NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2018 (UNAUDITED)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
History
Quanta, Inc (Quanta, Inc. and hereinafter referred to as “Quanta”, the “Company”, “we” or “us”) was incorporated on April 28, 2016 under the laws of the
State of Nevada, as Freight Solution, Inc. On June 5, 2018 the Company experienced a change in control. In connection with the change in control the Company acquired Bioanomaly, Inc. through its wholly-owned subsidiary. On July 11, 2018 we
changed our name from Freight Solution, Inc. to Quanta, Inc.
Following the merger, Freight Solution, Inc. adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors
became the officers and directors of Freight Solution, Inc. Bioanomaly, Inc, was incorporated under the laws of the state of California on December 27, 2016.
Quanta is an applied science business focused on increasing energy levels of plant matter increasing performance within the human body.
Change in Control
On June 5, 2018, the Company experienced a change in control (the “Change in Control”). With the Change in Control certain liabilities of the Company
were forgiven and/or paid for on behalf of the Company by our founder, a former officer and former director of the Company. Total liabilities at the time approximated $265,538 which included professional fees owed to software development firm and
other consultants. The board of directors nominated Mr. Eric Rice to the board of directors on June 5, 2018. Mr. Rice became our Chief Executive Officer on June 5, 2018.
New Business
On June 6, 2018, Bioanomaly, Inc. executed an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with us, as Freight Solution,
Inc. a publicly traded Nevada corporation, and our wholly-owned subsidiary Quanta Acquisition Corp., a California corporation. Pursuant to the terms of the merger agreement, Quanta Acquisition merged with and into Bioanomaly, Inc. in a statutory
reverse triangular merger (the “Merger”) with Bioanomaly, Inc. surviving as a wholly-owned subsidiary. Following the merger we adopted the business plan and operations of Bioanomaly, Inc. Bioanomaly, Inc.’s officers and directors became our
officers and directors.
As consideration for the Merger, we issued the shareholders of Bioanomaly, Inc. an aggregate of 25,900,000 shares (the “Share Exchange”) of our common
stock, par value $0.001 per share. Bioanomaly, Inc.’s existing shareholders along with Bioanomaly, Inc.’s convertible note holders received the requisite number of shares in the share exchange reflected by their ownership prior to the issuance of
any additional shares. Bioanomaly, Inc.’s three founders received 21,908,810 shares in the Share Exchange, the convertible note holders received 3,771,040 shares in the Share Exchange and one other individual received 220,150 shares in the Share
Exchange as payment for services related to the Bioanomaly, Inc.’s Joint Venture activity.
Simultaneously with the Merger, we accepted subscriptions for 6,500,090 shares of our common stock in a private placement. The common stock was sold at a
price of $0.20 per share for aggregate offering proceeds of $1,300,000. No fees were paid in association with this offering. In connection with the offering we issued warrants to purchase 3,000,000 shares of our common stock at an exercise price
of $0.30 per share with an expiry of four years.
On July 11, 2018 the State of Nevada approved the name change from Freight Solution, Inc. to Quanta, Inc. completing the Merger Agreement. As a result of
the Merger, the Bioanomaly, Inc. became a wholly-owned subsidiary of Quanta, Inc. The Merger is treated as a “tax free exchange” under Section 368 of the Internal Revenue Code of 1986, as amended. As a result of the Merger, Bioanomaly, Inc., the
surviving entity in the Merger, became a wholly-owned subsidiary of Quanta, Inc. For accounting purposes, the Merger was treated as a “reverse acquisition” and Bioanomaly, Inc. was considered the accounting acquirer.
In connection with the Merger, 15,000,000 shares of our common stock were returned to treasury for no cost. The Bioanomaly, Inc. shareholders own
approximately sixty-three percent (63%) of our issued and outstanding common stock. At the time of the Merger, the Company’s board of directors and officers were reconstituted by the resignation of our founder, Mr. Shane Ludington as Chairman,
Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer with the appointment of Mr. Eric Rice as Chairman, Chief Executive Officer, Chief Financial Officer and Mr. Jeffrey Doiron as President and Chief Operations Officer of the
combined company. On June 6, 2018, the Company approved an amendment to its Articles of Incorporation to Quanta, Inc. The Secretary of State for Nevada approved the name change in August 2018.
Year end
The Company’s year-end is April 30
th
. Our wholly-owned subsidiary Bioanomaly, Inc.’s year-end is December 31
st
.
