Offering Circular, Dated February 28, 2020
Filed
pursuant to Rule 253(g)(1)
File No. 024-11090
Greene Concepts,
Inc.
13195 U.S. Highway
221 N
Marion, North
Carolina, 28752
(844) 889-2837;
www.greeneconcepts.com
Best
Efforts Offering of up to 2,000,000,000 Shares of Common Stock
Greene
Concepts, Inc. (which we refer to as “our company,” “we,” “our” and “us”) is offering
up to two billion (2,000,000,000) shares of its Common Stock at a fixed offering price of $0.0015 per share. The aggregate amount
of gross proceeds we are seeking to raise is three million dollars ($3,000,000). There is no minimum number of shares that must
be sold in order to close this offering and thus no escrow account is being utilized. See “Plan of Distribution” beginning
on page 19 and “Securities Being Offered” beginning on page 39.
Our Common
Stock is quoted on the OTC Pink Market maintained by OTC Markets Group Inc., under the trading symbol “INKW” and the
closing bid price of our Common Stock on February 6, 2020 was $0.0022. Our Common Stock currently trades on a sporadic and limited
basis. Our board of directors used its business judgment in setting a value of $0.0015 per share of common stock of our company
as the offering price for this offering. The purchase price per share bears no relationship to our book value or any other measure
of our current value or worth.
The proposed
sale of our common stock in this offering will begin as soon as practicable after this offering statement has been qualified by
the Securities and Exchange Commission, or the SEC, and the relevant state regulators, as necessary. This offering will terminate
at the earlier of: (1) the date on which the maximum offering amount has been sold, (2) the date which is one year after this
offering has been qualified by the SEC or (3) the date on which this offering is earlier terminated by us in our sole discretion.
This offering
is being conducted on a “best efforts” basis pursuant to Regulation A of Section 3(b) of the Securities Act of 1933,
as amended, or the Securities Act, for Tier 1 offerings and there is no minimum offering amount. We plan to hold a series of closings
at which we and investors will execute subscription documents, we will receive the funds from investors and issue the shares to
investors. See “Plan of Distribution” and “Securities Being Offered” for a description of our capital
stock.
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Price
to Public
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Underwriting
Discount and Commissions(1)
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Proceeds
to Issuer(2)
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Proceeds
to Other Persons
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Per share
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$
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0.0015
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$
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0
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$
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0.0015
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$
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0
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Total Maximum
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$
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3,000,000
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$
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0
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$
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3,000,000
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$
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0
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(1)
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We
do not intend to use commissioned sales agents or underwriters.
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(2)
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The
amounts shown are before deducting offering costs to us, which include legal, accounting,
printing, due diligence, marketing, consulting, selling and other costs incurred in this
offering.
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We are
an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, and, as such,
may elect to comply with certain reduced reporting requirements for this offering circular and future filings after this offering.
Investing
in this offering involves a high degree of risk, and you should not invest unless you can afford to lose your entire investment.
See “Risk Factors” beginning on page 10 for a discussion of certain risks that you should consider in connection with
an investment in our securities.
Generally,
no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual
income or your net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation
that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For
general information on investing, we encourage you to refer to www.investor.gov.
THE
U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE
TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS.
THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE
AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.
This offering circular is following
the offering circular format described in Part II (a)(1)(i) of Form 1-A.
The approximate date of commencement of proposed
sale to the public is February 28, 2020.
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Summary
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4
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Risk Factors
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10
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Dilution
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17
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Plan of Distribution
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19
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Use of Proceeds
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22
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Description of Business
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23
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Description of Property
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28
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Management’s Discussion
and Analysis of Financial Condition and Results of Operations
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29
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Directors, Executive Officers and
Significant Employees
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34
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Compensation of Directors and Executive
Officers
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35
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Security Ownership of Management
and Certain Securityholders
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37
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Interest of Management and Others
in Certain Transactions
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38
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Securities Being Offered
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39
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Legal
Matters
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44
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Interests
of Named Experts and Counsel
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44
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Where
You Can Find More Information
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44
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Financial Statements
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F-1
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THIS OFFERING
CIRCULAR MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN
AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION
CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,”
“PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH
RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE.
We are
offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You
should rely only on the information contained in this offering circular. We have not authorized anyone to provide you with any
information other than the information contained in this offering circular. The information contained in this offering circular
is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither
the delivery of this offering circular nor any sale or delivery of our securities shall, under any circumstances, imply that there
has been no change in our affairs since the date of this offering circular. This offering circular will be updated and made available
for delivery to the extent required by the federal securities laws.
SUMMARY
This summary
highlights information contained elsewhere in this offering circular. This summary does not contain all of the information that
you should consider before deciding to invest in our securities. You should read this entire offering circular carefully, including
the “Risk Factors” section, our historical financial statements and the notes thereto, each included elsewhere in
this offering circular.
Our
Company
Overview
Our company
name is Greene Concepts, Inc. We are headquartered in Marion, North Carolina. We are a New York corporation that was incorporated
on August 18, 1952 and previously operated as Tech-OHM Resistor Corporation, Tech-OHM Electronics, Inc., International Citrus
Corporation, Princeton Commercial Holdings, Inc., Eurowind Energy, Inc., First Petroleum and Pipeline Inc., and Luke Entertainment,
Inc. Since our inception, we have operated different businesses under these different names before changing our name to Greene
Concepts, Inc. and engaging in our current business line. Through our wholly-owned subsidiary, Mammoth Ventures Inc., or Mammoth,
we are now a bottling and beverage company committed to providing the world with high quality, healthy, and enhanced beverage
choices. Our beverage and bottling facility is located in Marion, North Carolina. The facility is a 55,000 square foot bottling
and beverage plant that is located within the boundaries of the Pisgah National Forest. The bottling facility has as its water
sources a combination of seven (7) spring and artesian wells that are fed from a natural aquifer that is located deep below the
Pisgah National Forest. We are focused on producing a variety of beverage product lines including, but not limited to, spring
and artesian water, cannabinoid, or CBD, infused beverages, pH balanced water and beverage offerings, as well as enhanced athletic
drinks in addition to other product offerings. Additionally, we expect that Mammoth will act as a third-party producer and bottler
of "white label" beverage and water products. White label bottling services are provided for clients that desire to
market their own product formulations, brand name and labeling while outsourcing the production and bottling of their products
to Mammoth.
Before
acquiring Mammoth on February 6, 2019, we operated our legacy business, which was the manufacture and distribution of a line of
25 high quality consumer focused inkjet kits. On April 30, 2019, our board of directors made a determination to wind down our
legacy business and to transition into the beverage and bottling business.
On February
6, 2019, we entered into a Stock Purchase Acquisition Agreement and Merger Agreement and Promissory Note Agreement with BNL Capital
LLC, or BNL Capital. Pursuant to the terms of the agreement, BNL Capital agreed to sell 100% of the outstanding shares of Mammoth
to us for a purchase price of $1,350,000. Mammoth acquired certain assets of the defunct business formerly referred to as “North
Cove Springs Bottling and Beverage,” which includes the Marion, North Carolina bottling facility and related assets. We
financed the acquisition through a secured promissory note in the amount of $1,350,000 in favor of BNL Capital. The promissory
note was secured by 100% of the outstanding shares of Mammoth that are owned by our company. See “Description of Business
– Terms of Acquisition of Mammoth Ventures, Inc.” for a description of the terms of our acquisition of Mammoth.
Upon
acquiring Mammoth, we began the process of performing required maintenance to revitalize all the equipment and facility infrastructure
in order to relaunch production at the plant. At the time of the acquisition all of the plant equipment was in good condition
although the equipment had not operated for several years and it did require a thorough inspection and light maintenance to assure
proper operation when the bottling lines are relaunched. At the time of the acquisition, we hired, Kenneth Porter, a 30+ year
veteran of the beverage and bottling industry, as plant manager to oversee operations as well as the revitalization and expected
relaunch of the facility.
The Food
and Drug Administration, or FDA, requires adherence to current good manufacturing practice, or CGMP, regulations for the processing
and bottling of bottled drinking water, which includes facility inspection and documentation of corrective measures and reporting
requirements, as well as new requirements for hazard assessments and food safety, or HACCP, plans mandated by the Food Safety
and Modernization Act, or FSMA. Final preparations for inspection are underway, including building and facility maintenance such
as pressure washing, painting, general cleaning, and minor building repairs.
In addition
to complete cleaning and maintenance of the 55,000 square foot facility, standard operating policies and procedures must be documented
in accordance with federal legislation. This documentation includes conducting and reporting of microbial testing of source water
and any finished product, which must be completed prior to initiating filling and packaging of bottles for shipment from our production
lines.
In concert
with the coordination of the final preparations for inspection and the launching of production, we are presently working with
a number of distributors and retailers to presale orders for production once the plant is fully operational. We expect to relaunch
the plant during the first quarter of 2020.
Our
Industry
Consumers
are consistently switching from carbonated drinks to water and healthy energy drinks. As a result, the beverage market has seen
increased demand for enhanced water and other functional drinks. Overall, rapid urbanization, along with widening base of the
middle-class population, has increased the demand for a variety of healthy beverages.
This
higher demand for water and functional beverages has benefited the packaging industry. Moreover, increasing consumer demand for
quality products, made from organic and naturally sourced ingredients, requires science-based formulations of effective products
in the beverage industry. These factors have created growth potential for beverage packaging service providers who have the expertise
and knowledge required to create successful products in an increasingly discerning market.
Modor
Intelligence predicts the global beverage packaging market to grow at a compounded annual growth rate, or CAGR, of 4.17% and reach
a value of $142.28 billion by 2023. Currently, North America accounts for the largest market share, poised to reach $28.84 billion
by 2023. According to Statistica, revenue in the US bottled water segment alone amounts to US$67.5 billion in 2019 and is expected
to grow annually by 5.5% (CAGR 2019-2023).
The International
Bottled Water Association (IBWA), and the Beverage Marketing Corporation (BMC), reports bottled water volume grew to 13.2 billion
gallons in 2017 to 13.8 gallons in 2018, an almost five percent increase over the previous year (as compared to more than 6% growth
in 2017). This growth is fueled in large part by increased numbers of consumers choosing bottled water instead of soda. Carbonated
soft drink sales decreased for the thirteenth consecutive year, according to the most recent numbers from BMC. BMC statistics
show per capita consumption exceeded 42 gallons of bottled water, a 6.2 percent increase and the average annual intake of carbonated
soft drinks has declined to 37.5 gallons. BMC foresees bottled water consumption will climb higher than 50 gallons per capita
within just a few years. According to BMC, nearly all Americans (94 percent) believe that bottled water is a healthier choice
than soft drinks, and 93 percent say bottled water should be available wherever drinks are sold.
The shift
away from sugary drinks is having a dramatic impact on sales of functional beverages. The global functional drinks market size
is expected to reach USD 93.68 billion by 2019, according to a new study by Grand View Research, Inc., progressing at a CAGR of
6.1% during the forecast period. Per Grand View Research, the global functional drink market is anticipated to reach $93.68 billion
in 2019, at a CAGR of 6.1%. According to the Grand View Report, four players hold 55.2% of this market. Functional beverages include
energy drinks and sports drinks, and nutritional drinks. In 2014, energy drinks represented almost 56% of all functional beverage
sales. Ibis World reports, over the past five years, the US energy drink production industry has grown by 5.2% to reach revenue
of $9 billion in 2018. The energy drinks market is forecast to register a CAGR of 3.6% till 2023, whereas, the sports drinks market
will grow at a CAGR of 4.3% during the same period.
In contrast
to the energy and sports drink categories, functional drinks with nutraceutical formulations are designed to support consumer
desire for establishing healthy lifestyle routines. Often formulated using herbs, botanicals, vitamins and minerals, these beverages
are designed to support digestive wellness, reduce stress and improve sleep, as examples. They are often sold as dietary supplements,
and subject to additional regulation by the FDA. As a result, they are sold at a higher price point. Netherlands-based Innova
Market Insights, in its 2017 “Functional Drinks” reports 30.5 percent of all functional drink launches were vitamin/mineral
fortified, while 22.8 percent contained high amounts of protein. Rounding out the Top 5 were energy/alertness (20 percent), digestive/gut
health (19 percent), and antioxidants (12.7 percent).
We believe
that the growth in bottled water and other healthy beverages and away from carbonated or sugary beverages will create opportunities
for our company. We also believe that recent market trends will continue to grow as federal and state regulation is for hemp derived
CBD products is codified. The CBD market now stands at $1.01 trillion with forecasts calling for it to grow to $22 billion by
2022. Many analysts are calling for 20% or more of that growth to occur in the CBD infused beverage space. This trend, plus the
opportunity presented by the US private label beverage market, which, according to Technavio, will have revenue of almost USD
140 billion by 2021, are expected by management to fuel growth of our bottling and distribution business for years to come.
Our
Products
Our bottling
facility is not yet operational, and we have not begun selling any products yet.
We expect
that our future products will include:
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Enhanced
spring and artesian water;
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Functional
beverages and liquid dietary supplements for a variety of market needs, including, but
not limited to, pH balanced water, enhanced athletic drinks;
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CBD
infused beverages; and
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Beverages
that meet the nutritional needs for unique defined populations and health conditions.
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We also
plan to operate as a third-party producer and bottler of "white label" beverage and water products once our facility
is fully licensed and becomes operational.
Our
Production
We plan
to produce our future products at our 55,000 square foot bottling and beverage plant that is located within the boundaries of
the Pisgah National Forest in Marion, North Carolina. The bottling facility has as its water sources a combination of seven (7)
spring and artesian wells that are fed from a natural aquifer that is located deep below the Pisgah National Forest. We are focused
on producing a variety of beverage product lines including, but not limited to spring and artesian water, cannabinoid, or CBD,
infused beverages, pH balanced water and beverage offerings, as well as enhanced athletic drinks in addition to other product
offerings.
Since
we will not rely on independent third-party bottlers to manufacture and market our products, we believe we can more effectively
manage quality control and consumer appeal while responding quickly to changing market conditions. We expect that we will produce
substantially all of the concentrates and essences used in our future branded products. We believe that our ability to control
our own formulas in the future will allow us to craft products in a uniform manner with high quality standards while innovating
flavors to meet changing consumer preferences.
Our
Distribution
Given
our particular interest in the natural health, organic and dietary supplement arenas, our primary distribution systems will utilize
the fresh, natural and organic wholesale food distributors and representatives. Distribution will be targeted to independent natural
food retailers and large box stores through both independent warehouse distribution system and direct-store delivery system. ‘White
label’ products will utilize customer shipping and qualified independent shipping companies for direct delivery to the convenience
channels. At this time, we do not have plans to distribute through food service industry.
Sales
and Marketing
We plan
to sell and market our products through an internal sales force as well as networks of brokers.
We will
seek to reach consumers directly through digital marketing, digital social marketing, social media engagement and creative content.
Our marketing efforts will be focused on increasing our digital presence and capabilities to further enhance the consumer experience
across our future brands. We may retain agencies to assist with social media content creative and platform selection for our brands.
Additionally,
we expect that we will create brand recognition and loyalty through a combination of regional event participation, special event
marketing, endorsements, consumer coupon distribution and product sampling.
More
specifically, we expect to use the following techniques to market our product offerings and attract customers:
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Attending
Trade and Other Events: We will attend these events in order to create awareness of our
brand/ products and develop relationships with potential commercial customers. The potential
customers will then be followed up in order to convert them into regular customers for
whom we can provide white label services.
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Signboards
and Billboards Marketing
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Printing
and Distributing Brochures and Flyers
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Search
Engine Optimization (SEO) of our Website: SEO will be employed as it will bring our website
at the top positions in natural search queries on widely used search engines like Google
and Bing.
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CRM
Software: We plan to utilize client relationship management, or CRM, software to offer
materials, such as free guides or informative materials, ready to be downloaded in exchange
of contact details. The software will then automatically send marketing materials to
available contacts in order to convert them into customers.
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Google
AdWords: We will start different campaigns including text-based search ads, graphic display
ads, and YouTube video ads in order to reach our targeted audience(s) with AdWords.
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Word
of Mouth/ Recommendations
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Referral
Marketing: Referrals are one of the most valuable assets for our company. We will add
our customers to a special, dedicated group and give them benefits on referring us to
others.
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Raw
Materials
The products
that we expect to produce and sell will be packaged in various materials suitable for cold pack beverages, including aluminum,
glass, paper and plastic bottles, including recyclable and reusable containers. Ingredients for our functional beverage lines
will include minerals, vitamins, herbs and botanicals, as well as flavors and naturally derived sweeteners. Ingredients will be
sourced from cGMP compliant companies who are committed to transparency and traceability relating to origin, identify, testing
and quality. Certifications for gluten-free, Kosher, Organic and other relevant ingredient criteria will be required on an as-needed
basis. The majority of materials and ingredients we will purchase will be presently available from several suppliers. However,
our specialized approach to formulation and quality standards may result in reduced availability of some ingredients due to weather,
governmental controls or price/supply fluctuations, which would lead to price fluctuations. Therefore, we expect to clearly delineate
our supply program qualifications and enroll suppliers in our own supplier program to ensure continued access to the ingredients
we seek for production.
Seasonality
We expect
that our operating results will not be materially affected by seasonal factors, including fluctuations in costs of raw materials,
holiday and seasonal programming and weather conditions. Our products are “functional” beverages chosen by consumers
who ascribe to a certain lifestyle, and as such we do not expect our products to be impacted by seasonal factors.
Our
Competition and Competitive Strengths
Our products
will compete with many varieties of liquid refreshment, including water products, soft drinks, juices, fruit drinks, energy drinks
and sports drinks, as well as powdered drinks, coffees, teas, dairy-based drinks, functional beverages and various other nonalcoholic
beverages. We will also compete with bottlers and distributors of national, regional and private label products. Several competitors,
including those that dominate the beverage industry, such as Nestlé S.A., PepsiCo and The Coca-Cola Company, have greater
financial resources than we have and aggressive promotion of their products may adversely affect sales of our brands.
The principal
methods of competition in the beverage industry are price and promotional activity, advertising and marketing programs, point-of-sale
merchandising, retail space management, customer service, product differentiation, packaging innovations and distribution methods.
We believe we will be able to differentiate ourselves in the following ways:
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Formulations
of products for specific, targeted audiences who have unique health and exercise requirements
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Infusion
of ingredients with scientific research regarding the effectiveness of the products to
address specific health and wellness needs.
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Utilization
of ingredients sourced from quality companies committed to our quality standards
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Access
to research opportunities and outcomes to support our future family of functions beverages
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Regulatory
capacity that ensures brands and stores are selling product that meets the standards
of states and governments
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Access
to industry stakeholders, influencers and high-profile consumers who can provide third-party
endorsement of our products.
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Our
Growth Strategies
We expect
that our first product will be spring water and that we will white label our spring water for third parties. Although we
are in negotiations with third parties for the white label of our expected first product (spring water) we have not yet received
any purchase orders or entered into any contracts for the sale of this product because our facility is not yet fully licensed.
We have completed licensing of our facility and expect to launch our white label spring water sometime during the first
quarter of 2020. Following the launch of our first product, we will be working on the development of other products and expect
to launch other products in the second half of 2020.
Recent
Developments
On January
11, 2020, we cancelled 225,000,000 shares of our common stock that were registered in the name of Andy Greider. The shares were
cancelled pursuant an understanding between us and Mr. Greider that dated back to October 2018 and is evidenced by a written letter
from Mr. Greider to our transfer agent. Mr. Greider previously provided consulting services to our company and agreed to forfeit
these shares when he ceased providing such services.
Corporate
Information
Our principal
executive offices are located at 13195 U.S. Highway 221 N, Marion, North Carolina, 28752 and our telephone number is (844) 889-2837.
We maintain a website at www.greeneconcepts.com. Information available on our website is not incorporated by reference in and
is not deemed a part of this offering circular.
