The accompanying reviewed interim unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders’ equity in conformity with generally accepted accounting principles applicable in the United States of America. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in our Company’s annual report on Form 10-K for the year ended June 30, 2018. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the ninw months ended March 31, 2019 are not necessarily indicative of the results that can be expected for the year ending June 30, 2019.
See the accompanying notes to the condensed consolidated financial statements
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2019
(UNAUDITED)
NOTE 1 - ORGANIZATION AND OPERATIONS
Metwood, Inc. (The Company, Our, We) was incorporated under the laws of the State of Wyoming on June 19, 1969. On January 28, 2000, the Company, through a majority shareholder vote, changed its domicile to Nevada through a merger with EMC Energies, Inc., a Nevada corporation. The Company also changed its par value to $.001 and the amount of authorized common stock to 100,000,000 shares.
Prior to 1990, the Company was engaged in the business of exploring for and producing oil and gas in the Rocky Mountain and mid-continental areas of the United States. The Company liquidated substantially all of its assets in 1990 and was dormant until June 30, 2000, when it acquired, in a stock-for-stock, tax-free exchange, all of the outstanding common stock of a privately held Virginia corporation, Metwood, Inc. (“Metwood”), which was incorporated in 1993. Metwood has been in the metal and metal/wood construction materials manufacturing business since 1992. Following the acquisition, the Company approved a name change from EMC Energies, Inc. to Metwood, Inc.
The Company provides construction-related products and engineering services to residential customers and contractors, commercial contractors, developers and retail enterprises, primarily in southwesternVirginia.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Going Concern
Our condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have sustained significant operating losses which raises substantial doubt about the Company’s ability to continue as a going concern. During the nine months ended March 31, 2019, the Company incurred a loss from operations of $230,137 and has an accumulated deficit of $2,383,458. Management will continue its ongoing efforts to increase the customer base and seek lower cost suppliers to generate future profits. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. The basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.
Basis of Presentation - The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ended June 30, 2019. The condensed balance sheet at June 30, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
For further information, refer to the consolidated financial statements and footnotes thereto included in Metwood, Inc.’s annual report on Form 10-K for the year ended June 30, 2018.
Fair Value of Financial Instruments - For certain of the Company’s financial instruments, none of which are held for trading, including cash, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.
Management’s Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents - For purposes of the Consolidated Statements of cash Flows, we consider liquid investments with an original maturity of six months or less to be cash equivalents. We maintain our cash in bank deposit accounts, which, at times, may exceed the federally insured limit of $250,000. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk on cash and cash equivalents.
Accounts Receivable - We grant credit in the form of unsecured accounts receivable to our customers based on an evaluation of their financial condition. We perform ongoing credit evaluations of our customers. The estimate of the allowance for doubtful accounts, which is charged off to bad debt expense, is based on management’s assessment of current economic conditions and historical collection experience with each customer. At March 31, 2019, the allowance for doubtful accounts was $ 8,362. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms and are charged off to bad debt expense when they are determined to be uncollectible. For the six months ended March 31, 2019 and 2018, the net amount of bad debts charged off was $-0- for each period.
Inventory - Inventory, consisting of metal and wood raw materials, is located on our premises and is stated at the lower of cost or market using the first-in, first-out method. The inventory at March 31, 2019 consisted of raw materials of $355,369 and work in process of $107,418.
Property and Equipment - Property and equipment are recorded at cost and include expenditures for improvements when they substantially increase the productive lives of existing assets. Maintenance and repair costs are expensed to operations as incurred. Depreciation is computed using the straight-line method over the assets’ estimated useful lives, which range from three to forty years. When a fixed asset is disposed of, its cost and related accumulated depreciation are removed from the accounts. The difference between undepreciated cost and the proceeds is recorded as a gain or loss.
Impairment of Long-lived Assets - We evaluate our long-lived assets for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amounts to the future net undiscounted cash flows which the assets are expected to generate. Should an impairment exist, the impairment would be measured by the amount by which the carrying amount of the assets exceeds the fair value. There have been no such impairments of long-lived assets through March 31, 2019.
Patents - We have been assigned several key product patents developed by certain company officers. No value has been recorded in our financial statements because the fair value of the patents was not determinable within reasonable limits at the date of assignment.
Revenue Recognition - In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update. The guidance’s adoption had no impact on our source of revenue from the sale of building materials or have a material impact on our financial statements.
