07/26/2021 | Press release | Distributed by Public on 07/26/2021 10:59

Amendment to Annual Report (SEC Filing - 10-K/A)

GLOSSARY OF KEY TERMS

Adjusted diluted EPS from continuing operations	Non-GAAP measure defined as diluted earnings per share from continuing operations before the one-time, non-cash income tax benefit
Adjusted income from continuing operations	Non-GAAP measure defined as income from continuing operations before the one-time, non-cash income tax benefit
GAAP	Generally Accepted Accounting Principles
QEGY	Quantum Energy Inc.
SEC	United States Securities and Exchange Commission

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Except for historical information, this Annual Report contains forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements are based on management's current expectations, assumptions, and beliefs concerning future developments and their potential effect on our business and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition, and stock price. We have attempted to identify forward-looking statements by terminology including 'anticipates,' 'believes,' 'can,' 'continue,' 'could,' 'estimates,' 'expects,' 'intends,' 'may,' 'plans,' 'potential,' 'predicts,' 'should,' 'will,' 'would', 'if, 'shall', 'might', 'will likely result, 'projects', 'goal', 'objective', or 'continues', or the negative of these terms or other comparable terminology, although the absence of these words does not necessarily mean that a statement is not forward-looking. Additionally, statements concerning future matters such as our business strategy, development of new products, sales levels, expense levels, cash flows, future commercial and financing matters, future partnering opportunities and other statements regarding matters that are not historical are forward-looking statements.

Although the forward-looking statements in this Annual Report reflect our good faith judgment, based on currently available information, they involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled 'Risk Factors.' Moreover, we intend to operate in one or more very competitive and rapidly changing industry. New risks emerge from time to time. It is not possible for our management 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 Annual Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, 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 Annual Report to conform these statements to actual results or to changes in our expectations. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date we file this Annual Report. Readers are urged to carefully review and consider the various disclosures made in this Annual Report.

CERTAIN REFERENCES AND NAMES OF OTHERS USED HEREIN

This Annual Report may contain additional trade names, trademarks, and service marks of others, which are the property of their respective owners. Except as otherwise disclosed herein, we do not intend our use or display other companies' trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

PART I

The terms 'we,' 'our,' 'us', 'Quantum Energy' and the 'Company' refer to Quantum Energy Inc. and its subsidiaries, unless the context suggests otherwise.

ITEM 1.

Business.

General

We, Quantum Energy Inc., are a Nevada corporation. We were originally incorporated as Boomers Cultural Development, Inc. ('Boomers') on February 5, 2004, in the State of Nevada to be a service-oriented firm that would integrate the cultural interests of baby boomers with destination learning, by packaging onsite personal growth, education, and entertainment seminars with a variety of vacation destinations. On May 18, 2006, our name was changed to Quantum Energy, Inc. and our business focus was changed to concentrate on the energy industry and, in particular, refining, as well as the oil and gas portions of the energy industry. We currently have two 100% owned subsidiaries: Dominion Energy Processing Group, Inc. ('DEPG'), a Canadian Federal business corporation, which is our 100% owned Canadian subsidiary and FTPM Resources, Inc., a Texas corporation.

During the period from October 2017 to April 2019, among other things: we reviewed all of the outstanding agreements and transactions that we had entered into between August 2013 and November 2017 and we began to renegotiate, rescind or settle all of those agreements that had proven not to be in our best interest or in the best interest of our stockholders. In this regard, the shares of our common stock that had been issued in connection with such cancelled transactions were returned to us and shares of our Series B Preferred Stock that had been issued were returned and cancelled.

From December 2016 to about September 2020, we have pursued energy and refining opportunities, including alternative energy opportunities, as well as, the substantial financing needed by such energy opportunities as follows:

On April 15, 2018, we entered into a (conditional) binding letter of intent (the 'IEC LOI') with Inductance Energy Corporation Energy Corporation, a Wyoming corporation ('IEC'), which purports to have developed an alternative source of energy through the invention and development of magnetic 'earth engines'. Pursuant to the IEC LOI , if all of the conditions contained in the IEC LOI are satisfied, (a) we would merge with a newly formed subsidiary of IEC with us being the surviving company, (b) we would issue to IEC such number of new shares of our Common Stock as shall represent 60% of our then issued and outstanding shares of Common Stock, and (c) IEC would provide to us, as the surviving company, up to $50,000,000(USD). The LOI ultimately expired without being implemented.

On April 2, 2019, we and our wholly owned subsidiary FTPM Resources, Inc. entered into non-binding Letter of Intent with Easy Energy systems Inc. ('EESI') to form a joint venture the purpose of developing and marketing of clear glucose using EESI's patented Modular Energy Production System technology ('MEPS®'). EESI's Modular Energy Production Systems are small-scale modular biorefineries for the production of alternative liquid biofuels and other products from various feedstocks. MEPS® modules are fully automated, self-contained shipping container sized modules (the 'Modules') that contain a specific scientific process to process energy based on the particular targeted Feedstock. The Modules are factory-built and can be connected together in a matter of weeks to convert different forms of Feedstock into different forms of renewable energy and other high value products. The Modules can be shipped to remote villages and cities all over the world. That joint venture was to have been owned 33% by FTPM and 67% by EESI.

