Notes
to the Financial Statements
December
31, 2016
(Unaudited)
NOTE
1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization
and Description of Business
ALTAIR INTERNATIONAL
CORP. (the “Company”) was incorporated under the laws of the State of Nevada on December 20, 2012. The Company’s
physical address is 20704 N 90
th
Place, Scottsdale, AZ 85254. The Company is in the development stage as defined under
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915-205 "Development-Stage
Entities.”
The Company
has entered into a strategic alliance with Cure Pharmaceutical Corporation (“CURE”), a California company engaged
in the development of oral thin film (“OTF”) for the delivery of nutraceutical, over-the-counter and prescription
products. Initially this alliance was comprised of an Exclusive License and Distribution Agreement for CURE’s Sildenafil
(commonly known as Viagra) Products throughout Asia, Brazil, the Middle East and Canada acquired at a cost of $200,000 while a
joint venture agreement for the procurement of converting and packaging equipment specific for oral thin film products was proposed
through a Letter of Intent. In addition, Altair and Cure agreed to enter into further joint ventures or other business relationships
for the purpose of completing the development and marketing of additional products, and for license and distribution agreements
for additional Cure products such as aspirin, sleep-aid, topical muscle and joint pain relief, and electrolytes delivered through
OTF or other methods. Altair advanced $360,000 to CURE in this regard.
On September
23, 2016, the Company and CURE agreed to terminate the Exclusive License and Distribution Agreement for CURE’s Sildenafil
Products due to the unanticipated costs of obtaining regulatory approvals for the introduction of these pharmaceutical products
into the licensed markets. In its place, the Company and CURE agreed to replace it with an Exclusive License and Distribution
Agreement for a family of sports related nutraceutical products including a topical active for joint and muscle pain and OTF products
for delivery of electrolyte, energy, sleep and recovery actives, The Company will become the exclusive worldwide distributor for
these products. The fee for this new Exclusive License and Distribution Agreement was $560,000, comprised of the $200,000 fee
paid for the Sildenafil agreement and the $360,000 advanced as a deposit for future license and distribution agreements.
The Company
had previously planned to commence operations in the architectural field and to be responsible for the concept architectural vision
of future private and public buildings as well as municipal organized public areas. This plan was abandoned in the 2015 fiscal
year in favor of the business operations described above.
Since inception
(December 20, 2012) through December 31, 2016, the Company has not generated any revenue and has accumulated losses of $298,430.
In
management’s opinion all adjustments necessary for a fair statement of the results for the interim periods have been made,
and that all adjustments have been made to maintain the books in accordance with GAAP. Furthermore, sufficient disclosures have
been made in order to ensure that the interim financial statements will not be misleading.
NOTE
2 - 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 has incurred losses
since inception resulting in an accumulated deficit of $298,430 as of December 31, 2016 and further losses are anticipated in
the development of its business raising substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or
obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when
they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans
from directors and/or private placement of common stock.
NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation
The accompanying
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America,
and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments,
consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position,
results of operations and cash flows of the Company as of and for the nine month periods ending December 31, 2016 and 2015 and
year ending March 31, 2016.
Cash and
Cash Equivalents
For purposes
of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three
months or less to be cash equivalents.
The Company's
bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At December 31, 2016 the Company's
bank deposits did not exceed the insured amounts.
Basic and
Diluted Income (Loss) Per Share
The Company
computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation
of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing
net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted
loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share
excludes all potential common shares if their effect is anti-dilutive.
Income Taxes
The Company
follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities
are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values
and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the enactment date.
Fair Value
of Financial Instruments
FASB ASC 820
"Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs
in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring
fair value are observable in the market.
These tiers
include:
Level 1: defined
as observable inputs such as quoted prices in active markets;
Level 2:
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable;
and
Level 3:
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own
assumptions.
The carrying
amounts of financial assets and liabilities, such as cash and accrued liabilities approximate their fair values because of the
short maturity of these instruments.
Use of Estimates
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 and disclosure of contingent assets and liabilities at
the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 4 –
SALES AND DISTRIBUTION LICENSE
On November
26, 2014, the Company entered into a license and distribution agreement with Cure Pharmaceutical Corporation (“Cure”)
for the exclusive rights to distribute and sell in certain defined territories any product produced and supplied by Cure that
contains Sildenafil delivered through an oral thin film. The defined territories included Asia, Brazil, the Middle East and Canada.
For the sake of clarity, Asia was further defined as India, China, Malaysia, Indonesia, Taiwan, Japan, Philippines, and those
other countries dependent on China’s SDA certification for their approval protocol of the Products. There was no expiry
date to this agreement. The agreement required that the Company pay to Cure a fee in the aggregate amount of $200,000, payable
in two equal $100,000 instalments. The Company completed the purchase of the license in the 2015 fiscal year.
