HLLK.OIDHallmark Venture Group, INC
10-K/A: Hallmark Venture Group Restates 2023 Annual Report to Include Audit Opinion
Sentiment:
Annual Results
Hallmark Venture Group has restated its 2023 annual report solely to include the audit opinion from its prior auditor, with no other changes made to the original filing.
Capital raiseThe company anticipates needing additional financing to maintain its existence as a shell company for the next twelve months.The company may consider a transaction with an entity that needs additional funds for development or expansion.The company may need to raise capital as a condition of closing a business combination or other acquisition.The company may issue debt or equity securities to fund its working capital requirements.Additional issuances of equity or convertible debt securities will result in dilution to current shareholders.
Worse than expectedThe company's financial results are worse than expected due to the lack of revenue, significant liabilities, and material weaknesses in internal control.The company's dependence on related party funding and the substantial doubt about its ability to continue as a going concern indicate a poor financial position.
Summary
- Hallmark Venture Group, Inc. has filed an amended annual report on Form 10-K/A for the fiscal year ended December 31, 2023.
- The restatement was made only to include the audit opinion for the year ended December 31, 2023, which was audited by the company's prior auditor.
- No other changes were made to the original Form 10-K.
- The company is currently a shell company focused on identifying and consummating a merger or acquisition with a private entity, with a preference for real estate related assets or businesses.
- The company has no specific acquisition targets in mind and has not engaged in any negotiations as of the date of the report.
- The company's common stock is quoted on the OTC Pink market under the symbol HLLK.
- The company reported a net loss of $195,084 for the year ended December 31, 2023, compared to a net loss of $288,546 for the year ended December 31, 2022.
- The company had no cash on hand at December 31, 2023 and 2022, and had outstanding liabilities of $850,078 and $898,348, respectively.
- The company's operations are currently funded by advances from related parties, specifically John D. Murphy, Jr. and Paul Strickland.
- The company has identified material weaknesses in its internal control over financial reporting due to its size and limited resources.
Sentiment
Score: 2
Explanation: The document reveals a company in a precarious financial position with no revenue, significant liabilities, and material weaknesses in internal controls. The dependence on related party funding and the substantial doubt about its ability to continue as a going concern contribute to a very negative sentiment.
Positives
- The company's net loss decreased year-over-year, from $288,546 in 2022 to $195,084 in 2023.
- The company is actively seeking a merger or acquisition, which could provide a path to future growth.
Negatives
- The company is a shell company with no current operations and no revenue.
- The company has no cash on hand and significant liabilities of $850,078.
- The company is dependent on related party funding to continue operations.
- The company has identified material weaknesses in its internal control over financial reporting.
- There is substantial doubt about the company's ability to continue as a going concern.
Risks
- The company's ability to identify and implement a viable business strategy is uncertain.
- The company's limited capital resources may hinder its ability to pursue new business opportunities.
- The company may be unable to secure additional financing on acceptable terms.
- The company's lack of diversification poses a substantial risk to investors.
- The company's internal control over financial reporting is not effective.
- The company is dependent on related party funding, which may not continue indefinitely.
Future Outlook
The company intends to pursue the direct or indirect acquisition and development of real estate assets and/or businesses related thereto, but has no specific acquisition targets in mind and has not engaged in any negotiations as of the date of the report. The company anticipates needing additional financing to maintain its existence as a shell company for the next twelve months.
Management Comments
- Management has determined to direct its efforts and limited resources to pursue potential new business and/or acquisition opportunities.
- Management presently intends to prioritize the direct or indirect acquisition and development of real estate assets and/or businesses related thereto.
- Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources.
- Management believes that being a reporting company under the Exchange Act will enhance the Company's efforts to acquire or merge with an operating business.
Industry Context
The company's strategy of seeking a merger or acquisition with a private entity is not uncommon for shell companies. The focus on real estate assets and businesses reflects a specific sector interest, but the company's lack of specific targets and negotiations indicates an early stage of this process. The company's challenges in internal controls and financial stability are not unusual for smaller reporting companies.
Comparison to Industry Standards
- Hallmark Venture Group's financial situation is weak compared to industry standards for public companies, particularly those with ongoing operations.
- The company's lack of revenue and reliance on related party funding is not typical for established public companies.
- The company's negative working capital and accumulated deficit are significant concerns compared to industry benchmarks.
- The material weaknesses in internal control over financial reporting are a serious deficiency compared to the standards expected of public companies.
- The company's status as a shell company seeking a merger or acquisition is a common strategy, but the lack of specific targets and negotiations is a risk factor compared to companies with defined acquisition plans.
