Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
NOTE 1 NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS
PureSnax International, Inc. (the Company) was incorporated under the laws of the State of Nevada on June 24, 2011. PureSnax International is a wellness brand focused on bringing healthy snacks and foods to consumers. PSI offers a wide assortment of sugar free, peanut free, Kosher, low fat, low sodium and Non GMO certified products. With new nutritional standards being rolled out through schools in the United States, we believe we are poised to capitalize on these regulations by offering good for you, functional foods and snacks that meet these new regulatory standards. Product categories include marshmallow squares (made without Gelatin), protein bars, mints, gum and various condiments as well as offering Xylitol, an all-natural sweetener. PureSnax products are available online and through select locations and are rolling out through strategic distributor networks across North America. The Company has limited revenue to date and consequently its operations are subject to all risks inherent in the establishment of a new business enterprise. We will distribute delicious tasting, very healthy snack foods meeting the highest of standards and compliance for the US consumers with plans to evolve into an international audience. With a socially responsible mandate supported by education and driven by integrity and sincerity, PSI will provide people with healthier snack and food choices by utilizing wholesome, natural, high quality ingredients that promote healthier lifestyles. We have chosen to specialize in the development, sourcing, branding and distribution of high quality, healthy food and snack products. It is our vision to brand PureSnax International as one of the trusted names in the healthy food and snack industry.
With major illnesses, such as diabetes, obesity, cancer, and heart disease on the rise, people are looking for ways to minimize the risks in developing these diseases. People are starting to read and understand labels looking for healthier choices. We believe that the demand for healthier products is driving a fundamental change in the food and snack markets. This demand will provide enormous opportunities for PureSnax International to position itself in the healthy food and snack industry.
Our goal is to utilize open public forums, education, integrity and honesty to earn the publics trust and become that trusted brand that provides healthy food and snack products to the growing percentage of the population wanting to make healthier life choices. In other words, what we put on our labels, we mean. We believe in having a position in the marketplace where the market will be rather than where the market is.
We intend to become pioneers in a dynamic and growing segment of the industry where future demand will be and it means addressing the new public awareness of healthier food and snack products. The snack products developed must not only meet healthy product guidelines but also taste good. This is a very unique niche and one that hasnt been completely tapped into for its greatest potential. PPM150 Nutritional Guidelines that came into effect in Ontario, Canada, was one of the first nutritional standards to be implemented for vending and school products. Similar guidelines in many other provinces and states across Canada and the United States have since been implemented. They call for vending and school products that are low in fat (80% with 3 grams of fat and under or 20% with 5 grams of fat and under) as well as low in sodium and sugar, which is not the primary ingredient. Candy, Chocolate, Soda, junk food such as potato chips and confectionary have been banned. Our recipe for Marshmallow Squares are sugar-free, Gluten-free, vegan, contains very little salt, Gelatin Free, kosher, nut free and taste great! Knowing that there are healthy products required for this channel and that the trend will be towards healthier products, we have developed and are constantly continuing to work on other recipes for healthier products that meet the highest standards of quality.
These financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. For the period from inception on June 24, 2011 through December 31, 2016, the Company has incurred accumulated losses totalling $372,082. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
7
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements and Basis of Presentation
The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the SEC) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited condensed interim financial statements should be read in conjunction with the financial statements of the Company for the year ended June 30, 2016 and notes thereto contained in our 10-K Annual Report filed on May 15, 2017.
a. Basis of Presentation - These financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States and are expressed in United States dollars. Our companys fiscal year end is June 30.
b. Use of Estimates and Assumptions - The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. Our company bases our estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected
c. Cash Equivalents - For purposes of the balance sheet and statement of cash flows,
the Company considers all highly liquid instruments with maturity of Six Months or less at the time of issuance to be cash equivalents. The company has no cash equivalents
d. Financial Instruments - Our Companys financial instruments consist principally of cash, accounts payable and accrued liabilities, and related party payables, notes payable. The fair value of our companys cash equivalents is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. The carrying value of accounts payable and accrued liabilities and related party payables approximates their fair value because of the short maturity of these instruments. Unless otherwise noted, it is managements opinion our company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
The company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-base derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instrument at inception and on subsequent valuation dates. The classification of derivative instrument, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. There were no derivative instruments as of December 31, 2015. As of December 31, 2016, the Companys derivative financial instruments were three convertible debt notes and one of then includes convertible warrant that are derivative due to the reset and dilutive issuance clause in the note relating to the conversion price from dilute share issuance.
