VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
|
|
March 31,
2016
(Unaudited)
|
|
|
December 31,
2015
(Audited)
|
|
ASSETS
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
$
|
156
|
|
|
$
|
19,618
|
|
Inventory
|
|
|
393
|
|
|
|
465
|
|
Total current assets
|
|
|
549
|
|
|
|
20,083
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
549
|
|
|
$
|
20,083
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
13,358
|
|
|
$
|
5,602
|
|
Accounts payable, related party
|
|
|
110,000
|
|
|
|
95,000
|
|
Interest payable
|
|
|
377
|
|
|
|
1,868
|
|
Loans payable
|
|
|
9,899
|
|
|
|
20,999
|
|
Convertible notes, net
|
|
|
15,000
|
|
|
|
15,000
|
|
Total current liabilities
|
|
|
148,634
|
|
|
|
138,469
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
148,634
|
|
|
|
138,469
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit)
|
|
|
|
|
|
|
|
|
Common stock (no par value: shares authorized 100,000,000; 10,247,000 shares issued and outstanding at March 31, 2016 and December 31, 2015
|
|
|
-
|
|
|
|
-
|
|
Additional Paid-in capital
|
|
|
49,700
|
|
|
|
49,700
|
|
Accumulated deficit
|
|
|
(197,785
|
)
|
|
|
(168,086
|
)
|
Total stockholders' equity (deficit)
|
|
|
(148,085
|
)
|
|
|
(118,386
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
549
|
|
|
$
|
20,083
|
|
The accompanying notes are an integral part of these Financial Statements.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
(UNAUDITED)
|
|
Three Months ended
March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
230
|
|
|
$
|
200
|
|
Cost of goods sold
|
|
|
79
|
|
|
|
64
|
|
Gross profit
|
|
|
151
|
|
|
|
136
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
(29,135
|
)
|
|
|
(17,739
|
)
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
(28,984
|
)
|
|
|
(17,603
|
)
|
Interest expense
|
|
|
(715
|
)
|
|
|
(2,710
|
)
|
Net (loss)
|
|
|
(29,699
|
)
|
|
|
(20,313
|
)
|
|
|
|
|
|
|
|
|
|
Net (loss) per common shares (basic and diluted)
|
|
|
(0.00
|
)
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
10,247,000
|
|
|
|
10,000,000
|
|
The accompanying notes are an integral part of these Financial Statements.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
(UNAUDITED)
|
|
Three Months Ended
March 31, 2016
|
|
|
Three Months Ended
March 31, 2015
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(29,699
|
)
|
|
$
|
(20,313
|
)
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
|
|
|
|
|
|
Amortization of debt discount
|
|
|
-
|
|
|
|
2,500
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
7,756
|
|
|
|
(10,514
|
)
|
Accounts payable, related party
|
|
|
15,000
|
|
|
|
15,000
|
|
Interest payable
|
|
|
(1,491
|
)
|
|
|
210
|
|
Inventory
|
|
|
72
|
|
|
|
36
|
|
Net cash provided used by operating activities
|
|
|
(8,362
|
)
|
|
|
(13,081
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
|
|
Repayment to loan payable
|
|
|
(11,100
|
)
|
|
|
-
|
|
Proceeds from loans payable
|
|
|
-
|
|
|
|
5,000
|
|
Net cash provided from financing activities
|
|
|
(11,100
|
)
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
(19,462
|
)
|
|
|
(8,081
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
19,618
|
|
|
|
8,643
|
|
Cash and cash equivalents at end of period
|
|
$
|
156
|
|
|
$
|
562
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these Financial Statements.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Business Activity:
Valeritas Holdings Inc. (the "Company" or “Valeritas Holdings”)
(Formerly Cleaner Yoga Mat, Inc.)
is a Delaware corporation incorporated on May 9, 2014, and reincorporated in Delaware on April 15, 2016. We are a company that engages in the sale of sanitizing solutions for Yoga and Pilates studios as well as conventional gyms of all sizes. We intend to be a viable solution for fitness studios around the world for the sanitization of their equipment. Valeritas Holdings’ focus is to bring its revolutionary sanitizing products to market, to meet an extremely strong need for a green, fast, inexpensive, and effective method to sanitize mats and equipment in the fitness industry. Leisa Swanson, who is currently our sole officer and director, founded our Company. Our headquarters are located at 1370 Sawleaf, San Luis Obispo CA 93401.
To date, our activities have been limited to formation, the raising of equity capital, and the development of a business plan. We have filed a Form S-1 with the U.S. Securities and Exchange Commission and have obtained a listing on the OTC Markets QB tier under the symbol “CYGM”. We are now exploring additional sources of capital and are in the process of executing our business plan We anticipate incurring operating losses as we implement our business plan.
