Notes
to Consolidated Financial Statements
Three
Months Ended March 31, 2021
(Unaudited)
Note
1 - Basis of Presentation
The
accompanying unaudited condensed financial statements of American International Holdings Corp. (“AMIH” or the “Company”)
have been prepared in accordance with the generally accepted accounting principles in the United States of America (“GAAP”)
for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information
or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant
to the applicable rules and regulations for interim financial reporting. Accordingly, they do not include all the information and footnotes
necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management,
the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are
necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Annual Report on Form 10-K for the year
ended December 31, 2020. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results
to be expected for the year ending December 31, 2021 or for any future interim periods.
Impact
of COVID-19 Pandemic on Consolidated Financial Statements. The outbreak of the 2019 novel coronavirus disease (“COVID-19”),
which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and
governmental authorities to contain and combat its outbreak and spread has severely impacted the U.S. and world economies, the market
for health spa services, nutrition supplements and our other business offerings during the end of the first quarter of 2020, and continuing
throughout 2020. Government mandated ‘stay-at-home’ and similar orders have to date, and may in the future, prevent us from
staffing our spas and construction services, and prohibited us from operating altogether. Specifically, as a result of COVID-19 and ‘stay-at-home’
and social distancing orders issued in McKinney and The Woodlands, Texas, we had to close both of our MedSpas, VISSIA McKinney and VISSIA
Waterway, Inc., which were closed effective March 10, 2020, and which resulted in both the loss of income and the loss of most of our
workforce, who had to be let go. VISSIA Waterway, Inc. reopened effective June 21, 2020 and VISSIA McKinney reopened effective August
8, 2020. However, due to the termination of employees associated with the shutdown we were forced to expend resources to attract, hire
and train completely new staff for preparation of the re-launchings. Notwithstanding the re-openings, customer traffic and demand at
our VISSIA Waterway, Inc. and VISSIA McKinney MedSpa locations failed to rebound to pre-closure levels due to COVID-19 and the pandemic’s
effects on the economy, and because we are unable to predict the length of the pandemic or ultimate outcome thereof, and further due
to our limited capital resources, effective in October 2020, we made the decision to close both our VISSIA Waterway, Inc. and VISSIA
McKinney locations and discontinued such operations. Although our MedSpas were forced to close during the second and third quarters,
and are temporarily closed for economic reasons currently, Legend Nutrition was able to remain open as an essential business as we sold
vitamins and other nutritional supplements. Legend Nutrition’s lease was up January 31, 2021, and the Company chose not to renew
the lease, closed the store, and will not continue in this line of business moving forward.
As
of the date of this report, our operations are limited, and consist mainly of American International Holdings Corp, Capitol City Solutions
USA, Inc., ZipDoctor, Inc., EPIQ MD, Inc.
Moving
forward, economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for our services
and our operating results. All of the above may be exacerbated in the future as the COVID-19 outbreak and the governmental responses
thereto continues.
Note
2 - Organization, Ownership and Business
Prior
to May 31, 2018, the Company was a 93.2% owned subsidiary of American International Industries, Inc. (“American” or
“AMIN”) (OTCQB: AMIN). Effective May 31, 2018, the Company issued 10,100,000 shares of restricted common stock. As
a result of the issuance of the common shares, a change in control occurred. American International Industries, Inc. ownership decreased
from 93.2% to 6.4%. No one individual or entity owns at least 50% of the outstanding shares of the Company. Effective April 12, 2019,
the Company changed its business focus to the services of medical spas.
On
April 12, 2019, the Company entered into a Share Exchange Agreement (the “Agreement”) with Novopelle Diamond, LLC
(“Novopelle”) and all three members of Novopelle, pursuant to which the Company issued 18,000,000 shares of the Company
common stock to the members (three individuals) of Novopelle Diamond, LLC (“Novopelle”), a Texas limited company,
to acquire 100% of the membership interests of Novopelle. The issuance of these shares represents a change in control of the Company.
Concurrent with the issuance, Jacob Cohen, Esteban Alexander and Alan Hernandez, representing the three former members of Novopelle,
were elected to the board of directors and to the office of Chief Executive Officer, Chief Operating Officer and Chief Marketing officer
of the Company, respectively. Everett Bassie and Charles Zeller resigned as board members of the Company. This transaction was treated
as a reverse acquisition for accounting purposes, with the Company remaining the parent company and Novopelle (which has since been renamed
VISSIA McKinney, LLC) becoming a wholly-owned subsidiary of the Company.
On
April 28, 2020, the Company incorporated a wholly-owned subsidiary, ZipDoctor, Inc. (“ZipDoctor”) in the State of
Texas. ZipDoctor plans to provide its customers with unlimited, 24/7 access to board certified physicians and licensed mental and behavioral
health counselors and therapists via a newly developed, monthly subscription based online telemedicine platform. ZipDoctor was launched
in August 2020 and has generated nominal revenues through the quarter ended March 31, 2021.
On
May 15, 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) with Global Career Networks Inc,
a Delaware corporation (the “GCN”), the sole owner of Life Guru, Inc., a Delaware corporation (“Life Guru”).
Pursuant to the SPA, the Company acquired a 51% interest in Life Guru from GCN. As consideration for the purchase of the 51% ownership
interest in Life Guru, the Company issued to GCN 500,000 shares of its newly designated Series B Convertible Preferred Stock, which had
an agreed upon value of $500,000 ($1.00 per share), and agreed to issue GCN up to an additional 1,500,000 shares of Series B Convertible
Preferred Stock (with an agreed upon value of $1,500,000) upon reaching certain milestones.
The
unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries: VISSIA McKinney, LLC
(f/k/a Novopelle Diamond, LLC), VISSIA Waterway, Inc. (f/k/a Novopelle Waterway, Inc.), Novopelle Tyler, Inc., Legend Nutrition, Inc.,
Capitol City Solutions USA, Inc. EPIQ MD, Inc., ZipDoctor, Inc., and its majority owned subsidiary, Life Guru, Inc. All significant intercompany
transactions and balances have been eliminated in consolidation.
Note
3 - Recently Issued Accounting Pronouncements
From
time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other
standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes
that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial
position or results of operations upon adoption.
In
February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASU 2016-02). Under ASU No.
2016-2, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information
about leasing arrangements. ASU No. 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions.
Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of
the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. For public companies, the Company
adopted this standard on January 1, 2019 using the modified retrospective method. The new standard provides a number of optional practical
expedients in transition. The Company elected the package of practical expedients, which permitted the Company not to reassess under
the new standard its prior conclusions about lease identification, lease classification and initial direct costs; and all of the new
standard’s available transition practical expedients. The Company did not enter into any new lease agreements during the first
quarter of 2021.
The
new standard also provides practical expedients for a company’s ongoing accounting. The Company elected the short-term lease recognition
exemption for its leases. For those leases with a lease term of 12 months or less, the Company will not recognize right-of-use (ROU)
assets or lease liabilities.
