Elvictor Group, Inc. - Quarter Report: 2023 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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 September 30, 2023

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

Commission file number 333-225239

ELVICTOR GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		82-3296328
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Vassileos Constantinou 79
Vari, Attiki, Greece		16672
(Address of principal executive offices)		(Zip Code)

(877) 374-4196

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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, if any, 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. (Check one):

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. ☐

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ELVG		OTC Pink Market

As of November 13, 2023 there were 414,448,757 shares of common stock, par value $0.0001 per share, issued and outstanding.

ELVICTOR GROUP, INC.

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Audited)	1
	Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21

Signatures		22

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ELVICTOR GROUP, INC

Unaudited Condensed Consolidated Balance Sheets

ASSETS	September 30, 2023			December 31, 2022
				Audited
Current Assets
Cash	$	151,998		$	503,981
Accounts Receivable		398,164			330,864
Other Receivables		20,481			7,194
Other Receivables - Related Party		412,361			369,800
Prepaid expenses and other current assets		143,083			58,628
Total Current Assets		1,126,087			1,270,467

Non-current Assets
ROU Asset - Related Party		277,891			21,653
Intangible Assets, Net		139,498			168,000
Office Equipment, net		16,198			19,211
Total Non-current Assets		433,587			208,864

Total Assets	$	1,559,674		$	1,479,331
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable	$	31,564		$	34,336
Trade Accounts Payable		172,402			310,892
Trade Accounts Payable - Related Parties		149,352			56,434
Other Payables		399,524			485,675
Lease Liability – Current - Related Parties		43,684			12,262
Accrued and Other Liabilities		243,298			68,759
Due to related party		22,275			48,991
Total Current Liabilities		1,062,099			1,017,349

Long-term Liabilities
Lease Liability – Non-Current - Related Party		234,207			9,391
Total Long-term Liabilities		234,207			9,391

Total Liabilities		1,296,306			1,026,740

Stockholders’ Equity
Common stock, par value $0.0001; 700,000,000 common shares authorized; 414,448,757 common shares issued and outstanding both at September 30, 2023 and December 31, 2022		41,445			41,445
Additional paid in capital		45,050,884			45,050,884
Accumulated deficit		(44,828,961	)		(44,639,738	)
Total Stockholders’ Equity		263,368			452,591

Total Liabilities and Stockholders’ Equity	$	1,559,674		$	1,479,331

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

ELVICTOR GROUP, INC

Unaudited Condensed Consolidated Statements of Operations

	For the Three Months Ended September 30, 2023			For the Three Months Ended September 30, 2022			For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022

Gross Revenue	$	429,914		$	542,790		$	1,410,523		$	1,549,221
Net Revenue		121,922			119,857			375,012			328,781
Total Revenue		551,836			662,647			1,785,535			1,878,002
Less: Cost of Revenue		100,724			107,436			318,642			297,031
Cost of Revenue - Related Parties		16,058			19,820			53,048			81,590

Total Cost of Revenue		116,782			127,256			371,690			378,621

Gross Profit		435,054			535,391			1,413,845			1,499,381
Operating expenses
Professional fees		34,893			142,624			198,206			433,255
Professional fees - Related Party		-			6,000			-			31,634
Salaries		391,537			381,043			1,179,882			892,212
Rent -Related Party		14,694			13,610			43,897			43,152
Bad Debt Expense		-						3,113			-
Depreciation and Amortization		13,503			6,760			39,677			19,206
Other general and administrative costs		33,970			39,060			131,758			141,644

Total operating expenses		488,597			589,097			1,596,533			1,561,103

Loss from operations		(53,543	)		(53,706	)		(182,688	)		(61,722	)

Foreign Currency Translation Adjustment		1,281			3,106			(4,250	)		6,709
Other Income		-			4,925			-			21,302
Total other income (expense)		1,281			8,031			(4,250	)		28,011

Net loss before income tax		(52,262	)		(45,675	)		(186,938	)		(33,711	)

Provision for income taxes (benefit)		2,285			8,598			2,285			10,217

Net loss	$	(54,547	)	$	(54,273	)	$	(189,223	)	$	(43,928	)

Net Loss Per Common Stock
- basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted-average number of shares of common stock outstanding
- basic and fully diluted		414,448,757			414,448,757			414,448,757			413,927,878

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

ELVICTOR GROUP, INC

Unaudited Condensed Consolidated Statements of Cash Flows

	For the Nine Months Ended September 30, 2023			For the Nine Months Ended September 30, 2022
Cash Flows from Operating Activities
Net loss	$	(189,223	)	$	(43,928	)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities
Depreciation		7,524			4,197
Amortization		32,154			15,009
Amortization of ROU Asset		22,709			-
Shares Issued for Services		-			38,700
Changes in assets and liabilities
Accounts Receivable		(67,301	)		9,894
Other Receivables		(13,288	)		41,253
Other Receivables - Related Party		(42,562	)		(203,927	)
Prepaid expenses and other current assets		(84,455	)		(59,004	)
Accounts Payable		(2,773	)		(49,490	)
Trade Accounts Payable		(138,490	)		72,860
Trade Accounts Payable - Related Party		92,919			(13,791	)
Other Payables		(86,150	)		266,252
Accrued and Other Liabilities		174,539			41,135
Lease Liability		(22,709	)		-
Due to related party		(26,715	)		(19,562	)
Net cash (used in)/provided by operating activities		(343,821	)		99,598

