Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒
Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended November 30, 2019
☐
Transition Report pursuant to 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to__________
Commission File Number: 333-207163
MOMENTOUS HOLDINGS
CORP.
(Exact name of registrant as specified in its charter)
|
Nevada |
|
7900 |
|
32-0471741 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Primary Standard Industrial
Classification Code Number) |
|
(I.R.S. Employer
Identification Number) |
32 Curzon Street, London, W1J 7WS, United Kingdom
(address of principal executive offices)
Registrant's telephone number, including area
code: +44 203 871 3051
IncSmart.biz, Inc.
4264 Lady Burton St.
Las Vegas, NV 89129
(Name and address of agent for service of process)
Securities registered pursuant to Section 12(g) of the Act: -
NONE
Securities registered pursuant to Section 12(g) of the
Act:
|
Title of each
class |
Trading Symbol(s) |
Name of each exchange on which
registered |
| Common
Stock: $0.001 par value |
MMNT |
Other
OTC |
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). ☒ Yes ☐
No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
| ☐ |
Large accelerated filer |
☐ |
Accelerated filer |
| ☒ |
Non-accelerated filer |
☒ |
Smaller reporting company |
| |
|
☒ |
Emerging growth company |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date:
34,165,000 shares as of January 15, 2020.
TABLE OF CONTENTS
PART I - FINANCIAL
INFORMATION
Item 1. Financial
Statements
Momentous Holdings Corp. and
Subsidiaries
Consolidated Balance Sheets (unaudited)
| |
|
November 30, |
|
|
May
31, |
|
| |
|
2019 |
|
|
2019 |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
|
|
| Cash |
|
|
39,619 |
|
|
|
4,840 |
|
| Accounts
receivable |
|
|
29,817 |
|
|
|
17,309 |
|
| Accounts receivable
from related party |
|
|
– |
|
|
|
2,238 |
|
|
Prepaid expenses and other |
|
|
4,165 |
|
|
|
3,484 |
|
|
Total Current Assets |
|
$ |
73,601 |
|
|
$ |
27,871 |
|
| |
|
|
|
|
|
|
|
|
| Intangible asset |
|
|
49,400 |
|
|
|
48,125 |
|
|
Property and Equipment, net of accumulated depreciation of $2,799
and $1,971, respectively |
|
|
4,508 |
|
|
|
1,899 |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
127,509 |
|
|
$ |
77,895 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
| Current
Liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable |
|
|
35,982 |
|
|
|
10,470 |
|
| Due to related
parties |
|
|
174,525 |
|
|
|
96,615 |
|
| Short term
borrowings |
|
|
9,036 |
|
|
|
17,424 |
|
|
Other accrued expenses and liabilities |
|
|
83,873 |
|
|
|
59,914 |
|
|
Total Current Liabilities and Total Liabilities |
|
$ |
303,416 |
|
|
$ |
184,423 |
|
| |
|
|
|
|
|
|
|
|
|
Stockholders' Deficit |
|
|
|
|
|
|
|
|
| Common
stock, $0.001 par value, 75,000,000 shares authorized; 34,165,000
and 34,115,000 shares issued and outstanding as of November 30,
2019 and May 31, 2019, respectively |
|
|
34,165 |
|
|
|
34,115 |
|
| Additional paid-in
capital |
|
|
28,257 |
|
|
|
7,807 |
|
| Accumulated
deficit |
|
|
(233,929 |
) |
|
|
(152,605 |
) |
|
Accumulated other comprehensive (deficit)/income |
|
|
(4,400 |
) |
|
|
4,155 |
|
|
Total Stockholders' Deficit |
|
|
(175,907 |
) |
|
|
(106,528 |
) |
| |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
$ |
127,509 |
|
|
$ |
77,895 |
|
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
Momentous Holdings Corp. and Subsidiaries
Consolidated Statements of Operations and Others Comprehensive
Loss (unaudited)
| |
|
Three
Months Ended November 30, 2019 |
|
|
Three
Months Ended November 30, 2018 |
|
|
Six Months
Ended November 30, 2019 |
|
|
August 1,
2018 through November 30, 2018 |
|
|
June 1,
2018 through July 31, 2018 |
|
| |
|
(Successor) |
|
|
(Successor) |
|
|
(Successor) |
|
|
(Successor) |
|
|