The
offering
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Securities being offered:
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Up to 2,000,000,000 shares
of Common Stock, par value $0.0001, for a maximum offering amount of $3,000,000.
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Offering price per share:
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$0.0015 per share.
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Minimum subscription:
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The minimum subscription amount is $100,
but we may waive such minimum amount in our sole discretion.
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Shares outstanding before the offering:
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637,861,741 shares of Common Stock and
13,119,500 shares of Preferred Class A Stock as of February 6, 2020.
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Shares outstanding after the offering:(1)
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Assuming this offering is fully funded,
there will be 2,637,861,741 shares of Common Stock issued and outstanding and 13,119,500 shares of Preferred Class A Stock
issued and outstanding.
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Best efforts offering:
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We are offering shares on a “best
efforts” basis through our Chief Executive Officer, Mr. Greene, who will not receive any discounts or commissions for
selling the shares. There is no minimum number of shares that must be sold in order to close this offering.
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Restrictions on investment amount:
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Generally, no sale may be made to you in
this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth.
Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment
does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information
on investing, we encourage you to refer to www.investor.gov.
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No Escrow account:
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We have not engaged an escrow agent for
this offering. Funds invested will be deposited directly into our company’s operating account and immediately
available for our use.
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Termination of the offering:
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This offering will commence as soon as
practicable after this offering statement has been qualified by the SEC and will terminate at the earlier of: (1) the date
on which the maximum offering amount has been sold, (2) the date which is one year after this offering has been qualified
by the SEC or (3) the date on which this offering is earlier terminated by us in our sole discretion.
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Use of proceeds:
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We estimate
that, at a per share price of $0.0015, the net proceeds from the sale of the 2,000,000,000 shares in this offering will
be approximately $2,947,000, after deducting the estimated offering expenses of approximately $53,000.
We
intend to use the net proceeds of this offering for working capital expenses. See
“Use of Proceeds” for details.
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Market for our Common Stock:
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Our Common Stock is currently quoted on
the OTC Pink Market under the trading symbol “INKW”.
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Risk factors:
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Investing in our securities involves risks.
See the section entitled “Risk Factors” in this offering circular and other information included in this offering
circular for a discussion of factors you should carefully consider before deciding to invest in our securities.
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RISK
FACTORS
Investing
in our shares involves a significant degree of risk. In evaluating our company and an investment in the shares, careful consideration
should be given to the following risk factors, in addition to the other information included in this offering circular. Each of
these risk factors could materially adversely affect our business, operating results or financial condition, as well as adversely
affect the value of an investment in our shares. The following is a summary of the most significant factors that make this offering
speculative or substantially risky. We are still subject to all the same risks that all companies in our industry, and all companies
in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological
developments (such as cyber-security). Additionally, early-stage companies are inherently riskier than more developed companies.
You should consider general risks as well as specific risks when deciding whether to invest.
Risks
Related to our Business, Operating Results and Industry
Our
bottling facility is not yet operational, and we do not yet have all of the licenses we will require to operate our facility.
A failure to obtain such licenses or any significant delays in our budgeted time for the commencement of operations will have
a material adverse effect on our financial condition and prospects.
Upon
acquiring the Marion, North Carolina bottling facility, Mammoth began the process of performing required maintenance to revitalize
all the equipment and facility infrastructure in order to relaunch production at the plant. At the time of the acquisition the
plant equipment had laid dormant for several years and all of the equipment required a thorough inspection and light maintenance
to assure proper operation when the bottling lines are relaunched. We continue the process of maintaining our equipment and getting
our facility ready for operation. The Food and Drug Administration, or FDA, requires adherence to current good manufacturing practice,
or CGMP, regulations for the processing and bottling of bottled drinking water, which includes facility inspection and documentation
of corrective measures and reporting requirements, as well as new requirements for hazard assessments and food safety, or HACCP,
plans mandated by the Food Safety and Modernization Act, or FSMA. Final preparations for inspection are underway, including building
and facility maintenance such as pressure washing, painting, general cleaning, and minor building repairs. No assurance can be
given that we will be able to pass such governmental inspections within our expected timeframe. Any delays in completing required
inspections could delay the commencement of our operations, which would have a material adverse effect on our financial conditions
and prospects.
In addition
to complete cleaning and maintenance of the 55,000 square foot facility, standard operating policies and procedures must be documented
in accordance with federal legislation. This documentation includes conducting and reporting of microbial testing of source water
and any finished product, which must be completed prior to initiating filling and packaging of bottles for shipment from our production
lines. Delays in documenting our standard operating policies and procedures in accordance with federal legislation could similarly
delay the commencement of our operations and have a material adverse effect on our financial condition and prospects.
We
have almost $2 million in convertible debt outstanding and some of such debt is already in default or about to go into default.
If the holders of such debt bring a legal action against us either in bankruptcy or otherwise, our financial condition and future
prospects would be materially adversely affected.
We provide
a detailed table of our outstanding convertible notes in this offering circular under “Securities Being Offered –
Convertible Notes.” Such table provides the maturity date of each of our outstanding convertible notes among other information.
Of the outstanding convertible notes, over $100,000 in obligations is already past due and we are, therefore, in default under
such notes. Several other notes will mature over the next few months. Accordingly, we are in default under the matured notes and
the holders of those notes could bring an action against our company for its failure to pay the note when due. We have obtained
the non-binding verbal agreement of the noteholders who hold past due notes to forbear against bringing any such action against
us for a period expiring at the earliest on April 30, 2020. However, no assurance can be given that such noteholders will abide
by his nonbinding verbal agreement. Each such holder has the right to bring an action against us immediately and may be able to
bring an action in bankruptcy court against us. Any such legal action would have a material adverse effect on our financial condition,
operations, and future prospects.
We
will need additional financing to execute our business plan which we may not be able to secure on acceptable terms, or at all.
We will
require additional financing in the near and long term to fully execute our business plan. Our success depends on our ability
to raise such additional financing on reasonable terms and on a timely basis. Conditions in the economy and the financial markets
may make it more difficult for us to obtain necessary additional capital or financing on acceptable terms, or at all. If we cannot
secure sufficient additional financing, we may be forced to forego strategic opportunities or delay, scale back or eliminate further
development of our goals and objectives, operations and investments or employ internal cost savings measures.
In
order for us to compete and grow, we must attract, recruit, retain and develop the necessary personnel who have the needed experience.
Recruiting
and retaining highly qualified personnel is critical to our success. These demands may require us to hire additional personnel
and will require our existing management personnel to develop additional expertise. We face intense competition for personnel.
The failure to attract and retain personnel or to develop such expertise could delay or halt the sales and licensing of our product.
If we experience difficulties in hiring
and retaining
personnel in key positions, we could suffer from delays in our development, loss of customers and sales and diversion of management
resources, which could adversely affect operating results. Our future consultants and advisors may be employed by third parties
and may have commitments under consulting or advisory contracts with third parties that may limit their availability to us.
Quality
management plays an essential role in determining and meeting customer requirements, preventing defects, improving our products
and services and maintaining the integrity of the data that supports the safety and efficacy of our products.
Our future success
depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality
or safety issue in an effective and timely manner may also cause negative publicity, a loss of customer confidence in us or our
current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition,
a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim
that results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.
Our success depends
on the services of our Chief Executive Officer, the loss of whom could disrupt our business.
We
depend to a large extent on the services of our CEO, Mr. Leonard Greene. Given his knowledge and experience, he is important to
our future prospects and development as we rely on his expertise in developing our business strategies and maintaining our operations.
The loss of the service of Mr. Greene and the failure to find timely replacements with comparable experience and expertise could
disrupt and adversely affect our business.
Although
dependent on certain key personnel, we do not have any key person life insurance policies on any such people.
We are
dependent on Leonard Greene in order to conduct our operations and execute our business plan, however, we have not purchased any
insurance policies with respect to him in the event of his death or disability. Therefore, if Leonard Greene dies or becomes disabled,
we will not receive any compensation to assist with his absence. The loss of Leonard Greene could negatively affect us and our
operations.
We
face significant competition for our beverage and bottling business.
The commercial
beverage and bottling industry is highly competitive and we compete with a number of other companies that provide similar products.
Our ability to compete successfully in the commercial beverage industry and to manage our planned growth will depend primarily
upon the following factors:
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maintaining
continuity in our management and key personnel;
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ability
to react to competitive product and pricing pressures;
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the
strength of our brand;
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the
ability to expand into specialized bottling, including carbonated beverages, unique sizes
and shapes;
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increasing
the productivity of our future sales employees;
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effectively
marketing and selling our products;
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acquiring
new customers for our products;
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ability
to respond to complaints if necessary;
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developing
and improving our operational, financial and management controls;
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developing
and improving our information reporting systems and procedures; and
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the
design and functionality of our products.
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Many
of our competitors have greater financial, technical, product development, marketing and other resources than we do. These organizations
may be better known than we are and may have more customers or users than we do. We cannot provide assurance that we will be able
to compete successfully against these organizations, which may lead to lower customer satisfaction, decreased demand for our solutions,
loss of market share or reduction of operating profits.
The
forecasts of market growth included in this offering circular may prove to be inaccurate, and even if the markets in which we
compete achieve the forecasted growth, we cannot assure you our business will grow at similar rates, if at all.
Growth
forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
The forecasts contained in this offering circular may prove to be inaccurate. Even if these markets experience the forecasted
growth described in this offering circular, we may not grow our business at similar rates, or at all. Our growth is subject to
many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly,
the forecasts of market growth included in this offering circular should not be taken as indicative of our future growth.
Reductions
in future sales of our products will have an adverse effect on our profitability and ability to generate cash to fund our business
plan.
The following
factors, among others, could affect future market acceptance and profitability of our products:
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the
introduction of additional competitive or alternative beverage products or white label
bottlers;
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changes
in consumer preferences among commercial beverages products;
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changes
in awareness of the environmental impact of commercial beverages products;
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the
level and effectiveness of our sales and marketing efforts;
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any
unfavorable publicity regarding our products or services;
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any
unfavorable publicity regarding our future brands;
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litigation
or threats of litigation with respect to our future products or services;
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the
price of our products or services compared to those of our competitors;
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price
increases resulting from rising commodity costs;
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regulatory
developments affecting the manufacturing or marketing of our products;
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any
changes in government policies and practices related to our products; and
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new
science or research or regulatory barriers that impede the development of our future
CBD products.
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Adverse
developments with respect to the manufacturing or sale of our products would significantly reduce our net sales and profitability
and have a material adverse effect on our ability to maintain profitability and achieve our business plan.
We
will rely on other companies to provide materials for our products.
We will
depend on suppliers and subcontractors to meet our contractual obligations to our future customers and conduct our operations.
Our ability to meet our obligations to our customers may be adversely affected if suppliers or subcontractors do not provide the
agreed-upon supplies or perform the agreed-upon services in compliance with customer requirements and in a timely and cost-effective
manner. Likewise, the quality of our future products may be adversely impacted if companies from whom we acquire such items do
not provide materials which meet required specifications and perform to our and our customers’ expectations. Our distributors
and suppliers may be less likely than us to be able to quickly recover from natural disasters and other events beyond their control
and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk
of these adverse effects may be greater in circumstances where we may rely on only one or two distributors or suppliers for a
particular material.
We plan to source certain
materials from a number of third-party suppliers and, in some cases, single-source suppliers.
Although
we believe that alternative suppliers will be available, the loss of any of our future material suppliers could adversely affect
our results of operations and financial condition. Our inability to preserve the expected economics of these agreements could
expose us to significant cost increases in future years.
Substantial
disruption to a future distributors’ or suppliers’ manufacturing facilities could occur.
A disruption
in production at a future distributors’ or suppliers’ manufacturing facilities could have an adverse effect on our
business. The disruption could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing
problems, disease, strikes, transportation or supply interruption, government regulation, cybersecurity attacks or terrorism.
Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may take
a significant amount of time to start production, each of which could negatively affect our business and results of operations.
Increased
costs could affect our company.
An increase
in the cost of raw materials could affect our profitability. Commodity and other price changes may result in unexpected increases
in the cost of raw materials and other materials used by us. We may also be adversely affected by shortages of raw materials.
In addition, energy cost increases could result in higher transportation, freight and other operating costs. We may not be able
to increase our prices to offset these increased costs without suffering reduced volume, sales and operating profit, and this
could have an adverse effect on your investment.
Any
disruption in our information systems could disrupt our future operations and could adversely impact our business and results
of operations.
We plan
to depend on various information systems to support our customers’ requirements and to successfully manage our business,
including managing orders, supplies, accounting controls and payroll. Any inability to successfully manage the procurement, development,
implementation or execution of our information systems and back-up systems, including matters related to system security, reliability,
performance and access, as well as any inability of these systems to fulfill their intended purpose within our business, could
have an adverse effect on our business and results of operations. Such disruptions may not be covered by our future business interruption
insurance, which is insurance that we plan to, but have not yet, obtained.
Manufacturing
or design defects, unanticipated use of our products, or inadequate disclosure of risks relating to the use of the products can
lead to injury or other adverse events.
These
events could lead to recalls or safety alerts relating to our products (either voluntary or required by governmental authorities)
and could result, in certain cases, in the removal of a product from the market. Any recall could result in significant costs
as well as negative publicity that could
reduce demand for our products. Personal injuries relating to the use of our products can also result in product liability claims
being brought against us. In some circumstances, such adverse events could also cause delays in new product approvals. Similarly,
negligence in performing our services can lead to injury or other adverse events.
We
will need to increase brand awareness.
Due to
a variety of factors, our opportunity to achieve and maintain a significant market share may be limited. Developing and maintaining
awareness of our brand name, among other factors, is critical. Further, the importance of brand recognition will increase as competition
in our market increases. Successfully promoting and positioning our brand, products and services will depend largely on the effectiveness
of our marketing efforts. Therefore, we may need to increase our financial commitment to creating and maintaining brand awareness.
If we fail to successfully promote our brand name or if we incur significant expenses promoting and maintaining our brand name,
it would have a material adverse effect on our results of operations.
Our
future advertising and marketing efforts may be costly and may not achieve desired results.
We plan
to incur substantial expense in connection with our advertising and marketing efforts. Although we plan to target our advertising
and marketing efforts on current and potential customers who we believe are likely to be in the market for the products we plan
to sell, we cannot assure you that our advertising and marketing efforts will achieve our desired results. In addition, we will
periodically adjust our advertising expenditures in an effort to optimize the return on such expenditures. Any decrease in the
level of our advertising expenditures, which may be made to optimize such return could adversely affect our sales.
We
expect our future intellectual property rights will be critical to our success, and the loss of such rights may materially adversely
affect our business.
We expect
to own trademarks as we launch new products in the future. We expect that these trademarks will be very important to our business.
We may also own copyright in, and to, the content on the packaging of our products. We view these future intellectual property
rights as very important to our potential success and plan to protect such intellectual property through registration and enforcement
actions. However, there can be no assurance that other parties will not infringe or misappropriate our future trademarks, copyrights
and similar proprietary rights. If we lose some or all of our future intellectual property rights, our business may be materially
adversely affected.
We
plan to obtain insurance that may not provide adequate levels of coverage against claims.
We have
obtained commercial product liability insurance that covers us for up to $1,400,000 in overall damages and $1,000,000 per occurrence.
This policy also covers us for general liability for up to $500,000 for damages to equipment and property. However, there are
types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Such
losses could have a material adverse effect on our business and results of operations.
Changes
in laws and regulations relating to beverage containers and packaging could increase our costs and reduce demand for our products.
We expect
that our initial products will involve nonrefillable recyclable containers in the United States. Legal requirements have been
enacted in various jurisdictions in the United States and overseas requiring that deposits or certain ecotaxes or fees be charged
in connection with the sale, marketing and use of certain beverage containers. Other proposals relating to beverage container
deposits, recycling, tethered bottle caps, ecotax and/or product stewardship have been introduced in various jurisdictions in
the United States and overseas, and we anticipate that similar legislation or regulations may be proposed in the future at local,
state and federal levels, both in the United States and elsewhere. Consumers' increased concerns and changing attitudes about
solid waste streams and environmental responsibility and the related publicity could result in the adoption of such legislation
or regulations. If these types of requirements are adopted and implemented on a large scale in any of the major markets in which
we operate, they could affect our costs or require changes in our distribution model, which could reduce our net operating revenues
and profitability.
Significant
additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected
products.
Various
jurisdictions may seek to adopt significant additional product labeling or warning requirements or limitations on the marketing
or sale of our products as a result of what they contain or allegations that they cause adverse health effects. If these types
of requirements become applicable to one or more of our major products under current or future environmental or health laws or
regulations, they may inhibit sales of such products.
For example,
under one such law in California, known as Proposition 65, if the state has determined that a substance causes cancer or harms
human reproduction, a warning must be provided for any product sold in the state that exposes consumers to that substance, unless
the exposure falls under an established safe harbor level. If we were required to add Proposition 65 warnings on the labels of
one or more of our beverage products
produced for sale in California, the resulting consumer reaction to the warnings and possible adverse publicity could negatively
affect our sales both in California and in other markets.
Any
potential growth in the cannabis or cannabidiol-related industries continues to be subject to new and changing state and local
laws and regulations.
Our future
CBD products will be made from Hemp Finished Products. Under 21 U.S.C. § 802(16), the seeds (incapable of germination) and
the mature stalks of the Cannabis sativa plant, together with products made from these parts, are known as Hemp Finished Products
and are exempted from the definition of cannabis and are legal. Continued development of the cannabis and cannabidiol related
industries is dependent upon continued legislative legalization of cannabis and cannabidiol related products at the state level,
and a number of factors could slow or halt progress in this area, even where there is public support for legislative action. Any
delay or halt in the passing or implementation of legislation for the re-criminalization or restriction of cannabidiol at the
state level could negatively impact our business because of the perception that it is related to cannabidiol. Additionally, changes
in applicable state and local laws or regulations could restrict the products and services we plan to offer or impose additional
compliance costs on us or our customers. Violations of applicable laws, or allegations of such violations, could disrupt our business
and result in a material adverse effect on our operations. We cannot predict the nature of any future laws, regulations, interpretations
or applications, and it is possible that regulations may be enacted in the future that will have a material adverse effect on
our business.
We
are subject to income taxes as well as non-income-based taxes, such as payroll, sales, use, value-added, net worth, property and
goods and services taxes, in the U.S.
Significant
judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business,
there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe that our tax
estimates are reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different
from what is reflected in our income tax provisions, expense amounts for non-income-based taxes and accruals and (ii) any material
differences could have an adverse effect on our financial position and results of operations in the period or periods for which
the determination is made.
We
are not subject to Sarbanes-Oxley regulations and lack the financial controls and safeguards required of public companies.
We do
not have the internal infrastructure necessary, and are not required, to complete an attestation about our financial controls
that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurances that there are no significant
deficiencies or material weaknesses in the quality of our financial controls. We expect to incur additional expenses and diversion
of management’s time when it becomes necessary to perform the system and process evaluation, testing and remediation required
to comply with the management certification and auditor attestation requirements.
Risks
Related to this Offering and Ownership of our Securities
We
have not engaged a third-party bank or financial institution to act as escrow agent. Your funds will be deposited directly into
our operating account. Since there is no minimum amount required to be raised by us before we can accept funds, there is no guarantee
that any funds other than your own will be invested in this offering.
We
have not currently engaged a third-party bank or financial institution to act as escrow agent. Your funds will be placed in our
general corporate bank account and immediately available for our use. We are not required to raise any minimum amount in this
offering before we may utilize the funds received in this offering. Potential investors should be aware that there is no assurance
that any monies beside their own will be invested in this offering.
We
will be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our Common Stock.