Cash Flows from Investing Activities
Office Equipment		(4,510	)		(12,025	)
Software		(3,652	)		-
Net cash used in investing activities		(8,162	)		(12,025	)

Net (Decrease)/Increase in Cash		(351,983	)		87,573

Cash at beginning of period		503,981			308,526
Cash at end of period	$	151,998		$	396,099

Supplemental Cash Flow Information:
Cash paid for:
Income Taxes	$	-		$	-

Supplemental Non-Cash Investing and Financing
Transactions
Shares exchanged for Intangible Asset	$	-		$	301,000
Right-of-use assets obtained in exchange for operating lease obligations	$	291,467		$	-

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

ELVICTOR GROUP, INC

Unaudited Condensed Statements of the Changes in Stockholders’ Equity

	Nine Months Period Ended September 30, 2023
	Common Stock				Preferred Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, January 1, 2023	$	414,448,757		41,445		-		-		45,050,884		(44,639,738	)		452,591
Net Loss		-		-		-		-		-		(8,410	)		(8,410	)
Balance, March 31, 2023	$	414,448,757		41,445		-		-		45,050,884		(44,648,148	)		444,181
Net Loss		-		-		-		-		-		(126,266	)		(126,266	)
Balance, June 30, 2023	$	414,448,757		41,445		-		-		45,050,884		(44,774,414	)		317,915
Net Loss		-		-		-		-		-		(54,547	)		(54,547	)
Balance, September 30, 2023	$	414,448,757		41,445		-		-		45,050,884		(44,828,961	)		263,368

	Nine Months Period Ended September 30, 2022
	Common Stock				Preferred Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, January 1, 2022	$	406,548,757		40,655		-		-		44,802,974		(44,400,880	)		442,749
Shares issued for services		900,000		90		-		-		38,610		-			38,700
Shares exchanged for Intangible Asset		7,000,000		700		-		-		300,300		-			301,000
Net Loss		-		-		-		-		-		(465	)		(465	)
Balance, March 31, 2022	$	414,448,757		41,445		-		-		45,141,884		(44,401,346	)		781,984
Net Profit		-		-		-		-		-		10,810			10,810
Balance, June 30, 2022	$	414,448,757		41,445		-		-		45,141,884		(44,390,535	)		792,794
Net Loss		-		-		-		-		-		(54,273	)		(54,273	)
Balance, September 30, 2022	$	414,448,757		41,445		-		-		45,141,884		(44,444,808	)		738,521

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

ELVICTOR GROUP, INC

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 – DESCRIPTION OF BUSINESS

Elvictor Group, Inc., formerly known as Thenablers, Inc. (“Elvictor Group, Inc.” or the “Company”), was incorporated in the State of Nevada on November 3, 2017. With the change to the Elvictor name came the addition of the Company’s brand and a new crew management team in the shipping industry. The new management team comes from Elvictor (the Greece-based private entity founded in 1977, which is the predecessor to the Company whose business became a part of the business of Thenablers in 2019, referred to herein as “Elvictor Greece”) that has been active across various value-adding shipping sector activities, such as ship management, technical management, crewing & crew management. The Company’s professional core of activities includes crew management, training and the creation of in-house software related to crew and ship matters, for the amelioration of all its operations to facilitate both its employees and those that depend on them. The Company aims to broaden its scope of activities, expanding on to new areas, while refining the existing ones. Placing prime importance on digitalization, the Company plans on the extensive use of Artificial Intelligence, through the application of Machine and Deep Learning, in concert with the integration of a wide array of cloud systems. The Company’s strategic growth on a horizontal and vertical manner throughout the shipping industry will be reinforced with technologically adept tools, containing know-how and experience. Working on a technologically oriented path, the Company is flexible and open to other avenues of international business for the successful and profitable diversification of its portfolio.

On December 13, 2019, the Company filed a Certificate of Amendment with the Nevada Secretary of State to change its name from “Thenablers, Inc.” to “Elvictor Group, Inc.” (the “Name Change”), to better reflect its new business interests. On February 25, 2020, FINRA approved the Name Change and the Company’s new stock symbol “ELVG”.

As of July 10, 2020, the Company founded Elvictor Group Hellas Single Member S.A., a subsidiary in Vari, Greece, to assist the Company’s management in facilitating its operations. Additionally, the Company purchased Ultra Ship Management, a Marshall Islands company that is licensed to provide ship management services, and which established their own subsidiary in Vari, Greece.