(Predecessor) |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales |
|
$ |
48,748 |
|
|
$ |
48,559 |
|
|
$ |
109,432 |
|
|
$ |
57,388 |
|
|
$ |
23,938 |
|
| Sales to related
party |
|
|
– |
|
|
|
1,677 |
|
|
|
– |
|
|
|
1,963 |
|
|
|
2,129 |
|
| |
|
|
48,748 |
|
|
|
50,236 |
|
|
|
109,432 |
|
|
|
59,351 |
|
|
|
26,067 |
|
| Cost of goods
sold |
|
|
(46,104 |
) |
|
|
(42,162 |
) |
|
|
(78,418 |
) |
|
|
(42,792 |
) |
|
|
(22,559 |
) |
| Gross Profit |
|
|
2,644 |
|
|
|
8,074 |
|
|
|
31,014 |
|
|
|
16,559 |
|
|
|
3,508 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and
administrative expenses |
|
|
(62,044 |
) |
|
|
(27,280 |
) |
|
|
(118,030 |
) |
|
|
(88,096 |
) |
|
|
(26,949 |
) |
| Selling
and distribution expenses |
|
|
(1,222 |
) |
|
|
(954 |
) |
|
|
(2,586 |
) |
|
|
(1,408 |
) |
|
|
(409 |
) |
| Total
Operating Expenses |
|
|
(63,266 |
) |
|
|
(28,234 |
) |
|
|
(120,616 |
) |
|
|
(89,504 |
) |
|
|
(27,358 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Loss |
|
|
(60,622 |
) |
|
|
(20,160 |
) |
|
|
(89,602 |
) |
|
|
(72,945 |
) |
|
|
(23,850 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income |
|
|
5,295 |
|
|
|
4,014 |
|
|
|
9,722 |
|
|
|
4,014 |
|
|
|
2,681 |
|
| Interest
expense |
|
|
(443 |
) |
|
|
(153 |
) |
|
|
(1,444 |
) |
|
|
(180 |
) |
|
|
– |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
|
(55,770 |
) |
|
|
(16,299 |
) |
|
|
(81,324 |
) |
|
|
(69,111 |
) |
|
|
(21,169 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income Taxes |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Loss |
|
$ |
(55,770 |
) |
|
$ |
(16,299 |
) |
|
$ |
(81,324 |
) |
|
$ |
(69,111 |
) |
|
$ |
(21,169 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign
currency translation adjustment |
|
|
(9,064 |
) |
|
|
1,843 |
|
|
|
(8,555 |
) |
|
|
3,774 |
|
|
|
2,819 |
|
| Total
Comprehensive Loss |
|
$ |
(64,834 |
) |
|
$ |
(14,456 |
) |
|
$ |
(89,879 |
) |
|
$ |
(65,337 |
) |
|
$ |
(18,350 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss per
Share: Basic and Diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
(211.69 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding: Basic and
Diluted |
|
|
34,159,945 |
|
|
|
15,750,000 |
|
|
|
34,142,650 |
|
|
|
15,750,000 |
|
|
|
100 |
|
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
Momentous Holdings Corp. and
Subsidiaries
Consolidated Statements of Stockholders’ Deficit
(unaudited)
|
|
|
Common Stock |
|
|
Additional Paid-in |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive |
|
|
Total
Stakeholders’ |
|
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Deficit |
|
|
PREDECESSOR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2018 |
|
|
100 |
|
|
$ |
129 |
|
|
|
– |
|
|
$ |
(31,725 |
) |
|
$ |
363 |
|
|
$ |
(31,233 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(21,169 |
) |
|
|
– |
|
|
|
(21,169 |
) |
|
Foreign currency translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
2,819 |
|
|
|
2,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 31, 2018 |
|
|
100 |
|
|
$ |
129 |
|
|
$ |
– |
|
|
$ |
(52,894 |
) |
|
$ |
3,182 |
|
|
$ |
(49,583 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUCCESSOR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
July 31, 2018 |
|
|
15,750,000 |
|
|
|
15,750 |
|
|
|
(15,750 |
) |
|
|
(14,725 |
) |
|
|
(313 |
) |
|
|
(15,038 |
) |
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(52,812 |
) |
|
|
|
|
|
|
(52,812 |
) |
|
Foreign currency translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1,931 |
|
|
|
1,931 |
|
| Balance,
August 31, 2018 |
|
|
15,750,000 |
|
|
|
15,750 |
|
|
|
(15,750 |
) |
|
|
(67,537 |
) |
|
|
1,618 |
|
|
|
(65,919 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(16,299 |
) |
|
|
– |
|
|
|
(16,299 |
) |
|
Foreign currency translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1,843 |
|
|
|
