Company Quick10K Filing
Wadena
Price-0.00 EPS-0
Shares29 P/E0
MCap-0 P/FCF0
Net Debt-0 EBIT-0
TEV-0 TEV/EBIT0
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-13
10-Q 2020-03-31 Filed 2020-06-11
S-1 2020-01-23 Public Filing
10-K 2019-12-31 Filed 2020-04-16
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-19
10-Q 2019-03-31 Filed 2019-05-01
10-K 2018-12-31 Filed 2019-04-01
10-Q 2018-09-30 Filed 2018-11-13
S-1 2018-09-11 Public Filing
10-Q 2018-06-30 Filed 2018-08-20
10-Q 2018-03-31 Filed 2018-05-17
10-K 2017-12-31 Filed 2018-03-30
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-12
10-K 2016-12-31 Filed 2017-03-22
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-09
10-K 2015-12-31 Filed 2016-03-30
8-K 2020-08-18
8-K 2020-05-14
8-K 2020-05-11
8-K 2020-03-27
8-K 2020-03-20
8-K 2020-03-18
8-K 2020-02-25
8-K 2020-01-02
8-K 2019-08-08
8-K 2019-02-22
8-K 2018-10-15

WDN 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1. Basis of Presentation
Note 2.Going Concern
Note 3.Related Party Transactions
Note 4. Notes Payable
Note 5.Convertible Notes Payable and Derivative Liability
Note 6.Equity
Note 7.Commitments and Contingencies
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations
Item 4. Controls and Procedures
Part II
Item 6. Exhibits
EX-31.1 ex311.htm
EX-31.2 ex312.htm
EX-32.2 ex321.htm

Wadena Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
106775-51408-209591-367774-525957-6841402015201620182020
Assets, Equity
34500413-33674-67761-101848-1359352018201820192020
Rev, G Profit, Net Income
1581001100036190613809-34288-823852015201620182020
Ops, Inv, Fin

10-Q 1 10qfwe.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2020

 

o  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period _____________to______________

 

Commission File Number 333-207047

 

 

 

 

 

FOURTH WAVE ENERGY, INC.

 

 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Nevada

  

47-4046237

(State or other jurisdiction of incorporation or organization)

  

(IRS Employer Identification No.)

 

 

 

 

75 E. Santa Clara, 6th Floor

  

  

San Jose, CA

  

95113

(Address of principal executive offices)

  

(Postal or Zip Code)

 

 

 

 

Registrant’s telephone number, including area code:

 

(408) 213-8874

 

 

 

 

 

Pierre Corp.

 

 

(Former name, former address and former fiscal year,

 if changed since last report

 

 

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

 

Title of each classTrading Symbol(s)Name of each exchange on which registered 

 N/AN/AN/A 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days.

Yes                   No  

 

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

 

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

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 


1


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).

Yes   No  

 

State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 36,126,329 shares of $0.001 par value common stock outstanding as of August 13, 2020.


2



PART I. FINANCIAL INFORMATION

 

Item 1.   Financial Statements

 

Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Balance Sheets

(Unaudited)

 

 

June 30,
2020

 

December 31,
2019

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash

$           2,154

 

$         1,691

Prepaid assets

11,876

 

24,018

Total current assets

14,030

 

25,709

Total assets

$         14,030

 

$      25,709

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

$       513,467

 

$     128,519

Accounts payable - related party

96,162

 

104,623

Notes payable

329,900

 

332,900

Convertible notes, net of unamortized discount of $74,272 and $83,441, respectively

299,728

 

116,559

Derivative liability

212,227

 

185,295

 

 

 

 

Total current liabilities

1,451,484

 

867,896

Total liabilities

1,451,484

 

867,896

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

Preferred stock, $0.001 par value, 5,0000,000 shares authorized,

 

 

 

Series A Preferred stock, $0.001 par value, 1,000 shares authorized

 

 

 

   1,000 and 0 shares issued and outstanding, respectively

1

 

-   

Common stock, $0.001 par value, 200,000,000 shares authorized,

 

 

 

36,126,329 and 29,288,163 shares issued and outstanding, respectively

36,126

 

29,288

Additional paid in capital

3,505,238

 

348,680

Accumulated deficit

(4,978,819)

 

(1,220,155)

Total stockholders' deficit

(1,437,454)

 

(842,187)

Total liabilities and stockholders' deficit

$          14,030

 

$       25,709

 

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


3



Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Operations

(Unaudited)

 

 

For the Three

 

For the Three

 

For the Six

 

For the Six

 

Months Ended

 

Months Ended

 

Months Ended

 

Months Ended

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

Operating expenses:

 

 

 

 

 

 

 

General and administrative

$         334,173

 

$     79,656

 

$      3,537,694

 

$      127,311

 

 

 

 

 

 

 

 

Total operating expenses

(334,173)

 

(79,656)

 

(3,537,694)

 

(127,311)

 

 

 

 

 

 

 

 

Amortization of debt discount

(50,888)

 

(8,637)

 

(130,855)

 

(8,637)

Interest expense

(7,783)

 

(839)

 

(13,789)

 

(839)

Change in fair value of derivative liability

(58,111)

 

(8,493)

 

(76,326)

 

(8,493)

Total other expense

(116,782)

 

(17,969)

 

(220,970)

 

(17,969)

 

 

 

 

 

 

 

 

Net loss

$       (450,955)

 

$   (97,625)

 

$   (3,758,664)

 

$      (145,280)

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

Basic and diluted

$           (0.01)

 

$      (0.00)

 

$           (0.11)

 

$           (0.00)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic and diluted

35,758,968

 

29,069,856

 

33,053,757

 

29,060,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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


4



Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Changes in Stockholders’ Deficit

For the six months ended June 30, 2020 and 2019

(Unaudited)

 

 

Series A Preferred

Common Stock

Additional paid-in

Accumulated

 

 

Shares

Amount

Shares

Amount

capital

Deficit

Total

 

 

 

 

 

 

 

 

Balance, December 31, 2019

-   

$            -   

29,288,163

$    29,288

$  348,680

$ (1,220,155)

$(842,187)

 

 

 

 

 

 

 

 

Stock based compensation

1,000

1

6,200,000

6,200

2,908,254

-   

2,914,455

 

 

 

 

 

 

 

 

Net loss

-   

-   

-   

-   

-   

(3,307,709)

(3,307,709)

 

 

 

 

 

 

 

 

Balance, March 31, 2020

1,000

1

35,488,163

35,488

3,256,934

(4,527,864)

(1,235,441)

 

 

 

 

 

 

 

 

Sale of common stock

-   

-   

200,000

200

49,800

-   

50,000

 

 

 

 

 

 

 

 

Common shares issued for conversion of debt and accrued interest

-   

-   

438,166

438

32,424

-   

32,862

 

 

 

 

 

 

 

 

Extinguishment of derivative liability due to conversion

-   

-   

-   

-   

166,080

-   

166,080

 

 

 

 

 

 

 

 

Net loss

-   

-   

-   

-   

-   

(450,955)

(450,955)

 

 

 

 

 

 

 

 

Balance, June 30, 2020

1,000

$           1

36,126,329

$    36,126

$ 3,505,238

$ (4,978,819)

$(1,437,454)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

-   

$          -   

29,051,800

$    29,052

$   189,048

$   (640,984)

$ (422,884)

 

 

 

 

 

 

 

 

Net loss

-   

-   

-   

-   

-   

(47,655)

(47,655)

 

 

 

 

 

 

 

 

Balance, March 31, 2019

-   

-   

29,051,800

29,052

189,048

(688,639)

(470,539)

 

 

 

 

 

 

 

 

Common shares issued with convertible note

 

 

25,000

25

6,225

-   

6,250

 

 

 

 

 

 

 

 

Net loss

-   

-   

-   

-   

-   

(97,625)

(97,625)

 

 

 

 

 

 

 

 

Balance, June 30, 2019

-   

$          -   

29,076,800

$    29,077

$  195,273

$    (786,264)

$  (561,914)

 

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


5



Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Statements of Cash Flows

(Unaudited)

 

 

For the Six Months Ended

For the Six Months Ended

 

June 30, 2020

June 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

Net loss

$       (3,758,664)

$       (145,280)

Adjustment to reconcile net loss to cash used in operating activities

 

 

cash used in operating activities:

 

 

Stock based compensation

2,914,455

-   

Amortization of debt discount

130,855

8,637

Loss on change in derivative liability

76,326

8,493

Net change in:

 

 

Prepaid assets

12,142

-   

Accounts payable and accrued expenses

387,810

(3,679)

Accounts payable - related party

(8,461)

10,380

 

 

 

CASH FLOWS USED IN OPERATING ACTIVITIES

(245,537)

(121,449)

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from sale of common stock

50,000

-   

Proceeds from convertible notes

199,000

75,000

Advances from unrelated party

-   

79,900

Payment on notes payable

                      (3,000)

-   

 

 

 

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES

246,000

154,900

 

 

 

NET CHANGE IN CASH

463

33,451

Cash, beginning of period

1,691

1,285

Cash, end of period

$                2,154

$           34,736

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION

 

 

 

 

 

Cash paid on interest expenses

$                       -   

$                    -   

Cash paid for income taxes

$                       -   

$                    -   

 

 

 

NON-CASH TRANSACTIONS

 

 

Common stock issued with convertible notes

$                       -   

$            6,250

Debt discount created by derivative liability

$           116,686

$          52,366

Common shares issued for conversion of debt and accrued interest

$             32,862

$                    -   

Extinguishment of derivative liability due to conversion

$           166,080

$                    -   

 

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


6



Fourth Wave Energy, Inc.

(formerly Pierre Corp.)

Notes to the Financial Statements

June 30, 2020

(Unaudited)

 

 

Note 1. Basis of Presentation 

 

The accompanying unaudited interim financial statements of Fourth Wave Energy, Inc. (formerly Pierre Corp.) (“Fourth Wave” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2019, as reported in the Form 10-K of the Company, have been omitted.

 

On March 20, 2020, shareholders owning a majority of the Company's outstanding shares of common stock amended the Company's Articles of Incorporation to change the name of the Company from Pierre Corp. to Fourth Wave Energy, Inc.

 

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

 

Significant Accounting Policies

 

Fair Value of Financial Instruments

 

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

 

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

 

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

 

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

 

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

 

Fair Value Measurements

 

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

 

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2020 and December 31, 2019:


7



 

Fair value measured at June 30, 2020

 

 

Total carrying

value

at June 30, 2020

 

Quoted prices in active

markets

(Level 1)

 

Significant other

observable

inputs

(Level 2)

 

Significant

Unobservable

inputs

(Level 3)

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

212,227

 

$

-

 

$

-

 

$

212,227

 

 

Fair value measured at December 31, 2019

 

 

Total carrying

value

at December 31,

2019

 

Quoted prices in active

markets

(Level 1)

 

Significant other

observable

inputs

(Level 2)

 

Significant

Unobservable

inputs

(Level 3)

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

185,295

 

$

-

 

$

-

 

$

185,295

 

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


The table below presents the change in the fair value of the derivative liability during the six months ended June 30, 2020:

 

 

 

Fair value as of December 31, 2019

$     185,295

Fair value on the date of issuance recorded as a debt discount

116,686

Fair value on the date of issuance recorded as a loss on derivatives

15,164

Extinguishment of liability to equity due to conversions

(166,080)

Loss on change in fair value of derivatives

61,162

Fair value as of June 30, 2020

$  212,227

 

Convertible debt

 

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

  

Beneficial Conversion Features

 

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

 

Derivative Financial Instruments

 

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


8



 

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

 

Recent Accounting Pronouncements

 

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

 

Reclassification

 

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

 

Note 2.Going Concern 

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2020 the Company had not yet achieved profitable operations and expects to incur further losses in the development of its business, all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

 

Note 3.Related Party Transactions 

 

Effective April 30, 2019, the Company agreed to increase compensation to the President of the Company to $11,500 per month for management services if funds are available or to accrue such amount if funds are not available.  The agreement is verbal and can be cancelled at any time. In addition, the President of the Company advances cash to fund operations and periodically pays expenses on behalf of the Company subject to reimbursement.  

 

Fees earned during the period are as follows:

 

 

Six months ended

June 30, 2020

Six months ended

June 30, 2019

 

 

 

 

 

Prior period balance

$     104,623

$     68,341

 

Management fees

      69,000

       52,500

 

Cash advances

9,105

-

 

Expenses paid on behalf of Company

4,229

-

 

Repayments

      (90,795)

      (42,120)

 

End of period balance

$    96,162

$    78,721

 

 

 

 

 

Note 4.  Notes Payable 

 

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

 

During the six months period ended June 30, 2020 and 2019, the Company received advances of $0 and $79,900, respectively, from unrelated third parties. The advances are unsecured, non-interest bearing and have no specific terms for repayment and payable on demand. As of June 30, 2020 and December 31, 2019 the advances totaled $329,900 and $332,900, respectively.


9



Note 5.Convertible Notes Payable and Derivative Liability 

 

On April 25, 2019, the Company borrowed $30,000 from an unrelated third party. The unsecured loan had an original issuance discount of $2,500 plus an additional $2,500 to pay for transaction fees of the lender, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and was due and payable on October 25, 2019 and is currently past due. If a default notice is received the interest rate will be 18%.  The unpaid principal is convertible into shares of the Company’s common stock at the conversion price of 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $28,112 which was recorded as a discount on the note payable and a day one loss on the derivative liability of $9,362. In addition, the note holder was issued 25,000 shares of common stock with a relative fair value of $6,250 which was recorded as a debt discount and will be amortized over the life of the note. On June 15, 2020, the Company converted the $30,000 note and $2,862 into 438,166 shares of common stock with a fair value of $32,862. As of June 30, 2020, the balance on the loan, net of unamortized discount of $0, is $0.

 

On June 4, 2019, the Company borrowed $55,000 from an unrelated third party. The unsecured loan had an original issuance discount of $5,000 which will be amortized over the life of the note. The loan bears interest at a rate of 10% and is due and payable on March 4, 2020 and is currently past due. If a default notice is received the interest rate will be 20%. At any time on or before December 1, 2019 the Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 20% to 40%. After December 1, 2019, the Company may not repay the loan without the consent of the lender. At any time after December 1, 2019, the unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 65% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $33,615 which was recorded as a discount on the note payable. As of June 30, 2020, the balance on the loan, net of unamortized discount of $0, is $55,000.

 

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

 

On November 14, 2019, the Company borrowed $85,000 from an unrelated third party. The unsecured loan had an original issuance discount of $20,000, which will be amortized over the life of the note. The loan bears interest at a rate of 9% and is due and payable on May 14, 2020 and is currently past due. If a default notice is received the interest rate will be 18%. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 50% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days immediately prior to the date of conversion. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $89,071, of which $24,071 was recorded as a day one loss on the derivative liability and an additional $65,000 was recorded as a discount on the notes payable. As of June 30, 2020, the balance on the loan, net of unamortized discount of $0, is $85,000.

 

On January 23, 2020, the Company entered into an agreement for up to $120,000 in debt financing from an unrelated third party. The unsecured loan had an original issuance discount of $10,500, which will be amortized over the life of the note. The loan bears interest at a rate of 10% and is due and payable on January 22, 2021. The Company may prepay the loan by paying the lender the outstanding loan principal and accrued interest plus premiums ranging from 5% to 25% and accrued interest. The unpaid principal is convertible into shares of the Company’s common stock at the conversion price. The conversion price is 45% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days immediately prior to the date of conversion. As of June 30, 2020, the Company received $40,000 with original issuance discount of $5,000 from


10



the first tranche of the note. Due to the variable conversion feature the note conversion feature was bifurcated from the note and recorded as a derivative liability. The day one derivative liability was $50,164, of which $15,164 was recorded as a day one loss on the derivative liability and an additional $35,000 was recorded as a discount on the notes payable. As of June 30, 2020, the balance on the loan, net of unamortized discount of $22,575, is $17,425

 

During the six months ended June 30, 2020, the Company issued convertible notes in the principal amount of $164,000.  The notes are unsecured, bear interest at 8% per year, and are due and payable on February 15, 2021. At the option of the holder, the notes can be converted into shares of the Company’s common stock.  The number of shares of the Company’s common stock which will be issued upon any conversion will be determined by dividing the amount to be converted by $0.25. Due to the other variable convertible notes, these fixed convertible notes are treated as derivatives due to possibility of insufficient shares available at conversion to settle the notes. The day one derivative liability was $81,686 and recorded as a discount on the notes payable. As of June 30, 2020, the balance on the loans, net of unamortized discount of $51,697, is $112,303.

 

As of June 30, 2020, the total derivative liability on the above notes (other than the convertible note issued on January 23, 2020) was adjusted to a fair value of $212,227. During the six months ended June 30, 2020, $130,855 of the discount was amortized leaving an unamortized balance of $74,272. The fair value of the conversion option was estimated using the Black-Scholes option pricing model and the following assumptions during the period: fair value of stock $0.12 - $0.55, volatility of 50% - 66% based on a comparable company peer group, expected term of 1.00 years, risk-free rate of 0.16% - 1.56% and a dividend yield of 0%.

 

Note 6.Equity  

 

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

 

On March 26, 2020, the Company designated 1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001 par value. Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of our shareholders or with respect to actions that may be taken by written consent. The 1,000 shares of Series A shares shall have the voting power of 250% of the outstanding common shares at the time of any vote.  The Series A holders shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, annual dividends payable in cash on the 31st day of December in each year, commencing on December 3l, 2020 at the rate of $0.10 per share per year. On March 26, 2020, the Company issued 1,000 shares of its Series A preferred stock with a fair value of $744,455 to the Company’s CEO, J. Jacob Isaacs. The Company recognized this fair value as compensation during the six months ended June 30, 2020.

 

In April 2020, the Company issued 200,000 shares of common stock for cash proceeds of $50,000.

 

On June 15, 2020, issued 438,166 shares of common stock upon the conversion of debt and accrued interest. See Note 5.

 

Note 7.Commitments and Contingencies 

 

In connection with the acquisition of Fourth Wave Energy, Inc., the Company entered into consulting agreements with certain members of Fourth Wave.  The consulting agreements require the Company to collectively pay $385,000 in consulting fees during the terms of the consulting agreements, all but one of which expire between May 31 and June 30, 2020.  One consulting agreement is for a twelve month period and expires in the January 2021. As of June 30, 2020, the Company accrued $301,000 in accrued expenses for these consulting agreements.

 

On May 5, 2020, the Company signed an option agreement to purchase a certain parcel of land in Jefferson County, Colorado for an option fee of $100. The Company did not exercise the option and the option expired on June 18, 2020.

 

 


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Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations  

 

The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions.

 

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

 

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

 

Overview

 

Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” “our company,” “Fourth Wave” or the “Company” refer to Fourth Wave, Inc (formerly Pierre Corp.).

 

We were incorporated in Nevada on January 21, 2011.  Since our incorporation, we have attempted to become involved in a number of business ventures, all of which were unsuccessful and which we have abandoned.

 

Residential Energy Efficiency and Renewable Energy Overview

 

Homes and buildings use energy for heating, cooling, hot water, and electrification. A number of factors determine how much energy is required to deliver these services including the age of the structure, type of construction, heating, ventilation, and air conditioning (HVAC) equipment used and its condition, lighting, appliances, and electronics used. Different types of energy are used for these end-uses, which is often based on regional energy production and availability, historical construction preferences, and local legislation. Energy sources include, but are not limited to natural gas, heating oil, utility electricity, and on-site renewable energy generation.

 

Based on home conditions and energy sources, energy efficiency improvements are often the lowest way to reduce ongoing utility and maintenance costs. Energy efficiency improvements often result in improved living comfort, for example


12



enhanced heating, cooling, lighting, and air quality. Energy efficiency upgrades have an up-front cost but are designed to reduce ongoing utility and maintenance costs. Upgrades also often result in increased home values.

Homes and commercial buildings consume 40% of the energy used in the United States. Most homeowners could save between 15-25% of their utility bills by addressing wasted energy from drafts, air leaks, and outdated heating and cooling systems. Typical energy efficiency upgrades include sealing air leaks, adding insulation, installing more efficiency windows, doors, and skylights, installing and properly setting programmable thermostats, sealing ducts, tuning or upgrading heating and cooling systems, installing energy efficiency hot water heaters, upgrading household appliances and electronics, and installing energy efficient lighting.

 

Improvements in electric heat exchanger (also known as heat pump) technology have increased their usage across the country. Different types of heat pump technologies exist. Some transfer energy from water sources and others directly from the air. Water source heat pumps are often connected to geothermal systems, also known as ground source heating and cooling. Since geothermal technologies rely on transferring energy from the earth instead of creating energy, they are widely considered the most efficient heating and cooling system.

 

On-site renewable energy generation has been improving greatly for years with gains in performance and reductions in cost. The most typical type of on-site generation is photovoltaics, also known as solar energy. Panels are typically installed on a roof-mounted configuration or on an adjacent ground-mounted system. Inverters capture the solar energy and transform it into electricity. Most residential systems are tied to the existing electrical utility grid for back-up and resiliency when solar energy is not being generated.

Fourth Wave Energy

 

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

 

Fourth Wave Energy’s GSP system is designed to significantly reduce energy consumption and associated greenhouse gas emissions in residences and commercial buildings, while improving indoor air quality. By improving the building envelope, reducing energy loads, and generating on-site renewable solar energy the system offers a highly-efficiency whole-home energy upgrade.

 

The GSP system includes:

 

·home energy audit and environmental analysis; 

·improved building envelope, including upgrades to insulation, sealing, and air tightness; 

·on-site photovoltaic power generation; 

·efficient heat pump heating, ventilation, and air conditioning (HVAC) technology; 

·LED lighting;  

·heat pumps for domestic hot water heating; 

·energy recovery ventilation systems; 

·advanced air filtration and distribution; and 

·220v electric vehicle charger 

 

Optional equipment and services includes:

·Battery storage system 

·Hot tub and pool heaters 

·Xeriscape and landscape design 

·ground source geothermal technology for heating and cooling; 

·air source heating and cooling depending on home conditions and requirements; 

 

We plan to use a sales force that will market the GSP system directly to homeowners.


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We will use independent subcontractors to replace a home’s existing heating and air conditioning system with the GSP system.  We estimate that the removal of an existing HVAC system and the installation of the GSP system will cost approximately $39,000, after tax credits, and will require approximately 14 to 21 days to complete.

 

The sale of solar and geothermal energy system has benefitted from tax credits which lowers the effective cost of these systems to homeowners.  However, these tax credits are set to expire in 2021.  Although there is hope that these tax credits will be extended, there can be no assurance that they will be extended in which case the net cost of the GSP system to the homeowner will increase significantly.

 

A depiction of a home with the GSP system installed is shown below:

 

Picture 6 

 

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

 


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Critical Accounting Policies

 

Use of Estimates and Assumptions

 

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

 

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

 

Results of Operations for the three months ended June 30, 2020, compared to three months ended June 30, 2019.

 

During the three months ended June 30, 2020 general and administrative expenses was $334,173 compared to $79,656 in 2019. The $254,517 increase is due to the change in our business plan which resulted in increased consulting, legal and management fees as well as increased travel costs.  

 

During the three months ended June 30, 2020 other expenses was $116,782 compared to $17,969 in 2019. The $98,813 increase in other expenses are the result of cost associated with our new note payable arrangements included amortization of discounts, derivative liability expense and interest.

 

Net loss for the three months ended June 30, 2020 and 2019, was $450,955 and $97,625, respectively.

 

 

Results of Operations for the six months ended June 30, 2020, compared to six months ended June 30, 2019.

 

During the six months ended June 30, 2020 general and administrative expenses was $3,537,694 compared to $127,311 in 2019. The $3,410,383 increase is due to the change in our business plan which resulted in increased stock based compensation, consulting, legal and management fees as well as increased travel costs.  

 

During the six months ended June 30, 2020 other expenses was $220,970 compared to $17,969 in 2019. The $203,001 increase in other expenses is the result of costs associated with our new note payable arrangements included amortization of discounts, derivative liability expense and interest.

 

Net loss for the six months ended June 30, 2020 and 2019, was $3,758,664 and $145,280, respectively.

 

Liquidity and Capital Resources

 

Our sources and (uses) of cash for the three months ended June 30, 2020 and 2019 were:

 

 

2020

 

2019

 

 

 

 

 

 

Cash used in operations

 

$

(245,537

)

 

$

(121,449)

 

Payment on notes payable

 

$

(3,000)

 

 

$

-

 

Proceeds on convertible notes

 

$

199,000

 

 

$

75,000

 

Advances from unrelated party

 

$

-

 

 

$

79,900

 

Proceeds from sale of common stock

 

$

50,000

 

 

$

-

 

 

 

Going Concern

 

The unaudited financial statements accompanying the report have been prepared on a going concern basis, which assumes that our company will be able to meet our obligations and continue our operations for our next fiscal year. Realization values may be substantially different from carrying values as shown and the financial statements do not give effect to


15



adjustments that would be necessary to the carrying values and classification of assets and liabilities should we be unable to continue as a going concern. At June 30, 2020, we have had no revenue and have not yet achieved profitable operations and expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available.

 

There is no assurance that we will be able to obtain further funds required for our continued operations. We are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be forced to scale down or perhaps even cease the operation of our business

 

Item 4.  Controls and Procedures 

 

Evaluation of Disclosure Controls and Procedures

 

Under the direction and with the participation of the Company’s management, including the Company’s Chief Executive and Chief Financial Officer, the Company has conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of June 30, 2020. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Based on the evaluation, the Chief Executive and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2020.

 

Changes in Internal Control over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting that occurred during the six months ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


16



PART II

OTHER INFORMATION

 

 

 

Item 6. Exhibits 

 


17



SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  

 

 

DATED:   August 13, 2020FOURTH WAVE ENERGY, INC.  

 

 

By: /s/ J. Jacob Isaacs  

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


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