NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Natur
International Corp was formerly named Future Healthcare of America. Future Healthcare of America was founded in 2012 and was traded
with stock ticker symbol FUTU. Future Healthcare of America was a provider of home healthcare services, including senior care,
occupational and speech therapy, and pediatric nursing services.
The
name change took place following the consummation of acquisition of Natur Holding B.V. and became effective Monday, January 7.
The stock ticker symbol has become NTRU. Currently the healthcare services are being wound down.
Natur
Holding B,V. (“we”, “our”, “the Company” or “Natur”) was founded in late 2015
and has its headquarters in Amsterdam, the Netherlands.
At the onset of the quarter, our product line up centered on
a range of cold pressed juices and healthy snacks. These products were sold either directly or through distribution partners in
the Netherlands and the United Kingdom. Beginning in the fourth quarter of 2018, and throughout the first quarter of 2019, the
Company focus shifted from dependence on the legacy fruit and vegetable juices and snacks toward innovating a new line of hemp-derived
natural food and beverage products. The Company products value proposition is to affordably provide the most culturally relevant,
authentic, fresh fruit, vegetable and hemp-derived supplement consumer products to democratize clean, healthy, eating and drinking
occasions, with plans to address the growing needs for products that address other personal needs in health, wellness and beauty
care.
Through third party contract manufacturers, we apply patented
technology to proprietary nutrient dense blends of fruit and vegetables, adding hemp-derived supplements. These are bottled or
packed with technically advanced food and product safety measures and in some cases cold high-pressure processing to bring fresh
tasting fruit, vegetable and hemp-derived supplement blends to market through more than fifteen product types. These newly innovated
products are brought to market through Natur’s distribution channels of direct-to-business, direct-to-consumer and through
select distributors.
Natur
operated as a private enterprise in the Netherlands from its founding in 2015 through November 13, 2018, when it was acquired
as a wholly owned subsidiary in a share exchange transaction by Future Healthcare of America on November 13, 2018, contemplated
by that certain Share Exchange Agreement, among the Company and the former shareholders of Natur Holding, B.V. (the “Share
Exchange Transaction”). In connection with the Share Exchange Transaction, the former shareholders of Natur received the
equivalent of 215,759,999 shares of the Common Stock (the “Common Stock”), which was issued in part as 115,760,000
shares of Common Stock and in part as 100,000 shares of voting, convertible Series B Preferred Stock (the “Series B Preferred
Stock”) representing 100,000,000 shares of Common Stock upon conversion. The Series B Preferred Stock will convert automatically
upon the Company increasing the number of shares of Common Stock of its authorized capital, which it plans to do promptly so as
to cause the conversion of the Series B Preferred Stock. Immediately after the Share Exchange Transaction, the former Natur shareholders
collectively own the controlling position among the shareholders of the Company
The
merger was accounted for as a reverse capitalization with Natur Holding BV being treated as the accounting acquirer. As such,
the historical information for all periods presented prior to the merger date relate to Natur Holding BV. Subsequent to the merger
date, the information relates to the consolidated entities of Natur with its subsidiary Natur Holding BV and the former subsidiaries
of Future Healthcare of America, that are currently in the process of being wound down and presented as discontinued operations.
In
connection with the acquisition, net cash received was $2,000,000 and costs incurred were $399,381 including professional fees
for legal, accounting services and finance commission.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation.
The Company prepares its financial statements using the accrual basis of accounting in accordance with United
States generally accepted accounting principles (“US GAAP”).
Consolidation -
The financial statements presented reflect the accounts of Natur Holding B.V. and it’s direct or indirect subsidiaries.
All inter-company transactions have been eliminated in consolidation.
Use
of Estimates in Financial Statement Preparation.
The preparation of financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Actual results could differ from those estimates.
Cash
and Cash Equivalents.
Cash equivalents include all highly liquid investments with original maturities of three months or less.
Accounts
Receivable.
Accounts receivable are comprised of unsecured amounts due from customers. The Company carries its accounts receivable
at their face amounts less an allowance for bad debts. The allowance for bad debts is recognized based on management’s estimate
of likely losses per year, based on past experience and review of customer profiles and the aging of receivable balances.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Inventory.
Inventory, consisting of raw materials, work in progress and finished goods, is valued at the lower of the inventory’s
costs or net realizable value, using the first in, first out method to determine the cost. Management compares the cost of inventory
with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.
Property
and Equipment
. Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged
to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets as follows:
Category
|
|
Estimated
Useful lives
|
Building and improvements
|
|
5 years
|
Machines and installations
|
|
5 years
|
Furniture and fixtures
|
|
7 years
|
Hardware and software
|
|
3 years
|
Intangible
Assets, and Long-Lived Assets.
The Company recognizes an acquired intangible asset apart from goodwill whenever the intangible
asset arises from contractual or other legal rights, or when it can be separated or divided from the acquired entity and sold,
transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability.
Such intangibles are amortized over their useful lives. Impairment losses are recognized if the carrying amount of an intangible
asset subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds its fair value.
The
Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances
indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability
of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the
carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An
impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Long lived
assets are evaluated on a yearly basis and no impairment losses were incurred during the three months ended March 31, 2019.
