UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
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of the Securities Exchange Act of 1934:
Indicate by check mark whether the registrant
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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 ☐
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
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Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging company, indicate by check mark
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provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant
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As of February 14, 2025, the Registrant had
FORMATION MINERALS, INC.
TABLE OF CONTENTS
i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Formation Minerals, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
| * | Please note that throughout this Quarterly Report, except as otherwise indicated by the context, references to the “Company”, “we”, “us” or “our” are references to Formation Minerals, Inc., a Nevada corporation. |
ii
PART I. FINANCIAL INFORMATION
Item 1. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FORMATION MINERALS, INC.
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. Dollars, except share data or otherwise stated)
FOR THE THREE AND SIX MONTHS ENDED
OCTOBER 31, 2024 AND 2023 (unaudited)
INDEX TO FINANCIAL STATEMENTS
1
FORMATION MINERALS, INC.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
AS AT OCTOBER 31, 2024 AND APRIL 30, 2024
| 2024 (unaudited) | 2024 (audited) | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | ||||||||
| Accounts receivable | ||||||||
| Prepayments and other receivables | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Oil and natural gas properties, net based on the full cost method of accounting | ||||||||
| Total assets | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Convertible notes payable | ||||||||
| Amounts and loans due related parties | ||||||||
| Warrant liabilities | ||||||||
| Dividends payable | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS’ DEFIECIENCY | ||||||||
| Class A Preferred Stock: $ | ||||||||
| Class B Preferred Stock: $ | ||||||||
| Common Stock: $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ deficiency | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficiency | ||||||||
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-1
FORMATION MINERALS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS
(Expressed in US dollars)
(unaudited)
| Three months ended October 31, | Six months ended October 31, | |||||||||||||||
| 2024$ | 2023$ | 2024$ | 2023$ | |||||||||||||
| Revenue | ||||||||||||||||
| Mineral property and royalty revenues | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Consulting fees | ||||||||||||||||
| Depletion expense | ||||||||||||||||
| Depreciation expense | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Stock compensation | ||||||||||||||||
| Project expenditures | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Net Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expenses) | ||||||||||||||||
| Financing cost | ( | ) | ( | ) | ||||||||||||
| Amortization of debt discount | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain upon extinguishment of warrant liabilities | ||||||||||||||||
| Other revenue | ||||||||||||||||
| Total Other Income (Expenses) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Series C Preferred Stock Dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss to Common Shareholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Per Share – Basic and Diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted Average Shares Outstanding – Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
F-2
FORMATION MINERALS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
FOR THE THREE AND SIX MONTH PERIODS ENDED OCTOBER 31, 2024 AND 2023
(In U.S. Dollars, except share data or otherwise stated)
(unaudited)
| Class A Preferred Stock | Class B Preferred Stock | Common Stock | Additional Paid-in |
Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Value | Shares | Value | Shares | Value | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| # | $ | # | $ | # | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Balance – April 30, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Adjustment pursuant to reverse acquisition transaction | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Issuance of Class B preferred stock | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class B preferred stock - transaction cost | - | - | ||||||||||||||||||||||||||||||||||
| Extinguishment of warrant liabilities and transfer to equity | - | - | - | |||||||||||||||||||||||||||||||||
| Class B preferred stock dividend | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | |||||||||||||||||||||||||||||||||
| Balance – July 31, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Stock compensation | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of Class B preferred stock | - | - | ||||||||||||||||||||||||||||||||||
| Conversion of notes payable | - | - | ||||||||||||||||||||||||||||||||||
| Class B preferred stock dividend | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Net loss for the period | - | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
| Balance – October 31, 2024 | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Capital | Deficit | Total | ||||||||||||||||||||||
| # | $ | # | $ | $ | $ | $ | ||||||||||||||||||||||
| Balance – April 30, 2023 | ( | ) | ||||||||||||||||||||||||||
| Series C preferred stock issued for commitment fee | - | - | ||||||||||||||||||||||||||
| Common shares issued for conversion of Series C preferred stock | - | ( | ) | |||||||||||||||||||||||||
| Series C preferred stock issued for cash | - | - | ||||||||||||||||||||||||||
| Series C preferred stock dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance – July 31, 2023 | ( | ) | ||||||||||||||||||||||||||
| Common shares issued for conversion of Series C preferred stock | - | ( | ) | |||||||||||||||||||||||||
