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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2019

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

For the transition period from ____________ to ____________

Commission file number:333-180954

Hawkeye Systems, Inc.

(Exact name of small business issuer as specified in its charter)

Nevada		830799093
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7119 W. Sunset Blvd., Suite 468

Los Angeles, CA 90046

(Address of principal executive offices)

(310)_ 606-2054

(Registrants telephone number, including area code)

_____________________________________________________________

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

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐No

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Yes ☒No

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

The number of shares outstanding of each of the issuer's classes of common equity as of May 15, 2019 was 9,660,516 shares of common stock.

Contents


Part 1	FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)

	Condensed Balance Sheets as of March 31, 2019 (unaudited) and June 30, 2018 (audited)	4

	Condensed Statement of Operation for the three and nine months ending March 31, 2019 (unaudited)	5

	Condensed Statement of Changes in Stockholders’ Equity (unaudited)	6

	Condensed Statement of Cash Flows for the nine months ending March 31, 2019 (unaudited)	7

	Notes to Condensed Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19

Item 4.	Controls and Procedures	19

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	21

Item 6	Exhibits	21

	SIGNATURES	21

Item 1. Financial Information

Hawkeye Systems, Inc.

Condensed Balance Sheets

		March 31, 2019		June 30, 2018
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	`32,827`	$	`334,650`

Total current assets		`32,827`		`334,650`

Investment in joint venture (Cost: $900,000- March 31, $150,000 – June 30)		`640,819`		`150,000`

Total Assets	$	`673,646`	$	`484,650`


Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable and accrued liabilities	$	`18,000`	$	`12,800`
Note due on demand		`200,000`		`-`

Total current liabilities	$	`218,000`		`12,800`

Total liabilities		`218,000`		`12,800`

Preferred stock, $0.0001 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2019 or June 30, 2018		`-`		`-`
Common stock, $0.0001 par value, 400,000,000 shares authorized, 9,660,516 and 8,886,416 shares issued and outstanding as of March 31, 2019 and June 30, 2018		`966`		`889`
Additional paid-in capital		`1,334,027`		`655,836`
Stock subscription receivable		`-`		`(142,500)`
Accumulated deficit		`(879,347)`		`(42,375)`

Total stockholders’ equity		`455,646`		`471,850`

Total Liabilities and Stockholders’ Equity	$	`673,646`	$	`484,650`

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

Hawkeye Systems, Inc.

Condensed Statement of Operations

(Unaudited)

		For the three months ended March 31, 2019		For the nine months ended March 31, 2019


Revenue	$	`-`	$	`-`

Expenses:
General and administrative expenses		`10,450`		`11,825`
Legal and professional expenses		`44,688`		`90,503`
Regulatory filing expenses and fees		`20,182`		`53,582`
Escrow Fees		`-`		`11,893`
Marketing expenses	**	`30,550`		`30,550`
Consulting fees	**	`186,058`		`186,058`
Management compensation	**	`118,580`		`118,580`
Total expenses		`410,508`		`502,991`

Operating loss		`(410,508)`		`(502,991)`

Non-operating income (expense):
Unrealized loss on joint venture		`(36,382)`		`(259,181)`
Interest expense	**	`(74,800)`		`(74,800)`
Total non-operating income		`(111,182)`		`(333,981)`

Net loss	$	`(521,690)`	$	`(836,972)`

Net loss per share – basic and diluted *	$	`(0.06)`	$	`(0.09)`


Basic and diluted weighted average shares outstanding		`9,402,483`		`9,055,927`

*Excludes all anti-dilutive potential shares
**Includes stock based remuneration

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

Hawkeye Systems, Inc.

Statement of changes in stockholders’ equity

(Unaudited)

	*Common Stock*		Paid-in	Stock Subscription Received/	Accumulated Gain/	Total Stockholders’
	Shares	Amount	Capital	(Receivable)	(Deficit)	Equity
Balance – December 31, 2018*	`8,886,416`	`$889`	`$655,836`	`$340,000`	`$(357,656)`	`$639,069`

Common stock issued for cash	`715,000`	`72`	`135,700`	`-`	`-`	`135,771`

Common stock issued as compensation	`59,100`	`6`	`29,544`	`-`	`-`	`29,550`

Warrants issued	`-`	`-`	`221,729`	`-`	`-`	`221,729`

Stock options issued as compensation - vested	`-`	`-`	`291,218`			`291,218`

Stock subscription receivable	`-`	`-`	`-`	`(340,000)`	`-`	`(340,000)`

Net gain/(loss) during the period	`-`	`-`	`-`	`-`	`(521,690)`	`(521,690)`

Balance – March 31, 2019	`9,660,516`	`$966`	`$1,334,027`	`$-`	`$(879,347)`	`$455,646`

*No prior period presented as inception was May 15, 2018

The accompanying notes form an integral part of these unaudited condensed financial statements

Hawkeye Systems, Inc.