Related
Party Transactions.
The Board of Directors has adopted a Related Party Transaction Policy for the review of related person
transactions. Under these policies and procedures, the management reviews related person transactions in which we are or will
be a participant to determine if they are fair and beneficial to the Company. Financial transactions, arrangements, relationships
or any series of similar transactions, arrangements or relationships in which a related person has or will have a material interest
and that exceeds the lesser of: (i) $10,000, and (ii) one percent of the average of the Company’s total assets at year-end
for the last two completed fiscal years, in the aggregate per year are subject to the boards review. Any member of the board who
is a related person with respect to a transaction under review may not participate in the deliberation or vote requesting approval
or ratification of the transaction. Transactions that are subject to the policy include any transaction, arrangement or relationship
(including indebtedness or guarantees of indebtedness) in which the Company is a participant with a related person. The related
person may have a direct or indirect material interest in the transaction. It is Company policy that the board shall approve any
related party transaction before the commencement of the transaction. However, if the transaction is not identified before commencement,
it must still be presented to the board for their review and ratification.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenue
Recognition.
Beginning on January 1, 2018, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers.
The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange
for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will
collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following
five steps are applied to achieve that core principle:
Step
1: Identify the contract with the customer
Step
2: Identify the performance obligations in the contract
Step
3: Determine the transaction price
Step
4: Allocate the transaction price to the performance obligations in the contract
Step
5: Recognize revenue when the company satisfies a performance obligation
The
Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is
when the customer has title and the significant risks and rewards of ownership. Therefore, the Company’s contracts have
a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product.
The
Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers
contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities
are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised
service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which
generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time.
Share-Based
Payment Arrangement.
The Company measures the cost of employee services received in exchange for an award of equity instruments
(share-based payments, or SBP) based on the grant-date fair value of the award. That cost is recognized over the period during
which an employee is required to provide service in exchange for the SBP award—the requisite service period (vesting period).
For SBP awards subject to conditions, compensation is not recognized until the performance condition is probable of occurrence.
The grant-date fair value of share options is estimated using the Black-Scholes-Merton option-pricing model. The Company adopted
ASU 2018-07 in the first quarter of 2019 which aligns the accounting for share-based payment awards issued to employees and non-employees.
The
fair value of each option granted during the period ended March 31, 2019 was estimated on the date of grant using the Black-Scholes-Merton
option-pricing model with the weighted average assumptions in the following table:
|
|
2019
|
|
Expected dividend yield
|
|
|
0
|
%
|
Expected option term (years)
|
|
|
6
|
|
Expected volatility
|
|
|
382
|
%
|
Risk-free interest rate
|
|
|
3
|
%
|
The
expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected
volatility was based on the volatility in the trading of the Company’s common stock. The assumed discount rate was the default
risk-free six-year interest rate in the Netherlands.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenues
do not include sales or other taxes collected from customers.
The
Company’s products are sold and distributed through various channels, which include selling directly to retail stores and
other outlets such as food markets, institutional accounts and independent outlets. The Company typically collects payment
from customers within 30 days from the date of sale. The following table presents our continued revenues disaggregated by geographical
region for the period ended March 31, 2019:
|
|
March 31,
2019
|
|
Netherlands
|
|
|
64,419
|
|
France
|
|
|
-
|
|
Iceland
|
|
|
-
|
|
Total
|
|
|
64,419
|
|
The
Company sells its products and extends credit, generally without requiring collateral, based on an ongoing evaluation of the customer’s
business prospects and financial condition. The Company evaluates the collectability of its trade accounts receivable based
on a number of factors, including the Company’s historic collections pattern and changes to a specific customer’s
ability to meet its financial obligations. The Company has established an allowance for doubtful accounts to adjust the recorded
receivable to the estimated amount the Company believes will ultimately be collected.
The
nature of the Company’s contracts does not give rise to variable consideration, such as prospective and retrospective rebates.
The
Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates
less than 1% of sales could be at risk for return by customers. As the company do not deem this amount to be material no
provision was recorded for the period ended 31 March, 2019. Returned product is recognized as a reduction of net sales.
Recent
Accounting Pronouncements
Compensation—Stock
Compensation:
On June 20, 2018, the FASB issued ASU No. 2018-07,
Compensation—Stock Compensation (Topic 718) - Improvements
to Nonemployee Share-Based Payment Accounting,
which aligns the accounting for share-based payment awards issued to employees
and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as
long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution
of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods
or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model
for nonemployee awards. The adoption had no impact on the Company’s historic financial statements.
