ASII 10-K & 10-Q changes, risk factors and insider trading

These forward-looking statements, which reflect our management’s beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.

We are also subject to other risks detailed from time to time in our other filings with Securities and Exchange CommissionSEC and elsewhere in this report. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Accordingly, (1) the Company’s Consolidatedfinancial Balancestatements Sheetfor asthe ofyear ended December 31, 2023 and 2022, reportsreflect the Companyoperations andof PXS onas adiscontinued consolidated basis,operations, (2) the Company’s Consolidated Balance Sheet as of December 31, 2021,2023 and 2022, reports the CompanyPXS as itdiscontinued existed prior to its acquisition of PXS,operations, (3) the3the Company’s Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for December 31, 2021, reflects the Company as it existed prior to its acquisition of PXS, and for December 31, 2022 reflects an adjustment for the reverse merger (recapitalization) between the Company and PXS,PXS and for December 31, 2023, reflects an adjustment for the cancellation of the reverse merger, (4) the Company’s Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the year ended December 31, 2023 and 2022, reports the Company and PXS onas adiscontinued consolidated basis, and (5), the Company’s Consolidated Statement of Operations and Consolidated Statement of Cash Flows for the year ended December 31, 2021, report historical information of PXS.operations.

We had $483,036$688,875 and $0$483,036 in revenue for the years ended December 31, 20222023 and 2021,2022, respectively. Revenue increased in 20222023 as compared to 20212022, becausedue of the acquisition ofto Diamond CreekCreek’s inrecovery thefrom reverseinflationary mergershocks in Mayduring 2022. Diamond Creek actually experienced a decrease in sales volumes resulting from sudden and extreme inflationary pressures faced by Diamond Creek for the shipping and delivery of its bottled water during the second, third and much of the fourth quarter of 2022. In response to such inflationary pressures, Diamond Creek simply did not ship orders that would, as a result of the extremely inflated shipping costs, result in a transactional loss. This strategy, while yielding lower total revenue, permitted Diamond Creek to continue operating without requiring infusions of capital.

We had $387,909$550,792 and $0$387,909 ofin cost of sales for the years ended December 31, 20222023 and 2021,2022, respectively.

Operating expenses for the years ended December 31, 20222023 and 2021,2022, were $301,444$286,856 and $0,$301,444, respectively. The increaseslight decrease in expenses for 20222023 compared to 20212022 is due primarily to thereduced acquisitionpayroll ofexpense associated with Diamond CreekCreek’s in the reverse merger in May 2022.operations.

Other income (expenses) for the years ended December 31, 20222023 and 2021,2022, were $231,918($1,142,571) and $0,$235,918, respectively. The gainchange onin derivatives for the years ended December 31, 20222023 and 2021,2022, was $2,189,161($456,538) and 0,$2,189,161, respectively. The lossgain on extinguishment of debt for the yearsyear ended December 31, 2022 and 2021,2022, was $1,149,267$1,149,267. andThe $0,loss respectively.on impairment of intangible assets was $302,215 for the year ended December 31, 2023.

Net Income (Loss)

Net income (loss) for the years ended December 31, 20222023 and 2021,2022, was ($31,688$1,488,595) and ($30$31,688), respectively.

We had a cash balance of $919 and negative working capital of $5,233,610 at December 31, 2023, and a cash balance of $1,418 and negative working capital of $4,369,108 at December 31, 2022, and a cash balance of $0 and working capital of $22,172 at December 31, 2021.2022.

Operating activities during the year ended December 31, 2023, used $81,458 of net cash. Operating activities during the year ended December 31, 2022, used $233,526 of net cash. OperatingNet cash provided by financing activities of $41,450 was received from the issuance of convertible notes payable of $12,000 and $29,450 from advances from related parties and $5,500 from financing activities of discontinued operations during the year ended December 31, 2021 used $30 of net cash.2023. Net cash provided by financing activities of $125,000 was received from the issuance of convertible notes payable and $110,00$110,000 was received from thefinancing issuanceactivities of commondiscontinued stockoperations during the year ended December 31, 2022. Net cash provided by financing activities of $20,000 was received from the issuance of common stock during the year ended December 31, 2021.

Changes in Accounting Principles. No significant changes in accounting principles were adopted during fiscal 20222023 and 2021.2022, except the Company switched from valuing its derivative liabilities using the Black Scholes valuation method to using a Binomial valuation method in fiscal year 2023, which resulted in a decrease in derivative liabilities of $289,388.

