Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of XLR Medical Corp (now known as Bloomios, Inc.)
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of XLR Medical Corp, now known as Bloomios, Inc. as of December 31, 2020 and 2019, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (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, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
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.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/S/ BF Borgers CPA PC
BF Borgers CPA PC
We have served as the Company’s auditor since 2019
Lakewood, CO
April 15, 2021
|
|
December 31,
2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
72,205
|
|
|
$
|
1,045
|
|
Accounts receivable – net
|
|
|
36,274
|
|
|
|
-
|
|
Inventory
|
|
|
195,681
|
|
|
|
-
|
|
WIP
|
|
|
96,551
|
|
|
|
-
|
|
Investment in life on earth Series B
|
|
|
50,000
|
|
|
|
-
|
|
Total Current Assets
|
|
|
450,711
|
|
|
|
1,045
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment – Net
|
|
|
2,070,416
|
|
|
|
-
|
|
Loan receivable
|
|
|
50,000
|
|
|
|
|
|
Right of use asset
|
|
|
258,019
|
|
|
|
-
|
|
Goodwill
|
|
|
300,000
|
|
|
|
-
|
|
Other assets
|
|
|
64,511
|
|
|
|
-
|
|
Total Assets
|
|
$
|
3,193,657
|
|
|
$
|
1,045
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ (Deficit)
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable – trade
|
|
$
|
1,747,852
|
|
|
$
|
433,116
|
|
Accrued expenses
|
|
|
73,501
|
|
|
|
-
|
|
Accrued expenses related party
|
|
|
14,235
|
|
|
|
-
|
|
Unearned revenue
|
|
|
149,966
|
|
|
|
|
|
Customer JV account liabilities
|
|
|
600,000
|
|
|
|
-
|
|
Lease liability current
|
|
|
114,675
|
|
|
|
-
|
|
Notes payable
|
|
|
150,000
|
|
|
|
-
|
|
Notes payable PPP
|
|
|
310,000
|
|
|
|
-
|
|
Notes payable – related party
|
|
|
120,800
|
|
|
|
-
|
|
Notes payable – convertibles
|
|
|
202,300
|
|
|
|
-
|
|
Total Current Liabilities
|
|
|
3,483,329
|
|
|
|
433,116
|
|
Long-Term Debt:
|
|
|
|
|
|
|
|
|
Lease liability
|
|
|
143,344
|
|
|
|
-
|
|
Notes payable
|
|
|
831,000
|
|
|
|
40,800
|
|
Total Liabilities
|
|
|
4,457,673
|
|
|
|
473,916
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit)
|
|
|
|
|
|
|
|
|
Common stock ($0.00001 par value; 950,000,000 shares authorized; 12,508,011 shares issued and outstanding at December 31, 2020 and 2019 respectively
|
|
|
125
|
|
|
|
125
|
|
Additional paid-in capital
|
|
|
3,059,920
|
|
|
|
2,680,399
|
|
Accumulated deficit
|
|
|
(4,324,061
|
)
|
|
|
(3,153,395
|
)
|
Total Stockholders’ (Deficit)
|
|
|
(1,264,016
|
)
|
|
|
(472,871
|
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
3,193,657
|
|
|
$
|
1,045
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Consolidated Statement of Operations
|
for the years ended
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,316,304
|
|
|
$
|
-
|
|
Cost of Goods Sold
|
|
|
914,759
|
|
|
|
-
|
|
Gross Profit
|
|
|
401,545
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
General and Administrative expense
|
|
|
110,520
|
|
|
|
56,177
|
|
Salaries
|
|
|
258,913
|
|
|
|
-
|
|
Rent
|
|
|
146,013
|
|
|
|
10,000
|
|
Utilities
|
|
|
29,956
|
|
|
|
-
|
|
Professional fees
|
|
|
18,728
|
|
|
|
16,284
|
|
Consulting
|
|
|
667,976
|
|
|
|
383,973
|
|
Depreciation
|
|
|
232,271
|
|
|
|
|
|
Total Expenses
|
|
|
1,464,377
|
|
|
|
466,434
|
|
Net Profit From Operations
|
|
|
(1,062,832
|
)
|
|
|
(466,434
|
)
|
|
|
|
|
|
|
|
|
|
Other Income / (Expenses)
|
|
|
|
|
|
|
|
|
Gain on Debt settlement
|
|
|
-
|
|
|
|
-
|
|
Financing Fees
|
|
|
(36,860
|
)
|
|
|
(23,800
|
)
|
Interest Expense
|
|
|
(70,974
|
)
|
|
|
-
|
|
Net Profit / (Loss) Before Income Taxes
|
|
|
(1,170,666
|
)
|
|
|
(490,234
|
)
|
Income Tax Expense
|
|
|
-
|
|
|
|
-
|
|
Net Profit / (Loss)
|
|
$
|
(1,170,666
|
)
|
|
$
|
(490,234
|
)
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE – BASIC & DILUTED
|
|
$
|
(0.09
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC & DILUTED
|
|
|
12,508,011
|
|
|
|
12,508,011
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Consolidated Statement of Stockholders Equity
|
December 31, 2020
|
|
|
Common Stock .00001 Par
|
|
|
Additional Paid
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
Description
|
|
Shares
|
|
|
Amount
|
|
|
in Capital
|
|
|
Deficit
|
|
|
Deficit Totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
|
12,508,011
|
|
|
$
|
125
|
|
|
$
|
2,663,035
|
|
|
$
|
(2,663,160
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
16,864
|
|
|
|
-
|
|
|
|
16,864
|
|
CBD Capital contribution
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
|
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(490,235
|
)
|
|
|
(490,235
|
)
|
December 31, 2019
|
|
|
12,508,011
|
|
|
|
125
|
|
|
|
2,680,399
|
|
|
|
(3,153,395
|
)
|
|
|
(472,871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
11,225
|
|
|
|
-
|
|
|
|
11,225
|
|
CBD Equity
|
|
|
|
|
|
|
|
|
|
|
368,296
|
|
|
|
|
|
|
|
368,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,170,666
|
)
|
|
|
(1,170,666
|
)
|
December 31, 2020
|
|
|
12,508,011
|
|
|
$
|
125
|
|
|
$
|
3,059,920
|
|
|
$
|
(4,324,061
|
)
|
|
$
|
(1,264,016
|
)
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Consolidated Statement of Cashflows
|
for the year ended
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
Cash provided (used) from operating activities
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
(1,170,666
|
)
|
|
$
|
(490,234
|
)
|
Depreciation
|
|
|
232,271
|
|
|
|
-
|
|
Change in Accounts Receivable
|
|
|
(36,274
|
)
|
|
|
-
|
|
Change in inventory
|
|
|
(292,232
|
)
|
|
|
-
|
|
Change in other assets
|
|
|
(64,511
|
)
|
|
|
-
|
|
Change in JV liabilities
|
|
|
600,000
|
|
|
|
-
|
|
Change in Accounts Payable and Accrued Expenses
|
|
|
1,388,237
|
|
|
|
433,115
|
|
Change in Accrued Expenses – related party
|
|
|
14,235
|
|
|
|
-
|
|
Change in Unearned Revenue
|
|
|
149,966
|
|
|
|
-
|
|
Net cash provided (used) from operating activities
|
|
|
821,026
|
|
|
|
(57,119
|
)
|
|
|
|
|
|
|
|
|
|
Cash used in investing activities
|
|
|
|
|
|
|
|
|
Purchase of Equipment
|
|
|
(2,302,687
|
)
|
|
|
-
|
|
Investment in series B
|
|
|
(50,000
|
)
|
|
|
-
|
|
Shareholder loan
|
|
|
(50,000
|
)
|
|
|
-
|
|
Investment in XLR
|
|
|
(300,000
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(2,702,687
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash provided by financing activities
|
|
|
|
|
|
|
|
|
Proceeds from Notes Payable
|
|
|
1,452,500
|
|
|
|
40,800
|
|
Contributed Capital
|
|
|
379,521
|
|
|
|
17,364
|
|
Proceeds from Notes Payable related parties
|
|
|
120,800
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
1,952,821
|
|
|
|
58,164
|
|
Net Increase (Decrease) In Cash
|
|
|
71,160
|
|
|
|
1,045
|
|
|
|
|
|
|
|
|
|
|
Cash At Beginning of Period
|
|
|
1,045
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash At End of Period
|
|
$
|
72,205
|
|
|
$
|
1,045
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cashflow Information
|
|
|
|
|
|
|
|
|
Interest Paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Taxes Paid
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Notes to the Consolidated financial statements
|
December 31, 2020
|
NOTE 1 – BUSINESS ACTIVITY
XLR Medical Corp. (the “Company”) was organized under the laws of the State of Nevada on February 2, 2001 under the name Relay Mines Limited—subsequently the name of the Company was changed to XLR Medical Corp. After the October 31, 2007 10Q filing, the management of the Company abandoned the Company and it became a dormant company until 2018 when a new shareholder acquired stock to become the majority shareholder and owner of the Company. The Company’s fiscal year end is December 31st.
