in Los Angeles County.  We do not presently have any firm commitments for additional working capital and there are no assurances that such capital will be available to us when needed or upon terms and conditions which are

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acceptable to us. If we are able to secure additional working capital through the sale of equity securities, the ownership interests of our current stockholders will be diluted. If we raise additional working capital through the issuance of debt our future interest expense will increase.

Going Concern

The unaudited financial statements accompanying the report have been prepared on a going concern basis, which assumes that our company will be able to meet our obligations and continue our operations for our next fiscal year. Realization values may be substantially different from carrying values as shown and the financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should we be unable to continue as a going concern. At March 31, 2019, we have not yet achieved profitable operations, have accumulated losses of $688,639 and expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

There are no assurances that we will be able to obtain further funds required for our continued operations. We are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be forced to scale down or perhaps even cease the operation of our business.

Off Balance Sheet Arrangements

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our management, with participation of our Chief Executive Officer and Chief Financial Officer as of March 31, 2019, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting.

Certain internal control weaknesses became evident that, in the aggregate, represent material weaknesses, including:  (i) lack of segregation of incompatible duties; and (ii) insufficient Board of Directors representation.

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including

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our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II- OTHER INFORMATION

Item 1.

Legal Proceedings.

None.  

Item 1A.

Risk Factors.

Not required.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.

Item 6. 

Exhibits

Exhibit Number	Description
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.
101	Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Linkbase Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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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, thereunto duly authorized.

DATED:   May 1, 2019

PIERRE CORP.

By: /s/ J. Jacob Isaacs

J. Jacob Isaacs, Principal Executive, Financial and Accounting Officer

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