Unaudited Interim Financial Statements
The unaudited interim financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those audited financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three-month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.
Financial Statement Presentation:
The unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Fiscal year end:
The Company has selected December 31 as its fiscal year end.
Use of Estimates:
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Cash Equivalents:
The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
Revenue recognition and related allowances:
Revenue from the sale of goods is recognized when the risks and rewards of ownership have been transferred to the customer, which is usually when title passes. Revenue is measured at the fair value of the consideration received, net of trade discounts and sales taxes.
Accounts Receivable and Allowance for Doubtful Accounts:
Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at March 31, 2016 and 2015 are $Nil.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
|
Inventories:
Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method and are adjusted to actual cost quarterly based on a physical count. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Inventory is maintained at the Company’s office headquarters and consists only of finished goods.
Provisions:
Provisions for warranties are recognized when the Company has a legal or constructive obligation as a result of a past event; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognized for future operating losses.
Warranty:
We record warranty liabilities at the time of sale for the estimated costs that may be incurred under the terms of the limited warranty. Warranty claims are reasonably predictable based on historical experience of failure rates. If actual results differ from our estimates, we revise our estimated warranty liability to reflect such changes. Each quarter, we re-evaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary.
Advertising and Marketing Costs:
Advertising and marketing costs are expensed as incurred and were $Nil during the three month periods ended March 31, 2016 and 2015.
Beneficial Conversion Feature:
From time to time, the Company may issue convertible notes that may have conversion prices that create an embedded beneficial conversion feature pursuant to the Emerging Issues Task Force guidance on beneficial conversion features. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of any attached equity instruments, if any related equity instruments were granted with the debt. In accordance with this guidance, the intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Income taxes:
The Company has adopted SFAS No. 109 – “Accounting for Income Taxes”. ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share
: In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In the year ended December 31, 2014, the Company has entered into convertible loan agreements whereby the holders may acquire up to 1,500,000 shares of the Company’s common stock, which are anti-dilutive and excluded in the loss per share computation.
New Accounting Pronouncements:
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The Company has experienced net losses to date, and it has generated minimal revenue from operations. The Company will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about its ability to continue as a going concern. Management of the Company has developed a strategy to meet operational shortfalls which may include equity funding, short term or long term financing or debt financing, to enable the Company to reach profitable operations.
(1)
|
Convertible Note due on May 28, 2015:
|
On May 28, 2014, the Company entered into a convertible note for cash proceeds of $5,000 with a company controlled by the daughter of our sole officer and director. The note matures on May 28, 2015 and bears interest at 5% per annum. The holder is entitled, at its option, to convert any or all of the outstanding principal plus accrued and unpaid interest at any time into shares of the Company’s common stock, at $0.01 per share. There is no beneficial conversion feature associated with the convertible note. The note came due on maturity and remained payable at March 31, 2016. During the three month’ period ended March 31, 2016, we accrued interest expenses of $64 in respect of the above convertible note, and paid $438 in cash to reduce the accrued interest. As of March 31, 2016, $34 remained as interest payable (December 31, 2015 - $408).
.
(2)
|
Convertible Note due on September 4, 2015
|
On September 4, 2014, the Company entered into a convertible note for cash proceeds of $10,000 with Amy Chaffe, the daughter of our sole officer and director. The note matures on September 4, 2015 and bears interest at 5% per annum. The holder is entitled, at its option, to convert any or all of the outstanding principal plus accrued and unpaid interest at any time into shares of the Company’s common stock, at $0.01 per share. The note came due on maturity and remained payable at March 31, 2016.
The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $10,000 on the note. This value was recorded as a discount on debt and offset to additional paid in capital.
During the three month period ended March 31, 2016, we accrued interest expenses of $128 in respect of the above convertible note, and paid $738 in cash to reduce the accrued interest. As of March 31, 2016, $67 remained as interest payable (December 31, 2015 - $677).
Interest expense:
|
Three Months ended
March 31,
|
|
|
2016
|
|
2015
|
|
Amortization of debt discount
|
|
$
|
-
|
|
|
$
|
2,500
|
|
Interest at contractual rate
|
|
|
128
|
|
|
|
189
|
|
Totals
|
|
$
|
128
|
|
|
$
|
2,689
|
|
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
On March 16, 2015, April 8, 2015, May 13, 2015, October 13, 2015 and November 5, 2015, the Company received loans in the amount of $5,000, $1,000, $1,620, $759 and $12,620, respectively, from a company controlled by the daughter of our sole officer and director. The loans are unsecured, have a one-year term from the date the funds were received, and bear interest at 10% per annum, payable on maturity. During the three month period ended March 31, 2016, we accrued cumulative interest expenses of $523 in respect of these loans and made cash payment in the amount of $1,030 to reduce previously accrued interest. As of March 31, 2016 $276 remained as interest payable (December 31, 2015 - $783)
The Company’s authorized common stock consists of 100,000,000 shares with no par value.