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim financial statements (October 31, 2018 (unaudited)) and basis of presentation
The accompanying unaudited 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 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 results for a full fiscal year. These financial statements should be read along
with the financial statements of the Company for the period ended April 30
th
(audited) and notes thereto.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported
amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and
on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At October
31, 2018 and April 30, 2018, the Company cash equivalents totaled $211,692 and $6,314, respectively. There is no amount that is uninsured by the FDIC (Federal Deposit Insurance Corporation).
Accounts Receivable
We rec
ord accounts receivable at net realizable value. This
value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. The Company
calculates this allowance based on the history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and the relationships with, and the economic status of, the customers. Allowance for estimated,
uncollectible accounts was determined to be unnecessary.
Property and Equipment
Property and equipment are recorded at cost. Expenditures for
major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for
financial statement purposes.
Net Loss per Share
Net loss per common share is computed by dividing net loss by
the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260 - “
Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net
income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common
share equivalents outstanding. For the three month periods ended October 31, 2018 and October 31, 2017, net loss per share is $(0.01) and $(0.02) respectively.
For the six month periods ended October 31, 2018 and October 31, 2017, net loss per share is $(0.04) and $(0.02) respectively.
Revenue Recognition
Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that
an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of
revenue that is recorded reflects the consideration the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the
contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable
consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company applies the five-step model to contracts when it is probable that we will collect the consideration it is entitled to in exchange for the
goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company at contract inception reviews the contract to determine which performance obligations the Company must deliver and which
of these performance obligations are distinct. The Company recognizes revenues as the amount of the transaction price is allocated to each respective performance obligation when the performance obligation is satisfied or as it is to be satisfied.
Generally, the Company’s performance obligations are transferred to the customer at a point in time, typically upon delivery.
Advertising costs
Advertising costs are anticipated to be expensed as incurred. During the three month periods ended October 31, 2018 and October 31, 2017, advertising
costs totaled $14,870 and $2,130, respectively, and
$22,633 and $3,137, respectively, for the six month periods then ended
Fair Value of Financial Instruments
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain
related FASB staff positions. This guidance defines fair value as the price would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining
the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions marketplace participants
would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
∙
|
Level 1 - quoted market prices in active markets for identical assets or liabilities.
|
∙
|
Level 2 - inputs other than Level 1 are observable, either directly or indirectly, such as quoted prices in active markets for
similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets are not active, or other inputs are observable or can be corroborated by observable market data for substantially the full term of
the assets or liabilities.
|
∙
|
Level 3 - unobservable inputs are supported by little or no market activity and are significant to the fair value of the assets or
liabilities.
|
The carrying amount of the Company's financial instruments approximate fair value as of October 31, 2018 and April 30, 2018 due to the short-term nature
of these instruments.
Recently Issued Accounting Pronouncements
Company’s management evaluated recent accounting pronouncements through October 31, 2018 and believe none of them would have a material effect on the
Company’s financial statements except for the following.
With the acquisition of the new business we are subject to ASC Topic 606,
Revenue from Contracts with Customers.
The revenue standard requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time based on when
control of goods and services transfers to a customer. As a result of the adoption of the standard, we will record changes in the timing of revenue recognition and in the classification between revenues and costs. The new standard does not
currently impact the cash or the economics of underlying customer contracts we may acquire with the New Business (see Note 1 – Organization).
Other recent accounting pronouncements issued by the FASB,
including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on our present or future financial
statements.
Income Taxes
Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability is
recognized for estimated future tax effects attributable to temporary differences and carry-forwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the
extent, based on available evidence; it is more likely than not such benefits will be realized. The Company’s deferred tax assets were fully reserved for as of October 31, 2018 and April 30, 2018.
The Company accounts for income taxes applying FASB ASC 740, which requires the recognition of deferred tax liabilities and assets for expected future
tax consequences of events have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
NOTE 3 – RELATED PARTY TRANSACTIONS
Related party transactions for the six month periods ended October 31, 2018 and October 31, 2017 were as follows:
During the six month period ended October 31, 2018, the Company paid shareholders of the Company, Mr. Eric Rice, Mr. Michael Oirech, and Mr. Blake
Gillette $5,500, $19,060 and $17,577, respectively, for their services.
During the six month period ended October 31, 2017 the Company paid shareholders of the Company, Mr. Eric Rice, Mr. Michael Oirech, and Mr. Blake
Gillette $0, $22,000, and $24,100, respectively, for their services
No other related party transactions occurred for the three month periods ended October 31, 2018 and October 31, 2017.