NOTE 2 – GOING CONCERN
Going Concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s deficit of $1,264,016 and a net loss of $1,170,666 for the year ended December 31, 2020. The company also had an accumulated deficit of $4,324,061 as of December 31, 2020. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern. There can be no assurance that the Company will achieve its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to generate positive cash flow from operations.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations 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 circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty.
To address these aforementioned, management has undertaken the following initiatives: 1) enter into discussions to secure additional equity funding from current or new shareholders; 2) undertake a program to continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; 3) continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets, the collection of accounts receivable and valuation of inventory and reserves.
Cash and Cash Equivalents
We maintain the majority of our cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per commercial bank, at times we may exceed the FDIC limits. For purposes of the statement of cash flows we consider all cash and highly liquid investments with initial maturities of one year or less to be cash equivalents.
Accounts Receivable
We grant credit to our customers and do not require collateral. Our ability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. Reserves for un-collectable amounts are provided, based on past experience and a specific analysis of the accounts. Although we expect to collect amounts due, actual collections may differ from the estimated amounts. As of December 31, 2020, and December 31, 2019, we had a reserve for potentially un-collectable accounts of $0 and $0 respectively. Historically, our bad debt write-offs related to these trade accounts have been insignificant.
Inventory
Inventories are valued at the lower of weighted average cost or market value. Our industry experiences changes in technology, changes in market value and availability of raw materials, as well as changing customer demand. We make provisions for estimated excess and obsolete inventories based on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisions are made. Any inventory write offs are charged to the reserve account. As of December 31, 2020, and 2019, we had a reserve for potentially obsolete inventory of $0.
Property and Equipment
Property and equipment are recorded at cost. Assets held under capital leases are recorded at lease inception at the lower of the present value of the minimum lease payments or the fair market value of the related assets. The cost of ordinary maintenance and repairs is charged to operations. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of the related assets:
Furniture and fixtures
|
|
3 to 7 years
|
Equipment
|
|
7 to 10 years
|
Leasehold Improvements
|
|
7 years
|
Long –Lived Assets
Our management assesses the recoverability of its long-lived assets by determining whether the depreciation and amortization of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment if any, is measured based on fair value and is charged to operations in the period in which long-lived assets impairment is determined by management. There can be no assurance however, that market conditions will not change or demand for our services will continue, which could result in impairment of long-lived assets in the future.
Revenue Recognition
The Company recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”).
Performance Obligations Satisfied Over Time
FASB ASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
An entity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if one of the following criteria is met:
a. The customer receives and consumes the benefits provided by the entity’s performance as the entity performs (as described in FASB ASC 606-10-55-5 through 55-6).
b. The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced (as described in FASB ASC 606-10-55-7).
c. The entity’s performance does not create an asset with an alternative use to the entity (see FASB ASC 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
Performance Obligations Satisfied at a Point in Time
FASB ASC 606-10-25-30
If a performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity should consider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer of control, which include, but are not limited to, the following:
a.The entity has a present right to payment for the asset
b. The customer has legal title to the asset
c. The entity has transferred physical possession of the asset
d. The customer has the significant risks and rewards of ownership of the asset
e. The customer has accepted the asset
The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. In addition a) the company also does not have an alternative use for the asset if the customer were to cancel the contract, and b.) has a fully enforceable right to receive payment for work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
Also from time to time we require deposits from our customers. As of December 31, 2020, and 2019 we had $149,966 and $0 of deferred revenue.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
|
●
|
Level 1: Quoted prices in active markets for identical assets or liabilities.
|
|
●
|
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
|
●
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
The Company’s financial instruments consist of cash, prepaid expenses, inventory, accounts payable, convertible notes payable, and advances from related parties. The estimated fair value of cash, prepaid expenses, investments, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.
The carrying amounts of accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.
Other Comprehensive Income
We have no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods.
Net Profit (Loss) per Common Share
Basic profit / (loss) per share is computed on the basis of the weighted average number of common shares outstanding. At December 31, 2020, we had outstanding common shares of 12,508,011 used in the calculation of basic earnings per share. Basic Weighted average common shares and equivalents for the years ended December 31, 2020 and 2019 were 12,508,011. As of December 31, 2020, we had convertible notes to potentially convert into approximately 1,011,500 of additional common shares and 390,000 common stock warrants convertible into an additional 390,000 common shares. Fully diluted weighted average common shares and equivalents were withheld from the calculation as they were considered anti-dilutive.
Research and Development
We had no amounts of research and development R&D expense during the three and nine months ended December 31, 2020 and 2019.
Share-Based Compensation
The Company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation), which supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black-Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of SFAS No. 123R; however, the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility. For the “risk-free interest rate,” we use the Constant Maturity Treasury rate on 90-day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the Company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20-trading-day average. At the time of grant, the share-based compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. The expense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates.
We re-evaluate the assumptions used to value our share-based awards on a quarterly basis and, if changes warrant different assumptions, the share-based compensation expense could vary significantly from the amount expensed in the past. We may be required to adjust any remaining share-based compensation expense, based on any additions, cancellations or adjustments to the share-based awards. The expense is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. For the years ended December 31, 2020 and 2019, the company had no share-based expense.
Income Taxes
Federal Income taxes are not currently due since we have had losses since inception.
On December 22, 2018 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the months ended September 30, 2020 using a Federal Tax Rate of 21%.
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.
