UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ Quarterly Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2024
☐ 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. 000-56301
OUTDOOR SPECIALTY PRODUCTS, INC.
(Exact name of registrant as specified in charter)
| NEVADA | | 46-4854952 |
(State or other jurisdiction of
incorporation or organization) | | (IRS Employer
Identification No.) |
| 3842 Quail Hollow Drive, Salt Lake City, Utah | | 84109 |
| (Address of principal executive offices) | | (Zip Code) |
(801) 560-5184
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: None.
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) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
| | Emerging Growth Company ☐ |
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any news 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 Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of each of the issuer’s classes
of common stock as of May 14, 2024 is 5,284,318.
OUTSIDE SPECIALTY PRODUCTS, INC.
FORM 10-Q
FOR THE SIX MONTHS ENDED MARCH 31, 2024
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements and information in this report on Form 10-Q may
constitute forward-looking statements. The words believe, may, potentially, estimate, continue, anticipate,
intend, could, would, project, plan, expect and similar expressions that convey uncertainty
of future events or outcomes are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties
and other important factors that may cause our actual results, performance, or achievements to be materially different from any future
results, performances or achievements expressed or implied by the forward-looking statements. These forward-looking statements include,
but are not limited to, statements concerning the following:
| |
● |
our future financial and operating results; |
| |
● |
our intentions, expectations and beliefs regarding anticipated growth, market penetration and trends in our business; |
| |
● |
the effects of market conditions on our stock price and operating results; |
| |
● |
our ability to maintain our competitive technological advantages against competitors in our industry; |
| |
● |
our ability to timely and effectively adapt our existing technology and have our technology solutions gain market acceptance; |
| |
● |
our ability to introduce new products and bring them to market in a timely manner; |
| |
● |
our ability to maintain, protect and enhance our intellectual property; |
| |
● |
the effects of increased competition in our market and our ability to compete effectively; |
| |
● |
costs associated with defending intellectual property infringement and other claims; |
| |
● |
our expectations concerning our relationships with customers and other third parties; |
| |
● |
the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as consumer spending; |
| |
● |
risks associated with sourcing and manufacturing; and |
| |
● |
our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and United States export regulations. |
These forward-looking statements speak only as of the date of this
Form 10-Q and are subject to uncertainties, assumptions, and business and economic risks. As such, our actual results could differ materially
from those set forth in the forward-looking statements. Moreover, we operate in a competitive and changing environment, and new risks
emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances
discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied
in our forward-looking statements.
You should not rely upon forward-looking statements as predictions
of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will
be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking
statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q
to conform these statements to actual results or to changes in our expectations, except as required by law.
You should read this Report on Form 10-Q and the documents that we
have filed with the SEC as exhibits hereto with the understanding that our actual future results and circumstances may be materially different
from what we expect.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Financial Statements
OUTDOOR SPECIALTY PRODUCTS, INC.
Balance Sheets
(Unaudited)
| Assets: | |
March 31,
2024 | | |
September 30,
2023 | |
| Current Assets: | |
| | |
| |
| Cash | |
$ | 3,241 | | |
$ | 3,162 | |
| Prepaid expense | |
| 3,360 | | |
| 458 | |
| Inventory | |
| 3,654 | | |
| 3,661 | |
| Total current assets | |
| 10,255 | | |
| 7,281 | |
| | |
| | | |
| | |
| Other Assets: | |
| - | | |
| - | |
| | |
| | | |
| | |
| Total Assets | |
$ | 10,255 | | |
$ | 7,281 | |
| | |
| | | |
| | |
| Liabilities and Stockholders’ (Deficit): | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Accounts payable | |
$ | - | | |
$ | 2,310 | |
| Accrued interest | |
| 7,040 | | |
| 5,012 | |
| Line of credit-related party | |
| 127,913 | | |
| 98,360 | |
| | |
| | | |
| | |
| Total Liabilities: | |
| 134,953 | | |
| 105,682 | |
| | |
| | | |
| | |
| Stockholders’ Deficit: | |
| | | |
| | |
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding | |
| - | | |
| - | |