On June 28, 2019, we and EESI modified that proposed joint venture transaction and we entered into a Binding Letter of Intent (the June 28, 2019 Binding Letter of Intent') with EESI to form a joint venture (hereinafter referred to as 'JV-1') for the purpose of creating and funding multiple operating joint venture limited liability companies (each an 'Operating JV') each of which to be focused on a different vertical market feedstock utilizing the MEPS® technology to create energy. Each Operating JV is expected to be assigned exclusive distribution rights based on a territory and/or specified Feedstock, and each of which will be financed by the funding source of that Operating JV. Each Operating JV would be owned 50% by that funding source for the particular LLC and the remaining 50% by JV-1 (which will be split equally between us and EESI). That joint venture was ultimately terminated.

At the beginning of March 2020, we again enter discussions with Inductance Energy Corporation ('IEC'), as we were in April 2018. In this particular instance IEC was offering to bring to the table several significant investors interested in funding the Company through its regulatory cleanup. It was suggested that MP Special Purpose Corporation ('MP'), would be interested in signing a joint commitment letter so long as necessary shares were set aside in return for the significant effort that would be expended by both IEC and MP. On March 22, 2020 IEC began due diligence on the Company, with the permission of its Board of Directors, for the purpose of forming future business alliances including joint ventures, joint stock ownership, and capital raises. Due diligence on the Company was completed by IEC at the beginning of July of 2020. The results of such within forwarded to the various investors of MP. The Company and MP signed an Agreement and Plan of Asset Acquisition ('Plan'), on September 22, 2020 to allow the Company to enter into the refining of rare earth materials from various locations under the control of MP and IEC. The Plan was assignable to IEC, or other investors or investor group's willing to fund the growth of the Company through a private investment into a public entity, otherwise known as a PIPE ('PIPE').

Since early November 2020 the Company expanded its board to include directors William Hinz, Douglas Bean, and Anthony Ker. The company also recruited and contractually hired Harry Ewert as its new CEO. Mr. Ewert also joined the Board of Directors. The Company recruited and contractually hired William Westbrook as its CFO. Both Mr. Ewert and Mr. Westbrook began their contracts in early December with the Company.

After the expanded Board of Directors was seated, and at the start of Mr. Ewert and Mr. Westbrook's contracts, the Company moved quickly to establish a strategic and tactical operating plan to enter the rare earth refining market. The company established a technical committee which helped build out a plan to develop a private investment path. In addition, the Company moved to conduct due diligence on the former Willwood Air Force Base located in Wyoming at which IEC had been granted a special use permit for the processing of rare earth materials, and the manufacturer of permanent magnets.

In January 2021 the Company settled on a $50 million private placement offering, that would include a proposed $15 municipal bond package as offered by the town of Byron Wyoming, only 9 miles from the 164 acre former Willwood Air Force Base. The company decided to include the $15 million bond package in its $50 million private placement offering, therefore needing to raise $35 million of new equity in the company. The Board of Directors voted previously to authorize the development of a private placement memorandum to be filed with the SEC so that the private placement offering could be discussed with current and potential individual investors, and investor groups in the United States and Canada.

The Company has experienced strong demand for participation in its private placement offering, and expanded its staff to include two additional finance positions, as well as plans to expand its internal accounting staff.

The Company has developed a strategic plan for hiring experienced professionals, including those that are credentialed and hold licenses in engineering, mining, and chemical engineering. This increased depth of personnel surrounding the granting of a license from IEC to the Company for the exclusive production of magnetic materials and assemblies. The decision on the granting of a license from IEC, on an exclusive basis, would be made by IEC only if the Company could show substantial progress in its capital raise efforts, and its ability to attract technical expertise.

As the Company experienced success in both its private placement efforts, as well as its exploratory efforts for sources of rare earths, the Company put forth expanded efforts to execute on its new strategic and tactical business plans in order to begin refining rare earth materials for the recovery of oxides and metals that are required for the production of various magnetic products, and assemblies.

The Company developed a straightforward strategic and tactical business plan that could be executed around 3 basic business segments; Mining, Minerals and Magnets. These 3 segments would become a highly focused center of work for the Company.

Various work at the Company by its technical committee had shown that the Company could enter the mining industry through a very unique path of recovering rare earth and ferrite magnet material from discarded appliances, computers, and other sources in the United States and Canada. Secondly, the Company would concentrate its efforts on the recovery of rare earth materials from other waste streams including fly ash and fly bottom waste streams from combusted coal burning power plants in the United States and Canada. It is estimated that over 1 billion tons of this material exists and dumpsites, and far greater than 4 billion pounds of this material is still generated from coal burning power plants and other sources in the United States alone each and every year.