In connection with the Change in Control (see Note 1 – Organization) our founder who negotiated and guaranteed the forgiveness of certain debts of the
Company. The Company recognized related party debt forgiveness of approximately $265,538 from nonrelated party notes payable and accounts payable negotiated and guaranteed by our founder. This transaction related in revenue from debt relief. This
transaction occurred on or about June 5, 2018. Our founder, a former officer and former director guaranteed the forgiveness of these debts and received no compensation from it.
.
In connection with the Merger Agreement, Mr. Rice original shares were increased by 9,743,571 shares of common stock, Mr. Hickman original shares were
increased by 962,953 shares of common stock, and Mr. Gillette original shares were increased by 1,202,284 shares of common stock. The share increase was a forward split share associated with the share exchange. The number of shares did not
increase or decrease the parties percentage of ownership prior to or in connection with the merger or share exchange.
During the six month period ended July 31, 2017, the Company received a loan in the amount of $20,000 from Mr. Hickman and repaid that amount during the
three month period then ended.
NOTE 4 – SHARE CAPITAL
The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 25,000,000 shares of its $0.001 par value preferred stock.
Preferred stock
No shares of blank check preferred stock have been issued.
Common stock
On April 28, 2016, the Company issued to its founder, 11,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. These
services were valued at $11,000. On April 29, 2016, the Company issued to its founder 4,000,000 shares of its $0.001 par value common stock at a price of $0.001 per share. In acquiring certain intangible assets we recorded their value at $4,000.
On August 23, 2017 the Company completed a public offering of its equity registered on Form S-1. The Company issued 7,000,000 shares of its common stock
to 34 investors. The investors paid $0.01 per share for a combined investment of $70,000. On March 15, 2018 and on March 22, 2018, respectively, 100,000 shares and 400,000 shares of the Company’s common stock were returned to treasury by certain
shareholders for no consideration.
On June 6, 2018, the Company executed the Merger Agreement (see Note 1 – Organization). In connection with the Merger Agreement 15,000,000 shares of
common stock acquired in the Change in Control transaction were returned to treasury and cancelled. In connection with the Merger Agreement the shareholders of Bioanomaly, received 25,900,000 shares of our common stock. In connection with the
Change in Control, the Company received subscriptions for 6,500,090 shares of its common stock in a private placement offering. The investors paid a purchase price of $0.20 per share for an aggregate offering amount of $1,300,000.
For the three months ended October 31, 2018, the company received $161,000 as in the form of 11 payments for its shares of $.001 par value per share
common stock for a price of $0.50 per share. The shares had not been issued and the Company is obligated to issue the shares once the offering is completed. As of October 31, 2018, the Company is obligated to issue 322,000 shares. Subsequent to
the period ended October 31, 2018 the Company received another $145,000 in subscriptions with another 290,000 shares of common stock to be issued. The offering will terminate upon the sale and completion of 3,000,000 shares of common stock. The
offering is not registered with the SEC under the 1933 Act, or the securities laws of any state, and are being offered upon reliance upon certain exceptions from registration under the laws of the United States.
As of October 31, 2018, there were 38,900,090 shares of our common stock issued and outstanding. 322,000 shares are to be issued with respect to the
recent offering.
Deferred offering costs
Deferred offering costs consisted of accounting fees, legal fees and other fees incurred related to our direct public offering. Upon completion of the
public offering in 2017, we netted deferred offering costs of $34,161 against the net offering proceeds of $70,000 received in that offering. No deferred offering costs were incurred in connection with the private placement of 6,500,090 and the
recent offering shares of our common stock or the aforementioned warrants or subscriptions.
NOTE 5 – JOINT VENTURES
In March 2017, the Company through its wholly owned subsidiary
entered into a joint venture and exclusive license agreement (the “Joint Venture”) for the development, design, and manufacture of certain technology for commercialization. The Joint Venture obligates the Company to a contribution of $350,000
in order to pay for the cost of the technology machine. The Joint Venture provides for the exclusive use of a certain patent developed by Dr. Arthur Grant Mikaelian (the “Patent Holder”). The patent has an expiry of 2037. Profits from the Joint
Venture are allocated 50/50 between the Company and the Patent Holder. Payments are required to be paid monthly to the Patent Holder. There are no amounts due to the Joint Venture as of October 31, 2018. Both parties to the Joint Venture are
compliant with the contractual terms as
of each period recorded.
