Groove Botanicals Inc. Files 10-Q, Shows Financial Snapshot

TL;DR

Groove Botanicals 10-Q filed. Financials for Q2 2024 out. Check preferred stock, common stock, and retained earnings.

AI Summary

Groove Botanicals Inc. filed its 10-Q for the period ending June 30, 2024. The company, formerly Avalon Oil & Gas, Inc., is classified under Crude Petroleum & Natural Gas. Financial details for preferred stock series A and B, common stock, additional paid-in capital, and retained earnings are presented for the periods ending March 31, 2024, and March 31, 2023.

Why It Matters

This filing provides investors with a quarterly update on Groove Botanicals Inc.'s financial health and capital structure, crucial for understanding its current operational standing.

Risk Assessment

Risk Level: medium — The company's classification in the volatile Crude Petroleum & Natural Gas sector and its history of name changes suggest potential business model shifts or past financial instability.

Key Numbers

• 0000918573 — Central Index Key (Unique identifier for Groove Botanicals Inc.)
• 1311 — SIC Code (Industry classification for Crude Petroleum & Natural Gas)

Key Players & Entities

• Groove Botanicals Inc. (company) — Filer of the 10-Q
• Avalon Oil & Gas, Inc. (company) — Former name of Groove Botanicals Inc.
• June 30, 2024 (date) — End of reporting period for the 10-Q
• March 31, 2024 (date) — Previous period end for financial comparison
• March 31, 2023 (date) — Prior year period end for financial comparison

FAQ

Key Financial Figures

• $48,000 — On an annual basis the Company accrues $48,000 of wages payable to its CEO. Kent Rodri
• $4,000 — to CEO Kent Rodriguez in the amount of $4,000. On July 30, 2024, the Company and Mr.
• $10,000.00 — ed through settlement date, as follows: $10,000.00 to be paid to Hymers upon execution of
• $40,000 — greement, with an additional payment of $40,000 30 days after GRVE's Form 10 has gone e
• $500,000 — it would result in an aggregate of the $500,000 liquidation preference, on a per share

Filing Documents

• eps11490_grve.htm (10-Q) — 348KB
• ex31.htm (EX-31) — 11KB
• ex32.htm (EX-32) — 4KB
• 0001171520-24-000304.txt ( ) — 1881KB
• grve-20240630.xsd (EX-101.SCH) — 18KB
• grve-20240630_cal.xml (EX-101.CAL) — 25KB
• grve-20240630_def.xml (EX-101.DEF) — 61KB
• grve-20240630_lab.xml (EX-101.LAB) — 136KB
• grve-20240630_pre.xml (EX-101.PRE) — 111KB
• eps11490_grve_htm.xml (XML) — 147KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 17 Item 4.

Controls and Procedures

Controls and Procedures 18

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 19 Item 1A.

Risk Factors

Risk Factors 19 I tem 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Mine Safety Disclosures 19 Item 5. Other Information 19 Item 6. Exhibits 20

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Groove Botanicals, Inc. Consolidated Balance Sheets June 30, 2024 March 31, 2024 ASSETS Current Assets: Cash $ 2,638 $ 1,688 Accounts Receivable — — Prepaid Expenses 416 454 Total Current Assets 3,054 2,142 TOTAL ASSETS $ 3,054 $ 2,142 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable and Accrued Liabilities $ 94,929 $ 91,172 Interest Payable — — Related Party Payable 486,751 453,057 Convertible Notes Payable — — Dividend payable, related parties 273,087 218,470 Total Current Liabilities 854,767 762,699 Total Liabilities 854,767 762,699 Stockholders' Equity Preferred Stock, Series A, $ 0.10 par value, 100 shares authorized; 100 shares issued and outstanding as of June 30, 2024, and March 31, 2024 10 10 Preferred Stock, Series B, $ 0.10 par value, 2,000 shares authorized; 1,983 shares issued and outstanding as of June 30, 2024, and March 31, 2024 198 198 Common Stock, $ 0.001 par value, 200,000,000 shares authorized. and 59,643,062 shares issued and outstanding as of June 30, 2024, and March 31, 2024 59,643 59,643 Additional paid-in capital 34,026,869 34,026,869 Accumulated deficit ( 34,938,433 ) ( 34,847,277 ) Total stockholder's equity ( 851,713 ) ( 760,557 ) TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 3,054 $ 2,142 The accompanying notes are an integral part of these consolidated