Leases:
In February 2016, the FASB issued ASU No. 2016-02,
“Leases (Topic 842)”. This update requires the recognition of lease assets and lease liabilities on the balance sheet
for leases classified as operating leases under previous guidance. The accounting for finance leases (capital leases) was substantially
unchanged. The original guidance required application on a modified retrospective basis with adjustments to the earliest comparative
period presented. In August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842,” which
included an option to not restate comparative periods in transition and elect to use the effective date of ASU No. 2016-02
as the date of initial application, which the Company elected. As a result, the consolidated balance sheet prior to January 1,
2019 was not restated, and continues to be reported under previous guidance that did not require the recognition of operating
lease liabilities and corresponding lease assets on the consolidated balance sheet. As a result of the adoption of ASU No. 2016-02
on January 1, 2019, the Company recorded operating lease right-of-use assets of $580,310 and operating lease liabilities
of $578,007. The adoption of ASU No. 2016-02 had an immaterial impact on the Company’s condensed consolidated statement
of income and c consolidated statement of cash flows for the three-month period ended March 31, 2019. In addition, the
Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed
the Company to carry forward the historical lease classification, not reassess prior conclusions related to expired or existing
contracts that are or that contain leases, and not reassess the accounting for initial direct costs.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Foreign
Currency Translation.
The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section
830-10-45”) for foreign currency translation to translate the financial statements from the functional currency, generally
the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the
functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books
of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities,
and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional
currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the
environment, or local currency, in which an entity primarily generates and expends cash.
The
financial records of the Company are maintained in its local currency, the euro (“EUR”), which is the functional currency.
Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate
prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to
approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial
statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements
into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’
equity.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Unless
otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation
(www.oanda.com) contained in its consolidated financial statements. Translation of amounts from EUR into U.S. dollars has been
made at the following exchange rates for the respective periods:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Balance Sheets
|
|
|
0.8914
|
|
|
|
0.8734
|
|
Statements of operations and comprehensive income
(loss)
|
|
|
0.8805
|
|
|
|
0.8464
|
|
Equity
|
|
|
0.9037
|
|
|
|
0.9037
|
|
Cost
of Revenues.
Cost of revenue includes all direct expenses incurred to produce the revenue for the period. This includes, but
is not limited to, costs for finished products, pick packing costs, storage costs and transportation costs. Cost of revenues are
recorded in the same period as the resulting revenue.
Employee
Benefits.
Wages, salaries, bonuses and social security contributions are recognized as an expense in the year in which the
associated services are rendered by employees. For any unused portion of vacation leave, an accrual is recorded for carry over
to the following year.
Income
Taxes.
The Company is subject to US corporation tax. The US combined federal and state corporate tax rate is 23%. The company’s
United States net operating losses totaled $3,483,928 as of December 31, 2017 and begin to expire in tax years 2032 and following.
Net losses from US operating totaled $157,386 for 2018 and may be carried forward indefinitely. The company is subject to US Internal
Revenue Code rules limiting the use of US net operating losses after the merger with Future Health Care of America during 2018
(described in Note 17). This limitation has no effect on the Company’s financial statements because the Company has recognized
no deferred tax asset with respect to its net operating loss carryforwards. The NOLs are the cumulative NOL’s per the Company’s
2017 federal income tax return. The 382 limit will not be factored in until the company has income and the limit is therefore
applicable.
Natur
Holding, the Dutch subsidiary of Natur International Corp is structured as a Dutch limited liability company. Tax on the result
is calculated based on the result before tax in the profit and loss account, taking into account losses available for set-off
from previous years (to the extent that they have not already been included in the deferred tax assets) and exempt profit components
and after the addition of non-deductible costs. Due account is also taken of changes which occur in the deferred tax assets and
deferred tax liabilities in respect of changes in the applicable tax rate.
The
corporate tax rate for profits above $238,812 (or €200,000) amounts to 25%. Below that amount the rate is 20%. Future profits
can be carried back to prior year losses for a maximum of 9 years for the full amount of losses incurred.
In
the financial statements of group companies, a tax charge is calculated on the basis of the accounting result. The corporate income
tax that is due by these group companies is charged into the current accounts of the company.
Because
of the compensable losses no deferred taxes are included in the financial statements. From incorporation of the company only the
Corporation Tax return of 2015/2016 has been filed. All years are still subject to examination.
Fair
Value of Financial Instruments.
The carrying value of short-term instruments, including cash, accounts payable and accrued
expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The
long-term debt approximate fair value since the related rates of interest approximate current market rates.
Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in
the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on
the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use
of unobservable inputs.
The
Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.
Income
/(Loss) Per Share
- The Company computes income (loss) per share in accordance with Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share, which requires the Company to present basic
earnings per share and diluted earnings per share when the effect is dilutive (see Note 13).
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
3 – GOING CONCERN
The
Company considered its going concern disclosure requirements in accordance with ASC 240-40-50. The Company concluded that its
negative working capital and decreased cash flows from operations are conditions that raised substantial doubt about the Company’s
ability to continue as a going concern. Without a successful plan in place from management these conditions could negatively impact
the Company’s ability to meets its financial obligations over the next year. In response, the Company has implemented a
plan to alleviate such reasonable doubt as follows: (i) the Company will continue to generate additional revenue (and positive
cash flows from operations) partly related to the Company’s expansion into new product lines during 2019 and partly related
to the Company wide sales initiatives already implemented; (ii) in addition cost saving initiatives and an organization restructuring
program that is almost completed, will have an additional positive impact on the cost-basis of the organization. Notwithstanding
the foregoing, the Company will seek capital as needed, which may be either equity or debt, or both. The Company does not have
any capital sources determined at this time, and capital may not be available when sought. The accompanying financial statements
have been prepared assuming that the company will continue as a going concern. The company is currently undertaking a corporate
restructuring exercise, which is further disclosed in Note 15 – subsequent events.