Statement of Cash Flows

(Unaudited)

		For the nine months ended March 31, 2019

Cash flows from operating activities:
Net loss	$	`(836,972)`
Adjustments to reconcile net loss to net cash used in operating activities:
Unrealized loss on joint venture		`259,181`
Stock based remuneration		`245,968`
Changes in operating assets and liabilities:
Increase in accounts payable and accrued liabilities		`5,200`
Net cash used in operating activities**		`(326,623)`

Cash flows from investing activities:
Investment in joint venture*		`(350,000)`
Net cash used in investing activities		`(350,000)`

Cash flows from financing activities:
Issuance of common stock for cash*		`300,000`
Options issued in lieu of interest payment		`74,800`
Net cash from financing activities		`374,800`

Net decrease in cash		`(301,823)`

Cash, beginning of period		`334,650`

Cash, end of period	$	`32,827`

Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest	$	-
Income taxes	$	-

*Excludes $400,000 cash payments made directly from a shareholder and a lender to the joint venture
**Funds from the note due on demand were paid directly from the lender to the joint venture
Refer to Note 2 in the financial statements for disclosures over all non-cash investing and financing activities during the period.

The accompanying notes form an integral part of these unaudited condensed financial statements

Hawkeye Systems, Inc.

Notes to Condensed Financial Statements

1.Nature of Operations and Organization of the Company

Hawkeye Systems, Inc., a Nevada corporation incorporated on May 15, 2018, is a technology company that is developing cutting edge optical imaging products for military and law enforcement markets to assist with intelligence, surveillance and reconnaissance (“ISR”). Other potential markets include commercial entertainment and outdoor sportsmanship activities. This “SOCOM to Commercial” (United States Special Operations Command to Commercial) model has worked well for other companies such as Oakley and Camelbak.

On June 7, 2018, the Company entered into a joint-venture partnership with Insight Engineering, LLC (“Insight”). On August 1, 2018, the Company and Insight incorporated Optical Flow, LLC and entered into an operating agreement (the “Joint Venture” or “Optical Flow”) which superseded the previous joint-venture partnership. Pursuant to the Joint Venture, the Company and Insight will co-develop high resolution imaging systems. Insight is a Nevada limited liability corporation that is led by Lucas Foster, who has two decades of experience working on advanced camera technology for entertainment/motion picture uses.

The Company currently owns fifty (50%) percent of the Joint Venture. Pursuant to the terms and conditions of the Joint Venture, the Company must contribute $2,000,000 to the Joint Venture over a 12-month period or it will forfeit its interest in the Joint Venture pro rata to funds raised.

2.Summary of Significant Accounting Policies

Basis of presentation

The financial statements present the balance sheet, statements of operations, stockholders' equity and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with U.S. generally accepted accounting principles.

Year End

The Company has adopted June 30 as its fiscal year end.

Use of Estimates

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

The Company maintains a cash balance in a non-interest-bearing account. The Company considers short-term, highly liquid investments that are readily convertible to known amounts of cash and that are so near their maturity that they present insignificant risk of changes in value because of changes in interest rate to be cash equivalents. This balance includes $32,827 ($334,650 at June 30, 2018) held in a trust account that is legal title of the Company. There were no cash equivalents as at March 31, 2019 (none as at June 30, 2018).

2.Summary of Significant Accounting Policies (continued)

Investment in Joint Venture

The investment in the Joint Venture is accounted for by the Company using the equity method in accordance with FASB ASC 323. The company currently owns fifty percent of the Joint Venture. Pursuant to the terms and conditions of the Joint Venture, the Company must contribute $2,000,000 to the Joint Venture over a 12-month period or it will forfeit its interest in the Joint Venture pro rata to funds raised. As at March 31, 2019 the Company has contributed $900,000 ($150,000 as at June 30, 3018) to the Joint Venture and will, subject to available financing, use its reasonable commercial efforts to pay the remaining $1,100,000 commitment on or before June 15, 2019.