| Series C preferred stock dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the period | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance – October 31, 2023 | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-3
FORMATION MINERALS, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED OCTOBER 31, 2024 AND 2023
(In U.S. Dollars, except share data or otherwise stated)
(unaudited)
| Six months ended October 31, |
Six months ended October 31, |
|||||||
| 2024 | 2023 | |||||||
| $ | $ | |||||||
| Operating Activities | ||||||||
| Net income (loss) for the period | ( |
) | ( |
) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of right-of-use asset | ||||||||
| Depreciation expense | ||||||||
| Amortization of debt discount | ||||||||
| Depletion expense | ||||||||
| Original issuance discount and transaction fees on financing | ||||||||
| Shares issued for commitment fee | ||||||||
| Stock compensation | ||||||||
| Gain upon extinguishment of warrant liabilities | ( |
) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( |
) | ||||||
| Prepayments and other receivables | ( |
) | ||||||
| Accounts payable and accrued liabilities | ( |
) | ||||||
| Operating lease liability | ( |
) | ||||||
| Net Cash Used In Operating Activities | ( |
) | ( |
) | ||||
| Investing Activities | ||||||||
| Acquisition of oil and gas properties | ( |
) | ||||||
| Proceeds from sale of oil and gas properties | ||||||||
| Net Cash Provided By Investing Activities | ||||||||
| Financing Activities | ||||||||
| Proceeds from convertible notes | ||||||||
| Proceeds from issuance of Class B preferred stock | ||||||||
| Repayment of convertible notes | ( |
) | ( |
) | ||||
| Repayment of related party loan | ( |
) | ||||||
| Proceeds from related party loans | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| Change in Cash (Bank Overdraft) | ||||||||
| Cash – Beginning of Period | ||||||||
| Cash (Bank Overdraft) – End of Period | ||||||||
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-4
FORMATION MINERALS, INC.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2024 AND 2023
| 1. | DESCRIPTION OF BUSINESS |
Formation Minerals, Inc., a Nevada corporation,
(“FOMI” or the “Company”) was incorporated on
SensaBues AB (“Sensabues”) was incorporated in the Kingdom of Sweden in November 2009. Until November 1, 2023, Sensabues owned the core intellectual properties for the design of sample collection devices and the methodologies to collect, extract and detect the non-volatile substances presented within aerosols in exhaled breath. These aerosols, which originate from the lungs and blood, are captured using electret-based filter technologies. This non-invasive breath-based biological sample collection and testing methodology is called ExaBreath (“EB”) technology. Sensabues performed medical device design and research focusing on developing and commercializing EB for disease detection, exposure monitoring, and drug metabolism.
During the three months ended January 31, 2024, the Company began winding-up the business of Sensabues to reduce operating expenses associated with maintaining the exhale breath technology patents.
Since then, management of the Company has been in the process of establishing a new business segment to develop energy related businesses which led to the entry into that certain agreement and plan of merger with Verde Bio Holdings, Inc., a Nevada corporation (“Verde”), and Formation Minerals Inc., a Nevada corporation and the Company’s then wholly-owned subsidiary (“Merger Sub”), as of December 11, 2023, as amended as of February 8, 2024 (the “Merger Agreement”), providing for the merger of Merger Sub with and into Verde, with Verde continuing as the surviving entity (the “Merger”). The Merger was completed at 4:15 p.m., Eastern Time, on May 9, 2024 (the “Effective Time”) and the separate existence of Merger Sub ceased. Following the Effective Time, pursuant to articles of merger filed with the Nevada Secretary of State, Verde was merged with and into the Company with the Company continuing as the surviving corporation and the Company changed its name to “Formation Minerals, Inc.”. Following the Merger, the Company has been focused on the acquisition and exploitation of upstream energy assets, specifically targeting oil and gas mineral interests, oil and gas royalty interests and select non-operated working interests.
Pursuant to the Merger, the Company completed the following transactions:
| ● | As of the Effective Time, FOMI issued |
F-5
| ● | As of the Effective Time, FOMI issued |
| ● | As of the Effective Time, FOMI issued |
| ● | Effective immediately following the Effective Time, FOMI issued to Spartan Capital Securities, LLC, a New York limited liability company (“Spartan”) |
| ● | As of the Effective Time, FOMI assumed all of Verde’s obligations under Verde’s common stock purchase warrant issued on December 8, 2021 and January 27, 2022 (the “Verde Warrants”) and issued and delivered to the Verde Warrant holder, in exchange for the Verde Warrant, a common stock purchase warrant to purchase up to |
Going Concern
These condensed interim consolidated financial
statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. During the period ended October 31, 2024, the Company had a net loss of $
F-6
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Basis of Presentation and Principles of Consolidation |
The accompanying condensed interim consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompany notes filed with the U.S. Securities and Exchange Commission for the fiscal year ended April 30, 2024. These condensed interim consolidated financial statements are unaudited and have been prepared on the same basis as the annual consolidated financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
These condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are expressed in U.S. dollars. The condensed interim consolidated financial statements are comprised of the records of the Company. All intercompany transactions have been eliminated on consolidation. The Company’s fiscal year end is April 30.