financial statements

financial statements. 3 Groove Botanicals, Inc. Consolidated Statements of Operations For the Three Months Ended June 30, 2024 2023 Expenses: Selling, General and Administrative Expenses $ 16,599 $ 16,963 Rent 4,644 4,644 Legal and Professional Expenses 14,546 24,070 Consulting Expense 750 78,300 Total operating expenses 36,539 123,977 Operating loss ( 36,539 ) ( 123,977 ) Other Income (Expense) Interest Income (Expense) — ( 2,250 ) Total Other Income (Expense) — ( 2,250 ) Net (loss) $ ( 36,539 ) $ ( 126,227 ) Dividend on Preferred Stock 54,617 54,618 Net (loss) attributable to common shareholders $ ( 91,156 ) $ ( 180,845 ) Basic and diluted loss per common share $ ( 0.00 ) $ 0.00 ) Weighted average common shares outstanding – Basic and diluted 59,643,062 58,478,227 The accompanying notes are an integral part of these consolidated

financial statements

financial statements. 4 Groove Botanicals, Inc. Consolidated Statements of Stockholders' Equity For the Three Months Ended June 30, 2024, and 2023 Series A Preferred Stock Series B Preferred Stock Common Stock Additional Paid In Capital Accumulated Deficit Total Shares Amount Shares Amount Shares Amount Amount Amount Amount Balance, March 31, 2023 100 $ 10 1,983 $ 198 57,643,062 $ 57,643 $ 33,930,569 $ ( 34,426,718 ) $ ( 438,298 ) Issuance of Stock for Consulting 1,000,000 1,000 77,300 78,300 Accrued dividend to related party ( 54,618 ) ( 54,618 ) Net (loss) - - ( 126,227 ) ( 126,227 ) Balance, June 30, 2023 100 $ 10 1,983 $ 198 58,643,062 $ 58,643 $ 34,007,869 $ ( 34,607,563 ) $ ( 540,843 ) Series A Preferred Stock Series B Preferred Stock Common Stock Additional Paid In Capital Accumulated Deficit Total Shares Amount Shares Amount Shares Amount Amount Amount Amount Balance, March 31, 2024 100 $ 10 1,983 $ 198 59,643,062 $ 59,643 $ 34,026,869 $ ( 34,847,277 ) $ ( 760,557 ) Accrued dividend to related party ( 54,617 ) ( 54,617 ) Net (loss) - - - - ( 36,539 ) ( 36,539 ) Balance, June 30, 2024 100 $ 10 1,983 $ 198 59,643,062 $ 59,643 $ 34,026,869 $ ( 34,938,433 ) $ ( 851,713 ) The accompanying notes are an integral part of these consolidated

financial statements

financial statements. 5 Groove Botanicals, Inc. Consolidated Statements of Cash Flows For the Three Months Ended June 30, 2024 2023 Cash Flow From Operating Activities Net Loss $ ( 36,539 ) $ ( 126,227 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock Issued for Outside Services — 78,300 Accrued Interest — 2,250 Accrued Payroll 12,000 12,000 Changes in working capital Decrease in Prepaid Expenses 38 41 Increase in Accounts Payable and Accrued Liabilities 3,757 878 Net Cash Used in Operating Activities ( 20,744 ) ( 32,758 ) Cash Flow From Investing Activities Net Cash From Investing Activities — — Cash Flow From Financing Activities Funds received from Related Party 21,694 30,558 Net Cash From Financing Activities 21,694 30,558 Net Change in Cash 950 ( 2,200 ) Cash at Beginning of Period 1,688 4,566 Cash at End of Period $ 2,638 $ 2,366 Net cash paid for: Interest $ — $ — Income Taxes $ — $ — The accompanying notes are an integral part of these consolidated

financial statements

financial statements. 6 GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 1 - ORGANIZATION AND OPERATIONS Current Operations Groove Botanicals, Inc. (the "Company"), (formerly known as Avalon Oil & Gas, Inc.), was originally incorporated in Colorado on April 25, 1991, under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August 1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc. In November 1994 we changed our name to the Sled Dogs Company. On May 25, 1999, we filed articles of merger with Xdogs.com Inc., changing our state of domicile to Nevada. On June 22, 2005, the Corporation changed our name from XDOGS.com, Inc. to Avalon Oil and Gas, Inc. On May 14, 2018, the Corporation changed our name from Avalon Oil and Gas, Inc., to Groove Botanicals, Inc. Until August 2, 2021, when we filed a 15-12B to suspend duty to file reports under sections 13 and 15(d) of the securities exchange act of 1934, we were a reporting company. Subsequently, on September 14, 2023 we filed a Form 10 with the Securities and Exchange Commission, which became effective 60 days later. Since inception we have operated, unsuccessfully, in various different industries. Currently, we plan to assemble a portfolio of early-stage EV Battery Technologies developed from Universities in Norway, Sweden and Finland, and seek grants from the State of Minnesota Department of Economic Development to find and identify corporate partners to commercialize these technologies and ultimately produce revenues for the Company. The Company does not currently own any patents or technologies related to the EV battery industry, and the process to acquire patents and technologies can be costly, and as such, the Company is not guaranteed to acquire any such