On September 12, 2018, the Company through its wholly owned subsidiary entered into a joint venture with a Canadian corporation to expand the Quanta
brand, technology and product lines in Canada (the “Canadian Joint Venture”). The Joint Venture terms were never effectuated into with no amounts being paid from either party, and so the Joint Venture agreement was voided. No amount is owed to
either party.
NOTE 6 – COMMITMENTS AND CONTINGENCIES
There are no future minimum commitments or contingencies as of October 31, 2018 except for the following:
On June 6
th
, 2018, the Company entered into a noncancelable operating lease on its headquarters requiring payments of $8,385 per month, with
lease payments increase of 5% each year, ending on July 31, 2023. Future minimal rental payments under this noncancelable operating lease as of October 31 is:
October 31, 2018-October 31, 2019
|
|
|
101,878
|
|
October 31, 2019-October 31, 2020
|
|
|
106,972
|
|
November 1, 2020-October 31 2021
|
|
|
112,320
|
|
November 1, 2021-October 31 2022
|
|
|
117,936
|
|
November 1, 2022-July 31 2023
|
|
|
91,728
|
|
Total
|
|
$
|
530,834
|
|
The Company has not assessed its entire financial obligation or contingent liability for income tax withholding from the misclassification of independent
contractors that be employees under the laws of the state of California. The California Supreme Court decision on April 30, 2018, held there is a presumption that all workers are employees, and a business classifying a worker as an independent
contractor bears the burden of establishing such a classification is proper under a new test called the “ABC test.” This test or compliance thereof, by the Company could be held liable for penalties, interest, tax withholdings which we believe to
be immaterial.
NOTE 7 –PROPERTY AND EQUIPMENT
During the year December 31, 2017, the Company pursuant to the Joint Venture purchased certain technological equipment for $347,500. The equipment is
being depreciated on the straight line method over 7 years. Depreciation for this equipment has been determined to be 7 years.
During the six months ended October 31, 2018. The Company paid a deposit with the Patent Holder for another piece of equipment under the Joint Venture.
As of October 31, 2018, the equipment
is 50%
complete, and under the terms of the Joint Venture has incurred costs of $175,000 and remitted an
additional amount to the Patent Holder.
Depreciation expense for the six-month periods ended October 31, 2018 and October 31, 2017 is $24,822 and $0, respectively.
|
|
As of October 31, 2018
|
|
|
As of April 30, 2018
|
|
Furniture and equipment
|
|
$
|
-
|
|
|
$
|
-
|
|
Machinery – Technology Equipment CIP
|
|
|
175,000
|
|
|
|
-
|
|
Machinery – Technology Equipment
|
|
|
347,500
|
|
|
|
-
|
|
Total property and equipment
|
|
|
522,500
|
|
|
|
-
|
|
Less accumulated depreciation
|
|
|
(49,644
|
)
|
|
|
-
|
|
|
|
$
|
472,856
|
|
|
$
|
-
|
|
NOTE 8 – INCOME TAXES
A reconciliation of statutory tax rates to effective tax rates were as follows in each of the periods presented:
|
|
For the six
month period ended
October 31, 2018
|
|
|
For the six
month period ended
October 31, 2017
|
|
Federal income taxes at statutory rate
|
|
|
21.0
|
%
|
|
|
35.0
|
%
|
State income taxes at statutory rate
|
|
|
8.84
|
%
|
|
|
8.84
|
%
|
Valuation allowance
|
|
|
(29.84
|
%)
|
|
|
(43.84
|
%)
|
Effective tax rate
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
As of October 31, 2018, the Company had a net operating loss for tax purposes of $798,543.
The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits within income tax expense. For the
periods ended October 31, 2018 the Company did not recognize any interest or penalties in its statement of operations, nor did it have any interest or penalties accrued in its balance sheet at October 31, 2018 relating to unrecognized tax
benefits.
Under the provisions of ASC 740,
Accounting for Uncertainty in Income
Taxes
, the Company identified no significant uncertain tax positions in 2018. The Company files income tax returns in U.S. jurisdiction. There are no federal or state income tax examinations underway for these, and tax returns for the
current year are still open to examination.