| (b) | Reverse Acquisition |
The Merger was accounted for as a “reverse acquisition” since, immediately following completion of the Merger, the stockholders of Verde acquired control of FOMI. For accounting purposes, Verde was deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of Verde (i.e., a capital transaction involving the issuance of shares by the Company for the shares of Verde). Accordingly, the historical financial statements, consolidated assets, liabilities and results of operations of Verde became the historical financial statements of the Company and its subsidiaries, and the Company’s assets, liabilities and results of operations were consolidated with those of Verde beginning at the Effective Time. No step-up in basis or intangible assets or goodwill were recorded in the Merger. The difference between the reverse acquisition transaction consideration and the net assets acquired is treated as a reduction in equity.
| (c) | Use of Estimates |
The preparation of these condensed interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company regularly evaluates estimates and assumptions related to the collectability of accounts receivable relating to oil and gas interests which is based on the operator’s production statements, carrying value of oil and gas properties, the useful life, carrying value, and incremental borrowing rate used for right of use assets and lease liabilities, the fair value of stock-based compensation, shares issued to acquire and exchange other equity instruments and equity classified warrants, revenue recognition including the calculation of the reserves and the fair value of the reserves for oil and gas interests, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
| (d) | Basic and Diluted Earnings / Loss per Share |
The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings (loss) per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of shares of Common Stock outstanding for the period. Diluted earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of an entity. The Company assessed the potentially dilutive shares quantitatively and qualitatively and considered the effect is insignificant as at October 31, 2024.
F-7
| (e) | Fair Value Measurements |
The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. GAAP. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:
Level 1 – quoted prices for identical instruments in active markets;
Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and
Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Financial instruments consist principally of cash, accounts payable and accrued liabilities, notes payable, convertible debentures and amounts due to related parties. The fair value of cash is determined based on Level 1 inputs. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
| (f) | Recent Accounting Pronouncements |
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
F-8
| 3. |
| $ | ||||
| Balance, April 30, 2024 | ||||
| Acquisition and exploration cost | ||||
| Disposal of mineral property | ( | ) | ||
| Depletion expense | ( | ) | ||
| Balance, October 31, 2024 | ||||
On May 22, 2024, the Company entered into a purchase
and sale agreement for the sale of certain mineral and royalty interests with a private buyer whereby the Company is selling various mineral
and oil and gas royalty interests in exchange for $
On June 27, 2024, the Company entered into a purchase and sale agreement
(the “Purchase and Sale Agreement”) with a private seller, pursuant to which we have agreed to purchase all the rights, title
and interest in and to various oil, gas, condensate, and other hydrocarbons that may be produced and saved from the lands described in
certain oil, gas and mineral leases (the “Property”), for the purchase price of $
| 4. | CONVERTIBLE LOANS |
On January 9, 2023, Verde entered into a convertible
loan agreement, with an arms-length party for $
On March 2, 2023, Verde entered into an additional
convertible loan agreement with the same arms-length party for $
On October 4, 2023, Verde entered into an additional
convertible loan agreement with the same arms-length party for $
F-9
On May 14, 2024 (the “Issue Date”),
the Company issued and sold to 1800 Diagonal Lending LLC, a Virginia limited liability company (“Diagonal”), a promissory
note (the “Diagonal Note”) in the principal amount of $
On August 15, 2024 (the “Issue Date”),
the Company issued and sold to 1800 Diagonal Lending LLC, a Virginia limited liability company (“Diagonal”), a Promissory
Note (the “Diagonal Note”) in the principal amount of $
| 5. |
RELATED PARTY TRANSACTIONS
The Company had the following balances and transactions with related parties except as disclosed in other notes: |
| (a) | Amounts due to related parties
At October 31, 2024, salary payable to the former Chief Executive Officer of the Company included in amounts due to related parties was $ |
| (b) | Loans from related party
At October 31, 2024, the Company owed $
| |
| (c) | Loans from other stockholders
In October 2024, the Company converted demand loans in the amount of $ |
| 6. | STOCKHOLDERS’ DEFICIENCY |
| (a) | Common Stock |
As at October 31, 2024, the Company had
On May 9, 2024, the Company issued
On May 9, 2024, the Company issued
In June 2024, the Company entered into a consulting
agreement with a consultant and issued
In October 2024, the Company converted demand
loans in the amount of $
F-10
On April 30, 2024, the Company had
During the period ended October 31, 2023, Verde
issued
| (b) | Class A Preferred Stock |
As at October 31, 2024, the Company had
The holder of shares of Class A Preferred Stock
is entitled to receive dividends equal to the amount of the dividend or distribution per share of Common Stock payable multiplied by the
number of shares of Class A Preferred Stock held by such holder. The holder of Class A Preferred Stock is entitled to cast
On May 9, 2024, FOMI issued
| (c) | Class B Preferred Stock |
As at October 31, 2024, the Company had
As at October 31, 2024, the Company recorded accrued
dividends payable of $
On May 9, 2024, the Company issued
On June 10, 2024, the Company entered into a Securities
Purchase Agreement (“Purchase Agreement”) with GHS Investments LLC, a Nevada limited liability company (“GHS”),
for the purchase of up to
Pursuant to the Purchase Agreement (i) effective
June 10, 2024, the Company issued and sold
| (d) | Stock Purchase Warrants |
FOMI Warrants are classified under equity in additional
paid-in capital in accordance with ASC 480, Distinguishing Liabilities from Equity. Accordingly, the previously liability classified warrant
liabilities in the amount of $
F-11
| Number of warrants | Weighted average exercise price $ | |||||||
| Balance, October 31, 2024 and April 30, 2024 | ||||||||
Additional information regarding share purchase warrants as of April 30, 2024 is as follows:
| Outstanding and exercisable | ||
| Number of Warrants | Weighted Average Remaining Contractual Life (years) | |
| (e) | Reverse acquisition |
The difference between, the pre-acquisition of
stockholders’ deficits in the amount of $
| 7. | COMMITMENTS AND CONTINGENCIES |
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As at October 31, 2024, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest.