Successful recovery from these waste streams are described as follows;

1.

Rare Earth and Ferrite (Iron) Magnets that are used in a wide variety of appliances and electronics that can be recovered, that were disposed of in the United States and Canada. These appliances include; televisions, computers, refrigerators, microwaves, dishwashers, as well as motor vehicles, and used electrical motors. Quantum is working with a wide variety of returned merchandise centers, landfills, and other recycling businesses to secure these resources. These types of magnet resources can be mechanically gathered, and reprocessed for use by IEC, and other customers.

2.

Fly ash and fly bottom waste streams. Fly ash and fly bottom waste streams are the remaining byproduct of coal combustion. There are billions of pounds of fly ash and fly bottom waste that are produced each and every year in the United States and Canada, as well as foreign countries. Currently Quantum has two large developmental projects to recover and test both fly ash and fly bottom waste streams for their rare earth content. These two sources currently produce just over 1.4 billion pounds of fly ash and fly bottom waste on an annual basis. Well-known resource testing shows that most fly ash, as well as fly bottom waste streams on average contain about 1.85% rare earth material.

3.

Coal and other mining resources. Currently in the United States and Canada, the mining of coal to be consumed in coal power plants is in rapid decline. Coal producing states such as Wyoming, Kentucky, and West Virginia must move from a coal-based economy or continue to face declining royalty revenues from these natural resources. Rare earth minerals could be one answer to this problem. It is well known from a wide variety of Department of Energy studies that coal, and coal byproducts contain high concentrations of rare earth materials. Quantum is in negotiations with several operating and now defunct coal bearing properties in order to secure rights to process and refine rare earth materials.

Refining rare earth materials from used magnets, fly ash and fly bottom waste streams, and coal reserves range in difficulty from very simple, to a chemical processes commonly called ion exchange, and precipitation . Both practices have been in place for many decades , worldwide , and are still used to this day for most mining recovery operations .in addition to these 2 common practices , membrane recovery , similar to reverse osmosis, is finding favor by a wide variety of professionals, in many geographic areas. W

The reprocessing of waste stream magnets whether ferrite (iron), or rare earth, such as neodymium iron boron magnets, is a relatively simple process wher the waste material is pulverized to approximately 80 mesh (177 microns), then re-blended into the required recipe, and then reformed in, to produce a value-added product. a choice of several different processes.

Refining rare earth materials from fly ash and fly bottom waste, is similar to recovering rare earth materials from coal ash, or coal seam material. It is a well-known ion exchange and precipitation process. A chemical process in which a wide variety of diluent made from acids and caustics are used to precipitate individual rare earth elements from waste streams. This can also include the recovery of rare earth materials from various membranes, such as membranes similarly used in reverse osmosis processes used to clean water. Membranes are size to very specific microns, and once the process is complete, the desired elements are recovered from recycling the membrane material.

The reclaiming of base materials that are suitable to be processed to extract rare Earth materials is heavily tied to wastewater treatment. While large quantities of water are not required to reclaim rare earth containing material, water can be used along with magnetic separation in the early stages of recovery. Wastewater resulting from these early-stage processes needs to be treated and then reintroduced into the process, thereby limiting the loss of treatment water to evaporation. Wastewater treatment also allows waste sludge to be minimalized, and dried for disposal in a common landfill. Typically these dried sludges are less than 1% of the overall material processed. The Company is currently seeking to purchase several different proven waste water technologies and systems to market alongside its rare earth recovery systems.

Employees

We have seven (7) employees as of the date of this report.

Intellectual Property

As of the date of this report, we do not own any patents, trademarks, licenses, franchises, concessions, and royalty agreements, or other intellectual property contracts, but the Company is actively in negotiations for an exclusive technical license from IEC, and is seeking to purchase, acquire, or license a series of wastewater technologies

Available Information

Our Periodic Reports including Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports, and amendments to those reports, and other forms that we file with or furnish to the Securities and Exchange Commission (SEC) are available to review on the SEC's EDGAR website.

Corporate Governance

In accordance with and pursuant to relevant related rules and regulations of the SEC, the Board of Directors of the Company has established and periodically updated our Corporate Governance Guidelines and Code of Conduct, which is applicable to all directors, officers and employees of the Company. We have established an audit committee of our board of directors. We intend to appoint three directors to our audit committee and least one of the appointees shall be independent and shall be an audit committee financial expert.

ITEM 1A.

Risk Factors.

Not applicable to a smaller reporting company.

ITEM 2.

Properties.

Our corporate headquarters are comprised of 10,000 square feet of floor space located at 3825 Rockbottom Drive, North Las Vegas, NV 89030. One of our shareholders makes the office space available to us without a lease and we pay no rent.