In
July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives
and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the
Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable
Noncontrolling Interests with a Scope Exception to simplify the accounting for certain instruments with down round features. The
amendments require companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for
purposes of determining liability or equity classification. Further, companies that provide earnings per share (“EPS”)
data will adjust the basic EPS calculation for the effect of the feature when triggered and will also recognize the effect of the trigger
within equity. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning
after December 15, 2018. Early adoption is permitted. The Company adopted this new standard on January 1, 2019 and it did not have a
material impact on the Company’s consolidated financial statements.
In
August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820).” This standard modifies disclosure
requirements related to fair value measurement and is effective for all entities for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2019. Early adoption is permitted. Implementation on a prospective or retrospective basis varies
by specific disclosure requirement. The standard also allows for early adoption of any removed or modified disclosures upon issuance
while delaying adoption of the additional disclosures until their effective date. The Company adopted ASU No. 2018-13 effective on January
1, 2020 and it did not have a material impact on the Company’s consolidated financial statements.
In
December 2019, the FASB issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)”. This standard
simplifies the accounting for income taxes. This standard is effective for fiscal years beginning after December 15, 2020, including
interim periods within those fiscal years. Early adoption is permitted for all entities. The Company is currently assessing the impact
of adopting this standard on its consolidated financial statements.
In
June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718)”: Improvements to Nonemployee
Share-Based Payment Accounting. This ASU was issued to expend the scope of Topic 718 to include share-based payment transactions for
acquiring goods and services from nonemployees. Previously, these awards were recorded at the fair value of consideration received or
the fair value of the equity instruments issued and were measured at the earlier of the commitment date of the date performance was completed.
The amendments in this ASU require nonemployee share-based payment awards to be measured at the grant-date fair value of the equity instrument.
ASU 2018-07 was effective for fiscal years, including interim periods within those fiscal years beginning after December 15, 2018. The
Company adopted ASU 2018-07 effective on January 1, 2019 and it did not have a material impact on the Company’s consolidated financial
statements.
In
August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”).
ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible
instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims
to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15,
2023, and interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2020-06 on its financial statements.
Note
4 – Property and Equipment
Property
and equipment from continuing operations were as follows at March 31, 2021 and December 31, 2020:
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
Leasehold
improvements
|
|
|
4,262
|
|
|
|
4,262
|
|
Furniture
& fixtures
|
|
|
18,830
|
|
|
|
18,830
|
|
|
|
|
23,092
|
|
|
|
23,092
|
|
Less
accumulated depreciation and amortization
|
|
|
5,309
|
|
|
|
4,238
|
|
Net
property and equipment
|
|
$
|
17,783
|
|
|
$
|
18,854
|
|
Property
and equipment from discontinued operations were as follows at March 31, 2021 and December 31, 2020:
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2021
|
|
|
2020
|
|
Leasehold
improvements
|
|
$
|
-
|
|
|
$
|
-
|
|
Furniture
& fixtures
|
|
|
11,072
|
|
|
|
11,072
|
|
Equipment
|
|
|
78,017
|
|
|
|
83,917
|
|
|
|
|
89,089
|
|
|
|
94,989
|
|
Less
accumulated depreciation and amortization
|
|
|
10,478
|
|
|
|
6,184
|
|
Net
property and equipment
|
|
$
|
78,611
|
|
|
$
|
88,805
|
|
As
a result of discontinued operations, the leasing equipment of $67,336 was returned in the first quarter of 2021, loss of $5,902 on
disposition and no liabilities were due currently.
Depreciation
and amortization expense from continuing operations for the three months ended March 31, 2021 and 2020 was $1,071 and $932, respectively.
Depreciation and amortization expense from discontinued operations for the three months ended March 31, 2021 and 2021 was $4,294 and
$9,406, respectively.
Note
5 – Goodwill
As
of March 31, 2021, the goodwill in connection with the acquisition of the assets in October 2019 associated with and related to a retail
vitamin, supplements and nutrition store located in McKinney, Texas was $0.
Goodwill
is not amortized, but is evaluated for impairment annually or when indicators of a potential impairment are present. The annual evaluation
for impairment of goodwill is based on valuation models that incorporate assumptions and internal projections of expected future cash
flows and operating plans. The Company believes such assumptions are also comparable to those that would be used by other marketplace
participants. The Company determined impairment adjustment was necessary for the year ended December 31, 2020, since the goodwill was
not substantiating a future cash flow. Hence, goodwill of $29,689 was impaired in full during the fourth quarter of 2020.
Note
6 – Licensing Agreement
On
June 27th, 2019, the Company executed an exclusive license agreement with Novo MedSpa Addison Corp (“Novo Medspa”)
providing the Company with the exclusive rights to the Novopelle brand and to establish new Novopelle branded MedSpa locations on a worldwide
basis (the “Exclusive License”). In consideration for the Exclusive License, the Company paid Novo MedSpa a one-time
cash payment of $40,000 and issued to Novo MedSpa 250,000 shares of the Company’s common stock. The 250,000 shares of the Company’s
common stock were valued at $0.10 per share or $25,000.
During
the fourth quarter of 2019, the Company opened a new MedSpa location and paid Novo MedSpa a one-time cash payment of $30,000 as a new
location fee pursuant to the exclusive license agreement.
On
May 13, 2020, the Company provided Novo Medspa with notice to terminate the June 27, 2019 License Agreement in pursuit of the Company’s
desire to establish and develop its own brand and have the flexibility to offer additional products and services that are not currently
available at Novopelle branded locations, which was effective immediately. Accordingly, the license of $95,000 was impaired in full during
the second quarter of 2020.
Note
7 – Other assets
On
May 15, 2020, the Company executed a securities purchase agreement with Global
Career Networks Inc, a Delaware corporation (the “Seller”), the sole owner of Life Guru, pursuant to which the Company
purchased from the Seller, a 51% interest in the capital stock of Life Guru, representing an aggregate of 2,040 shares of Life Guru’s
common stock. LifeGuru owns and operates the LifeGuru.me website which is currently in development
and is anticipated to be fully launched in the fourth quarter of 2020. In consideration for the purchase, the Company agreed to issue
the Seller 500,000 shares of the Company’s Series B Preferred Stock at closing, which occurred on May 15, 2020. An additional up
to 1,500,000 Series B Preferred Stock shares will be issuable to the Seller upon the following milestones, provided that such milestones
are met prior to the earlier of (i) one (1) year after closing; and (ii) thirty (30) days after the Company has provided the Seller written
notice of a breach by the Seller of any provision of the SPA, which breach has not been reasonably cured within such thirty (30) day
period (such earlier date of (i) and (ii), the “Milestone Termination Date”):
(a)
500,000 Series B Preferred Stock shares upon completion of the fully operational LifeGuru.me website;
(b)
500,000 Series B Preferred Stock shares upon such time as 300 coaches have signed up at LifeGuru.me; and
(c)
500,000 Series B Preferred Stock shares upon such time as 1,000 coaches have signed up at LifeGuru.me.
The
fair value of 500,000 shares of the Company’s Series B Preferred Stock issued at closing, valued on such grant date was $605,488,
which equaled the market price per common share on the grant multiplied by the equivalent number of common shares which would be issuable
upon conversion of Series B Preferred Stock.