As of December 31, 2020, we had a net operating loss carry-forward of approximately $(4,324,061) and a deferred tax asset of $908,053 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked valuation allowance of $(908,053). FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At December 31, 2020, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.
|
|
December 31,
2020
|
|
|
December 31,
2019
|
|
Deferred Tax Asset
|
|
$
|
908,053
|
|
|
$
|
662,213
|
|
Valuation Allowance
|
|
|
(908,053
|
)
|
|
|
(662,213
|
)
|
Deferred Tax Asset (Net)
|
|
$
|
-
|
|
|
$
|
-
|
|
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported income, total assets, total liabilities or stockholders’ equity as previously reported.
Recently Issued Accounting Standards
The Company is reviewing the effects of following recent updates. The Company has no expectation that any of these items will have a material effect upon the financial statements.
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses [codified as Accounting Standards Codification Topic (ASC) 326]. ASC 326 adds to US generally accepted accounting principles (US GAAP) the current expected credit loss (CECL) model, a measurement model based on expected losses rather than incurred losses. Under this new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. This will become effective in January 2023 and the impact on the company is under evaluation.
Update 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This was issued in August of 2020 and will become effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We are in the process of evaluating the impact to the company.
NOTE 4 -WRITE-OFF OF PAYABLES, RELATED PARTY TRANSACTIONS AND ACCRUED INTEREST OCCURRING PRIOR TO THE COMPANY ABANDONMENT
The last debts incurred by the Company was in 2007, 13 years ago. No new loans have been identified since the last filing and since the new owner has acquired the Company.
The new management of the Company takes the position that the statute of limitations with respect to the Related Party Loans has expired and the lenders are barred from pursuing a claim against us for repayment of the amount loaned. Nevada law relating to the statute of limitations is found in Chapter 11 of the Nevada Revised Statutes (“NRS”), titled “Limitations of Actions” (https://www.leg.state.nv.us/NRS/NRS-011.html#NRS011Sec190). NRS 11.010 titled “Commencement of civil actions” provides that “Civil actions can only be commenced within the periods prescribed in this chapter, after the cause of action shall have accrued, except where a different limitation is prescribed by statute.”
Given the foregoing, all existing liabilities would be time barred by the statute of limitations:
|
|
Last 10-Q
|
|
|
Last 10-K
|
|
|
|
10/31/07
|
|
|
1/31/07
|
|
Accounts payable
|
|
|
94,888
|
|
|
|
85,225
|
|
Accrued liabilities
|
|
|
25,347
|
|
|
|
18,935
|
|
Due to related parties
|
|
|
293,931
|
|
|
|
248,636
|
|
Loans payable
|
|
|
409,000
|
|
|
|
397,000
|
|
Total Liabilities
|
|
|
823,166
|
|
|
|
749,796
|
|
Therefore, the Company made the decision to write-off the Related Party Loans, Accrued Interest and Other Payables totaling $823,160 as of January 31, 2017. The debts were written off against Additional Paid in Capital—per ASC Section 470-50-40. ASC Section 470-50-40 (Debt Modification and Extinguishments), considers Related Party Transactions to be capital transactions and the extinguishment of the debt is in effect a capital transaction and it is not a gain or loss recognition event and should be excluded from the determination of net income.
NOTE 5 – EQUITY
The Company is authorized to issue 945,000,000 Common Shares at $.00001 par value per share.
On November 30, 2018, the Company’s board of directors and custodian appointed, Bryan Glass as the Company’s President, Secretary and Treasurer and authorized the issuance of 12,000,000 shares of stock to Mr. Glass for an aggregate price of $120.
Total issued and outstanding shares as of December 31, 2020 is 12,508,011.
NOTE 6 – MATERIAL EVENTS
In October 2007, prior management of the Company discontinued filing reports required under the Exchange Act, at which time current management considers the prior business of the Company to have been abandoned. In February 2009, the Company filed a Form 15 with the SEC terminating the registration of its class of common stock under Section 12(g) of the Exchange Act and its duty to file periodic and other reports with the SEC.
Current management assumed control of the Company in November 2018. This Registration Statement is being filed to register the Company’s class of common stock under Section 12 of the Exchange Act on a voluntary basis.
On November 29, 2018, the Eight Judicial District Court of Nevada entered an order appointing Bryan Glass as custodian of the Company, authorizing and directing him to, among other things, take any action reasonable, prudent and for the benefit of the Company, including reinstating the Company under Nevada law, appointing officers and convening an annual meeting of stockholders (the “Order”).
On November 30, 2018, Bryan Glass, as custodian, appointed himself to serve as an interim director of the Company until the next meeting of stockholders, as permitted by the Order. Also, on November 30, 2018, the board of directors and the custodian appointed Bryan Glass as our President, Secretary and Treasurer and authorized the issuance of 12,000,000 shares of stock to Mr. Glass for an aggregate price of $120.
On December 6, 2018, the Company filed a Certificate of Reinstatement with the state of Nevada to reestablish the Company’s existence.
On January 16, 2019, the Company held a stockholder’s meeting at which Mr. Glass was elected as the sole director of the Company.
On November 30, 2020, Mr. Bryan Glass, our President and a sole director of the Company, resigned from both positions as part of his departure from the Company. Mr. Glass served as the President, Secretary and Treasurer and a member of our Board since November 30, 2018. This resignation is not the result of any disagreement with the Company on any matter related to the Company’s operations, policies, or practices.
On November 30, 2020, the board of directors appointed Mr. Michael Hill, as the sole director of the Company, and as interim Chief Executive Officer and Chief Financial Officer of the Company. The board of directors has agreed to compensate Mr. Hill at a rate of $25,000 per month during his interim service to the Company.
NOTE 7 – NOTES PAYABLE
On February 19, 2019 the company entered into a promissory note with a related party in the amount of $17,000, with an interest due at the rates of 8% per annum and a due date of February 19, 2020.
On March 31, 2019 the company entered into a promissory note with a related party in the amount of $9,300, with an interest due at the rates of 8% per annum and a due date of March 31, 2020.
On March 31, 2019 the company entered into a promissory note with a related party in the amount of $14,500, with an interest due at the rates of 8% per annum and a due date of March 30, 2020.
On February 29, 2020 the company entered into a promissory note in the amount of $531,000, with an interest due at the rates of 9.9% per annum and a due date of January 1, 2021.
On February 29, 2020 the company entered into a promissory note with a related party in the amount of $60,000, with an interest due at the rates of 8% per annum and a due date of February 29, 2021.
On May 5, 2020 the company entered into a promissory note under the payroll protection program in the amount of $310,000, with an interest due at the rates of 1% per annum and a due date of August 15, 2022.
On July 8, 2020 the company entered into an SBA promissory note in the amount of $150,000, with an interest due at the rates of 3.75% per annum and a due date of August 15, 2022.
On June 4, 2020 the company entered into a promissory note with a in the amount of $20,000, with an interest due at the rates of 8% per annum and a due date of September 5, 2020. This note was offset against an account receivable in the fourth quarter of 2020 and the balance due as of December 31, 2020 was $0.
On June 5, 2020 the company entered into a promissory note with a in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of March 31, 2020. This note was offset against an account receivable in the fourth quarter of 2020 and the balance due as of December 31, 2020 was $0.
On June 8, 2020 the company entered into a promissory note with a related party in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of September 8, 2020.