In January 2022, the Company established its fully owned subsidiary, ELVG Crew Management Ltd, incorporated in Cyprus, to facilitate its crew management operations.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING AND BENEFICIAL CONVERSION FEATURES POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements (“financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and have been consistently applied. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP, but which are not required for interim reporting purposes, have been omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the financial position as of September 30, 2023 and the results of operations and cash flows for the interim periods ended September 30, 2023 and 2022, have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2023. Operating results for the nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023.

Principles of Consolidation

The unaudited condensed consolidated financial statements incorporate the assets and liabilities of all entities controlled by Elvictor Group, Inc as of September 30, 2023, and the results of the controlled subsidiaries in Vari Greece, the Marshall Islands and Cyprus for the year then ended. Elvictor Group, Inc and its subsidiaries together are referred to in this financial report as the unaudited condensed consolidated entity. The effects of all transactions between entities in the unaudited condensed consolidated entity are eliminated in full. The unaudited condensed consolidated financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”). The Company has adopted a December 31 fiscal year end.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date the unaudited condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly liquid investments with maturities of nine months or less, when purchased, to be cash and cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

For the nine months ended September 30, 2023, the Company has operations of crew manning and management and has accounts receivable due from its shipping industry. Contracts receivable from crew manning in the shipping industry are based on contracted prices. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, individual credit evaluation and specific circumstances of the customer, and existing economic conditions. The Company does not have an allowance for doubtful accounts as of September 30, 2023. Normal contracts receivable is due 30 days after the issuance of the invoice, normally at the month’s end. Receivables past due more than 120 days are considered delinquent and they are included in the provision for doubtful account. There is no interest charged on past due accounts.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The office equipment is depreciated over 3 years.

Intangible Assets

Intangible assets acquired are initially recognized at their fair value on the acquisition date. Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, if any. These assets are being amortized over their useful life of five years.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these unaudited condensed consolidated financial statements.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 606 upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue recognized from contracts with customers is disclosed separately from other sources of revenue. ASC 606 includes guidance on when revenue should be recognized on a Gross (Principal) or Net (Agent) basis.

Most of the Company’s revenues are recognized primarily under long-term contracts, including those for which revenues are based on either a fixed price, or cost-plus-fee basis, and primarily as performance obligations are satisfied. Professional services and other ancillary services are delivered, generally on a monthly basis and are separate and distinct deliverables. The Company’s performance obligation is generally satisfied on a monthly basis when its agency and related services are delivered.

The Company has the performance obligation to provide a crew for its customers, the shipping companies, and their ship managers. The Company utilizes its proprietary crew management platform to deliver crew management services to the ship owners. This crew management service is a monthly obligation that starts with the first stage of recruitment, to their transfer of crew to the vessel and continues to monitor the crew during the course of the contract until they disembark.

Revenue from crew manning services, agency fees and recruiting fees where the Company acts as a principal is recognized as gross revenue. When the Company is acting as an agent, revenue is recognized as net revenue in the accounting period in which the services are rendered. Such revenues are from allotment fees, communication, training fees, Covid-19 fees, and other sundry fees. For all fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period. The accounting treatment for the reporting of revenues may vary materially between whether the revenue is reported on a Principal (Gross) or an Agent (Net) basis.

Stock-Based Compensation

The measurement and recognition of stock - based compensation expense is based on estimated fair values for all share-based awards made to employees and directors, including stock options and for non-employee equity transactions as per ASC 718 rules.

For transactions in which we obtain certain services of employees, directors, and consultants in exchange for an award of equity instruments, we measure the cost of the services based on the grant date fair value of the award. We recognize the cost over the vesting period.

Basic Income/(Loss) Per Share

Basic income per share is calculated by dividing the Company’s net income/(loss) applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of September 30, 2023.

Recent Accounting Pronouncements

From time to time, the Financial Accounting Standards Board (the “FASB”) or other standards setting bodies issue new accounting pronouncements. The FASB issues updates to new accounting pronouncements through the issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, the Company believes that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the Company’s unaudited condensed consolidated financial statements upon adoption.

Foreign Currency Translation

The Company considers the U.S. dollar to be its functional currency as it is the currency of the primary economic environment in which the Company operates. Accordingly, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities are translated at the exchange rates in effect at the time of acquisition or issue. Revenues and expenses are translated at rates approximating the exchange rates in effect at the time of the transactions. All exchange gains and losses are included in operations.

Subsequent Events

The Company has analyzed the transactions from September 30, 2023, to the date these unaudited condensed consolidated financial statements were issued for subsequent event disclosure purposes.

NOTE 3 – RECEIVABLES

Trade receivables are amounts due from customers for services performed in the ordinary course of business.