The Joint Venture is currently developing a wide field of view, single lens virtual reality imaging product. Initially, these products are being designed to be able to be mounted to law enforcement and/or military personnel to record and stream high resolution images to a wifi or Bluetooth network, when required.

Through the Joint Venture, the Company is conducting research and development for the further development of this imaging system for the body/head camera platform. The milestones over the next 12-months are:

Design the single lens platform;

Develop hardware design and source components;

Sign a binding agreement with the imaging sensor provider;

Produce working prototype(s); and

Get user/client feedback on use cases and user requirements.

On August 1, 2018, the Company and Insight incorporated Optical Flow, LLC and entered into an operating agreement (the “Joint Venture” or “Optical Flow”) which superseded the previous joint-venture partnership. Pursuant to the Joint Venture, the Company and Insight will co-develop high resolution imaging systems. This includes a worldwide license for military and law enforcement purposes (the “License”) to use and build products derived from all technology, information, intellectual property and other materials for or relevant to the 360 degree visible and infrared spectrum single lens camera platform, including without limitation, all business plans, technical plans, specifications, templates, demonstration versions, hardware, equipment, software, devices, methods, apparatus, and product designs. The License is also subject to a five (5%) percent net sales royalty payable to Insight. The License will allow the Joint Venture to excel in developing a next generation body and head camera that sees behind the user and presents a clear and wide field of view. The Joint Venture will develop and own additional technology that may include further iterations of this system, and all the related mounting and charging technologies that facilitate its use.

2.Summary of Significant Accounting Policies (continued)

Investment in Joint Venture (continued)

Joint Venture Balance Sheets
	As at March 31, 2018	As at June 30, 2018
All figures in USD
Cash and cash equivalents	`73,590`	`150,000`
Deposit - Radiant	`310,000`	`-`
Computers (net of accumulated depreciation of $469)	`3,747`	`-`
*Total assets*	`387,337`	`150,000`

Accrued liabilities	`-`	`-`
Accrued liabilities – related party	`5,699`	`-`
Total liabilities	`5,699`	`-`

Venturer contributions	`900,000`	`150,000`
Retained earnings	`(518,362)`	`-`
Venturers’ equity	`381,638`	`150,000`
*Total liabilities and venturers’ equity*	`387,337`	`150,000`

Joint Venture Income Statement
	For the three months ended March 31, 2019	For the Nine months ended March 31, 2019
All figures in USD
Revenue	`-`
Expenses:
Research and development	`-`	`140,000`
Management fees	`37,000`	`198,500`
Consulting fees	`10,000`	`35,000`
Legal and professional fees	`10,000`	`29,636`
Marketing expenses	`2,500`	`21,267`
Meals, entertainment and travel expenses	`10,024`	`63,399`
Project management expenses	`-`	`13,413`
General and administrative expenses	`2,638`	`16,078`
Depreciation	`602`	`1,071`
*Net loss*	`72,764`	`518,364`

2.Summary of Significant Accounting Policies (continued)

Investment in Joint Venture (continued)

Value of Hawkeye Investment in Joint Venture
	For the period of May 15, 2018 to June 30, 2018
Investment in Joint Venture as at May 15, 2018	`$-`
Cash contributions to Joint Venture by Hawkeye	`150,000`
Company’s share of the Joint Venture net income for the period	`-`
Investment in Joint Venture value as at June 30, 2018	`$150,000`

	For the three months ended March 31, 2019
Cash contributions to Joint Venture by Hawkeye	`$205,000`
Company’s share of the Joint Venture net income for the period	`$(36,382)`

	For the nine months ended March 31, 2019
Cash contributions to Joint Venture by Hawkeye	`$750,000`
Company’s share of the Joint Venture net income for the period	`$(259,181)`

	Investment to date at March 31, 2019
Cash contributions to Joint Venture by Hawkeye	`$900,000`
Company’s share of the Joint Venture net income for the period	(259,181)
Investment in Joint Venture value as at March 31, 2018	`$640,819`

Income Taxes

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. As of December 31, 2018, the Company reviewed its tax positions and determined there were no outstanding tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

2.Summary of Significant Accounting Policies (continued)

Note Due on Demand

On January 22, 2019 the Company obtained a $200,000 note from a shareholder of the Company that was used to fund the Joint Venture. The note is due on demand after 60 days at which point the lender can request repayment at any time. The Company can repay the note (in full or in installments) at any time without notice or penalty.