On June 11, 2020 the company entered into a promissory note with a related party in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of September 11, 2020.
On July 27, 2020 the company entered into a promissory note in the amount of $300,000, with an interest due at the rates of 9% per annum and a due date of August 15, 2022.
On November 30, 2020 the company entered into a secured convertible promissory note for $202,300, with an interest rate of 6% per annum. The note is convertible at $.20 per share.
To date, the prior majority shareholder, Bryan Glass contributed $26,864 for expenses and fees to reinstate the Company. This money was booked as a capital contribution.
NOTE 8 - SUBSEQUENT EVENTS
On February 11, 2021, the Company entered into a non-binding Letter of (the “LOI”) with CBD Brand Partners, LLC., a Wyoming limited liability company (“CBDBP”). Under the terms of the LOI, the Company agreed to acquire CBDBP as its wholly owned subsidiary by merging CBDBP with and into a subsidiary, such that the Company would acquire all of the outstanding equity of CBDBP and the holders of the shares of CBDBP immediately prior to the Merger would receive 10,000 shares of Series A Preferred Stock, 800 shares of Series B Preferred Stock and 1,200,000 shares of Series C Preferred Stock.
INDEX TO FINANCIAL STATEMENTS
For the three months ended March 31, 2021
Bloomios, Inc.
|
Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
890,106
|
|
|
$
|
72,205
|
|
Accounts receivable – net
|
|
|
103,685
|
|
|
|
36,274
|
|
Inventory
|
|
|
204,834
|
|
|
|
195,681
|
|
WIP
|
|
|
74,256
|
|
|
|
96,551
|
|
Investment in life on earth Series B
|
|
|
-
|
|
|
|
50,000
|
|
Total Current Assets
|
|
|
1,272,881
|
|
|
|
450,711
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment – Net
|
|
|
2,017,838
|
|
|
|
2,070,416
|
|
Loan receivable
|
|
|
50,000
|
|
|
|
50,000
|
|
Right of use asset
|
|
|
250,421
|
|
|
|
258,019
|
|
Goodwill
|
|
|
300,000
|
|
|
|
300,000
|
|
Other assets
|
|
|
68,447
|
|
|
|
64,511
|
|
Total Assets
|
|
$
|
3,959,587
|
|
|
$
|
3,193,657
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ (Deficit)
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable – trade
|
|
$
|
1,949,235
|
|
|
$
|
1,747,852
|
|
Accrued expenses
|
|
|
84,990
|
|
|
|
73,501
|
|
Accrued expenses related party
|
|
|
17,859
|
|
|
|
14,235
|
|
Unearned revenue
|
|
|
139,014
|
|
|
|
149,966
|
|
Customer JV account liabilities
|
|
|
600,000
|
|
|
|
600,000
|
|
Lease liability current
|
|
|
111,028
|
|
|
|
114,675
|
|
Notes payable
|
|
|
757,910
|
|
|
|
150,000
|
|
Notes payable PPP
|
|
|
275,556
|
|
|
|
310,000
|
|
Notes payable – related party
|
|
|
100,800
|
|
|
|
120,800
|
|
Notes payable – convertibles
|
|
|
980,078
|
|
|
|
202,300
|
|
Total Current Liabilities
|
|
|
5,016,470
|
|
|
|
3,483,329
|
|
Long-Term Debt:
|
|
|
|
|
|
|
|
|
Lease liability
|
|
|
139,393
|
|
|
|
143,344
|
|
Notes payable
|
|
|
277,865
|
|
|
|
831,000
|
|
Total Liabilities
|
|
|
5,433,728
|
|
|
|
4,457,673
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit)
|
|
|
|
|
|
|
|
|
Common stock ($0.00001 par value; 950,000,000 shares authorized; 12,624,678 and 12,508,011 shares issued and outstanding at March 31, 2021 and December 31, 2020 respectively
|
|
|
137
|
|
|
|
125
|
|
Additional paid-in capital
|
|
|
4,418,258
|
|
|
|
3,059,920
|
|
Accumulated deficit
|
|
|
(5,892,536
|
)
|
|
|
(4,324,061
|
)
|
Total Stockholders’ (Deficit)
|
|
|
(1,474,141
|
)
|
|
|
(1,264,016
|
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
3,959,587
|
|
|
$
|
3,193,657
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Consolidated Statement of Operations
|
for the three months ended
|
March 31,
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
2,162,032
|
|
|
$
|
-
|
|
Cost of Goods Sold
|
|
|
1,126,244
|
|
|
|
-
|
|
Gross Profit
|
|
|
1,035,788
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
General and Administrative expense
|
|
|
210,166
|
|
|
|
716
|
|
Salaries
|
|
|
368,660
|
|
|
|
-
|
|
Rent
|
|
|
129,735
|
|
|
|
-
|
|
Utilities
|
|
|
33,453
|
|
|
|
-
|
|
Professional fees
|
|
|
26,120
|
|
|
|
-
|
|
Consulting
|
|
|
217,352
|
|
|
|
105,000
|
|
Depreciation
|
|
|
96,106
|
|
|
|
|
|
Total Expenses
|
|
|
1,081,592
|
|
|
|
105,716
|
|
Net Profit From Operations
|
|
|
(45,804
|
)
|
|
|
(105,716
|
)
|
|
|
|
|
|
|
|
|
|
Other Income / (Expenses)
|
|
|
|
|
|
|
|
|
Gain on Debt settlement
|
|
|
-
|
|
|
|
-
|
|
Financing Fees
|
|
|
(1,492,127
|
)
|
|
|
-
|
|
Interest Expense
|
|
|
(30,544
|
)
|
|
|
-
|
|
Net Profit / (Loss) Before Income Taxes
|
|
|
(1,568,475
|
)
|
|
|
(105,716
|
)
|
Income Tax Expense
|
|
|
-
|
|
|
|
-
|
|
Net Profit / (Loss)
|
|
$
|
(1,568,475
|
)
|
|
$
|
(105,716
|
)
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE – BASIC & DILUTED
|
|
$
|
(0.13
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC & DILUTED
|
|
|
12,515,789
|
|
|
|
12,508,011
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Consolidated Statement of Stockholders Equity
|
March 31, 2021
|
|
|
|
Common Stock .00001 Par
|
|
|
Additional Paid
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
Description
|
|
Shares
|
|
|
Amount
|
|
|
in Capital
|
|
|
Deficit
|
|
|
Deficit Totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
|
12,508,011
|
|
|
$
|
125
|
|
|
$
|
2,680,399
|
|
|
$
|
(3,153,395
|
)
|
|
$
|
(472,871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
11,225
|
|
|
|
-
|
|
|
|
11,225
|
|
CBD Equity
|
|
|
|
|
|
|
|
|
|
|
368,296
|
|
|
|
|
|
|
|
368,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,170,666
|
)
|
|
|
(1,170,666
|
)
|
December 31, 2020
|
|
|
12,508,011
|
|
|
$
|
125
|
|
|
$
|
3,059,920
|
|
|
$
|
(4,324,061
|
)
|
|
$
|
(1,264,016
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitment Shares
|
|
|
116,667
|
|
|
|
12
|
|
|
|
388,489
|
|
|
|
-
|
|
|
|
388,501
|
|
Warrants issued
|
|
|
|
|
|
|
|
|
|
|
969,849
|
|
|
|
|
|
|
|
969,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Net Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,568,475
|
)
|
|
|
(1,568,475
|
)
|
March 31, 2021
|
|
|
12,624,678
|
|
|
$
|
137
|
|
|
$
|
4,418,258
|
|
|
$
|
(5,892,536
|
)
|
|
$
|
(1,474,141
|
)
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
|
Consolidated Statement of Cashflows
|
|
for the three months ended
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
Cash provided (used) from operating activities
|
|
Net Income (Loss)
|
|
$
|
(1,568,475
|
)
|
|
$
|
(105,716
|
)
|
Depreciation
|
|
|
96,106
|
|
|
|
-
|
|
Change in Accounts Receivable
|
|
|
(17,411
|
)
|
|
|
-
|
|
Change in inventory
|
|
|
13,142
|
|
|
|
(76,900
|
)
|
Shares and warrants issued
|
|
|
1,358,350
|
|
|
|
|
|
Change in other assets
|
|
|
(3,936
|
)
|
|
|
-
|
|
Change in JV liabilities
|
|
|
-
|
|
|
|
900,000
|
|
Change in Accounts Payable and Accrued Expenses
|
|
|
212,872
|
|
|
|
823,569
|
|
Change in Accrued Expenses – related party
|
|
|
3,624
|
|
|
|
-
|
|
Change in Unearned Revenue
|
|
|
(10,952
|
)
|
|
|
-
|
|
Net cash provided (used) from operating activities
|
|
|
83,320
|
|
|