| 8. | SUBSEQUENT EVENTS |
The Company’s management has evaluated subsequent events up to February 5, 2025, the date these consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined to disclose the following subsequent events.
Sale of Oil and Gas Properties
On December 5, 2024, we entered into a purchase
and sale agreement (the “Purchase and Sale Agreement”) with a private buyer, pursuant to which we agreed to sell all our rights,
title and interest in and to various oil, gas, condensate, and other hydrocarbons that may be produced and saved from the lands described
in certain oil, gas and mineral leases, for the purchase price of $
Equity Line of Credit with GHS Investments LLC
On December 31, 2024, we entered into an equity
financing agreement with GHS (the GHS Equity Financing Agreement”), pursuant to which, GHS has committed, subject to the satisfaction
or waiver of certain conditions, to purchase up to an aggregate of $
F-12
On December 31, 2024, we also entered into a registration rights agreement (the “Registration Rights Agreement” with GHS. Under the Registration Rights Agreement, the Company agreed to file one or more registration statement (the “Registration Statement”), as necessary, to register under the Securities Act the resale of all of the shares o Common Stock that may, from time to time, be issued or become issuable to GHS under the Equity Financing Agreement and the Registration Rights Agreement. The Registration Rights Agreement requires that the Company file, within 30 days after execution of the Registration Rights Agreement, an initial Registration Statement and use commercially reasonable efforts to have such Registration Statement declared effective by the SEC within thirty (30 calendar days, but no more than ninety (90) calendar days after the Company has filed such Registration Statement.
Securities Purchase Agreement with GHS Investments LLC
On January 10, 2025, we entered into a securities
purchase agreement with GHS under which we sold
Securities Purchase Agreement with Accredited Investor
On January 14, 2025, the Company entered into
a common stock purchase agreement (the “January Purchase Agreement”) with an accredited investor (the “Investor”),
pursuant to which, the Investor has committed, subject to the satisfaction or waiver of certain conditions, to purchase up to an aggregate
of $
On January 14, 2025, as consideration for the
Investor’s commitment to purchase the January Shares, the Company issued to the Investor a common stock purchase warrant (the “Investor
Warrant”) to purchase up to a number of shares of Common Stock (the “Investor Warrant Shares”) with an aggregate value
equal to
Enclave Capital LLC (“Enclave”) acted
as investment banker in connection with the January Purchase Agreement and will receive a cash fee equal to
F-13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed 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.
Overview
Until November 2023, the Company was a medical technology or “MedTech” company that supplied a simple device and method to collect a breath sample for lab-based analysis. Exhaled breath contains aerosols which originate from the lungs and blood. These aerosols contain revealing information for analytics, diagnostics, and therapeutics. The Company’s patented method is called ExaBreath, and it can collect, extract, detect and identify non-volatile compounds present in exhaled breath by utilizing existing lab-based testing infrastructure and procedures. ExaBreath is applicable in toxicology, pharmacology, and clinical biochemistry. SensAbues AB (“Sensabues”), the Company’s wholly-owned subsidiary, owns the core intellectual properties for the design of sample collection devices and the methodologies to collect, extract and detect the non-volatile substances presented within aerosols in exhaled breath. During the nine months ended January 31, 2024, due to the difficulties in raising adequate capital, the significant cost of maintaining the patents, and delays in engaging appropriate commercialization partners, the management of the Company believed that the current business of commercializing the exhale breath technology patents was no longer feasible. The Company began winding-up the business of Sensabues to reduce operating expenses associated with maintaining the exhale breath technology patents.