The Company’s revenue stream is generated from sales of commercial building related products. Sales are initiated as directed from customers’ orders. Revenue is recognized generally upon shipment or delivery to our customers, depending upon the terms of the sales order. Control is considered transferred when title and risk of loss pass, when the customer is obligated to pay and, where required, when the customer has accepted the products.
We recognize shipping fees, if any, received from our customers in revenue. We expense shipping and handling costs as incurred which are included in cost of goods sold on the statements of operation.
Income Taxes - Income taxes are accounted for in accordance with FASB ASC 740, “Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carryforwards where applicable. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
Research and Development - We perform research and development on our metal/wood products, new product lines, and new patents. Costs, if any, are expensed as they are incurred. Research and development costs for the three months ended March 31, 2019 and 2018 were $-0- and $-0-, respectively.
Earnings Per Common Share - Basic earnings per share amounts are based on the weighted average shares of common stock outstanding. If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share. This presentation has been adopted for the quarters presented. There were no adjustments required to net income for the years presented in the computation of diluted earnings per share.
If the convertible note is converted in its entirety, it will result in the issuance of 50,000,000 shares of common stock. The maximum conversion per year is 10,000,000 shares of common stock. If the contract to change control of the corporation is close, there will be 30,000,000 shares of common stock issued.
Recent Accounting Pronouncements – In February, 2017 the FASB issued ASU 20 16-0 2, “Leases (Topic 842)” requiring lessees to recognize lease assets and lease liabilities for most leases classified as operating leases under previous U.S. GAAP. The guidance is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company will be required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The adoption of this standard is not expected have a material impact on the Company’s consolidated financial statements.
Accounting Standard Update No. 2014-09, (“ASU 2014-09’) Revenue from Customers (Topic 606), became effective for us in the period ending June 30, 2019. No significant adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is expected to be immaterial to the Company’s net income on an ongoing basis.
NOTE 3 - CONCENTRATIONS OF CUSTOMER RISK
For the nine months ended March 31, 2019 and 2018, all customers who individually accounted for 10% or more of our company’s revenues and accounts receivable.
|
|
% of Sales
|
|
|
% of Accounts Receivable
|
|
Customer
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84 Lumber
|
|
*
|
|
|
|
10.5
|
|
|
*
|
|
|
|
13.68
|
|
Builders First
|
|
|
10.6
|
|
|
|
11.9
|
|
|
|
16.81
|
|
|
|
13.55
|
|
Capps Home Building
|
|
*
|
|
|
|
13.9
|
|
|
*
|
|
|
*
|
|
David James Homes
|
|
*
|
|
|
*
|
|
|
|
19.39
|
|
|
|
26.77
|
|
Superior Homes
|
|
*
|
|
|
*
|
|
|
*
|
|
|
|
12.39
|
|
Mark Hannabury
|
|
|
13.3
|
|
|
*
|
|
|
*
|
|
|
*
|
|
Cahas Mountain Properties
|
|
*
|
|
|
*
|
|
|
|
10.79
|
|
|
*
|
|
_____
*Less than 10%
NOTE 4 – COMMITMENTS AND CONTINGENCIES
During the year ended June 30, 2005, The Company into as sales and leaseback transaction with a related party. The Company sold various buildings at the corporate headquarters which house it’s manufacturing plants, executive offices and other buildings for $600,000 in cash. The Company simultaneously entered into a commercial lease agreement with the related party whereby the Company is committed to lease back these same properties for $6,800 per month over a ten-year term expiring December 31, 2014. On July 1, 2015 a new lease was entered into with the related party. This lease has a term of five years and the monthly rental is $5,500 in cash, in addition the Company issued common stock as part of the transaction. The Company incurred rent expense of $301,500 and 296,300 including the amortization of prepaid rent of $234,000 for the nine months ended March 31, 2019 and 2018, respectively.
NOTE 5 – NOTES PAYABLE
The Company has executed a demand note with it’s controlling shareholder, Cahas Mountain, LLC, that Cahas Mountain will make available cash advances from time to time to bridge cash flow shortfalls. These advances ae repaid to Cahas Mountain as cash flow allows. The unpaid balance due to Cahas Mountain at the end of each month is subject to an interest rate of 6% per year, At March 31, 2019 and June 30, 2018, advances under this note are payable to Cahas Mountain Properties of approximately $88,000 and $77,000, respectively. Accrued interest payable to Cahas Mountain Properties totaled approximately $32,000 and $28,000 at March 31, 2019 and June 30, 2018, respectively. The Company recognized interest expense of approximately $4,000 and $-0- for the nine months ended March 31, 2019 and 2018, respectively, The unpaid advances are due on demand.