|
1,540,953
|
|
|
|
|
|
|
|
|
|
|
Cash used in investing activities
|
|
|
|
|
|
|
|
|
Purchase of Equipment
|
|
|
(43,528
|
)
|
|
|
(2,230,821
|
)
|
Net cash used in investing activities
|
|
|
(43,528
|
)
|
|
|
(2,230,821
|
)
|
|
|
|
|
|
|
|
|
|
Cash provided by financing activities
|
|
|
|
|
|
|
|
|
Proceeds from Notes Payable
|
|
|
798,109
|
|
|
|
631,900
|
|
Contributed Capital
|
|
|
-
|
|
|
|
58,296
|
|
Proceeds from (payments to) Notes Payable related parties
|
|
|
(20,000
|
)
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
778,109
|
|
|
|
690,196
|
|
Net Increase (Decrease) In Cash
|
|
|
817,901
|
|
|
|
328
|
|
|
|
|
|
|
|
|
|
|
Cash at Beginning of Period
|
|
|
72,205
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash at End of Period
|
|
$
|
890,106
|
|
|
$
|
328
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cashflow Information
|
|
|
|
|
|
|
|
|
Interest Paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Taxes Paid
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these financial statements.
Bloomios, Inc.
|
Notes to the Consolidated financial statements
|
March 31, 2021
|
NOTE 1 – BUSINESS ACTIVITY
Bloomios Inc fka XLR Medical Corp. (the “Company”) was organized under the laws of the State of Nevada on February 2, 2001 under the name Relay Mines Limited—subsequently the name of the Company was changed to XLR Medical Corp. After the October 31, 2007 10Q filing, the management of the Company abandoned the Company and it became a dormant company until 2018 when a new shareholder acquired stock to become the majority shareholder and owner of the Company. The Company’s fiscal year end is December 31st. On April 12, 2021 the Company amended its name from XLR Medical Corp to Bloomios Inc., its fiscal year end from January 31 to December 31, authorized the designation of Series A, B and C Preferred Stock, and acquired CBD Brand Partners LLC (“CBDBP”).
The Company is an integrated, seed-to-shelf operation which includes the growing, processing, extraction, and manufacture of cannabidiol (“CBD”) products. The Company intends to grow both organically and by way of an acquisition strategy that is currently in development. Currently, the Company is principally a business-to-business operation with plans to sell directly to consumers in the future.
NOTE 2 – GOING CONCERN
The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had a total stockholder’s deficit of $1,474,141 and a net loss of $1,568,475 for the three months ended March 31, 2021. The Company also had an accumulated deficit of $5,892,536 as of March 31, 2021. Therefore, there is substantial doubt about the ability of the Company to continue as a going concern. There can be no assurance that the Company will achieve its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to generate positive cash flow from operations.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations 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 circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise because of this uncertainty.
To address the aforementioned, management has undertaken the following initiatives: 1) enter into discussions to secure additional equity funding; 2) undertake a program to continue to monitor the Company’s ongoing working capital requirements; and 3) focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets, the collection of accounts receivable and valuation of inventory and reserves.
Cash and Cash Equivalents
We maintain the majority of our cash accounts at a commercial bank. The total cash balance is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per commercial bank, at times we may exceed the FDIC limits. For purposes of the statement of cash flows we consider all cash and highly liquid investments with initial maturities of one year or less to be cash equivalents.
Accounts Receivable
We grant credit to our customers and do not require collateral. Our ability to collect receivables is affected by economic fluctuations in the geographic areas and industries served by us. Reserves for un-collectable amounts are provided, based on past experience and a specific analysis of the accounts. Although we expect to collect amounts due, actual collections may differ from the estimated amounts. As of March 31, 2021, and December 31, 2020, we had a reserve for potentially un-collectable accounts of $26,000 and $0 respectively. Historically, our bad debt write-offs related to these trade accounts have been insignificant.
Inventory
Inventories are valued at the lower of weighted average cost or market value. Our industry experiences changes in technology, changes in market value and availability of raw materials, as well as changing customer demand. We make provisions for estimated excess and obsolete inventories based on regular audits and cycle counts of our on-hand inventory levels and forecasted customer demands and at times additional provisions are made. Any inventory write offs are charged to the reserve account. As of March 31, 2021, and December 31, 2020, we had a reserve for potentially obsolete inventory of $0.
Property and Equipment
Property and equipment are recorded at cost. Assets held under capital leases are recorded at lease inception at the lower of the present value of the minimum lease payments or the fair market value of the related assets. The cost of ordinary maintenance and repairs is charged to operations. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of the related assets:
Furniture and fixtures
|
|
3 to 7 years
|
Equipment
|
|
7 to 10 years
|
Leasehold Improvements
|
|
7 years
|
Long –Lived Assets
Our management assesses the recoverability of its long-lived assets by determining whether the depreciation and amortization of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment if any, is measured based on fair value and is charged to operations in the period in which long-lived assets impairment is determined by management. There can be no assurance however, that market conditions will not change or demand for our services will continue, which could result in impairment of long-lived assets in the future.
Revenue Recognition
The Company recognizes revenue under ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” (“ASC 606”).
Performance Obligations Satisfied Over Time
FASB ASC 606-10-25-27 through 25-29, 25-36 through 25-37, 55-5 through 55-10
An entity transfers control of a good or service over time and satisfies a performance obligation and recognizes revenue over time if one of the following criteria is met:
a. The customer receives and consumes the benefits provided by the entity’s performance as the entity performs (as described in FASB ASC 606-10-55-5 through 55-6).
b. The entity’s performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced (as described in FASB ASC 606-10-55-7).
c. The entity’s performance does not create an asset with an alternative use to the entity (see FASB ASC 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (as described in FASB ASC 606-10-25-29).