The SEC has
adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price
less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. We anticipate
that our Common Stock will become a “penny stock”, and we will become subject to Rule 15g-9 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or the “Penny Stock Rule.” This rule imposes additional
sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions
covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s
written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our
securities and may affect the ability of purchasers to sell any of our securities in the secondary market.
For any transaction
involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure
schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions
payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly
statements are required to be sent disclosing recent price information for the penny stock held in the account and information
on the limited market in penny stock.
We do not anticipate
that our Common Stock will qualify for exemption from the Penny Stock Rule. In any event, even if our Common Stock were exempt
from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority
to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be
in the public interest.
This offering
is being conducted on a self-underwritten “best efforts” basis without a minimum and we may not be able to execute
our growth strategy if the $5 million maximum is not sold.
If you invest
in the Common Stock and less than all of the offered shares are sold, the risk of losing your entire investment will be increased.
We are offering our Common Stock on a self-underwritten “best efforts” basis without a minimum, and we can give no
assurance that all of the offered Common Stock will be sold. If less than $5 million of Common Stock shares offered are sold,
we may be unable to fund all the intended uses described in this offering circular from the net proceeds anticipated from this
offering without obtaining funds from alternative sources or using working capital that we generate. Alternative sources of funding
may not be available to us at what we consider to be a reasonable cost, and the working capital generated by us may not be sufficient
to fund any uses not financed by offering net proceeds. No assurance can be given to you that any funds will be invested in this
offering other than your own.
This is
a fixed price offering and the fixed offering price may not accurately represent the current value of us or our assets at any
particular time. Therefore, the purchase price you pay for our shares may not be supported by the value of our assets at the time
of your purchase.
This is a fixed
price offering, which means that the offering price for our shares is fixed. Therefore, the fixed offering price established
for our shares may not be supported by the current value of our company or our assets at any particular time.
We
may, in the future, issue additional shares of Common Stock, which would reduce investors’ percent of ownership and may
dilute our share value.
Our certificate
of incorporation authorizes the issuance of 3,000,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock. As
of February 6, 2020, we had 637,861,741 shares of Common Stock outstanding. Accordingly, we may issue up to an additional
362,138,259 shares of Common Stock after this offering. The future issuance of Common Stock may result in substantial dilution
in the percentage of our Common Stock held by our then existing shareholders. We may value any Common Stock issued in the future
on an arbitrary basis. The issuance of Common Stock for future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by our investors and might have an adverse effect on any trading market for our
Common Stock.
We have
broad discretion in the use of the net proceeds from this offering, and our use of the offering proceeds may not yield a favorable
return on your investment.
We
intend to use the net proceeds of this offering for working capital. However, our management
has broad discretion over how these proceeds are to be used and based on unforeseen technical, commercial or regulatory issues
could spend the proceeds in ways with which you may not agree. Moreover, the proceeds may not be invested effectively or in a
manner that yields a favorable or any return, and consequently, this could result in financial losses that could have a material
adverse effect on our business, financial condition and results of operations.
We have
never paid cash dividends on our stock and we do not intend to pay dividends for the foreseeable future.
We have paid
no cash dividends on any class of our stock to date and we do not anticipate paying cash dividends in the near term. For the foreseeable
future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying
any cash dividends on our stock. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation
to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our shares. Any determination
to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations,
financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant.
Certain
provisions of our certificate of incorporation may make it more difficult for a third party to effect a change-of-control.
Our certificate
of incorporation authorizes our board of directors to issue up to 20,000,000 shares of Preferred Stock. The Preferred Stock may
be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without
further action by the stockholders. These terms may include voting rights including the right to vote as a series on particular
matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance
of any Preferred Stock could diminish the rights of holders of existing shares, and therefore could reduce the value of such shares.
In addition,
specific rights granted to future holders of Preferred Stock could be used to restrict our ability to merge with, or sell assets
to, a third party. The ability of our board of directors to issue Preferred Stock could make it more difficult, delay, discourage,
prevent or make it costlier to acquire or effect a change-in control, which in turn could prevent our stockholders from recognizing
a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our Common
Stock.
DILUTION
Dilution
means a reduction in value, control or earnings of the shares the investor owns.
Immediate
Dilution
An early-stage
company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash
cost, because they are, in effect, putting their “sweat equity” into the company. When the company seeks cash investments
from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier
investors, which means that the cash value of your stake is diluted because all the shares are worth the same amount, and you
paid more than earlier investors for your shares. Dilution may also be caused by pricing securities at a value higher than book
value or expenses incurred in this offering.
Purchasers
of our shares in this offering will experience an immediate dilution of net tangible book value per share from the public offering
price. Dilution in net tangible book value per share represents the difference between the amount per share paid by
the purchasers of shares and the net tangible book value per share immediately after this offering.
After
giving effect to the sale of all of our shares being offered in this offering at an assumed public offering price of $0.0015
per share and after deducting the estimated offering expenses payable by us, our adjusted
net tangible book value at October 31, 2019 would have been $4,105,401, or $0.00098 per share, assuming the sale of the maximum
number of shares offered for sale in this offering and the conversion of our preferred stock on a one for 100 basis (but not the
conversion of any of our outstanding convertible notes). Assuming the sale of the maximum
number of shares offered for sale in this offering, this represents an immediate increase in net tangible book value per share
of $0.00045 to the existing stockholders and dilution in net tangible book value per share of $0.00052 to new investors who purchase
shares in this offering.
The
following table sets forth the estimated net tangible book value per share after this offering and the dilution to persons purchasing
shares.
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Offering price per share
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$
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0.00150
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Net tangible book value per share at October 31, 2019
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$
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0.00053
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Adjusted net tangible book value per share after this offering
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$
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0.00098
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Increase in net tangible book value per share to the existing stockholders
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$
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0.00045
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Dilution in net tangible book value per share to new investors
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$
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0.00052
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The
above dilution calculation gives effect to the conversion of our preferred stock, but not to the conversion of our outstanding
convertible notes. If our outstanding convertible notes are converted into our Common Stock, you will suffer additional dilution
in net tangible book value.
Future
Dilution
Another
important way of looking at dilution is the dilution that happens due to future actions by our company. The investor’s stake
in our company could be diluted due to our issuing additional shares. In other words, when we issue more shares, the percentage
of our company that you own will go down, even though the value of our company may go up. You will own a smaller piece of a larger
company. This increase in number of shares outstanding could result from a stock offering (such as a public offering, an equity
crowdfunding round, a venture capital round or an angel investment), employees exercising stock options, or by conversion of certain
instruments (such as convertible bonds, preferred shares or warrants) into stock.
If we
decide to issue more shares, an investor could experience value dilution, with each share being worth less than before, and control
dilution, with the total percentage an investor owns being less than before. There may also be earnings dilution, with a reduction
in the amount earned per share (though this typically occurs only if we offer dividends, and most early stage companies are unlikely
to offer dividends, preferring to invest any earnings into the company).
The type
of dilution that hurts early-stage investors most occurs when a company sells more shares in a “down round,” meaning
at a lower valuation than in earlier offerings. An example of how this might occur is as follows (numbers are for illustrative
purposes only):
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·
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In
June 2019, an investor invests $20,000 for shares that represent 2% of a company valued
at $1 million.
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·
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In
December 2019, the company is doing very well and sells $5 million in shares to venture
capitalists on a valuation (before the new investment) of $10 million. The investor now
owns only 1.3% of the company but the investor’s stake is worth $200,000.
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·
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In
June 2020, the company has run into serious problems and in order to stay afloat it raises
$1 million at a valuation of only $2 million (the “down round”). The investor
now owns only 0.89% of the company and the investor’s stake is worth only $26,660.
|
This
type of dilution might also happen upon conversion of convertible notes into shares. Typically, the terms of convertible notes
issued by early-stage companies provide that in the event of another round of financing, the holders of the convertible notes
get to convert their notes into equity at a “discount” to the price paid by the new investors, i.e., they get more
shares than the new investors would for the same price. Additionally, convertible notes may have a “price cap” on
the conversion price, which effectively acts as a share price ceiling. Either way, the holders of the convertible notes get more
shares for their money than new investors. In the event that the financing is a “down round,” the holders of the convertible
notes will dilute existing equity holders, and even more than the new investors do, because they get more shares for their money.
Investors should pay careful attention to the amount of convertible notes that we may issue in the future and the terms of those
notes.
If you
are making an investment expecting to own a certain percentage of our company or expecting each share to hold a certain amount
of value, it’s important to realize how the value of those shares can decrease by actions taken by us. Dilution can make
drastic changes to the value of each share, ownership percentage, voting control, and earnings per share.
PLAN OF DISTRIBUTION
This offering relates to the sale
of 2,000,000,000 shares of Common Stock.
Initially,
we do not plan to use underwriters or pay any commissions. We will be selling our shares of Common Stock using our best efforts
and no one has agreed to buy any of our shares of Common Stock. This Offering Circular permits our CEO to sell the shares of Common
Stock directly to the public, with no commission or other remuneration payable to him for any shares of Common Stock he may sell.
Currently, there is no plan or arrangement to enter into any contracts or agreements to sell the shares of Common Stock through
a broker or dealer, although this may change in the future. Our CEO will sell the shares of Common Stock, and intends to offer
them to friends, family members and business acquaintances.
There is
no minimum amount of shares of Common Stock we must sell so no money raised from the sale of our shares of Common Stock will go
into escrow, trust or another similar arrangement.
We are
offering securities only in the state of New York. We may decide to offer securities in other states in the future. In the following
states we cannot offer or sell our shares of Common Stock unless we register as an issuer dealer: Alabama, Arizona, Florida, Nebraska,
Nevada, New Jersey, New York, North Dakota, Texas and Washington. If we wish to offer and sell our shares of Common Stock in these
states, we will hire an SEC registered broker-dealer to serve as our placement agent. We may, however, decide to comply with a
particular state’s issuer dealer registration requirements if we deem it appropriate to do so. For example, we plan to comply
with New York State’s issuer dealer requirements so that we will be able to sell securities in New York.
Initially,
the shares of Common Stock are being offered by Mr. Leonard Greene, the company’s Chief Executive Officer and Mr. Greene
will be relying on the safe harbor in Rule 3a4-1 of the Securities Exchange Act to sell the shares of Common Stock. No sales commission
will be paid for shares of Common Stock sold by Mr. Greene. Mr. Greene is not subject to a statutory disqualification and is not
an associated person of a broker or dealer.
Additionally,
Mr. Greene primarily performs substantial duties on behalf of the registrant otherwise than in connection with transactions in
securities. Mr. Greene has not been a broker or dealer or an associated person of a broker or dealer within the preceding 12 months
and he has not participated in selling an offering of securities for any issuer more than once every 12 months other than in reliance
on paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1 of the Securities Exchange Act.
This offering
will commence on the qualification date of the offering statement of which this offering circular is a part and will terminate
on or before the earliest event of the sale of the maximum offering, the termination of the offering by Company management or
the passage of one (1) year from the date of the qualification of the offering statement of which this offering circular forms
a part.
Under the
rules of the SEC, our Common Stock will come within the definition of a “penny stock” because the price of our Common
Stock is below $5 per share. As a result, our Common Stock will be subject to the “penny stock” rules and regulations.
Broker-dealers who sell penny stocks to certain types of investors are required to comply with the SEC’s regulations concerning
the transfer of penny stock. These regulations require broker-dealers to:
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·
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Make
a suitability determination prior to selling penny stock to the purchaser;
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·
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Receive
the purchaser’s written consent to the transaction; and
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·
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Provide
certain written disclosures to the purchaser.
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These requirements
may restrict the ability of broker-dealers to sell our Common Stock, and may affect the ability to resell our Common Stock.
OTC Market Considerations
Our Common Stock is eligible for
quotation on the OTC Pink Market under the symbol “INKW.”
The OTC
Pink Market is separate and distinct from the NASDAQ stock market. NASDAQ has no business relationship with issuers of securities
quoted on the OTC Pink Market. The SEC’s order handling rules, which apply to NASDAQ-listed securities, do not apply to
securities quoted on the OTC Pink Market.
Although
the NASDAQ stock market has rigorous listing standards to ensure the high quality of its issuers, and can delist issuers for not
meeting those standards, the OTC Pink Market has no listing standards. Rather, it is the market maker who chooses to quote a security
on the system, files the application, and is obligated to comply with keeping information about the issuer in its files. FINRA
cannot deny an application by a market
maker to quote the stock of a company. The only requirement for inclusion in this marketplace is that the issuer be current in
its reporting requirements with the SEC or its alternative reporting requirements with OTC Markets Group.
Investors
may have greater difficulty in getting orders filled on the OTC Pink Market. Investors’ orders may be filled at a price
much different than expected when an order is placed. Trading activity in general is not conducted as efficiently and effectively
as with NASDAQ-listed securities.
Investors must contact a broker-dealer
to trade OTC Pink Market securities. Investors do not have direct access to the marketplace’s service.
For these securities, there only
has to be one market maker.
These transactions
are conducted almost entirely manually. In times of heavy market volume, the limitations of this process may result in a significant
increase in the time it takes to execute investor orders. Therefore, when investors place market orders - an order to buy or sell
a specific number of shares at the current market price - it is possible for the price of a stock to go up or down significantly
during the lapse of time between placing a market order and getting execution.
Because these stocks are usually
not followed by analysts, there may be lower trading volume than for NASDAQ-listed securities.
Blue Sky Law Considerations
The holders
of our shares of Common Stock and persons who desire to purchase them in the OTC Pink Market should be aware that there may be
significant state law restrictions upon the ability of investors to resell our shares. Accordingly, investors should consider
any secondary market for the company's securities to be a limited one. We intend to seek coverage and publication of information
regarding the company in an accepted publication which permits a "manual exemption”. This manual exemption permits
a security to be distributed in a particular state without being registered if the company issuing the security has a listing
for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a
recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer's balance sheet,
and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year
of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is
a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service,
and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they
“recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions
and therefore do not expressly recognize the manual exemption: AL, CA, IL, KY, LA, MT, NH, NY, PA, TN and VA.
We currently
do not intend to and may not be able to qualify securities for resale in other states which require shares to be qualified before
they can be resold by our shareholders.
Offering Period and Expiration
Date
This offering
will start on or after the date that the offering is qualified by the SEC and will terminate at the earlier of: (1) the date on
which the maximum offering amount has been sold, (2) the date which is one year after this offering has been qualified by the
SEC or (3) the date on which this offering is earlier terminated by us in our sole discretion.
Procedures for Subscribing
General
If you decide to subscribe for any
Common Stock in this offering, you must:
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1.
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Receive,
review, execute and deliver to us a Subscription Agreement; and
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2.
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Deliver
a check or wire transfer (in accordance with the instructions contained in the Subscription
Agreement) for the amount set forth in the Subscription Agreement.
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You must
pay for the shares of our Common Stock at the time of your subscription. Subscription agreements may be submitted in paper form,
or electronically by email or other means made available to investors by us. All checks should be made payable to Greene Concepts,
Inc. Completed subscription agreements should be sent to us at the address set forth in the subscription agreement and payments
should be sent to us or wired according to the instructions in the subscription agreement.
Any potential
investor will have ample time to review the Subscription Agreement, along with their counsel, prior to making any final investment
decision. We shall only deliver such Subscription Documents upon request after a potential investor has had ample opportunity
to review this Offering Circular. Further, we will not accept any money until the SEC declares this Offering Circular qualified.
Right
to Reject Subscriptions. After we receive your complete, executed subscription agreement, we have the right to review
and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected
subscriptions immediately to you, without interest or deduction.
Acceptance
of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and
issue the shares subscribed. Once you submit the subscription agreement, you may not revoke or change your subscription or request
your subscription funds. All accepted subscription agreements are irrevocable.
Under Rule
251 of Regulation A, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds
which do not exceed 10% of the greater of the purchaser’s revenue or net assets (as of the purchaser’s most recent
fiscal year end). As a result, a non-accredited, natural person may only invest funds which do not exceed 10% of the greater of
the purchaser’s annual income or net worth (please see below on how to calculate your net worth).
How
to Calculate Net Worth. For the purposes of calculating your net worth, it is defined as the difference between total
assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness
secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts,
net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the
fiduciary directly or indirectly provides funds for the purchase of the shares in this offering.
In order
to purchase the shares in this offering and prior to the acceptance of any funds from an investor, an investor will be required
to represent, to our satisfaction, that he is either an accredited investor or is in compliance with the 10% of net worth or annual
income limitation on investment in this offering.
USE
OF PROCEEDS
We estimate
that, at a per share price of $0.0015, the net proceeds from the sale of the 2,000,000,000 shares in this offering will be approximately
$2,947,000, after deducting the estimated offering expenses of approximately $53,000.
The following
table below sets forth the uses of proceeds assuming the sale of 25%, 50%, 75% and 100% of the securities offered for sale in
this offering by the company. For further discussion, see the section entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations—Plan of Operations.”
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25%
of Offering Sold
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50%
of Offering Sold
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75%
of Offering Sold
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100%
of Offering Sold
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Offering Proceeds
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|
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Shares Sold
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500,000,000
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1,000,000,000
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1,500,000,000
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2,000,000,000
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Gross Proceeds
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$
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750,000
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$
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1,500,000
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$
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2,250,000
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$
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3,000,000
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Offering Expenses
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|
|
|
|
|
|
|
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Legal & Accounting
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$
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40,000
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$
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40,000
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$
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40,000
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$
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40,000
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Publishing/EDGAR
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$
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1,000
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$
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1,000
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$
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1,000
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$
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1,000
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Transfer Agent
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$
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2,000
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$
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2,000
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$
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2,000
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$
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2,000
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Blue Sky Compliance
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$
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10,000
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$
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10,000
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$
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10,000
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$
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10,000
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Total Offering
Expenses
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$
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53,000
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$
|
53,000
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$
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53,000
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$
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53,000
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|
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|
|
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Amount of
Offering Proceeds Available for Use
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$
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697,000
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$
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1,447,000
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$
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2,197,000
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$
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2,947,000
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,
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Expenditures
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Engineering and Prototyping
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$
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20,000
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$
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20,000
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$
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35,000
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$
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35,000
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Marketing
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$
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200,000
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$
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300,000
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$
|
500,000
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$
|
750,000
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Production and Inventory
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$
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250,000
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$
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350,000
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$
|
400,000
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$
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400,000
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Administrative and
Corporate Expenses
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$
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125,000
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$
|
125,000
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$
|
250,000
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$
|
547,000
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Professional Fees
and Compensation
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$
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15,000
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$
|
15,000
|
$
|
15,000
|
$
|
15,000
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Working Capital Reserves
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$
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87,000
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$
|
637,000
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$
|
485,000
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$
|
1,200,000
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Total Expenditures
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$
|
697,000
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$
|
1,447,000
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$
|
2,197,000
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$
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2,947,000
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The above
figures represent only estimated costs. This expected use of net proceeds from this offering represents our intentions based upon
our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending
on numerous factors, including the status of and results from operations. As a result, our management will retain broad discretion
over the allocation of the net proceeds from this offering. We may find it necessary or advisable to use the net proceeds from
this offering for other purposes, and we will have broad discretion in the application of net proceeds from this offering. Furthermore,
we anticipate that we will need to secure additional funding to fully implement our business plan. Please see section entitled
“Risk Factors” on page 10.
See
“Management’s Discussion and Analysis of Financial Condition and Results of Operation – Plan of Operation”
for an explanation of how the proceeds of this Offering will be allocated among different expenditure categories identified above
given the different phases of our twelve-month plan of operation. The total amount to be spent during the first twelve months
under our Plan of Operation includes an $87,000 working capital reserve, as listed above. Our plan of operation assumes that we
are able to raise at least $750,000 in gross proceeds in this offering (25% of our maximum aggregate offering amount).
We
reserve the right to change the above use of proceeds if management believes it is in the best interests of our company.