On August 18, 2016 the Company entered into a convertible note with Cahas Mountain in the amount of $50,000 with an interest rate of 8% per year, this note was extended to June 30, 2020. The note is convertible into common shares of Metwood, Inc. at par value of $.001 and if converted in it’s entirety will dilute the current shareholders by a maximum of 50,000,000 shares of common stock. The maximum conversion in any year is 10,000,000 shares of common stock. A debt discount of $50,000 was recorded at issuance and $13,233 was amortized during the nine months ended March 31, 2019 and $13,236 was expensed in the period ended March 31, 2018. Accrued interest payable totaled $11,000 and $8,000 at March 31, 2019 and June 30, 2018, respectively.
On October 11, 2019 the Company entered into a note with First-/Citizens Band and Trust for the purchase of a vehicle. The terms of this note are, sixty equal payments of 893.37 per month , payment for sixty months, and an interest rate of interest 5.05%. The grand total of the note is $47,791.25.
NOTE 6 – RELATED-PARTY TRANSACTIONS
The Company has executed a demand note with it’s controlling shareholder, Cahas Mountain, LLC, that Cahas Mountain will make available cash advances from time to time to bridge cash flow shortfalls. These advances ae repaid to Cahas Mountain as cash flow allows. The unpaid balance due to Cahas Mountain at the end of each month is subject to an interest rate of 6% per year, At March 31, 2019 and 2018, advances under this note are payable to Cahas Mountain Properties of approximately $88,000 and $77,000, respectively. Accrued interest payable to Cahas Mountain Properties totaled approximately $32,000 and $28,000 at March 31, 2019 and June 30, 2018 respectively. The Company recognized interest expense of approximately $20,285 and $10,294 for the nine months ended March 31, 2019 and 2018, respectively, The unpaid advances are due on demand.
On August 18, 2017 the Company entered into a convertible note with Cahas Mountain in the amount of $50,000 with an interest rate of 8% per year, this note expires on June 30, 2019. The note is convertible into common shares of Metwood, Inc. at par value of $.001 and if converted in it’s entirety will dilute the current shareholders by a maximum of 50,000,000 shares of common stock. The maximum conversion in any year is 10,000,000 shares of common stock. A debt discount of $50,000 was recorded at issuance and $13,233 was amortized during the nine months ended March 31, 2019 and $13,236 was expensed in the period ended March 31, 2018. Accrued interest payable totaled $11,000 and $8,000 at March 31, 2019 and June 30, 2018, respectively.
The Company entered into a lease with the related party. This lease has a term of five years and the monthly rental is $5,000 in cash, in addition the Company issued common stock as part of the transaction. The Company incurred rent expense $301,000 for the nine months ended March 31, 2019, $236,000 of this figure was amortization of prepaid rent.
NOTE 7 – EQUITY
During the nine months ended March 31, 2019 The Company did not issue any preferred shares or common shares of stock. There are 100,000,000 shares of common stock authorized and at the quarter end there are 17,766,647 shares issued and outstanding. The authorized preferred stock is 40,000,000 shares and there are -0- shares of preferred stock issued and outstanding.
If the convertible note that is covered in the related party note (Note 5) and is converted into common stock of The Company, an additional 50,000,000 shares of common stock could be issued, resulting in dilution of the current shareholders. When the contract of October 11, 2019 is completed (see Note 9) there will be an additional 15,000,000 shares issued to the principals of Emerge Nutraceuticals, Inc.
NOTE 8 – LEGAL PROCEEDINGS
There are no legal proceedings filed or anticipated that will affect these financial statements or operations.
NOTE 9 – SUBSEQUENT EVENTS
On June 20, 2019, an extension of the due date of the $50,000 convertible note due to Cahas Mountain Properties, Inc. was signed. This note extension, approved by the board of directors, extends the maturity of the convertible note to June 30, 2020.
Acquisition of Emerge Nutraceuticals, Inc.