Performance Obligations Satisfied at a Point in Time
FASB ASC 606-10-25-30
If a performance obligation is not satisfied over time, the performance obligation is satisfied at a point in time. To determine the point in time at which a customer obtains control of a promised asset and the entity satisfies a performance obligation, the entity should consider the guidance on control in FASB ASC 606-10-25-23 through 25-26. In addition, it should consider indicators of the transfer of control, which include, but are not limited to, the following:
a. The entity has a present right to payment for the asset
b. The customer has legal title to the asset
c. The entity has transferred physical possession of the asset
d. The customer has the significant risks and rewards of ownership of the asset
e. The customer has accepted the asset
The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. In addition, a) the Company also does not have an alternative use for the asset if the customer were to cancel the contract, and b.) has a fully enforceable right to receive payment for work performed (i.e., customers are required to pay as various milestones and/or timeframes are met)
Also, from time to time we require deposits from our customers. As of March 31, 2021, and December 31, 2020 we had $139,014 and $149,966 of deferred revenue respectively.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
|
●
|
Level 1: Quoted prices in active markets for identical assets or liabilities.
|
|
●
|
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
|
●
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
The Company’s financial instruments consist of cash, prepaid expenses, inventory, accounts payable, convertible notes payable, and advances from related parties. The estimated fair value of cash, prepaid expenses, investments, accounts payable, convertible notes payable and advances from related parties approximate their carrying amounts due to the short-term nature of these instruments.
The carrying amounts of accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.
Other Comprehensive Income
We have no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods.
Net Profit (Loss) per Common Share
Basic profit / (loss) per share is computed on the basis of the weighted average number of common shares outstanding. At March 31, 2021, we had outstanding common shares of 12,624,678 used in the calculation of basic earnings per share. Basic Weighted average common shares and equivalents for the three months ended March 31, 2021 and 2020 were 12,515,789 and 12,508,011 respectively. As of March 31, 2021, we had convertible notes to potentially convert into approximately 1,011,500 of additional common shares and 740,305 common stock warrants convertible into an additional 740,305 common shares. Fully diluted weighted average common shares and equivalents were withheld from the calculation as they were considered anti-dilutive.
Research and Development
We had no amounts of research and development expense during the three and nine months ended March 31, 2021 and 2019.
Share-Based Compensation
The Company has adopted the use of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (SFAS No. 123R) (now contained in FASB Codification Topic 718, Compensation-Stock Compensation), which supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting that was provided in Statement 123 as originally issued. This Statement requires an entity to measure the cost of employee services received in exchange for an award of an equity instruments, which includes grants of stock options and stock warrants, based on the fair value of the award, measured at the grant date (with limited exceptions). Under this standard, the fair value of each award is estimated on the grant date, using an option-pricing model that meets certain requirements. We use the Black-Scholes option-pricing model to estimate the fair value of our equity awards, including stock options and warrants. The Black-Scholes model meets the requirements of SFAS No. 123R; however, the fair values generated may not reflect their actual fair values, as it does not consider certain factors, such as vesting requirements, employee attrition and transferability limitations. The Black-Scholes model valuation is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We estimate the expected volatility and estimated life of our stock options at grant date based on historical volatility. For the “risk-free interest rate,” we use the Constant Maturity Treasury rate on 90-day government securities. The term is equal to the time until the option expires. The dividend yield is not applicable, as the Company has not paid any dividends, nor do we anticipate paying them in the foreseeable future. The fair value of our restricted stock is based on the market value of our free trading common stock, on the grant date calculated using a 20-trading-day average. At the time of grant, the share-based compensation expense is recognized in our financial statements based on awards that are ultimately expected to vest using historical employee attrition rates and the expense is reduced accordingly. It is also adjusted to account for the restricted and thinly traded nature of the shares. The expense is reviewed and adjusted in subsequent periods if actual attrition differs from those estimates.
We re-evaluate the assumptions used to value our share-based awards on a quarterly basis and, if changes warrant different assumptions, the share-based compensation expense could vary significantly from the amount expensed in the past. We may be required to adjust any remaining share-based compensation expense, based on any additions, cancellations or adjustments to the share-based awards. The expense is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. For the years ended December 31, 2020 and 2019, the Company had no share-based expense.
Income Taxes
Federal Income taxes are not currently due since we have had losses since inception.
On December 22, 2018 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the months ended September 30, 2020 using a Federal Tax Rate of 21%.
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.
As of March 31, 2021, we had a net operating loss carry-forward of approximately $(5,892,536) and a deferred tax asset of $1,237,433 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years. However, due to the uncertainty of future events we have booked valuation allowance of $(1,237,433). FASB ASC 740 prescribes recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. At March 31, 2021, the Company had not taken any tax positions that would require disclosure under FASB ASC 740.
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Deferred Tax Asset
|
|
$
|
1,237,433
|
|
|
$
|
908,053
|
|
Valuation Allowance
|
|
|
(1,237,433
|
)
|
|
|
(908,053
|
)
|
Deferred Tax Asset (Net)
|
|
$
|
-
|
|
|
$
|
-
|
|
Reclassification
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported income, total assets, total liabilities or stockholders’ equity as previously reported.
Recently Issued Accounting Standards
The Company is reviewing the effects of following recent updates. The Company has no expectation that any of these items will have a material effect upon the financial statements.
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses [codified as Accounting Standards Codification Topic (ASC) 326]. ASC 326 adds to US generally accepted accounting principles (US GAAP) the current expected credit loss (CECL) model, a measurement model based on expected losses rather than incurred losses. Under this new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. This will become effective in January 2023 and the impact on the Company is under evaluation.
Update 2020-06—Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This was issued in August of 2020 and will become effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We are in the process of evaluating the impact to the Company.
NOTE 4 -WRITE-OFF OF PAYABLES, RELATED PARTY TRANSACTIONS AND ACCRUED INTEREST OCCURRING PRIOR TO THE COMPANY ABANDONMENT
The Company takes the position that the statute of limitations with respect to the Related Party Loans has expired and the lenders are barred from pursuing a claim against us for repayment of the amount loaned. Nevada law relating to the statute of limitations is found in Chapter 11 of the Nevada Revised Statutes (“NRS”), titled “Limitations of Actions” (https://www.leg.state.nv.us/NRS/NRS-011.html#NRS011Sec190). NRS 11.010 titled “Commencement of civil actions” provides that “Civil actions can only be commenced within the periods prescribed in this chapter, after the cause of action shall have accrued, except where a different limitation is prescribed by statute.”
Given the foregoing, all existing liabilities would be time barred by the statute of limitations:
|
|
Last 10-Q
|
|
|
Last 10-K
|
|
|
|
10/31/07
|
|
|
1/31/07
|
|
Accounts payable
|
|
|
94,888
|
|
|
|
85,225
|
|
Accrued liabilities
|
|
|
25,347
|
|
|
|
18,935
|
|
Due to related parties
|
|
|
293,931
|
|
|
|
248,636
|
|
Loans payable
|
|
|
409,000
|
|
|
|
397,000
|
|
Total Liabilities
|
|
|
823,166
|
|
|
|
749,796
|
|
Therefore, the Company made the decision to write-off the Related Party Loans, Accrued Interest and Other Payables totaling $823,160 as of January 31, 2017. The debts were written off against Additional Paid in Capital—per ASC Section 470-50-40. ASC Section 470-50-40 (Debt Modification and Extinguishments), considers Related Party Transactions to be capital transactions and the extinguishment of the debt is in effect a capital transaction and it is not a gain or loss recognition event and should be excluded from the determination of net income.