financial statements at that date

financial statements at that date. Basis of Consolidation The Company's consolidated financial statements include the accounts of Groove Botanicals, Inc., and its two 100% controlled non-operating subsidiaries formed in Wyoming, Biotrex, Inc., and Maxidyne, Inc. Intercompany accounts and transactions have been eliminated in consolidation. 7 GROOVE BOTANICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial Company for the valuation of derivative liability, stock compensation and beneficial conversion feature expenses. Actual results could differ from those estimates. Financial Instruments The Company's financial instruments primarily consist of cash and cash equivalents, accounts payable and accrued liabilities, related party payables, dividends payable and other debt. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosures ("ASC 820") establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1—Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2—Significant other observable inputs that can be corroborated by observable market data; and Level 3—Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, related party payables, accrued dividends and debt approximate fair

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 Beneficial Conversion Feature The Company measures certain convertible debt using a nondetachable conversion feature known as a beneficial conversion feature, or BCF. A convertible instrument contains a BCF when the conversion price is less than the fair value of the shares into which the instrument is convertible at the commitment date. From time to time, the Company may issue convertible notes that may contain a beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. Debt Issuance Cost Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense over the term of the debt using the effective interest method. The unamortized amount is presented as a reduction of debt on the balance sheet. In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20 that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate Related Disclosures for Investors , which requires registrants to disclose climate-related information in registration statements and annual reports. The new rules would be effective for annual reporting periods beginning in fiscal year 2025. However, in April 2024, the SEC exercised its discretion to stay these rules pending the completion of judicial review of certain consolidated petitions with the United States Court of Appeals for the Eighth Circuit in connection with these rules. We are evaluating the impact the adoption of this rule, if any, may have on our financial statements. NOTE 3 - GOING CONCERN The accompanying consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements, the Company has incurred recurring net losses since its inception and has raised limited capital. The Company had a net loss of $ 36,539 and $ 126,227 for the three-month periods ended June 30, 2024, and 2023, respectively. The Company's accumulated deficit was $ 34,938,433 and $ 34,847,277 as of June 30, 2024, and March 31, 2024, respectively. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The consolidated financial the Company be unable to continue as a going concern. The Company is taking certain steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) focus on our new business model and 2) raising equity or debt financing. Our auditors e

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 6 – CONVERTIBLE NOTES PAYABLE Convertible notes payable consists of a $ 40,000 Convertible Promissory Note issued on March 5, 2021, by management to a third party in exchange for professional services. Beginning on the issuance date of this note, the outstanding principal balance of this note shall bear annual interest at 10 %, with interest commencing on the sixth month anniversary of the Issuance Date. The note has a maturity date of June 30, 2022 . Additionally, the note has a fixed conversion feature of $ 0.02 per share, and therefore the Convertible Note is measured at the net of Debt Discount, calculated based off its Beneficial Conversion Features. The note was booked with a debt discount of the full principal balance of $ 40,000 . As of June 30, 2022, this entire debt discount had been amortized. Further on March 7, 2022, the Company issued additional convertible promissory note in the amount of $ 60,000 , with a maturity date of March 7, 2023 , an annual interest rate of 10 % and a fixed conversion price of $ 0.02 per share, in exchange for consulting services. The convertible amount is accounted for based off the outstanding principal and related interest pertaining to the portion convertible debt instrument being converted, multiplied by the previously specified conversion rate. On July 18, 2022, a Letter Agreement was drafted between the Company and the debtholder, which establishes the settlement of these debts once the Company's Form 10 goes effective. On January 23, 2023 the Company and the convertible note holder mutually agreed to settle any and all amounts owed pursuant to 1) the Consulting Agreement and Convertible Promissory Note in the amount of $ 40,000 dated March 5, 2021; and 2) the Consulting Agreement and a Convertible Promissory Note in the amount of $ 60,000 dated March 7, 2022; 3) all interest accrued through settlement date, as fol

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023 Series B Preferred Stock holds designations of being ranked junior to the Series A Preferred Stock, cash dividends at the rate of 9% of the amount per share of Series B Preferred Stock per annum in the form of "Preferred Dividends", a dividend received deduction for federal income tax purposes, liquidation pref

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