| Common stock, $0.001 par value, 190,000,000 shares authorized, 5,284,318 shares issued and outstanding | |
| 5,285 | | |
| 5,285 | |
| Additional paid-in capital | |
| 99,232 | | |
| 99,232 | |
| Accumulated deficit | |
| (229,215 | ) | |
| (202,918 | ) |
| Total Stockholders’ Deficit | |
| (124,698 | ) | |
| (98,401 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders’ Deficit | |
$ | 10,255 | | |
$ | 7,281 | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Statements of Operations
(Unaudited)
| | |
Three Months Ended
March 31,
2024 | | |
Three Months Ended
March 31,
2023 | | |
Six Months Ended
March 31,
2024 | | |
Six Months Ended
March 31,
2023 | |
| | |
| | |
| | |
| | |
| |
| Revenue | |
$ | 65 | | |
$ | 195 | | |
$ | 78 | | |
$ | 325 | |
| Cost of sales | |
| 6 | | |
| 20 | | |
| 7 | | |
| 32 | |
| Gross profit | |
| 59 | | |
| 175 | | |
| 71 | | |
| 293 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating Expenses: | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 8,732 | | |
| 11,643 | | |
| 24,340 | | |
| 21,696 | |
| Total Operating Expenses | |
| 8,732 | | |
| 11,643 | | |
| 24,340 | | |
| 21,696 | |
| Loss from Operations | |
| (8,673 | ) | |
| (11,468 | ) | |
| (24,269 | ) | |
| (21,403 | ) |
| Other Expense | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (1,086 | ) | |
| (707 | ) | |
| (2,028 | ) | |
| (1,322 | ) |
| Net Loss | |
$ | (9,759 | ) | |
$ | (12,175 | ) | |
$ | (26,297 | ) | |
$ | (22,725 | ) |
Net loss per share of common stock- basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Weighted average number of common shares outstanding – basic and diluted | |
| 5,284,318 | | |
| 5,284,318 | | |
| 5,284,318 | | |
| 5,284,318 | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Statements of Changes in Stockholders’ Deficit
For the six months ended March 31, 2024 and 2023
(Unaudited)
| | |
Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total
Stock- holders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance, September 30, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (156,446 | ) | |
$ | (51,929 | ) |
| Net loss for the three months ended December 31, 2022 | |
| - | | |
| - | | |
| - | | |
| (10,550 | ) | |
| (10,550 | ) |
| Balance December 31, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (166,996 | ) | |
$ | (62,479 | ) |
| Net loss for the three months ended March 31, 2023 | |
| - | | |
| - | | |
| - | | |
| (12,175 | ) | |
| (12,175 | ) |
| Balance, March 31, 2023 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (179,171 | ) | |
$ | (74,654 | ) |
| Balance, September 30, 2023 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (202,918 | ) | |
$ | (98,401 | ) |
| Net loss for the three months ended December 31, 2023 | |
| - | | |
| - | | |
| - | | |
| (16,538 | ) | |
| (16,538 | ) |
| Balance December 31, 2023 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (219,456 | ) | |
$ | (114,939 | ) |
| Net loss for the three months ended March 31, 2024 | |
| - | | |
| - | | |
| - | | |
| (9,759 | ) | |
| (9,759 | ) |
| Balance, March 31, 2024 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (229,215 | ) | |
$ | (124,698 | ) |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR
SPECIALTY PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| | |
For the Six Months Ended
March 31, | |
| | |
2024 | | |
2023 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
| Net Loss | |
$ | (26,297 | ) | |
$ | (22,725 | ) |
| Adjustments to Reconcile Net Loss | |
| | | |
| | |
| To Net Cash Used by Operating Activities | |
| | | |
| | |
| Depreciation and Amortization | |
| - | | |
| 204 | |
| Changes in Operating Assets and Liabilities: | |
| | | |
| | |
| Increase in prepaid expense | |
| (2,902 | ) | |
| (2,750 | ) |
| Decrease in inventory | |
| 7 | | |
| 32 | |
| Decrease in accounts payable | |
| (2,310 | ) | |
| - | |
| Increase in accrued interest | |
| 2,028 | | |
| 1,322 | |
| Net Cash Used by Operating Activities | |
| (29,474 | ) | |
| (23,917 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
| Net Cash Used by Investing Activities | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| Proceeds from line of credit - related party | |
| 29,553 | | |
| 24,546 | |
| Net Cash Provided by Financing Activities | |
| 29,553 | | |
| 24,546 | |
| | |
| | | |
| | |
| Net Increase in Cash | |
| 79 | | |
| 629 | |
| Cash at Beginning of Period | |
| 3,162 | | |
| 1,241 | |
| Cash at End of Period | |
$ | 3,241 | | |
$ | 1,870 | |
| | |
| | | |
| | |
| SUPPLEMENTAL DISCLOSURES: | |
| | | |
| | |
| Cash Paid During the Period For: | |
| | | |
| | |
| Interest | |
$ | - | | |
$ | - | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Notes to the Unaudited Condensed Financial Statements
March 31, 2024
NOTE 1: Condensed Financial Statements
The accompanying unaudited financial statements
of Outdoor Specialty Products, Inc. (the “Company”) were prepared pursuant to the rules and regulations of the United States
Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such
rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make
the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements
and the notes thereto for the year ended September 30, 2023.