NOTE 5 – EQUITY
Common Stock
The Company is authorized to issue 945,000,000 shares of Common Stock at $.00001 par value per share.
On November 30, 2018, the Company’s board of directors and custodian appointed, Bryan Glass as the Company’s President, Secretary and Treasurer and authorized the issuance of 12,000,000 shares of stock to Mr. Glass for an aggregate price of $120.
On March 26, 2021, the Company issued 116,667 in commitment shares for the issuance of a convertible note.
Total issued and outstanding shares as of March 31, 2021 is 12,624,678.
Preferred Stock
At March 31, 2021, the Company did not have any Preferred Stock authorized or issued. Note: See Subsequent Events.
NOTE 6 – MATERIAL EVENTS
In October 2007, prior management of the Company discontinued filing reports required under the Exchange Act, at which time current management considers the prior business of the Company to have been abandoned. In February 2009, the Company filed a Form 15 with the SEC terminating the registration of its class of common stock under Section 12(g) of the Exchange Act and its duty to file periodic and other reports with the SEC.
Current management assumed control of the Company in November 2018. This Registration Statement is being filed to register the Company’s class of common stock under Section 12 of the Exchange Act on a voluntary basis.
On November 29, 2018, the Eight Judicial District Court of Nevada entered an order appointing Bryan Glass as custodian of the Company, authorizing and directing him to, among other things, take any action reasonable, prudent and for the benefit of the Company, including reinstating the Company under Nevada law, appointing officers and convening an annual meeting of stockholders (the “Order”).
On November 30, 2018, Bryan Glass, as custodian, appointed himself to serve as an interim director of the Company until the next meeting of stockholders, as permitted by the Order. Also, on November 30, 2018, the board of directors and the custodian appointed Bryan Glass as our President, Secretary and Treasurer and authorized the issuance of 12,000,000 shares of stock to Mr. Glass for an aggregate price of $120.
On December 6, 2018, the Company filed a Certificate of Reinstatement with the state of Nevada to reestablish the Company’s existence.
On January 16, 2019, the Company held a stockholder’s meeting at which Mr. Glass was elected as the sole director of the Company.
On November 30, 2020, Mr. Bryan Glass, our President and a sole director of the Company, resigned from both positions as part of his departure from the Company. Mr. Glass served as the President, Secretary and Treasurer and a member of our Board since November 30, 2018. This resignation is not the result of any disagreement with the Company on any matter related to the Company’s operations, policies, or practices.
On November 30, 2020, the board of directors appointed Mr. Michael Hill, as the sole director of the Company, and as interim Chief Executive Officer and Chief Financial Officer of the Company. The board of directors has agreed to compensate Mr. Hill at a rate of $25,000 per month during his interim service to the Company.
On February 10, 2021, the Company entered into a non-binding Letter of (the “LOI”) with CBDBP. Under the terms of the LOI, the Company agreed to acquire CBDBP as its wholly owned subsidiary, such that the Company would acquire all of the outstanding equity of CBDBP and the holders of the shares of CBDBP immediately prior to the Merger would receive 10,000 shares of Series A Preferred Stock, 800 shares of Series B Preferred Stock and 3,000,000 shares of Series C Preferred Stock.
On March 25, 2021, XLR Medical Corp. (the “Company”), entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a non-affiliated accredited investor (the “Investor”), pursuant to which the Company agreed to issue and sell directly to the Investor in a private offering (the “Offering”), a Senior Secured Promissory Note (the “Note”), in the aggregate principal amount of up to $1,666,666.67 or so much as has been advanced in one or more tranches. The Note carries an original issue discount of $166,666.67, to cover the Investor’s accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the Note, which is included in the principal balance of the Note. As a result of the original issuance discount, the potential aggregate purchase price of the Note is $1,500,000. The initial tranche was paid upon closing in an amount of $700,000, resulting in a current face value of the Note of $777,777.78. As additional consideration for the first tranche funded upon closing, the Company issued to the Investor 116,667 shares of its common stock. Upon future tranches being funded under the Note, the Company shall issue to the Investor an amount of the Company’s restricted common stock equal to the purchase price of such future tranche or tranches divided by six. The maturity date of each tranche of the Note is twelve months after the payment of such tranche. The Note provides that the Investor may not convert any amount of the Note that would result in the beneficial ownership of greater than 4.99% of the outstanding shares of the Company, with the exception that the beneficial ownership limitation may be waived up to a maximum of 9.99% at the election of the Investor, with not less than 61 days prior notice. The Note is secured with all of the assets of the Company, as described in the Security Agreement attached as Exhibit 10.3 to this Form 8-K. The Purchase Agreement contains customary representations and warranties, and the Offering was subject to customary closing conditions. The Shares were offered by the Company pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder. The Company is obligated to register the shares of common stock underlying the Note and the Warrants (as described below), within 90 days from the date of the Purchase Agreement.
As additional consideration for the purchase of the Note, the Company agreed to issue to the Investor Warrants (the Warrants”). The Warrants shall be issued upon the advance of each tranche by the Investor to the Company, exercisable for an amount of the Company’s common stock equal to the purchase price of such tranche divided by three. The Warrants have a term of 60 months, and contain full-ratchet anti-dilution protection provisions, and have an exercise price of $1.50 per share for 50% of the Warrants, and $2.00 per share for 50% of the Warrants. If at any time after the six-month anniversary of the issue date of the Warrants, the market price of one share of the Company’s common stock is greater than the exercise price of such Warrant, and there is not an effective registration statement registering the resale of the shares of common stock underlying the Warrants, then the Warrants may be exercised by means of a cashless exercise. The Warrants do not allow for any exercise that would result in the beneficial ownership of greater than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise, with the exception that the beneficial ownership limitation may be increased or decreased upon no less than 61 days prior notice.
As stated in our 8-K filing dated April 12, 2021, on April 12, 2021, Bloomios (the “Company”), acquired CBDBP.
The foregoing summaries of the Purchase Agreement, the Note, the Warrants and the Security Agreement do not purport to be complete and are subject to, and qualified in their entirety by, such documents attached as Exhibits 10.1, 10.2, 10.3, and 4.1, respectively, to the Current Report on Form 8-K filed on April 2, 2021, which are incorporated herein by reference.
NOTE 7 – NOTES PAYABLE
On February 19, 2019 the Company entered into a promissory note with a related party in the amount of $17,000, with an interest due at the rates of 8% per annum and a due date of February 19, 2020.
On March 31, 2019 the Company entered into a promissory note with a related party in the amount of $9,300, with an interest due at the rates of 8% per annum and a due date of March 31, 2020.
On March 31, 2019 the Company entered into a promissory note with a related party in the amount of $14,500, with an interest due at the rates of 8% per annum and a due date of March 30, 2020.
On February 29, 2020 the Company entered into a promissory note with a related party in the amount of $531,000, with an interest due at the rates of 9.9% per annum and a due date of January 1, 2021.