The
Company did not recognize any liabilities related to the milestone shares due to the uncertainty surrounding such milestones as of
December 31, 2020.
The
51% owned subsidiary is a consolidated entity which requires the presentation of noncontrolling interest in the consolidated statements
of operations for the three months ended March 31, 2021. As there was no activity for the entity as of March 31, 2021, no assets, liabilities
or noncontrolling interest were presented at the period ended March 31, 2021. Since
the asset is not substantiating a future cash flow, the Company determined an impairment adjustment was necessary for the periods presented.
Investment in LifeGuru of $605,488 was impaired in full during the fourth quarter of 2020.
During
the second quarter of 2021, the Company issued 500,000 Series B Preferred Stock shares for reaching the second milestone. The fair value
of 500,000 shares of the Company’s Series B Preferred Stock issued at closing, valued on such grant date was $601,852, which equaled
the market price per common share on the grant multiplied by the equivalent number of common shares which would be issuable upon conversion
of Series B Preferred Stock. This amount was expensed as in process research and development.
The
Company did not recognize any liabilities related to the milestone shares due to the uncertainty surrounding such milestones.
Note
8 – Capital lease
On
June 17, 2020, the Company entered into an agreement with a vendor to purchase equipment used in its spa operations. Pursuant to the
agreement, the Company agreed to pay a total amount of $44,722 in 24 installments, or $1,819 per month plus tax. The outstanding balance
of this capital lease was $34,987 as of March 31, 2021. Due to the discontinued operation, the Company returned equipment in the first
quarter of 2021. The Company impaired $1,455 the asset down to the value of the liability.
On
July 14, 2020, the Company entered into an agreement with a vendor to purchase equipment used in its spa operations. Pursuant to the
agreement, the Company agreed to pay a total amount of $44,722 in 24 installments, or $1,819 per month plus tax. The outstanding balance
of this capital lease was $31,457 as of March 31, 2021. Due to the discontinued operation, the Company returned equipment in the first
quarter of 2021. The Company impaired $5,991 the asset down to the value of the liability.
Note
9 – Operating Right-of-Use Lease Liability
On
January 1, 2019, the Company adopted Accounting Standards Update No. 2016-2, Leases (Topic 842), as amended, which supersedes the lease
accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding
right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosure surrounding the amount, timing and uncertainty of cash
flows arising from leasing arrangements.
As
of March 31, 2021, the Company had three (3) leasing agreements subject to Accounting Standards Codification (ASC) 842.
Location
1 – Capitol City Solutions USA, Inc.
On
January 1, 2020, the Company recognized an operating right-of-use asset in the amount of $113,794 and an operating lease liability in
the amount of $113,794 in connection with Location 1. The lease term is sixty-one (61) months and expires in January 2025.
The
following is a schedule, by year, of maturities of lease liabilities as of March 31, 2021:
2021
|
|
|
20,466
|
|
2022
|
|
|
27,288
|
|
2023
|
|
|
27,288
|
|
2024
|
|
|
27,288
|
|
2025
|
|
|
2,274
|
|
Total
undiscounted cash flows
|
|
|
104,604
|
|
Less
imputed interest (8%)
|
|
|
(23,167
|
)
|
Present
value of lease liability
|
|
$
|
81,437
|
|
Total
rental expense related to this location for the three months ended March 31, 2021 was $6,822. The operating lease right-of-use asset
net balance at December 31, 2020 related to this location was $81,437.
Due
to discontinued operations of VISSIA Waterway, Inc. and Vissia Mckinney LLC, the related right-of-use asset of $186,162 and $179,495,
respectively, net of amortization was impaired in full, as of December 31, 2020. Legend Nutrition’s lease was up December 31, 2020,
and the Company chose not to renew the lease, and closed the store. Hence, Legend Nutrition’s right-of use asset and liabilities
are fully amortized as of December 31, 2020.
Location
2 – VISSIA Mckinney, LLC
On
January 1, 2019, the Company recognized an operating right-of-use asset in the amount of $287,206 and an operating lease liability in
the amount of $294,774 in connection with Location 1. The lease term is eighty-four (84) months and expires in November 2025.
The
following is a schedule, by year, of maturities of lease liabilities as of March 31, 2021:
2021
|
|
|
54,951
|
|
2022
|
|
|
55,854
|
|
2023
|
|
|
56,776
|
|
2024
|
|
|
57,715
|
|
2025
|
|
|
53,828
|
|
Total
undiscounted cash flows
|
|
|
279,124
|
|
Less
imputed interest (8%)
|
|
|
(83,144
|
)
|
Present
value of lease liability
|
|
$
|
195,980
|
|
Total
rental expense related to this location for the three months ended March 31, 2021 was $0. The operating lease right-of-use asset net
balance at March 31, 2021 related to this location was $0, which was impaired in full due to discontinue operations.
Location
3 – VISSIA Waterway, Inc.
On
January 1, 2020, the Company recognized an operating right-of-use asset in the amount of $234,485 and an operating lease liability in
the amount of $234,485 in connection with Location 2. The lease term is sixty (60) months and expires in December 2024.
The
following is a schedule, by year, of maturities of lease liabilities as of March 31, 2021:
2021
|
|
|
55,540
|
|
2022
|
|
|
57,206
|
|
2023
|
|
|
58,922
|
|
2024
|
|
|
60,690
|
|
Total
undiscounted cash flows
|
|
|
232,358
|
|
Less
imputed interest (8%)
|
|
|
(49,529
|
)
|
Present
value of lease liability
|
|
$
|
182,829
|
|
Total
rental expense related to this location for the three months ended March 31, 2021 was $0. The operating lease right-of-use asset net
balance at March 31, 2021 related to this location was $0, which was impaired in full due to discontinue operations.
Note
10 – Accrued Compensation for Related Parties
At
March 31, 2021, accrued compensation was $151,500, representing cash compensation due to the Company’s executive officers for services
rendered.
Note
11 – Notes Payable
Notes
payable represents the following at March 31, 2021:
Note
payable dated May 17, 2019 for $30,000, with interest at 5% per annum and due on April 30, 2020. The Note and accrued interest totaled
$31,791 were settled by the issuance of 242,407 common shares of the Company at a price of $0.131 per share. The shares were valued
at $0.33 per share based on the market price at the settlement date. Accordingly, the Company recorded loss on loan settlement of
$48,203 during the year ended December 31, 2020.
|
|
$
|
30,000
|
|
Less:
Settlement
|
|
|
(30,000
|
)
|
|
|
|
0
|
(1)
|
|
|
|
|
|
Note
payable to an individual dated July 8, 2019 for $40,000, with interest at 8% per annum and due on July 8, 2020. The Note is a convertible
promissory note. The Note holder has the right to convert all or any portion of the principal amount and accrued interest due on
the Note into the shares issued under the Company’s qualified Regulation A offering circular (the “Offering Statement”),
at the offering price of such offering ($0.50 per share). The Note is currently past due.
|
|
|
40,000
|
(2)
|
|
|
|
|
|
Note
payable to a financial group dated August 26, 2019 for $75,000, with interest at 12% per annum and due on August 26, 2020. The Note
is a convertible promissory note in the event of default. The Note holder has the right to convert all or any portion of the principal
amount and accrued interest due on the Note into the shares of the Company at the price equal to 50% of the lowest trading price
on the primary trading market on which the Company’s common stock is quoted for the last ten (10) trading days immediately
prior to but not including the conversion date.