1,843 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2018 |
|
|
15,750,000 |
|
|
$ |
15,750 |
|
|
$ |
(15,750 |
) |
|
$ |
(83,836 |
) |
|
$ |
3,461 |
|
|
$ |
(80,375 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
May 31, 2019 |
|
|
34,115,000 |
|
|
|
34,115 |
|
|
|
7,807 |
|
|
|
(152,605 |
) |
|
|
4,155 |
|
|
|
(106,528 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(25,554 |
) |
|
|
– |
|
|
|
(25,554 |
) |
|
Issuance of common stock for cash |
|
|
40,000 |
|
|
|
40 |
|
|
|
14,960 |
|
|
|
|
|
|
|
– |
|
|
|
15,000 |
|
|
Foreign currency translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
509 |
|
|
|
509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
August 31, 2019 |
|
|
34,155,000 |
|
|
|
34,155 |
|
|
|
22,767 |
|
|
|
(178,159 |
) |
|
|
4,644 |
|
|
|
(116,573 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(55,770 |
) |
|
|
– |
|
|
|
(55,770 |
) |
|
Issuance of common stock for services provided |
|
|
10,000 |
|
|
|
10 |
|
|
|
5,490 |
|
|
|
|
|
|
|
– |
|
|
|
5,500 |
|
|
Foreign currency translation adjustment |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(9,044 |
) |
|
|
(9,044 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2019 |
|
|
34,165,000 |
|
|
$ |
34,165 |
|
|
$ |
28,257 |
|
|
$ |
(233,929 |
) |
|
$ |
(4,400 |
) |
|
$ |
(175,907 |
) |
Momentous Holdings Corp. and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
|
|
|
Six Months |
|
|
August 1, 2018 |
|
|
June 1, 2018 |
|
| |
|
Ended |
|
|
through |
|
|
through |
|
| |
|
November 30, |
|
|
August 31, |
|
|
July 31, |
|
| |
|
2019 |
|
|
2018 |
|
|
2018 |
|
| |
|
|
(Successor) |
|
|
|
(Successor) |
|
|
|
(Predecessor) |
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(81,324 |
) |
|
$ |
(52,812 |
) |
|
$ |
(21,169 |
) |
|
Adjustments to reconcile net loss to
net cash used in operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
expense |
|
|
776 |
|
|
|
188 |
|
|
|
265 |
|
|
Loss on goodwill
impairment |
|
|
– |
|
|
|
49,581 |
|
|
|
– |
|
|
Issue of common stock for services |
|
|
5,500 |
|
|
|
– |
|
|
|
– |
|
| Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
25,512 |
|
|
|
(243 |
) |
|
|
747 |
|
|
Accounts receivable – third
party |
|
|
(12,506 |
) |
|
|
4,420 |
|
|
|
(6,276 |
) |
|
Accounts receivable – related
party |
|
|
2,238 |
|
|
|
1,918 |
|
|
|
8,006 |
|
|
Prepaid expenses |
|
|
(681 |
) |
|
|
507 |
|
|
|
1,239 |
|
|
Accrued expenses |
|
|
11,079 |
|
|
|
(6,130 |
) |
|
|
155 |
|
|
Taxes payable |
|
|
12,880 |
|
|
|
(4,694 |
) |
|
|
5,107 |
|
|
Net cash used in operating
activities |
|
|
(36,526 |
) |
|
|
(7,265 |
) |
|
|
(11,926 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
|
(3,334 |
) |
|
|
– |
|
|
|
(3,179 |
) |
| Net cash used in investing activities |
|
|
(3,334 |
) |
|
|
– |
|
|
|
(3,179 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from the sale of common
stock |
|
|
15,000 |
|
|
|
– |
|
|
|
– |
|
| Loans advanced |
|
|
3,359 |
|
|
|
11,573 |
|
|
|
– |
|
| Loans and overdrafts repaid |
|
|
(11,747 |
) |
|
|
– |
|
|
|
– |
|
| Payments on related
party debt |
|
|
(1,940 |
) |
|
|
– |
|
|
|
– |
|
| Related party loans advanced |
|
|
77,551 |
|
|
|
– |
|
|
|
– |
|
|
Bank overdraft |
|
|
– |
|
|
|
– |
|
|
|
7,481 |
|
|
Net cash provided by financing
activities |
|
|
82,223 |
|
|
|
11,573 |
|
|
|
7,481 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash |
|
|
(7,584 |
) |
|
|
(98 |
) |
|
|
2,821 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in cash |
|
|
34,779 |
|
|
|
4,210 |
|
|
|
(4,803 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash at beginning of period |
|
|
4,840 |
|
|
|
198 |
|
|
|
4,803 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash at end of period |
|
$ |
39,619 |
|
|
$ |
4,408 |
|
|
$ |
– |
|
The accompanying notes are an integral part of these unaudited
consolidated financial statements.