DESCRIPTION
OF BUSINESS
Our Company
Our company
name is Greene Concepts, Inc. We are headquartered in Marion, North Carolina. We are a New York corporation that was incorporated
on August 18, 1952 and previously operated as Tech-OHM Resistor Corporation, Tech-OHM Electronics, Inc., International Citrus
Corporation, Princeton Commercial Holdings, Inc., Eurowind Energy, Inc., First Petroleum and Pipeline Inc., and Luke Entertainment,
Inc. Since our inception, we have operated different businesses under these different names before changing our name to Greene
Concepts, Inc. and engaging in our current business line. Through our wholly-owned subsidiary, Mammoth Ventures Inc., or Mammoth,
we are now a bottling and beverage company committed to providing the world with high quality, healthy, and enhanced beverage
choices. Our beverage and bottling facility is located in Marion, North Carolina. The facility is a 55,000 square foot bottling
and beverage plant that is located within the boundaries of the Pisgah National Forest. The bottling facility has as its water
sources a combination of seven (7) spring and artesian wells that are fed from a natural aquifer that is located deep below the
Pisgah National Forest. We are focused on producing a variety of beverage product lines including, but not limited to, spring
and artesian water, cannabinoid, or CBD, infused beverages, pH balanced water and beverage offerings, as well as enhanced athletic
drinks in addition to other product offerings. Additionally, we expect that Mammoth will act as a third-party producer and bottler
of "white label" beverage and water products. White label bottling services are provided for clients that desire to
market their own product formulations, brand name and labeling while outsourcing the production and bottling of their products
to Mammoth.
Before
acquiring Mammoth on February 6, 2019, we operated our legacy business, which was the manufacture and distribution of a line of
25 high quality consumer focused inkjet kits. On April 30, 2019, our board of directors made a determination to wind down our
legacy business and to transition into the beverage and bottling business.
On February
6, 2019, we entered into a Stock Purchase Acquisition Agreement and Merger Agreement and Promissory Note Agreement with BNL Capital
LLC, or BNL Capital. Pursuant to the terms of the agreement, BNL Capital agreed to sell 100% of the outstanding shares of Mammoth
to us for a purchase price of $1,350,000. Mammoth acquired certain assets of the defunct business formerly referred to as “North
Cove Springs Bottling and Beverage,” which includes the Marion, North Carolina bottling facility and related assets. We
financed the acquisition through a secured promissory note in the amount of $1,350,000 in favor of BNL Capital. The promissory
note was secured by 100% of the outstanding shares of Mammoth that are owned by our company. See “Description of Business
– Terms of Acquisition of Mammoth Ventures, Inc.” for a description of the terms of our acquisition of Mammoth.
Upon
acquiring Mammoth, we began the process of performing required maintenance to revitalize all the equipment and facility infrastructure
in order to relaunch production at the plant. At the time of the acquisition all of the plant equipment was in good condition
although the equipment had not operated for several years and it did require a thorough inspection and light maintenance to assure
proper operation when the bottling lines are relaunched. At the time of the acquisition, we hired, Kenneth Porter, a 30+ year
veteran of the beverage and bottling industry, as plant manager to oversee operations as well as the revitalization and expected
relaunch of the facility.
The Food
and Drug Administration, or FDA, requires adherence to current good manufacturing practice, or CGMP, regulations for the processing
and bottling of bottled drinking water, which includes facility inspection and documentation of corrective measures and reporting
requirements, as well as new requirements for hazard assessments and food safety, or HACCP, plans mandated by the Food Safety
and Modernization Act, or FSMA. Final preparations for inspection are underway, including building and facility maintenance such
as pressure washing, painting, general cleaning, and minor building repairs.
In addition
to complete cleaning and maintenance of the 55,000 square foot facility, standard operating policies and procedures must be documented
in accordance with federal legislation. This documentation includes conducting and reporting of microbial testing of source water
and any finished product, which must be completed prior to initiating filling and packaging of bottles for shipment from our production
lines.
In concert
with the coordination of the final preparations for inspection and the launching of production, we are presently working with
a number of distributors and retailers to presale orders for production once the plant is fully operational. We expect to relaunch
the plant during the first quarter of 2020.
Terms of Acquisition of Mammoth
Ventures, Inc.
On November
29, 2018 Mammoth was incorporated by BNL Capital, whose principals are Robert Levit and Loren Brown in the State of Florida for
the purpose of acquiring the North Carolina Facility from North Cove Springs Bottling and Beverage, Inc. and its owner Chris Mencis,
or North Cove. The acquisition of the assets constituting the North Carolina Facility by Mammoth closed on February 5, 2019. For
at least six years prior to the acquisition of the assets of the North Carolina Facility, North Cove had no operations whatsoever,
had no employees and generated no revenue from any source. The North Carolina Facility was dormant during that entire period.
Thereafter, on the next day, February 6, 2019, we acquired all of the issued and outstanding capital stock of Mammoth from BNL
Capital. Mammoth had no operations other than the ownership of the assets constituting the North Carolina Facility, which did
not operate, from the date of its acquisition of the North Carolina Facility on February 5, 2019 to the date that BNL Capital
sold all of the outstanding capital stock of Mammoth to the Company on the next day, February 6, 2019.
We acquired
the North Carolina Facility pursuant to a Stock Purchase Acquisition Agreement and Merger Agreement and Promissory Note Agreement
with BNL Capital. Pursuant to the terms of the agreement, BNL Capital agreed to sell 100% of the outstanding shares of Mammoth
to us for a purchase price of $1,350,000. We financed the acquisition through a secured promissory note in the amount of $1,350,000
in favor of BNL Capital. The promissory note was secured by 100% of the outstanding shares of Mammoth that are owned by our company.
Payments under the note are due in 60 monthly installments of $5,062.50 each. The first 59 months of the repayment period are
interest only. On the 60th month of the repayment period, the entire remaining outstanding principal balance will become due.
As an inducement for BNL Capital entering into the agreement, we also issued 2,000,000 shares of Series A Preferred Stock to BNL
Capital.
The Company
considered the provisions of FASB Accounting Standards Codification Topic 805, Business Combinations, or Topic 805, to determine
whether an acquisition of all of the outstanding capital stock of Mammoth should be treated as business combination or an asset
acquisition in accordance with GAAP. If the acquisition of Mammoth does not meet the definition of a “business” under
Topic 805, the Company accounts for the transaction as an asset acquisition rather than a business combination. On the other hand,
if the acquisition of Mammoth meets the definition of a business under Topic 805, the Company applies the acquisition method of
accounting for a business combination as provided for in Topic 805. The Company concluded that the acquisition of the capital
stock of Mammoth from BNL Capital does not represent the acquisition of a business and that the Company is not required to include
financial statements or pro forma financial information for Mammoth/North Cove in accordance with Rule 11-01 of Regulation S-X.
Our Industry
Consumers
are consistently switching from carbonated drinks to water and healthy energy drinks. As a result, the beverage market has seen
increased demand for enhanced water and other functional drinks. Overall, rapid urbanization, along with widening base of the
middle-class population, has increased the demand for a variety of healthy beverages.
This
higher demand for water and functional beverages has benefited the packaging industry. Moreover, increasing consumer demand for
quality products, made from organic and naturally sourced ingredients, requires science-based formulations of effective products
in the beverage industry. These factors have created growth potential for beverage packaging service providers who have the expertise
and knowledge required to create successful products in an increasingly discerning market.
Modor
Intelligence predicts the global beverage packaging market to grow at a compounded annual growth rate, or CAGR, of 4.17% and reach
a value of $142.28 billion by 2023. Currently, North America accounts for the largest market share, poised to reach $28.84 billion
by 2023. According to Statistica, revenue in the US bottled water segment alone amounts to US$67.5 billion in 2019 and is expected
to grow annually by 5.5% (CAGR 2019-2023).
The International
Bottled Water Association (IBWA), and the Beverage Marketing Corporation (BMC), reports bottled water volume grew to 13.2 billion
gallons in 2017 to 13.8 gallons in 2018, an almost five percent increase over the previous year (as compared to more than 6% growth
in 2017). This growth is fueled in large part by increased numbers of consumers choosing bottled water instead of soda. Carbonated
soft drink sales decreased for the thirteenth consecutive year, according to the most recent numbers from BMC. BMC statistics
show per capita consumption exceeded 42 gallons of bottled water, a 6.2 percent increase and the average annual intake of carbonated
soft drinks has declined to 37.5 gallons. BMC foresees bottled water consumption will climb higher than 50 gallons per capita
within just a few years. According to BMC, nearly all Americans (94 percent) believe that bottled water is a healthier choice
than soft drinks, and 93 percent say bottled water should be available wherever drinks are sold.
The shift
away from sugary drinks is having a dramatic impact on sales of functional beverages. The global functional drinks market size
is expected to reach USD 93.68 billion by 2019, according to a new study by Grand View Research, Inc., progressing at a CAGR of
6.1% during the forecast period. Per Grand View Research, the global functional drink market is anticipated to reach $93.68 billion
in 2019, at a CAGR of 6.1%. According to the Grand View Report, four players hold 55.2% of this market. Functional beverages include
energy drinks and sports drinks, and nutritional drinks. In 2014, energy drinks represented almost 56% of all functional beverage
sales. Ibis World reports, over the past five years, the US energy drink production industry has grown by 5.2% to reach revenue
of $9 billion in 2018. The energy drinks market is forecast to register a CAGR of 3.6% till 2023, whereas, the sports drinks market
will grow at a CAGR of 4.3% during the same period.
In contrast
to the energy and sports drink categories, functional drinks with nutraceutical formulations are designed to support consumer
desire for establishing healthy lifestyle routines. Often formulated using herbs, botanicals, vitamins and minerals, these beverages
are designed to support digestive wellness, reduce stress and improve sleep, as examples. They are often sold as dietary supplements,
and subject to additional regulation by the FDA. As a result, they are sold at a higher price point. Netherlands-based Innova
Market Insights, in its 2017 “Functional Drinks” reports 30.5 percent of all functional drink launches were vitamin/mineral
fortified, while 22.8 percent contained high amounts of protein. Rounding out the Top 5 were energy/alertness (20 percent), digestive/gut
health (19 percent), and antioxidants (12.7 percent).
We believe
that the growth in bottled water and other healthy beverages and away from carbonated or sugary beverages will create opportunities
for our company. We also believe that recent market trends will continue to grow as federal and state regulation is for hemp derived
CBD products
is codified. The CBD market now stands at $1.01 trillion with forecasts calling for it to grow to $22 billion by 2022. Many analysts
are calling for 20% or more of that growth to occur in the CBD infused beverage space. This trend, plus the opportunity presented
by the US private label beverage market, which, according to Technavio, will have revenue of almost USD 140 billion by 2021, are
expected by management to fuel growth of our bottling and distribution business for years to come.
Our
Products
Our bottling
facility is not yet operational, and we have not begun selling any products yet.
We expect
that our future products will include:
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·
|
Enhanced
spring and artesian water;
|
|
|
·
|
Functional
beverages and liquid dietary supplements for a variety of market needs, including, but
not limited to, pH balanced water, enhanced athletic drinks;
|
|
|
·
|
CBD
infused beverages; and
|
|
|
·
|
Beverages
that meet the nutritional needs for unique defined populations and health conditions.
|
We also
plan to operate as a third-party producer and bottler of "white label" beverage and water products once our facility
is fully licensed and becomes operational.
Our
Production
We plan
to produce our future products at our 55,000 square foot bottling and beverage plant that is located within the boundaries of
the Pisgah National Forest in Marion, North Carolina. The bottling facility has as its water sources a combination of seven (7)
spring and artesian wells that are fed from a natural aquifer that is located deep below the Pisgah National Forest. We are focused
on producing a variety of beverage product lines including, but not limited to spring and artesian water, cannabinoid, or CBD,
infused beverages, pH balanced water and beverage offerings, as well as enhanced athletic drinks in addition to other product
offerings.
Since
we will not rely on independent third-party bottlers to manufacture and market our products, we believe we can more effectively
manage quality control and consumer appeal while responding quickly to changing market conditions. We expect that we will produce
substantially all of the concentrates and essences used in our future branded products. We believe that our ability to control
our own formulas in the future will allow us to craft products in a uniform manner with high quality standards while innovating
flavors to meet changing consumer preferences.
Our
Distribution
Given
our particular interest in the natural health, organic and dietary supplement arenas, our primary distribution systems will utilize
the fresh, natural and organic wholesale food distributors and representatives. Distribution will be targeted to independent natural
food retailers and large box stores through both independent warehouse distribution system and direct-store delivery system. ‘White
label’ products will utilize customer shipping and qualified independent shipping companies for direct delivery to the convenience
channels. At this time, we do not have plans to distribute through food service industry.
Sales
and Marketing
We plan
to sell and market our products through an internal sales force as well as networks of brokers.
We will
seek to reach consumers directly through digital marketing, digital social marketing, social media engagement and creative content.
Our marketing efforts will be focused on increasing our digital presence and capabilities to further enhance the consumer experience
across our future brands. We may retain agencies to assist with social media content creative and platform selection for our brands.
Additionally,
we expect that we will create brand recognition and loyalty through a combination of regional event participation, special event
marketing, endorsements, consumer coupon distribution and product sampling.
More
specifically, we expect to use the following techniques to market our product offerings and attract customers:
|
|
·
|
Attending
Trade and Other Events: We will attend these events in order to create awareness of our
brand/ products and develop relationships with potential commercial customers. The potential
customers will then be followed up in order to convert them into regular customers for
whom we can provide white label services.
|
|
|
·
|
Signboards
and Billboards Marketing
|
|
|
·
|
Printing
and Distributing Brochures and Flyers
|
|
|
·
|
Search
Engine Optimization (SEO) of our Website: SEO will be employed as it will bring our website
at the top positions in natural search queries on widely used search engines like Google
and Bing.
|
|
|
·
|
CRM
Software: We plan to utilize client relationship management, or CRM, software to offer
materials, such as free guides or informative materials, ready to be downloaded in exchange
of contact details. The software will then automatically send marketing materials to
available contacts in order to convert them into customers.
|
|
|
·
|
Google
AdWords: We will start different campaigns including text-based search ads, graphic display
ads, and YouTube video ads in order to reach our targeted audience(s) with AdWords.
|
|
|
·
|
Word
of Mouth/ Recommendations
|
|
|
·
|
Referral
Marketing: Referrals are one of the most valuable assets for our company. We will add
our customers to a special, dedicated group and give them benefits on referring us to
others.
|
Raw
Materials
The products
that we expect to produce and sell will be packaged in various materials suitable for cold pack beverages, including aluminum,
glass, paper and plastic bottles, including recyclable and reusable containers. Ingredients for our functional beverage lines
will include minerals, vitamins, herbs and botanicals, as well as flavors and naturally derived sweeteners. Ingredients will be
sourced from cGMP compliant companies who are committed to transparency and traceability relating to origin, identify, testing
and quality. Certifications for gluten-free, Kosher, Organic and other relevant ingredient criteria will be required on an as-needed
basis. The majority of materials and ingredients we will purchase will be presently available from several suppliers. However,
our specialized approach to formulation and quality standards may result in reduced availability of some ingredients due to weather,
governmental controls or price/supply fluctuations, which would lead to price fluctuations. Therefore, we expect to clearly delineate
our supply program qualifications and enroll suppliers in our own supplier program to ensure continued access to the ingredients
we seek for production.
Seasonality
We expect
that our operating results will not be materially affected by seasonal factors, including fluctuations in costs of raw materials,
holiday and seasonal programming and weather conditions. Our products are “functional” beverages chosen by consumers
who ascribe to a certain lifestyle, and as such we do not expect our products to be impacted by seasonal factors.
Our
Competition and Competitive Strengths
Our products
will compete with many varieties of liquid refreshment, including water products, soft drinks, juices, fruit drinks, energy drinks
and sports drinks, as well as powdered drinks, coffees, teas, dairy-based drinks, functional beverages and various other nonalcoholic
beverages. We will also compete with bottlers and distributors of national, regional and private label products. Several competitors,
including those that dominate the beverage industry, such as Nestlé S.A., PepsiCo and The Coca-Cola Company, have greater
financial resources than we have and aggressive promotion of their products may adversely affect sales of our brands.
The principal
methods of competition in the beverage industry are price and promotional activity, advertising and marketing programs, point-of-sale
merchandising, retail space management, customer service, product differentiation, packaging innovations and distribution methods.
We believe we will be able to differentiate ourselves in the following ways:
|
|
·
|
Formulations
of products for specific, targeted audiences who have unique health and exercise requirements
|
|
|
·
|
Infusion
of ingredients with scientific research regarding the effectiveness of the products to
address specific health and wellness needs.
|
|
|
·
|
Utilization
of ingredients sourced from quality companies committed to our quality standards
|
|
|
·
|
Access
to research opportunities and outcomes to support our future family of functions beverages
|
|
|
·
|
Regulatory
capacity that ensures brands and stores are selling product that meets the standards
of states and governments
|
|
|
·
|
Access
to industry stakeholders, influencers and high-profile consumers who can provide third-party
endorsement of our products.
|
Our
Growth Strategies
We expect
that our first product will be spring water and that we will white label our spring water for third parties. Although we
are in negotiations with third parties for the white label of our expected first product (spring water) we have not yet received
any purchase orders or entered into any contracts for the sale of this product because our facility is not yet fully licensed.
We have completed the licensing of our facility and expect to launch our white label spring water sometime in the first
quarter of 2020. Following the launch of our first product, we will be working on the development of other products and expect
to launch other products in the second half of 2020.
Intellectual Property
We do not
currently own any trademarks but expect that we will trademark our future brands once launched. We intend to maintain all registrations
of our future significant trademarks and use our future trademarks in the operation of our businesses.
We also own the URL www.greeneconcepts.com.
Governmental Regulation
The operation
of our facility and the production, distribution and sale of our future products in the United States are subject to the Federal
Food, Drug and Cosmetic Act; the Dietary Supplement Health and Education Act of 1994; the Occupational Safety and Health Act;
the Lanham Act; various environmental statutes; and various other federal, state and local statutes regulating the production,
transportation, sale, safety, advertising, labeling and ingredients of such products. We believe that we are in compliance, in
all material respects, with such existing legislation and that prior to the operation of our facility, we will have all required
licenses to operate.
During
phase three of our plan of operation we will initiate development of nutritionally enhanced beverages. Nutritionally enhanced
beverages are beverages that are fortified with vitamins and minerals for greater nutritional value. In addition to enhancing
our bottled water with vitamins and minerals, we also plan, subject to compliance with applicable laws, to include CBD in our
bottled water. However, we make no claim that that the addition of CBD to our bottled water in and of itself will make our bottled
water nutritionally enhanced.
The Food
and Drug Administration (FDA) is responsible for the safety of bottled drinking water. The FDA has set Current Good Manufacturing
Practices (CGMPs) specifically for bottled water. The FDA requires bottled water producers, like us, to:
|
|
·
|
Process,
bottle, hold and transport bottled water under sanitary conditions;
|
|
|
·
|
Protect
water sources from bacteria, chemicals and other contaminants;
|
|
|
·
|
Use
quality control processes to ensure the bacteriological and chemical safety of the water;
|
|
|
·
|
Sample
and test both source water and the final product for contaminants.
|
The FDA
monitors and inspects bottled water products and processing plants under its food safety program. When FDA inspects plants, the
FDA verifies that the plant's product water and operational water supply are obtained from an approved source; inspects washing
and sanitizing procedures; inspects bottling operations; and determines whether companies analyze their source water and product
water for contaminants.
As we begin
to incorporate dietary supplements into our water to create nutritionally-enhanced beverages, we will become subject to additional
certification and regulatory compliance by the FDA. Compliance efforts relating to dietary supplements to be included in our water
are contained in Section 403(r)(6) of the Federal Food, Drug, and Cosmetic Act (the Act) (21 U.S.C. 343(r)(6)). Section 403(r)(6)
of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 343(r)(6)) requires that a manufacturer of a dietary
supplement making a nutritional deficiency, structure/function, or general well-being claim have substantiation that the claim
is truthful and not misleading. Under section 403(r)(6)(A) of the FD&C Act, such a statement is one that “claims a benefit
related to a classical nutrient deficiency disease and discloses the prevalence of such disease in the United States, describes
the role of a nutrient or dietary ingredient intended to affect the structure or function in humans, characterizes the documented
mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function, or describes general well-being
from consumption for a nutrient or dietary ingredient.” We will only need to collect information to substantiate our product's
nutritional deficiency, structure/function, or general well-being claim if we choose to place a claim on our product's label.
We expect
that it will take us approximately until the end of the first quarter 2020 to prepare our North Carolina Facility to comply with
FDA regulations for CGMPs and to substantiate any claim we make on the label of our products that contain dietary supplements
before we can begin to sell
any products containing dietary supplements. We expect that compliance costs for required audits and evaluation and substantiation
for dietary supplement claims for our bottled water containing dietary supplements will cost about $15,000 per year.
Certain
states and localities require a deposit or tax on the sale of certain beverages. These requirements vary by each jurisdiction.
Similar legislation has been proposed in certain other states and localities, as well as by Congress. We are unable to predict
whether such legislation will be enacted or what impact its enactment would have on our business, financial condition or results
of operations.
Our facility
is subject to federal, state and local environmental laws and regulations. We do not expect that compliance with these provisions
will have any material adverse effect on our financial or competitive position. We believe our future practices and procedures
for the control and disposition of toxic or hazardous substances will comply in all material respects with applicable law.
Employees and Contractors
We currently
have two employees, Leonard Greene, our CEO, and Kenneth Porter, our plant manager. Mr. Porter is located in North Carolina. Mr.
Greene operates out of a home office in Fresno, California, but travels to our facility in North Carolina as needed. In addition,
we use independent contractors for management, legal, accounting and administrative support.
Legal Proceedings
We know of no
existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation.
There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder,
is an adverse party or has a material interest adverse to our interest.
Recent
Developments
On January
11, 2020, we cancelled 225,000,000 shares of our common stock that were registered in the name of Andy Greider. The shares were
cancelled pursuant an understanding between us and Mr. Greider that dated back to October 2018 and is evidenced by a written letter
from Mr. Greider to our transfer agent. Mr. Greider previously provided consulting services to our company and agreed to forfeit
these shares when he ceased providing such services.
DESCRIPTION
OF PROPERTY
Currently,
our principal executive offices are located at 13195 U.S. Highway 221 N, Marion, North Carolina, 28752, which is where our 55,000
sq. ft. beverage and bottling facility is located.
We
believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate
for our business.
We
do not currently lease or own any other real property.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS
You
should read the following discussion and analysis of our financial condition and results of our operations together with our financial
statements and related notes appearing at the end of this offering circular. This discussion contains forward-looking statements
reflecting our current expectations that involve risks and uncertainties. Actual results and the timing of events may differ materially
from those contained in these forward-looking statements due to a number of factors, including those discussed in the section
entitled “Risk Factors” and elsewhere in this offering circular.
Overview
Since our inception we operated different
businesses under different names before changing our name to Greene Concepts, Inc. and engaging in our current business. Through
our wholly owned subsidiary, Mammoth, we are now a bottling and beverage company committed to providing the world with high quality,
healthy, and enhanced beverage choices. Our beverage and bottling facility is located in Marion, North Carolina.
Our beverage
and bottling facility is not yet operational and we have not yet sold any products. We are focused on producing a variety of beverage
product lines including, but not limited to, spring and artesian water, cannabinoid, or CBD, infused beverages, pH balanced water
and beverage offerings, as well as enhanced athletic drinks in addition to other product offerings. Additionally, Mammoth will
act as a third-party producer and bottler of "white label" beverage and water products. White label bottling services
are provided for clients that desire to market their own product formulations, brand name and labeling while outsourcing the production
and bottling of their products to Mammoth.
Before
acquiring Mammoth on February 6, 2019, we operated our legacy business, which was the manufacture and distribution of a line of
25 high quality consumer focused inkjet kits. On April 30, 2019, our board of directors made a determination to wind down our
legacy business and to transition into the beverage and bottling business. During the same period, Mammoth began the process of
performing required maintenance to revitalize all the equipment and facility infrastructure in order to relaunch production at
the plant. At the time of the acquisition all of the plant equipment was in good condition although the equipment had not operated
for several years and it did require a thorough inspection and light maintenance to assure proper operation when the bottling
lines are relaunched. At the time of the acquisition, we hired, Kenneth Porter, a 30+ year veteran of the beverage and bottling
industry, as plant manager to oversee operations as well as the revitalization and expected relaunch of the facility.
The Food
and Drug Administration, or FDA, requires adherence to current good manufacturing practice, or CGMP, regulations for the processing
and bottling of bottled drinking water, which includes facility inspection and documentation of corrective measures and reporting
requirements, as well as new requirements for hazard assessments and food safety, or HACCP, plans mandated by the Food Safety
and Modernization Act, or FSMA. Final preparations for inspection are underway, including building and facility maintenance such
as pressure washing, painting, general cleaning, and minor building repairs.
In addition
to complete cleaning and maintenance of the 55,000 square foot facility, standard operating policies and procedures must be documented
in accordance with federal legislation. This documentation includes conducting and reporting of microbial testing of source water
and any finished product, which must be completed prior to initiating filling and packaging of bottles for shipment from our production
lines.
In concert
with the coordination of the final preparations for inspection and the launching of production, we are presently working with
a number of distributors and retailers to presale orders for production once the plant is fully operational. We expect to relaunch
the plant during the first quarter of 2020.
Financial Results
General
Since 2011,
we have operated as a consumer direct marketing ink and toner technology distribution company, which markets and sells over 1,000
advanced and exceptional proprietary ink and toner “Do It Yourself” refilling systems and other products or inkjet
and toner cartridges. We marketed our products under the name ‘INKWAY USA’ and our business model was consumer direct
marketing to ensure long-term growth and stability, sales, and fulfillment for retail products. We also competed in the global
marketplace by marketing and signing distributors in Europe, North America, and Asia. These marketing efforts were coordinated
from our prior corporate offices in California.
In February
2019, we acquired Mammoth in support of our new strategic vision to become a bottling and beverage company. See “Description
of Business – Terms of Acquisition of Mammoth Ventures Inc.” for a description of the terms of our acquisition of
Mammoth. The acquisition transaction was consummated on February 6, 2019.
On April
30, 2019, the board of directors made a determination to wind down our legacy inkjet business and to transition into the beverage
and bottling business.
We
expect our financial condition to change as we transition into our new business model. The current operations will be significantly
different than the prior legacy business.
Results of Operations
Three-month period ended October
31, 2019 compared to October 31, 2018
The following table sets forth key
components of our results of operations during the nine-month period ended April 30, 2019 and 2018.
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
April
30,
|
|
|
|
|
Change
|
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
$
|
|
|
|
%
|
|
|
Revenues
|
$
|
-
|
|
|
$
|
12,860
|
|
|
$
|
(12,860
|
)
|
|
|
(100
|
)
|
|
Cost of revenues
|
|
-
|
|
|
|
5,735
|
|
|
(5,735
|
)
|
|
|
(100
|
)
|
|
Gross Margin
|
|
-
|
|
|
|
7,785
|
|
|
|
(7,785
|
)
|
|
|
(100
|
)
|
|
Operating Expenses
|
|
93,725
|
|
|
34,938
|
|
|
|
58,787
|
|
|
62.72
|
|
|
Net loss
|
$
|
(123,559)
|
|
$
|
(27,273)
|
|
$
|
96,286
|
|
|
72.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues.
During the three-month period ended October 31, 2019 we generated revenues from our legacy inkjet operations. Our revenues decreased
$12,860 or 100% from $12,860 for the period ended October 31, 2018 as compared to $0 for the period ended October 31, 2019. The
decrease in revenues is the result of the discontinuation of our legacy business. We do not expect to generate revenues in the
near term as we transition from our legacy operations to our new business model.
Cost
of revenues. Our cost of revenues includes marketing and advertising expenses. Our cost of revenues decreased by $5,735
or 100%, to $0 for the three-month period ended October 31, 2019 from $5,735 for the three-month period ended October 31, 2018.
This decrease was due to the discontinuation of our legacy business.
Gross
margin. Our gross margin decreased by $7,785 or 100%, to $0 for the three-month period ended October 31, 2019 from $7,785
for the three-month period ended October 31, 2018. Gross profit as a percentage of revenues (gross margin) was 0% and 61% for
the three-month period ended October 31, 2019 and 2018, respectively.
Operating
expenses. Total operating expenses during the period ended October 31, 2019 were $93,725 compared to $34,938 for the same
period in 2018, which is an increase of $58,787 or 62.72%. The reason for the increase in operating expense between the two periods
is the result of the increased administrative expense, professional fees and depreciation and amortization described above.
Net
loss. As a result of the cumulative effect of the factors described above, our net loss increased by $96,286 or 77.92%,
to $123,559 for the three-month period ended October 31, 2019 from $27,273 for the same period in 2018.
Year ended July 31, 2019 compared
to July 31, 2018
The following table sets forth key
components of our results of operations during the year ended July 31, 2019 and 20181.
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
July
31,
|
|
|
|
|
Change
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
$
|
|
|
|
%
|
|
Revenues
|
$
|
|
79,080
|
|
|
$
|
50,160
|
|
|
$
|
28,920
|
|
|
|
36.57
|
|
Cost of revenues
|
|
|
18,130
|
|
|
|
25,849
|
|
|
|
(7,719
|
)
|
|
|
(42.58)
|
|
Gross Margin
|
|
|
60,950
|
|
|
|
24,311
|
|
|
|
36,639
|
|
|
|
60.11
|
|
Operating expenses
|
|
|
310,915
|
|
|
|
120,449
|
|
|
|
190,466
|
|
|
|
61.26
|
|
Net loss
|
$
|
|
(287,839)
|
|
$
|
|
(96,138)
|
|
$
|
|
191,701
|
|
|
|
60.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues.
During the year ended July 31, 2019 we generated revenues from our legacy inkjet operations. Our revenues increased $28,920 or
36.57% from $50,160 for the year ended July 31, 2018 as compared to $79,080 for the year ended July 31, 2019. The increase in
revenues is the result of increased marketing driven sales. We do not expect to generate revenues in the near term as we transition
from our legacy operations to our new business model.
Cost
of revenues. Our cost of revenues includes marketing and advertising expenses. Our cost of revenues decreased by $7,719
or -42.58%, to $18,130 for the year ended July 31, 2019 from $25,849 for the year ended July 31, 2018. This decrease was mainly
due to reduced marketing activities following the acquisition of Mammoth.
Gross
margin. Our gross margin increased by $36,639 or 60.11%, to $60,950 for the year ended July 31, 2019 from $24,311 for
the year ended July 31, 2018. Gross margin as a percentage of revenues was 77% and 48% for the year ended July 31, 2019 and 2018,
respectively.
Operating
expenses. Our operating expenses include sales commissions, travel expenses, taxes and similar expenses. Our operating
expenses increased by $190,466, or 61.67%, to $310,915 for the year ended July 31, 2019 from $120,449 for the year ended July
31, 2018. Such increase was primarily due to expenses associated with relaunching our bottling facility.
Net
loss. As a result of the cumulative effect of the factors described above, our net loss increased by $191,701 or 66.60%,
to $287,839 for the year ended July 31, 2019 from $96,138 for the year ended July 31, 2018.
Plan of Operation
Our primary
goal for our first year of operation will be commence the operation of our North Carolina bottling facility and begin to generate
revenues from the sales of our proposed products. Our plan, assuming that we raise at least $750,000 in gross proceeds (or 25%
of our maximum offering amount), follows below. We are highly dependent upon the success of this offering in implementing the
following plan.
Phase One (Months
1-3)
Estimated
cost: $60,000, allocated as follows: $20,000 – Engineering and Prototyping, $20,000 - Production and Inventory; and $20,000
Administrative and Corporate Expenses.
Immediately,
we plan to cause our plant to become operational during the first quarter of 2020. We expect to hire additional personnel to satisfy
needs in the following areas: production, marketing and accounting staff. We will begin production of our first brand of bottled
water along with launch a modest marketing campaign.
Phase
Two (Months 4-6)
Estimated cost: $150,000, allocated as follows: $130,000 - Production and Inventory; and $20,000 Administrative and Corporate
Expenses.
Following
successful phase one, we will begin production and launch of the company’s first bottled water brand. The company will
additionally
seek opportunities to produce customer white labeled bottled water for third party customers.
Phase
Three (Months 7-9)
Estimated
cost: $200,000, allocated as follows: $100,000 – Production and Inventory; $50,000 Administrative and Corporate Expenses;
$45,000 – Marketing; and $5,000 – Professional Fees and Compensation
During
phase three, we will initiate development of nutritionally enhanced beverages. Nutritionally enhanced beverages are beverages
that are fortified with vitamins and minerals for greater nutritional value. In addition to enhancing our bottled water with vitamins
and minerals, we also plan, subject to compliance with applicable laws, to include CBD in our bottled water. However, we make
no claim that that the addition of CBD to our bottled water in and of itself will make our bottled water nutritionally enhanced.
As
we begin to incorporate dietary supplements into our water to create nutritionally-enhanced beverages, we will become subject
to additional certification and regulatory compliance by the FDA. We expect that it will take us approximately until the end of
the first quarter 2020 to prepare our North Carolina Facility to comply with FDA regulations for Current Good Manufacturing Practices
and to substantiate any claim we make on the label of our products that contain dietary supplements before we can begin to operate.
We expect that compliance costs for required audits and evaluation and substantiation for dietary supplement claims for our bottled
water containing dietary supplements will cost about $15,000 per year.
Phase
Four (Month 10-12)
Estimated cost: $200,000
, allocated as follows: $155,000 – Marketing; $35,000 – Administrative and Corporate Expenses; and $10,000 Professional
Fees and Compensation. We hope to begin expanding our market penetration and distribution for both bottled water and CBD-infused
beverages in this quarter and will concentrate our efforts on promoting the company’s product lines in the markets in which
we plan to distribute our products
We hope
to begin expanding our market penetration and distribution for both bottled water and nutritionally enhanced beverages in this
quarter and will concentrate our efforts on promoting the company’s product lines in the markets we plan to commence distribution
in.
Liquidity and Capital
Resources
We
are highly dependent on the success of this offering to meet our ongoing working capital needs and to fully execute our business
plan. The maximum aggregate amount of this offering will be required to fully implement our business plan. Historically, we have
been funded through the sale of our equity and debt securities, including convertible debt. In the event our proposed offering
is not successful, we will need to seek to raise capital through alternative sources, such as a private placement of our equity
or debt securities. However, we have not identified any potential source of alternative financing. There can be no guarantees
that any such financing would become available to us. If we cannot raise additional proceeds via a private placement of our equity
or debt securities, or secure a loan, we would be required to cease business operations. As a result, investors would lose all
of their investment.
Three-month period
ended October 31, 2019 compared to October 31, 2018
Our cash, total current assets,
total assets, total current liabilities and total liabilities as of October 31, 2019 and 2018 were as follows:
|
|
|
October
31, 2019
|
|
October
31, 2018
|
|
Cash
|
|
$
|
3,249
|
|
|
|
7,981
|
|
|
Accounts
Receivable
|
|
|
—
|
|
|
|
22,876
|
|
|
Inventory
|
|
|
—
|
|
|
|
448,161
|
|
|
Total
Current Assets
|
|
|
3,249
|
|
|
|
479,018
|
|
|
Total
Assets
|
|
|
3,250.900
|
|
|
|
680,412
|
|
|
Total
Current Liabilities
|
|
|
2,092,449
|
|
|
|
1,667,957
|
|
|
Total
Liabilities
|
|
|
2,092,449
|
|
|
|
1,667,957
|
|
|
Stockholders’
Equity (Deficit)
|
|
$
|
1,158,401
|
|
|
|
(987,545
|
)
|
Our
total current assets decreased by $475,769 when comparing the current assets as of October 31, 2019 to current assets of October
31, 2018 due to the divesture of the legacy business and the elimination of Accounts Receivables and Inventory. Our total liabilities
at October 31, 2019 increased $424,492 from the same period in the prior year because of convertible notes issued by the Company
to finance its working capital needs.
Year ended July 31,
2019 compared to July 31, 2018
Our cash, total current assets,
total assets, total current liabilities and total liabilities as of July 31, 2019 and July 31, 2018 were as follows:
|
|
|
|
|
July 31, 2019
|
|
|
|
July 31, 2018
|
|
Cash
|
|
|
$
|
|
|
|
94,048
|
|
|
|
$
|
|
|
|
10,040
|
|
|
Accounts Receivable
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
27,580
|
|
|
Inventory
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
453,216
|
|
|
Total Current Assets
|
|
|
|
|
|
|
94,048
|
|
|
|
|
|
|
|
490,836
|
|
|
Total Assets
|
|
|
|
|
|
|
3,344,940
|
|
|
|
|
|
|
|
709,012
|
|
|
Total Current Liabilities
|
|
|
|
|
|
|
1,926,808
|
|
|
|
|
|
|
|
1,669,284
|
|
|
Total Liabilities
|
|
|
|
|
|
|
1,926,808
|
|
|
|
|
|
|
|
1,669,284
|
|
|
Stockholders’ Equity (Deficit)
|
|
|
$
|
|
|
|
1,418,132
|
|
|
|
$
|
|
|
|
(960,272
|
)
|
Our
total current assets decreased by $396,788 when comparing the current assets as of July 31, 2018 to current assets of July 31,
2017, due to the divestiture of our legacy business and the elimination of accounts receivable and inventory. Our total liabilities
at July 31, 2019 increased $257,524 as the result of because of convertible notes issued by the Company to finance its working
capital needs.
Capital Expenditures
and Other Obligations
In
conjunction with the purchase of Mammoth, we entered into a long term financing agreement with Mammoth’s prior owner, BNL
Capital. This financing facilitated the purchase of Mammoth and its assets. We believe
the servicing of this debt will be satisfied through future operations. See “Description of Business – Terms
of Acquisition of Mammoth Ventures Inc.” for a description of the terms of our acquisition of Mammoth.
See “Securities Being
Offered – Convertible Notes” for a description of the terms of our outstanding convertible notes.
Off-Balance Sheet Arrangements
As of October 31, 2019, we
did not have any off-balance sheet arrangements.
Critical Accounting Policies
and Estimates
The
preparation of financial statements in conformity with GAAP requires our management to make assumptions, estimates and judgments
that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any.
We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and results of operation. Critical accounting policies
are those that are most important to the portrayal of our financial condition and results of operations and require management’s
difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates
are particularly sensitive because of their significance to financial statements and because of the possibility that future events
affecting the estimate may differ significantly from management’s current judgments. We believe the accounting policies
described in Note 1 to our financial statements – Significant Accounting Policies – describe our critical accounting
policies and estimates.