ITEM 3.

Legal Proceedings.

None.

ITEM 4.

Mine Safety Disclosures.

Not applicable.

PART II

ITEM 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is currently available for trading on the OTC Pink (over-the-counter pink sheets) under the trading symbol 'QEGY.' The following table sets forth the high and low bid prices (USD) for our Common Stock per quarter as reported by the OTC Markets based on our fiscal year end February 28, 2018, 2019, and 2020. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.

Fiscal Year 2020		HIGH			LOW
First Quarter (Mar. 1, 2019 - May 31, 2019)		$	.18			$	.15
Second Quarter (June 1, 2019 - August 31, 2019)			.14				.09
Third Quarter (Sept. 1, 2019 - Nov. 30, 2019)			.13				.05
Fourth Quarter (Dec. 1, 2019 - Feb. 28, 2021)			.99				.20
Fiscal Year 2019
First Quarter (Mar. 1, 2018 - May 31, 2018)		$	0.25			$	0.106
Second Quarter (June 1, 2018 - August 31, 2018)			0.75				0.20
Third Quarter (Sept. 1, 2018 - Nov. 30, 2018)
Fourth Quarter (Dec. 1, 2018 - Feb. 28, 2019)
Fiscal Year 2018
First Quarter (Mar. 1, 2017 - May 31, 2017)			0.309				0.15
Second Quarter (Jun. 1, 2017- Aug. 31, 2017)			0.229				0.10
Third Quarter (Sept. 1, 2017 - Nov. 30, 2017)			0.165				0.153
Fourth Quarter (Dec. 1, 2017 - Feb. 28, 2018)			0.175				0.066

Holders

As of June 1, 2021, there were 58 holders of record of our common stock.

Dividends

We have not declared any cash dividends on our Common Stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.

Securities authorized for issuance under equity compensation plans

We have not adopted an equity compensation plan and no securities have been authorized or reserved for issuance under any equity compensation plan.

Description of Securities

The following description is a summary of the material terms of the provisions of our Articles of Incorporation and Bylaws. The Articles of Incorporation and Bylaws have been filed with the SEC as exhibits to our registration statement on Form S-1.

Common Stock

We are authorized to issue 495,000,000 shares of Common Stock with $0.001 par value per share. As of our fiscal year ended February 28, 2021, there were 48,491,485 shares of Common Stock issued and outstanding and 3,688,524 shares reserved for issuance upon the exercise of issued and outstanding options.

Each share of Common Stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. The holders are not permitted to vote their shares cumulatively. Accordingly, the holders of our Common Stock who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of our directors and, in such event, the holders of the remaining minority shares will not be able to elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.

Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available. We have not paid any dividends since our inception, and we presently anticipate that all earnings, if any, will be retained for development of our business. Any future disposition of dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.

Holders of our Common Stock have no preemptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions. Upon our liquidation, dissolution or windup, the holders of our Common Stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities. There are not any provisions in our Articles of Incorporation or our Bylaws that would prevent or delay change in our control.

Our stock transfer agent is Issuer Direct Corporation, located at 1981 Murray Holladay Road, Suite 100, SLC UT, 84117.

Preferred Stock

We are authorized to issue 5,000,000 shares of preferred stock, par value $0.001 per share. As of our fiscal year ended February 28, 2021, no shares of preferred stock were issued and outstanding. Our preferred stock is not quoted on any market or system and there is currently no market for our preferred stock.

Promissory Notes

In April 2019, the Company borrowed $12,500 from Jeffrey Mallmes, President, Treasurer, and director of the Company, and $12,500 from Raleigh Kone, Co-Chairman of the Company's board of directors, Executive Vice President, and director of the Company. These loans are evidenced by promissory demand notes which bear interest at the rate of 6% per annum, computed on the basis of actual number of days based upon a 360-day year. Each lender also received warrants to purchase 225,000 shares of the Company's common stock. The warrants have an exercise price of $0.25 and expire three years after issuance. The principal and interest due under these notes are outstanding as of the issuance of these financial statements.

Separately in April 2019, the Company borrowed $3,325 from Raleigh Kone and John Provacek, which loans are evidenced by demand promissory notes that bear interest at the rate of 6% per annum. In connection with the loan from Mr. Provacek, the Company also issued to Mr. Provacek a warrant to purchase 25,000 shares of the Company's common stock at an exercise price of $0.25, which warrant expires three years after issuance. The Company also borrowed $3,390, from Jeffrey Mallmes, which loan is evidenced by a demand promissory note that bears interest at the rate of 6% per annum.

On October 22, 2019 and October 23, 2019, the Company borrowed approximately $90,0000 from six of its current stockholders in reliance on the Regulation D and Regulation S exemptions from the securities registration requirement of the Securities Act of 1933, as amended. These loans are evidenced by promissory notes that bear interest at the rate of 8% per annum and are convertible into shares of the Company's common stock, at $0.05 per share.