Momentous Holdings Corp.
Notes to the Financial
Statements
November 30, 2019
(Unaudited)
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF
PRESENTATION
We were incorporated as Momentous Holdings Corp., (“the Company”),
on May 29, 2015 in the State of Nevada for the purpose of
designing, acquiring and developing mobile apps and mobile software
for download by end consumers.
On August 1, 2018, V Beverages Limited (“V Beverages”) acquired
MaxChater Ltd. (“MaxChater”) for £1 ($1). MaxChater is the
operating entity in the transaction and is therefore viewed as the
predecessor entity for financial reporting purposes, and V
Beverages is viewed as the successor entity. The acquisition of
MaxChater by V Beverages was accounted for using the acquisition
method of accounting, and the excess of the consideration paid over
the net liabilities acquired, representing goodwill on acquisition,
was fully impaired at the date of the transaction, as further
described in the Company’s recently filed Form 10-K.
On December 31, 2018, the Company entered into a Share Exchange
Agreement with Andrew Eddy (“Owner”), an individual residing in
Great Britain and owner of 100% of the issued and outstanding
capital shares of V Beverages, a company organized under the laws
of the United Kingdom (the “Share Exchange Agreement”). Pursuant to
the Share Exchange Agreement, the Company acquired 100% of the
issued and outstanding capital shares of V Beverages (the “Target
Shares”). Upon the closing of the transaction under the Share
Exchange Agreement, the Owner transferred the Target Shares to the
Company in exchange for 15,750,000 shares of the Company’s common
stock, par value $0.001. The board members of the Company were
replaced with those of V Beverages at the date of the
transaction.
The transaction has been accounted for as a reverse merger and
recapitalization, whereby V Beverages is considered to be the
accounting acquirer and became a wholly-owned subsidiary of the
Company. V Beverages is considered to be the accounting acquirer
following the replacement of the Momentous Holdings Corp. board and
management by V Beverages management and board member. Following
the reverse merger we ceased operations of our app, the original
business of the Company.
The consolidated financial statements for the period ended November
30, 2019 and as of that date (successor) comprise the financial
statements of Momentous Holdings Corp., together with the financial
statements of V Beverages and MaxChater for the period from
September 1, 2019 to November 30, 2019 and for the six (6) month
period from June 1, 2019 to November 30, 2019.
The financial statements for the three (3) month period ended
November 30, 2018 (successor) comprise the financial statements of
V Beverages and MaxChater for the period from September 1, 2018 to
November 30, 2018.
The financial statements for the four (4) month period ended
November 30, 2018 (successor) comprise the financial statements of
V Beverages and MaxChater for the period from August 1, 2018 to
November 30, 2018.
The financial statements for the two (2) month period ended July
31, 2018 (predecessor – separated by black bar) comprise the
financial statements of MaxChater for the period from June 1, 2018
to July 31, 2018.
These unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (GAAP) and the rules of the
Securities and Exchange Commission, and should be read in
conjunction with the audited financial statements and notes thereto
for the period ended May 31, 2019 contained in the Company’s Form
10-K filed with the Securities and Exchange Commission on December
18, 2019.
In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim
period presented have been reflected herein. The results of
operations for the interim period are not necessarily indicative of
the results to be expected for the full year. Notes to the
financial statements which would substantially duplicate the
disclosure contained in the audited financial statements for the
period ended May 31, 2019, as reported in the Company’s Form 10-K,
have been omitted.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company had a working capital deficit of $229,815, a total
stockholders’ deficit of $175,907 at November 30, 2019 (successor)
and an accumulated deficit at that date of $233,929. These factors,
among others, raise substantial doubt about the ability of the
Company to continue as a going concern for a reasonable period of
time. The accompanying financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
The continuing operations of the Company are dependent upon its
ability to continue to raise adequate financing and to commence
profitable operations in the future and repay its liabilities
arising from normal business operations as they become due.