DIRECTORS,
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The following
table sets forth the name and position of each of our current executive officers, director and significant employees.
|
Name
|
|
Position
|
|
Age
|
|
Term of Office
|
|
Approximate hours per week for part-time employees
|
|
Leonard Greene
|
|
Chief Executive Officer; Director
|
|
|
66
|
|
|
|
1 Year
|
|
|
|
20
|
|
|
Kenneth Porter
|
|
Plant Manager
|
|
|
58
|
|
|
|
1 Year
|
|
|
|
N/A
|
|
Leonard
Greene, Chief Executive Officer
Lenny
M. Greene is the current Chief Executive Officer, President and Director of the Company and has held that position since November
19, 2019. On November 19, 2019 Mr. Greene resumed the role of company CEO and President after having served in both roles from
2003 - 2018. During his previous tenure the company manufactured and distributed high-quality ink technology formulations for
wide format, narrow format and industrial printing applications. Mr. Greene laid the groundwork to build the organization to an
elevated level of competitiveness and professionalism while taking the company public (OTC: INKW) thereby magnifying expansion
opportunities toward near-term growth and long-term value. He brings over thirty years of experience to Greene Concepts with an
impressive acumen of negotiating and closing deals with Fortune 500 corporate accounts. Mr. Greene is an expert dealing with corporate
executives and purchasing agents. His resume includes spearheading sales and service and repair contracts as CEO for Comservco,
a personal computing and Wide Area Network infrastructure business, from $0 to $15 million over a three-year period. Mr. Greene
has managed over 200 nationwide company accounts to include: ABC, CBS, Exxon Corporation, New York City (All City Agencies), New
York Telephone Company, Western Electric, Citibank and Bank of New York.
Kenneth
Porter, Plant Manager
Mr. Porter
has 36 years of experience in high speed food and beverage production, managing multiple plants, the maintenance, equipment &
processes. Mr. Porter has worked as a manager for Pepsi Bottling Group, Universal Food & Beverage, Summit Beverage Group
and prior to joining Greene Concepts, Ice River Springs, a bottling company with an annual volume of 25 million cases and 125
employees.
His career
began in 1983 working as Production Manager for Coca-Cola Bottling Co Consolidated. In 1994 he was promoted to Plant Manager
for a facility with an annual volume of 20 MM cases, and managed 105 hourly employees and 12 managers.
Mr. Porter’s
skills include PM systems, PLCs, Predictive maintenance, inferred & vibration analysis, Strong people/ coaching skills, Strong
problem solving skills, P&L and budgets, Costing of products, Cost analysis, Capital Appropriations, Managed multi-million
dollar projects, Removed and installed complete bottling lines, Personally installed over 20 pieces of major bottling, blow
molding and support equipment, Master sanitation programs, Warehouse management, inventory control & Union Plants. He
has training/certification in Computers, T.Q.M, S.P.C, T.P.M, Team Building, Self-directed work teams, M.R.P, E.R.P, OSHA &
GMP regulations, USDA, FDA, HACCP, SQF, NSF, Six Sigma Black Belt and lean manufacturing champion, Safety Committees and Pepsi
CQV process.
Directors
are elected until their successors are duly elected and qualified.
Family
Relationships
There
are no family relationships between any director, executive officer, person nominated or chosen to become a director or executive
officer or any significant employee.
Legal
Proceedings
To the
best of our knowledge, none of our directors or executive officers has, during the past five years:
-
been convicted in a criminal
proceeding (excluding traffic violations and other minor offences); or
-
had any petition under the federal
bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed
by a court for the business or property of such person, or any partnership in which he was general partner at or within two years
before the time of such filing, or any corporation or business association of which he was an executive officer at or within two
years before the time of such filing.
COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS
Summary
Compensation Table
The following
table sets forth the annual compensation of each of the three highest paid persons who were executive officers or directors during
our last completed fiscal year:
|
Name
|
|
Position
|
|
Cash Compensation
|
|
Other Compensation*
|
|
Total Compensation
|
|
Karen Howard
|
|
Former Chief Executive Officer; Director
|
|
$
|
12,000
|
|
|
$
|
75,000
|
|
|
$
|
87,000
|
|
|
Leonard Greene**
|
|
Chief Executive Officer, Director
|
|
$
|
36,847
|
|
|
$
|
0
|
|
|
$
|
36,847
|
|
*Upon becoming
Chief Executive Officer on January 18, 2019, Ms. Howard received 30,000 shares of Preferred Class A Stock. Those shares are convertible
on a 1 to 100 basis into 3,000,000 shares of common stock. On January 18, 2019, the Company’s common stock closed at a price
of $0.0250, which results in $75,000 of other compensation. Ms. Howard’s consulting agreement was assumed by our subsidiary,
Mammoth Ventures, Inc. upon Ms. Howard’s simultaneous resignation as CEO of the Company and appointment as Mammoth Ventures,
Inc.’s Chief Innovation Officer on November 19, 2019. Ms. Howard’s consulting agreement expired on January 31, 2020,
however, Mammoth Ventures, Inc. continues to pay Ms. Howard the same compensation and Ms. Howard continues to provide the same
services as contemplated by the consulting agreement under an at-will verbal arrangement on a month-to-month basis.
** Mr. Greene’s
total compensation for the most recent fiscal year ended July 31, 2019 was $36,847. This compensation was paid to Mr. Greene for
his services rendered as CEO of the Company during the period of August 1, 2018 through January 17, 2019.
In connection
with reinstating Mr. Greene as Chief Executive Officer of the Company and his agreement to forgive certain outstanding indebtedness
owed to him, the Company issued to Mr. Greene a total of 517,000 shares of Preferred Class A Stock, which convert on a 1 to 100
basis for common stock and have 1,000 votes per share.
Employment
Agreements
The Company
has entered into the following employment agreement that we believe is material to our business:
Leonard
Greene
Effective
as of November 19, 2019, we entered into an employment offer letter with Mr. Leonard Greene. Pursuant to the terms of the offer
letter, Mr. Greene is appointed as the Chief Executive Officer of our company. His duties include the general management of the
affairs of our company, together with the powers and duties usually incident to the office of chief executive officer. His monthly
compensation is $7,000. He is eligible to participate in the standard benefits plans offered to similarly situated employees of
our company. He is also eligible for annual bonuses at the sole discretion of the Board of Directors. The agreement may be terminated
at any time by either party with or without cause or advance notice.
Consulting
Agreements
We have
entered into the following consulting agreements that we believe are material to our business:
Dr.
Susan Hewlings
On February
5, 2019, we entered into a contract services agreement with Dr. Susan Hewlings. Pursuant to the terms of the contract, Dr. Hewlings
is retained as the Director of Scientific Formulations. Her annual compensation is fifteen thousand five hundred (15,500) shares
of our Series A Preferred Stock, issuable within 30 days of signing the agreement. The duration of the contract is one year and
may be renewed on a year-to-year basis. We may terminate the agreement upon Dr. Hewlings’ permanent disability, or if our
operations are discontinued.
Karen
Howard
Karen
Howard served as our Chief Executive Officer January 18, 2019 through November 19, 2019. Upon her resignation as Chief
Executive Officer, Ms. Howard was simultaneously appointed as the Chief Innovation Officer of our subsidiary, Mammoth Ventures,
Inc., and acts in such capacity as a contractor to the Company. Pursuant to the terms of her consulting agreement, we are required
to pay Ms. Howard for her services at the rate of one thousand dollars ($1,000) per month. In addition, we issued to Ms. Howard
thirty thousand (30,000) shares of our Series A Preferred Stock. In addition, we reimbursed Ms. Howard for any and all necessary,
customary, and usual expenses incurred by her while traveling for and on behalf of the Company pursuant to Company's directions.
As of November 19, 2019, Mammoth assumed all of our obligations under Ms. Howard’s consulting agreement, although we remained
primarily liable thereunder as well. The consulting agreement expired on January 31, 2020, however, Mammoth Ventures, Inc. continues
to pay Ms. Howard the same compensation and Ms. Howard continues to provide the same
services as contemplated by the consulting agreement under an at-will verbal arrangement on a month-to-month basis. Pursuant to
the verbal agreement, Ms. Howard is now responsible for managing the process of innovation and change management at Mammoth Ventures.
Dr.
Douglas Kalman
On February
5, 2019, we entered into a contract services agreement with Dr. Douglas Kalman. Pursuant to the terms of the contract, Dr. Kalman
is retained as Scientific Director of our company. His annual compensation is twenty-two thousand five hundred (22,500) shares
of Series A Preferred Stock of our company, issuable within 30 days of signing the agreement. The duration of the contract is
one year and may be renewed on a year-to-year basis. We may terminate the agreement upon Dr. Kalman’s permanent disability,
or if our operations are discontinued.
Dr.
Lane R. Phillips
On April
10, 2019, we entered into a contract services agreement with Dr. Lane R. Phillips. Pursuant to the terms of the contract, Dr.
Phillips is retained as Medical Director of our company. His annual compensation is ten thousand (10,000) shares of Series A Preferred
Stock of our company. The duration of the contract is one year and may be renewed on a year-to-year basis. We may terminate the
agreement upon Dr. Phillips’ permanent disability, or if our operations are discontinued.
Dr.
William Rowe
On March
30, 2019, we entered into a contract services agreement with Dr. William Rowe. Pursuant to the terms of the contract, Dr. Rowe
is retained as the Advisory Board Director of our company. His annual compensation is thirty five thousand (35,000) shares of
Series A Preferred Stock of our company, issuable within 30 days of signing the agreement. The duration of the contract is one
year and may be renewed on a year-to-year basis. We may terminate the agreement upon Dr. Rowe’s permanent disability, or
if our operations are discontinued.
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The
following table sets forth information regarding beneficial ownership of our voting stock as of February 6, 2020 (i) by each of
our officers and directors who beneficially own more than 10% of our voting stock; (ii) by all of our officers and directors as
a group; and (iii) by each person who is known by us to beneficially own more than 10% of each class of our voting stock. Unless
otherwise specified, the address of each of the persons set forth below is in care of the company at 13195 U.S. Highway 221 N,
Marion, North Carolina, 28752.
|
Name
and Address of Beneficial Owner
|
Amount
of Beneficial Ownership(1)
|
Percent
of Common Stock(2)
|
Percent
of Preferred Class A Stock(3)
|
Percent
of Total Voting Stock(4)
|
|
Common
Stock
|
Preferred
Class A Stock
|
|
Loren Brown
c/o BNL Capital LLC
1356 Bennett Drive
Longwood, FL 32750
|
-
|
12,000,000(5)
|
*
|
91.47%
|
87.22%
|
|
Robert Levit
c/o BNL Capital LLC
1356 Bennett Drive
Longwood, FL 32750
|
-
|
12,000,000(5)
|
*
|
91.47%
|
87.22%
|
|
Leonard M. Greene
|
51,927,302(6)
|
517,000
|
7.98%
|
3.94%
|
4.14%
|
|
All
directors and officers as a group
|
51,927,302
|
517,000
|
7.98%
|
3.94%
|
4.14%
|
*Less than 1%.
|
|
(1)
|
Beneficial
Ownership is determined in accordance with the rules of the SEC and generally includes
voting or investment power with respect to securities. Each of the beneficial owners
listed above has direct ownership of and sole voting power and investment power with
respect to the shares. For each beneficial owner above, any securities acquirable within
60 days have been included in the denominator in accordance with SEC Rule 13d-3(d)(1).
|
(2)
Based on 637,861,741 shares of our Common Stock outstanding as of February 6, 2020.
(3)
Based on 13,119,500 shares of our Preferred Class A Stock outstanding as of the date of this offering circular. Shares
of Preferred Class A Stock are convertible into shares of Common Stock on the basis of 1 share of Common Stock for every 100 shares
of Preferred Class A Stock. Each share of Preferred Class A Stock is entitled to one thousand (1,000) votes per share on all matters
to which they are so entitled to vote.
|
|
(4)
|
Percentage
of Total Voting Stock represents total ownership with respect to all shares of our Common
Stock and Preferred Class A Stock, as a single class and giving effect to the 1,000 for
1 vote of the Preferred Class A Stock.
|
|
|
(5)
|
Loren
Brown and Robert Levit each own fifty percent (50%) of BNL Capital, LLC and are each
considered control persons of BNL Capital, LLC and, therefore, each are deemed to beneficially
own the 12,000,000 shares of Preferred Class A stock held by BNL Capital, LLC. On November
19, 2018, pursuant to a Stock Purchase and Sale Agreement by and between BNL Capital,
LLC and Mr. Greene, BNL Capital acquired 10 million shares of Preferred Class A Stock
from Mr. Greene in exchange for $18,000. In addition, on February 6, 2019, we issued
to BNL Capital, LLC a total of 2 million shares of our Preferred Class A Stock for no
consideration, other than as an inducement for BNL Capital, LLC to enter into the Stock
Purchase Acquisition Agreement and Merger Agreement and Promissory Note pursuant to which
the Company acquired Mammoth Ventures Inc. from BNL Capital, LLC.
|
|
|
(6)
|
The
Company issued Mr. Greene 517,000 shares of our Preferred Class A Stock on September
18, 2019, shortly before Mr. Greene was officially reinstated as our Chief Executive
Officer, as an inducement to him to be reinstated as our Chief Executive Officer and
to forgive certain outstanding indebtedness owed to him.
|
INTEREST OF
MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Except
as set forth below, since the beginning of our 2017 fiscal year, we have not entered into any transactions with any related persons
in which the amount involved exceeded the lesser of $120,000 and one percent of the average of our total assets at year-end for
the last two completed fiscal years.
As
of July 31, 2018, and July 31, 2017, the Company owed $1,466,845 and $1,045,827, respectively, to Leonard Greene, the Company’s
Chief Executive Officer. These loans were forgiven by Leonard Greene on November 19, 2019. The loan was a noninterest-bearing,
unsecured obligation, due upon demand.
On
February 8, 2019, we issued to BNL Capital, LLC a total of 2 million shares of our Preferred Class A Stock as compensation for
services that BNL Capital, LLC rendered to us in connection with our acquisition of Mammoth Ventures Inc.
SECURITIES BEING OFFERED
This offering relates to the sale
of up to 2,000,000,000 shares of Common Stock of the company.
Our authorized
capital stock consists of 3,000,000,000 shares of Common Stock, $0.0001 par value per share, and 20,000,000 shares of Preferred
Class A Stock, par value $0.0001. As of February 6, 2020, there are 637,861,741 shares of our Common Stock and 13,119,500 shares
of our Preferred Class A Stock issued and outstanding.
The following
is a summary of the rights of our capital stock as provided in our certificate of incorporation and bylaws. For more detailed
information, please see our certificate of incorporation and bylaws, which have been filed as exhibits to the offering statement
of which this offering circular is a part.
Common Stock
As of February 6, 2020, there were
637,861,741 shares of Common Stock issued and outstanding.
Voting
Rights. The holders of the Common Stock are entitled to one vote for each share held of record on all matters submitted to
a vote of the stockholders. Under our certificate of incorporation and bylaws, any corporate action to be taken by vote of stockholders
other than for election of directors shall be authorized by the affirmative vote of the majority of votes cast. Directors are
elected by a plurality of votes. Stockholders do not have cumulative voting rights.
Dividend
Rights. Subject to preferences that may be applicable to any then-outstanding holders of our preferred stock, holders of our
Common Stock are entitled to receive ratably dividends, if any, as may be declared from time to time by the board of directors
out of legally available funds.
Liquidation
Rights. In the event of our liquidation, dissolution or winding up, holders of Common Stock will be entitled to share ratably
in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities
and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of Preferred Stock.
Other
Rights. Holders of Common Stock have no preemptive, conversion or subscription rights and there are no redemption or sinking
fund provisions applicable to the Common Stock. The rights, preferences and privileges of the holders of Common Stock are subject
to, and may be adversely affected by, the rights of the holders of shares of any series of Preferred Stock.
Preferred Class A Stock
As of February 6, 2020, there were
13,119,500 shares of Preferred Class A Stock outstanding.
Voting
Rights. Holders of shares of Preferred Class A Stock vote together with the holders of Common Stock. Each share of Preferred
Class A Stock is entitled to one thousand (1,000) votes per share on all matters. Except as provided by law, the holders of shares
of Preferred Class A Stock vote together with the holders of shares of Common Stock as a single class.
In addition,
so long as any shares of Preferred Class A Stock remains outstanding, in addition to any other vote or consent of stockholders
required by our certificate of incorporation, the company will not, without the affirmative vote or consent of the holders of
a majority of the outstanding shares of Preferred Class A Stock: (i) effect a sale of all or substantially all of the company’s
assets or which results in the holders of the company’s capital stock owning less than fifty percent (50%) of the voting
power of the company, (ii) alter or change the rights, preference, or privileges of the Preferred Class A Stock, (iii) increase
or decrease the number of authorized shares of Preferred Class A Stock, (iv) authorize the issuance of securities having preference
over or on par with the Series A Preferred Stock, (v) effectuate a forward or reverse stock split or dividend of the company’s
Common Stock , or (vi) increase the maximum number of directors constituting the board of directors to a number greater than seven
(7); with holders of Preferred Class A Stock having the right, but not the obligation, to fill four (4) of such board seats.
Dividend
Rights. We are not required to pay dividends at any specific rate on the Preferred Class A Stock; provided, however, that
if any dividend is paid on the outstanding Common Stock, the Preferred Class A Stock would participate in such dividend on a pari
passu basis with the holders of Common Stock on an as converted to Common Stock basis.
Liquidation
Rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the company, whether voluntary
or involuntary,, before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders
of shares of Preferred Class A Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution
to its stockholders, an amount per share equal to the amount that would be paid to one hundred shares of Common Stock (subject
to adjustment), plus any dividends declared but unpaid thereon.
Conversion
Rights. Each share of Preferred Class A Stock is convertible at any time, after one year from the issuance of such share,
at the option of the holder into one hundred (100) shares of Common Stock for each share of Preferred Class A Stock, subject to
adjustment in the event of any stock splits, stock combinations, recapitalizations and similar transactions.
Other
Rights. Holders of Preferred Class A Stock have no preemptive or subscription rights and there are no redemption or sinking
fund provisions applicable to our Preferred Class A Stock.
Convertible
Notes
The following table provides a summary of our outstanding
convertible notes as of October 31, 2019, including date of issuance, outstanding balance, principal amount at issuance, maturity
date, conversion terms, name of holder of note and reason or consideration for issuance. We may issue additional convertible notes
from time to time.