8
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
·
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
·
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in the active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
·
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurements.
The Companys derivative instruments were reported at fair value using Level 2 inputs as discussed in Note 7.
The Company uses level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Companys derivative liability is adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in result of operations as adjustments to fair value of derivatives.
At December 31, 2016 and 2015, the Company identified the following liabilities that are required to be presented on the balance sheet at fair value:
|
|
|
|
|
|
|
|
|
Description
|
|
Fair Value
As of
December 31, 2016
|
|
|
|
Fair Value Measurements at
December 31, 2016
Using Fair Value Hierarchy
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Derivative liability
|
$
|
11,235
|
$
|
-
|
$
|
11,235
|
$
|
-
|
Total
|
$
|
11,235
|
$
|
-
|
$
|
11,235
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Fair Value
As of
December 31, 2015
|
|
|
|
Fair Value Measurements at
December 31, 2015
Using Fair Value Hierarchy
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Derivative liability
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Total
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
e. Earnings (Loss) per Share - Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At December 31, 2016, all of our potentially dilutive securities outstanding are anti-dilutive and accordingly, basic loss and diluted loss per share are the same. Net loss per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares outstanding do not include shares of restricted stock that have not yet vested, although such shares are included as outstanding shares in the Company's Consolidated Balance Sheet. Diluted net loss per share is computed using the weighted average number of common shares outstanding and if dilutive; potential common shares outstanding during the period. Potential common shares consist of the additional common shares issuable in respect of convertible debt and warrants.
9
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
The following table present the computation of basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended December 31
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net loss attributable to PureSnax
|
|
$
|
(62,404)
|
$
|
(47,830)
|
Less: preferred stock dividends
|
|
|
-
|
|
-
|
Net loss applicable to common stock
|
|
$
|
(62,404)
|
$
|
(47,830)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted
|
|
148,241,424
|
|
235,326,087
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and diluted
|
|
$
|
(0.0004)
|
$
|
(0.0002)
|
f. Foreign Currency Translation -
The Companys initial operations will be in the United States however global expansion is anticipated which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to the Companys operations that
arise
from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company's functional currency for all operations worldwide is the U.S. dollar. Nonmonetary assets and liabilities are translated into their U.S. dollar equivalents at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included in current results of operations.
g. Income Taxes - Our Company accounts for income taxes using the asset and liability method which provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. Our company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
h. Recently Issued Accounting Pronouncements - Jumpstart Our Business Startups Act (JOBS Act) Transition Accounting: pursuant to Section 107(b) of the JOBS Act, we have elected to use the extended transition period for complying with new or revised accounting standards for an emerging growth company. This election will permit us to delay the adoption of new or revised accounting standards that will have difference effective dates for public and private companies until those standards apply to private companies. Consequently, our financial statements may not be comparable to companies that comply with public company effective dates.
In April 2016, the FASB issued Accounting Standards Update (ASU) 2016-10, Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing (ASU 2016-10). ASU 2016-10 was issued by the Board to improve Topic 606 by reducing:
1)
The potential for diversity in practice at initial application
2)
The cost and complexity of applying Topic 606 both at transition and on an ongoing basis.
The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
10
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
To achieve that core principle, an entity should apply the following steps:
1)
Identify the contract(s) with a customer
2)
Identify the performance obligations in the contract
3)
Determine the transaction price.
4)
Allocate the transaction price to the performance obligations in the contract.