- The company's financial metrics are not comparable to companies with established operations and revenue streams, such as real estate investment trusts (REITs) or other operating businesses.
Related Party Transactions
- The company has significant related party transactions, including loans and convertible notes from John D. Murphy, Jr., Paul Strickland, and Selkirk Global Holdings, LLC.
- The company has a settlement agreement with Green Horseshoe, LLC, involving the issuance of common stock for debt repayment.
Stakeholder Impact
- Shareholders face significant risks due to the company's financial instability and lack of operations.
- Employees are not directly impacted as the company has no current operations.
- Customers and suppliers are not directly impacted as the company has no current operations.
- Creditors, particularly related parties, are at risk due to the company's limited ability to repay debts.
Next Steps
- The company will continue to seek, investigate, and potentially acquire an interest in business opportunities.
- The company will prioritize the direct or indirect acquisition and development of real estate assets and/or businesses related thereto.
- The company will need to secure additional financing to maintain its operations and pursue its business plan.
- The company will need to address the material weaknesses in its internal control over financial reporting.
Key Dates
| Date | Description |
|---|---|
| 1995-07-14 | Company originally incorporated in Colorado as CPC Office Systems, Inc. |
| 1999-07-12 | Company changed its name to Homesmart USA, Inc. |
| 2006-03-03 | Company moved its domicile to Nevada. |
| 2006-03-08 | Company changed its name to Smart Truck Systems, Inc. |
| 2008-03-06 | Company changed its name to Speech Phone, Inc. |
| 2008-07-16 | Company changed its name to Hallmark Venture Group, Inc. |
| 2020-05-27 | Living Waters, LLC assigned the SPA to Medical Southern, LLC. |
| 2020-08-13 | All issued and outstanding Preferred Shares were issued to a designee of MSLLC, Top Knot, Inc. USA. |
| 2020-08-17 | MSLLC assigned the SPA to Stonecrest Acquisition, LLC. |
| 2020-10-19 | TKIU assigned 100% of the Preferred Shares it held to Endicott Holdings Group, LLC. |
| 2020-11-02 | Company entered into a Plan of Merger and Acquisition Agreement with Stonecrest Owner, LLC. |
| 2021-01-19 | Company increased the number of authorized shares of the Series A preferred stock from 100,000 to 200,000. |
| 2021-07-12 | Parties agreed to cancel and unwind the transactions contemplated by the Stonecrest Merger Agreement. |
| 2022-03-22 | Company redomiciled and became a Florida corporation. |
| 2022-06-20 | Endicott transferred 100% of the preferred shares, and 110,646,679 of the shares of common stock it held, to Beartooth Asset Holdings, LLC. |
| 2022-07-07 | Beartooth Asset Holdings, LLC transferred 75,000 Series A Preferred Shares to JMJ Associates, LLC. |
| 2022-07-12 | Paul Strickland became a director of the Company. |
| 2022-09-15 | Company was informed of a past due note payable with an unrelated third party. |
| 2022-10-05 | Company issued a $50,000 convertible promissory note to Selkirk Global Holdings, LLC. |
| 2023-03-07 | Company entered into an Assignment of Debt Agreement with Phase I Operations, Inc. |
| 2023-03-15 | Company issued 23,502,934 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2023-04-06 | Company issued a $50,000 convertible promissory note to Selkirk Global Holdings, LLC. |
| 2023-04-20 | Company issued 28,385,910 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2023-06-12 | Company issued 31,196,115 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2023-07-12 | Company issued 34,284,530 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2023-09-09 | Company issued 25,828,853 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2023-09-18 | Company issued shares of common stock to DACE Marketing Consulting, LLC, John Milardovic, and Phase I Operations, Inc. for debt conversion. |
| 2023-12-05 | Company issued a Convertible Exchange Note to John Murphy for $144,501. |
| 2024-01-05 | Company issued 10,005,580 shares of common stock to Phase I Operations, Inc. for debt conversion. |
| 2024-01-11 | Company entered into a Change of Control Agreement. |
| 2024-02-27 | Notice of Default and Termination letter delivered to Steven Arenal and Aurum International Ltd. |
| 2024-03-01 | Company issued a $100,000 promissory note to Alpha Strategies Trading Software, Inc. |
| 2024-03-25 | Date of the report, with 662,185,523 shares of common stock outstanding. |
| 2024-03-26 | Date of the audit opinion from Olayinka Oyebola & Co. |
Keywords
shell company, merger, acquisition, real estate, financial statements, restatement, audit opinion, OTC Pink, related party, internal control
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