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Evil Empire Designs, Inc. – ‘10-Q’ for 6/30/22

On:  Tuesday, 8/23/22, at 4:56pm ET   ·   For:  6/30/22   ·   Accession #:  1477932-22-6420   ·   File #:  0-56212

Previous ‘10-Q’:  ‘10-Q’ on 5/23/22 for 3/31/22   ·   Next:  ‘10-Q’ on 12/13/22 for 9/30/22   ·   Latest:  ‘10-Q’ on 2/7/24 for 9/30/23   ·   1 Reference:  To:  Evil Empire Designs, Inc. – ‘S-1’ on 5/2/19

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/23/22  Evil Empire Designs, Inc.         10-Q        6/30/22   37:1.5M                                   Discount Edgar/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    345K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     17K 
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10: R1          Cover                                               HTML     61K 
11: R2          Condensed Balance Sheets                            HTML     87K 
12: R3          Condensed Balance Sheets (Parenthetical)            HTML     31K 
13: R4          Statements of Operations (Unaudited)                HTML     69K 
14: R5          Condensed Statements of Stockholders Deficit        HTML     40K 
                (Unaudited)                                                      
15: R6          Condensed Statements of Cash Flows (Unaudited)      HTML     65K 
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18: R9          Going Concern                                       HTML     16K 
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20: R11         Related Party Transactions                          HTML     15K 
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22: R13         Investments                                         HTML     15K 
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24: R15         Property and Equipment (Tables)                     HTML     19K 
25: R16         Nature of Business (Details Narrative)              HTML     23K 
26: R17         Significant Accounting Policies (Details            HTML     17K 
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27: R18         Going Concern (Details Narrative)                   HTML     15K 
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29: R20         Property and Equipment (Details Narrative)          HTML     19K 
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM  i 10-Q

(MARK ONE)

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

For the quarterly period ended  i June 30, 2022

OR

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

For the transition period from ____________ to ___________

Commission File No.  i 000-56212

 i 441 Eastgate Rd.

 i Henderson,  i Nevada  i 89011

(Address of principal executive offices, zip code)

( i 725)  i 666-3700

(Registrant’s telephone number, including area code)

___________________________________________________________

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

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

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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.  i 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 and post such files).  i Yes ☒     No ☐

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

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.  i ☒

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

APPLICABLE ONLY TO CORPORATE ISSUERS

As of August 9, 2022 there were  i 8,057,750 shares of common stock, $0.001 par value per share, outstanding.

EVIL EMPIRE DESIGNS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2022

INDEX

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Evil Empire Designs, Inc., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: (i) the development and protection of our brands and other intellectual property, (ii) the need to raise capital to meet business requirements, (iii) significant fluctuations in marketing expenses, (iv) the ability to achieve and expand significant levels of revenues, or recognize net income, from the sale of our products, (v) the Company’s ability to conduct the business if there are changes in laws, regulations, or government policies related to the motorcycle or motorcycle parts industry, (vi) management’s ability to attract and maintain qualified personnel necessary for the development and commercialization of its planned products, (vii) the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees or the overall economy, and (viii) other information that may be detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

EVIL EMPIRE DESIGNS, INC 

CONDENSED BALANCE SHEETS

(Unaudited)

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

EVIL EMPIRE DESIGNS, INC.

STATEMENTS OF OPERATIONS 

As of June 30,

(Unaudited)

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

EVIL EMPIRE DESIGNS, INC

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)

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

EVIL EMPIRE DESIGNS, INC

CONDENSED STATEMENTS OF CASH FLOWS

FOR SIX MONTHS ENDED JUNE 30

(Unaudited)

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

EVIL EMPIRE DESIGNS, INC

NOTES TO CONDENSED FINANCIAL STATEMENTS

 (Unaudited)

Inventory

Revenue recognition

Property and Equipment

Impairment of long-lived assets

Income Taxes

Basic and diluted net loss per share

Fair Value of Financial Instruments

Financial assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1 — Quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3 — Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Related Parties

Recent Accounting Pronouncements

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

The following information should be read in conjunction with (i) the financial statements of Evil Empire Designs, Inc., a Nevada corporation (the “Company”), and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2021 audited financial statements and related notes included in the Company’s Form 10-K (File No. 000-56212; the “Form 10-K”), as filed with the Securities and Exchange Commission on April 27, 2022. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.

OVERVIEW

The Company was incorporated in the State of Nevada on December 23, 2009, and has established a fiscal year end of December 31.

The Company’s authorized capital stock amounts to 125,000,000 shares, consisting of 100,000,000 of common stock with a par value of $0.001 per share, and 25,000,000 shares of preferred stock with a par value of $0.001 per share.

Going Concern

To date the Company has had operations and revenues of a developing business, and consequently has incurred recurring losses from operations. No substantial revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

Our activities have been financed from related-party loans and the proceeds of share subscriptions.

The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings.