On June 28, 2019, Metwood, Inc. entered into an Acquisition Agreement with Emerge Nutraceuticals, Inc.( ENI), a Florida Corporation. Pursuant to the agreement, 100% of ENI’s common stock (500 shares) and $300,000 was transferred to Metwood, Inc. In consideration, fifteen million (15,000,000) shares of Metwood common stock was issued which were valued at one million two hundred fifty thousand $1,250,000) dollars. This purchase excluded the formulas for the products produced by ENI, which were spun out of ENI prior to the acquisition. Upon closing, two the Company’s manager’s, officers and board of directors members, Robert M. Callahan and Shawn A. Callahan, resigned after appointing Mr. Keith Thomas, Shawn Phillips and Raffaela Thomas to the Board of Directors. ENI is the acquirer for financial statement purposes and the transaction will be handled as a reverse merger and recapitalization. Financial statements are not available.
Sale of Wholly Owned Subsidiary
On June 29, 2019, the Company, entered into a stock purchase agreement with Cahas Mountain Properties, LLC, a Virginia limited liability company, (“Cahas”) a majority shareholder of the Company. Pursuant to the agreement, Cahas agreed to purchase from the Company the wholly owned subsidiary, Metwood of Virginia, Inc., a Virginia corporation, for nine million four hundred thousand (9,400,000) common shares of the Company’s common stock which it held at a value of seven hundred fifty-two thousand ($752,000) dollars. As part of this agreement, all assets and liabilities of Metwood of Virginia except, the convertible note payable to Cahas of $50,000 which remained an obligation of the Company. After the sale of the subsidiary the proforma Balance Sheet at March 31, 2019 and June 30, 2018 and Statement of Operations for the nine months ended March 31, 20199 and the year ended June 30, 2018 are shown below:
Pro Forma adjustments on the balance sheet:
|
a)
|
Represents Metwood of Virginia, Inc.’s historical balance sheet as of September 30, 2018 to carve out Metwood of Virginia’s assets and liabilities as of June 30, 2018 prior to its sale.
|
|
|
|
|
b)
|
Represents the retirement of 9,400,000 share of the Company’s common stock which the Company received in exchange from Cahas Mountain Properties, LLC.
|
Metwood, Inc.
|
Proforma Unaudited Balance Sheet
|
March 31, 2019
|
|
|
|
|
|
|
Less
|
|
|
Proforma
|
|
|
|
2019
|
|
|
Metwood VA
|
|
|
2019
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
109,251
|
|
|
$
|
(109,251
|
)
|
|
$
|
-
|
|
Accounts receivable, net of reserve
|
|
|
195,558
|
|
|
|
(195,558
|
)
|
|
|
-
|
|
Inventory
|
|
|
462,787
|
|
|
|
(462,787
|
)
|
|
|
-
|
|
Other current assets
|
|
|
7,351
|
|
|
|
(7,351
|
)
|
|
|
-
|
|
Total current assets
|
|
|
774,947
|
|
|
|
(774,947
|
)
|
|
|
-
|
|
Property and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold Improvements
|
|
|
274,869
|
|
|
|
(274,869
|
)
|
|
|
-
|
|
Furniture, fixtures and equipment
|
|
|
78,222
|
|
|
|
(78,222
|
)
|
|
|
-
|
|
Computer and software
|
|
|
193,204
|
|
|
|
(193,204
|
)
|
|
|
-
|
|
Machinery & Equipment
|
|
|
746,505
|
|
|
|
(746,505
|
)
|
|
|
-
|
|
Vehicles
|
|
|
469,164
|
|
|
|
(469,164
|
)
|
|
|
-
|
|
Land improvements
|
|
|
67,959
|
|
|
|
(67,959
|
)
|
|
|
-
|
|
Total property and equipment
|
|
|
1,829,923
|
|
|
|
(1,829,923
|
)
|
|
|
-
|
|
Less accumulated depreciation
|
|
|
(1,385,931
|
)
|
|
|
1,385,931
|
|
|
|
-
|
|
Net property and equipment
|
|
|
443,992
|
|
|
|
(443,992
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,218,939
|
|
|
$
|
(1,218,939
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
221,562
|
|
|
$
|
(213,562
|
)
|
|
$
|
8,000
|
|
Accrued payroll expense
|
|
|
25,455
|
|
|
|
(25,455
|
)
|
|
|
-
|
|
Note payable to bank
|
|
|
10,720
|
|
|
|
(10,720
|
)
|
|
|
|
|
Demand note payable-related party
|
|
|
88,059
|
|
|
|
(88,059