Emerging Growth Company

We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:

1.	the last day of our first fiscal year following the fifth anniversary of the Company's S-1 Registration which was declared effective on December 26, 2018;

2.	the last day of our fiscal year during which we had annual gross revenues are $1 billion or more;

3.	the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt securities; or

4.	the date on which we are deemed to be a 'large accelerated filer', as defined in section 240.12b-2 of title 46, Code of Federal Regulations, or any successor thereto.

As an emerging growth company, we are exempt from Section 404(a) and (b) of Sarbanes Oxley. Section 404(a) requires issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment and the effectiveness of the internal control structure and procedures for financial reporting.

As an emerging growth company, we are also exempt from Section 14A(a) and (b) of the Exchange Act, which require the stockholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

ITEM 6.

Not applicable to a smaller reporting company.

ITEM 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

This section provides management's discussion of the financial condition, changes in financial condition and results of operations of Quantum Energy Inc. with specific information on results of operations and liquidity and capital resources. It includes management's interpretation of our financial results, the factors affecting these results, the major factors expected to affect future operating results and future investment and financing plans. This discussion should be read in conjunction with our consolidated financial statements and notes thereto.

Several factors exist that could influence our future financial performance, some of which are described in Item 1A above, 'Risk Factors'. They should be considered in connection with evaluating forward-looking statements contained in this report or otherwise made by or on behalf of us since these factors could cause actual results and conditions to differ materially from those set out in such forward-looking statements.

Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995

The statements contained in this Annual Report on Form 10-K may contain 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact included in this Report are forward-looking statements made in good faith by us and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this Report, or any other of our documents or oral presentations, the words 'anticipate', 'believe', 'estimate', 'expect', 'forecast', 'goal', 'intend', 'objective', 'plan', 'projection', 'seek', 'strategy' or similar words are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements relating to our strategy, operations, markets, services, and other factors all of which are difficult to predict and many of which are beyond our control. Accordingly, while we believe these forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. Further, we undertake no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events or otherwise.

Results of Operations

Year Ended February 28, 2021 Compared to Year Ended February 29, 2020.

Operating expenses for the year ended February 28, 2021 were $210,929 compared to $234,359 for the year ended February 28, 2020. The decrease in operating expenses was due to the fact that the Company had no cash to operate therefore professional fees and general and administrative expenses decreased by $109,126. Management and consulting fees however did increase by $86,584 for the year ended February 28, 2021. Other expenses for the year ended February 28, 2021 were $6,470 compared to $817,189 for the year ended February 29, 2020. During the year ended February 28, 2021 the Company had $-0- in bad debts, $21,787 gain on derivative for a convertible note payable, incurred $28,257 in interest expense and had $-0- in interest expense - warrants, compared to the year ended February 29, 2020 when the Company had $30,000 in bad debts, $138,185 loss on derivative for a convertible note payable, incurred $45,743 in interest expense, $453,261 in interest expense - warrants and $150,000 in joint venture write off.

Net Loss

Net loss for the years ended February 28, 2021 and February 29, 2020 was $217,399 and $1,051,548, respectively. The decrease in loss of $834,149 was due to the decrease in operating expenses of $23,430 and the changes to other expenses as mentioned above.

Liquidity and Capital Resources:

As of February 28, 2021, our assets totaled $47 which consisted of cash. The Company's total liabilities were $1,130,129, which consisted of accounts payable and accrued expenses, accounts payable and accrued expenses - related parties, common stock payable, convertible note payable, derivative liability, promissory notes payable and promissory notes payable - related parties. As of February 28, 2021, the Company had an accumulated deficit of $12,628,254 and working capital deficit of $1,130,082.

The Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. As indicated herein, we need capital for the implementation of our business plan, and we will need additional capital for continuing our operations. We do not have sufficient revenues to pay our operating expenses at this time. Unless the Company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan. For the next 12 months the Company has an oral commitment from its CEO to advance funds as necessary to meeting our operating requirement.

Cash (Used in) Operating Activities

Net cash used in operating activities for the year ended February 28, 2021 and February 29, 2020 was $-0- and $206,571, respectively. The decrease amount was attributed to interest expense on convertible note warrants, joint venture write off and (gain) loss on derivative.

Cash fromInvesting Activities

Net cash used in investing activities was $-0- and $150,000 for the year ended February 28, 2021 and February 29, 2020, respectively.

Cash from Financing Activities

Net cash provided by financing activities was $-0- for the year ended February 28, 2021, and was $355,040 for year ended February 29, 2020 which was all due to cash received from notes payable.

CRITICAL ACCOUNTING POLICIES

The Company has identified certain accounting policies, described below, that are most important to the portrayal of its current financial condition and results of operations. The Company's significant accounting policies are disclosed in the notes to the audited financial statements included in this Annual Report.