NOTE
4 – RELATED PARTY RECEIVABLES
Receivables
of related parties at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Micknifisent B.V.
|
|
|
1,796
|
|
|
|
1,833
|
|
|
|
|
1,796
|
|
|
|
1,833
|
|
NOTE
5 – OTHER CURRENT ASSETS
Other
current assets at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Value Added Tax receivable
|
|
|
62,851
|
|
|
|
67,388
|
|
Prepaid expenses
|
|
|
15,550
|
|
|
|
32,054
|
|
Other Receivables
|
|
|
91
|
|
|
|
93
|
|
|
|
|
78,492
|
|
|
|
99,535
|
|
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
6 – ACCRUED EXPENSES & OTHER CONTINGENT LIABILITIES
Accrued
expenses & other contingent liabilities at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Taxes payable
|
|
|
534,254
|
|
|
|
352,423
|
|
Invoices to be received
|
|
|
25,572
|
|
|
|
3,972
|
|
Holiday Allowance Payable
|
|
|
33,584
|
|
|
|
24,642
|
|
Other accrued expenses & other contingent liabilities
|
|
|
29,908
|
|
|
|
202,124
|
|
|
|
|
623,318
|
|
|
|
583,161
|
|
NOTE
7 – RELATED PARTY OTHER LIABILITIES
Related
party other liabilities at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
NL Life Sciences B.V.
|
|
|
829,942
|
|
|
|
563,118
|
|
STB Family Offices SARL
|
|
|
196,193
|
|
|
|
200,234
|
|
STB Family Offices B.V.
|
|
|
653,190
|
|
|
|
661,432
|
|
Stichting Thank You Nature
|
|
|
-
|
|
|
|
16,913
|
|
Flare Media B.V.
|
|
|
24,944
|
|
|
|
25,458
|
|
AMC
|
|
|
238,945
|
|
|
|
325,382
|
|
Management & Board Fees
|
|
|
251,910
|
|
|
|
142,154
|
|
Yoomoo Limited
|
|
|
-
|
|
|
|
98,014
|
|
Dynamic Health B.V.
|
|
|
22,316
|
|
|
|
-
|
|
|
|
|
2,217,440
|
|
|
|
2,032,705
|
|
For the outstanding amount relating to AMC this transaction
relates to the purchase of bottled juices for resale. Total purchases relating to goods sold for the three-month period ended March
31, 2019 and the three-month period ended March 31, 2018 was $31,726, and $581,997, respectively.
For
the loan from NL Life Sciences and STB Family Offices there is no repayment schedule in place. The interest rate is charged on
the basis of EURIBOR + 3% on the average balance of the loan.
The
other loans consist of the procurement of juices and consulting fees for the management team. No interest is being charged.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
8 – RELATED PARTY OTHER NOTES
Loan
from other related parties at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Efficiency Life Fund
|
|
|
392,641
|
|
|
|
400,750
|
|
TriDutch Holding B.V.
|
|
|
669,785
|
|
|
|
672,099
|
|
|
|
|
1,062,426
|
|
|
|
1,072,849
|
|
For
the loan from Tridutch Holding B.V., there is no repayment schedule in place. The interest rate is charged on the basis of EURIBOR
+ 3% on the average balance of the loan. In 2018 accrued interest of $17,249 was added to the balance and additional borrowings
of $128,043 were drawn down, partly offset by a positive exchange rate difference of $25,283. In 2019 accrued interest of $2,314
was added to the balance and no additional borrowings were drawn down, no repayments were made on the balance in either 2018 or
2019.
For
the loan from Efficiency Life Fund is a repayment schedule in place to repay the loan in 10 installments from July 2019 to April
2020. The entire balance of 400,750 was drawn down in 2018 with no repayments made on the balance to date. The movement in 2019
relates wholly to exchange rate difference.
NOTE
9 – CONVERTIBLE NOTE PAYABLE
Convertible
loans payable at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
|
|
|
|
|
|
Convertible loan 1
|
|
|
632,695
|
|
|
|
629,750
|
|
Convertible loan 2
|
|
|
962,285
|
|
|
|
970,960
|
|
Convertible loan 3
|
|
|
564,700
|
|
|
|
-
|
|
|
|
|
2,159,680
|
|
|
|
1,600,710
|
|
Convertible
Loan 1
Party
for loan 1 has granted a loan facility in the principle amount of $581,058 or €500,000 with the right, but not the obligation
to convert the outstanding loan amounts into shares in the capital of Natur at a company valuation of $17.4 million or €15
million for a term from December 19, 2017, till the maturity date of December 31, 2018, at an interest rate of 10% per annum.
No further drawdowns were made on the loan in 2018 or 2019 and the increased balance is due to the accrued interest as no repayment
for capital or interest have been made. The lender has agreed to a term sheet for conversion of the debt into common stock at
May 7, 2019. Please refer to Note 15, subsequent events.