On February 29, 2020 the Company entered into a promissory note with a related party in the amount of $60,000, with an interest due at the rates of 8% per annum and a due date of February 29, 2021.
On May 5, 2020 the Company entered into a promissory note under the Payroll Protection Program in the amount of $310,000, with an interest due at the rates of 1% per annum and a due date of August 15, 2022.
On July 8, 2020 the company entered into an SBA promissory note in the amount of $150,000, with an interest due at the rates of 3.75% per annum and a due date of August 15, 2022.
On June 4, 2020 the Company entered into a promissory note with a third party in the amount of $20,000, with an interest due at the rates of 8% per annum and a due date of September 5, 2020. This note was offset against an account receivable in the fourth quarter of 2020 and the balance due as of March 31, 2021 was $0.
On June 5, 2020 the Company entered into a promissory note with a third party in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of March 31, 2020. This note was offset against an account receivable in the fourth quarter of 2020 and the balance due as of March 31, 2021 was $0.
On June 8, 2020 the Company entered into a promissory note with a related party in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of September 8, 2020. The balance due as of March 31, 2021 was $0.
On June 11, 2020 the Company entered into a promissory note with a related party in the amount of $10,000, with an interest due at the rates of 8% per annum and a due date of September 11, 2020. The balance due as of March 31, 2021 was $0.
On July 27, 2020 the Company entered into a promissory note with a third-party in the amount of $300,000, with an interest due at the rates of 9% per annum and a due date of August 15, 2022.
On November 30, 2020, the Company entered into a 6% secured convertible promissory note with a third-party in the amount of $203,000.00. Pursuant to the agreement, the Company issued the lender 350,000 5-year warrants with an exercise price of $1.00. On January 19, 2021, we issued the lender an additional 100,000 warrants on the same terms as the previous warrants, as a penalty pursuant to the agreement. Subsequently, on April 2, 2021, the Company and lender entered into a pay-off letter agreement in the amount of $252,875.00 and the Company paid the amount on April 6, 2021. The note has been paid in full.
The prior majority shareholder, Bryan Glass contributed $26,864 for expenses and fees to reinstate the Company. This money was booked as a capital contribution.
On March 25, 2021, the Company entered into a 11% secured convertible promissory note with a third-party with a total commitment of $1,666,667 and the first tranche advanced on that date of $777,778. Pursuant to the agreement, the Company issued the lender 116,667 shares of common stock, 116,667 5-year warrants with an exercise price of $1.50 and 116,667 5-year warrants with an exercise price of $2.00. The note had an original issue discount of $77,778.
NOTE 8 – WARRANTS
On November 30, 2020, we issued 350,000 five-year common stock warrants exercisable at $1.00 per share.
On November 30, 2020, we issued 40,000 five-year common stock warrants exercisable at $.264 per share.
On January 19, 2021, we issued 100,000 five-year common stock warrants exercisable at $1.00 per share.
On March 22, 2021, we issued 116,667 five-year common stock warrants exercisable at $1.50 per share.
On March 22, 2021, we issued 116,667 five-year common stock warrants exercisable at $2.00 per share.
On March 26, 2021, we issued 16,971 five-year common stock warrants exercisable at $3.30 per share.
The following is the outstanding warrant activity:
|
|
Warrants – Common Share Equivalents
|
|
|
Weighted Average Exercise price
|
|
|
Warrants exercisable – Common Share Equivalents
|
|
|
Weighted Average Exercise price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding December 31, 2020
|
|
|
390,000
|
|
|
$
|
0.63
|
|
|
|
390,000
|
|
|
$
|
0.63
|
|
Additions
|
|
|
350,305
|
|
|
|
1.61
|
|
|
|
350,305
|
|
|
|
1.61
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Outstanding March 31, 2021
|
|
|
740,305
|
|
|
$
|
1.25
|
|
|
|
740,305
|
|
|
|
1.250
|
|
NOTE 9 – SUBSEQUENT EVENTS
On November 30, 2020, the Company entered into a 6% secured convertible promissory note with a third-party in the amount of $203,000.00. Pursuant to the agreement, the Company issued the lender 350,000 5-year warrants with an exercise price of $1.00. On January 19, 2021, we issued the lender an additional 100,000 warrants on the same terms as the previous warrants, as a penalty pursuant to the agreement. Subsequently, on April 2, 2021, the Company and lender entered into a pay-off letter agreement in the amount of $252,875.00 and the Company paid the amount on April 6, 2021. The note has been paid in full.
On April 8, 2021, the Company established a wholly owned subsidiary with the Oregon Secretary of State, Bloomios Labs, LLC, an Oregon limited liability company.
On April 12, 2021, XLR Medical Corp (the “Company”), acquired CBDBP. XLR issued 10,000 shares of its Series A Preferred Stock and 800 shares of its Series B Preferred Stock as the purchase price.
On April 16, 2021, we received notification from the U.S. Small Business Administration (“SBA”) that our Paycheck Protection Program Loan Forgiveness Application was approved and our Paycheck Protection Program loan has been paid in full.
On April 19, 2021, the Company established a wholly owned subsidiary with the Florida Secretary of State, Bloomios Private Label, LLC, a Florida limited liability company.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits included in the registration statement of which this prospectus is a part for further information about us and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements.
The SEC allows us to “incorporate by reference” information we file with it, which means that we can disclose important information to you by referring you to other documents. The information incorporated by reference is considered to be a part of this prospectus. Information contained in this prospectus supersedes information incorporated by reference that we have filed with the SEC prior to the date of this prospectus.
We incorporate by reference the following documents listed below (excluding any document or portion thereof to the extent such disclosure is furnished and not filed):
|
·
|
Our Annual Report on Form 10-K for the period ended December 31, 2020;
|
|
|
|
|
·
|
Our Quarterly Report on From 10-Q for the period ended March 31, 2021;
|
|
|
|
|
·
|
Our Current Reports on Form 8-K covering our recent acquisition, filed with the SEC on April 20, 2021; and
|
|
|
|
|
·
|
Our other Current Reports on From 8-K filed with the SEC
|
In addition, we hereby incorporate by reference into this prospectus all documents that we file with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act after the effective date of this Registration Statement and before we terminate the offering under this prospectus. These documents include periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (other than current reports or portions thereof furnished under Items 2.02 or 7.01 of Form 8-K, unless specifically incorporated herein), as well as proxy statements.
We will provide without charge to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon written or oral request, a copy of any or all of the foregoing documents which we incorporate by reference in this prospectus (not including exhibits to such documents unless such exhibits are specifically incorporated by reference to such documents). Requests should be directed to:
Bloomios, Inc.
201 W Montecito Street
Santa Barbara, California 93101
(805) 222-6330
A copy of any or all of the foregoing documents which we incorporate by reference in this prospectus may be accessed on our corporate web site at http://www.bloomios.com/(Click the “Investors” link and then the “SEC Filings” link).
3,389,203 SHARES OF COMMON STOCK AND
1,098,177 SHARES OF COMMON STOCK UNDERLYING WARRANTS EXERCISES AND
10,000,000 SHARES OF COMMON STOCK UNDERLYING CONVERTIBLE DEBENTURES
AND
2,531,160 SHARES OF COMMON STOCK
PROSPECTUS
July 13, 2021