PLAN OF OPERATION

We are an operating motorcycle parts design, manufacturing, marketing and sales business and have generated revenues of $24,100 and $34,574, from our business for the three and six months, respectively, ended June 30, 2022. During the 12 months following the date of filing of this Quarterly Report on Form 10-Q, we will be focused on attempting to raise $750,000 of funds to expand our business. We have no assurance that future financing will materialize. If that financing is not available, we may be unable to continue. Management believes that if we are successful in raising $750,000, we will be able to generate sales revenue within the following twelve months thereof. However, if such public financing is not available, we could fail to satisfy our future cash requirements. We have no assurance that future financing will materialize. If that financing is not available we may be unable to continue. Management believes that if subsequent private placements are successful, we will be able to generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

If we are unsuccessful in raising the additional proceeds through a private placement offering we will then have to seek additional funds through debt financing, which would be highly difficult for an early-stage company to secure. Therefore, the Company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in the Company having to seek capital from other sources such as debt financing, which may not even be available to the Company. However, if such financing were available, because we are an early stage company, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If we cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in our common stock would lose all of their investment.

With new investors joining, the Company will increase its current efforts on marketing and selling its already created variety of products.

RESULTS OF OPERATIONS

Comparison of the three and six months ended June 30, 2022 and 2021

The Company recorded revenue of $10,171 and $5,277 during the three months ended June 30, 2022 and 2021, respectively. The Company recorded revenue of $20,645 and $10,334 during the six months ended June 30, 2022 and 2021, respectively.

Operating expenses for the three-month periods ended June 30, 2022 and 2021, were $5,591 and $(6,475), respectively, consisting of a general and administrative expense of $5,448 and depreciation and amortization of $143 for the three months ended June 30, 2022, and consisting of a general and administrative expense of $5,448 and depreciation and amortization of $143 for the three months ended June 30, 2022

Operating expenses for the six-month periods ended June 30, 2022 and 2021, were $12,071 and $20,968, respectively, consisting of a general and administrative expense of $10,031 and depreciation and amortization of $2,040 for the six months ended June 30, 2022, and consisting of a general and administrative expense of $17,174 and depreciation and amortization of $3,794 for the six months ended June 30, 2021.

For the three-month periods ended June 30, 2022 and 2021, we had net losses of $(8,714) and $(830). For the six-month periods ended June 30, 2022 and 2021, we had net losses of $(28,004) and $(33,607), respectively.

Liquidity and Capital Resources

There are no agreements or understandings about future loans by or with the officers, directors, principals, affiliates, or shareholders of the Company. The Company will continue to raise outside capital through loans, equity sales and possible licensing agreements. These factors raise substantial doubt about the company’s ability to continue as a going concern

At June 30, 2022, the Company had negative working capital of 386,887. Total current assets were $16,533. Current liabilities as of the same date were $682,919, consisting of convertible debt of $379,125, outstanding notes of $158,958, and accounts payable and accrued liabilities $158,764.

Net cash used in operating activities in the six-month periods ended June 30, 2022 and 2021 was $15,747 and $23,728, respectively. The variance between the same periods relates mainly to a lower loss in 2022 over 2021.

Net cash used in investing activities was $0 and $27,500 for the six-month periods ended June 30, 2022 and 2021.

Net cash provided by financing activities for the six month periods ended June 30, 2022 was $15,911, compared to $53,836 in the same period in 2021. Cash provided was a result of proceeds from convertible notes and note payable in the principal amounts of $2,000 offset by overdraft $18 in 2022 and $53,836 in convertible notes issued plus a note payable of $40 in 2021.

As of June 30, 2022, the Company had total assets of $309,960 and total liabilities of $696,847. Our accumulated deficit as of March 31, 2022 was $617,702.

Inflation

We believe that inflation has not had a significant impact on our operations since inception.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements or guarantees of third party obligations at June 30, 2022.

Subsequent Events

None through date of this filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures

Our management, with the participation of our President and Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, our 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on that evaluation, our President and Chief Executive Officer concluded that, as of June 30, 2022, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our President and Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

Our management, with the participation of the President and Chief Executive Officer, has concluded there were no significant changes in our internal controls over financial reporting that occurred during this quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

(a) The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.

_______________ 

 *Furnished, not filed.

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.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing		Date		Other Filings
Filed on:		8/23/22
		8/9/22
For Period end:		6/30/22		NT 10-Q
		4/27/22		10-K
		3/31/22		10-Q
		12/31/21		10-K,  NT 10-K
		6/30/21		10-Q,  NT 10-Q
		3/31/21		10-Q
		12/31/20		10-K,  NT 10-K
		12/12/19
		9/12/16
		4/24/12
		12/23/09
				List all Filings

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1 Previous Filing that this Filing References

As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/02/19 Evil Empire Designs, Inc. S-1 7:4.8M Discount Edgar/FA

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Filing Submission 0001477932-22-006420   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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