Convertible
Loan 2
On
October 20, 2017, an amount of $929,692 or €800,000 was advanced to the Company for a loan agreement that was drafted but
never signed. An interest rate of 5% per annum is calculated and the loan has a maturity date of February 28, 2018. The loan is
convertible to shares of Natur at a company valuation of $23.3 million or €20 million. The loan is in default and lender
has demanded payment and does not want to convert. No further drawdowns were made on the loan in 2018 or 2019 and the decreased
balance is due to favorable movement in the exchange rate offsetting the additional accrued interest as no repayment for
capital or interest have been made.
Convertible
Loan 3
Natur
Holding BV, the principle subsidiary of Natur International Corp, entered into a loan agreement with Dam! Holding BV, under which
Natur Holding may borrow up to US$560,915 or €500,000. The final terms of the agreement were concluded on February 18, 2019.The
full drawdown of US$560,915 was made in three tranches throughout January and February 2019 and was used for general expenses
of Natur Holding and a partial repayment of their major supplier, as provided in the loan agreement. The loan amount can be made
in Euros, in the same numeric amounts if certain additional conditions are met by Natur Holdings related to further capital restructuring
of Natur Holdings, which the company has already undertaken.
Repayment
is due after six months from the date of receipt of the initial funds in the Natur Holding’s account. The loan may be pre-paid
in full or in part at any time. Interest, at the rate of 5% per annum, is due and payable quarterly. The loan carries a default
interest rate of 11% per annum. The loan has the typical default provisions of a borrowing arrangement, including breach of the
borrower obligations, bankruptcy of the borrower, significant changes in the borrower’s business, and dissolution of the
borrower. The full amount of the loan is covered by the grant of a security interest in Natur Holdings.
The
loan amount, if unpaid at maturity, may be converted into common stock of Natur International Corp. at the conversion price of
$0.05 per common stock. The lender has agreed to a term sheet for conversion of the debt into common stock at April
29, 2019. Please refer to Note 15, subsequent events.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
10 – RELATED PARTY CONVERTIBLE NOTE PAYABLE
Related
party convertible note payable at March 31, 2019 and December 31, 2018 consisted of the following:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Convertible loan Efficiency Life Fund
|
|
|
11,436,228
|
|
|
|
11,671,743
|
|
The
convertible loan has been converted in the subsequent period. $8,671,743 of the balance was settled, using series C
preferred shares and the remaining $3,000,000 was converted into long term debt. Please refer to Note 15, subsequent
events.
NOTE
11 – OPTIONS & WARRANTS
On
November 13, 2018, the Company closed a Subscription Agreement with Alpha Capital Anstalt wherein the Company granted the following
warrants to purchase:
-A
total of 33,000,000 shares of common stock, at $0.0606060 per share, exercisable for four years.
-A
total of 6,000,000 shares of common stock, at $0.15 per share, exercisable for four years.
A
summary of the status of the warrants granted is presented below for the three months ended:
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
|
|
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
|
Shares
|
|
|
Weighted
Average
Exercise Price
|
|
Outstanding at beginning of period
|
|
|
39,000,000
|
|
|
$
|
0.074
|
|
|
|
-
|
|
|
$
|
-
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
39,000,000
|
|
|
|
0.074
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding at end of period
|
|
|
39,000,000
|
|
|
$
|
0.074
|
|
|
|
39,000,000
|
|
|
$
|
0.074
|
|
On
January 16, 2019, the company completed compensatory arrangements with three board members of Natur International Corp. with the
following terms:
Mr.
Anthony Joel Bay, through La Bay Ventures Inc., will be issued a six-year option to purchase an aggregate of 7,319,321
shares of common stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing
March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at
any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered
for resale at the election of NTRU. If the service agreement is terminated for a breach thereof, all vested and unvested
options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to
be exercisable for the full term.
Mr.
Rudolf Derk Huisman, through Pas Beheer BV, will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common
stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing March 31, 2019, over three
years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025,
the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of NTRU.
If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service
agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
11 – OPTIONS & WARRANTS - continued
Mr.
Robert A. Paladino, through Cavalier Aire LLC., will be issued a six-year option to purchase an aggregate of 7,319,321 shares
of common stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing March 31, 2019,
over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March
31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election
of NTRU. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the
service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.
A
summary of the status of the share options is presented below for the three months ended:
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
|
|
Shares
|
|
|
Weighted Average Fair Value
|
|
|
Shares
|
|
|
Weighted Average Fair Value
|
|
Outstanding at beginning of period
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Vested
|
|
|
1,829,844
|
|
|
|
0.071
|
|
|
|
-
|
|
|
|
-
|
|
Unvested
|
|
|
20,128,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
|
0.071
|
|
|
|
-
|
|
|
|
-
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding at end of period
|
|
|
21,957,963
|
|
|
$
|
0.071
|
|
|
|
-
|
|
|
$
|
-
|
|
The
fair value of all stock options outstanding at 31 March, 2019 is $1,559,013 at a weighted average fair value of $0.071 per option.
NOTE
12 – LEASES
The
Company leases identified assets comprising real estate. Real estate leases consist primarily of office space. At the inception
of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on:
(1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right
to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has
the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to
each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments.
Lease and non-lease components are accounted for separately.