5)
Recognize revenue when (or as) the entity satisfies a performance obligation.
The amendments in ASU 2016-10 clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guide, while retaining the related principles for those areas. The effective date and transition requirements for the amendments in ASU 2016-10 are for annual reporting periods beginning after December 31, 2016, including interim periods within that reporting period. FASB ASU 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently assessing this guidance for future implementation.
In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 was issued as part of the Boards Simplification Initiative. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, Accounting for Income Taxes, Classification of Excess Tax Benefits on the Statement of Cash Flows, Forfeitures, Minimum Statutory Tax Withholding Requirements, Classification of Employee Taxes Paid on the Statement of Cash Flows When an Employer Withholds Shares for Tax-Withholding Purposes, Practical Expedient- Expected Term, and Intrinsic Value. The amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is currently assessing this guidance for future implementation.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. In addition, also consistent with the previous leases guidance, a lessee (and a lessor) should exclude most variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments.
For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.
The accounting applied by a lessor is largely unchanged from that applied under previous GAAP.
In January 2015, FASB issued Accounting Standards Update (ASU) No. 201501 Income Statement Extraordinary and Unusual Items, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Eliminating the concept of extraordinary items will save time and reduce costs for preparers because they will not have to assess whether a particular event or transaction event is extraordinary (even if they ultimately would conclude it is not). This also alleviates uncertainty for preparers, auditors, and regulators because auditors and regulators no longer will need to evaluate whether a preparer treated an unusual and/or infrequent item appropriately. This update is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early application is permitted.
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
11
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
NOTE 3 RELATED PARTY TRANSACTIONS
As of December 31, 2016, Mr. Patrick Gosselin loaned the Company $18,517, Gosselin Consulting Group, Inc. loaned the Company $4,380. The amounts owed are unsecured, non-interest bearing, and have no specified repayment terms. The loan to related parties is $22,897 as of December 31, 2016.
NOTE 4 STOCKHOLDERS EQUITY
The Companys authorized capital consists of 1,000,000,000 shares of common stock with a par value of $0.001 per share and 4,250,000 shares of preferred stock with a par value of $0.001 per share.
On June 1, 2015, the board of directors approved a forward split of the issued and outstanding common shares on the basis of 40 new common shares for each 1 existing common share. Upon effectiveness of the forward split, the issued and outstanding shares of common stock increased from 10,000,000 to 400,000,000. All share and per share amounts have been retroactively adjusted to reflect the forward stock split. On June 11, 2015, the Companys Articles of Incorporation were amended reflect these changes.
On September 21, 2015, Patrick Gosselin executed an agreement whereby an aggregate of 300,000,000 common stock shares beneficially owned by would be cancelled in exchange for the issuance of 1,000,000 shares of Series A Convertible Preferred stock.
On September 29, 2015 the Company filed an amendment to its certificate of designation whereby its Series A Convertible Preferred Stock was increased to 1,000,000 shares with a par value of $0.001 per share, Senior liquidation preference to all junior shares, Convertible into common shares at a ratio of one Series A Preferred to 120 common shares, Right to vote for each share of common stock into which a convertible share could be converted, No redemption rights, Certain protective provisions, and No pre-emptive rights.
On February 24, 2016, the Company issued to Typenex Co-Investment, LLC,
and 85,662 common stock purchase warrants, with a term of three years, at an exercise price of $0.271 per share. This was in connection with the Promissory
convertible note the Company issued to Typenex Co-Investment, LLC.
On April 1, 2016, the Company executed a subscription agreement with Nick Mastoris for the purchase of 44,118 restricted shares of Common Stock for a purchase price of $15,000.
On April 5, 2016, the Company executed a subscription agreement with Gary Kamen for the purchase of 73,530 restricted shares of Common Stock for a purchase price of $25,000.
On April 1, 2016, the Company executed a subscription agreement with Principe Asset Partners LLC for the purchase of 44,118 restricted shares of Common Stock for a purchase price of $15,000.