During the year ended December 31, 2020, principal and accrued interest totaling
$86,100 was converted into 713,250 common shares of the Company within the terms of the note.
|
|
|
75,000
|
|
Less:
conversion
|
|
|
(75,000
|
)
|
|
|
|
0
|
(3)
|
|
|
|
|
|
Note
payable dated October 15, 2019 for $75,000, with interest at 10% per annum and due on July 15, 2020. The Note is a convertible promissory
note. The Note holder has the right to convert all or any portion of the principal amount and accrued interest due on the Note into
the shares under the Offering Statement at the offering price. Furthermore, the Company issued 10,000 shares of the Company’s
common stock to the unrelated party investor as further consideration to enter into the loan with the Company. During the year ended
December 31, 2020, principal and accrued interest totaling $83,233 was converted into 1,503,883 common shares of the Company within
the terms of the note.
|
|
|
75,000
|
|
Less:
conversion
|
|
|
(75,000
|
)
|
|
|
|
0
|
(4)
|
|
|
|
|
|
Note
payable of $78,750 dated October 28, 2019 for cash of $75,000, with interest at 10% per annum and due on October 28, 2020. The Note
is a convertible promissory note. The conversion price is equal to the lesser of (i) the price per share of common stock sold to
investors in the Offering Statement ($0.50 per share), or (ii) a variable conversion price equal to 60% multiplied by the lowest
trading price for the common stock during the ten (10) trading day period ending on the latest completed trading day prior to the
conversion date, representing a discount rate of 40%. The Note and accrued interest totaling $84,620 was converted into 1,119,309
common shares of the Company within the terms of the note during the year ended December 31, 2020. Accordingly, the unamortized discount
as of the conversion date in the amount of $62,652 was expensed.
|
|
|
78,750
|
|
Less:
conversion
|
|
|
(78,750
|
)
|
|
|
|
0
|
(5)
|
|
|
|
|
|
Note
payable of $78,750 dated October 28, 2019 for cash of $75,000, with interest at 10% per annum and due on October 28, 2020. The Note
is a convertible promissory note. The conversion price equals the lesser of (i) the price per share of common stock sold to investors
in the Offering Statement ($0.50 per share), or (ii) a variable conversion price equal to 60% multiplied by the lowest trading price
for the common stock during the ten (10) trading day period ending on the latest completed trading day prior to the conversion date,
representing a discount rate of 40%. The Note and accrued interest totaling $84,529 was converted into 1,080,808 common shares of
the Company within the terms of the note during the year ended December 31, 2020. Accordingly, the unamortized discount as of the
conversion date in the amount of $57,130 was expensed.
|
|
|
78,750
|
|
Less:
conversion
|
|
|
(78,750
|
)
|
|
|
|
0
|
(6)
|
Note
payable of $78,750 dated October 28, 2019 for cash of $75,000, with interest at 10% per annum and due on October 28, 2020. The Note
is a convertible promissory note. The conversion price equals the lesser of (i) the price per share of common stock sold to investors
in the Offering Statement ($0.50 per share), or (ii) a variable conversion price equal to 60% multiplied by the lowest trading price
for the common stock during the ten (10) trading day period ending on the latest completed trading day prior to the conversion date,
representing a discount rate of 40%. The Note and accrued interest totaling $84,620 was converted into 1,119,309 common shares of
the Company within the terms of the note during the year ended December 31, 2020. Accordingly, the unamortized discount as of the
conversion date in the amount of $62,652 was expensed.
|
|
|
78,750
|
|
Less:
conversion
|
|
|
(78,750
|
)
|
|
|
|
0
|
(7)
|
|
|
|
|
|
On
October 18, 2019, Legend Nutrition, Inc. (“Legend”), a wholly-owned subsidiary of the Company, entered into an
Asset Purchase Agreement with David Morales to acquire all of the assets associated with and related to a retail vitamin, supplements
and nutrition store located in McKinney, Texas. Pursuant to the Asset Purchase Agreement, Legend purchased a variety of assets including
software, contracts, bank and merchant accounts, products, inventory, computers, security systems and other intellectual properties
(the “Assets”). For consideration of the Assets, Legend issued to Mr. Morales a promissory note in the amount
of $75,000 bearing an interest rate of five percent (5%) per annum and with a maturity date of one year (October 18, 2020). The Note
and accrued interest totaling $ 81,657 was settled by the issuance of 889,979 common shares of the Company. The shares were valued
at $0.21 per share based on the market price at the settlement date. Accordingly, the Company recorded a loss on loan settlement
of $889,979 during the year ended December 31, 2020.
|
|
|
75,000
|
|
Less:
Settlement
|
|
|
(75,000
|
)
|
|
|
|
0
|
(8)
|
|
|
|
|
|
Note
payable of $157,500 dated February 24, 2020 for cash of $150,000, net of original issue discount of $7,500, with interest at 8% per
annum and due on February 24, 2021. The Note is a convertible promissory note. The conversion price equals 60% of the lowest daily
volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to and including the conversion
date, representing a discount rate of 40%. %. The Note and accrued interest totaling $166,362 was converted into 3,071,819 common
shares of the Company within the terms of the note during the year ended December 31, 2020.
|
|
|
157,500
|
(9)
|
Less:
Conversion
|
|
|
(157,500
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $88,000 dated April 20, 2020 for cash of $88,000, with interest at 8% per annum and due on April 20, 2021. The annual
interest rate will increase to 22% if in default. The Note is a convertible promissory note. The conversion price equals 61% of the
lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the conversion
date, representing a discount rate of 39%. The Note and accrued interest totaling $140,968 was converted into 2,232,298 common shares
of the Company within the terms of the note during the year ended December 31, 2020.
|
|
|
88,000
|
(10)
|
Less:
Conversion
|
|
|
(88,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $105,000 dated April 30, 2020 for cash of $100,000, net of original issue discount of $5,000, with interest at 8% per
annum and due on April 30, 2021. The annual interest rate will increase to 15% if in default. The Note is a convertible promissory
note. The conversion price equals the lower of $0.50 per share or 60% of the lowest daily volume weighted average price (VWAP) for
the common stock during the ten (10) trading day period prior to the conversion date, representing a discount rate of 40%. The Note
and accrued interest totaling $109,200 was converted into 1,511,000 common shares of the Company within the terms of the note during
the year ended December 31, 2020.
|
|
|
105,000
|
(11)
|
Less:
Conversion
|
|
|
(105,000
|
)
|
|
|
|
0
|
|
Note
payable of $53,000 dated May 19, 2020 for cash of $53,000, with interest at 8% per annum and due on August 19, 2021. The annual interest
rate will increase to 22% if in default. The Note is a convertible promissory note. The conversion price equals 61% of the lowest
daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the conversion date,
representing a discount rate of 39%. The Note and accrued interest totaling $86,217 was converted into 683,791 common shares of the
Company within the terms of the note during the year ended December 31, 2020.