NOTE 9 - NOTE PAYABLE
Prior to the Change in Control we executed several promissory notes with nonrelated parties in the aggregate of $75,071 of which $24,738 was outstanding
at the end of April 30, 2018. The unsecured promissory notes bear interest at 0% per annum and are due and payable upon demand. The Company in connection with the public offering repaid approximately $59,800 of these two nonrelated parties. In
connection with the Change in Control our founder negotiated and guaranteed the forgiveness of certain debts of the Company. The Company recognized debt forgiveness of $18,538 from the remaining nonrelated party note payable.
During the six month period ended October 31, 2018, the Company entered into a new promissory note with a nonrelated party for $25,000. The $25,000 note
and interest of $841 was paid in full prior to July 2018.
Short-term notes payable at October 31, 2018 and April 30, 2018 was $110,000 and $0, respectively.
NOTE 10 – CONCENTRATION OF SALES AND SEGMENTED DISCLOSURE
For the six month periods ended October 31, 2018 and October 31, 2017, there were no concentration of sales with respect to the Company’s revenues.
Revenue for all customers during these periods was in the form of product sales and services. No single customer made up more than 10% or more of total revenues.
The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii)
determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange
for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver
and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price is allocated to the respective performance obligation when the performance obligation is satisfied or as it is
satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.
NOTE 11 – WARRANTS
In June 2018, 3,000,000 warrant shares were issued in connection with the sale of private placement offering. The fair value of the warrants were
calculated based on the Black-Scholes model. See Note 5. The warrents are through private placement as the timing of the issuance of the warrants, as there was not a true public market as of the six months ended October 31, 2018. The value is
accounted for to and from paid in capital, and so there is no true financial statement impact as of October 31, 2018. The warrants will expire in 4 years as of the issuance date. The warrants have not been exercised.
For the Black Scholes model calculation, we calculated a volatility rate averaging 73.1% based on other companies that with similar operations
and size. Historical volatility was computed using daily pricing observations for recent periods. The Company believed this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected
term. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the common stock equivalents. As of October 31, 2018, the fair value of these warrants was $4,468,006.
The following table summarizes the assumptions used to estimate the fair value of warrants granted during the three months ended October 31,
2018:
|
|
For the
three months
ended October
31, 2018
|
|
|
|
|
|
Expected dividend yield
|
|
|
0
|
%
|
Weighted-average expected volatility
|
|
|
73.1
|
%
|
Weighted-average risk-free interest rate
|
|
|
2.77-2.85
|
%
|
Expected life of warrants
|
|
4 years
|
|
The Company’s outstanding and exercisable warrants as of October 31, 2018 and December 31, 2017 are presented below:
|
|
Number
Outstanding
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Contractual
Life in
Years
|
|
|
Fair
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants Outstanding and Exercisable as of December 31, 2017
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants granted (June 2018)
|
|
|
3,000,000
|
|
|
$
|
0.30
|
|
|
|
4.00
|
|
|
$
|
1,748,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants Forfeited
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants Outstanding and Exercisable as of October 31, 2018
|
|
|
3,000,000
|
|
|
$
|
0.30
|
|
|
|
4.00
|
|
|
$
|
4,468,006
|
|
NOTE 12 – SUBSCRIPTION RECEIVABLE
During the three months ended July 31, 2018, the Company issued a net total of 250,000 shares of common stock for $0.20 per share in the
private placement offering conducted in connection with the going public transaction. The total net purchase price of $50,000 had not been received as of July 31, 2018 and this amount is presented on the balance sheet as common stock
subscriptions receivable, a contra-equity account. In addition, there was $13,000 in the escrow account as part of the going public transaction that was not deposited as of October 31, 2018, and so it was part of the common stock subscription
receivable contra equity as well. The Company collected the total of $63,000 of the receivable subsequent to on August 9, 2018.
As part of the 692,000 shares in subscriptions entered for the three months ended October 31, 2018, there were 80,000 common shares at $.50 a
share totaling $40,000 that was entered into, but the amount had not been paid as of October 31, 2018. This is presented on the balance sheet as common stock subscriptions receivable, a contra-equity account. The total subscription receivable as
of October 31, 2018 is $40,000.
NOTE 13 – SUBSEQUENT EVENTS
The Company evaluated all events that occurred after the balance sheet date of October 31, 2018 through the date the financial statements were
issued. The only significant events occurred during this period were:
On November 6th, 2018 the
Company issued 300,000 shares to a vendor for professional services performed. Those services were valued at $90,000 or $0.30 per share.
Subsequent to the period ended October 31, 2018 the Company received another $145,000 in subscriptions with another 290,000 shares of common
stock to be issued (See Note 4 – Share Capital).