Following the recent completion of the 10-K for the year ended May
31, 2019, management expects to raise funds in order to provide
working capital for the foreseeable future.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The consolidated financial statements include the financial
statements of Momentous Holdings Corp, together with the financial
statements of V Beverages and MaxChater, presented in accordance
with the basis of presentation footnote. All significant
intercompany balances and transactions have been eliminated in
full.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board or other standard setting
bodies that may have an impact on the Company’s accounting and
reporting. The Company believes that such recently issued
accounting pronouncements and other authoritative guidance for
which the effective date is in the future will not have an impact
on its accounting or reporting or that such impact will not be
material to its financial position, results of operations and cash
flows when implemented.
NOTE 4 - DEBT
Short term borrowings from related parties as of November 30, 2019
(successor) were unsecured and include an amount of $49,400 due in
respect of the purchase of the ‘Victory’ brand acquired in November
2017. This balance was due for repayment in two equal installments
by August 2, 2019 without interest, however the terms of the credit
note have been extended until February 2020. In November 2019, the
directors advanced new unsecured loans to the Company amounting to
$77,551 and $1,940 was repaid. The total amount loaned by the
directors was $125,125 as of November 30, 2019 and the total
amount loaned by related parties as of November 30, 2019 was
therefore $174,525.
On August 2, 2019, the Company entered into a new £20,000 ($24,250)
bank overdraft facility with an effective rate of 12.22 per cent
per annum which is personally guaranteed by one of the Company’s
directors. The Facility does not have a fixed or minimum duration
but may be cancelled by the bank at any time. As of November 30,
2019 the Company had drawn $9,036 from the overdraft facility.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the three (3) month period ended November 30, 2019
(successor), new amounts loaned to the Company by the directors
were $77,551, and $1,940 was repaid.
The total amounts due to directors as of November 30, 2019 and May
31, 2019 were $125,125 and $48,489, respectively, the change being
mainly due to the advance of new loans from the directors net of
foreign currency translation differences from GBP in which the
loans are denominated. The amounts loaned by the directors are
unsecured, non-interest bearing, and due on demand. See Note 4 for
further details on the Company’s debt.
In addition to amounts due to current directors, the amount due to
James Horan, a former director, was $9,873 as of November 30, 2019
and May 31, 2019. This amount is included in the total due of
$125,125 disclosed above. The amount loaned is unsecured,
non-interest bearing, and due on demand.
During the three (3) month period ended November 30, 2019
(successor), the Company invoiced and sold products, totaling $0 to
a related party, The Drafthouse, which is considered to be a
related party due to there being common significant shareholders
with Momentous Holdings Corp. During the one (1) month period ended
August 31, 2018 (successor) the Company sold products to The
Drafthouse totaling $1,963 and during the two (2) month period
ended July, 2018 (predecessor) the Company invoiced and sold
products totaling $2,129.
Accounts receivable balances from The Drafthouse were $0, and
$2,238 as of November 30, 2019 and May 31, 2019, respectively.
NOTE 6 - CAPITAL STOCK
On October 17, 2019, we issued 10,000 shares of our common stock to
one of our independent service providers as additional
compensation for continued service and deferment of payment
owed by the Company for prior services rendered. The value of the
stock based compensation was determined with reference to the
market value of the Company’s shares as of October 17, 2019.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Operating leases
The Company operated from rent-free premises
in Central London until March 26, 2018 when the Company
leased approximately 300 square feet of industrial space in
Tottenham, London in the United Kingdom for approximately $450 per
month for a twelve month term which was cancelable by either party
with one months’ notice The Company also purchased a shipping
container for additional space on location.
The company incurred no rental costs for keeping the shipping
container on location.
On April 26, 2019, the Company entered into an agreement with a
third party for the sale and leaseback of the shipping container in
the amount of $2,223. Rental payment after usage of the credit from
the sale and leaseback of the shipping container was agreed at
approximately $1,100 per month for a three month term. On November
1, 2019, the Company relinquished the 300 square feet of industrial
space and has solely retained the shipping container at a reduced
rental of approximately $410 per month on a month by month term
which is cancelable by either party with two weeks notice.