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
345,796
|
|
|
|
(337,796
|
)
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Note payable to bank long term portion
|
|
|
33,009
|
|
|
|
(33,009
|
)
|
|
|
|
|
Convertible note payable-related party
|
|
|
|
|
|
|
|
|
|
|
|
|
note discount of $17,647 and $38,294, respectively
|
|
|
45,589
|
|
|
|
|
|
|
|
45,589
|
|
Total long term liabilities
|
|
|
78,598
|
|
|
|
(33,009
|
)
|
|
|
45,589
|
|
Total liabilities
|
|
|
424,394
|
|
|
|
(370,805
|
)
|
|
|
53,589
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (par $.001) 40,000,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Common stock (par $.001)
|
|
|
17,767
|
|
|
|
(9,400
|
)
|
|
|
8,367
|
|
Paid in capital
|
|
|
3,550,236
|
|
|
|
|
|
|
|
3,550,236
|
|
Accumulated deficit
|
|
|
(2,383,458
|
)
|
|
|
(1,228,734
|
)
|
|
|
(3,612,192
|
)
|
Contra equity-prepaid rent
|
|
|
(390,000
|
)
|
|
|
390,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Total stockholders' equity
|
|
|
794,545
|
|
|
|
(848,134
|
)
|
|
|
(53,589
|
)
|
Total liabilities and stockholders' equity
|
|
$
|
1,218,939
|
|
|
$
|
(1,218,939
|
)
|
|
$
|
-
|
|
Metwood Inc.
|
Proforma Unaudited Statement of Operations
|
MARCH 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
|
|
|
Proforma
|
|
|
|
2019
|
|
|
Metwood VA
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Gross sales
|
|
$
|
1,757,746
|
|
|
$
|
(1,757,746
|
)
|
|
$
|
-
|
|
Cost of sales
|
|
|
(1,127,188
|
)
|
|
|
1,127,188
|
|
|
|
-
|
|
Gross profit
|
|
|
630,558
|
|
|
|
(630,558
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
851,521
|
|
|
|
(851,521
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (Loss)
|
|
|
(220,963
|
)
|
|
|
220,963
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
(20,285
|
)
|
|
|
3,999
|
|
|
|
(16,286
|
)
|
Gain on sale of asset
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other Income (expense)
|
|
|
11,111
|
|
|
|
(11,111
|
)
|
|
|
-
|
|
Total Other Income (expense)
|
|
|
(9,174
|
)
|
|
|
(7,112
|
)
|
|
|
(16,286
|
)
|
Net income (loss)
|
|
|
(230,137
|
)
|
|
|
213,851
|
|
|
|
(16,286
|
)
|
Income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net (loss)
|
|
$
|
(230,137
|
)
|
|
$
|
213,851
|
|
|
$
|
(16,286
|
)
|
Basic loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.00
|
)
|
Weighted number of shares outstanding
|
|
|
17,776,647
|
|
|
|
9,400,000
|
|
|
|
8,376,647
|
|
Metwood Inc.
|
Proforma Unaudited Statement of Operations
|
March 31, 2018
|
|
|
|
|
|
|
Less
|
|
|
Proforma
|
|
|
|
2018
|
|
|
Metwood VA
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
Gross sales
|
|
$
|
1,444,191
|
|
|
$
|
(1,444,191
|
)
|
|
$
|
-
|
|
Cost of sales
|
|
|
(931,243
|
)
|
|
|
931,243
|
|
|
|
-
|
|
Gross profit
|
|
|
512,948
|
|
|
|
(512,948
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
842,055
|
|
|
|
(842,055
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (Loss)
|
|
|
(329,107
|
)
|
|
|
329,107
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
(13,236
|
)
|
|
|
(3,050
|
)
|
|
|
(16,286
|
)
|
Gain on sale of asset
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other Income (expense)
|
|
|
2,224
|
|
|
|
(2,224
|
)
|
|
|
-
|
|
Total Other Income (expense)
|
|
|
(11,012
|
)
|
|
|
(5,274
|
)
|
|
|
(16,286
|
)
|
Net income (loss)
|
|
|
(340,119
|
)
|
|
|
323,833
|
|
|
|
(16,286
|
)
|
Income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net (loss)
|
|
$
|
(340,119
|
)
|
|
$
|
323,833
|
|
|
$
|
(16,286
|
)
|
Basic loss per share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.00
|
)
|
Weighted number of shares outstanding
|
|
|
17,776,647
|
|
|
|
9,400,000
|
|
|
|
8,376,647
|
|
Pro Forma adjustments on the balance sheet:
|
a)
|
Represents Metwood of Virginia, Inc.’s historical balance sheet as of June 30, 2018 to carve out Metwood of Virginia’s assets and liabilities as of June 30, 2018 prior to its sale.
