10-K/A: GiveMePower Corporation Files Amended 2021 Annual Report to Correct Related Party Transaction Disclosures

GiveMePower Corporation filed an amendment to its 2021 annual report to include previously omitted disclosures regarding related party transactions.

Summary

• GiveMePower Corporation (GMPW) has filed an amendment to its 2021 annual report on Form 10-K to include disclosures about related party transactions that were not included in the original filing.
• The amendment does not revise the company's financial statements or any other disclosures from the original report.
• The company had 42,724,687 shares outstanding as of December 31, 2021, and 43,792,804 shares outstanding as of December 9, 2024.
• The market value of non-affiliate shares was approximately $12,621,818 as of December 31, 2021, based on an average bid and ask price of $0.65 per share.
• The company engaged in several transactions with entities controlled by its officers and directors, including the sale and repurchase of a subsidiary, Alpharidge Capital, LLC.
• These transactions involved lines of credit, long-term liabilities, notes receivable, and mortgage loans, primarily with Los Angeles Community Capital (LACC) and other entities controlled by Frank I. Igwealor, an officer and director of GMPW.
• Alpharidge had a total liability of approximately $5.3 million to LACC as of December 30, 2021.
• The company sold Alpharidge to Kid Castle Educational Corporation (KDCE) in exchange for preferred stock, which was later repurchased and cancelled.
• The sale of Alpharidge was intended to simplify the company's balance sheet and facilitate the removal of a Caveat Emptor tag from GMPW's stock.

Sentiment

Score: 4

Explanation: The document reveals significant related party transactions and a need to amend a previous filing, which raises concerns about corporate governance and financial reporting. While the company has taken steps to address these issues, the overall sentiment is cautious.

Positives

• The company has taken steps to correct previous omissions in its financial reporting by filing this amendment.
• The removal of the Caveat Emptor tag suggests an improvement in the company's standing with regulatory bodies.
• The company has been proactive in simplifying its balance sheet, which may improve its financial health and attractiveness to investors.
• The company has secured funding through related party transactions, which has allowed it to continue operations.

Negatives

• The need to file an amendment indicates a previous failure in the company's internal controls and reporting processes.
• The company's reliance on related party transactions for funding raises concerns about potential conflicts of interest and the sustainability of its operations.
• The complex web of transactions between GMPW and related entities may make it difficult for investors to fully understand the company's financial position.
• The company had zero assets, zero revenue and zero operations at the time of the change of control transaction.

Risks

• The company's dependence on loans from officers and directors could pose a risk if these sources of funding become unavailable.
• The complex related party transactions could lead to potential conflicts of interest and regulatory scrutiny.
• The company's financial health may be vulnerable due to its limited revenue and operating income.
• The company's real estate business is subject to market fluctuations and risks associated with property ownership and lending.

Future Outlook

The document does not provide specific forward-looking statements or guidance, but it does mention the company's efforts to improve its financial standing and remove the Caveat Emptor tag.

Management Comments

• The purpose of this Amendment No. 1 is to provide required disclosure under Item 404(a) of Regulation S-K regarding the transaction and other related party transactions, which was inadvertent not included in the Original 2021 Form 10-K.
• The sale of Alpharidge was strategically executed to simplify the balance sheet, aligning with the consultants projection for attracting a favorable decision from FINRA.
• By accepting the mortgage, Mr. Igwealor facilitated Alpharidges long-term investment in real estate, acting as a testament to his generous support for the company.

Industry Context

The related party transactions and the company's efforts to streamline its balance sheet are not uncommon in smaller, publicly traded companies. The focus on real estate investments and the use of related party loans are also seen in similar companies seeking growth and capital.

Comparison to Industry Standards

• The use of related party transactions is common in smaller companies, but the extent and complexity of GMPW's transactions are notable.
• The 0% interest rate on some loans from related parties is unusual and may raise questions about fair market value.
• The mortgage loan to Frank and Patience Igwealor at 5% interest, while above the prevailing rate, is not uncommon in private lending arrangements.
• The sale of Alpharidge to simplify the balance sheet is a strategic move often seen in companies seeking to improve their financial profile.

Related Party Transactions

• The company sold one-member unit of Alpharidge Capital, LLC to GMPW in exchange for $1.
• GMPW sold 1,000,000 shares of GMPW preferred stock to KDCE in exchange for 100% interest in CED Capital and 97% of Cannabinoid Biosciences, Inc.
• GMPW sold all of its interest in CBDX to Premier Information Management, Inc. for $1.
• GMPW sold Alpharidge to KDCE in exchange for the 1,000,000 GMPW preferred stock.
• Alpharidge entered into a line of credit agreement with Goldstein for $41,200, later amended to $190,000.
• Alpharidge entered into a line of credit agreement with Los Angeles Community Capital for $1,500,000.
• Alpharidge entered a proprietary model licensing agreement with LACC, accruing a $4,747,906 long-term liability.
• Alpharidge made a long-term loan to CED Capital for $200,000.
• Alpharidge made a mortgage loan of $2.2 million to Frank and Patience Igwealor.
• Alpharidge made a mortgage loan to CED Capital for $314,000.

Stakeholder Impact

• Shareholders may be concerned about the company's reliance on related party transactions and the need to amend its financial reports.
• Employees may be affected by the company's financial performance and any changes in its operations.
• Customers and suppliers may be impacted by the company's ability to continue operations and fulfill its obligations.
• Creditors may be concerned about the company's debt levels and its ability to repay its obligations.

Next Steps

• The company needs to ensure that all future filings are accurate and complete to avoid further amendments.
• The company should continue to monitor its related party transactions and ensure they are conducted at arm's length.
• The company should focus on generating revenue and reducing its reliance on related party funding.

Key Dates

Keywords

related party transactions, Form 10-K/A, Alpharidge Capital LLC, GiveMePower Corporation, financial reporting, corporate governance, related party loans, real estate, Caveat Emptor, Frank Igwealor