|
|
|
53,000
|
(12)
|
Less:
Conversion
|
|
|
(53,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable dated June 24, 2020 for $30,000, with interest at 5% per annum and due on September 24, 2020. The Note is unsecured. The
Note and accrued interest totaling $ 30,777 was settled by the issuance of 376,704 common shares of the Company. The shares were
valued at $0.21 per share based on the market price at the settlement date. Accordingly, the Company recorded a loss on loan settlement
of $48,331 during the year ended December 31, 2020.
|
|
|
30,000
|
(13)
|
Less:
Conversion
|
|
|
(30,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable dated July 7, 2020 for $50,000, with interest at 5% per annum and due on July 7, 2021. The Note is unsecured.
|
|
$
|
50,000
|
(14)
|
|
|
|
|
|
Note
payable of $53,000 dated August 5, 2020 for cash of $53,000, with interest at 8% per annum and due on November 5, 2021. The annual
interest rate will increase to 22% if in default. The Note is a convertible promissory note. The conversion price equals 61% of the
lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the conversion
date, representing a discount rate of 39%. The note, accrued interest and early payment penalty totaling $70,736 was paid during
the three months ended March 31, 2021.
|
|
|
53,000
|
(15)
|
Less:
Repayment
|
|
|
(53,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $105,000 dated August 11, 2020 for cash of $100,000, net of original issue discount of $5,000, with one-time interest
charge of 8% payable and due on May 11, 2021. The outstanding balance of the Note will be increase by 135% if in default. The Note
is a convertible promissory note. The conversion price equals the lower of $0.50 per share or 60% of the lowest daily volume weighted
average price (VWAP) for the common stock during the ten (10) trading day period prior to the conversion date, representing a discount
rate of 40%. The note and accrued interest totaling $111,466 was settled by the issuance of 708,750 common shares of the Company
and $50,000 in cash. The note and accrued interest were converted at $0.1614 per share and settled with additional share at $0.45
per shares. Accordingly, the Company recorded a loss on loan settlement of $58,059 during the three months ended March 31, 2021.
|
|
|
105,000
|
(16)
|
Less:
Repayment
|
|
|
(105,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $53,000 dated September 14, 2020 for cash of $53,000, with interest at 8% per annum and due on December 14, 2021. The
annual interest rate will increase to 22% if in default. The Note is a convertible promissory note. The conversion price equals 61%
of the lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the
conversion date, representing a discount rate of 39%. The note, accrued interest and early payment penalty totaling $70,736 was paid
during the three months ended March 31, 2021.
|
|
|
53,000
|
(17)
|
Less:
Repayment
|
|
|
(53,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable to an unrelated party dated September 11, 2020 for $4,000, with no interest and due on demand.
|
|
|
4,000
|
(18)
|
|
|
|
|
|
Note
payable to an unrelated party dated September 16, 2020 for $5,000, with no interest and due on demand.
|
|
|
5,000
|
(19)
|
|
|
|
|
|
Note
payable of $56,750 dated October 12, 2020 for cash of $52,750, with interest at 8% per annum and due on October 12, 2021. The annual
interest rate will increase to 24% if in default. The Note is a convertible promissory note. The conversion price equals the lessor
of $0.50 per share or 60% of the lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading
day period prior to the conversion date, representing a discount rate of 40%.
|
|
|
56,750
|
(20)
|
Note
payable of $138,00 dated November 13, 2020 for cash of $138,000, with interest at 8% per annum and due on November 13, 2021. The
annual interest rate will increase to 18% if in default. The Note is a convertible promissory note. The conversion price equals 61%
of the lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the
conversion date, representing a discount rate of 39%. The note, accrued interest and early payment penalty totaling $183,483 was
paid during the three months ended March 31, 2021.
|
|
|
138,000
|
(21)
|
Less:
Repayment
|
|
|
(138,000
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $83,500 dated December 2, 2020 for cash of $83,500, with interest at 8% per annum and due on March 2, 2022. The annual
interest rate will increase to 22% if in default. The Note is a convertible promissory note. The conversion price equals 61% of the
lowest daily volume weighted average price (VWAP) for the common stock during the ten (10) trading day period prior to the conversion
date, representing a discount rate of 39%. The note, accrued interest and early payment penalty totaling $104,527 was paid during
the three months ended March 31, 2021.
|
|
$
|
83,500
|
(22)
|
Less:
Repayment
|
|
|
(83,500
|
)
|
|
|
|
0
|
|
|
|
|
|
|
Note
payable of $425,000 dated January 6, 2021 for cash of $400,000, with interest at 6% per annum and due on January 7, 2022. The annual
interest rate will increase to 15% if in default. The Note is a convertible promissory note. The conversion price equals the lessor
of $0.50 or 75% of the lowest daily volume weighted average price (VWAP) for the common stock during the seven (7) trading day period
prior to the conversion date, representing a discount rate of 25%. The note totaling $300,000 was converted into 1,640,638 common
shares of the Company within the terms of the note during the quarter ended March 31, 2021.
|
|
$
|
425,000
|
(23)
|
Less:
Conversion
|
|
|
(300,000
|
)
|
|
|
|
125,000
|
|
|
|
|
|
|
Note
payable of $425,000 dated January 6, 2021 for cash of $400,000, with interest at 6% per annum and due on January 7, 2022. The annual
interest rate will increase to 15% if in default. The Note is a convertible promissory note. The conversion price equals the lessor
of $0.50 or 75% of the lowest daily volume weighted average price (VWAP) for the common stock during the seven (7) trading day period
prior to the conversion date, representing a discount rate of 25%. The note totaling $200,000 was converted into 1,089,910 common
shares of the Company within the terms of the note during the quarter ended March 31, 2021.
|
|
$
|
425,000
|
(24)
|
Less:
Conversion
|
|
|
(200,000
|
)
|
|
|
|
225,000
|
|
|
|
|
|
|
Note
payable of $300,000 dated March 30, 2021 for cash of $282,000, with interest at 6% per annum and due on March 30, 2022. The annual
interest rate will increase to 15% if in default. The Note is a convertible promissory note. The conversion price equals the lessor
of $0.2437 or 75% of the lowest daily volume weighted average price (VWAP) for the common stock during the seven (7) trading day
period prior to the conversion date, representing a discount rate of 25%.
|
|
$
|
300,000
|
(25)
|
|
|
|
|
|
Note
payable of $300,000 dated March 30, 2021 for cash of $282,000, with interest at 6% per annum and due on March 30, 2022. The annual
interest rate will increase to 15% if in default. The Note is a convertible promissory note. The conversion price equals the lessor
of $0.2437 or 75% of the lowest daily volume weighted average price (VWAP) for the common stock during the seven (7) trading day
period prior to the conversion date, representing a discount rate of 25%.