Other receivables are mainly for the payments of items such as Home Allotments and Cash Advances to the crews where the Company collects funds from the shipping companies and then facilitates the payments to the crew on their behalf.

As of September 30, 2023, the Company has trade accounts receivable of $398,164, Other Receivables of $20,481, and Other Receivables from Related Parties of $412,361.

NOTE 4 – INTANGIBLE ASSETS

As of September 30, 2023, and December 31, 2022, Intangible assets consisted of the following:

	Useful life	September 30, 2023 (Unaudited)			December 31, 2022
At cost:
Software platform	5 years	$	210,000		$	210,000
Accounting software			3,652

Less: accumulated amortization			(74,154	)		(42,000	)
		$	139,498		$	168,000

On November 15, 2021, the Company entered into a subscription agreement with Seatrix Software Production Single Member S.A, a related party company, to issue 7,000,000 restricted common stock shares for the purchase of license software, equal to the aggregate of $210,000 at the stated value of $0.03 per share.

Under this agreement Seatrix grants the Company an exclusive and non-transferable license to use their artificial intelligence software managing shipping crews. The term of this agreement began on January 1, 2022.

The value of each common share was stated at $0.030, the FMV that the shares were trading as of January 3, 2022. The total value of $210,000 was amortized over its useful life of 5 years and the amortization began on January 1, 2022. Intangible assets are measured initially at cost. After initial recognition, an entity usually measures an intangible asset at cost less accumulated amortization.

Amortization of intangible assets attributable to future periods is as follows:

Schedule of Amortization of intangible assets

Year ending December 31:	Amount
2023	$	10,885
2024		43,302
2025		43,182
2026		43,129
	$	139,498

The amortization of Intangible assets was $74,154 and $42,000 as of September 30, 2023, and December 31, 2022, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company has related party transactions with companies that are owned or controlled by either Stavros Galanakis, the Vice-President and Chairman of the Board of Directors, and Konstantinos Galanakis, the Company’s Chief Executive and Financial Officer and Director.

In October 2020, the Company entered into an agreement with related party Elvictor Crew Management Services Ltd in Cyprus to provide human resources services as well as to perform the running and management of the Company’s contracts with third parties and provide key personnel for these services. The October 2020 agreement was terminated in the first quarter of 2022 since the formation of the new wholly owned Cypriot subsidiary. A total amount of $0 has been expensed for the related party Elvictor Crew Management Services Ltd as of September 30, 2023, for the cost of services sold, included in the Cost of Revenue- Related Party. As of September 30, 2023, the Company has other receivables of $412,361 from related party, Elvictor Crew Management Ltd Cyprus.

On September 11, 2020, the Company entered into a Manning Agency Agreement with Elvictor Crew Management Service Ltd in Georgia. During the nine months ended September 30, 2023, the latter provided manning services to the Company of $179,880, included in the Cost of Revenue – Related Party ($ 38,328) and Net Revenue ($141,552), while as of September 30, 2023, the Company had a liability of $95,954.

On September 1, 2020, the Company signed an agreement with Qualship Georgia Ltd for the latter to provide training of the qualified personnel. For the nine months ended September 30, 2023, we incurred $109,644 in expenses that offset Net Revenue, and the amount due to Qualship Georgia Ltd as of September 30, 2023, was $52,128 included under Trade Accounts Payable – Related Party.

On September 11, 2020, the Company entered into a Manning Agency Agreement with Elvictor Odessa. During the nine months ended September 30, 2023, the latter provided manning services to the Company of $14,720, included in the Cost of Revenue – Related Party, and amount due to Elvictor Odessa as of September 30, 2023, was $1,270 included under Trade Accounts Payable – Related Party.

As disclosed in Note 4 above, the Company entered into an agreement with Seatrix Software Production Single Member S.A. to provided software development services. For the nine months ended September 30, 2023, the Company has a balance of $0 due.

NOTE 6 – LEASES

On July 10, 2020, the Company entered into a rental lease agreement with Stavros Galanakis’ wife (Aikaterini Galanaki), for its subsidiary in Vari, Greece. The term of the lease is from July 10, 2020, to December 31, 2021, with a fixed monthly rental payment. of 5,000€. Then on April 1, 2021, the rental lease agreement was modified with the new term beginning as of April 1, 2021, and ending on December 31, 2022, with a fixed monthly rental payment of 3,500€.

On October 1, 2021, the Company entered into a second lease with Stavros Galanakis’ wife (Aikaterini Galanaki), for its new subsidiary in Vari, Greece for Ultra Ship Management. The term of the lease is from October 1, 2021, to December 31, 2024, with a fixed monthly rental of 1,000€.

In January 2023, the Company renewed the office lease for its subsidiary in Vari, Greece. The Company accounted for its new lease as an operating lease under the guidance of Topic 842. The new lease is 3,500€ per month, with no annual increase during the 8-year term. The Company used an incremental borrowing rate of 4.92% based on the average interest rate of corporate loans in Greece from the Bank of Greece. At the lease inception the company recorded a Right of Use Asset of $291,467 and a corresponding Lese Liability of $291,467.