Leases
are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”)
842. The Company’s operating leases are generally comprised of real estate. Operating leases are included shown separately
in the unaudited consolidated balance sheet. On adoption of ASC 842 the Company recorded operating lease right-of-use assets of
$580,310 and operating lease liabilities of $578,007. We do not believe the standard will materially affect our consolidated net
earnings.
Right-of-use
(“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments
over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental
borrowing rate based on the information available at the lease commencement date if the implicit rate cannot be determined. ROU
assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate
the lease when it is reasonably certain that the Company will exercise that option.
Lease
expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term. Included
in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.
Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s
estimated useful life and interest expense calculated using the amortized cost basis.
The
Company’s leases have remaining lease terms of less than 3 years, which include options to extend the leases for up to five
years, and some of which include options to terminate the leases within one year. The Company has elected not to recognize
ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less. The effect of short-term
leases on the Company’s ROU assets and lease liabilities was not material.
Operating Lease Assets and Liabilities
|
|
March 31, 2019
|
|
|
Balance Sheet Classification
|
Lease Assets
|
|
$
|
580,310
|
|
|
Right-of-use Asset
|
|
|
|
|
|
|
|
Current lease liabilities
|
|
|
263,013
|
|
|
Operating lease liabilities
|
Non-current lease liabilities
|
|
|
314,994
|
|
|
Operating lease liabilities
|
Total Lease Liabilities
|
|
$
|
578,007
|
|
|
|
Maturity of Operating Lease Liabilities
|
|
March 31, 2019
|
|
2019
|
|
$
|
196,034
|
|
2020
|
|
|
270,649
|
|
2021
|
|
|
178,323
|
|
|
|
|
|
|
Total lease payments
|
|
|
645,006
|
|
Less imputed interest
|
|
|
66,999
|
|
|
|
|
|
|
Present value of lease liabilities
|
|
$
|
578,007
|
|
As of March 31, 2019, our operating leases have a weighted-average
remaining lease term of 2.25 years and a weighted-average discount rate of 4%.
The future minimum obligations under operating leases in effect
as of December 31, 2018 having a noncancelable term in excess of one year as determined prior to the adoption of ASC 842 are as
follows:
2019
|
|
|
436,657
|
|
2020
|
|
|
392,004
|
|
2021
|
|
|
146,759
|
|
2022
|
|
|
-
|
|
2023
|
|
|
-
|
|
Thereafter
|
|
|
-
|
|
Total
|
|
|
975,430
|
|
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
13 – LOSS PER SHARE
At
March 31, 2019 the Company had 131,425,194 shares issues and outstanding at a nominal value of $.001. besides that, the Company
has 2,397.130 preferred A shares and 100,000 preferred B shares. Alpha capital Anstalt has two outstanding warrants issued
at November 13, 2018 with 4 years term. The first warrant has an exercise price of $0.0606 for 36,000,000 shares the second warrant
is 6,000,000 at $0.15 exercise price, the company has reserved 16,240,000 shares for management and Employee Stock Ownership Plan.
At December 31, 2018, the Company had 129,049,192 shares of common stock issued and outstanding.
Because
the company is in a net loss position, basic and diluted earnings per share are the same as the inclusion of potential dilutable
shares would be anti-dilutive.
NOTE
14 – DISCONTINUED OPERATIONS AND ASSETS/LIABILITIES HELD FOR DISPOSAL
Effective November 30, 2018, the Company has closed down the
London office and shops as part of the restructuring plan. Functionally the operations were shut down before December 31, 2018
and therefore we have qualified it as discontinued operations the sale of assets is in process. The existing support functions
have been transferred to the headquarters in Amsterdam as part of the centralization of support staff initiative.
As of March 22, 2019 the company Naturalicious UK Limited has been put into liquidation and the matters
are being dealt with by a qualified administration firm in the United Kingdom. A board meeting was held on March 22, 2019 with
all creditors and it was agreed to liquidate the company. At this moment in time the rights & obligations of the company are
handled by the administration firm and the legal obligation over the liabilities are extinguished. As the parent company no longer
has any rights or obligations to the subsidiary it has been removed from the consolidation and the net liability position of the
company is released and recognized as a gain on disposal.
Effective
August 31, 2018, Natur International Corp closed the offices of its Casper, Wyoming operations. The increase in costs coupled
with a decrease in business activity, lead to the decision to close the Casper, Wyoming operations. In closing the office, the
Company transitioned its clients to new service providers, and terminated employees as the transition happened. The month to month
lease was terminated with the landlord on August 31, 2018, and the office was closed the same day. We have one part-time employee,
working remotely, primarily on the collection of accounts receivable.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
14 – DISCONTINUED OPERATIONS AND ASSETS/LIABILITIES HELD FOR DISPOSAL - continued
The
following table presents the carrying amounts of the major classes of assets and liabilities included in our discontinued operations
as presented on our Unaudited Consolidated Balance Sheet as of March 31, 2019.