In connection with the winding-up of the business of Sensabues, management of the Company sought to establish a new business segment to develop energy related businesses which led to the entry into that certain agreement and plan of merger with Verde Bio Holdings, Inc., a Nevada corporation and a growing U.S. energy company engaged in the acquisition and development of high-probability, lower risk onshore oil and gas properties within the major oil and gas plays in the United States (“Verde”), and Formation Minerals Inc., a Nevada corporation and the Company’s then wholly-owned subsidiary (“Merger Sub”), as of December 11, 2023, as amended as of February 8, 2024 (the “Merger Agreement”), providing for the merger of Merger Sub with and into Verde, with Verde continuing as the surviving entity (the “Merger”). The Merger was completed effective at 4:15 p.m., Eastern Time, on May 9, 2024 (the “Effective Time”) and the separate existence of Merger Sub ceased. Following the Effective Time, pursuant to articles of merger filed with the Nevada Secretary of State, Verde was merged with and into the Company with the Company continuing as the surviving corporation and the Company changed its name to “Formation Minerals, Inc.”. Following the Merger, the Company has been focused on the acquisition and exploitation of upstream energy assets, specifically targeting oil and gas mineral interests, oil and gas royalty interests and select non-operated working interests. In connection with the Merger, (i) on May 2, 2024, the Certificates of Designation of Preferences, Rights and Limitations of the Class A preferred stock, par value $0.001 per share, of the Company and the Class B preferred stock, par value $0.001 per share, of the Company were cancelled with the Nevada Secretary of State and (ii) on May 9, 2024, we amended and restated our articles of incorporation (the “Amended and Restated Articles of Incorporation”) to, among other modifications, (a) increase the number of shares of capital stock which we are authorized to issue to 2,000,000,000 shares, (b) authorize the issuance of up to 150,000,000 shares of “blank check” preferred stock, the rights, preferences and privileges of which may be designated from time to time by our board of directors (the “Board”) and (c) provide that special meetings of stockholders may be called only by our Board. Also on May 9, 2024, following the filing of the Amended and Restated Articles of Incorporation, we filed a Certificate of Designation of Preferences, Rights and Limitations of Class A Preferred Stock, and a Certificate of Designation of Preferences, Rights and Limitations of Class B Preferred Stock, with the Nevada Secretary of State to reflect the Board’s designation of 2,000 shares of our authorized and unissued preferred stock as Class A Preferred Stock and 10,000 shares of our authorized and unissued preferred stock as Class B Preferred Stock, and establishment of the voting powers, designations, preferences and relative participation and other rights and qualifications, limitations and restrictions thereof as set forth therein.
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Pursuant to the Merger Agreement, at the Effective Time (1) each holder of common stock, par value $0.001 per share, of Verde (“Verde Common Stock”) received, for every approximately 300.47 shares of Verde Common Stock, one share of our common stock, par value $0.01 per share (“Common Stock”), (2) each holder of Series A preferred stock, par value $0.001 per share, of Verde (“Verde Series A Preferred Stock”) received, for every approximately 300.47 shares of Verde Series A Preferred Stock, one share of Class A Preferred Stock, and (3) each holder of Series C preferred stock, par value $0.001 per share, of Verde (“Verde Series C Preferred Stock”) received, for every 0.15 shares of Verde Series C Preferred Stock, one share of Class B Preferred Stock. No fraction of a share of Common Stock, Class A Preferred Stock or Class B Preferred Stock was issued by virtue of the Merger, and each person who would otherwise be entitled to a fraction of a share of Common Stock, Class A Preferred Stock or Class B Preferred Stock (after aggregating all fractional shares of Common Stock, Class A Preferred Stock and Class B Preferred Stock that otherwise would be received by such holder) had the number of shares of Common Stock, Class A Preferred Stock and Class B Preferred Stock issued to such person rounded up in the aggregate to the nearest whole share of Common Stock, Class A Preferred Stock or Class B Preferred Stock. At the Effective Time, we issued 6,917,770 shares of Common Stock, 1,665 shares of Class A Preferred Stock and 5,345 shares of Class B Preferred Stock in connection with the Merger. Pursuant to the Merger Agreement, at the Effective Time, we assumed (i) all of Verde’s obligations under Verde’s common stock purchase warrant issued on December 8, 2021 (the “December Verde Warrant”) and issued and delivered to the December Verde Warrant holder, in exchange for the December Verde Warrant, a common stock purchase warrant to purchase up to 205,962 shares of Common Stock, at an exercise price of $0.75 per share which expires on December 8, 2026 (the “ December Company Warrant”) and (ii) all of Verde’s obligations under Verde’s common stock purchase warrant issued on January 27, 2022 (the “January Verde Warrant”) and issued and delivered to the January Verde Warrant holder, in exchange for the January Verde Warrant, a common stock purchase warrant to purchase up to 210,195 shares of Common Stock, at an exercise price of $0.75 per share which expires on January 27, 2027 (the “ January Company Warrant”). Both the December Company Warrant and January Company Warrants are subject to a beneficial ownership limitation of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the each of the December Company Warrant and January Company Warrant, respectively.