Subsequent to November 30, 2019, on December 1, 2019, the Company
leased approximately 500 square feet of industrial space in
Walthamstow, London in the United Kingdom for approximately $1,300
per month for a two year term, which is cancelable by either party
with six months’ notice. The space will be used as the new Company
distillery. The Company paid approximately $1,300 as a
refurbishment fee and a refundable deposit of approximately $4,000
to the Landlord.
The rental expense for the six (6) month period ended November 30,
2019 (successor) was $9,896, for the four (4) month period ended
November 30, 2018 (successor) was approximately $1,448 and for the
one (1) month period ended July 31, 2018 (predecessor) was
approximately $900.
NOTE 8 - SUBSEQUENT EVENTS
On January 13, 2020, the Company issued a Convertible Promissory
Note in the principal amount of $250,000 (the “Note”) to a venture
capital firm with offices in New York, New York (the “Holder”). Per
the terms of the Note, the principal amount of the Note shall
accrue interest at the rate of ten percent (10%) per annum. The
Note matures on January 13, 2021 and includes various rates of
penalties for earlier repayment. The Note is convertible, at the
Holder’s sole discretion, into shares of the Company’s common stock
at a fixed price of $0.25 per share. The Holder is restricted from
exercising its right to convert any portion of the Note if such
conversion would result in the number of shares of the Company’s
common stock received from such conversion plus the number of such
shares beneficially owned by the Holder and its affiliates on the
date of conversion equaling or exceeding more than 9.9% of the
outstanding shares of the Company’s common stock.
Item 2. Management Discussion
and Analysis of Financial Condition and Results of
Operations
Forward-Looking Statements
Management's statements contained in this portion of the prospectus
are not historical facts and are forward-looking statements.
Factors which could have a material adverse effect on the
operations and future prospects of the Company on a consolidated
basis include, but are not limited to, those matters discussed
under the section entitled “Risk Factors,” above. Such risks and
uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such
statements.
Our Plan for the Next 12 Months
On December 31, 2018, the Company completed the transactions
contemplated by a certain Share Exchange Agreement entered into by
and between the Company and Mr. Andrew Eddy, an individual residing
in Great Britain and owner of 100% of the issued and outstanding
capital shares of V Beverages, a company organized under the laws
of the United Kingdom (the “Share Exchange Agreement”). Pursuant to
the Share Exchange Agreement, the Company acquired 100% of the
issued and outstanding capital shares of V Beverages (the “V
Beverage Shares”). At the closing of the transactions under the
Share Exchange Agreement, Mr. Eddy transferred and sold all of the
V Beverage Shares to the Company in exchange for 15,750,000 shares
of the Company’s common stock, par value $0.001, which the Company
issued on April 17, 2019. Subsequent to the completion the
transactions under the Share Exchange Agreement, V Beverages is
operated as the Company’s wholly-owned subsidiary.
The Company is focused entirely on the business of its wholly owned
subsidiaries. Our subsidiary, V Beverages, owns 100% of the issued
and outstanding capital shares of MaxChater Ltd., a company
organized under the laws of the United Kingdom, which it acquired
on August 1, 2018. MaxChater serves as our wholly-owned operating
subsidiary that is solely engaged in the business of designing,
producing, marketing and selling low carbon, eco-friendly alcoholic
beverages.
Momentous Holdings Corp. Group Structure
We are a modern craft beverage company, founded in 2015, that is
based in London, United Kingdom. We design, produce, market and
sell handcrafted, award-winning alcohol beverage products with a
portfolio consisting of gin, vodka, bitter aperitif and
ready-to-drink cocktails (“RTD”).
Our strategy is to produce premium products with minimal impact to
the environment through the use of modern technology during
production. Our methods help us to conserve energy and reduce water
waste whilst delivering what we believe is a superior product. We
also focus on environmentally friendly and recyclable packaging to
reduce our carbon footprint. We are also looking to employ carbon
offsetting in order to meet our carbon neutral status target by the
end of 2020.