|
|
|
|
|
b)
|
Represents the retirement of 9,400,000 share of the Company’s common stock which the Company received in exchange from Cahas Mountain Properties, LLC.
|
Metwood, Inc.
|
Proforma Unaudited Balance Sheet
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
|
|
|
Proforma
|
|
|
|
2018
|
|
|
Metwood VA
|
|
|
2018
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
61,872
|
|
|
$
|
(61,872
|
)
|
|
$
|
-
|
|
Accounts receivable, net of reserve
|
|
|
225,414
|
|
|
|
(225,414
|
)
|
|
|
-
|
|
Inventory
|
|
|
439,649
|
|
|
|
(439,649
|
)
|
|
|
-
|
|
Other current assets
|
|
|
18,436
|
|
|
|
(18,436
|
)
|
|
|
-
|
|
Total current assets
|
|
|
745,371
|
|
|
|
(745,371
|
)
|
|
|
-
|
|
Property and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold Improvements
|
|
|
274,869
|
|
|
|
(274,869
|
)
|
|
|
-
|
|
Furniture, fixtures and equipment
|
|
|
78,222
|
|
|
|
(78,222
|
)
|
|
|
-
|
|
Computer and software
|
|
|
193,204
|
|
|
|
(193,204
|
)
|
|
|
-
|
|
Machinery & Equipment
|
|
|
744,672
|
|
|
|
(744,672
|
)
|
|
|
-
|
|
Vehicles
|
|
|
415,528
|
|
|
|
(415,528
|
)
|
|
|
-
|
|
Land improvements
|
|
|
67,959
|
|
|
|
(67,959
|
)
|
|
|
-
|
|
Total property and equipment
|
|
|
1,774,454
|
|
|
|
(1,774,454
|
)
|
|
|
-
|
|
Less accumulated depreciation
|
|
|
(1,353,003
|
)
|
|
|
1,353,003
|
|
|
|
-
|
|
Net property and equipment
|
|
|
421,451
|
|
|
|
(421,451
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,166,822
|
|
|
$
|
(1,166,822
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
247,150
|
|
|
$
|
(247,150
|
)
|
|
$
|
-
|
|
Accrued payroll expense
|
|
|
19,177
|
|
|
|
(19,177
|
)
|
|
|
-
|
|
Demand note payable-related party
|
|
|
77,460
|
|
|
|
(77,460
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
343,787
|
|
|
|
(343,787
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible note payable-related party
|
|
|
|
|
|
|
|
|
|
|
|
|
note discount of $17,647 and $38,294, respectively
|
|
|
32,353
|
|
|
|
-
|
|
|
|
32,353
|
|
Total long term liabilities
|
|
|
32,353
|
|
|
|
-
|
|
|
|
32,353
|
|
Total liabiilites
|
|
|
376,140
|
|
|
|
(343,787
|
)
|
|
|
32,253
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (par $.001) 40,000,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Common stock (par $.001)
|
|
|
17,767
|
|
|
|
(9,400
|
)
|
|
|
8,367
|
|
Paid in capital
|
|
|
3,550,236
|
|
|
|
|
|
|
|
3,550,236
|
|
Accumulated deficit
|
|
|
(2,153,321
|
)
|
|
|
(1,437,635
|
)
|
|
|
(3,590,956
|
)
|
Contra equity-prepaid rent
|
|
|
(624,000
|
)
|
|
|
624,000
|
|
|
|
-
|
|
Treasury stock
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Total stockholders' equity
|
|
|
790,682
|
|
|
|
(823,035
|
)
|
|
|
(32,353
|
)
|
Total liabilities and stockholders' equity
|
|
$
|
1,166,822
|
|
|
$
|
(1,166,822
|
)
|
|
$
|
-
|
|