As of
October 31, 2019, we had total obligations of $1,907,973 in principal amount (not including accrued interest) to lenders under
our outstanding convertible notes. Of this amount a total of $1,417,024.29 (not including accrued interest or default interest)
in principal amount of these notes was past due. Accordingly, these past due notes are in default and the holders of the past
due notes could bring an action against the company for its failure to pay the notes when due. However, we have obtained the non-binding
verbal agreement of the noteholder to forbear against bringing any such action against us for a period expiring at the earliest
on April 30, 2020. In addition, several other convertible notes come due over the next few months. We similarly expect that holders
of these other past due notes will forbear against bringing any action against us for a period expiring at the earliest on April
30, 2020. No assurance can be given that any holder of our notes will forbear until April 30, 2020 or any other date. Each such
holder has the right to bring an action against us immediately and may be able to bring an action in bankruptcy court against
us. Any such legal action would have a material adverse effect on our financial condition, operations, and future prospects. below
for further details.
|
Date
of Note Issuance
|
Outstanding
Balance ($)
|
Principal
Amount at Issuance ($)
|
Interest
Accrued ($)
|
Maturity
Date
|
Conversion
Terms (e.g. pricing mechanism for determining conversion of instrument to shares)
|
Name
of Noteholder
|
Reason
for Issuance (e.g. Loan, Services, etc.)
|
|
07/16/2014
|
$10,750.14
|
$15,000.00
|
$750.14
|
07/16/2015
|
Convertible
after one-year Conversion at $.00005 per share
|
Nuemark
Group LLC Shaun Diedrich
|
Loan
|
|
10/01/2018
|
$5,000.00
|
$5,000.00
|
$0.00
|
10/01/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/01/2018
|
$6,519.45
|
$6,000.00
|
$519.45
|
10/01/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/05/2018
|
$10,856.99
|
$10,000.00
|
$856.99
|
10/05/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/05,2018
|
$1,248.55
|
$1,150.00
|
$98.55
|
10/05/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/05/2018
|
$9,771.29
|
$9,000.00
|
$771.29
|
10/05/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/26/2018
|
$12,973.15
|
$12,000.00
|
$973.15
|
10/26/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/26/2018
|
$1,081.10
|
$1,000.00
|
$81.10
|
10/26/2009
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
10/26/2018
|
$9,970.95
|
$9,223.00
|
$747.95
|
10/26/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
11/15/2018
|
$10,767.12
|
$10,000.00
|
$767.12
|
11/15/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
12/11/2018
|
$11,352.75
|
$10,600.00
|
$752.75
|
12/11/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
12/28/2018
|
$1,604.22
|
$1,500.00
|
$104.72
|
12/28/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
Bradley
Wilson
|
Loan
|
|
12/17/2018
|
$10,696.99
|
$10,000.00
|
$696.99
|
12/17/2019
|
Convertible
after one-year Conversion at $.00005 per share
|
CDN
Associates Shaun Diedrich
|
Loan
|
|
01/16/2019
|
$5,315.62
|
$5,000.00
|
$315.62
|
01/16/2020
|
Convertible
after one-year Conversion at $.00005 per share
|
CDN
Associates Shaun Diedrich
|
Loan
|
|
02/06/2019
|
$1,234,953.35
|
$1,350,000.00
|
$15.312.33
|
02/06/2024
|
None
|
BNL
Capital LLC
|
Loan
|
|
02/06/2019
|
$26,463.01
|
$25,000.00
|
$1,463.01
|
02/06/2020
|
Convertible
after one-year Conversion at $.00005 per share
|
Nuemark
Group Shaun Diedrich
|
Loan
|
|
02/08/2019
|
$15,871.23
|
$15,000.00
|
$871.23
|
02/08/2020
|
Convertible
after one-year Conversion at $.00005 per share
|
Nuemark
Group Shaun Diedrich
|
Loan
|
|
02/22/2019
|
$15,825.21
|
$15,000.00
|
$825.21
|
02/22/2020
|
Convertible
after one-year Conversion at $.00005 per share
|
Nuemark
Group Shaun Diedrich
|
Loan
|
|
03/06/2019
|
$2,080.23
|
$2,000.00
|
$80.23
|
03/06/2020
|
Convertible
after one-year Conversion at $.00005 per share
|
Shaun
Diedrich
|
Loan
|
|
3/18/2019
|
$12,895.56
|
$12,000.00
|
$895.56
|
3/18/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
4/2/2019
|
$10,696.99
|
$10,000.00
|
$696.99
|
4/2/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
4/11/2019
|
$16.001.10
|
$15,000.00
|
$1,001.10
|
4/11/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
4/15/2019
|
$52,271.23
|
$50,000.00
|
$3,271.23
|
4/15/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
04/16/2019
|
$13,846.25
|
$13,000.00
|
$864.26
|
4/16/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
4/17/2019
|
$5,323.84
|
$5,000.00
|
$323.84
|
4/17/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
4/30/2019
|
$90,113.97
|
$85,000.00
|
$5,113.97
|
4/30/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
5/10/2019
|
$21,144.11
|
$20,000.00
|
$1,144.11
|
5/10/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
5/23/2019
|
$21,058.63
|
$20,000.00
|
$1,058.63
|
5/23/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
6/5/2019
|
$20,973.15
|
$20,000.00
|
$973.15
|
6/5/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
6/20/2019
|
$20,874.52
|
$20,000.00
|
$874.52
|
6/20/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
7/2/2019
|
$10,397.81
|
$10,000.00
|
$397.81
|
7/02/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
7/15/2019
|
$10,355.07
|
$10,000.00
|
$355.07
|
7/15/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
7/26/2019
|
$12,989.63
|
$12,500.00
|
$398.63
|
7/26/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
8/13/2019
|
$14,363.62
|
$14,000.00
|
$363.62
|
8/13/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
8/29/2019
|
$16,841.75
|
$16,500.00
|
$341.75
|
8/29/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
9/03/2019
|
$2,541.67
|
$2,500.00
|
$41.67
|
09/03/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
9/11/2019
|
$2,541.10
|
$2,500.00
|
$41.10
|
9/11/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
9/26/2019
|
$2,528.77
|
$2,500.00
|
$28.77
|
9/26/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
9/27/2019
|
$25,279.45
|
$25,000.00
|
$279.45
|
9/27/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
10/07/2019
|
$5,039.5
|
$5,000.00
|
$39.45
|
10/07/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
10/11/2019
|
$5,032.88
|
$5,000.00
|
$32.88
|
10/11/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
10/16/2019
|
$5,024.66
|
$5,000.00
|
$24.66
|
10/16/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
|
10/25/2019
|
$15,029.59
|
$15,000.00
|
$29.59
|
10/25/2020
|
Conversion
at 50% to market
|
Bergamo
Consulting LLC Craig Coaches
|
Loan
|
Sean
Diedrich, Nuemark Group LLC and CDN Associates Promissory Notes
As of
October 31, 2019, we have issued an aggregate of $87,000 in principal amount of convertible promissory notes in favor Sean Diedrich
and his affiliates Nuemark Group LLC and CDN Associates. The aggregate outstanding unpaid principal and interest due under the
notes is $ 92,002.43. The notes were issued on the dates indicated above in the table and mature on the dates indicated above
in the table. Pursuant to their general terms, the notes mature on the one-year anniversary of issuance. The interest on the unpaid
principal balance is 8% per annum. Any outstanding unpaid principal balance following the maturity date will bear interest at
a rate of 16% per annum. The note holder has the right to convert all or part of the outstanding and unpaid principal amounts
under the notes into shares of Common Stock of the company at a conversion price of $0.00005 per share. The right to conversion
is, however, is subject to a blocker provision such that Mr. Diedrich and his affiliates may own no more than 9.99% of the outstanding
shares of common stock of the company.
Bradley
Wilson Promissory Notes
As of
October 31, 2019, we have issued an aggregate of $75,473.00 in principal amount of convertible promissory notes in favor of Bradley
Wilson. The aggregate outstanding unpaid principal and interest due under the notes is $81,227.17. The notes were issued on the
dates indicated in the table above. The general terms of the notes are substantially similar to the notes issued to Mr. Diedrich
and his affiliates as described above.
Bergamo
Consulting LLC Promissory Notes
As of
October 31, 2019, we have issued an aggregate of $480,500 in principal amount of convertible redeemable promissory notes in favor
of Bergamo Consulting LLC. The aggregate outstanding unpaid principal and interest due under the notes is $499,091.81.
The notes were issued on the dates indicated in the table above and mature on the dates indicated in the table above. Pursuant
to their general terms, the notes mature on the one-year anniversary of issuance. The interest on the unpaid principal balance
is 12% per annum. Bergamo Consulting LLC has the right to convert all or part of the outstanding and unpaid principal amounts
under the notes into shares of Common Stock of the company at a discounted conversion price of 50% of the lowest trading price
on the OTC Pink Market in the prior thirty (30) trading days. The right to conversion, is however, limited such that Bergamo Consulting
LLC and its affiliates may own no more than 9.99% of a class of voting securities of the company while such note is outstanding.
Transfer Agent and Registrar
The company
has engaged Pacific Stock Transfer Company, Inc. as its transfer agent and registrar. Pacific Stock’s address is 6725 Via
Austi Parkway, Suite 300, Las Vegas, NV 89119 and its telephone number is (800) 785-7782.
Shares
Eligible for Future Sale
After
giving effect to the completion of this offering, assuming we sell the maximum, we will have 2,637,861,741shares of Common Stock
outstanding. The 2,000,000,000 shares of Common Stock sold in this offering will be freely transferable without restriction or
further registration under the Securities Act, subject to the limitations on ownership set forth in our charter.
LEGAL
MATTERS
The validity
of the Common Stock offered hereby will be passed upon for us by Bevilacqua PLLC.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
We issued
to our legal counsel, Bevilacqua PLLC, 1,449,275 shares of our Common Stock as partial consideration for legal services rendered
to us on December 16, 2019.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed with the SEC an offering statement on Form 1-A under the Securities Act with respect to the Common Stock offered by this
offering circular. This offering circular does not contain all of the information included in the offering statement, portions
of which are omitted as permitted by the rules and regulations of the SEC. For further information pertaining to us and the Common
Stock to be sold in this offering, you should refer to the offering statement and its exhibits. Whenever we make reference in
this offering circular to any of our contracts, agreements or other documents, the references are not necessarily complete, and
you should refer to the exhibits attached to the offering statement for copies of the actual contract, agreement or other document
filed as an exhibit to the offering statement or such other document, each such statement being qualified in all respects by such
reference. Upon the closing of this offering, we will be subject to the informational requirements of Tier 1 of Regulation A and
will be required to file annual reports, semi-annual reports, current reports and other information with the SEC. We anticipate
making these documents publicly available, free of charge, on our website as soon as reasonably practicable after filing such
documents with the SEC.
You can
read the offering statement and our future filings with the SEC over the Internet at the SEC’s website at www.sec.gov. You
may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Room 1580, Washington,
D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
OCTOBER 31, 2019
GREENE CONCEPTS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2019 and OCTOBER 31, 2018
(Unaudited)
GREENE CONCEPTS, INC.
CONSOLIDATED BALANCE SHEETS
AT OCTOBER 31, 2019 & 2018
(UNAUDITED)
|
|
|
2019
|
|
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
3,249
|
|
|
$
|
7,981
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable
|
|
|
—
|
|
|
|
22,876
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
—
|
|
|
|
448,161
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS
|
|
|
3,249
|
|
|
|
479,018
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS-NET
|
|
|
3,246,001
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Start-Up Costs-Net
|
|
|
|
|
|
|
201,394
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility Deposit
|
|
|
1,650
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
3,250,900
|
|
|
|
680,412
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
37,491
|
|
|
|
87,330
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Interest Payable
|
|
|
35,200
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable (Note 2)
|
|
|
552,973
|
|
|
|
113,792
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Payable shareholder (Note 3)
|
|
|
1,466,835
|
|
|
|
1,466,835
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
2,092,499
|
|
|
|
1,667,957
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock $.0001 par value 20,000,000 Authorized 13,119,500 issued, & outstanding at October 31, 2019 & 10,000,000 issued, & outstanding at October 31, 2018
|
|
|
1,312
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $.0001 par value 3,000,000,000 Authorized 863,112,467 issued & outstanding at October 31,2019 & 3,000,000,000 Authorized 723,112,467 issued & outstanding at October 31,2018
|
|
|
86,311
|
|
|
|
72,311
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in-capital
|
|
|
3,161,408
|
|
|
|
645,649
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings
|
|
|
(2,090,630
|
)
|
|
|
(1,706,505
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
1,158,401
|
|
|
|
(987,545
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
3,250,900
|
|
|
|
680,412
|
|
The accompanying notes are an integral part of the financial statements.
GREENE CONCEPTS, INC.
CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2019 & 2018
(UNAUDITED)
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
—
|
|
|
$
|
12,860
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
REVENUE
|
|
|
—
|
|
|
|
12,860
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF SALES
|
|
|
—
|
|
|
|
5,735
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN
|
|
|
—
|
|
|
|
7,785
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
39,634
|
|
|
|
18,156
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
Fees
|
|
|
36,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
& Amortization
|
|
|
17,241
|
|
|
|
16,782
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating expenses
|
|
|
93,725
|
|
|
|
34,938
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
OPERATING INCOME/ (LOSS)
|
|
|
(93,725
|
)
|
|
|
(27,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance
and interest fees
|
|
|
(29,834
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME/ (LOSS)
|
|
$
|
(123,559
|
)
|
|
$
|
(27,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Loss per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(.00014
|
)
|
|
|
(.00004
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Number of Common Shares Outstanding
|
|
|
863,112,467
|
|
|
|
673,112,467
|
|
The accompanying notes are an integral part of the financial statements.
GREENE CONCEPTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2019 & 2018
(UNAUDITED)
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income / (Loss)
|
|
|
(123,559
|
)
|
|
|
(27,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided By operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
17,241
|
|
|
|
16,782
|
|
|
|
|
|
|
|
|
|
|
|
|
Write off acquisition debt
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/decrease in accounts receivable
|
|
|
|
|
|
|
4,704
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/ (decrease) in accounts payable
|
|
|
(2,697
|
)
|
|
|
(2,119
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Increase/ (decrease) in accrued interest payable
|
|
|
28,834
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in inventory
|
|
|
—
|
|
|
|
5,055
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
|
|
(80,181
|
)
|
|
|
(2,851
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Fixed Assets
|
|
|
(14,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
|
|
|
(14,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)/Increase in notes payable
|
|
|
93,500
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)/Increase in Due from Stockholder
|
|
|
(96,882
|
)
|
|
|
792
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
|
|
(3,382
|
)
|
|
|
792
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
90,799
|
|
|
|
(2,059
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
94,048
|
|
|
|
10,040
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS, END OF PERIOD
|
|
|
3,249
|
|
|
|
7,981
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the financial statements.
GREEN CONCEPTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE TWELVE MONTHS ENDED OCTOBER 31, 2019
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
PREFERRED SHARES
|
|
|
VALUE
|
|
|
STOCK
SHARES
|
|
|
COMMON
VALUE
|
|
|
ADDITIONAL
PAID
IN
CAPITAL
|
|
|
ACCUMULATED
EQUITY
(DEFICIT)
|
|
|
SHAREHOLDERS
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2017
|
|
|
10.000.000
|
|
|
$
|
1,000
|
|
|
|
1,034,712,401
|
|
|
$
|
103,471
|
|
|
$
|
614,489
|
|
|
$
|
(1,538,094
|
)
|
|
$
|
(864,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
|
50,000,06
|
|
|
|
5,000
|
|
|
|
(5,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CANCELLATION
OF SHARES
|
|
|
|
|
|
|
|
|
|
|
(465,000,000
|
)
|
|
|
(46,500
|
)
|
|
|
46,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
|
103,400,000
|
|
|
|
10,340
|
|
|
|
(10,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS JULY 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(96,138
|
)
|
|
|
(96,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2018
|
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
|
723,112,467
|
|
|
$
|
72,311
|
|
|
$
|
645,649
|
|
|
$
|
(1,679,232
|
)
|
|
$
|
(960,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
|
40,000,000
|
|
|
|
6,000
|
|
|
|
(6,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF PREFERRED SHARES FOR SERVICES
|
|
|
|
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
(209
|
)
|
|
|
(550)
|
|
|
|
(550)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACQUISITION
OF ASSETS AND DEBT ASSUMPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,666,243
|
|
|
|
|
|
|
|
2,666,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS JULY 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(287,289
|
)
|
|
|
(287,289
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2019
|
|
|
12,085,500
|
|
|
$
|
1,209
|
|
|
|
783,112,467
|
|
|
$
|
78,311
|
|
|
$
|
3,305,683
|
|
|
$
|
(1,967,071
|
)
|
|
$
|
1,418,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONVERSION
OF DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(136,172
|
)
|
|
|
|
|
|
|
(136,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF PREFERRED SHARES FOR SERVICES
|
|
|
|
|
|
|
103
|
|
|
|
|
|
|
|
|
|
|
|
(103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
|
80,000,000
|
|
|
|
8,000
|
|
|
|
(8,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS OCTOBER 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(123,559
|
)
|
|
|
(123,559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
OCTOBER 31, 2019
|
|
|
12,085,500
|
|
|
$
|
1,312
|
|
|
|
863,112,467
|
|
|
$
|
86,311
|
|
|
$
|
3,161,408
|
|
|
$
|
(2,090,630
|
)
|
|
$
|
1,158,401
|
|
The accompanying notes are an integral part of the financial statements.
GREENE CONCEPTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2019
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION AND OPERATIONS
NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Greene Concepts, Inc. (the Company) is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Nature of Operations
Greene Concepts, Inc. is headquartered in the City of Fresno, California and has been in service for fifty-eight years. The Company manufactured and distributed a line of 25 high quality consumer focused inkjet kits. The Company has recently divested itself of these operations and have acquired a facility that will be focused on production of a variety of beverage product lines including, but not limited to CBD infused beverages, spring and artesian water, as well as enhanced athletic drinks in addition to other product offerings The Company has prepared these financial statements on the accrual basis of accounting.
B. BASIS OF ACCOUNTING
The Company utilizes the accrual method of accounting, whereby revenue is recognized when earned and expenses when incurred. The unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. As such, the financial statements 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 considered necessary for a fair presentation have been included and these adjustments are of a normal recurring nature. The results of operations for the Three months ended October 31, 2019 and 2018 are not necessarily indicative of the results for the full fiscal year ending July 31, 2018.
C. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
D. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand; cash in banks and any highly liquid investments with maturity of three months or less at the time of purchase. The Company maintains cash and cash equivalent balances at several financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.
E. FIXED ASSETS Fixed assets are carried at cost. Depreciation is computed using the straight-line method of depreciation over the assets estimated useful lives. Maintenance and repairs are charged to expense as incurred; major renewals and improvements are capitalized. When items of fixed assets are sold or retired, the related cost and accumulated depreciation is removed from the accounts and any gain or loss is included in income. In February, 2019 the Company acquired Mammoth Ventures Inc. which included all assets owned by Mammoth including the Marion, North Carolina facility and all bottling equipment and other assets formerly known as the North Cove Springs Bottling and Beverage from BNL Capital LLC
F. COMPUTATION OF EARNINGS PER SHARE
Net income per share is computed by dividing the net income by the weighted average number of common shares outstanding during the period.
F. INCOME TAXES
In February 1992, the Financial Accounting Standards Board issued Statement on Financial Accounting Standards 109 of “Accounting for Income Taxes.” Under Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
G. REVENUE RECOGNITION
Revenue for license fees is recognized upon the execution and closing of the contract for the amount of the contract. Contract fees are generally due based upon various progress milestones. Revenue from contract payments are estimated and accrued as earned. Any adjustments between actual contract payments and estimates are made to current operations in the period they are determined.
H. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments”, requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reported in the balance sheet for cash, accounts receivable, inventory, accounts payable and accrued expenses, and loans payable approximate their fair market value based on the short-term maturity of these instruments.