In lieu of interest payments, the Company will grant 150,000 stock options at $0.50 per share for a five year term.

At the option of the lender, the note is convertible at any time from the date of issuance for one year subsequent at a conversion price of $0.50 per share. Upon conversion the lender will also be issued (i) two times the number of share converted in Series A warrants each exercisable for one year from the date hereof for one share of the Company’s common stock at an exercise price of $1.00 per share, and (ii) two times the number of share converted in Series B warrants each exercisable for one year from the date hereof for one share of the Company’s common stock at an exercise price of $2.00 per share.

As of March 31, 2019 the fair value of the 400,000 warrants were the conversion exercised is $141,844.

The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions:

Expected life:1.0 year

Volatility:267%*

Dividend yield:0%**

Risk free interest rate:2.40%***

* The volatility is based on the average volatility rate of three similar publicly traded companies

** The Company has no history or expectation of paying cash dividends on its common stock

*** The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant

Stock Subscription Receivable

This balance relates to capital stock issued during the period for which payment has not been received by the Company at period end.

Net Loss per Share

Net income (loss) per common share is computed and presented in both basic and diluted earnings per share (“EPS”) on the face of the income statement.

Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

2.Summary of Significant Accounting Policies (continued)

Stock Purchase Warrants

The Company accounts for warrants issued to purchase shares of its common stock as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity.

During the period there were warrants acquired as part of the sale of shares to shareholders. The warrants to acquire additional shares of stock that would have a dilutive effect on current shares outstanding, the warrants outstanding have been disclosed below:

Number of Warrants Outstanding	Years to maturity	Exercise Price	Value
2,438,666	1.00	$0.50	$536,717
2,438,666	2.00	$0.50	$636,195

The fair value of the warrants was determined using the Black-Scholes option pricing model with the following assumptions:

Expected life:1 to 2 years

Volatility:267%*

Dividend yield:0%**

Risk free interest rate:2.57 to 2.52%***

* The volatility is based on the average volatility rate of three similar publicly traded companies

** The Company has no history or expectation of paying cash dividends on its common stock

*** The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant

Stock Options

During the period, pursuant to the Company’s 2019 Directors, Officers, Employees and Consultants Stock Option Plan the Company granted stock options as remuneration for work performed. The holders of the options rights to acquire shares shall vest 20% immediately upon issuance of this option, and an additional 20% every three months thereafter.

The Company also issued stock options in lieu of interest payments for the note due on demand which vested upon issuance.

2.Summary of Significant Accounting Policies (continued)

Stock Options (continued)

Refer to tables below for summary of options issued and vested during the period:

Options Granted	# of Options	Weighted Average strike price	Weighted Average remaining life (in years)
Outstanding as at 1/1/2019	-	-	-
Issued	1,455,000	0.52	4.84
Exercised	-	-	-
Forfeited	-	-	-
Expired	-	-	-
Outstanding as at 3/31/2019	1,455,000	0.52	4.84

Options Vested	# of Options	Weighted Average strike price	Weighted Average remaining life (in years)
Vested as at 1/1/2019	-	-	-
Issued	411,000	0.51	4.84
Exercised	-	-	-
Forfeited	-	-	-
Expired	-	-	-
Vested as at 3/31/2019	411,000	0.51	4.84

During the period the fair value of the options granted was $725,517, of which $291,218 vested during the period. The fair value of the options was determined using the Black-Scholes option pricing model with the following assumptions:

Expected life:5 years

Volatility:267%*

Dividend yield:0%**

Risk free interest rate:2.43 to 2.57%***

* The volatility is based on the average volatility rate of three similar publically traded companies

** The Company has no history or expectation of paying cash dividends on its common stock

*** The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant

Commitments and Contingencies

The Company has committed to contribute $2,000,000 to the Joint Venture over a twelve month period as disclosed above. To date the Company has contributed $900,000 ($150,000 at June 30, 2018) and has a commitment of $1,100,000 ($1,850,000 as at June 30, 2018) to the Joint Venture to be paid within the next 3 months.

Management of the Company is not aware any other commitments or contingencies that would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

2.Summary of Significant Accounting Policies (continued)

Foreign Currency translation

The Company’s functional and reporting currency is the US dollar. Foreign exchange items are translated to US dollars using the exchange rate prevailing at the balance sheet date. Monetary assets and liabilities are translated using the exchange rate at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Recent Accounting Pronouncements

In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements as the Company did not have any lease arrangements that were subject to this new pronouncement.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

3.Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company had an accumulated deficit of $879,347 ($42,375 as of June 30, 2018). The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

3.Going Concern (Continued)

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

4.Stockholders’ Equity

Common Stock

The Company has 400,000,000 shares of Common Stock authorized with a par value of $0.0001 per share and 50,000,000 shares of Preferred Stock authorized, with a par value of $0.0001 per share. As of March 31, 2019 there are 9,660,516 common shares outstanding (June 30, 2018 there were 8,886,416 common shares outstanding) and no shares of Preferred Stock are outstanding.

Effective May 15, 2018, 3,000,000 shares of common stock were offered and sold to Corby Marshall (Director, CFO and CEO of the Company), at a purchase price of $0.0001 per share.

Effective May 22, 2018, 2,362,500 shares of common stock were offered and sold to 14 investors at a purchase price of $0.01 per share. This included 1,250,000 shares to directors of the Company.

Effective June 1, 2018, 612,500 shares of common stock were offered and sold to 9 investors at a purchase price of $0.05 per share.

Effective June 15, 2018, 2,438,666 shares of common stock were offered and sold to 12 investors at a purchase price of $0.15 per share and include the option to purchase up to 9,754,644 shares via warrants at various exercise prices between $0.30 and $2.00.

Effective June 29, 2018, 472,750 shares of common stock were offered and sold to 29 investors at a purchase price of $0.50 per share and include the option to purchase up to 1,891,000 shares via warrants at exercise prices of $1.00 and $2.00.

Effective January 30, 2019 715,000 shares of common stock were offered and sold to 5 investors at a purchase price of $0.50 per share and include the option to purchase up to 2,860,000 shares via warrants at exercise prices of $1.00 and $2.00.

Effective January 30, 2019 59,100 shares were provided at a value of $0.50 per share to 4 individuals as compensation for $29,550 in services provided to the Company during the period.

5.Related Party Transactions

None noted during the period.

6.Subsequent Events

Management has evaluated events that occurred subsequent to the end of the reporting period shown herein:

Subsequent to March 31, 2019, Optical Flow LLC has, through its contractor, entered into a new cooperative research and development agreement ("CRADA") with the U.S. Special Operations Command ("USSOCOM"). The overall goal for the CRADA is to provide enhanced operational capability to USSOCOM assets through the development of novel solutions and technologies.

Subsequent to March 31, 2019, the Company issued 75,000 shares of common stock offered and sold to an accredited investor at a purchase price of $1.00 per share pursuant to subscription agreements. The subscription also included the option to purchase up to 75,000 additional shares via warrants at an exercise price of $1.50 and the option to purchase up to 75,000 additional shares via warrants at an exercise price of $2.00 per share.

Subsequent to March 31, 2019, the Company issued 50,000 shares of common stock offered and sold to an accredited investor at a purchase price of $1.00 per share pursuant to subscription agreements. The subscription also included the option to purchase up to 75,000 additional shares via warrants at an exercise price of $2.00.

Subsequent to March 31, 2019, the Company issued 161,600 shares of common stock to Advanced Digital Manufacturing LLC, in consideration for a promissory note payable by Radiant Images, Inc. for $80,800 to the Company.

The Company’s Management has reviewed all other material events through the date of this report and there are no additional material subsequent events to report that have not already been disclosed within the aforementioned notes.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Results of Operations Nine Months Ended March 31, 2019

We have had no operating revenues since our inception on May 15, 2018 through the date of this report. Our activities have been financed by the proceeds of share subscriptions and loans. From our inception to March 31, 2019, we raised a total of $1,089,225 from private offerings of our common stock. We raised an additional $200,000 subsequent to March 31, 2019 in connection with a promissory note issued to an accredited investor.

Total expenses in the nine month period ended March 31, 2019 were $502,991 which is also the Company’s operating loss. The operating loss for this period is a result of legal and professional fees required to form the Company, complete the joint venture and licensing arrangements, investment in our joint venture and continued development of products through that joint venture, and regulatory filing expenses and fees.