NATUR
INTERNATIONAL CORP
UNAUDITED
BALANCE SHEET OF DISCONTINUED OPERATIONS
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
-
|
|
|
|
-
|
|
Related party receivable
|
|
|
-
|
|
|
|
201,907
|
|
Accounts receivable
|
|
|
339
|
|
|
|
124,016
|
|
Inventories
|
|
|
-
|
|
|
|
-
|
|
Other current assets
|
|
|
-
|
|
|
|
51,705
|
|
Total current assets
|
|
|
339
|
|
|
|
377,628
|
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
|
|
|
|
|
|
Tangible fixed assets
|
|
|
-
|
|
|
|
27,547
|
|
Financial Fixed Assets
|
|
|
-
|
|
|
|
23,618
|
|
Total fixed assets
|
|
|
-
|
|
|
|
51,165
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
339
|
|
|
|
428,794
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
25,692
|
|
|
|
643,616
|
|
Accrued expenses & other contingent liabilities
|
|
|
125,575
|
|
|
|
243,510
|
|
Total Liabilities
|
|
|
151,267
|
|
|
|
887,126
|
|
NATUR
INTERNATIONAL CORP
UNAUDITED
INCOME STATEMENT OF DISCONTINUED OPERATIONS
|
|
March 31,
2019
|
|
|
|
|
|
REVENUE
|
|
|
-
|
|
|
|
|
|
|
COST OF GOODS SOLD
|
|
|
-
|
|
|
|
|
|
|
GROSS MARGIN
|
|
|
-
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
Wages & Salaries
|
|
|
-
|
|
Selling, General & Administrative
|
|
|
39,410
|
|
Amortization & depreciation
|
|
|
-
|
|
|
|
|
|
|
Total operating expenses
|
|
|
39,410
|
|
|
|
|
|
|
LOSS FROM OPERATIONS
|
|
|
(39,410
|
)
|
|
|
|
|
|
Interest expense
|
|
|
-
|
|
|
|
|
|
|
LOSS FROM DISCONTINUED OPERATIONS
|
|
|
(39,410
|
)
|
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
15 – SUBSEQUENT EVENTS
Discontinued
operations
Effective
March 31, 2019, Natur International Corp closed the offices of its Billings, Montana operations. These operations were discontinued
during 2018. During 2018, the Company saw a continued decrease in the utilization of our home healthcare services in Billings,
Montana. Additionally, we have seen an increase in competition, specifically for Medicare service providers in 2018. Also, there
has been a shortage of Registered Nurses, Physical Therapists and management personnel, leading to higher costs due to having
to source the required talent from staffing companies. This increase in costs coupled with a decrease in business activity, lead
to the decision to close the Billings, Montana operations. In closing the office, the Company transitioned its clients to new
service providers, and terminated employees as the transition happened. The month to month lease will be terminated with the landlord
on March 31, 2019. We have one part-time employee, working remotely, primarily on the collection of accounts receivable.
Debt
restructuring
Effective
April 9, 2019 the Company and 6
th
Wave Efficiency Life Fund have agreed & executed a contract to settle a portion
of the amounts owed by the Company to the Holder under the Debt Agreement, including principle, interest expenses, penalties and
other charges of whatsoever nature, all in an amount equal to USD 8,846,208 (the “Converted Debt”) in exchange for
and in consideration of the issuance to Holder or its designees by the Parent Company of an aggregate of 78,832,399 shares of
Class C Preferred Stock (“Debt Repayment Shares”), convertible initially into the equivalent of 78,832,399 shares
of Common Stock of the Parent Company (the “Conversion Shares”). The condition precedent to the agreement, the issuance
of the Debt Repayment Shares was completed April 9, 2019.
The
Holder 6
th
Wave Efficiency Life Fund agrees that if it sells any of the shares of Common Stock it was directly or beneficially
issued by the Parent Company on November 13, 2018, either as shares of Common Stock or the Common Stock underlying the Class B
Preferred Stock, in exchange for its equity interest in the Company and any of the Conversion Shares (together the Common Stock,
the Common Stock underlying the Class B Preferred Stock and the Conversion Shares are referred to as the “Value Calculation
Shares”) at any time prior to December 31, 2022, and the gross proceeds to the Holder or its affiliates from the sale (or
deemed sale as provided herein) of any or all of the Value Calculation Shares exceeds USD $15,000,000, then the balance of the
Debt, equal to USD $3,000,000 as of the date hereof and any interest, expenses, penalties, and other charges of any nature due
thereon under the terms of the Debt Agreement (the “Debt Balance”), will be deemed fully paid, discharged and extinguished
and the Debt Agreement in all respects will be terminated and of no further effect.
Corporate
restructuring
In
line with the objective to secure the continuity of the company, it was decided late 2018 to extend the product line with added
functional extracts (Nutrigenomics, hemp-derived extracts). For this, the company established a NewCo as sister company of Natur
Holding BV at March 13, 2019, wholly owned by Natur International Corp. Based on global developments and following the success
of companies in the USA and Canada, the company defined new growth objectives with
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
15 – SUBSEQUENT EVENTS – continued
complementary
products based on hemp-derived extracts as a new revenue model for this NewCo. Additional funding was sought in the market, but
it became apparent that the willingness of new investors to provide the company with funding in debt or equity was dependent on
the restructuring of the existing debt on the Balance Sheet of the Company. As most of this debt is held on the Balance Sheet
of Natur Holding BV, it was decided to develop a restructuring plan to:
|
A.