The following is a list of milestones we wish to accomplish within
the next twelve months.
| Secure necessary funding to meet additional
expenses of being a public company and to expand
operations |
| |
|
Product Development, Facility improvements and Equipment
upgrades
|
| Parent Company name change to
better reflect new business |
| |
|
Engage in advertising and marketing programs, through both
traditional sources and social media
|
| Develop/Complete development of
Cannabinoid infused alcoholic beverages |
| |
| Hire additional skilled employees
to complete our team, such as brand ambassadors |
| |
| Develop an advisory committee to
complement the board and employees of the Company |
| |
| Develop additional corporate
governance standards, including formation of independent majority
compliance, audit and compensation committees |
| |
| Continuation of MaxChater annual
growth, in terms of both units sold and annual revenues |
Our first major milestones are expected to be securing funds and
increasing the scale of our production. This is our primary focus.
In three years, we hope to have established our brand, products and
corporate presence in the United States, and internationally.
Revenue
Revenue (including related party revenue) for the six (6) month
period ended November 30, 2019 (successor) was $109,432, for the
four (4) month period ended November 30, 2018 (successor) was
approximately $59,351 and for the two (2) month period ended July
31, 2018 (predecessor) was approximately $26,067.
Gross Profit for the six (6) month period ended November 30, 2019
(successor) was $31,014, for the four (4) month period ended
November 30, 2018 (successor) was approximately $16,559 and for the
two (2) month period ended July 31, 2018 (predecessor) was
approximately $3,508.
Operating Expenses
Operating expenses for the six (6) month period ended November 30,
2019 (successor) were $120,616, for the four (4) month period ended
November 30, 2018 (successor) were approximately $89,504 and for
the two (2) month period ended July 31, 2018 (predecessor) were
approximately $27,358.
Operating expenses for the successor periods consisted of general
and administrative expenses and increased due to the acquisition
and increase of V Beverages operating activities following the
acquisition of MaxChater by V Beverages.
Operating expenses for the predecessor one (1) month period ended
July 31, 2018 consisted of general and administrative expenses of
MaxChater.
We anticipate our operating expenses will increase as we undertake
our plan of operations. The increase will be attributable to the
measures described above to implement our business plan and the
professional fees associated with our being a reporting company
under the U.S. Securities Exchange Act of 1934.
Net Loss
Net loss for the six (6) month period ended November 30, 2019
(successor) was $81,324 for the four (4) month period ended
November 30, 2018 (successor) was approximately $69,111 and for the
two (2) month period ended July 31, 2018 (predecessor) was
approximately $21,169.
Liquidity and Capital Resources
As of November 30, 2019, we had total current assets of $73,601,
consisting of cash of $39,619, accounts receivable of $29,817, and
prepaid expenses and other of $4,165 We had total current
liabilities of $303,416 as of November 30, 2019 consisting of
advances from related parties of $174,525, accounts payable of
$35,982, taxes payable of $61,538, bank overdraft of $9,036, and
other liabilities of $22,335. Accordingly, we had a working capital
deficit of $229,815 as of November 30, 2019.
As of May 31, 2019 (successor), we had total current assets of
$27,871, consisting of cash of $4,840, accounts receivable of
$19,547 and prepayments and other receivables of $3,484. We had
current liabilities of $184,423 as of May 31, 2019. We therefore
had a working capital deficit of $156,552 as of May 31, 2019.
Operating activities resulted in a net cash outflow of $42,026 for
the six (6) month period ended November 30, 2019.
Our ability to operate beyond the next twelve (12) months is
contingent upon us obtaining additional financing and/or upon
realizing sales revenue sufficient to fund our ongoing expenses.
Our currently available funds will allow us to operate for another
two (2) months. Until we are able to sustain our ongoing operations
through sales revenue, we intend to fund operations through debt
and/or equity financing arrangements, which may be insufficient to
fund our capital expenditures, working capital, or other cash
requirements. We do not have any formal commitments or arrangements
for the sales of stock or the advancement or loan of funds at this
time. There can be no assurance that such additional financing will
be available to us on acceptable terms, or at all.
Going Concern
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company had a working capital deficit of $229,815, a total
stockholders’ deficit of $175,907 at November 30, 2019 and an
accumulated deficit at that date of $233,929. These factors, among
others, raise substantial doubt about the ability of the Company to
continue as a going concern for a reasonable period of time. The
accompanying financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The continuing operations of the Company are dependent upon its
ability to continue to raise adequate financing and to commence
profitable operations in the future and repay its liabilities
arising from normal business operations as they become due. The
Directors are also in agreement that they will make unsecured loans
to the business as necessary until such future funding can be
secured.