|
|
$
|
300,000
|
(26)
|
|
|
$
|
1,105,750
|
|
Less:
unamortized discount
|
|
|
(959,303
|
)
|
Total
|
|
$
|
146,447
|
|
Short
term convertible notes, net of discount of $959,303
|
|
$
|
87,447
|
|
Long-term
convertible notes, net of discount of $0
|
|
$
|
0
|
|
Short-term
non-convertible notes – continuing operations
|
|
$
|
55,000
|
|
Short-term
non-convertible notes – discontinued operations
|
|
$
|
4,000
|
|
Long-term
non-convertible notes
|
|
$
|
0
|
|
Note
12 – Loans from Related Parties
On
April 12, 2019, the Company entered into individual share exchange agreements and promissory notes with each of Daniel Dror, Winfred
Fields and former Directors Everett Bassie and Charles Zeller (the “AMIH Shareholders”), whereby the AMIH Shareholders
agreed to cancel and exchange a total of 5,900,000 shares of their AMIH common stock. The Company issued individual promissory notes
with an aggregate principal amount of $350,000 (the “Promissory Notes”) for cancellation of the 5,900,000 common
shares. The Promissory Notes have a term of two years and accrue interest at the rate of 10% per annum until paid in full by the
Company. The Company recorded interest of $7,506 on these notes during the year ended December 31, 2020. The accrued interest on
these notes was $18,982 as of December 31, 2020. The Note and accrued interest totaling $ 280,108 was settled by the issuance of
3,476,495 common shares of the Company. The shares were valued at $0.31 and $0.27 per share based on the market price at the settlement
date. Accordingly, the Company recorded a loss on loan settlement of $758,601 during the year ended December 31, 2020.
|
|
$
|
350,000
|
|
Less:
Conversion
|
|
|
(240,000
|
)
|
|
|
|
110,000
|
|
|
|
|
|
|
Note
payable to Isaak Cohen, father to the Company’s CEO, dated June 21, 2019 for $40,000, with interest at 8% per annum and due
on June 21, 2020. The promissory note is unsecured. Furthermore, the Company issued 50,000 shares of the Company’s common stock
to the related party investor as further consideration to enter into the loan with the Company. The Company issued 50,000 common
shares valued at $0.10 per share, or $5,000, based on recent sales of common stock to the third party, which was accounted for at
a discount on the note. The principal of this Note of $40,000 and accrued interest of $2,214 was paid with cash in full during the
first quarter of 2020. Accordingly, the unamortized discount as of the payment date in the amount of $2,363 was expensed.
|
|
|
0
|
|
|
|
|
|
|
Note
payable to Isaak Cohen, father to the Company’s CEO, dated September 9, 2019 for $100,000, with interest at 8% per annum and
due on September 9, 2020. The promissory note is unsecured. Furthermore, the Company issued 100,000 shares of the Company’s
common stock to the related party investor as further consideration to enter into the loan with the Company. The Company issued 100,000
common shares valued at $1.00 per share, or $100,000, based on the market price at the grant date, which was accounted for as a discount
on the note. The Note and accrued interest totaling $109,278 were settled by the issuance of 895,722 common shares of the Company
at a price of $0.122 per share. The shares were valued at $0.33 per share based on the market price at the settlement date. Accordingly,
the Company recorded a loss on loan settlement of $186,310 during the nine months ended September 30, 2020.
|
|
|
0
|
|
|
|
|
|
|
As
of March 31, 2021, the Company had a short-term note payable in the amount of $13,473 to Kemah Development Texas, LP, a company owned
by Dror Family Trust, a related party.
|
|
|
13,473
|
|
|
|
|
|
|
As
of March 31, 2021, the Company had a short-term loan payable in the amount of $6,253 to a related party with no interest and due
on demand.
|
|
|
6,253
|
|
|
|
|
|
|
As
of March 31, 2021, outstanding loan balances payable to two of the Company officers and board members, Esteban Alexander and Jacob
Cohen, was $23,878. The Company incurred $465 and $75, respectively, on imputed interest expense due to related party borrowing during
the three months ended March 31, 2021.
|
|
|
23,878
|
|
|
|
$
|
153,604
|
|
Less:
unamortized discount
|
|
|
(0
|
)
|
Total
|
|
$
|
153,604
|
|
Long-term
loan from related parties
|
|
$
|
0
|
|
Short-term
loan from related parties – continuing operations
|
|
$
|
129,726
|
|
Short-term
loan from related parties – discontinued operations
|
|
$
|
23,878
|
|
Note
13 – Derivative Liabilities
Notes
that are convertible at a discount to market are considered embedded derivatives.
Under
Financial Accounting Standard Board (“FASB”), U.S. GAAP, Accounting Standards Codification, “Derivatives
and Hedging”, ASC Topic 815 (“ASC 815”) requires that all derivative financial instruments be recorded on
the balance sheet at fair value. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where
market prices are not readily available, fair values are determined using market-based pricing models incorporating readily observable
market data and requiring judgment and estimates.
The
Company’s convertible note has been evaluated with respect to the terms and conditions of the conversion features contained in
the note to determine whether they represent embedded or freestanding derivative instruments under the provisions of ASC 815. The Company
determined that the conversion features contained in the notes totaled $2,040,383 and represent a freestanding derivative instrument
that meets the requirements for liability classification under ASC 815. As a result, the fair value of the derivative financial instrument
in the note is reflected in the Company’s balance sheet as a liability. The fair value of the derivative financial instrument of
the convertible note was measured using the Lattice Model at the inception date of the note and will do so again on each subsequent balance
sheet date. Any changes in the fair value of the derivative financial instruments are recorded as non-operating, non-cash income or expense
at each balance sheet date. The derivative liabilities will be reclassified into additional paid in capital upon conversion.
The
Convertible Note derivatives were valued as of December 31, 2020, issuance, conversion and March 31, 2021 as set forth in the table below.
Derivative
liabilities as of December 31, 2020
|
|
$
|
517,366
|
|
Initial
derivative liabilities at new note issuance
|
|
|
2,719,439
|
|
Initial
loss
|
|
|
(0
|
)
|
Conversion
|
|
|
(763,241
|
)
|
Mark
to market changes
|
|
|
(433,181
|
)
|
|
|
|
|
|
Derivative
liabilities as of March 31, 2021
|
|
$
|
2,040,383
|
|
As
of March 31, 2021, the Company had derivative liabilities of $2,040,383, and recorded changes in derivative liabilities in the amount
of $433,181 during the three months ended March 31, 2021.