For the Three Months Ended JuneSeptember 30, 2024, compared to the three months ended JuneSeptember 30, 2023

We had $102,328$241,136 and $222,363$164,515 of revenue for the three months ended JuneSeptember 30, 2024 and 2023, respectively. Revenue was lower in 2024 as a result of management focusing on revamping the operations and getting sales force and processes dialed in for future growth.growth along with an aggressive marketing campaign in 2024.

We had $53,766$189,824 and $163,040$121,616 of cost of sales and a gross profit of $48,562$51,312 and $59,323$42,899 for the three months ended JuneSeptember 30, 2024 and 2023, respectively.

Operating income (expenses) for the three months ended JuneSeptember 30, 2024 and 2023, were $63,977$426,497 and $11,322$77,195 respectively. The increase in operating expenses for the three months ended JuneSeptember 30, 2024 compared to the three months ended JuneSeptember 30, 2023 is due primarily to increased payrolladvertising relatedand expenses.marketing expense and consulting expense.

Net income (loss) from continuing operations for the three months ended JuneSeptember 30, 2024 and 2023, was $2,079,465$4,272,002 and $1,375,776,($250,971), respectively. Net loss from discontinued operations for the three months ended JuneSeptember 30, 2024 and 2023, was $0 and $162,173,$0, respectively. Net income (loss) for the three months ended JuneSeptember 30, 2024 and 2023, was $2,079,465$4,272,002 and $1,537,949,($250,971), respectively.

For the SixNine Months Ended JuneSeptember 30, 2024, compared to the SixNine Months Ended JuneSeptember 30, 2023

We had $211,701$452,837 and $378,601$543,116 of revenue for the sixnine months ended JuneSeptember 30, 2024 and 2023, respectively. Revenue was lower in 2024 as a result of management focusing on revamping the operations and getting sales force and processes dialed in for future growth. The Company began an advertising and marketing campaign during the third quarter of 2024.

We had $173,057$362,881 and $293,030$414,646 of cost of sales and a gross profit of $38,644$89,956 and $85,571$128,470 for the sixnine months ended JuneSeptember 30, 2024 and 2023, respectively.

Operating expenses for the sixnine months ended JuneSeptember 30, 2024 and 2023, were $122,887$549,384 and $93,025,$210,967, respectively. The increase in expenses for the sixnine months ended JuneSeptember 30, 2024 compared to the sixnine months ended JuneSeptember 30, 2023 is due primarily to increased payrolladvertising relatedand expenses.marketing expense and consulting expense.

Net income (loss) from continuing operations for the sixnine months ended JuneSeptember 30, 2024 and 2023, was $2,152,771$2,119,231 and $1,572,149,($1,775,418), respectively. Net loss from discontinued operations for the sixnine months ended JuneSeptember 30, 2024 and 2023, was $0 and $197,251, respectively. Net income (loss) for the sixnine months ended JuneSeptember 30, 2024 and 2023, was $2,152,771$2,119,231 and $1,769,400,($1,972,669), respectively.

We had cash used in operations of $36,490$244,813 the sixnine months ended JuneSeptember 30, 2024, compared to $43,482$9,497 for the sixnine months ended JuneSeptember 30, 2023.

We had cash used in investing activities of $0 and $541 for the sixthree months ended JuneSeptember 30, 2024 and 2023, respectively.

We had cash provided by financing activities of $42,350$256,000 for the sixnine months ended JuneSeptember 30, 2024, compared to cash provided by financing activities of $19,600$29,950 for the sixnine months ended JuneSeptember 30, 2023.

As of JuneSeptember 30, 2024, the Company had cash and cash equivalents of $6,779.$12,106. We do not have sufficient resources to effectuate our business. We expect to incur a minimum of $100,000 in expenses during the next twelve months of operations. We estimate that these expenses will be comprised primarily of general expenses including overhead, inventory purchases, legal and accounting fees.

As of JuneSeptember 30, 2024, the Company has primarily been funded by the advances from related parties.parties and convertible notes. As of JuneSeptember 30, 2024, the Company had received related party advances of $12,350,$9,000, relatedfunds partyfrom notes totaledpayable $374,102,totaling $132,500, net of discounts, and third-partyfunds from convertible notes totaledpayable $945,840,totaling $130,000, net of discounts, respectively.

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 reflected in the financial statements, the Company had a working capital deficit of $7,219,468$1,227,987 at JuneSeptember 30, 2024, a net lossincome of $2,152,771$2,119,231 for the sixnine months ended JuneSeptember 30, 2024, and $36,490$244,813 of cash used in operating activities for the sixnine months ended JuneSeptember 30, 2024, which raises substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of the interim financial statements.