ITEM 7A.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements:

Audited financial statements as of February 28, 2021, including:

1.	Report of Independent Registered Public Accounting Firm;
2.	Consolidated Balance Sheets as of February 28, 2021 and 2020;
3.	Consolidated Statements of Operations for the years ended February 28, 2021 and 2020;
4.	Consolidated Statement of Changes in Stockholders' Deficit for the years ended February 28, 2021 and 2020;
5.	Consolidated Statements of Cash Flows for the years ended February 28, 2021 and 2020;
6.	Consolidated Notes to Financial Statements.

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Quantum Energy, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Quantum Energy, Inc. (the 'Company') as of February 28, 2021, the related statement of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the 'financial statements'). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ('PCAOB') and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company's Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company's auditor since 2020

Lakewood, CO

June 14, 2021

QUANTUM ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these financial statements.

QUANTUM ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these financial statements.

QUANTUM ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020 - UNAUDITED

The accompanying notes are an integral part of these financial statements.

QUANTUM ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these financial statements.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

For the years ended February 28, 2021 and 2020 there were no disagreements with our auditors on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. For the years ended February 28, 2021 and 2020, there were no 'reportable events' as that term is described in Item 304(a)(1)(v) of Regulation S-K.

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this Annual Report on Form 10-K, an evaluation was carried out under the supervision of and with the participation of our management, including the Principal Executive Officer and the Principal Financial Officer of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a - 15(e) and Rule 15d - 15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer have concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

Disclosure controls and procedures were not effective due primarily to a material weakness in the segregation of duties in the Company's internal control of financial reporting as discussed below.

Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company (including its consolidated subsidiaries) and all related information appearing in our Annual Report on Form 10-K. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America

Management conducted an evaluation of the design and operation of our internal control over financial reporting as of the end of the period covered by this report, based on the criteria in a framework developed by the Company's management pursuant to and in compliance with the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, walkthroughs of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management has concluded that our internal control over financial reporting was not effective, because management identified a material weakness in the Company's internal control over financial reporting related to the segregation of duties as described below.

While the Company does adhere to internal controls and processes that were designed and implemented based on the COSO report, it is difficult with a very limited staff to maintain appropriate segregation of duties in the initiating and recording of transactions, thereby creating a segregation of duties weakness. Due to: (i) the significance of segregation of duties to the preparation of reliable financial statements; (ii) the significance of potential misstatement that could have resulted due to the deficient controls; and (iii) the absence of sufficient other mitigating controls, we determined that this control deficiency resulted in more than a remote likelihood that a material misstatement or lack of disclosure within the annual or interim financial statements may not be prevented or detected.

Management's Remediation Initiatives.

Management has evaluated, and continues to evaluate, avenues for mitigating our internal controls weaknesses, but mitigating controls to completely mitigate internal control weaknesses have been deemed to be impractical and prohibitively costly, due to the size of our organization at the current time. Management expects to continue to use reasonable care in following and seeking improvements to effective internal control processes that have been and continue to be in use at the Company

Changes in internal controls over financial reporting

There were no changes in the Company's internal control over financial reporting that occurred prior to the Company's most recent financial quarter that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B.

Other Information.

Not applicable.

PART III

ITEM 10.

Directors, Executive Officers and Corporate Governance.

EXECUTIVE OFFICERS OF THE REGISTRANT

The board of directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year, and until her successor is elected and qualified, or until her earlier resignation or removal. The following table sets forth certain information as of February 28, 2021, regarding the executive officers of the Company. It is followed by a brief description of the business experience of each executive officer.

Name	Age	Position at February 28, 2021
Robert Henry		Director
Harry Ewert	___	Director and CEO
William Hinz	___	Director and Chairman
Douglas C. Bean	___	Director and Treasurer
Anthony Ker	___	Director and Secretary
William Westbrook	___	Chief Financial Officer
Jeffrey Mallmes	___	Director

Code of Ethics Policy

In November 2017, we adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Corporate Governance

In November 2017, we established an audit committee, a compensation committee and a nominating and corporate governance committee and we adopted charters for each of these committees. As of January 1, 2021, each of these committees has three directors, one of which was independent. Mr. Ballmann was appointed as the audit committee financial expert. As of the date of this report, Mr. Ballmann has resigned as a director and as a member of these committees. Also, as of the date of this report, none of these committees have formally met or become functional. In the near future, we intend to appoint a new independent director who will qualify as a financial expert on our audit committee.

Audit Committee and Audit Committee Financial Expert

Our board of directors has determined that Mr. Ballmann, who at the time was a member of the audit committee, qualified as an 'audit committee financial expert' as defined in item 407(d)(5)(ii) of Regulation S-K and is 'independent' as the term is used in item 7(d)(3)(iv) of schedule 14a under the Securities Exchange Act of 1934, as amended. Mr. Ballmann is no longer a director and therefore is no longer a member of the Audit Committee. We intend to appoint a new independent director who will be an audit committee financial expert on our audit committee.