Also in connection with the Merger, effective immediately following the Effective Time: (i) pursuant to the Merger Agreement and the side letter dated as of February 6, 2024 by and among the Company, Verde and Spartan, we issued to Spartan 5,000,000 shares of Common Stock in consideration of services Spartan provided to Verde; and (ii) pursuant to the Merger Agreement, we issued to Li Sze Tang 23,110,000 shares of Common Stock in consideration of services provided to the Company as an advisor in connection with the Merger and the other transactions contemplated in the Merger Agreement.
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Critical accounting policies
The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and are expressed in United States Dollars. The Company’s critical accounting policies are reflected in Footnote 2 of the financial statements
Financial Position
Working Capital
| October 31, 2024 $ | April 30, 2024 $ | |||||||
| Current Assets | 128,253 | 153,828 | ||||||
| Current Liabilities | 3,252,450 | 2,538,621 | ||||||
| Working Capital (Deficit) | (3,124,197 | ) | (2,384,793 | ) | ||||
Three months ended October 31, 2024
Revenue
| October 31, 2024 $ | October 31, 2023 $ | |||||||
| Revenue | 87,281 | 59,496 | ||||||
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Expenses
| October 31, 2024 $ | October 31, 2023 $ | |||||||
| Consulting fees | 24,375 | 70,616 | ||||||
| Depletion expense | 35,065 | 39,200 | ||||||
| Depreciation expense | - | 15,483 | ||||||
| General and administrative | 341,869 | 191,845 | ||||||
| Professional fees | 375,483 | 45,680 | ||||||
| Project expenditures | - | - | ||||||
| Stock compensation | 306,000 | - | ||||||
| Total operating expenses | 1,082,792 | 362,824 | ||||||
Six months ended October 31, 2024
Revenue
| October 31, 2024 $ | October 31, 2023 $ | |||||||
| Revenue | 123,420 | 135,190 | ||||||
Expenses
| October 31, 2024 $ | October 31, 2023 $ | |||||||
| Consulting fees | 80,410 | 155,859 | ||||||
| Depletion expense | 53,315 | 95,283 | ||||||
| Depreciation expense | - | 30,966 | ||||||
| General and administrative | 841,392 | 349,477 | ||||||
| Professional fees | 527,789 | 127,305 | ||||||
| Project expenditures | - | 6,581 | ||||||
| Stock compensation | 306,000 | - | ||||||
| Total operating expenses | 1,808,906 | 765,471 | ||||||
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Cash Flows
| October 31, 2024 $ | October 31, 2023 $ | |||||||
| Cash Flows used in Operating Activities | (505,864 | ) | (628,875 | ) | ||||
| Cash Flows provided by Investing Activities | 140,000 | 329,869 | ||||||
| Cash Flows provided by Financing Activities | 371,715 | 313,145 | ||||||
Assets, Liabilities and Working Capital
As at October 31, 2024, the Company had $9,555 in cash and total assets of $329,674 compared to cash of $3,704 and total assets of $548,564 as at April 30, 2024. The Company’s cash increased primarily due to proceeds from the sale of equity and the placement of notes payable during the period ending October 31, 2024. The decrease in total assets was due to the sale of certain mineral properties during the three months ended July 31, 2024.
As of October 31, 2024, the Company had total liabilities of $3,252,450 compared to total liabilities of $2,538,621 as at April 30, 2024. The increase in total liabilities from the year end was primarily due to an increase in Company’s accounts payable of approximately $1.43 million as a result of various Merger transaction related expenses and the net increase in notes payable of $110,000, offset by the extinguishment of warrant liabilities in the amount of approximately $1.22 million.
As at October 31, 2024, the Company had a working capital deficit of $3,124,197 compared to a working capital deficit of $2,384,793 as of April 30, 2024. The increase in the working capital deficit was due to the use of cash for operating activities being greater than cash provided by investing and financing activities.
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Comparison of the Three Month Period Ended October 31, 2024 and October 31, 2023
Revenues
During the three months ended October 31, 2024, the Company recorded revenue of $87,281 compared to revenue of $59,496 during the three months ended October 31, 2023, an increase of $27,785. Revenues were derived from our interests in various oil and gas properties and the increase in royalty revenues in the current period was attributed to higher production by the operators due to higher oil and gas prices. As part of the revenue generated from the oil and gas properties, the Company recorded depletion expense of $35,065 during the three months ended October 31, 2024 compared to depletion expense of $39,200 during the three month period ended October 31, 2023 which represents the proportionate use of the produced units in the properties relative to proven and probable reserves.