Our financial statements reflect a net loss of $502,991 for the nine month period ended March 31, 2019. This net loss includes a net loss of $259,181 in our joint venture project for development of our project. Our total investment in that project through March 31, 2019 is $640,819. The remaining loss includes legal, accounting and other professional fees, expenses for regulatory filings, as well as general corporate expenses. The loss in our joint venture is related to development of our product.

Liquidity and Capital Resources

Our cash balance at March 31, 2019 was $32,827. We believe these cash reserves are sufficient to cover our expenses for the fourth quarter of 2019. We will require additional funding for our ongoing operations. We have an investment in our joint venture partnership of $640,819 at March 31, 2019.

On February 11, 2018 our Registration Statement on Form S-1 became effective. We intend to raise up to $10,000,000 through that offering by the sale of 5,000,000 shares of common stock at $2.00 per share. There can be no assurance that we will be able to raise money through this offering. If we cannot raise any additional financing prior to the expiration of the fourth quarter of 2019, we believe we will be able to obtain loans from management in the future, if necessary, but have no agreement in writing. Our current negative cash flow per month is less than $15,000, but will significantly increase after the commencement of our offering as we commence further development of our products.

We are an emerging growth company and have generated no revenue to date. Under a limited operations scenario to maintain our corporate existence, we believe we will require additional funds over the next 12 months to complete our regulatory reporting and filings. However, we will require maximum participation in the public offering to implement our complete business plan.

There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.

Plan of Operation

Our plan of operations over the 12 month period following the successful completion of our offering is to continue to develop our products. We estimate our annual cost will be approximately of $100,000 for being a “reporting issuer” under the Securities Exchange Act of 1934. In order to complete the development of

our 360-degree head/body camera, the Company expects that it will need more capital pursuant to the Joint Venture.

Going Concern Consideration

We have not generated any revenues since inception. As of March 31, 2019 the Company had accumulated losses of $879,347 (including our loss in the joint venture). Our independent auditors included an explanatory paragraph in their report on the financial statements accompanying our filing on June 30, 2018 regarding concerns about our ability to continue as a going concern. Those financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Off Balance Sheet Arrangements

As of the date of this prospectus, there are no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company's Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, the Company's Chief Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act reports is (1) recorded, processed, summarized and reported within the periods specified in the Commission's rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We have not made a change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

We are not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. We are not aware of any other legal proceedings pending or that have been threatened against us or our properties.

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

Item 1A – Risk Factors

Not required for Smaller Reporting Companies.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended March 31, 2019 the Company received subscriptions for 35,000 shares of common stock which were issued at a purchase price of $0.50 per share, and included the option to purchase up to 140,000 shares pursuant to warrants at exercise prices of $1.00 and $2.00 per share. The purchase of these shares were paid for via subscriptions from two accredited investors received during the period December 31, 2018 through March 31, 2019.

During the quarter ended March 31, 2019 the Company also received a stock subscription for 75,000 shares of common stock which were issued at a purchase price of $1.00 per share, which was paid for via subscriptions from an accredited investor. The purchase included the option to purchase up to 75,000 additional shares pursuant to warrants at an exercise price of $1.50 per share and the option to purchase up to 75,000 additional shares pursuant to warrants at an exercise price of $2.00 per share.

During the quarter ended March 31, 2019 the Company also received a stock subscription for 50,000 shares of common stock which were issued at a purchase price of $1.00 per share, which was paid for via subscriptions from an accredited investor. The purchase included the option to purchase up to 50,000 additional shares pursuant to warrants at an exercise price of $2.00 per share.

During the quarter ended March 31, 2019 the Company issued 59,100 shares of common stock to four service providers who converted outstanding obligations to them into common stock at a conversion price of $0.50 per share.

Subsequent to March 31, 2019, the Company issued 161,600 shares to Advanced Digital Manufacturing LLC, in consideration for a promissory note payable by Radiant Images, Inc. for $80,800 to the Company.

Item 3 – Defaults Upon Senior Securities

No disclosure required.

Item 4 – Mine Safety Disclosure

No disclosure required.

Item 5 – Other Information

No disclosure required.

Item 6 – Exhibits

Number	Description

31.1	Certification of Chief Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002

31.2	Certification of Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101	XBRL Interactive Data Files

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.

	Hawkeye Systems, Inc.

Date: May 15, 2019	By:	/s/ Corby Marshall
		Corby Marshall Chief Executive Officer and Chief Financial Officer
		(Principal Executive and Financial Officer)