These unaudited financial statements reflect
all adjustments, consisting only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the
financial position and results of operations of the Company for the periods presented. Operating results for the six months ended March
31, 2024, are not necessarily indicative of the results that may be expected for the year ending September 30, 2024.
NOTE 2 – Going Concern
The accompanying 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 accompanying financial statements, the Company did not generate sufficient revenue to generate
net income, has a negative working capital, and has a limited operating history. These factors, among others, may indicate that there
is substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue
as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient
cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company intends to seek additional
funding through additional stockholder loans and debt or equity offerings to fund its business plan. There is no assurance
that the Company will be successful in raising additional funds.
OUTDOOR SPECIALTY PRODUCTS, INC.
Notes to the Unaudited Condensed Financial Statements
March 31, 2024
NOTE 3 – LINE OF CREDIT – RELATED
PARTY
During the six months ended March 31, 2024, the
Company amended the revolving promissory note agreement with its related party to extend the maturity date to December 31, 2024 and increase
the maximum principal indebtedness to $127,500. The revolving promissory note bears interest at the rate of 3.5%. The Company received
proceeds under the line of credit of $26,000 during the six months ended March 31, 2024, resulting in principal balances of $109,521 and
$83,521, with accrued interest of $6,172 and $4,444, at March 31, 2024 and September 30, 2023, respectively.
Also, during the six months ended March 31, 2024,
the Company amended the revolving promissory note agreement with another principal stockholder to extend the maturity date to December
31, 2024 and increase the maximum principal indebtedness to $22,500. The revolving promissory note bears interest at the rate of 3.5%
per annum. The Company received proceeds under the line of credit of $3,553 during the six months ended March 31, 2024, resulting in balances
of $18,392 and $14,839, with accrued interest of $868 and $568, at March 31, 2024, and September 30, 2023, respectively.
NOTE 4 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet
date through the date of the financial statements were issued and determined that there are no events requiring disclosure.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
You should read the following discussion in conjunction with our
financial statements, which are included elsewhere in this report.
Overview
We are and have since our inception in 2014 been engaged in the business
of developing, selling, and marketing products in niche markets within the specialty outdoor products marketplace. We introduced our proprietary
“Reel Guard” product in 2014 and continue to offer it for sale. We have ceased efforts to redesign the licensed SLINKOR product
to replace the lead weight component with a weight made from a non-lead material. Our initial efforts to locate a weight made of non-lead
material were unsuccessful and we are now focusing our efforts on the design of a new slow-sinking sinker that involves the use of a single
injection molded component made of a material with weighting properties similar to lead. We believe the use of a single injection molded
product will allow us to accelerate the manufacturing process, which we anticipate will increase production capacity and reduce costs
as compared to the manual manufacturing process currently used by the Licensor to produce the SLINKOR. No assurances can be given that
the proposed injection molded product will be successfully completed or that it will ever be available for production and sale. We do
not plan to commence manufacturing of the new product until the design has been completed and additional debt or equity funding has been
received to cover the manufacturing costs.
Our 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. We did not
generate sufficient revenue to generate net income, we have negative working capital, and we have a limited operating history. These factors,
among others, may indicate that there is substantial doubt that we will be able to continue as a going concern for a reasonable period
of time. Our financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities
that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent
upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. We
intend to seek additional funding through additional stockholder loans and debt or equity offerings. We also intend to increase
our sales through the addition of our proposed new slow-sinking sinker when and if its design is completed and we have received adequate
financing to commence manufacturing. There is no assurance that we will be successful in raising additional funds or that the slow-sinking
sinker will result in an increase in sales.