Expenses and Net Loss
During the three months ended October 31, 2024, the Company recorded general and administrative expenses of $341,869 compared to $191,845 during the three months ended October 31, 2023, an increase of $130,437. The increase in general and administrative expenses was primarily due to an increase in professional fees in expenses as a result of the Merger transaction during the three months ended October 31, 2024, and an increase in wages during the period of $50,000.
Net loss for the three months ended October 31, 2024 was $(1,016,569) as compared to a net loss of $(331,912) during three months ended October 31, 2023. Interest and finance charges decreased from $28,584 during the three months ended October 31, 2023 to $21,058 during the three months October 31, 2024. The decrease in net income was primarily due to stock compensation of $306,000, and increases in professional fees of $330,000 and general and administrative expenses of $150,000 during the three months ended October 31, 2024 as compared to the three months ended October 31, 2023.
For the three months ended October 31, 2024, the Company recorded net loss per share of $0.01, which represented a decrease of $0.05 compared to the three months ended October 31, 2023 primarily due to the increase in net loss in the three months ended October 31, 2024 as compared with a net loss in the three months ended October 31, 2023.
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Comparison of the Six Month Period Ended October 31, 2024 and October 31, 2023
Revenues
During the six months ended October 31, 2024, the Company recorded revenue of $123,420 compared to revenue of $135,190 during the six months ended October 31, 2023, a decrease of $11,770. Revenues were derived from our interests in various oil and gas properties and the decrease in royalty revenues in the current period was attributed to lower production by the operators due oil and gas prices which, on average, were lower during the period, as well as the sale of oil and gas properties during the current period. As part of the revenue generated from the oil and gas properties, the Company recorded depletion expense of $53,315 during the six months ended October 31, 2024 compared to depletion expense of $95,283 during the six month period ended October 31, 2023 which represents the proportionate use of the produced units in the properties relative to proven and probable reserves.
Expenses and Net Loss
During the six months ended October 31, 2024, the Company recorded general and administrative expenses of $841,392 compared to $349,477 during the six months ended October 31, 2023, an increase of $491,915. The increase in general and administrative expenses was primarily due to an increase in professional fees in expenses as a result of the Merger transaction during the six months ended October 31, 2024.
Net loss for the six months ended October 31, 2024 was $(727,615) as compared to a net loss of $(649,708) during six months ended October 31, 2023. Interest and finance charges decreased from $61,009 during the six months ended October 31, 2023 to $7,526 during the six months October 31, 2024. The increase net loss of $92,320 was primarily due to the gain from the extinguishment of warrant liabilities of $1.043 million offset by an increase in operating expenses of $1,043,000 during the six months ending October 31, 2024 as compared to the six months ending October 31, 2023.
For the six months ended October 31, 2024, the Company recorded net loss per share of $0.01, which represented an decrease of $0.11 compared to the six months ended October 31, 2023 primarily due to the decrease in net loss in the six months ended October 31, 2024 as compared with a net loss in the six months ended October 31, 2023.
Cash Flows from Operating Activities
During the six months ended October 31, 2024, the Company used $(505,864) of cash for operating activities compared with $(628,875) cash for operating activities during the six months ended October 31, 2023. The increase in the use of cash for operating activities was due to a decrease in net loss, which increased the cash inflows from operating activities compared to prior year.
Cash Flows from Investing Activities
During the six months ended October 31, 2024, the Company generated $140,000 of cash in investing activities compared to $329,869 for investing activities during the six months ended October 31, 2023. Proceeds from investing activities consists of the sale of oil and gas properties for aggregate proceeds of $140,000.
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Cash Flows from Financing Activities
During the six months ended October 31, 2024, the Company received $371,715 of proceeds from financing activities compared to proceeds of $313,145 during the six months ended October 31, 2023. The decrease in proceeds from financing activities was primarily due to less loans provided by a related party in the six months October 31, 2024.
Liquidity and Capital Resources
At October 31, 2024, the Company had $9,555 cash and total assets of $329,674 compared to cash of $3,704 and total assets of $548,564 at April 30, 2024.
Since the closing of the Merger, our management has been focused on developing our energy-related businesses, including continuing with Verde’s business plan of acquiring and managing cash flowing, oil and gas minerals and royalties, which management expects will present new opportunities in the oil, gas and mineral industries, increasing our presence and reputation in the energy space more broadly. In addition, since the closing of the Merger the Company has received notice that over fourteen (14) new wells were in the process of being brought online on our oil and gas properties. The main areas of these new wells being brought online and new development continue to be on the Company’s Permian Basin and Haynesville Shales properties which management believes adds concrete, new oil and gas development assets to the Company’s portfolio. Management continues to actively manage its portfolio to maximize stockholder value, including by identifying potential sales of non-core assets to allow for the reinvestment of those proceeds into the higher growth areas. In May 2024, the Company sold five lower-performing, non-core assets for $140,000 in cash and is working to reinvest the proceeds into better performing royalty properties.