Total future minimum payments required under the lease agreements are as follows:

	ELVG Hellas			Ultra Mgmt			Total
	Amount						Amount
2023		11,116			3,176			14,292
2024		44,464			9,528			53,992
2025		44,464						44,464
2026		44,464						44,464
2027		44,464						44,464
Thereafter		133,392						133,392
Total undiscounted minimum future lease payments		322,364			12,704			335,068
Less Imputed interest		(56,761	)		(415	)		(57,176	)
Present value of operating lease liabilities		265,603			12,289			277,891
Disclosed as:
Current portion		31,396			12,289			43,684
Non-current portion		234,207			-			234,207

The Company recorded rent expenses of $43,897 and $43,152 for the nine months ended September 30, 2023, and 2022, respectively.

NOTE 7 - OTHER PAYABLES

The services in the manning of a crew provided by the Company to the shipping companies include the Company making bank transfers of the wages to the crew, on the customer’s behalf. The shipping companies transfer the funds to the Company’s bank account followed by the Company making each payment to the indicated crew, in this capacity, the Company will show the balance of the funds received and not yet transferred to the crew as Other Payables on the Balance Sheet. The amount of Other Payables was $399,524 as of September 30, 2023 compared to $485,675 as of December 31, 2022.

NOTE 8 – STOCKHOLDERS’ EQUITY

Issuance of Common Stock

The Company has 700,000,000, ($0.0001 par value) authorized shares of common stock. On December 31, 2022, there were 414,448,757 common shares issued and outstanding.

On July 7, 2020 the Company entered into a Settlement Agreement and Release with the holders of the Series A Preferred Stock, Konstantinos Galanakis and Stavros Galanakis, having 46,702,857 and 33, 297,143 shares each, respectively (the “Preferred Holders”), whereby the Preferred Holders agreed to cancel all shares of Series A Preferred in exchange for 95% of the common stock held as an aggregate of the holdings of the founding shareholders plus the shares to be issued to the Preferred Holders the earliest of a) the Company showing pro forma 12 month revenues in excess of $3,000,000; b) the successful raising of funds through equity or debt in excess of $10,000,000; or 9 months from the date of execution (the “Settlement Agreement”). The Settlement Agreement is further conditioned upon the execution of a non-compete agreement between the Company and the Preferred Holders preventing them from competing in crew and ship management. In conjunction therewith, on April 8, 2021, the Company issued 375,459,000 common stock shares to the holders of the Series A Preferred Stock pursuant to the July 7, 2020 Settlement Agreement, and further to the conversion of those preferred stock shares to common stock shares. Specifically, 217,310,305 restricted common stock shares were issued to Konstantinos Galanakis, 156,271,400 restricted common stock shares were issued to Stavros Galanakis, and 1,877,295 restricted common stock shares were issued to Theofanis Anastasiadis. As a result, there were no shares of Series A Preferred Stock issued and outstanding as of December 31, 2022.

On January 19, 2022, the Company issued 7,000,000 restricted common stock shares with a value of $210,000 to Seatrix Software Production Single Member S.A., a company owned and controlled by Konstantinos Galanakis, pursuant to the November 15, 2021 Software License Agreement, for the exclusive and non-transferable license to use the Licensor’s artificial intelligence software in connection with the managing of shipping crews.

On January 19, 2022, the Company issued an aggregate of 900,000 restricted common stock shares with a value equal to $38,700 at the time to certain directors and former directors for past services provided to the Company.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

The Company entered in a long-term rental lease agreement for offices of its subsidiary branch in Vari, Greece for the period commencing from July 10, 2020, through December 31, 2021, in the amount of 5,000€ per month, the first month of which, July, was adjusted for the shortened period. The lessor, Aikaterini Galanakis, is the wife of the Company’s president, Stavros Galanakis.

Then as of April 1, 2021, the Company terminated the lease and entered into a new lease for the period commencing from April 1, 2021, to December 31, 2022, with an amount of 3,500€ per month. This specific lease was renewed for an 8-year term commencing on January 1, 2023, and terminating on December 31, 2030.

On October 1, 2021, the Company entered into a second lease agreement with Stavros Galanakis’ wife for its new subsidiary, Ultra Ship Management, in Vari, Greece. The term of the lease is from October 1, 2021, to December 31, 2024, with a fixed monthly rental of 1,000€.