ITEM 11.

Executive Compensation.

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities for the years ending February 28, 2019 and February 28, 2020.

Name and Position	Year Ended Feb 28		Salary ($)			Bonus ($)			Stock Awards			Option Awards			Non-Equity Incentive Plan Compensation Earnings ($)			Non-Qualified Deferred Compensation Earnings ($)			All Other Compensation ($)			Total
Harry Ewert, CEO and Director	2020		$	250,000				-				-				-				-				-				-				-

ITEM 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following tables set forth, as of the February 28, 2021, the ownership of our Common Stock by each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock, and by our directors, and our executive officers and directors as a group. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.

			Amount and
			Nature of
			Beneficial
			Ownership			Percent of Class
Name and Address of Beneficial Owner	Title of Class		(1)			(2)
Jeffrey Mallmes (3)
1200 Trans Canada Highway
Sicamous, BC, Canada V0E2VO	Common Stock			7,584,395				15.64	%
Kandy, LP (4)
PO Box 1169
Big Fork, Montana 59911	Common Stock			7,449,622				15.47	%
Robert C. Henry 1742 Carriage
Dr.
Victoria, MN 55386	Common Stock			3,000,000				6.19	%

Security Ownership of Management
			Amount and
			Nature of
			Beneficial			Percent of Class
Name and Address of Beneficial Owner	Title of Class		Ownership (1)			(2)
Jeffrey Mallmes (3)
1200 Trans Canada Highway
Sicamous, BC, Canada V0E2VO	Common Stock			7,584,395				15.64	%
Andrew J. Kacic (4)
PO Box 1169
Big Fork, Montana 59911	Common Stock			7,449,622				15.47	%
Raleigh C. Kone (5)
(address)
All Officers and Directors as a group
(5 person) (3) (4)	Common Stock			16,334,017				33.68	%

(1)

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

(2)

Based on 48,491,485 shares of Common Stock issued and outstanding as of February 28, 2021.

(3)

Jeffrey Mallmes, director, beneficially owns directly and indirectly an aggregate of 7,584,395 shares of our Common Stock as follows: directly, 3,459,173 restricted shares and 352,097 unrestricted shares; indirectly 2,000,000 restricted shares in the name of The Big Barge Company Inc. (which is owned by Mr. Mallmes); and indirectly 1,773,125 restricted shares in the name of Oopik Holdings LTD (which is owned by Mr. Mallmes). Mr. Mallmes disclaims any beneficial ownership of shares owned by Janice Mallmes, his wife.

(4)

Andrew J. Kacic beneficially controls the shares held by Kandy, LP. Mr. Kacic is also owns indirectly through Kandy, L.P. a 3-year warrant to purchase 1,000,000 shares of our common stock at $0.25 per share.

(5)

Mr. Kone owns a 3 year warrant issued March 20, 2019 to purchase 150,000 shares of common stock and a 3 year warrant to purchase 225,000 shares of common stock.

Separately in April 2019, the Company borrowed $3,325 from Raleigh Kone and John Provacek. These loans are evidenced by demand promissory notes that bear interest at the rate of 6% per annum. In connection with the loan from Mr. Provacek, the Company also issued to Mr. Provacek a warrant to purchase 25,000 shares of the Company's common stock at an exercise price of $0.25, which warrant expires three years after issuance. The Company also borrowed $3,390, from Jeffrey Mallmes, which loan is evidenced by a demand promissory note that bears interest at the rate of 6% per annum.

Warrants

In March and April 2019, the Company's board of directors authorized the issuance of 1,925,000 warrants to purchase shares of the Company's common stock to officers, directors and other individuals as incentives for said individuals continuing efforts to find opportunities for and provide services to the Company. The warrants have an exercise price of $0.25 and are exercisable for three years.

ITEM 13.

Certain Relationships and Related Transactions, and Director Independence.

March 2019 Promissory Note Payable

On March 15, 2019, the Company borrowed $5,000 from Raleigh Kone, a stockholder. This loan is evidenced by a demand promissory note which bears interest at the rate of 8% per annum, computed on the basis of actual number of days based upon a 360-day year. Mr. Kone became a director and co-Chairman of the Company's board of directors and Executive Vice President on April 23, 2019. The principal and interest due under this note are outstanding as of February 28, 2021.

April 2019 Promissory Notes Payable

In April 2019, the Company borrowed $12,500 from Jeffrey Mallmes, President, Treasurer, and director of the Company, and $12,500 from Raleigh Kone, CEO and director of the Company. These loans are evidenced by promissory demand notes which bear interest at the rate of 6% per annum, computed on the basis of actual number of days based upon a 360-day year. Each lender also received warrants to purchase 225,000 shares of the Company's common stock. The warrants have an exercise price of $0.25 and expire three years after issuance. The principal and interest due under these notes are outstanding as of February 28, 2021.