Results of Operations for the Three and Six
Months Ended March 31, 2024 and 2023
Revenues
From our inception in 2014 through the present, our revenue has resulted
solely from sales of our proprietary Reel Guard product and our cost of sales also relate solely to that product. Our Reel Guard product
is offered for sale on our website and on eBay and sales vary from quarter to quarter based on the number of customers that become aware
of the product and decide to make a purchase. Total revenue for the three months ended March 31, 2024, was $65, compared to $195 for the
three months ended March 31, 2023, a decrease of $130 or approximately 67%. Total revenue for the six months ended March 31, 2024, was
$78, compared to $325 for the six months ended March 31, 2023, a decrease of $247, or approximately 76%.
Cost of Sales
Cost of sales for the three months ended March 31, 2024 was $6, compared
to $20 for the three months ended March 31, 2023, a decrease of $14, or approximately 70%. Cost of sales for the six months ended March
31, 2024 was $7, compared to $32 for the six months ended March 31, 2023, a decrease of $25, or approximately 78%. Cost of sales as a
percentage of revenue for the six months ended March 31, 2024 and 2023 was approximately 9% and 10%, respectively. Our cost of sales as
a percentage of revenue did not differ significantly from 2023 to 2024 since we offered only one product for sale and there have been
no material changes in the sales price or manufacturing cost of our product.
General and Administrative Expenses
General and administrative expenses were $8,732 for the three months
ended March 31, 2024, compared to $11,643 for the three months ended March 31, 2023, a decrease of $2,911 or approximately 25%. General
and administrative expenses were $24,340 for the six months ended March 31, 2024, compared to $21,696 for the six months ended March 31,
2023, an increase of $2,644 or approximately 12%. General and administrative expenses consist primarily of legal, accounting, and Edgar
filing expenses.
Depreciation and Amortization Expense
Depreciation and amortization expenses currently are not material to
our business. Depreciation and amortization expense was $0 for the six months ended March 31, 2024 as compared to $204 for the six months
ended March 31, 2023. As of September 30, 2023, the Company wrote off the remaining net balance on its patent after it was determined
an impairment existed in accordance with ASC 360 which requires that a company recognize an impairment loss if, and only if, the carrying
amount of a long-lived asset (asset group) is not recoverable from the sum of the undiscounted cash flows expected to result from the
use and eventual disposal of the asset.
Research and Development Expenses
Research and development expenses are not currently material to our
business. We did not incur research and development expenses in the six months ended March 31, 2024 or 2023.
Liquidity and Capital Resources
As of March 31, 2024, we had total current assets of $10,255, including
cash of $3,241, and current liabilities of $134,953, resulting in a working capital deficit of $124,698. Our current liabilities include
a principal outstanding balance of $127,913, and $7,040 in accrued interest, under the short-term revolving loan agreements with our president
and another principal stockholder that are due on or before December 31, 2024. As of March 31, 2024, we had an accumulated deficit of
$229,215 and a total stockholders’ deficit of $124,698. We have financed our operations to date from sales of our Reel Guard product,
proceeds from our 2014 private placement, and proceeds from the short-term revolving loan agreements.
For the six months ended March 31, 2024, net cash used by operating
activities was $29,474, as a result of a net loss of $26,297, which was (i) reduced by a decrease in inventory of $7 and an increase in
accrued interest of $2,028, and (ii) increased by an increase in prepaid expense of $2,902 and a decrease in accounts payable of $2,310.
By comparison, for the six months ended March 31, 2023 net cash used by operating activities was $23,917, as a result of a net loss of
$22,725, which was (i) reduced by depreciation and amortization of $204, a decrease in inventory of $32, and an increase in accrued interest
of $1,322, and (ii) increased by an increase in prepaid expense of $2,750.
For the six months ended March 31, 2024 and 2023, we had no cash flows
used in or provided by investing activities.
For the six months ended March 31, 2024, we had net cash provided by
financing activities of $29,553 consisting of proceeds from the revolving loan agreements. For the six months ended March 31, 2023, we
had net cash provided by financing activities of $24,546, also consisting of proceeds from the revolving loan agreements.
