Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
The information set forth in this section contains certain "forward-looking statements," including, among other things,
(i) expected changes in our revenues and profitability, (ii) prospective business opportunities, and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or
statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate to our plans, objectives and
expectations for future operations. Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in
light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be regarded as a representation by us or any other person that our objectives or plans will
be achieved. Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock. As used in this quarterly report, the
terms “we”, “us”, “our” and “our company” mean Takedown Entertainment Inc. and our subsidiary Takedown Fight Media Inc., unless otherwise indicated.
Corporate Overview
Green Hygienics Holdings Inc. (the Company) was incorporated in the State of Nevada on June 12, 2008 as Silver Bay
Resources Inc. and issued 55,000 shares of common stock on June 12, 2008 for cash of $20,000. On June 30, 2010, the Company changed its name to Takedown Entertainment Inc. On July 24, 2012, the Company changed its name to Green
Hygienics Holdings Inc.
During 2008, the Company staked one mineral claim located 100 km northwest of Vancouver, British Columbia and acquired a
molybdenum property comprised of one mineral claim located approximately 35 kilometers north of Vancouver, British Columbia. We did not proceed with further exploration of the mineral claims due to a determination that the results of
our initial geological program did not generate investor interest in the claims and we were unable to finance further exploration. Mineral property costs of $20,000 were expensed during 2009. Both properties have since been abandoned by
the Company.
During the years 2009 to June 3, 2015, the Company was involved in the acquisition, production, licensing, marketing and
distribution of mixed martial arts (MMA) content, programming and merchandising for North American and International markets. The Company was negotiating to transfer to the former President of the Company all of its rights to and
interests in its mixed martial arts program (Takedown), including any and all Takedown assets, in return for the forgiveness of a liability of $29,812 owing to the former President of the Company.
On June 3, 2015, through the expertise of its new management, Rick Powell and Jim Loseth, we entered into the commercial
indoor cultivation business specializing in the construction of cannabis growing facilities and the management thereof. Currently, we are planning to obtain contracts to build marijuana growing operations for third parties.
We were to build pre-fabricated buildings which meet new mandatory fire and energy codes with structural products that
are fire, rot, mold, and termite resistant. Our, pre-fabricated Green Hygienics material render the electrical, mechanical and HVAC engineering and installation more efficiently than conventional construction methods. This cuts the
initial set up cost and time. Utilizing a sterile growing environment increases the likelihood of meeting requisite quality assurance standards. We use a soilless, scalable, production system. This provides the low running costs and
high yielding required to produce the both quality of product, but volume consistently, while maintaining the possible lowest carbon footprint.
On June 1, 2017, David Ashby resigned as a Director.
On June 1, 2017, Rick Powell resigned as CEO and as a Director.
On June 1, 2017, Jim Loseth resigned as COO and as a Director.
On June 1, 2017, Ronald Loudoun was appointed as the President and as a Director.
On August 30, 2018, Matthew Dole was appointed as VP of Business Development and as a Director.
On August 30, 2018, Jeff Palumbo was appointed as Chief technology Officer (“CTO”).
On September 15, 2018, the Company executed a definitive agreement to acquire a portfolio of IP assets from the CTO,
pertaining to the cannabis and urban agriculture industries (the “Asset”). The Asset consists of a destination portal that includes news, reviews, ecommerce and automatic content curation with an integrated E-Commerce system that can be
set-up for product sales and marketing. The system is a mobile online directory platform that supports premium listings, self-service, geolocation and reviews and is mobile optimized. In exchange for the Asset, the Company will issue
1,000,000 shares of common stock to the CTO.
Results of
Operations
We are still in the development stage and have not generated any revenues to date.
Expenses
We incurred operating losses of $41,036,664 from date of incorporation June 12, 2008 to the period ended April 30, 2019.