Off Balance Sheet Arrangements
As of November 30, 2019, there were no off balance sheet
arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their
most “critical accounting policies” in the Management Discussion
and Analysis. The SEC indicated that a “critical accounting policy”
is one which is both important to the portrayal of a company’s
financial condition and results, and requires management’s most
difficult, subjective or complex judgments, often as a result of
the need to make estimates about the effect of matters that are
inherently uncertain. We do not believe that any accounting
policies currently fit this definition.
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of
operations, financial position or cash flow.
Item 3. Quantitative and
Qualitative Disclosures about Market Risk
A smaller reporting company is not required to provide the
information required by this Item.
Item 4. Controls and
Procedures
Disclosure Controls and Procedures
As required by Rule 13a-15 of the Securities Exchange Act of 1934,
our principal executive officer and principal financial officer
evaluated our company's disclosure controls and procedures (as
defined in Rules 13a-15(e) of the Securities Exchange Act of 1934)
as of the end of the period covered by this report. Based on this
evaluation, our principal executive officer and principal financial
officer concluded that as of the end of the period covered by this
report, these disclosure controls and procedures were not effective
to ensure that the information required to be disclosed by our
company in reports it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms
of the Securities Exchange Commission and to ensure that such
information is accumulated and communicated to our company's
management, including our principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure. The conclusion that our disclosure controls and
procedures were not effective was due to the presence of the
following material weaknesses in internal control over financial
reporting which are indicative of many small companies with small
staff: (i) inadequate segregation of duties and effective risk
assessment; and (ii) insufficient written policies and procedures
for accounting and financial reporting with respect to the
requirements and application of both United States generally
accepted accounting principles and Securities and Exchange
Commission guidelines. Management anticipates that such disclosure
controls and procedures will not be effective until the material
weaknesses are remediated.
We plan to take steps to enhance and improve the design of our
internal controls over financial reporting. During the period
covered by this quarterly report on Form 10-Q, we have not been
able to remediate the material weaknesses identified above. To
remediate such weaknesses, we plan to implement the following
changes during our fiscal year ending May 31, 2020, subject to
obtaining additional financing: (i) appoint additional qualified
personnel to address inadequate segregation of duties and
ineffective risk management; and (ii) adopt sufficient written
policies and procedures for accounting and financial reporting. The
remediation efforts set out above are largely dependent upon our
securing additional financing to cover the costs of implementing
the changes required. If we are unsuccessful in securing such
funds, remediation efforts may be adversely affected in a material
manner.
Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all
control issues, if any, within our company have been detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because
of simple error or mistake.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial
reporting during the quarter ended November 30, 2019 that have
materially affected or are reasonably likely to materially affect,
our internal control over financial reporting.
PART II – OTHER
INFORMATION
Item 1. Legal
Proceedings
We are not a party to any pending legal proceeding. We are not
aware of any pending legal proceeding to which any of our officers,
directors, or any beneficial holders of 5% or more of our voting
securities are adverse to us or have a material interest adverse to
us.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of
Equity Securities and Use of Proceeds
On October 17, 2019, we issued 10,000 shares of our common stock to
one of our independent service providers as additional compensation
for continued service and deferment of payment owed by the Company
for prior services rendered.
The foregoing issuance was exempt from registration pursuant to
Rule 506 of Regulation D. Neither we nor any person acting on our
behalf offered or sold these securities by any form of general
solicitation or general advertising. The shares issued are
restricted securities and the certificates representing these
shares have been affixed with a standard restrictive legend, which
states that the securities cannot be sold without registration
under the Securities Act of 1933 or an exemption therefrom. The
recipient represented to us that he was obtaining the securities
for his own account and not for the account of any other persons.
The recipient was provided with written disclosure that the
securities have not been registered under the Securities Act of
1933 and therefore cannot be sold without registration under the
Securities Act of 1933 or an exemption therefrom.
Item 3. Defaults upon Senior
Securities
None
Item 4. Mine Safety
Disclosures
Not applicable.
Item 5. Other
Information
None
Item 6. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
| Momentous Holdings
Corp. |
|
| |
|
|
| Date: |
January 22, 2020 |
|
| |
|
|
| By: |
/s/ Andrew Eddy |
|
| |
Andrew Eddy |
|
| Title: |
Chief Executive Officer,
principal financial officer and principal accounting
officer |
|