NOTE 10 – SUBSEQUENT EVENT

The Company has analyzed its operations subsequent to September 30, 2023, through the date of this filing of these unaudited condensed consolidated financial statements and has determined that there are no material subsequent events to these unaudited condensed consolidated financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the context otherwise requires, the term “we,” “us,” “our,” or “the Company,” refers to the business of Elvictor Group, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. Our SEC filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Organizational Overview

Together with our wholly owned crew management subsidiaries, we are a crewing and crew management company responsible for sourcing, recruitment, selection, deployment, scheduling, training, and on-going management of seafarers. Our services also include administrative functions related to crew management services, including payroll services, travel arrangements, and verifying the insurance coverage information of all onboarded seafarers. We benefit from over 65 years of combined experience in various value adding activities of the shipping sector such as ship management, technical management, ship agency, crewing, and crew management of Stavros Galanakis and Konstantinos Galanakis.

Through the crew management platform developed by our affiliate, Seatrix, our personnel can collaborate with many different cultures in many different time zones with ever rising complexities, presenting a uniform service level to our principals, regardless of the point of origin of the crew. This innovation allows us to hire junior operators, who after a training procedure are able to serve our principals with high quality standards, helping us be cost effective while maintaining the highest possible service level.

We intend to expand our services by also providing ship management services. In furtherance of such expansion, we acquired Ultra Shipmanagement from Stavros Galanakis and Konstantinos Galanakis, both of which are related parties, which has received its Det Norske Veritas as approved Interim Document of Compliance provided under the authority granted by the Government of the Republic of the Marshall Islands, and we have also employed specialized personnel. The Interim Document of Compliance is the license required for a ship management company to start providing its services.

Known Trends, Demands, Commitments, Events or Uncertainties Impacting Our Business

The shipping industry is currently experiencing historical uncertainty in sustainability logistics and daily operations as a result of the COVID-19 pandemic, geopolitical tensions and the war between Russia and Ukraine. Additionally, shortages of crew members have also been created due to aging crew members leaving the maritime business. As a result of the foregoing, competition in crew resources is becoming stiffer and more unpredictable resulting in higher wage demands by crew members. These wage demands, accompanied by incentive compensation requested by crew members, are increasing vessel operating expenses. The impact of global inflation has also added to these increases. Additionally, smaller contract durations are requested and timely changes in ports, increasing the costs of changing crews and the costs and volume of such logistics.

To address these issues, we are implementing short and long-term strategies based on proactive scheduling and recruitment, with the help of our cloud-based system and intelligent metrics that have been developed in-house to monitor the “trends and fashions” of the maritime industry. Our goal is to build new pools of seafarers by accelerating promotions, cadetship programs, and the employment of more cadets onboard. These cadets are scheduled to be promoted to junior officers in the near future, generating a new breed of officers to address the global shortage and maintain crews at reasonable costs. We have also developed interactive screens through HTML5 links to communicate with seafarers and to keep crews updated, monitor their welfare and provide better services to them. We also proceed to regular updates of our cloud-based system to elevate logistics intelligence, allowing us to handle growth and recruitment volumes more efficiently. While we believe that these actions will help address many of these issues, if we are unable to effectively do so, the shortage of crew members and significant increase in expenses could have a materially adverse impact on our business.

COVID-19

The future outbreak of COVID-19 may negatively impact our business, results of operations and financial condition.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which at such time continued to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 resulted in a widespread health crisis that adversely affected the economies and financial markets worldwide; the future outbreak of COVID-19 would adversely affect our business, results of operations and financial condition.

The future outbreak of the COVID-19 may adversely affect our shipping industry related customers and have an adverse effect on our results of operations.

The risks associated with any future outbreak of COVID-19 would adversely affect our revenues due to health concerns by patrons of the shipping industry and government restrictions upon the airline and shipping industry. Risks related to a future epidemic, pandemic, or other health crisis, such as COVID-19, could negatively impact our results of operations. The ultimate extent of the impact of any epidemic, pandemic or other health crisis our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including future information that may emerge concerning the severity of such future epidemic, pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. These and other potential impacts of a future epidemic, pandemic, or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition, and results of operations.

Future Operations

In order to meet business goals, we must (a) execute efficiently our current business of crew management; and (b) continue to focus on new business development in order to acquire new agreements.

In order to raise sufficient funds to implement our business plan, we may have to find alternative sources of funds, from a public offering, a private placement of securities, or loans from third parties (such as banks or other institutional lenders). Equity financing could result in additional dilution to then existing shareholders. If we are unable to meet our needs for cash from either the money that we raise from private placements, or possible alternative sources, then we may be unable to continue to maintain, develop or expand our operations.

We generated revenues of $1,785,535 and $1,878,002 for the nine-month period ended September 30, 2022 and September 30, 2023 reflecting decreased revenues of $92,467.

In the second quarter of 2021, we entered into an exclusive Software License Agreement with Seatrix in order to have the right to use crew software that facilitates our operations. Thereafter in the fourth quarter of 2021, we signed a new Software License Agreement, effective on January 1, 2022, that granted the perpetual exclusive and non-transferable license in exchange for our restricted common stock shares. Through this agreement, we are entitled to use the crew management platform and our personnel to collaborate with many different cultures in many different time zones with ever rising complexities, presenting a uniform service level to our principals regardless of the point of origin of the crew.