Following our incorporation in 2014, we completed the private placement
of 285,714 shares of our common stock to accredited investors in a private placement at a price of $0.35 per share for total proceeds
of $100,011. The proceeds from the private placement together with our limited product sales were sufficient to fund our operations through
our fiscal year ended September 30, 2020. On January 4, 2021, we entered into a revolving promissory note agreement with our president
and principal stockholder that, as amended, provides for total loans of up to $127,500 at an interest rate 3.5% per annum, which is repayable
on or before December 31, 2024. We received proceeds under the revolving promissory note of $26,000 during the six months ended March
31, 2024, resulting in principal balances of $109,521 and $83,521, with accrued interest of $6,172 and $4,444, at March 31, 2024 and September
30, 2023, respectively. During December 2021, we entered into a revolving promissory note agreement with another principal stockholder
that, as amended, provides for loans of up to $22,500 at an interest rate of 3.5% per annum, which is repayable on or before December
31, 2024. We received proceeds under the second revolving promissory note of $3,553 during the six months ended March 31, 2024, resulting
in principal balances of $18,392 and $14,839, with accrued interest of $868 and $568, at March 31, 2024 and September 30, 2023, respectively.
We do not believe we will generate adequate revenues to meet our obligations
for the next twelve months and believe we will require additional financing in order to meet such obligations. Cash flow from operations
has not historically been sufficient to sustain our operations without the additional sources of capital described below. Our future working
capital requirements will depend on many factors, including our revenues, an increase in the amounts and extension of the due dates of
the revolving loan agreements if required, and the costs of designing and manufacturing our proposed new slow-sinking sinker. To the extent
our cash, cash equivalents, and cash flows from operating activities and the revolving note agreements are insufficient to fund our future
activities, we may need to raise additional funds through additional stockholder loans or private equity or debt financing. We also may
need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies,
or products. If additional funding is required, we may not be able to obtain additional stockholder loans or effect an equity or debt
financing on terms acceptable to us or at all.
Cash Requirements
As of March 31, 2024 and September 30, 2023, we did not have any lease
obligations or requirements or other agreements requiring a significant commitment of cash.
Off-Balance Sheet Arrangements
As of March 31, 2024 and September 30, 2023, we did not have any off-balance
sheet financing arrangements.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates
as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable. The Company is a “smaller reporting company.”
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
in reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive
officer and principal financial officer, or persons performing similar functions, as appropriate to allow for timely decisions regarding
required disclosure. Due to inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Further,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that degree of compliance with the policies and procedures may deteriorate. Accordingly, even effective disclosure
controls and procedures can only provide reasonable assurance of achieving their control objectives.
Under the supervision and with the participation of our management,
including our President and Treasurer who serves as our principal executive and principal financial officer, we evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (“the Exchange Act”) as of March 31, 2024, the end of the period covered by this report. Based upon that
evaluation, our principal executive and financial officer concluded that our disclosure controls and procedures were not effective as
of March 31, 2024, due to the existence of the material weaknesses in our internal control over financial reporting described in our annual
report on Form 10-K for the year ended September 30, 2023.
Changes in internal controls over financial reporting.
Except as described below, there was no change in our internal control
over financial reporting during the three months ended December 31, 2023 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. During such quarter, in order to address the material weaknesses in our internal
control over financial reporting described in our annual report on Form 10-K for the year ended September 30, 2023, we put in place additional
review related to the accuracy of accounting for inventory and strengthened our procedures around complex accounting issues such as asset
impairments and set guidelines for how to conduct and document the reviews of those complex topics. We believe additional testing is required
before concluding that the material weaknesses have been remediated.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material pending legal proceedings.
Item 1A. Risk Factors
Not Applicable. The Company is a “smaller reporting company.”
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
Item 6: Exhibits
The following are included as exhibits to this report:
| (1) | Incorporated
by reference to the Company’s Registration Statement on Form 10-12G filed June 24, 2021. |
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.
| |
Outdoor Specialty Products, Inc. |
| |
|
|
| Dated: May 15, 2024 |
By |
/s/ Kirk Blosch |
| |
|
Kirk Blosch |
| |
|
President, Secretary and Treasurer |
| |
|
(Principal Executive and Accounting Officer) |
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In connection with the Quarterly Report of Outdoor
Specialty Products, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and
Exchange Commission on or about the date hereof (the “Report”), I, Kirk Blosch, President, Secretary and Treasurer of the
Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
A signed original of this written statement
required by Section 906 of the Sarbanes-Oxley Act has been furnished to Outdoor Specialty Products, Inc. and will be retained by Outdoor
Specialty Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.