These losses consisted of general operating expenses and professional fees incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. An analysis of the loss is as
follows:
|
|
Nine Months Ended
|
|
|
|
|
|
|
April 30, 2019
|
|
|
April 30, 2018
|
|
|
Change
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting fees
|
|
|
100,000
|
|
|
|
90,000
|
|
|
|
10,000
|
|
General and administrative
|
|
|
12,268
|
|
|
|
19,949
|
|
|
|
(7,681
|
)
|
Interest expense
|
|
|
2,148
|
|
|
|
2,125
|
|
|
|
23
|
|
Gain on forgiveness of debt
|
|
|
-
|
|
|
|
(39,750
|
)
|
|
|
39,750
|
|
Net
Income (
loss) for the period
|
|
|
(114,416
|
)
|
|
|
(72,324
|
)
|
|
|
42,092
|
|
In 2018, our auditors issued a going concern opinion. This means that there is substantial doubt that we can continue as
an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues. We have generated no revenues to date. The following table provides selected financial
data about our company as at April 30, 2019 and July 31, 2018.
Balance Sheet Data:
|
|
April 30, 2019
|
|
|
July 31, 2018
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Cash and prepaid expenses
|
|
|
648
|
|
|
|
592
|
|
Total assets
|
|
|
648
|
|
|
|
592
|
|
Total liabilities
|
|
|
455,674
|
|
|
|
341,202
|
|
Stockholders' equity (deficit)
|
|
|
(455,026
|
)
|
|
|
(340,610
|
)
|
Liquidity and
Capital Resources
Working Capital
|
|
April 30, 2019
|
|
|
July 31,2018
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
648
|
|
|
|
592
|
|
Current Liabilities
|
|
|
455,674
|
|
|
|
341,202
|
|
Working Capital (Deficit)
|
|
|
(455,026
|
)
|
|
|
(340,610
|
)
|
During the nine months ended April 30, 2019 and 2018, we did not raise any cash and had minimal expenditures for
operating activities.
Our current cash balance will be unable to sustain operations for the next twelve months. We will be forced to raise
additional funds by issuing new debt or equity securities or otherwise. We have raised no funds during the current quarter. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. We are a
development stage company and have generated no revenue to date.
The future of our company is dependent upon its ability to obtain financing and upon future profitable operations from
the development of acquisitions.
We estimate that our expenses over the next 12 months will be approximately $220,000 as described in the table
below. These estimates may change significantly depending on the performance of our products in the marketplace and our ability to raise capital from shareholders or other sources.
Description
|
|
Estimated
Completion Date
|
|
Estimated Expenses
($)
|
|
|
|
|
|
|
|
|
Business development
|
|
12 months
|
|
|
120,000
|
|
General and administrative expenses
|
|
12 months
|
|
|
100,000
|
|
Total
|
|
|
|
|
220,000
|
|
We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity
financing by way of private placements. We currently do not have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any private placement financings
on terms that will be acceptable to us. We may not raise sufficient funds to fully carry out our business plan.
FUTURE FINANCINGS
We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above,
including approximately $220,000 over the next 12 months to pay for our ongoing expenses. These expenses include legal, accounting and audit fees as well as general and administrative expenses. These cash requirements are in excess of
our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds to us in
order to enable us to sustain our plan of operations or to repay our liabilities.
We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances
of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business
activities.
We presently do not have any arrangements for additional financing and no potential lines of credit or sources of
financing are currently available for the purpose of proceeding with our plan of operations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
Use of Estimates
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. Our company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and
expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company's estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be affected.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in
our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to our management, including our president and chief financial officer (also our principal executive officer, principal financial officer and principal accounting officer) to allow for timely
decisions regarding required disclosure.
As of April 30, 2019, we carried out an evaluation, under the supervision and with the participation of our president and
chief financial officer (also our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the
foregoing, our president and chief financial officer (also our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in
providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this quarterly report due to certain deficiencies that existed in the design or operation of our internal controls over
financial reporting and that may be considered to be material weaknesses.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting that occurred during the quarter ended April
30, 2019 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
Saturna Group Chartered Professional Accountants LLP, our independent registered public accounting firm, is not required
to and has not provided an assessment over the design or effectiveness of our internal controls over financial reporting.