On December 5, 2024, we entered into a purchase and sale agreement (the “Purchase and Sale Agreement”) with a private buyer, pursuant to which we agreed to sell all our rights, title and interest in and to various oil, gas, condensate, and other hydrocarbons that may be produced and saved from the lands described in certain oil, gas and mineral leases, for the purchase price of $75,000 in cash, effective as of December 1, 2024. The Purchase and Sale Agreement includes customary representations, warranties and covenants for a transaction of this type. The transaction closed on December 6, 2024.
In addition, since the closing of the Merger, we have completed seven capital raises, raising gross proceeds of approximately $551,000.
Our principal cash requirements are to finance the growth of our operations, including working capital and capital expenditures and for other general corporate purposes. Our future capital requirements will depend on many factors, including our acquisition pipeline and revenue growth. Equity or debt financing may not be available to us on acceptable terms or at all. If sufficient funds are not available or are not available on acceptable terms, our ability to take advantage of unexpected business opportunities or to respond to competitive pressures could be limited or severely constrained. The Company expects to continue to finance its future operations primarily through the stockholders of the Company, through the incurrence of debt, through public offerings and through other strategic financing opportunities. In the event that the Company requires additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, certain stockholders of the Company have indicated their intent and ability to provide additional equity financing. Absent additional capital raising, we do not believe that our existing cash and cash equivalents and sources of liquidity will be sufficient to fund our operations for at least the next 12 months.
Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.
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Going Concern
The Company’s condensed interim consolidated financial statements for the three- and six-month periods ended October 31, 2024 have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the period ended October 31, 2024, the Company had a net income of $(727,615) and used cash of $(505,864) for operating activities. At October 31, 2024, the Company had an accumulated deficit of $(21,333,808). The continuation of the Company as a going concern is dependent upon our ability to identify future investment opportunities and obtain the necessary debt or equity financing and generating profitable operations from the Company’s future operations. In the past, the Company has relied, and expects to continue to rely on, the issuance and sale of shares of Common Stock and preferred stock in order to continue to fund its business operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the date the Company’s financial statements for the three- and six-month periods ended October 31, 2024 were issued on February 14, 2025. The Company’s financial statements for the three- and six-month period ended October 31, 2024 do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company’s management, including its Chief Executive Officer who also serves as its Chief Financial Officer, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. 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 assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 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 over financial reporting are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation Company’s Chief Executive Officer who also acts as our Chief Financial Officer in consultation with the Company’s independent public accounting firm, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, and identified certain matters involving internal controls and procedures that the Company’s management considered to be material weaknesses as described in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2024, under the standards of the Public Company Accounting Oversight Board. The Company’s management believes that these material weaknesses did not have an effect on the Company’s financial results. However, the Company’s management believes that these material weaknesses resulted in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in the Company’s financial statements in future periods. The Company’s management recognizes that its controls and procedures would be substantially improved if the Company had adequate staffing and an audit committee and as such is actively seeking to remediate this issue.
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Based on the foregoing, our Chief Executive Officer who also acts as out Chief Financial Officer concluded that, as of October 31, 2024, our disclosure controls and procedures were ineffective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, as well as recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to the Company.
As the Company grows and operations increase, it is important for management to establish, document and communicate consistent processes over financial reporting to ensure accuracy over financial data and to prevent and detect fraud. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, as the Company grows and operations increase and as sufficient funds become available to us, we plan to:
| ● | increase our personnel resources and technical accounting expertise within the accounting function, including hiring a chief financial officer, to allow for sufficient oversight and segregation of duties consistent with control objectives; and |
| ● | recruit and appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us. |
We intend to work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting during the three month period ended October 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report include the risk factors described in our Annual Report on Form 10-K filed with the SEC on August 13, 2024.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On October 10, 2024, the Company issued 4,500,000 shares of Common Stock, to PCG Advisory, Inc. (“PCG”) pursuant to a services agreement dated June 1, 2024 (the “PCG Issuance”), as compensation for consulting services provided and to be provided by PCG thereunder. The PCG Issuance was made in reliance on the exemption from registration provided under Section 4(a)(2) of the Securities Act of 1933, as amended, and applicable state securities laws, and no cash proceeds were received by the Company in
connection with this transaction.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
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Item 6. Exhibits
The following exhibits are filed as part of this 10-Q:
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| * | Filed herewith. |
| ** | Furnished herewith. This certification is being furnished solely to accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
| † | Excludes certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K, which the Company agrees to furnish supplementally upon request by the SEC. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| FORMATION MINERALS, INC. | ||
| By: | /s/ Scott A. Cox | |
| Scott A. Cox President, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
||
| Date: | February 14, 2025 | |
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