GREENE CONCEPTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2019
(UNAUDITED)
NOTE 2 –NOTES AND OTHER LOANS PAYABLE
CONVERTIBLE NOTES
|
Date
|
Name
|
Principal
|
Interest Rate
|
Maturity Date
|
|
|
|
|
|
|
|
July 16, 2014
|
The Nuemark Group, LLC
|
$15,000.00
|
8.00% APR
|
July 16, 2015
|
|
October 1, 2018
|
Bradley Wilson
|
$6,000.00
|
8.00% APR
|
October 1, 2019
|
|
October 5, 2018
|
Bradley Wilson
|
$1,150.00
|
8.00% APR
|
October 5, 2019
|
|
October 5, 2018
|
Bradley Wilson
|
$9,000.00
|
8.00% APR
|
October 5, 2019
|
|
October 5, 2018
|
Bradley Wilson
|
$10,000.00
|
8.00% APR
|
October 5, 2019
|
|
October 26, 2018
|
Bradley Wilson
|
$1,000.00
|
8.00% APR
|
October 26, 2019
|
|
October 26, 2018
|
Bradley Wilson
|
$9,223.00
|
8.00% APR
|
October 26, 2019
|
|
October 26, 2018
|
Bradley Wilson
|
$12,000.00
|
8.00% APR
|
October 26, 2019
|
|
November 15, 2018
|
Bradley Wilson
|
$10,000.00
|
8.00% APR
|
November 15, 2019
|
|
December 11, 2018
|
Bradley Wilson
|
$10,600.00
|
8.00% APR
|
December 11, 2019
|
|
December 17, 2018
|
CDN Associates, LLC
|
$10,000.00
|
8.00% APR
|
December 18, 2019
|
|
December 18, 2018
|
Bradley Wilson
|
$1,500.00
|
8.00% APR
|
December 17, 2019
|
|
January 16,2019
|
CDN Associates, LLC
|
$5,000.00
|
8.00% APR
|
January 16, 2020
|
|
February 6, 2019
|
Nuemark Group LLC
|
$25,000.00
|
8.00% APR
|
February 6,2020
|
|
February 8, 2019
|
Nuemark Group LLC
|
$15,000.00
|
8.00% APR
|
February 8,2020
|
|
February 22, 2019
|
Nuemark Group LLC
|
$15,000.00
|
8.00% APR
|
February 22,2020
|
|
March 6, 2019
|
Shaun Diedrich
|
$2,000.00
|
8.00% APR
|
March 6, 2020
|
|
March 18, 2019
|
Bergamo Consulting LLC
|
$12,000.00
|
12.00% APR
|
March 18, 2020
|
|
April 2, 2019
|
Bergamo Consulting LLC
|
$10,000.00
|
12.00% APR
|
April 2, 2020
|
|
April 11,2019
|
Bergamo Consulting LLC
|
$15,000.00
|
12.00% APR
|
April 11,2020
|
|
April 15, 2019
|
Bergamo Consulting LLC
|
$50,000.00
|
12.00% APR
|
April 15,2020
|
|
April 16,2019
|
Bergamo Consulting LLC
|
$13,000.00
|
12.00% APR
|
April 16,2020
|
|
April 17, 2019
|
Bergamo Consulting LLC
|
$5,000.00
|
12.00% APR
|
April 17, 2020
|
|
April 30, 2019
|
Bergamo Consulting LLC
|
$85,000.00
|
12.00% APR
|
April 30, 2020
|
|
May 10, 2019
|
Bergamo Consulting LLC
|
$20,000.00
|
12.00% APR
|
May 10, 2020
|
|
May 23, 2019
|
Bergamo Consulting LLC
|
$20,000.00
|
12.00% APR
|
May 23, 2020
|
|
June 5,2019
|
Bergamo Consulting LLC
|
$20,000.00
|
12.00% APR
|
June 5, 2020
|
|
June 20, 2019
|
Bergamo Consulting LLC
|
$20,000.00
|
12.00% APR
|
June 20, 2020
|
|
July 7, 2019
|
Bergamo Consulting LLC
|
$10,000.00
|
12.00% APR
|
July 7. 2020
|
|
July 15,2019
|
Bergamo Consulting LLC
|
$10,000.00
|
12.00% APR
|
July 15, 2020
|
|
July 26, 2019
|
Bergamo Consulting LLC
|
$12,500.00
|
12.00% APR
|
July 26, 2020
|
|
August 13, 2019
|
Bergamo Consulting LLC
|
$14,000.00
|
12.00% APR
|
August 13,2020
|
|
August 19, 2019
|
Bergamo Consulting LLC
|
$16,500.00
|
12.00% APR
|
August 19,2020
|
|
September 3, 2019
|
Bergamo Consulting LLC
|
$2,500.00
|
12.00% APR
|
September 3.2020
|
|
September 11, 2019
|
Bergamo Consulting LLC
|
$2,500.00
|
12.00% APR
|
September 11.2020
|
|
September 26, 2019
|
Bergamo Consulting LLC
|
$2,500.00
|
12.00% APR
|
September 26.2020
|
|
September 27, 2019
|
Bergamo Consulting LLC
|
$25,000.00
|
12.00% APR
|
September 27.2020
|
|
October 7, 2019
|
Bergamo Consulting LLC
|
$5,000.00
|
12.00% APR
|
October 7, 2020
|
|
October 11, 2019
|
Bergamo Consulting LLC
|
$5,000.00
|
12.00% APR
|
October 11, 2020
|
|
October 16, 2019
|
Bergamo Consulting LLC
|
$5,000.00
|
12.00% APR
|
October 16, 2020
|
|
October 25, 2019
|
Bergamo Consulting LLC
|
$15,000.00
|
12.00% APR
|
October 25, 2020
|
NOTE
3 – SHAREHOLDER LOANS
As
of October 31, 2019 and October 31, 2018, the Company had a shareholder loan payable to Leonard Greene in the amount of $1,466,835.00.
The shareholder loan is a noninterest-bearing, unsecured obligation, due upon demand.
NOTE
4- SUBSEQUENT EVENTS
Subsequent
events were evaluated through December 11, 2019 which is the date the financial statements were available to be issued. There
were no events that would require additional disclosure at the time of financial statement presentation.
FINANCIAL STATEMENTS
JULY 31, 2019
GREENE
CONCEPTS, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
JULY 31, 2019 and JULY 31, 2018
(Unaudited)
GREENE CONCEPTS, INC.
CONSOLIDATED BALANCE SHEETS
AT JULY 31, 2019 & 2018
(UNAUDITED)
|
|
|
2019
|
|
|
2018
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
94,048
|
|
|
$
|
10,040
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Receivable
|
|
|
—
|
|
|
|
27,580
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
—
|
|
|
|
453,216
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
CURRENT ASSETS
|
|
|
94,048
|
|
|
|
490,836
|
|
|
|
|
|
|
|
|
|
|
|
|
FIXED
ASSETS-NET
|
|
|
3,249,242
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Start-Up
Costs-Net
|
|
|
|
|
|
|
218,766
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
Deposit
|
|
|
1,650
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
3,344,940
|
|
|
|
709,012
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
|
40,134
|
|
|
|
89,449
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
Interest Payable
|
|
|
12,466
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable (Note 2)
|
|
|
459,973
|
|
|
|
202,449
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable Shareholder (Note 3)
|
|
|
1,466,835
|
|
|
|
1,466,835
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
1,926,808
|
|
|
|
1,669,284
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock $.0001 par value 20,000,000 Authorized 12,085,500 issued, and outstanding at July 31, 2019 and 10,000,000 issued, and outstanding
at July 31, 2018
|
|
|
1,209
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, $.0001 par value 3,000,000,000 Authorized 783,112,467 issued and outstanding at July 31,2019 and 3,000,000,000 Authorized
723,112,467 issued and outstanding at July 31,2018
|
|
|
78,311
|
|
|
|
72,311
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
paid-in-capital
|
|
|
3,305,683
|
|
|
|
645,649
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
earnings
|
|
|
(1,967,071
|
)
|
|
|
(1,679,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
1,418,132
|
|
|
|
(960,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
3,344,940
|
|
|
|
709,012
|
|
The accompanying notes are an integral part of the financial statements.
GREENE CONCEPTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JULY 31, 2019 & 2018
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
79,080
|
|
|
$
|
50,160
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL REVENUE
|
|
|
79,080
|
|
|
|
50,160
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES
|
|
|
18,130
|
|
|
|
25,849
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN
|
|
|
60,950
|
|
|
|
24,311
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
118,699
|
|
|
|
40,402
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional Fees
|
|
|
124,171
|
|
|
|
12,918
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization
|
|
|
68,045
|
|
|
|
67,129
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating expenses
|
|
|
310,915
|
|
|
|
120,449
|
|
|
|
|
|
|
|
|
|
|
|
|
NET OPERATING INCOME/ (LOSS)
|
|
|
(249,965
|
)
|
|
|
(96,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME/(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance and interest fees
|
|
|
(38,143
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME/ (LOSS)
|
|
$
|
(287,839
|
)
|
|
$
|
(96,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per Common Share
|
|
$
|
(.00038
|
)
|
|
|
(.00013
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding
|
|
|
783,112,467
|
|
|
|
723,112,467
|
|
The accompanying notes are an integral part of the financial statements.
GREENE CONCEPTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED JULY 31, 2019 & 2018
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income / (Loss)
|
|
|
(287,839
|
)
|
|
|
(96,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided By operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
68,045
|
|
|
|
67,129
|
|
|
|
|
|
|
|
|
|
|
|
|
Write off acquisition debt
|
|
|
218,766
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/decrease in accounts receivable
|
|
|
27,580
|
|
|
|
(14,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Increase/ (decrease) in accounts payable
|
|
|
(49,315
|
)
|
|
|
9,458
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/ (decrease) in accrued interest payable
|
|
|
12,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(decrease) in inventory
|
|
|
(490,836
|
)
|
|
|
74,141
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
|
|
(501,133
|
)
|
|
|
39,890
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Fixed Assets
|
|
|
(1,350,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES
|
|
|
(1,350,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)/Increase in notes payable
|
|
|
1,935,141
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease)/Increase in Due from Stockholder
|
|
|
|
|
|
|
(52,992
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
|
|
1,935,141
|
|
|
|
(37,992
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
|
|
84,008
|
|
|
|
1,898
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
10,040
|
|
|
|
8,142
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND EQUIVALENTS, END OF PERIOD
|
|
|
94,048
|
|
|
|
10,040
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued to raise capital
|
|
$
|
5,000
|
|
|
$
|
|
|
The accompanying notes are an integral part of the financial statements.
GREEN
CONCEPTS, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE TWELVE MONTHS ENDED
JULY 31, 2019
(UNAUDITED)
|
|
|
PREFERRED
SHARES
|
|
|
VALUE
|
|
|
STOCK
SHARES
|
|
|
COMMON
VALUE
|
|
|
ADDITIONAL
PAID
IN
CAPITAL
|
|
|
ACCUMULATED
EQUITY
(DEFICIT)
|
|
|
TOTAL
SHAREHOLDERS
EQUITY
(DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2017
|
|
10.000.000
|
|
|
$
|
1,000
|
|
|
|
1,034,712,401
|
|
|
$
|
103,471
|
|
|
$
|
614,489
|
|
|
$
|
(1,538,094
|
)
|
|
$
|
(864,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
50,000,066
|
|
|
|
5,000
|
|
|
|
(5,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CANCELLATION
OF SHARES
|
|
|
|
|
|
|
|
|
|
(465,000,000
|
)
|
|
|
(46,500
|
)
|
|
|
46,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARES FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
103,400,000
|
|
|
|
10,340
|
|
|
|
(10,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS JULY 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(96,138
|
)
|
|
|
(96,138
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2018
|
|
10,000,000
|
|
|
$
|
1,000
|
|
|
|
723,112,467
|
|
|
$
|
72,311
|
|
|
$
|
645,649
|
|
|
$
|
(1,679,232
|
)
|
|
$
|
(960,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF COMMON SHARE FOR CAPITAL
|
|
|
|
|
|
|
|
|
|
60,000,000
|
|
|
|
6,000
|
|
|
|
(6,000
|
)
|
|
|
(550
|
)
|
|
|
(550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUANCE
OF PREFERRED SHARE FOR SERVICES
|
|
|
|
|
|
209
|
|
|
|
|
|
|
|
|
|
|
|
(209
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACQUISITION
OF ASSETS AND DEBT ASSUMPTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,666,243
|
|
|
|
|
|
|
|
2,666,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS JULY 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(287,289
|
)
|
|
|
(287,289
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE
JULY 31, 2019
|
|
12,085,500
|
|
|
$
|
1,209
|
|
|
|
783,112,467
|
|
|
$
|
78,311
|
|
|
$
|
3,305,683
|
|
|
$
|
(1,967,071
|
)
|
|
$
|
(1,418,132
|
)
|
The
accompanying notes are an integral part of the financial statements.
GREENE
CONCEPTS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
JULY
31, 2019
(UNAUDITED)
NOTE
1 - SIGNIFICANT ACCOUNTING POLICIES
A.
ORGANIZATION AND OPERATIONS
NOTE
A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of significant accounting policies of Greene Concepts, Inc. (the Company) is presented to assist in understanding the
Company’s financial statements. The financial statements and notes are representations of the Company’s management
who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Nature
of Operations
Greene
Concepts, Inc. is headquartered in the City of Fresno, California and has been in service for fifty-eight years. The Company
manufactured and distributed a line of 25 high quality consumer focused inkjet kits. The Company has recently divested itself
of these operations and have acquired a facility that will be focused on production of a variety of beverage product lines including,
but not limited to CBD infused beverages, spring and artesian water, as well as enhanced athletic drinks in addition to other
product offerings The Company has prepared these financial statements on the accrual basis of accounting.
B.
BASIS OF ACCOUNTING
The
Company utilizes the accrual method of accounting, whereby revenue is recognized when earned and expenses when incurred.
The unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim
financial information. As such, the financial statements 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
considered necessary for a fair presentation have been included and these adjustments are of a normal recurring nature.
The results of operations for the Three months ended July 31, 2019 and 2018 are not necessarily indicative of the results for
the full fiscal year ending July 31, 2018.
C.
USE OF ESTIMATES
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could
differ from those estimates.
D.
CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand; cash in banks and any highly liquid investments
with maturity of three months or less at the time of purchase. The Company maintains cash and cash equivalent balances at several
financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.
E.
FIXED ASSETS Fixed assets are carried at cost. Depreciation is computed using the straight-line method of depreciation over
the assets estimated useful lives. Maintenance and repairs are charged to expense as incurred; major renewals and improvements
are capitalized. When items of fixed assets are sold or retired, the related cost and accumulated depreciation is removed from
the accounts and any gain or loss is included in income. In February, 2019 the Company acquired Mammoth
Ventures Inc. which included all assets owned by Mammoth including the Marion, North Carolina facility and all bottling equipment
and other assets formerly known as the North Cove Springs Bottling and Beverage from BNL Capital LLC
F.
COMPUTATION OF EARNINGS PER SHARE
Net
income per share is computed by dividing the net income by the weighted average number of common shares outstanding during the
period.
F.
INCOME TAXES
In
February 1992, the Financial Accounting Standards Board issued Statement on Financial Accounting Standards 109 of “Accounting
for Income Taxes.” Under Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases.
G.
REVENUE RECOGNITION
Revenue
for license fees is recognized upon the execution and closing of the contract for the amount of the contract. Contract fees are
generally due based upon various progress milestones. Revenue from contract payments are estimated and accrued as earned. Any
adjustments between actual contract payments and estimates are made to current operations in the period they are determined.
H.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement
of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments”, requires disclosures
of information about the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose
of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts reported in the balance
sheet for cash, accounts receivable, inventory, accounts payable and accrued expenses, and loans payable approximate their fair
market value based on the short-term maturity of these instruments.
GREENE
CONCEPTS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
JULY 31, 2019
(UNAUDITED)
NOTE
2 – NOTES AND OTHER LOANS PAYABLE
CONVERTIBLE
NOTES
|
Date
|
|
|
Name
|
|
Principal
|
|
|
Interest Rate
|
|
Maturity Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 16, 2014
|
|
|
The Nuemark Group, LLC
|
|
$15,000.00
|
|
|
8.00% APR
|
|
July 16, 2015
|
|
October 1, 2018
|
|
|
Bradley Wilson
|
|
$6,000.00
|
|
|
8.00% APR
|
|
October 1, 2019
|
|
October 5, 2018
|
|
|
Bradley Wilson
|
|
$1,150.00
|
|
|
8.00% APR
|
|
October 5, 2019
|
|
October 5, 2018
|
|
|
Bradley Wilson
|
|
$9,000.00
|
|
|
8.00% APR
|
|
October 5, 2019
|
|
October 5, 2018
|
|
|
Bradley Wilson
|
|
$10,000.00
|
|
|
8.00% APR
|
|
October 5, 2019
|
|
October 26, 2018
|
|
|
Bradley Wilson
|
|
$1,000.00
|
|
|
8.00% APR
|
|
October 26, 2019
|
|
October 26, 2018
|
|
|
Bradley Wilson
|
|
$9,223.00
|
|
|
8.00% APR
|
|
October 26, 2019
|
|
October 26, 2018
|
|
|
Bradley Wilson
|
|
$12,000.00
|
|
|
8.00% APR
|
|
October 26, 2019
|
|
November 15, 2018
|
|
|
Bradley Wilson
|
|
$10,000.00
|
|
|
8.00% APR
|
|
November 15, 2019
|
|
December 11, 2018
|
|
|
Bradley Wilson
|
|
$10,600.00
|
|
|
8.00% APR
|
|
December 11, 2019
|
|
December 17, 2018
|
|
|
CDN Associates, LLC
|
|
$10,000.00
|
|
|
8.00% APR
|
|
December 18, 2019
|
|
December 18, 2018
|
|
|
Bradley Wilson
|
|
$1,500.00
|
|
|
8.00% APR
|
|
December 17, 2019
|
|
January
16,2019
|
|
|
CDN Associates, LLC
|
|
$5,000.00
|
|
|
8.00% APR
|
|
January 16, 2020
|
|
February 6, 2019
|
|
|
Nuemark Group LLC
|
|
$25,000.00
|
|
|
8.00% APR
|
|
February 6,2020
|
|
February 8, 2019
|
|
|
Nuemark Group LLC
|
|
$15,000.00
|
|
|
8.00% APR
|
|
February 8,2020
|
|
February 22, 2019
|
|
|
Nuemark Group LLC
|
|
$15,000.00
|
|
|
8.00% APR
|
|
February 22,2020
|
|
March 6, 2019
|
|
|
Shaun Diedrich
|
|
$2,000.00
|
|
|
8.00% APR
|
|
March 6, 2020
|
|
March 18, 2019
|
|
|
Bergamo Consulting LLC
|
|
$12,000.00
|
|
|
8.00% APR
|
|
March 18, 2020
|
|
April 2, 2019
|
|
|
Bergamo Consulting LLC
|
|
$10,000.00
|
|
|
8.00% APR
|
|
April 2, 2020
|
|
April
11,2019
|
|
|
Bergamo Consulting LLC
|
|
$15,000.00
|
|
|
8.00% APR
|
|
April 11,2020
|
|
April 15, 2019
|
|
|
Bergamo Consulting LLC
|
|
$50,000.00
|
|
|
8.00% APR
|
|
April 15,2020
|
|
April
16,2019
|
|
|
Bergamo Consulting LLC
|
|
$13,000.00
|
|
|
8.00% APR
|
|
April 16,2020
|
|
April 17, 2019
|
|
|
Bergamo Consulting LLC
|
|
$5,000.00
|
|
|
8.00% APR
|
|
April 17, 2020
|
|
April 30, 2019
|
|
|
Bergamo Consulting LLC
|
|
$85,000.00
|
|
|
8.00% APR
|
|
April 30, 2020
|
|
May 10, 2019
|
|
|
Bergamo Consulting LLC
|
|
$20,000.00
|
|
|
8.00% APR
|
|
May 10, 2020
|
|
May 23, 2019
|
|
|
Bergamo Consulting LLC
|
|
$20,000.00
|
|
|
8.00% APR
|
|
May 23, 2020
|
|
June
5,2019
|
|
|
Bergamo Consulting LLC
|
|
$20,000.00
|
|
|
8.00% APR
|
|
June 5, 2020
|
|
June 20, 2019
|
|
|
Bergamo Consulting LLC
|
|
$20,000.00
|
|
|
8.00% APR
|
|
June 20, 2020
|
|
July 7, 2019
|
|
|
Bergamo Consulting LLC
|
|
$10,000.00
|
|
|
8.00% APR
|
|
July 7. 2020
|
|
July
15,2019
|
|
|
Bergamo Consulting LLC
|
|
$10,000.00
|
|
|
8.00% APR
|
|
July 15, 2020
|
|
July 26, 2019
|
|
|
Bergamo Consulting LLC
|
|
$12,500.00
|
|
|
8.00% APR
|
|
July 26, 2020
|
NOTE
3 – SHAREHOLDER LOANS
As
of July 31, 2019 and July 31, 2018, the Company had a shareholder loan payable to Leonard Greene in the amount of $1,466,835.00.
The shareholder loan is a noninterest-bearing, unsecured obligation, due upon demand.
NOTE4-
SUBSEQUENT EVENTS
Subsequent
events were evaluated through October 30,, 2019, which is the date the financial statements were available to be issued. There
were no events that would require additional disclosure at the time of financial statement presentation.
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