Results of Operations

Revenues

For the nine-month periods ended September 30, 2023 and September 30, 2022, we generated $1,785,535 and $1,878,002 in total revenue, respectively, representing a decrease in total revenue of $92,467 between the two periods, or 4.9%. The increase in total revenue between these two periods is primarily due to an increase in crewing clients.

For the three-month periods ended September 30, 2023 and September 30, 2022, we generated $551,836 and $662,647 in total revenue, respectively, representing a decrease in total revenue of $110,811 between the two periods, or 16.7%. The decrease in total revenue between these two periods is primarily due to a decrease in crew management clients during the specific quarter of 2023.

Operating Expenses

For the nine-month periods ended September 30 2023, and September 30, 2022, we incurred $1,596,533 and $1,561,103, respectively in total operating expenses, representing an increase in total operating expenses between the two periods of $35,430, or 2.3%. The increase in operating expenses in 2023 is primarily due to an increase of $287,670 (32.2%) in salaries payable to our employees from $892,212 for the nine-month period ended September 30, 2022 to $1,179,882 for the same period in 2023, as a result of increases in salaries payable to management and an increase in the number of employees.

For the three-month periods ended September 30 2023, and September 30, 2022, we incurred $488,598 and $589,097, respectively in total operating expenses, representing a decrease in total operating expenses between the two periods of $100,498, or 17.1%. The decrease in operating expenses in 2023 is primarily due to a decrease of $107,713 (75.5%) in professional fees, not including professional fees from related parties, from $142,624 for the three-month period ended September 30, 2022 to $34,893 for the same period in 2023, as a result of substantial savings in legal and other advisory related costs.

Net Loss and Gross Profit

For the nine-month periods ended September 30, 2023 and September 30, 2022, we incurred a net loss of $189,223, after provision for income taxes, and $43,298, after provision for income taxes, respectively, representing a decrease in net profit of $145,925 between the two periods. This decrease in net profit is primarily attributable to the decreased revenues described above, that resulted to a gross profit decreased by $85,536, or 5.7%, from $1,499,381 for the nine-month period ended September 30, 2022 to $1,413,845 for the same period in 2023.

For the three-month periods ended September 30, 2023 and September 30, 2022, we incurred a net loss of $54,547, after provision for income taxes, and $54,273, after provision for income taxes, respectively, representing a decrease in net profit of $274 between the two periods. This decrease in net profit is attributable to the decreased revenues described above.

Liquidity, Capital Resources, and Off-Balance Sheet Arrangements

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had a working capital surplus during the nine-month period ended September 30, 2023 of $63,988 compared to the surplus of $253,118 for the year ended December 31, 2022, which is calculated as current assets minus current liabilities.

Cash flows for the nine-month period ended September 30, 2023

Net cash outflow provided by operating activities was $343,821 for the nine-month period ended September 30, 2023, compared to an inflow of $99,598 during the same period in 2022. This change was mainly attributable to the cash receivable from our customers and payable to our suppliers.

Net cash flow used in investing activities was $8,162, mainly deriving from the purchase of office equipment, and $12,025 for the nine-month periods ended September 30, 2023 and September 30, 2022, respectively.

Net cash used for financing activities was $0, for the nine-month periods ended September 30, 2023 and September 30, 2022, respectively.

Cash Requirements

We believe our cash and cash equivalents, together with anticipated cash flow from operations will be sufficient to meet our working capital, and capital expenditure requirements for at least the next twelve months. We will require additional capital to implement our business development and fund our operations. In the event that our plans or assumptions change, we may need to raise additional capital sooner than expected.

Since the commencement of our crew management business, we have funded our operations primarily through equity financings. We expect that we will continue to fund our business through equity and debt financing, either alone or through strategic alliances. Additional funding may be unavailable on favorable terms, if at all, which could harm our business plans, financial condition and operating results. We intend to continue to fund our business by way of equity or debt financing along with revenues to support us. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership held by our existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock.

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, capital expenditures or capital resources that is material to our stockholders.

Contractual Obligations

On July 10, 2020, we entered into a rental lease agreement with Stavros Galanakis’ wife for its subsidiary, Elvictor Group Hellas Single Member S.A., in Vari, Greece. The term of the lease is from July 10, 2020, to December 31, 2021, with a fixed monthly rental payment of 5,000€. Then on April 1, 2021, the rental lease agreement was modified with the new term beginning as of April 1, 2021, and ending on December 31, 2022, with a fixed monthly rental payment of 3,500€.

In January 2023, the Company renewed the office lease for its subsidiary in Vari, Greece. We accounted for the new lease as an operating lease under the guidance of Topic 842. The new lease is 3,500€ per month, with no annual increase during the 8-year term. We used an incremental borrowing rate of 4.92% based on the average interest rate of corporate loans in Greece from the Bank of Greece. At the lease we recorded a Right of Use Asset of $291,467 and a corresponding Lease Liability of $291,467.