The
following assumptions were used for the valuation of the derivative liability related to the Notes:
|
-
|
The
stock price would fluctuate with the Company’s projected volatility;
|
|
-
|
The
projected volatility curve from an annualized analysis for each valuation period was based on the historical volatility of the Company
and the term remaining for each note ranged from 176% through 290% at issuance, conversion, and quarters ends;
|
|
-
|
The
Company would not redeem the notes;
|
|
-
|
An
event of default adjusting the interest rate would occur initially 0% of the time for all notes with increases 1% per month to a
maximum of 10% with the corresponding penalty;
|
|
-
|
The
Company would raise capital quarterly at market, which could trigger a reset event; and
|
|
-
|
The
Holder would convert the note monthly if the Company was not in default.
|
Note
14 – Costs and estimated earnings in excess of billings on uncompleted contract
The
Company has two major long-term contracts in progress which were completed during the year ended December 31, 2020. Work has started
on the long-term contracts that will have costs and earnings in the following periods:
Job
|
|
March
31,
2021
|
|
|
December
31, 2020
|
|
|
|
|
|
|
|
|
Contract
Revenues
|
|
|
-
|
|
|
|
5,640,707
|
|
Other
Revenue
|
|
|
-
|
|
|
|
156,922
|
|
Total
Revenues
|
|
|
-
|
|
|
|
5,797,629
|
|
|
|
|
|
|
|
|
|
|
Contract
COGS
|
|
|
-
|
|
|
|
4,184,033
|
|
Other
COGS
|
|
|
-
|
|
|
|
668,598
|
|
Total
COGS
|
|
|
-
|
|
|
|
4,852,631
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
-
|
|
|
|
944,998
|
|
Percentage
of completion (POC)
|
|
|
-
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Revenues
– POC
|
|
|
-
|
|
|
|
7,358,273
|
|
|
|
|
|
|
|
|
|
|
Bill
to Date
|
|
$
|
-
|
|
|
$
|
7,358,273
|
|
|
|
|
|
|
|
|
|
|
Costs
and estimated earnings in excess of billings on uncompleted contract
|
|
$
|
-
|
|
|
$
|
-
|
|
Unbilled
receivables, which represent an unconditional right to payment subject only to the passage of time, are reclassified to accounts receivable
when they are billed under the terms of the contract. Contract liabilities represent amounts billed to clients in excess of revenue recognized
to date, which was $0 as of December 31, 2020. The Company recognized revenue of $5,640,707 for the two construction projects, Normandy
and Gateway during the year ended December 31, 2020 in connection with such contract assets. All incurred costs associated with contract
assets as of December 31, 2020 was billed and collected. No activities incurred during the first quarter of 2021.
Note
15 – Capital Stock
Preferred
Stock
The
Company is authorized to issue up to 5,000,000 shares of preferred stock, $0.0001 par value, of which three shares were designated as
Series A Preferred Stock and 2,000,000 were designated as Series B Preferred stock, the balance of 2,999,997 shares of preferred stock
were undesignated as of December 31, 2020.
The
holders of Series A Preferred Stock have no dividend rights, liquidation preference and conversion rights. As long as any shares of Series
A Preferred Stock remain issued and outstanding, the holders of Series A Preferred Stock have the right to vote on all shareholder matters
equal to sixty percent (60%) of the total vote. At the option of the Company, Series A Preferred Stock is redeemable at $1.00 per share.
The
holders of Series B Preferred Stock have the same dividend rights as common stockholders on a fully converted basis, are entitled to
receive pari passu with any distribution of any of the assets of the Company to the holders of the Company’s common stock, but
not prior to any holders of senior securities. Each share of Series B Preferred Stock may be converted, at the option of the holder thereof,
into that number of shares of common stock of the Company as equals $1.00 divided by 90% of the average of the volume weighted average
prices (“VWAP”) of the Company’s common stock, for the five trading days immediately preceding the date the
notice of conversion is received, subject to the limit of 4.999% of the Company’s outstanding shares of common stock. The holders
of Series B Preferred Stock have no voting rights.
On
May 15, 2020, the Company entered into a Securities Purchase Agreement with GCN as described in greater detail in “Note 2 - Organization, Ownership and Business”. Pursuant to the SPA, the Company acquired a 51% interest in Life Guru from GCN in consideration for 500,000
shares of newly designated Series B Convertible Preferred Stock, which had an agreed upon value of $500,000 ($1.00 per share), and agreed
to issue GCN up to an additional 1,500,000 shares of Series B Convertible Preferred Stock (with an agreed upon value of $1,500,000) upon
reaching certain milestones. The fair value of the first 500,000 shares of the Company’s
Series B Preferred Stock at grant date was $605,488, a result of market price per common share at the grant date times the equivalent
number of common shares after the conversion of Series B Preferred Stock. Such 500,000 initial shares of Series B Preferred Stock
were subsequently converted to common stock in June 2020, as discussed below. On February 26, 2021, the Company issued GNC 500,000 shares
of Series B Convertible Preferred Stock as miles stones was reach. The fair value of the 500,000 shares of the Series B Preferred Stock
at grant date was $601,852, a result of market price per common shares at the grant date times the equivalent number of common shares
after the conversion of Series B Preferred Stock. Such 500,000 of Series B preferred Stock were subsequent converted to common stock
in February 2021, as discussed below.
On
May 20, 2020, the Company issued one share of its newly designated shares of Series A Preferred Stock to each of the three members of
its then Board of Directors, (1) Jacob D. Cohen, (2) Esteban Alexander and (3) Luis Alan Hernandez, in consideration for services rendered
to the Company as members of the Board of Directors. Such shares of Series A Preferred Stock vote in aggregate sixty percent (60%) of
the total vote on all shareholder matters, voting separately as a class. Notwithstanding such voting rights, no change in control of
the Company was deemed to have occurred in connection with the issuance since Messrs. Cohen, Alexander and Hernandez, own in aggregate
68% of the Company’s outstanding common stock and therefore controlled the Company prior to such issuance. The shares of Series
A Preferred Stock held by Mr. Alexander and Mr. Hernandez were canceled on November 6, 2020 pursuant to the Stock Purchase Agreements
dated October 2, 2020, and as such, a change of control occurred on such date, with Mr. Cohen taking over voting control of the Company,
and serving since December 15, 2020, as the sole officer and director of the Company.
As
of March 31, 2021 and December 31, 2020, there was one share of Series A Preferred Stock and no shares of Series B Preferred Stock issued
and outstanding.
Common
Stock
The
Company is authorized to issue up to 195,000,000 shares of common stock, $0.0001 par value, of which 72,563,766 shares were issued and
outstanding at March 31, 2021 and 55,066,855 were issued and outstanding at December 31, 2020.
On
January 12, 2021, the Company issued 708,750 common shares and payment of $50,000 to settle a note with an unrelated party, dated August
11, 2020. The Company recorded a loss on loan settlement of $58,059.
On
February 2, 2021, the Company issued 200,000 shares of the Company’s common stock to a non-related third-party investor in exchange
for $100,000 in cash.
On
February 8, 2020, the 500,000 shares of Series B Convertible Preferred stock were converted into 2,057,613 shares of the Company’s
restricted common stock per GCN’s request.
In
first quarter of 2021, the Company issued 11,800,000 shares of the Company’s common stock in consideration for services performed
by employee and non-employee. The shares were valued at $4,223,390 based on the market price on the date of agreement.
In
first quarter of 2021, the Company issued 2,730,548 common shares to investors in exchange for $502,050 of principal and accrued
interest owed under the terms and conditions of that convertible note as issued.