|
To establish an asset transfer from Natur Holding
BV to Natur CBD BV, optimizing the proceeds for these assets and subsequently liquidate Natur Holding BV;
|
|
B.
|
Continue the business in Natur CBD BV with an extended portfolio of functional products, including food and beverages infused with hemp-derived extracts and deliver the objectives as set by the Board
|
|
C.
|
Expeditiously seek new funding in the form of
(long-term) or convertible Debt or equity. Discussions with Third parties are on-going. The execution of the intended restructuring
program is conditional upon the ability of the company to raise additional capital prior to the implementation of the restructuring
plan in order to supply the buying entity of the assets and liabilities with sufficient funds for the asset transaction and
the financing of the daily operations. If this condition is not met, the restructuring will fail, and management will be forced
to seek legal protection against its creditors and debtholders.
|
The
related party loan of Tridutch Holding BV and related party liabilities of STB Family Offices BV and Flare Media BV totaling $1,382,472
were transferred to NL Life Sciences BV at May 8, 2019 as part of a debt transfer agreement.
NATUR
INTERNATIONAL CORP.
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
16 – RECAPITALIZATION
As
discussed in Note 1 – Organization and nature of business, effective November 13, 2018, Future Healthcare of America entered
into a reverse capitalization transaction with Natur Holding BV. In conjunction with the transaction the Company was recapitalized,
resulting in the capital structure outlined below. The main purpose of the merger is to raise additional capital for the purposes
of growth. The historical number of common shares presented in our financial statements were converted to post merger shares on
a 1 to 112 basis. As part of the recapitalization net assets of $1.9 million.
The
following shares of common stock were issued subsequent to the reverse capitalization. Natur shareholders had a controlling voting
percentage of 94% subsequent to the reversed merger:
-
115,759,999 shares of common stock for the Natur shareholders.
-
2,023,562 shares of common stock for release of accrued salaries of management
-
2,469,131 shares of preferred A for a capital investment of $2,000,000 and a debt forgiveness of $1,010,000 and accrued interest
of $410,552. The preferred A shares will convert at a ratio of 1 preferred A share to 33 common shares.
-
100,000 shares of preferred B were issued for Natur shareholders. They will convert at a ratio of 1 preferred B share to 1,000
common shares.
NOTE
17 – STOCKHOLDERS’ DEFICIT
On
November 13, 2018, Future Healthcare of America (“Parent Company”) completed the transactions (the “Share Exchange
Transaction”) contemplated by that certain Share Exchange Agreement, among Parent Company and the former shareholders of
Natur Holdings, B.V., a Netherlands-based holding company (“Natur”). In connection with the Share Exchange Transaction,
the former shareholders of Natur received the equivalent of 215,759,999 shares of the Common Stock of Parent Company (the “Common
Stock”), which was issued in part as 115,760,000 shares of Common Stock and in part as 100,000 shares of voting, convertible
Series B Preferred Stock of Parent Company (the “Series B Preferred Stock”) representing 100,000,000 shares of Common
Stock upon conversion. The Series B Preferred Stock will convert automatically upon Parent Company increasing the number of shares
of Common Stock of its authorized capital in sufficient amount to permit the conversion of the Series B Preferred Stock, which
it plans to do promptly so as to cause the conversion of the Series B Preferred Stock. Immediately after the Share Exchange Transaction,
the former Natur shareholders collectively have a controlling position among the shareholders of Parent Company, and Natur has
become a wholly-owned subsidiary of Parent Company. At closing the number of common shares, issued and outstanding was 129,049,192.
On
September 21, 2018, Parent Company also executed a Securities Purchase Agreement (the “SPA”) by which it agreed to
privately issue and sell to Alpha Capital Anstalt (the “Alpha”) 2,469,131 shares of non-voting, convertible Series
A Preferred Stock, each share convertible into approximately 33 shares of Common Stock at the rate of $.030303. Alpha also purchased
two warrants, one pursuant to the SPA that is exercisable for 33,000,000 shares of Common Stock at $.060606 per share and one
pursuant to a debt cancellation agreement exercisable for 6,000,000 shares of Common Stock at $.15 per share. The aggregate purchase
price for the Series A Preferred Stock and the two warrants was $2,000,000 in cash and conversion of approximately $769,000 of
debt and interest due Alpha from Parent Company under a prior loan agreement. Prior to the acquisition of Natur, Alpha also cancelled
approximately $651,000 of debt principle and interest due from Parent Company. These transactions eliminated $1,420,000 of debt
principle and interest of Parent Company and improved its balance sheet. As part of the SPA transaction, Alpha has also agreed
to reimburse up to $100,000 of the liabilities of Parent Company existing at the closing date.
On
March 19, 2019, the holder of the Series A Preferred Stock converted 72 of such shares with a stated value of $72,000 for 2,376,002
shares of common stock. The applicable conversion price was $0.030303. The company did not receive any payment on this conversion,
having received the consideration for the Series A Preferred Shares on November 12, 2018. There are remaining an aggregate of
2,397.131 shares of Series A Preferred Stock issued and outstanding. The shares of common stock issued on conversion are registered
for resale by the holder.