Total future minimum payments required under the lease agreements are as follows:

	ELVG Hellas			Ultra Mgmt			Total
	Amount						Amount
2023		11,116			3,176			14,292
2024		44,464			9,528			53,992
2025		44,464						44,464
2026		44,464						44,464
2027		44,464						44,464
Thereafter		133,392						133,392
Total undiscounted minimum future lease payments		322,364			12,704			335,068
Less Imputed interest		(56,761	)		(415	)		(57,176	)
Present value of operating lease liabilities		265,603			12,289			277,891
Disclosed as:
Current portion		31,396			12,289			43,684
Non-current portion		234,207			-			234,207

The Company recorded rent expenses of $43,897 and $43,152 for the nine months ended September 30, 2023, and 2022, respectively.

Outlook

The shipping industry and especially the crew management segments will likely continue to face increasing pressures due to the war in Ukraine. According to the International Chamber of Shipping (the “ICS”), which represents approximately 80% of the worlds’ merchant fleet, Ukrainian and Russian seafarers make up 14.5% of the global shipping workforce.

Our management team is assessing alternative plans to mitigate potential challenges arising from the ongoing war in Ukraine, among other things.

Lack of qualified seafarers has led to increased competition among crewing and shipping companies not only revolving around retaining current crew members, but also involving the strategic challenge of finding and attracting new, qualified seafarers. Traditional recruitment methods may no longer be as effective, and companies will need to invest more resources in recruitment campaigns, including attending job fairs, forming partnerships with maritime academies, and leveraging digital platforms for wider reach. However, this might intensify the financial pressure on crewing companies and lead to thinner profitability margins. Ultimately, this underscores the importance of innovative recruitment and retention strategies in an era of limited seafarer supply.

Further to the above, the demand for our services depends on the demand for maritime shipping services which are subject to normal economic cycles affecting the general economy, including the effect of increased inflation. Inflationary pressures may result to important increases to our operating costs that we may not be able to fully transfer to our clients thus affecting our profitability. Additionally, increase in operating costs of our clients may lead to delays in payments for our services and accumulation of bad debt, although we closely monitor their credit behavior to avoid such incidents. Additionally, significant deteriorations of economic conditions over a prolonged period could produce a material adverse effect on the demand for our services.

The ongoing conflict in Israel may influence the wider macroeconomic environment, but it is unlikely to substantially impact our operations, given that the majority of our seafarers are not from the affected region and none of our clients are based there.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedure

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Framework used by Management to Evaluate the Effectiveness of Internal Control over Financial Reporting

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and the related rule of the SEC, management assessed the effectiveness of our internal control over financial reporting using the Internal Control-Integrated Framework (2013) developed by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment and for the reasons described below, management concluded that our internal control over financial reporting were not effective at the reasonable assurance level due to material weaknesses in internal controls over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

●

Refer to the upkeep of records which, with reasonable detail, accurately and fairly reflect our transactions and dispositions;

●

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company;

●

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements;

●

Provide reasonable assurance that any unauthorized cash transactions are detected and prevented; and

●

Provide reasonable assurance, that potential erroneous accounting entries are identified and corrected on a timely manner.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Evaluation of Disclosure Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls 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. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to material weaknesses in internal controls over financial reporting (as described below).

Deficiencies and Significant Deficiencies

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Audit Standard No. 5, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that as of September 30, 2023 our internal controls over financial reporting were not effective at the reasonable assurance level:

We do not have sufficient written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of the Sarbanes-Oxley Act which is applicable to us for the year ended December 31, 2022. Management evaluated the impact of our failure to have sufficient written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We do not have sufficient resources in our accounting function, which restricts the Company’s ability to gather, analyze and properly review information related to financial reporting in a timely manner. In addition, due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We have taken steps to remediate some of the weaknesses described above and we are in discussions with the risk advisory departments of reputable accounting firms to assist us in the COSO framework documentation and testing of the internal controls. We intend to continue to address these weaknesses as resources permit, including the employment of new qualified employees.

Remediation of Deficiencies and Significant Deficiencies

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Additionally, we will continue to establish and implement proper processes and systems to remediate the deficiencies we have had, including preventive controls with the segregation of duties on main areas such as payroll, billing, cash recording, and IT control and detective controls involving account reconciliations on a monthly basis.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the nine-months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against us, 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 disclose risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered equity securities during the third quarter of 2023.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.		Description of Exhibit
31.1*		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) Under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to U.S.C. Section 1350, as Adopted 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).

*	Filed herewith.

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.

	ELVICTOR GROUP, INC.

Dated: November 14, 2023	By:	/s/ Konstantinos Galanakis
		Konstantinos Galanakis
		Chief Executive and Financial Officer (Principal Executive Officer)