10-K: Freedom Holdings Inc. Reports Fiscal Year 2024 Results Following Reverse Merger with The Awareness Group

Freedom Holdings Inc. reports its fiscal year 2024 results, highlighting a significant transformation following a reverse merger with The Awareness Group (TAG), shifting its focus to alternative energy.

Summary

• Freedom Holdings Inc. (FHLD) completed a reverse merger with The Awareness Group (TAG) on September 17, 2024, marking a significant shift in the company's business focus to alternative energy.
• The company's historical operations included mortgage activities, oil and gas leases, and asphalt shingle recycling, all of which were unsuccessful.
• The merger resulted in TAG shareholders gaining 89.5% control of FHLD through a restated Series A Preferred stock.
• TAG's management team, led by CEO Pablo Diaz, took over the executive roles at FHLD.
• FHLD reported total revenues of $1,272,800 for the year ended September 30, 2024, compared to no revenue in the previous year.
• The cost of goods sold was $1,005,341 for the year ended September 30, 2024.
• Operating expenses were $310,096 for 2024, down from $395,456 in 2023.
• The company's total assets increased dramatically to $30,270,399 in 2024 from $588 in 2023, primarily due to the TAG merger.
• Total liabilities also increased to $7,354,162 in 2024 from $412,477 in 2023, due to the merger.
• The company reported a net loss of $20,426 for 2024, a significant improvement from the $399,918 loss in 2023.
• The company has an accumulated deficit of $9,950,869 as of September 30, 2024.
• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company is classified as an emerging growth company, allowing for reduced reporting requirements.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the reverse merger and new business direction are positive, the company's history of losses, going concern issues, ineffective internal controls, and auditor concerns create significant risks and uncertainties. The sentiment is therefore cautiously negative.

Positives

• The reverse merger with TAG provides a new direction and potential for growth in the alternative energy sector.
• The company generated $1,272,800 in revenue for the year ended September 30, 2024, a significant improvement from the previous year.
• The net loss decreased substantially from $399,918 in 2023 to $20,426 in 2024.
• The company has a working capital surplus of $3.9 million as of September 30, 2024.
• The company has a new management team with experience in the alternative energy sector.

Negatives

• The company has a history of unsuccessful business ventures prior to the TAG merger.
• The auditor has expressed substantial doubt about the company's ability to continue as a going concern.
• The company has an accumulated deficit of $9,950,869 as of September 30, 2024.
• The company's internal controls over financial reporting were deemed ineffective.
• The company's auditor has been charged with violations by the Securities and Exchange Commission.

Risks

• The company's ability to continue as a going concern is uncertain due to its accumulated losses and the auditor's concerns.
• The company's auditor has been charged with violations by the Securities and Exchange Commission, which could lead to restatements and delays in regulatory filings.
• The company's internal controls over financial reporting are not effective, which could lead to errors in financial reporting.
• The company's stock is subject to penny stock rules, which may limit marketability and make it difficult for shareholders to sell their shares.
• The company has a limited operating history and may not be able to successfully implement the TAG business model.
• The company may be subject to further government regulation which would adversely affect its operations.
• The company may not be able to secure additional financing on reasonable terms.

Future Outlook

The company plans to fully integrate and develop the TAG GRID and grow the business through expanding its residential and commercial customer base and exploring additional acquisition opportunities. The company's future liquidity requirements will depend on operating results, payment of current obligations, and future capital expenditures. The primary sources of funding are expected to be cash generated from operations and raising additional funds from private sources and/or debt financing.

Management Comments

• Pablo Diaz, the new CEO, has been a high-level executive at two successful publicly traded companies and has structured over $400 million for alternative energy projects.
• Nadia Conn, the new CFO, has 30+ years of experience leading the financial health and business strategy of companies.

Industry Context

The company's shift to alternative energy aligns with the growing global focus on renewable energy sources. The TAG GRID platform aims to provide a comprehensive suite of solar services and financing solutions, which could position the company to capitalize on the increasing demand for solar energy.

Comparison to Industry Standards

• It is difficult to compare FHLD to industry standards due to its unique history and recent reverse merger.
• The company's previous ventures in mortgage, oil and gas, and asphalt recycling were unsuccessful, making direct comparisons to companies in those sectors irrelevant.
• The company's current focus on alternative energy through the TAG GRID platform is a new direction, and its performance will need to be evaluated against other companies in the solar and renewable energy space.
• Companies like SunPower, First Solar, and Enphase Energy are established players in the solar industry, and FHLD will need to demonstrate its ability to compete effectively.
• The company's financial metrics, such as revenue and profitability, will need to be compared to industry benchmarks as it develops its business model.

Management Changes

Corporate Governance

Legal Proceedings

• There are no material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject.
• The company's auditor, Olayinka Oyebola & Co., has been charged by the Securities and Exchange Commission with aiding and abetting violations of the anti-fraud provisions of the federal securities laws.

Related Party Transactions

• The company received loans from Bruce Miller, a personal acquaintance of the former CEO, and Brian Kistler, a former related party.

Stakeholder Impact

• Shareholders face significant risks due to the company's going concern issues and penny stock status.
• Employees may experience uncertainty due to the company's financial instability and leadership changes.
• Customers may be impacted by the company's ability to deliver on its promises due to its financial challenges.
• Suppliers and creditors face increased risk due to the company's financial instability.

Next Steps

• The company plans to fully integrate and develop the TAG GRID.
• The company will focus on expanding its residential and commercial customer base.
• The company will explore additional acquisition opportunities.
• The company will need to improve its internal controls over financial reporting.
• The company will need to secure additional financing to continue operations.

Key Dates

Keywords

alternative energy, reverse merger, TAG, solar, financial results, going concern, emerging growth company, internal controls, penny stock, auditor