Advances from related parties

Mr. Mallmes and certain stockholders of the Company have advanced to the Company in the aggregate approximately $200,000 during the period from 06/26/2018 to 03/30/2019 These funds were used to pay legal, accounting and various operating expenses of the Company.

ITEM 14.

Principal Accountant Fees and Services.

Audit Fees

The aggregate fees billed by BF Borgers, Independent Registered Public Accounting Firm, for professional services rendered for the audit of our annual financial statements for the fiscal years ended February 29, 2020 and February 28, 2021 were $48,600 and $48,600, respectively, with a total for both years of $97,200

Audit Related Fees

None.

Tax Fees

The aggregate tax fees billed by BF Borgers, Independent Registered Public Accounting Firm, for professional services rendered for tax services for the fiscal years ended February 28, 2021 and February 29, 2020 was $-0- and $-0-,respectively.

All Other Fees

There were no other fees billed by BF Borgers, Independent Registered Public Accounting Firm, for professional services rendered during the fiscal years ended December 31, 2020 and 2019, other than as stated under the captions Audit Fees, Audit-Related Fees, and Tax Fees.

Section 16A Beneficial Ownership Reporting Compliance

All Section 16A reporting is current with the filings of both Form 3s and Form 4s.

PART IV

ITEM 15.

Exhibits and Financial Statement Schedules.

(a)

1. and 2. Financial statements and financial statement schedules.

The financial statements and financial statement schedule listed in the Index to Financial Statements in Item 8 are filed as part of this Form 10-K.

3. Exhibits

Exhibit Number	Description	Page Number or Incorporation by Reference to
3.1	Articles of Incorporation	Exhibit 3.1 to Form S-1 filed 6.26.18
3.2	Bylaws	Exhibit 3.2 to Form S-1 filed 6.26.18
3.3	Certificate of Amendment to the Articles of Incorporation	Exhibit 3.3 to Form S-1 filed 6.26.18
3.4	Certificate of Amendment to the Articles of Incorporation 5.24.06	Exhibit 3.4 to Form S-1A filed 11.28.18
3.5	Certificate of Amendment to the Articles of Incorporation 6.12.06	Exhibit 3.5 to Form S-1A filed 11.28.18
3.6	Certificate of Amendment to the Articles of Incorporation 9.16.13	Exhibit 3.6 to Form S-1A filed 11.28.18
3.7	Certificate of Amendment to the Articles of Incorporation 3.20.14	Exhibit 3.7 to Form S-1A filed 11.28.18
3.8	Certificate of designation 3.20.14	Exhibit 3.8 to Form S-1Afiled 11.28.18
3.9	Cert of Designation 4.03.14	Exhibit 3.9 to Form S-1A filed 11.28.18
3.10	Cert of Amendment 6.11.18	Exhibit 3.10 to Form S-1A filed 11.28.18
3.11	Cert of withdrawal of designation of certificate designation 11.26.18	Exhibit 3.11 to Form S-1A filed 11.28.18
3.12	Articles of Incorporation 12.05.18	Exhibit 3.12 to Form S-1A filed 12.6.18
10.1	Audit Committee Charter	Exhibit 10.1 to Form S-1 filed 6.26.18
10.2	Compensation Committee charter	Exhibit 10.2 to Form S-1 filed 6.26.18
10.3	Nominating and corporate governance committed charter	Exhibit 10.3 to Form S-1 filed 6.26.18

14	Code of Business Conduct and Ethics	Exhibit 14.1 to Form S-1 filed 6.26.18
21	List of Subsidiaries of Quantum Energy Inc.	Exhibit 21.1 to Form S-1A filed 11.9.18
31.1	Mutual Agreement to Cancel/Rescind Binding Letter of Intent with IEC dated 4.23.19
31.2	Asset Swap Agreement -5.24.19 w/ Looper and Quay
32.1	Form of certificate of Designation, Preferences and Rights of Series W Convertible Preferred Stock (not filed in Nevada)
32.2	Section 906 Certification of Chief Financial Officer

Interactive Data File

101.INS XBRL Instance Document*

101.SCH XBRL Taxonomy Extension Schema*

101.CAL XBRL Taxonomy Extension Calculation Linkbase*

101.DEF XBRL Taxonomy Extension Definition Linkbase*

101.LAB XBRL Taxonomy Extension Labels Linkbase*

101.PRE XBRL Taxonomy Extension Presentation Linkbase*

	*	To be filed by amendment.
	**	These certifications pursuant to 18 U.S.C. Section 1350 by the Company's Chief Executive Officer and Chief Financial Officer, furnished as Exhibit 32 to this Annual Report on Form 10-K, will not be deemed to be filed with the Securities and Exchange Commission or incorporated by reference into any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates such certifications by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

QUANTUM ENERGY INC. (Registrant)

By:
/s/ HARRY EWERT		Date: July 23, 2021
Harry Ewert
CEO

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