On May 13, 2016, Typenex Co-Investment, LLC elected to convert warrant # 1 with a fair market value of $26,412 into 73,798 shares of the Companys common stock,
at an exercise price of $0.35789 per share.
On June 7, 2016, the Company issued to Typenex Co-Investment, LLC,
31,852 common stock purchase warrants, with a term of three years, at an exercise price of $0.69 per share.
On August 25, 2016, EMA Financial, LLC, elected to convert $7,000 of its
convertible promissory note in the principal amount of $30,000
into 500,000 shares of the company common stock at a conversion price of $0.035. The principal remaining after conversion was $23,000.
On September 9, 2016, Typenex Co-Investment, LLC, elected to convert $20,000 of its
convertible promissory note in the principal amount of $115,000
into 332,779 shares of the companys common stock at a conversion price of $0.0601. The principal remaining after conversion was $100,962.
On September 16, 2016, EMA Financial, LLC, elected to convert $4,392 of its
convertible promissory note in the principal amount of $30,000
into 200,000 shares of the companys common stock at a conversion price of $0.008785. The principal remaining after conversion was $18,607.
12
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
On September 20, 2016, Typenex Co-Investment, LLC, elected to convert $15,019.14 of its
convertible promissory note in the principal amount of $115,000
into 999,943 shares of the companys common stock at a conversion price of $0.01502. The principal remaining after conversion was $86,846.84.
On September 21, 2016, Pinz Capital International, LP, elected to convert $10,000 of its
convertible promissory note in the principal amount of $30,556
into 664,010 shares of the companys common stock at a conversion price of $0.01506. The principal remaining after conversion was $20,556.
On September 29, 2016, Pinz Capital International, LP, elected to convert $7,500 of its
convertible promissory note in the principal amount of $30,556
into 1,785,714 shares of the companys common stock at a conversion price of $0.0042. The principal remaining after conversion was $13,056.
On September 30, 2016, EMA Financial, LLC, elected to convert $1,617 of its
convertible promissory note in the principal amount of $30,000
, plus an additional principal on account of conversion of $33 into 1,650,000 shares of the companys common stock at a conversion price of $0.001. The principal remaining after conversion was $16,990.
On October 13, 2016, Typenex Co-Investment, LLC, elected to submit a True Up notice from a previous conversion of $20,000 (September 9, 2016) of its
convertible promissory note in the principal amount of $115,000. The True Up notice called for an additional conversion of
7,242,979 shares of the companys common stock at a conversion price of $0.002640. The principal remaining after conversion was $100,962.
On October 14, 2016, Pinz Capital International, LP, elected to convert $5,000 of its
convertible promissory note in the principal amount of $30,556
into 2,976,190 shares of the companys common stock at a conversion price of $0.001680. The principal remaining after conversion was $8,056.
On October 17, 2016, EMA Financial, LLC, elected to convert $5,370.40 of its
convertible promissory note in the principal amount of $30,000
, plus an additional principal on account of conversion of $109.60 into 5,480,000 shares of the companys common stock at a conversion price of $0.001. The principal remaining after conversion was $11,620.10.
On October 25, 2016, EMA Financial, LLC, elected to convert $4,402.30 of its
convertible promissory note in the principal amount of $30,000
, plus an additional principal on account of conversion of $1,886.70 into 6,289,000 shares of the companys common stock at a conversion price of $0.001. The principal remaining after conversion was $7,217.80.
On October 25, 2016, Pinz Capital International, LP, elected to convert $9,656 of its
convertible promissory note in the principal amount of $30,556
into 8,046,488 shares of the companys common stock at a conversion price of $0.0012. The principal remaining after conversion was $0.
On November 2, 2016, Typenex Co-Investment, LLC, elected to submit a True Up notice from a previous conversion of $15,019.14 (September 20, 2016) of its
convertible promissory note in the principal amount of $115,000. The True Up notice called for an additional conversion of
7,834,845 shares of the companys common stock at a conversion price of $0.00170. The principal remaining after conversion was $86,846.84.