At inception, the Company issued 10,000,000 shares of common stock at $0.0015 per share for cash of $15,000.
During the year ended December 31, 2015, the Company has received proceeds totaling $24,700 from various parties subscribing for a total of 247,000 shares at $0.10 per share under our Form S-1 registration statement. 247,000 shares of the Company’s common stock were issued in respect of these subscriptions.
As at March 31, 2016 there were a total of 10,247,000 shares issued and outstanding.
6.
|
RELATED PARTY TRANSACTIONS
|
The Company entered into a Convertible Note of $5,000 (ref Note 3(1)) on May 28, 2014 with a company controlled by the daughter of our sole officer and director.
The Company entered into a Convertible Note of $10,000 (ref Note 3(2)) on September 4, 2014 with a company controlled by the daughter of our sole officer and director.
On March 16, 2015, April 8, 2015, May 13, 2015, October 13, 2015 and November 5, 2015, the Company received loans in the amount of $5,000, $1,000, $1,620, $759 and $12,620, respectively, from a company controlled by the daughter of our sole officer and director. (ref Note 4)
During the three month period ended March 31, 2016 our sole officer and director, Ms. Leisa Swanson accrued $5,000 per month for management services, totaling $15,000 (March 31, 2015 - $15,000). At March 31, 2016 a total of $110,000 (December 31, 2015 - $95,000) is due and payable to Ms. Swanson.
Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
Operating loss carry-forwards generated during the period from May 9, 2014 (date of inception) through March 31, 2016 of approximately $197,700, will begin to expire in 2034. The Company applies a statutory income tax rate of 34%. Accordingly, deferred tax assets related to net operating loss carry-forwards total approximately $67,200 at March 31, 2016. For the three month period ended March 31, 2016, the valuation allowance increased by approximately $10,100.
VALERITAS HOLDINGS INC.
(Formerly Cleaner Yoga Mat, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
7.
|
INCOME TAXES (continued)
|
The Company has no tax positions at December 31, 2015, or December 31, 2014, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accruals for interest and penalties since inception.
The tax returns for the period from inception to December 31, 2015 are subject to examination by the Internal Revenue Service.
The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued.
Subsequent to the end of the period covered by this Report, on April 14, 2016, Cleaner Yoga Mat, Inc., a Florida corporation (“CYGM”), entered into an Agreement and Plan of Merger (the “Plan of Merger”) with Valeritas Holdings, Inc., its wholly owned Delaware subsidiary (“Valeritas”), pursuant to which CYGM merged with and into Valeritas (the “Merger”). Effective as of April 15, 2016, CYGM merged with and into Valeritas, with Valeritas as the surviving corporation and successor in interest to CYGM, pursuant to the Plan of Merger. The Merger was accomplished by the filing of (a) Articles of Merger with the Secretary of State of the State of Florida (the “Articles of Merger”) and (b) Certificate of Merger with the Secretary of State of the State of Delaware (the “Certificate of Merger”). The purpose of the Merger was to re-domicile CYGM from Florida to Delaware and to effect a name change and recapitalization, as described below.
Pursuant to the Plan of Merger, upon the effectiveness of the Merger:
·
|
CYGM re-domiciled from Florida to Delaware and changed its name from “Cleaner Yoga Mat, Inc.” to “Valeritas Holdings, Inc.”;
|
·
|
The authorized capital stock of CYGM increased from 100,000,000 shares of common stock, no par value (“CYGM Common Stock”) to 310,000,000 shares of Valeritas, consisting of 300,000,000 shares of Valeritas Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share;
|
·
|
The affairs of the registrant ceased to be governed by the FBCA and became subject to the Delaware General Corporation Law;
|
·
|
The Certificate of Incorporation of Valeritas and its existing bylaws became the Certificate of Incorporation (the “Delaware Certificate of Incorporation”) and new bylaws (the “Delaware Bylaws”) of the registrant by operation of the Merger;
|
·
|
The sole director of Valeritas immediately preceding the Merger became the sole director of the surviving corporation on and after the effectiveness of the Merger, and the sole officer of Valeritas immediately preceding the Merger became the sole officer of the surviving corporation on and after the effectiveness of the Merger;
|
·
|
Each share of the CYGM Common Stock issued and outstanding immediately before the Merger automatically extinguished and converted into 4.0486 issued and outstanding and fully paid and non-assessable shares of Valeritas Common Stock subject to the same terms, conditions as it existed immediately before the Merger;
|
·
|
Valeritas, as the successor registrant, will continue to file reports under Section 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
|
Share and per share numbers in these financial statements have not been adjusted to give effect to the 4.0486-for-1 share exchange in the Merger.