Edgemode, Inc. - Quarter Report: 2020 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2020

  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

	FOURTH WAVE ENERGY, INC.
	(Exact name of registrant as specified in its charter)

Nevada		47-4046237
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

75 E. Santa Clara, 6th Floor
San Jose, CA		95113
(Address of principal executive offices)		(Postal or Zip Code)

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

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

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

  N/A

N/A

N/A

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) had been subject to such filing requirements for the past 90 days.

Yes

No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  

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” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

 

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

 

1

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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: 35,488,163 shares of $0.001 par value common stock outstanding as of June  10, 2020.

Explanatory Note

The Company relied on the Securities and Exchange Commission’s Order under Section 36 of the Securities Exchange Act of 1934 Granting Exemptions From Specified Provisions of the Exchange Act and Certain Rules Thereunder dated March 4, 2020 (Release No. 34-88318) (the “Order”) to delay the filing of its Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “2020 10-Q”) due to the circumstances related to COVID-19. In particular, COVID-19 caused disruptions in the Company’s normal interactions with its auditors. In the past the Company has provided its auditors with full access to work papers and related information. Historically, personnel from the audit firm worked onsite, making whatever copies of materials they deemed necessary in order to complete their review of the 2020 10-Q. Because the audit personnel were working remotely as much as possible, and relying on the Company to scan work papers and other documents, the Company’s ability to file the 2020 10-Q prior to its due date was delayed.

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PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Balance Sheets

(Unaudited)

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

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Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Operations

(Unaudited)

	For the Three		For the Three
	Months Ended		Months Ended
	March 31, 2020		March 31, 2019
Operating expenses:
General and administrative	$           3,203,521		$                47,655
Total operating expenses	(3,203,521)		(47,655)
Amortization of debt discount	(79,967)		-
Interest expense	(6,006)		-
Change in fair value of derivative liability	(18,215)		-
Total other expense	(104,188)		-
Net loss	$      (3,307,709)		$           (47,655)
Net loss per common share:
Basic and diluted	$               (0.11)		$               (0.00)
Weighted average common shares outstanding:
Basic and diluted	30,321,496		29,051,800

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

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Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Changes in Stockholders’ Deficit

For the three months ended March 31, 2020 and 2019

(Unaudited)

	Series A Preferred		Common Stock		Additional paid-in	Accumulated
	Shares	Amount	Shares	Amount	capital	Deficit	Total
Balance, December 31, 2019	-	$         -	29,288,163	$ 29,288	$        348,680	$   (1,220,155)	$  (842,187)
Stock based compensation	1,000	1	6,200,000	6,200	2,908,254	-	2,914,455
Net loss	-	-	-	-	-	(3,307,709)	(3,307,709)
Balance, March 31, 2020	1,000	$       1	35,488,	$ 35,488	$     3,256,934	$   (4,527,864)	$(1,235,441)
Balance, December 31, 2018	-	$         -	29,051,800	$ 29,052	$        189,048	$     (640,984)	$  (422,884)
Net loss	-	-	-	-	-	(47,655)	(47,655)
Balance, March 31, 2019	-	$         -	29,051,800	$ 29,052	$        189,048	$     (688,639)	$  (470,539)

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

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Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Cash Flows

(Unaudited)

	For the Three Months Ended	For the Three Months Ended
	March 31, 2020	March 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$        (3,307,709)	$             (47,655)
Adjustment to reconcile net loss to
cash used in operating activities:
Stock based compensation	2,914,455
Amortization of debt discount	79,967	-
Loss on change in derivative liability	18,215	-
Net change in:
Prepaid assets	2,676	-
Accounts payable and accrued expenses	140,588	89
Accounts payable - related party	(33,710)	8,500
CASH FLOWS USED IN OPERATING ACTIVITIES	(185,518)	(39,066)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes	199,000	-
Payments on notes payable	(3,000)	-
Proceeds from notes payable	-	47,900
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	196,000	47,900
NET CHANGE IN CASH	10,482	8,834
Cash, beginning of period	1,691	1,285
Cash, end of period	$               12,173	$                10,119
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid on interest expenses	$                         -	$                         -
Cash paid for income taxes	$                         -	$                         -
NON-CASH TRANSACTIONS
Debt discount created by derivative liability	$             116,686	$                        -

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

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Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Notes to the Financial Statements

March 31, 2020

 (Unaudited)

Note 1.

Basis of Presentation

The accompanying unaudited interim financial statements of Fourth Wave Energy, Inc. (formerly Pierre Corp.) (“Fourth Wave” 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 2019, as reported in the Form 10-K of the Company, have been omitted.

On March 20, 2020, shareholders 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 Pierre Corp. to Fourth Wave Energy, Inc.

Significant Accounting Policies

Fair Value of Financial Instruments

 

The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The long-term debt approximate fair value since the related rates of interest approximate current market rates.

 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a three-level valuation hierarchy for disclosures of fair value measurements, defined as follows:

 

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

 

Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

Level 3: inputs to the valuation methodology are unobservable and significant to the fair value

Fair Value Measurements

 

The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy.

 

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of March 31, 2020 and December 31, 2019:

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Fair value measured at March 31, 2020
		Total carrying value at March 31, 2020			Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant Unobservable inputs (Level 3)
Liabilities:
Derivative liabilities		$	320,196		$	-		$	-		$	320,196

 

Fair value measured at December 31, 2019
		Total carrying value at December 31, 2019			Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant Unobservable inputs (Level 3)
Liabilities:
Derivative liabilities		$	185,295		$	-		$	-		$	185,295

There were no transfers between Level 1, 2 or 3 during the period.

The table below presents the change in the fair value of the derivative liability during the three months ended March 31, 2020:

Fair value as of December 31, 2019	$     185,295
Fair value on the date of issuance recorded as a debt discount	116,686
Fair value on the date of issuance recorded as a loss on derivatives	15,164
Loss on change in fair value of derivatives	3,051
Fair value as of March 31, 2020	$  320,196

 

Convertible debt

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional noncash interest expense over the expected life of the convertible notes.

  

Beneficial Conversion Features

If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method.

Derivative Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815. The Company applies the guidance in ASC 815-40-35-12 to determine the order in which each convertible instrument would be evaluated for derivative classification.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

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Recent Accounting Pronouncements

 

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Reclassification

 

Certain reclassifications may have been made to our prior year’s financial statements to conform to our current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

Note 2.

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, 2020 the Company had not yet achieved profitable operations 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 3.

Related Party Transactions

Effective April 30, 2019, the Company agreed to increase compensation to the President of the Company to $11,500 per month for management services if funds are available or to accrue such amount if funds are not available.  The agreement is verbal and can be cancelled at any time. Accounts payable – related party are the fees earned but not yet paid of $70,913 and $104,623 at March 31, 2020 and December 31, 2019, respectively.

Fees earned during the period are as follows:

		Three months ended March 31, 2020	Three months ended March 31, 2019
	Management fees	$       34,500	$        18,000

Note 4.  

Notes Payable

On January 15, 2020, the Company converted $20,000 in advances from an unrelated third party into a promissory note. The unsecured note bears an interest rate of 8% and matures on January 15, 2021.

During the three months period ended March 31, 2020 and 2019, the Company received advances of $0 and $47,900, respectively, from unrelated third parties. The advances are unsecured, non-interest bearing and have no specific terms for repayment and payable on demand. As of March 31, 2020 and December 31, 2019 the advances totaled $329,900 and $332,900, respectively.

Note 5.

Convertible Notes Payable and Derivative Liability

On April 25, 2019, the Company borrowed $30,000 from an unrelated third party. The unsecured loan had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and was due and payable on October 25, 2019 and is currently past due. If a default notice is received the interest rate will be 18%.  The unpaid principal is convertible into shares of the Company’s common stock at the conversion price of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $28,112 which was recorded as a discount on the note payable and a day one loss on the derivative liability of $9,362. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $6,250 which was recorded

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as a debt discount and will be amortized over the life of the note. As of March 31, 2020, the balance on the loan, net of unamortized discount of $0, is $30,000.

On June 4, 2019, the Company borrowed $55,000 from an unrelated third party. The unsecured loan had an original issuance discount of $5,000 which will be amortized over the life of the note. The loan bears interest at a rate of 10% and is due and payable on March 4, 2020 and is currently past due. If a default notice is received the interest rate will be 20%. At any time on or before December 1, 2019 the Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 20% to 40%. After December 1, 2019, the Company may not repay the loan without the consent of the lender. At any time after December 1, 2019, the unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $33,615 which was recorded as a discount on the note payable. As of March 31, 2020, the balance on the loan, net of unamortized discount of $0, is $55,000.

On September 9, 2019, the Company borrowed $30,000 from an unrelated third party. The unsecured loan had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and is due and payable on March 9, 2020  and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $31,581, of which $20,291 was recorded as a day one loss on the derivative liability and an additional $11,290 was recorded as a discount on the notes payable. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $13,710 which was recorded as a debt discount and will be amortized over the life of the note. As of March 31, 2020, the balance on the loan, net of unamortized discount of $0, is $30,000.

On November 14, 2019, the Company borrowed $85,000 from an unrelated third party. The unsecured loan had an original issuance discount of $20,000, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and is due and payable on May 14, 2020. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $89,071, of which $24,071 was recorded as a day one loss on the derivative liability and an additional $65,000 was recorded as a discount on the notes payable. As of March 31, 2020, the balance on the loan, net of unamortized discount of $20,549, is $64,451.

On January 23, 2020, the Company entered into an agreement for up to $120,000 in debt financing from an unrelated third party. The loan had an original issuance discount of $10,500, which will be amortized over the life of the note. The loan bears interest at a rate of 10% and is due and payable on January 22, 2021. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 45% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days immediately prior to the date of conversion. As of March 31, 2020, the Company received $40,000 with original issuance discount of $5,000 from the first tranche of the note. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $50,164, of which $15,164 was recorded as a day one loss on the derivative liability and an additional $35,000 was recorded as a discount on the notes payable. As of March 31, 2020, the balance on the loan, net of unamortized discount of $32,548, is $7,452

During the three months ended March 31, 2020, the Company issued convertible notes in the principal amount of $164,000.  The notes are unsecured, bear interest at 8% per year, and are due and payable on February 15, 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock.  The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $81,686 and recorded as a discount on the notes payable. As of March 31, 2020, the balance on the loans, net of unamortized discount of $72,063, is $91,937.

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As of March 31, 2020, the total derivative liability on the above notes was adjusted to a fair value of $320,196. During the three months ended March 31, 2020, $79,967 of the discount was amortized leaving an unamortized balance of $125,160. The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.12 - $0.55, volatility of 50% - 59% based on a comparable company peer group, expected term of 1.00 years, risk-free rate of 0.17% - 1.56% and a dividend yield of 0%.

Note 6.

Equity

On March 16, 2020 the Company acquired all of the outstanding shares of Fourth Wave Energy, Inc. for 6,200,000 restricted shares of the Company’s common stock. At the time of acquisition, Fourth Wave Energy, Inc. had no assets, liabilities and no current or prior operations.  The fair value of the shares issues was $2,170,000 and recorded as share-based compensation.

On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of our shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares shall have the voting power of 250% of the outstanding common shares at the time of any vote.  The Series A holders shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, annual dividends payable in cash on the 31st day of December in each year, commencing on December 3l, 2020 at the rate of $0.10 per share per year. On March 26, 2020, the Company issued 1,000 shares of its Series A preferred stock with a fair value of $744,455 to the Company’s CEO, J. Jacob Isaacs. The Company recognized this fair value as compensation during the three months ended March 31, 2020.

Note 7.

Commitments and Contingencies

In connection with the acquisition of Fourth Wave Energy, Inc., the Company entered into consulting agreements with certain members of Fourth Wave.  The consulting agreements require the Company to collectively pay $385,000 in consulting fees during the terms of the consulting agreements, all but one of which expire between May 31 and June 30, 2020.  One consulting agreement is for a twelve month period and expires in the January 2021. As of March 31, 2020, the Company accrued $118,000 in accrued expenses for these consulting agreements.

Note 8.

Subsequent Events

In March 2020 the Director General of the World Health Organization declared COVID-19 a pandemic. We are still assessing the impact COVID-19 may have on our business, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-19 or its consequences, including downturns in business sentiment generally.  The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the pandemic and the actions taken to contain or treat the COVID-19 pandemic.

On May 7, 2020, the Company signed an option agreement to purchase a certain parcel of land in Jefferson County, Colorado for an option fee of $100. The term of the option shall terminate on June 18, 2020. The term of the option may be exercised at any time during the term by delivering both of the following (a) an executed purchase agreement and (b) earnest money in the amount of $500,000 to an escrow agent at a Title Company, to be held in escrow until Closing which shall be fully earned and non-refundable Buyer’s option exercise. The purchase price of the Property payable at Closing shall be $8,500,000 paid in immediately available good funds on the Closing pursuant to the terms of the Purchase Agreement.

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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, 2019 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,” “Fourth Wave” or the “Company” refer to Fourth Wave, Inc (formerly 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.

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sector for clean electricity, there are now nearly 78 gigawatts (GW) of solar capacity installed nationwide, enough to power 14.5 million homes.

The cost to install solar has dropped by more than 70% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. Prices as of Q4 2019 are at their lowest levels in history across all market segments. An average-sized residential system has dropped from a pre-incentive price of $40,000 in 2010 to roughly $18,000 today.

Solar has ranked first or second in new electric capacity additions in each of the last years. In 2019, 40% of all new electric capacity added to the grid came from solar, the largest such share in history.  Solar’s increasing competitiveness against other technologies has allowed it to quickly increase its share of total U.S. electrical generation - from just 0.1% in 2010 to more than 2.5% todayHomeowners and businesses are increasingly demanding solar systems that are paired with battery storage. While this pairing is still relatively new, the growth over the next five years is expected to be significant. By 2025, more than 25% of all behind-the-meter solar systems will be paired with storage, compared to under 5% in 2019. 

The residential solar market experienced a record year in 2019 as costs continued to fall and solar expanded into more state markets. While California had its strongest year ever due to the emergence of solar + storage as a remedy for disruptive power shutoffs, emerging markets also enjoyed strong growth. Future growth is expected across the country as prices continue to fall and combined solar + storage systems become increasingly viable.

Major U.S. corporations, including Apple, Amazon, Target, and Walmart are investing in solar and renewable energy at an incredible rate. Through 2018, the top corporate solar users in America have installed more than 7,000 megawatt of capacity across more than 35,000 different facilities across the country.

Fourth Wave Energy

On March 16, 2020 we acquired all of the outstanding shares of Fourth Wave Energy, Inc. for 6,200,000 restricted shares of our common stock.

Fourth Wave has designed an energy system which is based on combining solar power and other energy efficient technologies into one fully integrated system.  The Fourth Wave energy system is designed to significantly reduce energy consumption and associated carbon emissions in residences and commercial buildings.

The Fourth Wave energy system:

·

is powered by solar photovoltaics and is managed with direct current advanced energy management controls, and

·

uses:

°

advanced battery storage systems;

°

efficient HVAC via ground-source energy;

°

LED lighting

°

solar energy for hot water heating, and

°

geothermal heat

·

can be customized for new building construction and to retrofit existing structures.

Fourth Wave plans to build five pilot projects, including one in its office/warehouse in San Jose and one in Dallas and use these pilot projects as showcases for its technology.

In connection with this acquisition we entered into consulting agreements with certain founders of Fourth Wave.  The consulting agreements require us to collectively pay $385,000 in consulting fees during the terms of the consulting agreements, all but one of which expire between May 31 and June 30, 2020.  One consulting agreement is for a twelve month period and expires in January 2021.

On May 7, 2020 we entered into an agreement giving us an option to acquire approximately 19 undeveloped acres of land in Arvada, Colorado. If the option is exercised, we plan to build homes, townhomes, and condominiums on the property. If the option is exercised, we will pay $8,500,000 for the property.

The residences will be designed to use the energy system described above.

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As of the date of this filing, Fourth Wave had not generated any revenue.

Critical Accounting Policies

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, and (ii) the reported amount of expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.

These estimates and assumptions also affect the reported amounts of costs and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.

Results of Operations for the three months ended March 31, 2020, compared to three months ended March 31, 2019.

General and administrative expenses totaled $3,203,521 for the three months ended March 31, 2020, compared to $47,655 for the three months ended March 31, 2019. Operating expenses in 2020 and 2019 include legal and accounting costs, depreciation, and management fees.  The increase in operating expenses during the period ended March 31, 2020 is due to the change in our business plan which resulted in increased stock based compensation, advertising, consulting, legal and accounting fees as well as increased management fees and travel costs.

Net loss for the three months ended March 31, 2020 and 2019, was $3,307,709 and $47,655, respectively.

Liquidity and Capital Resources

Our sources and (uses) of cash for the three months ended March 31, 2020 and 2019 were:

	2020				2019
Cash used in operations		$	(185,518	)		$	(39,066)
Payment on notes payable		$	(3,000)			$	-
Proceeds from convertible notes		$	199,000			$	-
Proceeds from notes payable		$	-			$	47,900

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, 2020, we have had no revenue and have not yet achieved profitable operations 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

 

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Item 4.  

Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the direction and with the participation of the Company’s management, including the Company’s Chief Executive and Chief Financial Officer, the Company has conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of March 31, 2020. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based on the evaluation, the Chief Executive and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2020.

 

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, 2020 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 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On March 26, 2020 the Company issued 1,000 shares of its Series A preferred stock, to J. Jacob Isaacs, the Company’s sole officer and director. Each Series A Preferred Share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders or with respect to actions that may be taken by written consent.  The number of votes that the holder of each Series A preferred share is entitled to cast is determined by the following formula:

X  x  250%

1,000

Where:

X   =

number of votes entitled to be cast by holders of the Company’s common stock or by holders of any of the Company’s other outstanding securities.

The holders of the Series A Preferred shares and the holders of the Company’s common stock and any other shares of the Company’s capital stock having general voting rights will vote together as one class on all matters submitted to a vote of the Company’s shareholders.

The Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933 in connection with issuance of the securities described above.  The person who acquired these securities was a sophisticated investor and was provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the offer or sale of these securities. The person who acquired these securities acquired them for his own account. The certificate representing these securities will bear a restricted legend providing that they cannot be sold except pursuant to an effective registration statement or an exemption from registration. No commission was paid to any person in connection with the issuance of these securities.

Item 5. 

Other Information

See Item 2 above.

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

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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:   June 11, 2020

FOURTH WAVE ENERGY, INC.

By: /s/ J. Jacob Isaacs

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