On December 9, 2016, Typenex Co-Investment, LLC, elected to convert $18,000 of its
convertible promissory note in the principal amount of $115,000
into 16,981,132 shares of the companys common stock at a conversion price of $0.00106. The principal remaining after conversion was $70,894.42.
On November 14, 2016, EMA Financial, LLC, elected to convert $5,201.70 of its
convertible promissory note in the principal amount of $30,000
, plus an additional principal on account of conversion of $2,229.30 into 7,431,000 shares of the companys common stock at a conversion price of $0.001. The principal remaining after conversion was $2,016.10.
On December 14, 2016 the Company filed an amendment to its certificate of designation whereby its Series A Convertible Preferred Stock was increased to 4,250,000 shares with a par value of $0.001 per share, Senior liquidation preference to all junior shares, Convertible into common shares at a ratio of one Series A Preferred to 120 common shares, Right to vote for each share of common stock into which a convertible share could be converted, No redemption rights, Certain protective provisions, and No pre-emptive rights.
13
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
On December 14, 2016 the Company filed an amendment to its certificate of designation whereby its Authorized Common Stock was increased to 1,000,000,000 shares with a par value of $0.001 per share.
On December 21, 2016, EMA Financial, LLC, elected to convert $5,103.00 of its
convertible promissory note in the principal amount of $30,000
, plus an additional principal on account of conversion of $4,617.00 into 9,720,000 shares of the companys common stock at a conversion price of $0.001. The principal remaining after conversion was $4,948.15.
Warrants
The
Company
issued several Notes in prior periods and converted them in the issuance of warrants. The following table summarizes information about the Companys warrants at December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
Number of Units
|
|
Weighted Average
Exercise Price
|
|
Weighted Average Remaining
Contractual Term (in years)
|
|
Intrinsic
Value
|
Outstanding at June 30, 2015
|
|
-
|
|
-
|
|
-
|
|
-
|
Granted - Warrant 1
|
|
73,798
|
|
0.36
|
|
3.01
|
|
-
|
Exercised - Warrant 1
|
|
(73,798)
|
|
(0.36)
|
|
(0.36)
|
|
-
|
Granted - Warrant 2
|
|
76,501
|
|
0.18
|
|
2.67
|
|
-
|
Outstanding at June 30, 2016
|
|
76,501
|
$
|
0.18
|
|
2.67
|
$
|
-
|
Exercisable at June 30, 2016
|
|
76,501
|
$
|
0.18
|
|
2.67
|
$
|
-
|
Granted
|
|
-
|
|
-
|
|
-
|
|
-
|
Exercised
|
|
-
|
|
-
|
|
-
|
|
-
|
Exercisable at December 31, 2016
|
|
76,501
|
|
0.00436
|
|
2.16
|
|
-
|
Most of the
above
warrants were issued in connection to conversion of convertible notes from Typenex Co-Investment, LLC. When the debt is converted and warrants are issued, the Company determines the fair value of the warrants using the Black-Scholes model and takes a charge to interest expense at the date of issuance.
The exercise price for warrants outstanding and exercisable at December 31, 2016 is as follows:
|
|
|
|
|
|
|
Outstanding
|
|
Exercisable
|
Number of Warrants
|
|
Exercise Price
|
|
Number of Warrants
|
|
Exercise Price
|
76,501
|
$
|
0.00436
|
|
76,501
|
$
|
0.00436
|
14
PURESNAX INTERNATIONAL, INC.
Notes to the Condensed Financial Statements
December 31, 2016 (unaudited)
NOTE 5 CONVERTIBLE NOTES PAYABLE
The
Company
issued convertible notes payable in 2016. The outstanding balance and any accrued interest is due on maturity date. Under the agreement, the note can be convertible at holders discretion into common shares of the Company stock.
The Companys convertible notes payable is as follows: