This Offering Circular Supplement is being
filed to set the offering price per share and decrease the aggregate maximum offering amount of the Offering Statement, as amended,
qualified by the SEC on November 4, 2019, as well as amend sections affected by the foregoing.
We are offering up to 10,000,000 shares of
our common stock for $$0.80 per share, for gross proceeds of up to $8,000,000. There is no minimum offering amount or escrow established
and no minimum investment amount for investors. All accepted subscription funds will be immediately available for the Company’s
use. See “Securities Being Offered” on page 28.
TABLE
OF CONTENTS
SUMMARY
INFORMATION
This
summary highlights some of the information in this circular. It is not complete and may not contain all of the information that
you may want to consider. To understand this offering fully, you should carefully read the entire circular, including the section
entitled “Risk Factors,” before making a decision to invest in our securities. Unless otherwise noted or unless the
context otherwise requires, the terms “we,” “us,” “our,” “AMIH,” the “Company,”
and “American International Holdings” refer to American International Holdings Corp. together with its wholly owned
subsidiaries.
The
Company
American
International Holdings Corp. was organized in 1986 and is incorporated in Nevada. The Company has undergone several name changes
and changes of control since its incorporation; however, from 2012 until April, 2019, the Company had no operations and nominal
assets.
On
April 12, 2019, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Novopelle
Diamond, LLC, a Texas limited liability company (“Novopelle Diamond”) and certain unitholders of Novopelle Diamond.
Pursuant to the terms of the Share Exchange Agreement, the Company acquired 100% of the issued and outstanding membership interest
of Novopelle Diamond by means of a share exchange with the Novopelle Members in exchange for 18,000,000 newly issued shares of
the common stock of the Company (the “Share Exchange”). As a result of the Share Exchange, Novopelle became a 100%
owned subsidiary of AMIH, which on a going forward basis will result in consolidated financial reporting by AMIH to include the
results of Novopelle. The closing of the Share Exchange occurred concurrently with entry into the Share Exchange Agreement and
resulted in a change of control for the Company.
The
Company is headquartered in Houston, TX and operates as a holding company dedicated to acquiring, managing and operating health,
wellness and medical spa / treatment facilities across the United States. The Company seeks opportunities to acquire and grow
businesses that possess strong brand values and that can generate long-term sustainable free cash flow and attractive returns
in order to maximize value for all stakeholders.
We
are authorized to issue 195,000,000 shares of common stock and 5,000,000 shares of preferred stock. We currently have approximately
24,468,355 common shares issued and outstanding held by approximately 227 holders of record, and no shares of preferred stock
issued and outstanding. Our common stock is currently quoted on the OTC Market’s Pink Market under the symbol “AMIH.”
Our
executive offices are located at 11222 Richmond Avenue, Suite 195, Houston, TX 77082 and our telephone number is (281) 496-9971.
Business
Overview
As
a result of the Share Exchange, AMIH acquired the business of Novopelle Diamond and all of its assets. Novopelle Diamond operates
a Novopelle branded medical spa facility located in McKinney, TX. In addition to Novopelle Diamond, there are four Novopelle branded
medical spas in the state of Texas that are not owned by the Company but that are owned or operated by certain of its affiliates;
however, the Company has been granted an exclusive license by Novo MedSpa Addison Corporation to establish additional Novopelle
branded facilities across the United States and abroad.
Novopelle
branded spas are physician supervised, medical spas and wellness clinics that offer a full menu of wellness services. Novopelle
offers the following products and services:
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Stem
Cell Therapy
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Acne
& Acne Scar Reduction
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Laser
Hair Removal
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Testosterone
Replacement Therapy
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PRP
Facial (Vampire Facial)
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Hair
Restoration
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Novo
Lipo (Body Contouring)
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Botox
& Fillers
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Laser
Vein Removal
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Facials
& Peels
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Cellulite
Reduction
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Weight
Loss Solutions
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Stretch
Mark Reduction
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Tattoo
Removal
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In
addtion to Novopelle Diamond, the Company currently has three other wholly owned subsidiaries: Novopelle Waterway, Inc., which
is focused on a retail acquisitions, YS Brands, Inc., which is dedicated to creating, designing, manufacturing and marketing new
premium designer shoe concepts, and Capitol City Solutions USA, Inc., which acts as a general contracting and construction company
for the Company’s Novopelle branded med spa locations.
The
Offering
This circular relates to the sale
of 10,000,000 shares of our common stock by the Company at a price of $0.80 per share, for total offering proceeds of up to $8,000,000
if all offered shares are sold. There is no minimum offering amount and no provision to escrow or return investor funds if any
minimum number of shares is not sold. There is no minimum investment amount established for investors. All funds raised by the
Company from this offering will be immediately available for the Company’s use.
The
aggregate purchase price to be paid by any investor for the securities sold hereby cannot exceed 10% of the greater of the investor’s
annual income or net worth (for entity investors, revenues or net assets for the investor’s most recently completed fiscal
year are used instead). The foregoing limitation does not apply to “accredited investors”and non-natural investors.
Shares
offered by the Company will be sold by our directors and executive officers. We may also elect to engage licensed broker-dealers.
No sales agents have yet been engaged to sell shares. All shares will be offered on a “best-efforts” basis. Investors
may be publicly solicited through our website, investment websites, social media, or otherwise.
This
offering will terminate at the earlier to occur of: (i) all shares offered hereby are sold, or (ii) one year from the date this
Offering Circular is qualified with the SEC. Notwithstanding the foregoing, the Company may terminate or cancel this offering
at any time or extend this offering by 90 days, in its sole discretion.
Proceeds
from this offering will be used generally to improve Novopelle branded locations owned or acquired by the Company, to purchase
furniture and equipment, for selling, general and administrative expenses relating to the Company’s Novopelle locations,
debt reduction, acquisitions, and general working capital.
ABOUT
THIS CIRCULAR
We
have prepared this Offering Circular to be filed with the SEC for our offering of securities. The Offering Circular includes exhibits
that provide more detailed descriptions of the matters discussed in this circular.
You
should rely only on the information contained in this circular and its exhibits. We have not authorized any person to provide
you with any information different from that contained in this circular. The information contained in this circular is complete
and accurate only as of the date of this circular, regardless of the time of delivery of this circular or sale of our shares.
This circular contains summaries of certain other documents, but reference is hereby made to the full text of the actual documents
for complete information concerning the rights and obligations of the parties thereto. All documents relating to this offering
and related documents and agreements, if readily available to us, will be made available to a prospective investor or its representatives
upon request.
INDUSTRY
AND MARKET DATA
The
industry and market data used in this circular have been obtained from our own research, surveys or studies conducted by third
parties and industry or general publications. Industry publications and surveys generally state that they have obtained information
from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. We believe that
each of these studies and publications is reliable. We have not engaged any person or entity to provide us with industry or market
data.
TAX
CONSIDERATIONS
No
information contained herein, nor in any prior, contemporaneous or subsequent communication should be construed by a prospective
investor as legal or tax advice. We are not providing any tax advice as to the acquisition, holding or disposition of the securities
offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine
the U.S. Federal, state and any applicable foreign tax consequences relating to their investment in our securities. This written
communication is not intended to be “written advice,” as defined in Circular 230 published by the U.S. Treasury Department
RISK
FACTORS
Any
investment in our common stock involves a high degree of risk. Investors should carefully consider the risks described below and
all of the information contained in this circular before deciding whether to purchase our common stock. Our business, financial
condition or results of operations could be materially adversely affected by these risks if any of them actually occur. In addition
to the other information provided in this circular, you should carefully consider the following risk factors in evaluating our
business and before purchasing any of our common stock. The following may not be a comprehensive list of all risks relating to
the Company or an investment in its common stock but are those risks as identified by the Company’s management as material.
Risks
Related to our Business
Since
we have a limited operating history in our industry, it is difficult for potential investors to evaluate our business.
Our
short operating history in the health and wellness industry may hinder our ability to successfully meet our objectives and makes
it difficult for potential investors to evaluate our business or prospective operations. As an early stage company, we are subject
to all the risks inherent in the financing, expenditures, operations, complications and delays inherent in a new business. Accordingly,
our business and success faces risks from uncertainties faced by developing companies in a competitive environment. There can
be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.
We
may not be able to raise capital when needed, if at all, which would force us to delay, reduce or eliminate our service locations
and product development programs or commercialization efforts and could cause our business to fail.
We
expect to need substantial additional funding to pursue additional service locations and product development and commercialize
our products. There are no assurances that future funding will be available on favorable terms or at all. The failure to fund
our operating and capital requirements could have a material adverse effect on our business, financial condition and results of
operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate
our expansion of spa locations and development programs or any future commercialization efforts. Any of these events could significantly
harm our business, financial condition and prospects.
Our
independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.
Our
historical financial statements have been prepared under the assumption that we will continue as a going concern. Our independent
registered public accounting firm has issued a report on our financial statements for the year ended December 31, 2018 that included
an explanatory paragraph referring to our recurring operating losses and expressing substantial doubt in our ability to continue
as a going concern. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity financing
or other capital, attain further operating efficiencies, reduce expenditures, and, ultimately, generate revenue. Our financial
statements do not include any adjustments that might result from the outcome of this uncertainty. However, if adequate funds are
not available to us when we need it, we will be required to curtail our operations which would, in turn, further raise substantial
doubt about our ability to continue as a going concern. The doubt regarding our potential ability to continue as a going concern
may adversely affect our ability to obtain new financing on reasonable terms or at all. Additionally, if we are unable to continue
as a going concern, our stockholders may lose some or all of their investment in the Company.
We
depend heavily on key personnel, and turnover of key senior management could harm our business.
Our
future business and results of operations depend in significant part upon the continued contributions of our senior management
personnel. If we lose their services or if they fail to perform in their current positions, or if we are not able to attract and
retain skilled personnel as needed, our business could suffer. Significant turnover in our senior management could significantly
deplete our institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these
key personnel in managing the operations of our medical spas, product development, marketing and sales aspects of our business,
any part of which could be harmed by turnover in the future.
Because
we do not have an audit or compensation committee, shareholders will have to rely on the entire board of directors to perform
these functions.
We
do not have an audit or compensation committee comprised of independent directors. Indeed, we do not have any audit or compensation
committee. These functions are performed by the board of directors as a whole. Thus, there is a potential conflict in that board
members who are also part of management will participate in discussions concerning management compensation and audit issues that
may affect management decisions.
We
expect to face intense competition, often from companies with greater resources and experience than we have.
The
health and wellness industry is highly competitive and subject to rapid change. The industry continues to expand and evolve as
an increasing number of competitors and potential competitors enter the market. Many of these competitors and potential competitors
have substantially greater financial, technological, managerial and research and development resources and experience than we
have. Some of these competitors and potential competitors have more experience than we have in the development of health and wellness
services and products. In addition, our services and products compete with service and product offerings from large and well-established
companies that have greater marketing and sales experience and capabilities than we or our collaboration partners have. If we
are unable to compete successfully, we may be unable to grow and sustain our revenue.
Current
global financial conditions have been characterized by increased volatility which could negatively impact our business, prospects,
liquidity and financial condition.
Current
global financial conditions and recent market events have been characterized by increased volatility and the resulting tightening
of the credit and capital markets has reduced the amount of available liquidity and overall economic activity. We cannot guaranty
that debt or equity financing, the ability to borrow funds or cash generated by operations will be available or sufficient to
meet or satisfy our initiatives, objectives or requirements. Our inability to access sufficient amounts of capital on terms acceptable
to us for our operations will negatively impact our business, prospects, liquidity and financial condition.
We
are growing the size of our organization, and we may experience difficulties in managing any growth we may achieve.
As
of the date of this circular, we have six full-time employees. As our development and commercialization plans and strategies develop,
we expect to need additional development, managerial, operational, sales, marketing, financial, accounting, legal, and other resources.
Future growth would impose significant added responsibilities on members of management. Our management may not be able to accommodate
those added responsibilities, and our failure to do so could prevent us from effectively managing future growth, if any, and successfully
growing our company.
We
may expend our limited resources to pursue a particular products, services or locations and may fail to capitalize on products,
locations or services that may be more profitable or for which there is a greater likelihood of success.
Because
we have limited financial and managerial resources, we must focus our efforts on particular service programs, products and locations.
As a result, we may forego or delay pursuit of opportunities with other services, products or locations that later prove to have
greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products
or profitable market opportunities. Any such failure could result in missed opportunities and/or our focus on products, services
or locations with low market potential, which would harm our business and financial condition.
We
engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse
effect on us.
We
have entered, and may continue to enter, into transactions with related parties for financing, corporate, business development
and operational services, as detailed herein. Such transactions may not have been entered into on an arm’s-length basis,
and we may have achieved more or less favorable terms because such transactions were entered into with our related parties. This
could have a material effect on our business, results of operations and financial condition. The details of certain of these transactions
are set forth in “Certain Relationships and Related Party Transactions.” Such conflicts could cause an individual
in our management to seek to advance his or her economic interests or the economic interests of certain related parties above
ours. Further, the appearance of conflicts of interest created by related party transactions could impair the confidence of our
investors.
Our
potential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business
prospects, and we may be unable to effectively manage any growth associated with these new markets, which may increase the risk
of your investment and could harm our business, financial condition, results of operations and cash flow.
Our
entry into the rapidly growing health and wellness market may place a significant strain on our resources and increase demands
on our executive management, personnel and systems, and our operational, administrative and financial resources may be inadequate.
We may also not be able to effectively manage any expanded operations, or achieve planned growth on a timely or profitable basis,
particularly if the number of customers using our technology significantly increases or their demands and needs change as our
business expands. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the
quality of our products and services could deteriorate, and our business and results of operations could be materially adversely
affected.
If
we are unable to develop and maintain our brand and reputation for our service and product offerings, our business and prospects
could be materially harmed.
Our
business and prospects depend, in part, on developing and then maintaining and strengthening our brand and reputation in the markets
we serve. If problems arise with our products or services, our brand and reputation could be diminished. If we fail to develop,
promote and maintain our brand and reputation successfully, our business and prospects could be materially harmed.
We
may not maintain sufficient insurance coverage for the risks associated with our business operations.
Risks
associated with our business and operations include, but are not limited to, claims for wrongful acts committed by our officers,
directors, and other representatives, the loss of intellectual property rights, the loss of key personnel, risks posed by natural
disasters and risks of lawsuits from customers who are injured from or dissatisfied with our services. Any of these risks may
result in significant losses. We cannot provide any assurance that our insurance coverage is sufficient to cover any losses that
we may sustain, or that we will be able to successfully claim our losses under our insurance policies on a timely basis or at
all. If we incur any loss not covered by our insurance policies, or the compensated amount is significantly less than our actual
loss or is not timely paid, our business, financial condition and results of operations could be materially and adversely affected.
Our
business could be adversely affected by ongoing legal challenges to our business model or by new state actions restricting our
ability to provide the full range of our services in certain states.
Our
ability to conduct business in each state is dependent upon the state’s treatment of medical spas under such state’s
laws, rules and policies governing the practice of physician supervised services, which are subject to changing political, regulatory
and other influences.
We
may become subject to medical liability claims, which could cause us to incur significant expenses and may require us to pay significant
damages if not covered by insurance.
Our
business entails the risk of medical liability claims. Successful medical liability claims could result in substantial damage
awards that exceed the limits of our insurance coverage. Any claims made against us that are not fully covered by insurance could
be costly to defend against, result in substantial damage awards against us and divert the attention of our management and our
physicians from our operations, which could have a material adverse effect on our business, financial condition and results of
operations. In addition, any claims may adversely affect our business or reputation.
Our
use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy
and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could
result in significant liability or reputational harm and, in turn, a material adverse effect on our client base and revenue.
Numerous
state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability
and integrity of personally identifiable information, or PII, including protected health information, or PHI. These laws and regulations
include the Health Information Portability and Accountability Act of 1996, as amended by the Health Information Technology for
Economic and Clinical Health Act, or HITECH, and their implementing regulations (referred to collectively as HIPAA). HIPAA establishes
a set of basic national privacy and security standards for the protection of PHI. HIPAA requires us to develop and maintain policies
and procedures with respect to PHI that is used or disclosed, including the adoption of administrative, physical and technical
safeguards to protect such information. HIPAA imposes mandatory penalties for certain violations. Penalties for violations of
HIPAA and its implementing regulations start at $100 per violation and are not to exceed $50,000 per violation, subject to a cap
of $1.5 million for violations of the same standard in a single calendar year. However, a single breach incident can result in
violations of multiple standards. HIPAA also authorizes state attorneys general to file suit on behalf of their residents. Courts
will be able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does
not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have
been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach
of PHI. In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA covered entities or
business associates for compliance with the HIPAA Privacy and Security Standards. It also tasks HHS with establishing a methodology
whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the Civil Monetary Penalty
fine paid by the violator. HIPAA further requires that patients be notified of any unauthorized acquisition, access, use or disclosure
of their unsecured PHI that compromises the privacy or security of such information, with certain exceptions related to unintentional
or inadvertent use or disclosure by employees or authorized individuals. HIPAA specifies that such notifications must be made
“without unreasonable delay and in no case later than 60 calendar days after discovery of the breach.” If a breach
affects 500 patients or more, it must be reported to HHS without unreasonable delay, and HHS will post the name of the breaching
entity on its public web site. Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported
to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least
annually.
Numerous
other federal and state laws protect the confidentiality, privacy, availability, integrity and security of PII, including PHI.
These laws in many cases are more restrictive than, and may not be preempted by, the HIPAA rules and may be subject to varying
interpretations by courts and government agencies, creating complex compliance issues for us and our clients and potentially exposing
us to additional expense, adverse publicity and liability.
Because
of the extreme sensitivity of the PII we store and transmit, the security features of our technology platform are very important.
If our security measures are breached or fail, unauthorized persons may be able to obtain access to sensitive client data, including
HIPAA-regulated PHI. As a result, our reputation could be severely damaged, adversely affecting client confidence. In addition,
we could face litigation, damages for contract breach, penalties and regulatory actions for violation of HIPAA and other applicable
laws or regulations and significant costs for remediation, notification to individuals and for measures to prevent future occurrences.
Any potential security breach could also result in increased costs associated with liability for stolen assets or information,
repairing system damage that may have been caused by such breaches, incentives offered to clients in an effort to maintain our
business relationships after a breach and implementing measures to prevent future occurrences, including organizational changes,
deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
Any
failure to protect our intellectual property rights could impair our ability to protect our technology and our brand.
Our
success depends in part on our ability to enforce our intellectual property and other proprietary rights. We rely upon a combination
of trademark and trade secret laws, as well as license and other contractual provisions, to protect our intellectual property
and other proprietary rights. These laws, procedures and restrictions provide only limited protection and any of our intellectual
property rights may be challenged, invalidated, circumvented, infringed or misappropriated. To the extent that our intellectual
property and other proprietary rights are not adequately protected, third parties may gain access to our proprietary information,
develop and market solutions similar to ours or use trademarks similar to ours, each of which could materially harm our business.
The failure to adequately protect our intellectual property and other proprietary rights could have a material adverse effect
on our business, financial condition and results of operations.
Our
failure to attract and retain physicians and nurse practitioners in a competitive labor market could limit our ability to execute
our growth strategy, resulting in a slower rate of growth.
Our
business depends on our ability to continue to recruit and retain a sufficient number of qualified licensed doctors and nurses.
Although we believe we have an effective recruitment process, there is no assurance that we will be able to secure arrangements
with sufficient numbers of licensed doctors and nurses or retain the services of such practitioners. If we experience delays or
shortages in obtaining access to qualified physicians and nurses, we would be unable to expand our services and operations, resulting
in reduced revenues.
If
our physicians develop a poor reputation, our operations and revenues would suffer.
The
success of our business is dependent upon quality medical services being rendered by our physicians. As the patient-physician
relationship involves inherent trust and confidence, any negative publicity, whether from civil litigation, allegations of criminal
misconduct, or forfeiture of medical licenses, with respect to any of our physicians and/or our facilities could adversely affect
our results of operations.
If
we fail to comply with government laws and regulations it could have a materially adverse effect on our business.
The
health care industry is subject to extensive federal, state and local laws and regulations relating to licensure, conduct of operations,
ownership of facilities, addition of facilities and services, payment for services and prices for services that are extremely
complex and for which, in many instances, the industry does not have the benefit of significant regulatory or judicial interpretation.
We exercise care in structuring our arrangements with physicians and other referral sources to comply in all material respects
with applicable laws. We will also take such laws into account when planning future centers, marketing and other activities, and
expect that our operations will be in compliance with applicable law. The laws, rules and regulations described above are complex
and subject to interpretation. In the event of a determination that we are in violation of such laws, rules or regulations, or
if further changes in the regulatory framework occur, any such determination or changes could have a material adverse effect on
our business. There can be no assurance however that we will not be found in noncompliance in any particular situation.
Risks
Related to our Common Stock and this Offering
We
are subject to the reporting requirements of federal securities laws, which is expensive and subjects us to potential liability.
We
are a public reporting company in the United States and, accordingly, subject to the information and reporting requirements of
the Exchange Act and other federal securities laws, and the compliance obligations of the Sarbanes-Oxley Act. The costs of preparing
and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to
stockholders causes our expenses to be higher than they would be if we remained a privately-held company. We could also be subject
to sanctions or deregistration if we fail to keep up with our reporting obligations.
Our
compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls is time consuming, difficult and costly.
Because
we are a reporting company with the SEC, we must comply with Sarbanes-Oxley Act and SEC rules concerning internal controls. It
is time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required
by the Sarbanes-Oxley Act. In order to expand our operations, we will need to hire additional financial reporting, internal control,
and other finance staff in order to develop and implement appropriate internal controls and reporting procedures.
Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies
As
a former “shell company,” Rule 144” will not be initially available for our shareholders. In order to be eligible
for Rule 144, we must meet the following criteria:
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We
have ceased to be a shell company;
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We
are subject to the reporting requirement of Section 13 or 15(d) of the Exchange Act;
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We
have filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such
shorter period that the issuer was required to file such reports and materials), other than Form 8-K; and
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At
least one year has elapsed from the time that we filed current Form 10 type information with the SEC reflecting our status
as an entity that is not a shell company.
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We
could issue “blank check” preferred stock without stockholder approval with the effect of diluting then current stockholder
interests and impairing their voting rights, and provisions in our charter documents and under Nevada corporate law could discourage
a takeover that stockholders may consider favorable.
Our
Articles of Incorporation authorizes the issuance of up to 5,000,000 shares of “blank check” preferred stock with
designations, rights and preferences as may be determined from time to time by our board of directors. Our board of directors
is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting
or other rights which could dilute the interest of, or impair the voting power of our common stockholders. The issuance of a series
of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would
be possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to change control of the Company.
Our
stock price may be volatile, which may result in losses to our stockholders.
The
stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies quoted on
the OTC Markets’ Pink Market, where our shares of common stock is quoted, generally have been very volatile and have experienced
sharp share-price and trading-volume changes. The trading price of our common stock is likely to be volatile and could fluctuate
widely in response to many of the following factors, some of which are beyond our control:
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variations
in our operating results;
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changes
in expectations of our future financial performance, including financial estimates by securities analysts and investors;
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changes
in operating and stock price performance of other companies in our industry;
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additions
or departures of key personnel; and
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future
sales of our common stock.
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Domestic
and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general
economic and political conditions unrelated to our performance, may adversely affect the price of our common stock. In particular,
following initial public offerings, the market prices for stocks of companies often reach levels that bear no established relationship
to the operating performance of these companies. These market prices are generally not sustainable and could vary widely. In the
past, following periods of volatility in the market price of a public company’s securities, securities class action litigation
has often been initiated.
Our
common shares are thinly-traded, and in the future, may continue to be thinly-traded, and you may be unable to sell at or near
ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate such shares.
We
cannot predict the extent to which an active public market for our common stock will develop or be sustained due to a number of
factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional
investors, and others in the investment community that generate or influence sales volume, and that even if we came to the attention
of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or
recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods
of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which
has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share
price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop
or be sustained, or that current trading levels will be sustained. You may be unable to sell your common stock at or above your
purchase price if at all, which may result in substantial losses to you. As a consequence of this lack of liquidity, the trading
of relatively small quantities of shares by our stockholders may disproportionately influence the price of those shares in either
direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares
are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without
adverse impact on its share price. Secondly, an investment in us is a speculative or “risky” investment due to our
lack of revenues or profits to date. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of
losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares
on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.
We
do not anticipate paying any cash dividends.
We
presently do not anticipate that we will pay any dividends on any of our capital stock in the foreseeable future. The payment
of dividends, if any, would be contingent upon our revenues and earnings, if any, capital requirements, and general financial
condition. The payment of any dividends will be within the discretion of our Board of Directors. We presently intend to retain
all earnings, if any, to implement our business plan; accordingly, we do not anticipate the declaration of any dividends in the
foreseeable future.
Our
common stock may be subject to penny stock rules, which may make it more difficult for our stockholders to sell their common stock.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by
the SEC. Penny stocks generally are equity securities with a price of less than $5.00 per share. The penny stock rules require
a broker-dealer, prior to a purchase or sale of a penny stock not otherwise exempt from the rules, to deliver to the customer
a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny
stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in
a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules.
Our
principal stockholders and management own a significant percentage of our stock and will be able to exert significant control
over matters subject to stockholder approval.
Certain
of our executive officers, directors and large stockholders own a significant percentage of our outstanding capital stock. Accordingly,
our directors and executive officers have significant influence over our affairs due to their substantial ownership coupled with
their positions on our management team and have substantial voting power to approve matters requiring the approval of our stockholders.
For example, these stockholders may be able to control elections of directors, amendments of our organizational documents, or
approval of any merger, sale of assets, or other major corporate transaction. This concentration of ownership may prevent or discourage
unsolicited acquisition proposals or offers for our common stock that some of our stockholders may believe is in their best interest.
We
have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our
management will have broad discretion in the application of the net proceeds and may spend or invest these proceeds in a way with
which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business and financial
condition. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that
loses value.
The
offering price of our shares has been arbitrarily determined.
Our
management has determined the shares offered by the Company. The price of the shares we are offering was arbitrarily determined
based upon the current market value, illiquidity and volatility of our common stock, our current financial condition and the prospects
for our future cash flows and earnings, and market and economic conditions at the time of the offering. The offering price for
the common stock sold in this offering may be more or less than the fair market value for our common stock.
SPECIAL
INFORMATION REGARDING FORWARD LOOKING STATEMENTS
This
Offering Circular contains forward-looking statements, which statements involve substantial risks and uncertainties. Forward-looking
statements generally relate to future events or our future financial or operating performance. In some cases, you can identify
forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy,
plans or intentions. Forward-looking statements contained in this Offering Circular include, but are not limited to, statements
about:
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estimates
of our expenses, future revenue, capital requirements and our needs for additional financing;
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our
ability to develop, acquire, and advance services and products for our customer base;
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the
implementation of our business model and strategic plans for our business
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the
terms of future licensing, operational or management arrangements, and whether we can enter into such arrangements at all;
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timing
and receipt or revenues, if any;
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the
scope of protection we are able to establish and maintain for intellectual property rights and our ability to operate our
business without infringing the intellectual property rights of others;
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regulatory
developments in the United States;
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our
ability to maintain and establish collaborations or obtain additional funding;
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our
use of proceeds from this offering;
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our
financial performance; and
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developments
and projections relating to our competitors and our industry.
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We
caution you that the forward-looking statements highlighted above do not encompass all of the forward-looking statements made
in this Subscription Booklet. Further, we cannot assure you that the results, events and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described
in the forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our forward-looking statements.
We
undertake no obligation to update and revise any forward-looking statements or to publicly announce the result of any revisions
to any of the forward-looking statements in this document to reflect any future or developments. However, the Private Securities
Litigation Reform Act of 1995 is not available to us as a non-reporting issuer. Further, Section 27A(b)(2)(D) of the Securities
Act and Section 21E(b)(2)(D) of the Securities Exchange Act expressly state that the safe harbor for forward looking statements
does not apply to statements made in connection with an initial public offering.
DILUTION
Investors
in this offering will experience immediate dilution, as exampled below, from the sale of shares by the Company. If you invest
in our shares, your interest will be diluted to the extent of the difference between the public offering price per share of our
common stock and the as adjusted net tangible book value per share of our capital stock after this offering. Net tangible book
value per share represents our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding.
Net tangible book value dilution per share of common stock to new investors represents the difference between the amount per share
paid by purchasers in this offering and the as adjusted net tangible book value per share of common stock immediately after completion
of this offering.
Our net tangible book value was estimated
at approximately $497,472, or approximately $0.0203 per share. After giving effect to our sale of the maximum offering amount
of $8,000,000 in securities, assuming no other changes, our as-adjusted net tangible book value would be approximately $8,497,472,
or $0.2465 per share. At an offering price of $0.80 per share this represents an immediate dilution in net tangible book value
of $0.5535 per share to investors of this offering. The above calculations are based on 24,468,355 common shares issued and outstanding
as of August 21, 2019 before adjustments and 34,468,355 common shares to be outstanding after adjustment, assuming the offering
complete without additional shares issued, assets acquired or liabilities incurred.
PLAN
OF DISTRIBUTION
Currently,
we plan to have our directors and executive officers sell the securities on our behalf. They will receive no discounts or commissions.
Our executive officers will deliver this circular to those persons who they believe might have interest in purchasing all or a
part of this offering. The Company may generally solicit investors, including, but not limited to, the use of social media, newscasts,
advertisements, roadshows and the like.
As
of the date of this circular, we have not entered into any arrangements with any selling agents for the sale of the securities;
however, may engage one or more selling agents to sell the securities in the future. If we elect to do so, we will file a supplement
to this circular to identify them.
Our
directors and officers will not register as broker-dealers under Section 15 of the Securities Exchange Act of 1934 in reliance
upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated with an issuer may participate in the
offering of the issuer’s securities and not be deemed to be a broker-dealer. The conditions are that:
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the
person is not statutorily disqualified, as that term is defined in Section 3(a)(39) of the Act, at the time of his participation;
and
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the
person is not at the time of their participation an associated person of a broker-dealer; and
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the
person meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he (i) primarily performs,
or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise
than in connection with transactions in securities; and (ii) is not a broker or dealer, or an associated person of a broker
or dealer, within the preceding 12 months; and (iii) does not participate in selling and offering of securities for any issuer
more than once every 12 months other than in reliance on paragraphs (a)(4)(i) or (a)(4)(iii) of Rule 3a4-1 of the Exchange
Act.
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Our
officers and directors are not statutorily disqualified, are not being compensated, and are not associated with a broker-dealer.
They are and will continue to hold their positions as officers or directors following the completion of the offering and have
not been during the past 12 months and are currently not brokers or dealers or associated with brokers or dealers. They have not
nor will they participate in the sale of securities of any issuer more than once every 12 months.
Our
common stock is not now listed on any national securities exchange or the NASDAQ stock market. However, our stock is quoted on
the OTC Market’s Pink Market under the symbol “AMIH.” While our common stock is on the Pink Market, there has
been limited trading volume. There is no guarantee that an active trading market will develop in our securities. Accordingly,
our shares should be considered highly illiquid, which inhibits investors’ ability to resell their shares.
Upon
this circular being qualified by the SEC, the Company may offer and sell shares from time to time until all of the shares registered
are sold; however, this offering will terminate one year from the initial qualification date of this circular, unless extended
or terminated by the Company. The Company may terminate this offering at any time and may also extend the offering term by 90
days.
There
can be no assurances that the Company will sell any or all of the securities. In various states, the securities may not be sold
unless these securities have been registered or qualified for sale in such state or an exemption from registration or qualification
is available and is complied with. All shares will be offered on a “best efforts” basis.
All
of the foregoing and following may affect the marketability of our securities. Should any fundamental change occur regarding the
status or other matters concerning the selling shareholders or us, we will file an amendment to this circular disclosing such
matters.
Generally,
no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual
income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that
your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general
information on investing, we encourage you to refer to www.investor.gov.
We are offering up to 10,000,000 shares of
our common stock for $0.80 per share, for a total of up to $8,000,000 in gross offering proceeds, assuming all securities are
sold. There is no minimum investment established for investors and no minimum offering amount. We may sell significantly fewer
shares of common stock than those offered hereby. All accepted subscription funds will be immediately available for the Company’s
use. The Company may, in its sole discretion, choose to accept the cancelation of debt owed by the Company as consideration for
shares of common stock offered hereby. Any common shares sold for debt cancellation shall be subject to the same terms and conditions
as other Shares sold hereunder, including the purchase price for such Shares.
All
subscription agreements and checks are irrevocable until accepted or rejected by the Company and should be delivered to the Company
at the address provided in the subscription agreement. A subscription agreement executed by a subscriber is not binding on the
Company until it is accepted on our behalf by the Company’s CEO or by specific resolution of our Board of Directors. The
Company may accept or reject any subscription, in whole or in part, in its sole discretion.
The
Company will deliver stock certificates to the purchasers within five days from request by a shareholder; otherwise shareholders’
shares may be noted and held on the book records of the Company.
We
will not apply for “blue sky” registration in any state. If applicable, the shares may not be offered or sold in certain
jurisdictions unless they comply with the applicable securities laws of such jurisdictions by exemption, qualification or otherwise.
We intend to sell the shares only in the states in which an exemption from the registration requirements is available, and purchases
of shares may be made only in those states.
OTC
Markets Considerations
The
OTC Markets is separate and distinct from the NASDAQ stock market or other national exchange. NASDAQ has no business relationship
with issuers of securities quoted on the OTC Markets. The SEC’s order handling rules, which apply to NASDAQ-listed securities,
do not apply to securities quoted on the OTC Markets.
Although
the NASDAQ and other national stock markets have rigorous listing standards to ensure the high quality of their issuers, and can
delist issuers for not meeting those standards; the OTC Markets has no listing standards. Rather, it is the market maker who chooses
to quote a security on the system, files the application, and is obligated to comply with keeping information about the issuer
in its files.
Although
we believe being listed on the OTC Markets increases liquidity for our stock, investors may have greater difficulty in getting
orders filled than if we were on NASDAQ or other exchange. Investors’ orders may be filled at a price much different than
expected when an order is placed. Trading activity in general is not conducted as efficiently and effectively on OTC Markets as
with exchange-listed securities. Also, because OTC Markets stocks are usually not followed by analysts, there may be lower trading
volume than for NASDAQ-listed securities.
Investors
must contact a broker-dealer to trade OTC Markets securities. Investors do not have direct access to the quotation service. For
OTC Markets securities, there only has to be one market maker.
USE
OF PROCEEDS
The following table illustrates the amount
of net proceeds to be received by the Company on the sale of shares by the Company and the intended uses of such proceeds over
an approximate 12 month period. It is possible that the Company may not raise the entire $8,000,000 in shares being offered through
this Offering Circular. In such case, it will reallocate its use of proceeds as the board of directors deems to be in the best
interests of the Company in order to effectuate its business plan. The intended use of proceeds are as follows:
Capital
Sources and Uses
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100%
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75%
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50%
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25%
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Gross
Offering Proceeds
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$
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8,000,000
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$
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6,000,000
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$
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4,000,000
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$
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2,000,000
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Offering
Costs(1)
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$
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50,000
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$
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50,000
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$
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50,000
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$
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50,000
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Use
of Net Proceeds:
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Leasehold
Improvements
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$
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1,950,000
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$
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1,462,500
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$
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975,000
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$
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487,500
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Furniture,
Fixtures & Equipment
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$
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1,500,000
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$
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1,125,000
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$
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750,000
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$
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375,000
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Novopelle
Selling, General and Administrative Expenses
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$
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835,000
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$
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626,250
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$
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417,500
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$
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208,750
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Acquisitions
and Product Development
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$
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1,000,000
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$
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1,000,000
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$
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1,000,000
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$
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716,250
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Working
Capital(2)
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$
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2,415,000
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$
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1,548,750
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$
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682,500
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$
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100,000
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Debt
Reduction
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$
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250,000
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$
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187,500
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$
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125,000
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$
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62,500
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(1)
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The
Company expects to spend approximately $50,000 in expenses relating to this offering, including legal, accounting, travel,
printing and other misc..
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(2)
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The
Company will use working capital to pay for miscellaneous and general operating expenses, as well as research and development
and legal fees relating to securing and protecting the Company’s intellectual property.
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The
allocation of the use of proceeds among the categories of anticipated expenditures represents management’s best estimates
based on the current status of the Company’s proposed operations, plans, investment objectives, capital requirements, and
financial conditions. Future events, including changes in economic or competitive conditions of our business plan or the completion
of less than the total offering, may cause the Company to modify the above-described allocation of proceeds. The Company’s
use of proceeds may vary significantly in the event any of the Company’s assumptions prove inaccurate. We reserve the right
to change the allocation of net proceeds from the offering as unanticipated events or opportunities arise.
DESCRIPTION
OF BUSINESS
American
International Holdings Corp. (the “Company,” “we,” “us,” and “our”) was organized
in 1986 and is incorporated in Nevada. The Company has undergone several name changes and changes of control since its incorporation;
however, from 2012 until April, 2019, the Company had no operations and nominal assets.
On
April 12, 2019, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Novopelle
Diamond, LLC, a Texas limited liability company (“Novopelle Diamond” and “Novopelle”) and certain unitholders
of Novopelle Diamond. Pursuant to the terms of the Share Exchange Agreement, the Company acquired 100% of the issued and outstanding
membership interest of Novopelle Diamond by means of a share exchange with the Novopelle Members in exchange for 18,000,000 newly
issued shares of the common stock of the Company (the “Share Exchange”). As a result of the Share Exchange, Novopelle
became a 100% owned subsidiary of AMIH, which on a going forward basis will result in consolidated financial reporting by AMIH
to include the results of Novopelle. The closing of the Share Exchange occurred concurrently with entry into the Share Exchange
Agreement and resulted in a change of control for the Company. As a result of the Share Exchange, AMIH acquired the business of
Novopelle Diamond and all of its assets. Novopelle Diamond is a physician supervised, medical spa and wellness clinic that offers
a full menu of wellness services including anti-aging, weight loss and skin rejuvenation treatments. The business description
of the Company provided in this Current Report relates to the new medical spa business, which it intends to operate through its
subsidiaries.
The
Company is headquartered in Houston, TX and operates as a holding company dedicated to acquiring,
managing and operating health, wellness and medical spa / treatment facilities across the United States. The Company seeks
opportunities to acquire and grow businesses that possess strong brand values and that can generate long-term sustainable free
cash flow and attractive returns in order to maximize value for all stakeholders.
Service
Offerings
The
Company owns and operates a Novopelle branded medical spa facility located in McKinney, TX and has been granted an exclusive license
with Novo MedSpa Addison Corporation to establish additional Novopelle branded facilities across the United States and abroad.
Novopelle
is a Texas based, physician-supervised medical
spa & wellness clinic. Novopelle initially started its operations offering only laser hair removal services and has since
evolved to offer a full menu of wellness services including anti-aging, weight loss, and skin rejuvenation treatments. Novopelle
offers the following products and services:
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Stem
Cell Therapy
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Acne
& Acne Scar Reduction
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Laser
Hair Removal
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Testosterone
Replacement Therapy
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PRP
Facial (Vampire Facial)
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Hair
Restoration
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Novo
Lipo (Body Contouring)
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Botox
& Fillers
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Laser
Vein Removal
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Facials
& Peels
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Cellulite
Reduction
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Weight
Loss Solutions
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Stretch
Mark Reduction
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Tattoo
Removal
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In
addition to Novopelle Diamond, AMIH has three other recently formed wholly owned subsidiaries as follows:
On
September 11, 2019, the Company formed and organized Novopelle Waterway, Inc. in the State of Texas with the intent that the Company
is able to come to terms on a retail location for a newly established Novopelle branded med spa to be located in the Waterway
section of the Woodlands, TX. The Company is in early discussions with the landlord regarding the terms of a new lease.
On
September 13, 2019, the Company formed and organized YS Brands, Inc. (“YS Brands”) in the State of Texas. YS Brands
will be dedicated to creating, designing, manufacturing and marketing new premium designer shoe concepts intended to sell through
both direct to consumer (retail and e-commerce) and wholesale through larger, bigger box retail stores.
On
September 17, 2019, the Company formed and organized Capitol City Solutions USA, Inc. (“CCS”) in the State of Texas
to act as a general contracting and construction company focused on the remodeling, general construction and interior finish of
both the Company’s newly established Novopelle branded med spa locations as well as to market to other commercial real estate
projects within the United States.
The
foregoing are in their infancy and the Company has not consummated the business plans for any of the respective businesses and
may find that any one or all are not in the best interests of the Company to continue to operate.
Market
Strategy
Novopelle
currently markets its products and services to both men and women that are conscience about fitness, health, wellness and aesthetics.
While Novopelle remains competitive in pricing and product offerings, the Company currently focuses its marketing efforts to individuals
with above average and high disposable incomes. In addition to the McKinney, TX location owned by the Company, there are four
(4) non-Company owned Novopelle branded locations located across Texas with two (2) located in Dallas, TX, one (1) in Houston,
TX and another one (1) located in Austin, TX. These additional locations assist creating and maintaining a unique and strong branding
presence both physically and online.
The
Company currently deploys unique, proven marketing strategies through social media with both sponsored and paid advertisements
as well as the use of local brand ambassadors and influencers. The Company has also experienced a lot of success by placing marketing
materials in nearby retail establishments and utilizing cross marketing relationships with other vendors and retailers that market
to similar demographics.
The
Company intends to further develop and strengthen its market presence with the opening and establishment of additional Novopelle
branded locations across the United States and abroad with the Company seeking viable locations placed in fast growing trade areas
with high individual/family incomes.
Exclusive
License
On
June 27, 2019, the Company entered into an Exclusive License Agreement with Novo MedSpa
Addison Corporation (“NMAC”) granting the Company with the exclusive rights to the Novopelle intellectual property,
including copyrights and trademarks, proprietary technology, and other assets necessary or desirable to operate Novopelle branded
Med Spa locations and the right to open additional Novopelle branded Med Spa locations. A more detailed overview and a copy of
the Exclusive License Agreement has been furnished along with a Form 8-K as filed on July 5, 2019. The agreement provides the
Company with an exclusive worldwide, unrestricted, perpetual, irrevocable, and royalty-bearing license.
Competition
The
health, wellness and medical spa industry is highly competitive with new locations, brands and facilities being established on
a frequent basis. Specifically, and as it relates to medical spas, there are both many independently operated locations as well
as doctor’s offices that provide some or all of the services that Novopelle provides. At the same time, the demand and the
number of individuals – both men and women – that are seeking medical spas for a variety of health, wellness and cosmetic/aesthetic
type treatments and solutions has increased dramatically over the past several years. With medical spa treatments, such as laser
hair removal and Botox injections, are becoming more available, desirable, and affordable, demand for these services has dramatically
increased.
The
Company and management believe that by furthering the strength of the Novopelle brand through both the establishment of new locations
as well as through acquisition of smaller, independently owned and operated facilities, will better position the Company and the
Novopelle brand within the competitive landscape.
Employees
We
currently have a total of 6 full time employees and 3 part time employees. We have and will also engage independent contractors
to provide professional services.
Reports
to Security Holders
Our
common stock is registered under the Securities Exchange Act of 1934 and we are required to file current, quarterly and annual
reports and other information with the SEC. You may read and copy any document that we file at the SEC’s public reference
facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its
public reference facilities. Our SEC filings are available to you free of charge at the SEC’s web site at www.sec.gov. We
are an electronic filer with the SEC and, as such, our information is available through the Internet site maintained by the SEC
that contains reports, proxy and information statements and other information regarding issuers that file electronically with
the SEC. This information may be found at www.sec.gov and posted on our website at www.amihcorp.com.
Government
Regulation
The
health care industry is subject to extensive federal, state and local laws and regulations relating to licensure, conduct of operations,
ownership of facilities, addition of facilities and services, payment for services and prices for services that are extremely
complex and for which, in many instances, the industry does not have the benefit of significant regulatory or judicial interpretation.
Legal
Proceedings
We
are not aware of any pending or threatened legal proceedings in which we are involved.
DESCRIPTION
OF PROPERTY
The
Company does not own any properties. The Company currently utilizes approximately 1,200 square feet of office space located at
11222 Richmond Avenue, Suite 195, Houston, Texas 77082 (the “Houston Property”). There is currently no written lease
for the Houston Property and it is provided to the Company for free by a shareholder of the Company. We believe that the Houston
Property is currently adequate for the purposes of our operations. Additionally, the Company leases commercial/retail space in
McKinney, TX for its Novopelle Diamond location. The lease has a seven (7) year term and the Company pays a base rent of $3,616.67
per month plus triple-net.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
On
April 12, 2019, the Company acquired the business of Novopelle Diamond and all of its assets. The Company is headquartered
in Houston, TX and operates as a holding company dedicated to acquiring, managing and operating health, wellness and medical spa
/ treatment facilities across the United States. The Company seeks opportunities
to acquire and grow businesses that possess strong brand values and that can generate long-term sustainable free cash flow and
attractive returns in order to maximize value for all stakeholders.
Results
of Operations
The
following analysis on results of operations was based primarily on the Novopelle’s financial statements, footnotes and related
information for the periods identified below and should be read in conjunction with the audited financial statements and the notes
to those statements for the period from January 31, 2018 (inception) to December 31, 2018, which are included elsewhere in this
Offering Circular. The results discussed below are for the period from Novopelle’s inception (January 31, 2018) to March
31, 2019.
Results
of operations for the period from January 31, 2018 (inception) December 31, 2018, and for to the quarter ended March 31, 2019
Revenue
From
January 31, 2018 (inception) through December 31, 2018, revenue amounted to $35,913. For the quarter ended March 31, 2019, revenue
amounted to $15,241. Since inception, Novopelle has generated revenue by providing medical spa related services at its Novopelle
branded MedSpa located in McKinney, TX. Novopelle sells and markets its offerings directly to consumers. With additional capital
it is the Company’s plan to establish additional Novopelle branded MedSpa locations throughout the United States and abroad.
Cost
of Sales
From
inception (January 31, 2018) through December 31, 2018, cost of sales amounted to $8,895. For the three-month period ended March
31, 2019, cost of sale amounted to $12,656.
Selling,
General and Administrative Expenses
From
inception (January 31, 2018) through December 31, 2018, expenses amounted to $23,947. For the three-month period ended March 31,
2019, expenses amounted to $21,201.
Other
Expense
From
January 31, 2018 (inception) though the year ended December 31, 2018, Novopelle incurred interest expense of $10,591. For the
three-month period ended March 31, 2019, Novopelle incurred interest expense of $5,194.
Net
Profit (Loss)
From
January 31, 2018 (inception) through the year ended December 31, 2018, net loss amounted to $7,520. For the three-month period
ended March 31, 2019, net loss amounted to $23,810.
Liquidity
and Capital Resources
Liquidity
is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. Novopelle had cash
of $18,796 as of December 31, 2018 and $1,005 as of March 31, 2019.
Primary
uses of cash have been for furniture, fixtures, equipment and leasehold improvements for our Novopelle McKinney location, as well
as for costs of goods sold and general and administrative expenses. All funds received have been expended in the furtherance of
growing the business. Novopelle has primarily received funds from services, revenues, and through loans from Novopelle’s
original founding members. The following trends are reasonably likely to result in changes in our liquidity over the near to long
term:
|
●
|
An
increase in working capital requirements to finance our current business and establish additional Novopelle locations;
|
|
|
|
|
●
|
Addition
of management and administrative personnel as the business grows; and
|
|
|
|
|
●
|
The
cost of being a public company.
|
At
December 31, 2018, Novopelle had raised a total of $0 from the sale of common stock and convertible promissory notes. As of March
31, 2019, Novopelle has raised a total of $0 from the sale of common stock and convertible promissory notes to fund its operations.
Fund sources have come from individual investors. No institutional investment has been made to the company to date.
To
date, Novopelle is not profitable and we cannot provide any assurances that we will be profitable. We believe our cash and cash
equivalents in addition to the proceeds received from the sale of common stock will provide sufficient capital to satisfy anticipated
operational expenses for the next twelve months.
Cash
Flows
The
following table shows a summary of our cash flows from January 31, 2018 (inception) to the period ended December 31, 2018, and
the three-month period ended March 31, 2019.
|
|
From
January 31, 2018 to
December
31, 2018
|
|
|
Period
Ended
March 31, 2019
|
|
Net
cash used in operating activities
|
|
|
(15,810
|
)
|
|
$
|
(4,884
|
)
|
Net
cash used in investing activities
|
|
|
(42,276
|
)
|
|
|
(15,156
|
)
|
Net
cash provided by financing activities
|
|
|
76,882
|
|
|
|
2,249
|
|
Net
(decrease) increase in cash
|
|
|
18,796
|
|
|
|
(17,791
|
)
|
Cash
- beginning of period
|
|
|
-
|
|
|
|
18,796
|
|
Cash
- end of period
|
|
|
18,796
|
|
|
$
|
1,005
|
|
Net
cash flow used in operating activities was $15,810 from January 31, 2018 (inception) to the year ended December 31, 2018, $4,884
for the three-month period ended March 31, 2019. Net cash flow used in operating activities primarily reflected net loss of $7,520
and $23,810, respectively, as adjusted for non-cash items and working capital timing differences. Net cash used in operating activities
resulted from Novopelle ramping up its staffing to build its capabilities for current and future project performance.
We
expect the primary use of capital to continue to be salaries, third party project costs, and general overhead costs. It is anticipated
that additional capital will be required to execute our business plan and fund future revenue growth.
Going
Concern
As
of December 31, 2018, the Company’s auditor determined that there was substantial doubt about its ability to maintain operations
as a going concern. The Company’s financial statements have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the normal course of business. Management cannot provide
assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional equity
and/or debt capital. We will seek to raise capital through additional equity or debt financings to fund operations in the future.
Although the Company has historically raised capital from sales of common and from the issuance of convertible promissory notes,
there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure
additional lending in the near future, management expects that the Company will need to curtail its operations. Novopelle’s
consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or
the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Our
forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking
statement that involves risks and uncertainties, and actual results could vary materially as a result of a number of factors.
We have based this estimate on assumptions that may prove to be wrong and could utilize our available capital resources sooner
than we currently expect. Our capital requirements are difficult to forecast. Please see the section titled “Risk Factors”
elsewhere in this Current Report for additional risks associated with our capital requirements.
Until
such time as we generate substantial revenue to offset operational expenses, we expect to finance our cash needs through a combination
of public and private equity offerings and debt financing. We may be unable to raise capital or enter into such other arrangements
when needed or on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed
would have a negative impact on our financial condition.
Three
months ended June 30, 2019 compared to the three months ended June 30, 2018
Revenues
for the three months ended June 30, 2019 and 2018 was $75,706 and $6,299, respectively
Cost
of sales were $23,059 for the three months ended June 30, 2019 and compared to $0 for the three months ended June 30, 2018.
Selling,
general and administrative expenses were $119,191 for the three months ended June 30, 2019, compared to $429 for the three months
ended June 30, 2018.
Six
months ended June 30, 2019 compared to the six months ended June 30, 2018.
Revenues
for the six months ended June 30, 2019 and 2018 were $90,947 and $6,299, respectively.
Cost
of sales were $35,715 for the six months ended June 30, 2019 compared to $0 for the six months ended June 30, 2018.
Selling,
general and administrative expenses were $140,392 and $429, respectively
Liquidity
and Capital Resources for Fiscal Quarter Ended June 30, 2019
As
of June 30, 2019, AMIH had total assets of $471,971, including $11,510 in cash. At December 31, 2018, AMIH had total assets of
$123,350, including $18,796 in cash.
As
of June 30, 2019 and December 31, 2018, AMIH had total current liabilities of $314,862 and $128,734 respectively.
AMIH
had negative working capital of $303,352 and $101,072 as of June 30, 2019 and December 31, 2018, respectively.
Net
cash used in operating activities was $46,485 for the six months ended June 30, 2019. Net cash used in operating activities was
$3,340 for the six months ended June 30, 2018.
Net
cash used in investing activities for the six month ended June 30, 2019 and 2018, was $17,034 and $0, respectively. Net cash used
investing activities for the six months ended June 30, 2019 was used purchased property and equipment used in operations.
Net
cash provided by financing activities during the six months ended June 30, 2019 was $56,233, compared to $45,000 during the six
months ended June 30, 2018. During the six months ended June 30, 2019, the Company sold common shares for $10,000, borrowed $60,000
in short-term borrowing and $18,808 form related parties. It also repaid $31,633 in borrowing from related parties, $942 principal
payments on long-term debt. During the six months ended June 30, 2018, the Company borrowed $46,500 in short-term borrowing from
related parties, and repaid $1,500 in borrowing from related parties.
Off-Balance
Sheet Arrangements
As
of June 30, 2019, December 31, 2018 and December 31, 2017, we did not have any off-balance sheet arrangements as defined in
Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Our
board of directors is elected annually by our shareholders. The board of directors elects our executive officers annually. Our
directors and executive officers as of September 12, 2019 are as follows:
Name
|
|
Position
|
|
Age
|
|
Term
of Office
|
|
Approximate
Hours Per Week
|
Jacob
D. Cohen
|
|
Chief
Executive Officer, President, Director
|
|
40
|
|
April,
2019 – Present
|
|
Full
time
|
Everett
Bassie
|
|
Chief
Financial Officer
|
|
67
|
|
May,
2018 – Present
|
|
15
hours/week
|
Esteban
Alexander
|
|
Chief
Operating Officer, Treasurer, Director
|
|
31
|
|
April,
2019 – Present
|
|
Full
time
|
Alan
Hernandez
|
|
Chief
Marketing Officer, Secretary, Director
|
|
27
|
|
April,
2019 – Present
|
|
Full
time
|
Jacob
D. Cohen, 40, Chief Executive Officer
Jacob
Cohen is a serial entrepreneur, corporate finance and executive management professional with over 18 years of investment banking
and capital markets experience having started and growing multiple companies in various industry sectors including marketing,
advertising, healthcare, IT and financial services. Prior to joining the Company, Jacob was the co-founder and managing partner
of several boutique investment bank and strategic advisory firms where he advised both early and later stage companies in raising
capital in the form of debt and/or equity and in both private and public markets.
Prior
to his experiences in investment banking, Jacob served as the Chief Financial Officer of The Renewed Group, Inc. – a manufacturer,
wholesaler and retailer of eco-friendly and sustainable apparel primarily made from recycled textiles and under the brand name
REUSE JEANS from 2010 through the end of 2013. Further, Mr. Cohen served from 2008 through 2010 as Executive Vice President and
Controller of Metiscan, Inc., a publicly traded company, and as the President and Chief Executive Officer of one of its subsidiaries,
Shoreline Employment Services, Inc. During his tenure at Metiscan, Mr. Cohen was instrumental in restructuring, reorganizing and
operating the company and its five subsidiaries, and successfully raised over $8 million in equity financing for growth capital.
Mr. Cohen also spearheaded the company’s financial audit process and managed its various filings with the SEC.
From
2007 through 2008, Mr. Cohen served as the Chief Operating Officer of Artfest International, which he assisted in taking public
at the end of 2007. Throughout his career, Mr. Cohen was involved in starting many new ventures, including The AdvertEyes Network,
a digital signage advertising company where he served as founder and CEO. Other positions include investment advisor and institutional
equity research analyst for Solomon Advisors and Huberman Financial, securities broker-dealers, from 2003 through 2005, and investment
banker for Allegiance Capital, a middle market investment bank specializing on mergers and acquisitions, from 2005-2007. Mr. Cohen
holds a Bachelors of Arts in International Economics and Finance from Brandeis University in Waltham, MA.
Everett
Bassie, 67, Chief Financial Officer
Everett
Bassie founded Bassie & Co., a certified public accounting firm located in Houston, Texas in October 1991. Bassie & Co.
was involved in all aspects of accounting. Mr. Bassie closed Bassie & Co. during the second quarter of 2010. Since the closing
of Bassie & Co., Mr. Bassie has performed consulting services in connection with tax, accounting and pubic company accounting
advisory services. Prior to forming Bassie & Co., Mr. Bassie was a senior audit manager in the Houston office of KPMG Peat
Marwick. Mr. Bassie worked for KPMG Peat Marwick from June 1981 to October 1991.
Esteban
Alexander, 31, Chief Operating Officer
Esteban
Alexander is a seasoned operational professional and executive with a focus in the health, beauty and wellness industry. Prior
to his position with the Company, Mr. Alexander was the owner and operator of Ideal Nutrition - a retail store located in Allen,
TX dedicated to marketing and selling high quality nutritional products, vitamins and supplements. Mr. Alexander installed and
supervised operational policies and procedures ranging from purchasing, inventory control and management, finance and marketing.
As a former competitive bodybuilder and nutritionist, Mr. Alexander also provided clients with in-depth exercise, nutrition, and
weight loss programs specifically designed and tailor made to meet each of his client’s needs and goals. Esteban brings
both his operational expertise and knowledge of the health and wellness industry as the Company continues to develop the Novopelle
brand and new business concepts within the industry. Mr. Alexander holds a bachelor’s degree in Nutrition in Dietetics from
Texas Woman’s University in Denton, TX.
Alan
Hernandez, 27, Chief Marketing Officer
Alan
Hernandez is a serial entrepreneur with over 6 years of e-commerce and marketing experience. Mr. Hernandez possess as unique ability
to take a creative vision and turn it into reality through entrepreneurial development. His passion is complemented by his ability
to create innovative strategies that drive business and name recognition within the market.
Prior
to joining the Company, Mr. Hernandez served as Chief Marketing Officer and Co-CEO for Novopelle Med Spa, a chain of physician
supervised med spas in located throughout Texas with continued growth and success. Throughout his role since 2014, he has operated
both at an executive and ground level, all while establishing a strong company culture to overall enhance the consumer experience.
By implementing a sophisticated CRM (client relations management) system, Mr. Hernandez has created a strong lead management process
that continues to lead the company towards expansion. He continues to spearhead Novopelle’s operations while constantly
developing new business concepts outside of the industry.
Previously,
Mr. Hernandez co-founded several e-commerce brands in the fitness and wellness industry in addition to Vast Networks LLC, a Dallas-based
digital marketing agency. During his time as managing partner and Chief Marketing Officer, Mr. Hernandez learned the importance
of implementing effective marketing strategies while gaining experience in the digital marketing ecosystem and social media. Mr.
Hernandez attended the University of Texas at Dallas where he studied Business Administration with a focus in Entrepreneurship
and Marketing.
Family
Relationships
There
are no family relationships among the members of our Board or our executive officers.
Composition
of the Board
In
accordance with our certificate of incorporation, our Board is elected annually as a single class.
Director
Independence
The
Board has determined that none of our directors are independent as the term “independent” is defined by the rules
of NASDAQ Rule 5605.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding
traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten
years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters
that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions”
none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors,
executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Communications
with our Board of Directors
Our
stockholders may send correspondence to our board of directors, c/o the Corporate Secretary at 11222 Richmond Avenue, Suite 195,
Houston, TX 77082. Our corporate secretary will forward stockholder communications to our board of directors prior to the board’s
next regularly scheduled meeting following the receipt of the communication.
Corporate
Governance
The
Company intends to seek additional members for its Board of Directors. In evaluating director nominees, our Company considers
the following factors:
|
●
|
The
appropriate size of the Board;
|
|
●
|
Our
needs with respect to the particular talents and experience of our directors;
|
|
●
|
The
knowledge, skills and experience of nominees;
|
|
●
|
Experience
with accounting rules and practices; and
|
|
●
|
The
nominees’ other commitments.
|
Our
Company’s goal is to assemble a Board of Directors that brings our Company a variety of perspectives and skills derived
from high quality business, professional and personal experience. Other than the foregoing, there are no stated minimum criteria
for director nominees.
COMPENSATION
OF DIRECTORS AND EXECUTIVE OFFICERS
The
table below summarizes all compensation awarded to, earned by, or paid to our executive officers and directors for all services
rendered in all capacities to us during the last fiscal year, as of December 31, 2018.
Name
|
|
Capacities
in which compensation was received
|
|
Cash
compensation
($)
|
|
|
Stock
Awards
($)
|
|
|
Total
compensation
($)
|
|
Everett
Bassie
|
|
CFO,
Director
|
|
|
8000
|
|
|
|
375,000
|
|
|
|
383,000
|
|
Robert
Holden
|
|
CEO,
Director
|
|
|
15,000
|
|
|
|
1,900,000
|
|
|
|
1,915,000
|
|
Daniel
Dror
|
|
Chairman
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Charles
R. Zeller
|
|
Director
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Directors
as a Group (4 persons)
|
|
|
|
|
23,000
|
|
|
|
2,275,000
|
|
|
|
2,298,000
|
|
(1)
|
Everett
Bassie and Charles Zeller resigned as members of the Board of Directors effective April 12, 2019 in connection with the Share
Exchange. Mr. Bassie remained on as the Company’s CFO.
|
|
|
(2)
|
Effective
August 20, 2018, Mr. Robert Holden resigned as a member of the Board of Directors, President and Chief Executive Officer of
the Company.
|
The
directors serve without cash compensation, but may be granted stock as bonus compensation from time to time. No non-employee directors
received any form of compensation during the years ended December 31, 2018. We do not have a compensation committee and compensation
for our directors and officers is determined by our board of directors.
Executive
Officer Compensation
Concurrent
with the Share Exchange Agreement on April 12, 2019, each of Jacob D. Cohen, Esteban Alexander and Alan Hernandez (collectively,
the “Executives”) entered into Executive Employment Agreements with AMIH (collectively, the “Executive Employment
Agreements”). The Executive Employment Agreements have substantially similar terms.
Pursuant
to the Executive Employment Agreements, the Executives will each receive an annual base salary of $90,000, which will increase
to $120,000 per year in 2020, and will be eligible to receive equity awards in the future, as determined by the Board. In addition,
the Executives will have severance benefits in the form of salary continuation and health benefits through the employment term
remaining on the contract in the event the Company terminates the an agreement without cause or an Executive terminates with good
reason, as those terms are defined in the employment agreements. The Executives will also assist manage each of the medical spas
opened or acquired by the Company and shall be entitled to receive compensation therefor equal to 25% of the profits generated
by the medical spas. The Executive Employment Agreements have three-year terms, provided, however, after the end of one year,
the Executive Employment Agreements will automatically renew for successive one-year terms. Copies of the Executive Employment
Agreements are attached hereto as exhibits.
On
May 3, 2019, the Company entered into a Financial and Accounting Consulting Agreement (the “CFO Agreement”) with Everett
Bassie pursuant to which Mr. Bassie agreed to serve as the Company’s Chief Financial Officer on an independent contractor
basis for a term of two years. Mr. Bassie will be paid a monthly fee of $1,000 for his services, and such fee may be renegotiated
if the Company’s operations increase more than expected. A copy of Mr. Bassie’s CFO Agreement is attached hereto as
an exhibit.
Stock
Option Plan
On
July 5, 2019, the Board of Directors adopted and approved a 2019 Stock Option and Incentive Plan (the “Plan”). The
Plan is intended to promote the interests of the Company by providing eligible persons with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company as an incentive for them to remain in the service of
the Company. The maximum number of shares available to be issued under the Plan is currently 10,000,000 shares, subject to adjustments
for any stock splits, stock dividends or other specified adjustments which may take place in the future.
The
Plan is administered by the Company’s Board of Directors. Persons eligible to participate in the Plan must: (i) be a natural
person, (ii) provide bona fide services to the Company, and (iii) provide services to the Company that services are not in connection
with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a
market for the registrant’s securities. All grants under the Plan are intended to comply with the requirements under Internal
Revenue Code Section 409A and activities under the Plan will be administered accordingly.
Options
granted under the Plan are evidenced by agreement between the recipient and the Company, subject to the following general provisions:(i)
a recipient of employee stock option may not exercise any options which would cause him/her/it to hold more than 4.9% of the Company’s
issued and outstanding common or voting stock, unless such limitation is waived by providing 61 days’ written notice to
the Company, but in no event may exercise options that would cause such recipient to hold more than 9.9% of the Company’s
issued and outstanding common or voting stock; and (ii) the term of stock options shall be limited to a maximum of two years,
unless otherwise approved by the Board of Directors. A copy of the Plan is attached hereto as an exhibit.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our common stock by (i) each person who is
known by the Company to own beneficially more than ten percent (10%) of our outstanding voting stock; (ii) each of our directors;
(iii) each of our executive officers; and (iv) all of our current executive officers, significant employees and directors as a
group, as of August 21, 2019.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting and/or investing power with respect to securities.
These rules generally provide that shares of common stock subject to options, warrants or other convertible securities that are
currently exercisable or convertible, or exercisable or convertible within 60 days of August 21, 2019, are deemed to be outstanding
and to be beneficially owned by the person or group holding such options, warrants or other convertible securities for the purpose
of computing the percentage ownership of such person or group, but are not treated as outstanding for the purpose of computing
the percentage ownership of any other person or group.
Beneficial
ownership as set forth below is based on our review of our record shareholders list and public ownership reports filed by certain
shareholders of the Company, and may not include certain securities held in brokerage accounts or beneficially owned by the shareholders
described below.
We
believe that, except as otherwise noted and subject to applicable community property laws, each person named in the following
table has sole investment and voting power with respect to the shares of common stock shown as beneficially owned by such person.
Unless otherwise indicated, the address for each of the officers or directors listed in the table below is 11222 Richmond Avenue,
Suite 195, Houston, TX 77082. As of August 21, 2019, we had 24,468,355 outstanding shares of common stock.
Name
and Address of Beneficial Owner
|
|
Shares
Beneficially
Owned
|
|
|
Percentage
|
|
Officers
and Directors
|
|
|
|
|
|
|
|
|
Jacob
D. Cohen
|
|
|
6,000,000
|
|
|
|
24.25
|
%
|
Esteban
Alexander
|
|
|
6,000,000
|
|
|
|
24.25
|
%
|
Alan
Hernandez
|
|
|
6,000,000
|
|
|
|
24.25
|
%
|
Everett
Bassie
|
|
|
100,000
|
|
|
|
0.41
|
%
|
All
officers and directors as a group (4 persons)
|
|
|
18,100,000
|
|
|
|
73.97
|
%
|
|
|
|
|
|
|
|
|
|
Greater
than 10% Shareholders
|
|
|
|
|
|
|
|
|
Robert
Holden 1
|
|
|
3,800,000
|
|
|
|
15.53
|
%
|
|
1.
|
The
Company intends to initiate legal proceedings against Mr. Holden for return of these shares due to his failure to perform.
|
The
above tables are based upon information derived from our stock records. Except as otherwise indicated below and under applicable
community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment
power with respect to the shares shown.
INTEREST
OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Except
as described herein (or within the section entitled Executive Compensation of this prospectus), none of the following parties
(each a “Related Party”) has, in our fiscal years ended 2017 and 2018, had any material interest, direct or indirect,
in any transaction with us or in any presently proposed transaction that has or will materially affect us:
●
|
any
of our directors or officers;
|
●
|
any
person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding
shares of common stock; or
|
●
|
any
member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons.
|
SEC
rules require us to disclose any transaction or currently proposed transaction in which we were a participant and in which any
related person has or will have a direct or indirect material interest involving the lesser of $120,000 or 1% of the average of
our total assets as of the end of last two completed fiscal years. A related person is any executive officer, director, nominee
for director, or holder of 5% or more of our Common Stock, or an immediate family member of any of those persons. The descriptions
set forth above under the captions “The Exchange and Related Transactions—Exchange Agreement,” “Executive
Compensation—Employment and Related Agreements” and “—Director Compensation” and below under “Description
of Securities—Options” are incorporated herein by reference.
The
following is a description of transactions since January 1, 2017 to which we have been a party, in which the amount involved exceeded
or will exceed $120,000, and in which any of our directors, executive officers or holders of more than 5% of the Company’s
pre-Exchange capital stock (or pre-Exchange DSI’s common stock), or an affiliate or immediate family member thereof, had
or will have a direct or indirect material interest, other than compensation and other arrangements that are described in the
section titled “Executive Compensation.” The following description is historical and has not been adjusted to give
effect to the Exchange.
Loans
from Related Parties
During
the six month period ended June 30, 2019, two of the Company officers and board members, Jacob D. Cohen and Esteban Alexander,
loaned the Company $18,808, including $3,170 of accrued interest on the loans, respectively. During the six months ended June
30, 2019, the Company repaid $31,633 of loans to the two officers/board members. The Company incurred $2,026 on imputed interest
expense on related party borrowing during the three months ended June 30, 2019. As of December 31, 2018, the Company owed Mr.
Cohen $20,000 and Mr. Alexander $101,084.74.
The
outstanding loan balance to these related parties was $113,918 at June 30, 2019, of which $35,000 was owed to Mr. Cohen and $
78,868 was owed to Mr. Alexander.
On
June 21, 2019, the Company issued a promissory note with a principal amount of $40,000 to a related party the father of the Company’s
CEO, Jacob Cohen) in exchange for $40,000 in cash. The promissory note is unsecured, has a maturity date of June 21, 2020 and
accrues interest at the rate of 8% per annum until paid in full by the Company. Furthermore, the Company issued 50,000 shares
of the Company’s common stock to the related party investor as further consideration to enter into the loan with the Company.
The Company issued 50,000 shares of common stock valued at $.10 per share or $5,000, which was accounted for a discount on the
note.
As
of June 30, 2019, AMIH had a short-term note payable in the amount of $13,473 to Kemah Development Texas, LP, a company owned
by Dror Family Trust, a related party.
Long-Term
Debt to Related Parties
On
April 12, 2019 the Company entered into individual share exchange agreements and promissory notes with each of Daniel Dror, Winfred
Fields and former Directors Everett Bassie and Charles Zeller (the “AMIH Shareholders”), whereby the AMIH Shareholders
agreed to cancel and exchange a total of 5,900,000 shares of their AMIH common stock. The Company issued individual promissory
notes with an aggregate principal amount of $350,000 (the “Promissory Notes”) for cancellation of the 5,900,000shares
of common stock. The Promissory Notes have a term of two years and accrue interest at the rate of 10% per annum until paid in
full by the Company. The Company accrued $7,575 of interest on these notes during the six months ended June 30, 2019.
Related
Party Transactions of the Company Prior to the Exchange Agreement
As
of December 31, 2018, and December 31, 2017, AMIH had a payable to AMIN of $0 and $31,496, respectively. The loan is from the
former parent company. There is no loan agreement, and interest is not being charged. Effective May 31, 2018, AMIN Board forgave
the $31,496 loan owed to AMIN at March 31, 2018 plus an additional $500 loaned during the second quarter of 2018, for a total
of $31,996 in forgiveness, which was recorded as an increase in additional paid in capital. The Company incurred an imputed interest
expense in the amount of $1,035 on the loans owed to AMIN for the year ended December 31, 2018.
As
of December 31, 2018, AMIH had a short-term note payable in the amount of $13,072 to Kemah Development Texas, LP, a company owned
by Dror Family Trust, a related party. The original note was for $100,000. $86,928 was repaid during the year ended December 31,
2018. The note was effective May 31, 2018, bears interest at 3%, and is due on May 31, 2019. AMIH incurred interest expense of
$852 for the period ended September 30, 2018 and an additional $1,089 of interest expense was imputed on this note.
At
December 31, 2017, the Company had an accrued liability in the amount $30,000 for compensation to the Company’s CEO for
the year ended December 31, 2016. Effective May 31, 2018, the Company former CEO resigned his position as CEO and forgave the
$30,000 in accrued compensation owed to the former CEO.
The
$2,124 in imputed interest expense and the $30,000 in forgiveness of accrued compensation were recorded as increases in additional
paid in capital during the year ended December 31, 2018.
During
the year ended year 31, 2018, the Company issued the following shares of restricted common stock to related parties. Stock issued
for services to related parties was valued at $0.50 per share:
The
Company issued 4,300,000 shares for common stock valued $2,150,000 for organizational and acquisition consulting services to Daniel
Dror, Chairman and CEO of American International Industries, Inc. (“AMIN”). Daniel Dror is the former Chairman and
CEO of the Company.
The
Company issued 3,800,000 shares of common stock valued at $1,900,000 to Robert Holden, for the positions as President, CEO and
Director.
The
Company issued 750,000 shares of common stock valued at $375,000 to Everett Bassie, for the positions as CFO and Director.
The
Company issued 500,000 shares of common stock valued at $250,000 for Director Fees to Charles Zeller.
During
the period from January 31, 2018 (inception) to December 31, 2018, two members, who are also officers of the Company, loaned and/or
incurred debt for the benefit of the Company. The two members, Jacob D. Cohen and Esteban Alexander, loaned the Company a total
of $163,508 and repaid a total of $42,424 on the principal of the loans. $44,202 of this borrowing was used to pay for the construction
in progress for leasehold improvements. The Company incurred $2,136 of imputed interest on the related party borrowing during
this period, and $8,455 of actual interest paid on related borrowing for a total of $10,591 of interest expense.
Policies
and Procedures for Related Party Transactions
Our
board of directors intends to adopt a written related person transaction policy, to set forth the policies and procedures for
the review and approval or ratification of related person transactions. This policy will cover, with certain exceptions set forth
in Item 404 of Regulation S-K promulgated under the Exchange Act, any transaction, arrangement or relationship, or any series
of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved
exceeds or will exceed the lesser of $120,000 or 1% of the average of Novopelle’s total assets as of the end of the last
two completed fiscal years and a related person had, has or will have a direct or indirect material interest, including purchases
of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness,
guarantees of indebtedness and employment by us of a related person.
SECURITIES
BEING OFFERED
The
following description is a summary of the material rights of shareholders. Shareholder rights are dictated via the Company’s
Articles of Incorporation and Bylaws. Each of the foregoing documents has been filed as an exhibit to this circular.
We
have authorized capital stock consisting of 195,000,000 shares of common stock, $.0001 par value, and 5,000,000 shares of preferred
stock, $.0001 par value. As of August 21, 2019, we had 24,468,355 shares of common stock issued and outstanding, and no shares
of Preferred Stock issued and outstanding. Unless stated otherwise, the following discussion summarizes the term and provisions
of our amended and restated certificate of incorporation and our amended and restated bylaws. This description is summarized from,
and qualified in its entirety by reference to, our amended and restated certificate of incorporation, which has been publicly
filed with the SEC.
Common
Stock
The
holders of shares of our common stock are entitled to one vote per share on all matters to be voted upon by our stockholders and
there are no cumulative rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders
of shares of our common stock are entitled to receive ratably any dividends that may be declared from time to time by our board
of directors out of funds legally available for that purpose. In the event of our liquidation, dissolution or winding up, the
holders of shares of our common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject
to prior distribution rights of preferred stock then outstanding. Our common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. The outstanding shares
of our common stock are fully paid and non-assessable, and any shares of our common stock to be issued upon an offering pursuant
to this Offering Circular will be fully paid and nonassessable upon issuance.
We
have never paid cash dividends on our common stock. Moreover, we do not anticipate paying periodic cash dividends on our common
stock for the foreseeable future. Any future determination about the payment of dividends will be made at the discretion of our
board of directors and will depend upon our earnings, if any, capital requirements, operating and financial conditions and on
such other factors as our board of directors deems relevant.
Preferred
Stock
Our
board of directors, without stockholder approval, can issue preferred stock with voting, conversion or other rights that could
negatively affect the voting power and other rights of the holders of our common stock. Preferred stock could thus be issued quickly
with terms calculated to delay or prevent a change in control of us or make it more difficult to remove our management. Additionally,
the issuance of preferred stock may have the effect of decreasing the market price of our common stock. Our board of directors
may specify the characteristics of any preferred stock. Any preferred stock issued will be fully paid and nonassessable upon issuance.
Transfer
Agent
The
stock transfer agent for our securities is American Stock Transfer & Trust Company, LLC in Brooklyn, NY.
FINANCIAL
STATEMENTS
INDEX
TO THE AUDITED FINANCIAL STATEMENTS
From
January 31, 2018 (inception) to December 31, 2018
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Novopelle Diamond, LLC
Opinion
on the Financial Statements
We
have audited the accompanying balance sheet of Novopelle Diamond, LLC (the Company) as of December 31, 2018, and the related statement
of operations, members’ equity, and cash flows for the period from January 31, 2018 (inception) through December 31, 2018,
and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its
operations and its cash flows for the period from January 31, 2018 (inception) through December 31, 2018, in conformity with accounting
principles generally accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which
raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are
described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/
M&K CPAS, PLLC
We
have served as the Company’s auditor since 2019.
Houston,
TX
August
15, 2019
NOVOPELLE
DIAMOND, LLC
Balance
Sheet
December
31, 2018
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
$
|
18,796
|
|
Prepaid
expenses
|
|
|
8,866
|
|
Total
current assets
|
|
|
27,662
|
|
|
|
|
|
|
Property
and equipment:
|
|
|
|
|
Construction
in progress-leasehold improvements
|
|
|
85,016
|
|
Furniture
|
|
|
1,462
|
|
Total
property and equipment
|
|
|
86,478
|
|
Accumulated
depreciation and amortization
|
|
|
-
|
|
Net
property and equipment
|
|
|
86,478
|
|
|
|
|
|
|
Other
assets
|
|
|
9,210
|
|
Total
assets
|
|
$
|
123,350
|
|
|
|
|
|
|
Liabilities
and Members’ Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Deferred
lease liability
|
|
$
|
7,650
|
|
Short-term
notes payable to related parties
|
|
|
121,084
|
|
Total
liabilities
|
|
|
128,734
|
|
|
|
|
|
|
Members’
equity:
|
|
|
|
|
Members
equity
|
|
|
2,136
|
|
Retained
earnings (deficit)
|
|
|
(7,520
|
)
|
Total
members’ equity (deficit)
|
|
|
(5,384
|
)
|
|
|
|
|
|
Total
liabilities and members’ equity (deficit)
|
|
$
|
123,350
|
|
See
accompanying notes to financial statements.
NOVOPELLE
DIAMOND, LLC
Statement
of Operations
From
January 31, 2018 (inception) to December 31, 2018
Revenues
|
|
$
|
35,913
|
|
Cost
of sales
|
|
|
8,895
|
|
Gross
margin
|
|
|
27,018
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing expenses
|
|
|
10,225
|
|
General
and administrative expenses
|
|
|
13,722
|
|
Total
operating expenses
|
|
|
23,947
|
|
|
|
|
|
|
Operating
income
|
|
|
3,071
|
|
|
|
|
|
|
Other
expenses - interest expense
|
|
|
(10,591
|
)
|
|
|
|
|
|
Net
loss
|
|
$
|
(7,520
|
)
|
See
accompanying notes to financial statements.
NOVOPELLE
DIAMOND, LLC
Statement
of Members’ Equity
From
January 31, 2018 (inception) to December 31, 2018
|
|
|
|
|
|
|
|
Total
|
|
|
|
Members
|
|
|
Retained
|
|
|
members’
|
|
|
|
equity
|
|
|
earnings
|
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
January 31, 2018
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest
|
|
|
2,136
|
|
|
|
-
|
|
|
|
2,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
(7,520
|
)
|
|
|
(7,520
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2018
|
|
$
|
2,136
|
|
|
$
|
(7,520
|
)
|
|
$
|
(5,384
|
)
|
See
accompanying notes to financial statements.
NOVOPELLE
DIAMOND, LLC
Statement
of Cash Flows
From
January 31, 2018 (inception) to December 31, 2018
Cash
flows from operating activities:
|
|
|
|
|
Net
loss
|
|
$
|
(7,520
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Imputed
interest expense
|
|
|
2,136
|
|
(Increase)
decrease in operating assets:
|
|
|
|
|
Prepaid
expenses
|
|
|
(8,866
|
)
|
Other
assets
|
|
|
(9,210
|
)
|
(Decrease)
increase in operating liabilities:
|
|
|
|
|
Deferred
lease liability
|
|
|
7,650
|
|
Net
cash used in operating activities
|
|
|
(15,810
|
)
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
Capital
expenditures for property and equipment
|
|
|
(42,276
|
)
|
Net
cash used in investing activities
|
|
|
(42,276
|
)
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
Proceeds
from short-term borrowings from related parties
|
|
|
119,306
|
|
Repayment
of short-term borrowings from related parties
|
|
|
(42,424
|
)
|
Proceeds
from short-term borrowings
|
|
|
7,000
|
|
Repayment
of short-term borrowings
|
|
|
(7,000
|
)
|
Net
cash provided by financing activities
|
|
|
76,882
|
|
|
|
|
|
|
Net
increase cash
|
|
|
18,796
|
|
|
|
|
|
|
Cash
at beginning of year
|
|
|
-
|
|
Cash
at end of year
|
|
$
|
18,796
|
|
|
|
|
|
|
Supplemental
schedule of cash flow information:
|
|
|
|
|
Interest
paid
|
|
$
|
8,455
|
|
|
|
|
|
|
Taxes
paid
|
|
$
|
-
|
|
|
|
|
|
|
Non-cash
investing and financing transactions:
|
|
|
|
|
Leasehold
improvement purchases financed
|
|
$
|
44,202
|
|
See
accompanying notes to financial statements.
NOVOPELLE
DIAMOND, LLC
Notes
to Financial Statements
For
the Period from January 1, 2018 (inception) to December 31, 2018
Note
1 – Summary of Significant Accounting Policies
Organization,
Ownership and Business
Novopelle
Diamond, LLC is a limited liability company incorporated in the State of Texas on January 31, 2018. The Company began operations
in June 2018 as a medical spa. The Company owns and operates a Novopelle branded medical
spa facility located in McKinney, TX and has been granted an exclusive license with Novo MedSpa Addison Corporation to establish
additional Novopelle branded facilities across the United States and abroad.
Novopelle
is a Texas based physician-supervised medical
spa & wellness clinic. Novopelle initially started its operations offering only laser hair removal services and has since
evolved to offer a full menu of wellness services including anti-aging, weight loss, and skin rejuvenation treatments.
Management’s
Estimates and Assumptions
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these
estimates.
Cash
and Equivalents
The
Company considers cash and equivalents to include cash on hand and certificates of deposits with banks with an original maturity
of three months or less, that The Company intends to convert.
Accounts
Receivable
Accounts
receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Allowance
for Doubtful Accounts
The
Company extends credit to customers and other parties in the normal course of business. The Company regularly reviews outstanding
receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established
reserves, The Company makes judgments regarding its customers’ ability to make required payments, economic events and other
factors. As the financial condition of these parties change, circumstances develop or additional information becomes available,
adjustments to the allowance for doubtful accounts may be required. When the Company determines that a customer may not be able
to make required payments, the Company increases the allowance through a charge to income in the period in which that determination
is made.
Inventories
Inventories
are valued at the lower-of-cost or market on a first-in, first-out basis and includes the cost of the inventories and freight.
The Company assesses the reliability of its inventories based upon specific usage and future utility. A charge to income is taken
when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted.
NOVOPELLE
DIAMOND, LLC
Notes
to Financial Statements
For
the Period from January 1, 2018 (inception) to December 31, 2018
Investment
Securities
The
Company accounts for its investments in accordance with ASC 320-10, “Investments in Debt and Equity Securities.” Management
determines the appropriate classification of its investments in marketable securities at the time of purchase and reevaluates
such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them
in the near term are classified as trading securities. Debt securities for which the Company does not have the intent or ability
to hold to maturity and equity securities not classified as trading securities are classified as available-for-sale. The cost
of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported
at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at
fair value but unrealized gains and losses are included in stockholders’ equity. Management determines fair value of its
investments based on quoted market prices at each balance sheet date.
Property,
Plant, Equipment, Depreciation, Amortization and Long-Lived Assets
Long-lived
assets include:
Property,
Plant and Equipment – Assets acquired in the normal course of business are recorded at original cost and may be adjusted
for any additional significant improvements after purchase. We depreciate the cost evenly over the assets’ estimated useful
lives. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the
accounts, with any resultant gain or loss being recognized as a component of other income or expense.
Identifiable
intangible assets – These assets are recorded at acquisition cost. Intangible assets with finite lives are amortized evenly
over their estimated useful lives.
At
least annually, we review all long-lived assets for impairment. When necessary, we record changes for impairments of long-lived
assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying
value of these assets.
If
the carrying amount of a reporting unit exceeds its fair value, we measure the possible goodwill impairment based upon an allocation
of the estimate of fair value of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including
any previously unrecognized intangible assets (Step Two Analysis). The excess of the fair value of a reporting unit over the amounts
assigned to its assets and liabilities (“carrying amount”) is the implied fair value of goodwill.
Revenue
Recognition
The
Company recognizes revenue in according with Accounting Standards Codification (ASC) Topic 606. The underlying principle is that
the Company recognize revenue to depict the transfer of promised goods and services to customers in an amount that they expect
to be entitled to in the exchange for goods and services provided. A five-step process has been designed for the individual or
pools of contracts to keep financial statements focused on this principle.
NOVOPELLE
DIAMOND, LLC
Notes
to Financial Statements
For
the Period from January 1, 2018 (inception) to December 31, 2018
Going
Concern
The
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. The Company incurred a loss in 2018.
The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business
operations when they come due. Management plans to obtain the necessary financing to meet its obligations during 2019. These financials
do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts, or amounts and classifications
of liabilities that might result from this uncertainty.
New
Accounting Pronouncements
In
May 2014, FASB issued a new accounting pronouncement regarding revenue recognition effective for reporting periods beginning after
December 15, 2018. As permitted by the ASC the Company adopted this standard effective January 1, 2018.
In
August 2016, FASB issued a new accounting pronouncement regarding lease accounting for reporting periods beginning after December
15, 2018. A lessee will be required to recognize on the statement of financial position the assets and liabilities for leases
with terms of more than twelve months. Management is currently evaluating the effect this pronouncement will have on the financial
statements and related disclosures.
Note
2 – Prepaid Expenses
Prepaid
expenses at December 31, 2018 represents prepayments for monthly lease payments for the months of January and February 2019.
Note
3 – Construction-In-Progress - Leasehold Improvements
Construction
on leasehold improvements were in progress at December 31, 2018; therefore, no amortization was taken on this asset until the
asset is placed in service. Leasehold improvements were placed in service in March 2019.
Note
4 – Related Party Transactions
During the period from January 31, 2018 (inception)
to December 31, 2018, two members, Jacob D. Cohen and Esteban Alexander, who are also officers and directors of the Company, loaned
and/or incurred debt for the benefit of the Company. The two members loaned the Company a total of $163,508 and repaid a total
of $42,424 on the principal of the loans. $44,202 of this borrowing was used to pay for the construction in progress for leasehold
improvements. The Company incurred $2,136 of imputed interest on the related party borrowing during this period, and $8,455 of
actual interest paid on related borrowing for a total of $10,591 of interest expense.
Note
5- Uncertainties
The
Company is subject to claims and lawsuits that arise in the ordinary course of business. Management is not aware of any litigation
against the Company.
NOVOPELLE
DIAMOND, LLC
Notes
to Financial Statements
For
the Period from January 1, 2018 (inception) to December 31, 2018
Note
6 – Short-Term Borrowing
In
November 2018, the Company borrowed $7,000 from a non-related party. The $7,000 was repaid within thirty days from the date of
the loan.
Note
7 – Operating Lease Commitments
The
Company has a lease for its operating facility which expire in November 2025. Future minimum lease payments under to the operating
lease are detailed as follows:
Year
|
|
Amount
|
|
2019
|
|
$
|
53,198
|
|
2020
|
|
|
54,066
|
|
2021
|
|
|
54,951
|
|
2022
|
|
|
55,854
|
|
2023
|
|
|
56,776
|
|
2024
|
|
|
57,715
|
|
2025
|
|
|
53,828
|
|
|
|
$
|
386,388
|
|
Total
rental expense for the period from January 31, 2018 (inception) to December 31, 2018 was $12,083.
Note
8 - Subsequent Events
Effective
April 12, 2019, American International Holdings Corp. (“AMIH”) issued 18,000,000 shares of the Company common stock
to the members (three individuals) of Novopelle Diamond, LLC (“Novopelle”), a Texas limited company, to acquire 100%
of the membership interests of Novopelle. The issuance of these shares represent a change in control of The Company International
Holdings Corp. Concurrent with the issuance, Jacob Cohen, Esteban Alexander and Alan Hernandez, representing the three former
members of Novopelle, were elected to the board of directors and to the office of Chief Executive Officer, Chief Operating Officer
and Chief Marketing officer of the AMIH, respectively.
On
June 27th , 2019, the AMIH executed an exclusive license agreement with Novo MedSpa Addison Corp (“Novo Medspa”)
providing the AMIH with the exclusive rights to the Novopelle brand and to establish new Novopelle branded MedSpa locations on
a worldwide basis (the “Exclusive License”). In consideration for the Exclusive License, AMIH paid Novo MedSpa a one-time
cash payment of $40,000 and issued to Novo MedSpa 250,000 shares of the AMIH’s common stock.
Novopelle
Diamond, LLC has evaluated all subsequent events from December 31, 2018 through the issuance date of the financial statements
for subsequent event disclosure consideration.
|
Pages
|
Financial
Statements for Period Ending June 30, 2019
|
|
|
|
Consolidated
Balance Sheets — June 30, 2019 and December 31, 2018 (unaudited)
|
F-12
|
|
|
Consolidated
Statements of Operations — Three and Six Months Ended June 30, 2019 and Three Months Ended June 30, 2018, and From January
31, 2018 (inception) to June 30, 2018 (unaudited)
|
F-13
|
|
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)–Three and Six Months Ended June 30, 2019 and Three Months
Ended June 30, 2018 and From January 31, 2018 (inception) to June 30, 2018 (unaudited)
|
F-14
|
|
|
Consolidated
Statements of Cash Flows — Six Months Ended June 30, 2019 and From January 31, 2018 (inception) to June 30, 2018 (unaudited)
|
F-15
|
|
|
Notes
to Consolidated Financial Statements
|
F-16
|
AMERICAN
INTERNATIONAL HOLDINGS CORP.
Consolidated
Balance Sheets for
June
30, 2019 and December 31, 2018
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
|
11,510
|
|
|
|
18,796
|
|
Prepaid expenses
|
|
|
-
|
|
|
|
8,866
|
|
Total current assets
|
|
$
|
11,510
|
|
|
$
|
27,662
|
|
|
|
|
|
|
|
|
|
|
Operating lease right-of-use asset, net
|
|
|
260,431
|
|
|
|
-
|
|
Property and equipment net
|
|
|
130,253
|
|
|
|
86,478
|
|
Licensing agreement, net
|
|
|
65,000
|
|
|
|
-
|
|
Other asset - deposit
|
|
|
4,777
|
|
|
|
9,210
|
|
Total assets
|
|
$
|
471,971
|
|
|
$
|
123,350
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,164
|
|
|
$
|
-
|
|
Accrued interest payable
|
|
|
8,523
|
|
|
|
-
|
|
Accrued compensation, related parties
|
|
|
58,500
|
|
|
|
-
|
|
Deferred lease liability
|
|
|
-
|
|
|
|
7,650
|
|
Short-term note payable
|
|
|
20,000
|
|
|
|
-
|
|
Loans payable to related parties, net of discount
|
|
|
162,391
|
|
|
|
121,084
|
|
Operating lease liability, current
|
|
|
49,362
|
|
|
|
-
|
|
Current installments of long-term debt
|
|
|
12,922
|
|
|
|
-
|
|
Total current liabilities
|
|
|
314,862
|
|
|
|
128,734
|
|
|
|
|
|
|
|
|
|
|
Operating lease liability, non-current
|
|
|
219,417
|
|
|
|
-
|
|
Long-term debt to related parties
|
|
|
350,000
|
|
|
|
-
|
|
Long-term debt, less current installments
|
|
|
20,163
|
|
|
|
-
|
|
Total liabilities
|
|
|
904,442
|
|
|
|
128,734
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000,000 shares authorized:
0 shares issued
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value, 195,000,000 authorized:
23,433,355 shares issued and
outstanding at June 30, 2019,
10,933,355 issued and outstanding at December 31, 2018
|
|
|
2,343
|
|
|
|
1,093
|
|
Treasury stock, at cost;
|
|
|
(353,894
|
)
|
|
|
-
|
|
Additional paid-in capital
|
|
|
27,027
|
|
|
|
1,043
|
|
Retained earnings (deficit)
|
|
|
(107,947
|
)
|
|
|
(7,520
|
)
|
Total stockholders’ equity (deficit)
|
|
|
(432,471
|
)
|
|
|
(5,384
|
)
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
(deficit)
|
|
$
|
471,971
|
|
|
$
|
123,350
|
|
See
accompanying notes to the unaudited consolidated financial statements.
AMERICAN
INTERNATIONAL HOLDINGS CORP.
Consolidated
Statements of Operations
(Unaudited)
|
|
Three
Months
Ended
June
30,
|
|
|
Six
Months Ended
June
30,
|
|
|
The Period from January
31, 2018 (inception) to June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
75,706
|
|
|
$
|
6,299
|
|
|
$
|
90,947
|
|
|
$
|
6,299
|
|
Cost of sales
|
|
|
23,059
|
|
|
|
-
|
|
|
|
35,715
|
|
|
|
-
|
|
Gross margin
|
|
|
52,647
|
|
|
|
6,299
|
|
|
|
55,232
|
|
|
|
6,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
6,021
|
|
|
|
-
|
|
|
|
6,627
|
|
|
|
-
|
|
General and administrative expenses
|
|
|
113,170
|
|
|
|
429
|
|
|
|
133,765
|
|
|
|
429
|
|
Total operating expenses
|
|
|
119,191
|
|
|
|
429
|
|
|
|
140,392
|
|
|
|
429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
(66,544
|
)
|
|
|
5,870
|
|
|
|
(85,160
|
)
|
|
|
5,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses - interest expense
|
|
|
(10,073
|
)
|
|
|
-
|
|
|
|
(15,267
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(76,617
|
)
|
|
$
|
5,870
|
|
|
$
|
(100,427
|
)
|
|
$
|
5,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common shares
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted
|
|
|
21,514,674
|
|
|
|
10,933,355
|
|
|
|
16,253,245
|
|
|
|
10,933,355
|
|
See
accompanying notes to the unaudited consolidated financial statements.
AMERICAN
INTERNATIONAL HOLDINGS CORP.
Consolidated
Statements of Stockholders’ Equity (Deficit)
(Unaudited)
|
|
Three
Months Ended June 30, 2019
|
|
|
Three
Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
Deficit
|
|
|
Total
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
Deficit
|
|
|
Total
|
|
Balance at beginning of period
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
3,069
|
|
|
$
|
-
|
|
|
$
|
(31,330
|
)
|
|
$
|
(27,168
|
)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
(1,093
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for reverse acquisition
|
|
|
-
|
|
|
|
-
|
|
|
|
18,000,000
|
|
|
|
1,800
|
|
|
|
(16,592
|
)
|
|
|
(3,894
|
)
|
|
|
-
|
|
|
|
(18,686
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares under private placement
|
|
|
-
|
|
|
|
-
|
|
|
|
100,000
|
|
|
|
10
|
|
|
|
9,990
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of common shares for long-term
debt
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,900,000
|
)
|
|
|
(590
|
)
|
|
|
590
|
|
|
|
(350,000
|
)
|
|
|
-
|
|
|
|
(350,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for licensing agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
|
|
|
25
|
|
|
|
24,975
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for discount on
loan
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
5
|
|
|
|
4,995
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(76,617
|
)
|
|
|
(76,617
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,870
|
|
|
|
5,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
|
-
|
|
|
$
|
-
|
|
|
|
23,433,355
|
|
|
$
|
2,343
|
|
|
$
|
27,027
|
|
|
$
|
(353,894
|
)
|
|
$
|
(107,947
|
)
|
|
$
|
(432,471
|
)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
(1,093
|
)
|
|
$
|
-
|
|
|
$
|
5,870
|
|
|
$
|
5,870
|
|
|
|
Six
Months Ended June 30, 2019
|
|
|
From
January 31, 2018 (inception) to June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Treasury
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
Deficit
|
|
|
Total
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
Deficit
|
|
|
Total
|
|
Balance at beginning of
period
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
1,043
|
|
|
$
|
-
|
|
|
$
|
(7,520
|
)
|
|
$
|
(5,384
|
)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
(1,093
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,026
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,026
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common shares for reverse acquisition
|
|
|
-
|
|
|
|
-
|
|
|
|
18,000,000
|
|
|
|
1,800
|
|
|
|
(16,592
|
)
|
|
|
(3,894
|
)
|
|
|
-
|
|
|
|
(18,686
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common shares under private placement
|
|
|
-
|
|
|
|
-
|
|
|
|
100,000
|
|
|
|
10
|
|
|
|
9,990
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation
of common shares for long-term debt
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,900,000
|
)
|
|
|
(590
|
)
|
|
|
590
|
|
|
|
(350,000
|
)
|
|
|
-
|
|
|
|
(350,000
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common shares for licensing agreement
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
|
|
|
25
|
|
|
|
24,975
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common shares for discount on loan
|
|
|
-
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
5
|
|
|
|
4,995
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(100,427
|
)
|
|
|
(100,427
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,870
|
|
|
|
5,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end
of period
|
|
|
-
|
|
|
$
|
-
|
|
|
|
23,433,355
|
|
|
$
|
2,343
|
|
|
$
|
27,027
|
|
|
$
|
(353,894
|
)
|
|
$
|
(107,947
|
)
|
|
$
|
(432,471
|
)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
10,933,355
|
|
|
$
|
1,093
|
|
|
$
|
(1,093
|
)
|
|
$
|
-
|
|
|
$
|
5,870
|
|
|
$
|
5,870
|
|
See
accompanying notes to unaudited consolidated financial statements.
AMERICAN
INTERNATIONAL HOLDINGS CORP.
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
Six Months
Ended
June
30,
|
|
|
The
Period
From
January
31, 2018
(inception)
to
June
30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(100,427
|
)
|
|
$
|
5,870
|
|
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
7,286
|
|
|
|
-
|
|
Imputed interest expense
|
|
|
2,026
|
|
|
|
-
|
|
(Increase) decrease in operating assets:
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
8,866
|
|
|
|
-
|
|
Operating lease right-of-use asset, net
|
|
|
(260,431
|
)
|
|
|
-
|
|
Licensing agreement
|
|
|
(40,000
|
)
|
|
|
-
|
|
Other asset - deposit
|
|
|
4,433
|
|
|
|
(9,210
|
)
|
(Decrease) increase in operating liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
4,559
|
|
|
|
-
|
|
Accrued interest payable
|
|
|
7,574
|
|
|
|
-
|
|
Deferred lease liability
|
|
|
(7,650
|
)
|
|
|
-
|
|
Accrued compensation
|
|
|
58,500
|
|
|
|
-
|
|
Operating lease right-of-use liability, net
|
|
|
268,779
|
|
|
|
-
|
|
Net cash used in operating activities
|
|
|
(46,485
|
)
|
|
|
(3,340
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures for property and equipment
|
|
|
(17,034
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(17,034
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds of the sale of common shares
|
|
|
10,000
|
|
|
|
-
|
|
Proceed of short-term borrowings
|
|
|
60,000
|
|
|
|
-
|
|
Proceeds from short-term borrowings from related parties
|
|
|
18,808
|
|
|
|
46,500
|
|
Repayment of short-term borrowings from related parties
|
|
|
(31,633
|
)
|
|
|
(1,500
|
)
|
Principal payments on long-term debt
|
|
|
(942
|
)
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
56,233
|
|
|
|
45,000
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(7,286
|
)
|
|
|
41,660
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of year
|
|
|
18,796
|
|
|
|
-
|
|
Cash at end of period
|
|
$
|
11,510
|
|
|
$
|
41,660
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of cash flow information:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
10,073
|
|
|
$
|
10,591
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing transactions:
|
|
|
|
|
|
|
|
|
Equipment purchases financed with long-term debt
|
|
$
|
34,027
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for notes payable
|
|
$
|
350,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for licensing agreement
|
|
$
|
25,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for debt inducement
|
|
$
|
5,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Common shares issued for reverse acquisition
|
|
$
|
1,800
|
|
|
$
|
-
|
|
See
accompanying notes to the unaudited consolidated financial statements.
AMERICAN
INTERNATIONAL HOLDINGS CORP.
Notes
to Consolidated Financial Statements
June
30, 2019
(Unaudited)
Note
1 - Summary of Significant Accounting Policies
The
accompanying unaudited interim financial statements of American International Holdings Corp. (“AMIH”), have been prepared
in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and
Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto contained in AMIH’s
latest Annual Report filed with the SEC on Form 10-K for the year ended December 31, 2018. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations
for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that
would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as
reported in the Form 10-K have been omitted.
Organization,
Ownership and Business
Prior
to May 31, 2018, American International Holdings Corp. (“AMIH”) was a 93.2% owned subsidiary of American International
Industries, Inc. (“American”, “AMIN”) (OTCBB: AMIN). Effective May 31, 2018, the Company issued 10,100,000
shares of restricted common stock. As a result of the issuance of the common shares, a change in control occurred. American International
Industries, Inc. ownership decreased from 93.2% to 6.4%. No one individual or entity owns at least 50% of the outstanding shares
of the Company. Effective April 12, 2019, the Company changed its business focus to the services of medical spas.
On
April 12, 2019, The Company entered into a Share Exchange Agreement (the “Agreement”) with Novopelle Diamond, LLC
(“Novopelle”) and all three members of Novopelle. See Note 2 for the detail of the transaction. The acquisition was
treated as a reverse acquisition for accounting purposes, with the Company remaining the parent company and Novopelle becoming
a wholly-owned subsidiary of the Company.
Principles
of Consolidation
The
consolidated financial statements include the accounts of AMIH and its wholly-owned subsidiary: Novopelle Diamond, LLC. All significant
intercompany transactions and balances have been eliminated in consolidation.
Reclassifications
Certain
reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications
have been applied consistently to the periods presented.
Cash
Equivalents
Highly
liquid investments with original maturities of three months or less are considered cash equivalents. There are no cash equivalents
at June 30, 2019 and December 31, 2018.
Fair
Value of Financial Instruments
FASB
ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets
and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC
825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction
between willing parties. At June 30, 2019 and December 31, 2018, the carrying value of certain financial instruments (cash and
cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments
or interest rates, which are comparable with current rates.
Net
Loss Per Common Share
We
compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both
basic and diluted earnings per share (EPS) on the face of the income statement. 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 using the treasury stock method
and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period
is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS
excludes all dilutive potential shares if their effect is anti-dilutive.
Property,
Plant, Equipment, Depreciation, Amortization and Long-Lived Assets
Long-lived
assets include:
Property,
Plant and Equipment – Assets acquired in the normal course of business are recorded at original cost and may be adjusted
for any additional significant improvements after purchase. We depreciate the cost evenly over the assets’ estimated useful
lives. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the
accounts, with any resultant gain or loss being recognized as a component of other income or expense.
Identifiable
intangible assets – These assets are recorded at acquisition cost. Intangible assets with finite lives are amortized evenly
over their estimated useful lives.
At
least annually, we review all long-lived assets for impairment. When necessary, we record changes for impairments of long-lived
assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying
value of these assets.
If
the carrying amount of a reporting unit exceeds its fair value, we measure the possible goodwill impairment based upon an allocation
of the estimate of fair value of the reporting unit to all of the underlying assets and liabilities of the reporting unit, including
any previously unrecognized intangible assets (Step Two Analysis). The excess of the fair value of a reporting unit over the amounts
assigned to its assets and liabilities (“carrying amount”) is the implied fair value of goodwill.
Management’s
Estimates and Assumptions
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these
estimates.
Revenue
Recognition
The
Company recognizes revenue in according with Accounting Standards Codification (ASC) Topic 606. The underlying principle is that
the Company recognize revenue to depict the transfer of promised goods and services to customers in an amount that they expect
to be entitled to in the exchange for goods and services provided. A five-step process has been designed for the individual or
pools of contracts to keep financial statements focused on this principle.
Note
2 - Acquisition
Effective
April 12, 2019, American International Holdings Corp. (“AMIH”) issued 18,000,000 shares of the Company common stock
to the members (three individuals) of Novopelle Diamond, LLC (“Novopelle”), a Texas limited company, to acquire 100%
of the membership interests of Novopelle. The issuance of these shares represent a change in control of AMIH. Concurrent with
the issuance, Jacob Cohen, Esteban Alexander and Alan Hernandez, representing the three former members of Novopelle, were elected
to the board of directors and to the office of Chief Executive Officer, Chief Operating Officer and Chief Marketing officer of
the AMIH, respectively. Everett Bassie and Charles Zeller resigned as board members of AMIH. This transaction was accounted for
as a reverse acquisition. At closing, in accordance with the share exchange agreement, AMIH will remain as the parent company
with Novopelle being a wholly owned subsidiary of AMIH. Under U.S. generally accepted accounting principles, the acquisition is
treated as a “reverse acquisition” under the purchased method of accounting with Novopelle as the accounting acquirer.
Accordingly, Novopelle’s historical results of operations replace AMIH’s historical results of operations for all
periods prior to the Acquisition and, for all periods following the Acquisition; the results of operations of the combined company
will be included in the Company’s financial statements.
Note
3 – Property and Equipment
Property
and equipment is as follows at June 30, 2019 and December 31, 2018:
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Leasehold improvements
|
|
$
|
92,516
|
|
|
$
|
85,016
|
|
Furniture & fixtures
|
|
|
5,843
|
|
|
|
1,462
|
|
Equipment
|
|
|
39,180
|
|
|
|
-
|
|
|
|
|
137,539
|
|
|
|
86,478
|
|
Less accumulated depreciation and amortization
|
|
|
7,286
|
|
|
|
-
|
|
Net property and equipment
|
|
$
|
130,253
|
|
|
$
|
86,478
|
|
Depreciation
and amortization expense for the six months ended June 30, 2019 was $7,286.
The
Company incurred long-debt in the amount of $34,027 during the six months ended June 30, 2019 to purchase equipment used in its
operations. The total purchase price was $37,027, with the Company making a down payment in the amount of $3,000.
Note
4 – Licensing Agreement
On
June 27, 2019, the Company executed an exclusive license agreement with Novo MedSpa Addison Corp. (“Novo Medspa”)
providing the Company with the exclusive rights to the Novopelle brand and to establish new Novopelle branded MedSpa locations
on a worldwide basis (the “Exclusive License”). In consideration for the Exclusive License, the Company paid Novo
MedSpa a one-time cash payment of $40,000 and issued to Novo MedSpa 250,000 shares of the Company’s common stock. The 250,000
shares of the Company’s common stock was valued at $0.10 per share or $25,000.
Note
5 – Operating Right-of-Use Lease Liability
On
January 1, 2019, the Company adopted Accounting Standards Update No. 2016-2, Leases (Topic 842), as amended, which supersedes
the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities
and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosure surrounding the amount, timing
and uncertainty of cash flows arising from leasing arrangements.
On
January 1, 2019, the Company recognized an operating right-of-use asset in the amount $287,206 and an operating lease liability
in the amount of $294,774. The lease term is eighty-four (84) months and expires in November 2025.
The
following is a schedule, by year, of maturities of lease liabilities as of June 30, 2019:
2019
|
|
$
|
26,599
|
|
2020
|
|
|
54,066
|
|
2021
|
|
|
54,951
|
|
2022
|
|
|
55,854
|
|
2023
|
|
|
56,776
|
|
2024
|
|
|
57,715
|
|
2025
|
|
|
53,828
|
|
Total undiscounted cash flows
|
|
|
359,789
|
|
Less imputed interest (8%)
|
|
|
(91,010
|
)
|
Present value of lease liability
|
|
$
|
268,779
|
|
Total
rental expense for the six months ended June 30, 2019 was $27,740.
The
operating lease right-of-use asset net balance at June 30, 2019 was $260,431.
Note
6 – Accrued Compensation for Related Parties
At
June 30, 2019, accrued compensation represent compensation for the Company’s executive officers from April 12, 2019 to June
30, 2019.
Note
7 – Short-Term Note Payable
On
May 17, 2019, the Company issued a promissory note with a principal amount of $30,000 to a non-related third party in exchange
for three tranches of $10,000 in cash. The promissory note is unsecured, has a maturity date of April 30, 2020 and accrues interest
at the rate of 5% per annum until paid in full by the Company. The Company has only received two of the tranches for a total of
$20,000 as of June 30, 2019.
Note
8 – Loans to Related Parties
During the six-month period ended June 30,
2019, two of the Company officers and board members, Jacob D. Cohen and Esteban Alexander, loaned the Company $18,808, including
$3,170 of accrued interest on the loan. During the six months ended June 30, 2019, the Company repaid $31,633 of loans to the
two officers/board members. The Company incurred $2,026 on imputed interest expense on related party borrowing during the three
months ended June 30, 2019. Outstanding loan balances to these related parties was $113,918 at June 30, 2019.
On
June 21, 2019, the Company issued a promissory note with a principal amount of $40,000 to a related party in exchange for $40,000
in cash. The promissory note is unsecured, has a maturity date of June 21, 2020 and accrues interest at the rate of 8% per annum
until paid in full by the Company. Furthermore, the Company issued 50,000 shares of the Company’s common stock to the related
party investor as further consideration to enter into the loan with the Company. The Company issued 50,000 shares of common stock
valued at $.10 per share or $5,000, which was accounted for a discount on the note.
As
of June 30, 2019, AMIH had a short-term note payable in the amount of $13,473 to Kemah Development Texas, LP, a company owned
by Dror Family Trust, a related party.
Note
9 – Long-Term Debt to Related Parties
On
April 12, 2019 the Company entered into individual share exchange agreements and promissory notes with each of Daniel Dror, Winfred
Fields and former Directors Everett Bassie and Charles Zeller (the “ AMIH Shareholders “), whereby the AMIH
Shareholders agreed to cancel and exchange a total of 5,900,000 shares of their AMIH common stock. The Company issued individual
promissory notes with an aggregate principal amount of $350,000 (the “Promissory Notes”) for cancellation of
the 5,900,000 shares of common stock. The Promissory Notes have a term of two years and accrue interest at the rate of 10% per
annum until paid in full by the Company. The Company accrued $7,575 of interest on these notes during the six months ended June
30, 2019.
Note
10 – Long-Term Debt
The
Company incurred long-debt in the amount of $34,027 during the six months ended June 30, 2019 to purchase equipment used in its
operations. The total purchase price was $37,027, with the Company making a down payment in the amount of $3,000. The note is
due in monthly payments of $1,258.50, including interest at 8%, due in September 2021.
The
maturities of long-term debt is as follows:
Year
|
|
Amounts
|
|
2019
|
|
$
|
8,499
|
|
2020
|
|
|
13,628
|
|
2021
|
|
|
10,958
|
|
Total
|
|
|
33,085
|
|
Less current installments
|
|
|
(12,922
|
)
|
Long-term debt, less current installments
|
|
$
|
20,163
|
|
Note
11 – Capital Stock
The
Company is authorized to issue up to 5,000,000 shares of preferred stock, $ 0.0001 par value, of which 0 shares are issued and
outstanding at June 30, 2019 and December 31, 2018.
The
Company is authorized to issue up to 195,000,000 shares of common stock, $0.0001 par value, of which 23,433,355 shares are issued
and outstanding (outstanding shares includes 410 treasury shares) at June 30, 2019 and 10,933,355 at December 31, 2018.
On
May 31, 2018, the Company issued 3,800,000 shares of common stock to Robert Holden for future services as the Company CEO and
Director to pursue a digital marketing business under the name of Digital Marketing Interactive. As a result of the resignation
of Mr. Holden on August 19, 2018, the Company no longer anticipates operating under the d/b/a Digital Marketing Interactive and/or
maintaining a business focus in digital marketing moving forward. The Company plans to pursue legal actions to recover the 3,800,000
shares of stock issued to Mr. Holden.
On
April 12, 2019, the Company issued 18,000,000 shares of common stock for the acquisition Novopelle.
On
April 12, 2019, the Company entered into four exchange agreements with current shareholders to cancel 5,900,000 shares of common
stock in exchange for four long-term notes totaling $350,000.
On
May 3, 2019, the Company issued 100,000 shares of the Company’s common stock to a non-related third-party investor in exchange
for $10,000 in cash.
On
June 21, 2019, the Company issued 50,000 shares of common stock as part consideration of a loan agreement. The shares were valued
at $0.10 per share or $5,000.
On
June 24, 2019, the issued 250,000 shares of the Company’s common stock as part consideration of an exclusive licensing agreement.
The shares were valued at $0.10 per share or $25,000.
Note
12 — Going Concern
As
reflected in the accompanying financial statements, the Company has a net loss of $100,427 for the six months ended June 30, 2019,
an accumulated deficit of $107,947. The ability to continue as a going concern is dependent upon the Company generating profitable
operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from
normal business operations when they come due. These financials do not include any adjustments relating to the recoverability
and reclassification of recorded asset amounts, or amounts and classifications of liabilities that might result from this uncertainty.
Note
13 – Subsequent Events
On
July 5, 2019, our Board of Directors adopted and approved our 2019 Stock Option and Incentive Plan (the “Plan”).
The Plan is intended to promote the interests of our Company by providing eligible person with the opportunity to acquire a proprietary
interest, or otherwise increase their proprietary interest, in the Company as an incentive for them to remain in the service of
the Company. The maximum number of shares available to be issued under the Plan is currently 10,000,000 shares, subject to adjustments
for any stock splits, stock dividends or other specified adjustments which may take place in the future. The Company has issued
a total of 1,035,000 shares to eligible persons under the Plan.
On
July 8, 2019, the Company issued a convertible promissory note with a principal amount of $40,000 to a non-related third party
in exchange for $40,000 in cash. The promissory note is unsecured, has a maturity date of July 8, 2020 and accrues interest at
the rate of 8% per annum until paid in full by the Company. In the event that the Company files, and has qualified by the SEC,
an offering Statement under Regulation A (“Offering Statement”) of the Securities Act of 1933, as amended (the “Securities
Act”) in order to sell shares of its common stock, the holder of the note shall have the right to convert all or any portion
of the principal amount and interest due on the note into shares of common stock through the Offering Statement during the term
of the Offering Statement.
On
August 23, 2019, the Company entered into a Consulting Agreement with an unrelated third party to provide to provide strategic
marketing, branding and general consulting services to the Company. Pursuant to the agreement, the Company agreed to pay for the
services through a one time issuance of 100,000 shares of the Company’s common stock, valued at $.10 per share, or $10,000
On
August 26, 2019, the Company entered into a Financial Advisory Agreement with an unrelated third party to provide financial analytical
services to the Company. Pursuant to the agreement, the Company agreed to pay for the services through the issuance of a 12% promissory
note in the principal amount of $75,000. The promissory note matures on August 26, 2020 and is convertible into shares of the
Company’s common stock, only upon an occurance of default, at a discount of 50% of the lowest trading price for the last
twenty (20) trading days immediately prior to but not including the date of conversion.
On
September 9, 2019, the Company issued a promissory note with a principal amount of $100,000 to a related party in exchange for
$100,000 in cash. The promissory note is unsecured, has a maturity date of September 9, 2020 and accrues interest at the rate
of 8% per annum until paid in full by the Company. Furthermore, the Company issued 100,000 shares of the Company’s common
stock, valued at $.10 per share, or $10,000, to the related party investor as further consideration to enter into the loan with
the Company.
On
September 13, 2019, the Company formed and organized YS Brands, Inc. in the State of Texas to act as a company dedicated to creating,
designing, manufacturing and marketing new premium designer shoe concepts that are intended to sell through both direct to consumer
(retail and e-commerce) and wholesale through larger, bigger box retail stores.
Management
has evaluated all subsequent events through August 21, 2019, the date the financial statements were available to be issued. No
change to the financial statements for the quarter ended June 30, 2019 is deemed necessary as a result of this evaluation.
EXHIBITS
The
following exhibits are filed with this Offering Circular:
1
|
Attached
on Form 10-SB/12G filed on August 24, 2004, and incorporated herein
|
2
|
Attached
on Form 8-K filed on March 10, 2005, and incorporated herein
|
3
|
Attached
on Form 8-K/A filed on August 15, 2019, and incorporated herein
|
4
|
Attached
on Form 8-K filed on July 5, 2019, and incorporated herein
|
5
|
Attached
on Form 1-A filed on September 23, 2019, and incorporated herein
|
6
|
Attached
on Form 1-A/A filed on October 15, 2019, and incorporated herein
|
7
|
Attached on Form 1-A/A filed on October 22, 2019, and incorporated herein
|
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