Note
16 – Going Concern
These
consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the
realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As
reflected in the accompanying financial statements, the Company has a net loss from continuing operation of $7,354,994 for the
three months ended March 31, 2021 and a net loss from continuing operation of $30,619 for the three months ended March
31, 2020, a net loss from discontinued operation of $17,612 and $99,293 for the three months ended March 31, 2021 and 2020 respectively,
and an accumulated deficit of $17,932,264 as of March 31,2021. The ability to continue as a going concern is dependent upon the
Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come due. These financials do not include any adjustments relating to the
recoverability and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this
uncertainty. There can be no assurance that the Company will become commercially viable without
additional financing, the availability and terms of which are uncertain. If the Company cannot secure necessary capital when needed on
commercially reasonable terms, its business, condition (financial and otherwise) and commercial viability may be harmed. Although management
believes that it will be able to successfully execute its business plan, which includes third party financing and the raising of capital
to meet the Company’s future liquidity needs, there can be no assurances in this regard. These matters raise substantial doubt
about the Company’s ability to continue as a going concern.
Note
17 – Uncertainties
In
the ordinary course of business, the Company may become a party to lawsuits involving various matters. The impact and outcome of litigation,
if any, is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm
its business. The Company believes the ultimate resolution of any such current proceeding will not have a material adverse effect on
our continued financial position, results of operations or cash flows.
Robert
Holden vs AMIH
On
October 14, 2019, Robert Holden, the Company’s former CEO, filed a Petition and Application for Temporary Restraining Order in
the District Court of Harris County, Texas against the Company stating that the Company is blocking Mr. Holden’s legal right to
trade his shares in the open market and further attempting to stake his claim that he maintains his rights to the 3,800,000 shares he
received in connection with his acceptance as CEO of the Company on or around May 31, 2018. The Company is maintaining the position that
Mr. Holden does not have the right to those shares as he was in breach of his obligation to convey a digital marketing business to the
Company and subsequently resigned from the Company shortly thereafter, on or around August 15, 2018 and that he procured the shares through
fraud. On November 11, 2019, the Company issued a response with a Motion to Dismiss Under the Texas Citizen’s Participation Act
(TCPA) citing that any declaratory judgment and breach of contract claims be dismissed unless Mr. Holden can, through “clear
and specific evidence”, establish a prima facie case for each essential element of his claims. After an attempt to remand the
case to federal court, the Company filed an amended notice of submission for its TCPA motion for submission on May 18, 2020, whereby
Holden failed to respond to the motion in a timely manner. On May 18, 2020, the Company filed a response in support of its motion to
dismiss under the TCPA, which was denied on June 3, 2020. Immediately thereafter, on June 4, 2020, the Company filed a notice of accelerated
interlocutory appeal to appeal the denial of the motion to dismiss under the TCPA and the trial court’s failure to rule on the
Company’s objection to the timeliness of Holden’s response. The outcome of this action, and the ultimate outcome of the lawsuit
is currently unknown at this time, provided that the Company intends to vehemently defend itself against the claims made in the lawsuit.
AMIH
vs. Winfred Fields
On
November 11, 2019, the Company filed an original petition and jury demand against Winfred Fields, a shareholder, in the 458th Judicial
District Court of Fort Bend County seeking damages related to breach of contract and fraud related charges. The Company executed an exchange
agreement with Mr. Fields on or around April 12, 2019 whereby Mr. Fields was required to tender to the Company a total of 650,000 of
the 750,000 shares of the Company’s common stock that Mr. Fields then owned (the “Exchanged Shares”) in exchange
for a promissory note with a maturity date of April 12, 2021 payable in the amount of $42,500 (the “Fields Note”)
(see also “Note 12 - Loans to Related Parties”). The Exchange Agreement required that Mr. Fields immediately return the stock
certificates for the Exchanged Shares to the Company or its designated agent for immediate cancellation and for Mr. Fields to retain
the remaining 100,000 shares. Mr. Fields agreed in the Exchange Agreement that these shares would not become unrestricted until such
time as Mr. Fields received an opinion of counsel satisfactory to the Company that the shares were not restricted for trade under SEC
regulations. After executing the Exchange Agreement, Mr. Fields—rather than return the Exchanged Shares or obtain said opinion
of counsel—attempted to deposit and trade the Exchanged Shares and the restricted shares, which was a direct violation of the Exchange
Agreement. The Company asserts that Mr. Fields knowingly, willingly and fraudulently attempted to deposit and trade the Exchanged Shares
and is seeking damages and equitable relief. Upon several attempts to serve Mr. Fields, service was perfected on or around February 3,
2020. On March 2, 2020, Mr. Fields filed a response generally denying all claims. On May 22, 2020, the Company filed its first request
for production and request for disclosure and discovery insisting that Mr. Fields produce all documentation related to the fraudulent
transaction and is awaiting a response to these requested discovery items. The outcome of this action is currently unknown at this time.
In November 2019, the Company recovered 650,000 shares from Mr. Fields which were cancelled in 2019.
Note
18 – Discontinued Operations
During
2020, the Company decided to discontinue the operation of its VISSIA McKinney, VISSIA Waterway, and Legend Nutrition. VISSIA McKinney,
VISSIA Waterway, and Legend Nutrition have been presented as discontinued operations in the accompanying consolidated financial statements.
The operating results for VISSIA McKinney, VISSIA Waterway, and Legend Nutrition have been presented in the accompanying consolidated
statement of operations for the three months ended March 31, 2021 and 2020 as discontinued operations and are summarized below:
|
|
Years
Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Revenue
|
|
$
|
2,530
|
|
|
$
|
113,432
|
|
Cost
of revenue
|
|
|
0
|
|
|
|
53,449
|
|
Gross
Profit
|
|
|
2,530
|
|
|
|
59,983
|
|
Operating
expenses
|
|
|
20,142
|
|
|
|
158,268
|
|
Loss
from operations
|
|
|
(17,612
|
)
|
|
|
(98,285
|
)
|
Other
Expenses
|
|
|
(0
|
)
|
|
|
(1,008
|
)
|
Net
loss
|
|
$
|
(17,612
|
)
|
|
$
|
(99,293
|
)
|
Note
19 – Subsequent Events
On
April 8, 2021, the Company issued 909,361 common shares to an investor in exchange for $129,925 of principal and accrued interest owed
under the terms and conditions of that 6% convertible promissory note as issued to Cavalry, dated January 7, 2021.
On
April 21, 2021, the Company issued 403,769 common shares to an investor in exchange for $50,875 of principal and accrued interest owed
under the terms and conditions of that 6% convertible promissory note as issued to L1 Capital, dated January 7, 2021.
On
April 28, 2021, the Company issued 485,079 common shares to an investor in exchange for $61,120 of principal and accrued interest owed
under the terms and conditions of that 6% convertible promissory note as issued to L1 Capital, dated January 7, 2021.
On
May 3, 2021, the Company issued 760,928 common shares to an investor in exchange for $56,750 of principal and accrued interest owed under
the terms and conditions of that 8% convertible promissory note as issued to Quick Capital, LLC, dated October 20, 2020.
Management
has evaluated all subsequent events from March 31, 2021 through the issuance date of the financial statements for subsequent event disclosure
consideration. No change to the financial statements for the three months ended March 31, 2021 is deemed necessary as a result of this
evaluation.