On September
23, 2016, the Company and CURE agreed to terminate the Exclusive License and Distribution Agreement for CURE’s Sildenafil
Products due to unanticipated costs of obtaining regulatory approvals for the introduction of these pharmaceutical products into
the Asian markets and to replace it with an Exclusive License and Distribution Agreement for a family of sports related nutraceutical
products including a topical active for joint and muscle pain and OTF products for delivery of electrolyte, energy, sleep and
recovery actives, The Company will become the exclusive worldwide distributor for these products. The fee for this new Exclusive
License and Distribution Agreement was $560,000, comprised of the $200,000 fee paid for the Sildenafil agreement and the $360,000
advanced as a deposit for future license and distribution agreements. This Agreement has a ten year term and requires minimum
product orders of $1,500,000 in the first 24 month from the effective date of the Agreement and $1,500,000 for each year thereafter.
NOTE 5 –
ADVANCES AND DEPOSITS
The Company
and Cure agreed to enter into further joint ventures or other business relationships for the purpose of completing the development
and marketing of additional products and for license and distribution agreements for additional Cure products. To September 23,
2016 the Company had advanced $360,000 to Cure for these purposes. As described in Note 4 above, these advances were applied to
the $560,000 fee payable to CURE for the Exclusive License and Distribution Agreement for sports related nutraceutical products,
leaving a balance of $nil at December 31, 2016 ($360,000 as at December 31, 2015).
NOTE 6 –
PROMISSORY NOTES
On March 6,
2015, the Company executed a convertible promissory note for $100,000 with Williams Ten, LLC. The note was due in ninety days,
had a $10,000 one-time interest payment due at maturity and required the issuance of 10,000 shares of common stock. Any unpaid
principal and interest at the end of the term was convertible into shares of common stock at 50% of the average closing price
for the ten days prior to the end of the term of the note. The fair value of the common stock issued was determined to be $9,091
based on its fair value relative to the fair value of the debt issued. This amount was recorded as a debt discount and was to
be amortized utilizing the interest method of accretion over the term of the note. In addition, due to the variable nature of
the conversion feature which has no explicit limit on the number of shares that could be required to be issued, the company bifurcated
the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair
value of $100,004 based on the Black Scholes Merton pricing model and a corresponding debt discount of $90,909 and derivative
expense charge of $9,095. On September 29, 2016, Williams Ten, LLC agreed to cancel this Promissory Note and accept a new Convertible
Promissory Note in the amount of $121,000, which included all accrued interest and penalties. This Convertible Promissory Note
bears interest at the rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the principal
amount of this Note and any accrued interest, late fee, and extension fee, if applicable, into such number of shares of the Company’s
shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount
of this Note plus any accrued interest by $0.01 per share. On October 3, 2016, the Company converted $10,000 of the principal
balance into 1,000,000 shares of common stock. As of December 31, 2016, $111,000 remains outstanding; and the Company fair valued
the derivative at $71,105 resulting in a gain on the change in the fair value of $24,645.
On September
29, 2016, the Company issued a Convertible Promissory Note in the principal amount of $13,850 to Strips Nutrition, Inc. as consideration
for $13,850 in cash advances to the Company. This Convertible Promissory Note bears interest at the rate of 6.00% per annum and
has a one year term. The Holder is entitled to convert any or all of the principal amount of this Note and any accrued interest,
late fee, and extension fee, if applicable, into such number of shares of the Company’s shares of common stock, par value
$.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount of this Note plus any accrued interest
by $0.01 per share. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company
recorded the derivative liability at its fair value of $10,960 based on the Black Scholes Merton pricing model and a corresponding
debt discount of $10,960 to be amortized utilizing the interest method of accretion over the term of the note.
As of December
31, 2016, the Company fair valued the derivative at $8,872 resulting in a gain on the change in the fair value of $2,088. In addition,
$2,763 of the debt discount has been amortized to interest expense.
On September
29, 2016, the Company issued a Convertible Promissory Note in the principal amount of $13,768.89 to Mr. Fred Lee as consideration
for $13,768.89 in travel expenses incurred in assessing distribution opportunities in Asia for the Company. This Convertible Promissory
Note bears interest at the rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the
principal amount of this Note and any accrued interest, late fee, and extension fee, if applicable, into such number of shares
of the Company’s shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the
entire principal amount of this Note plus any accrued interest by $0.01 per share. The company bifurcated the conversion feature
and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $10,896 based
on the Black Scholes Merton pricing model and a corresponding debt discount of $10,896 to be amortized utilizing the interest
method of accretion over the term of the note. As of December 31, 2016, the Company fair valued the derivative at $8,820 resulting
in a gain on the change in the fair value of $2,076. In addition, $2,776 of the debt discount has been amortized to interest expense.
On September
29, 2016, the Company issued a Convertible Promissory Note in the principal amount of $160,000 to Mr. Brent McMahon as consideration
for $160,000 in cash advances to the Company. This Convertible Promissory Note bears interest at the rate of 6.00% per annum and
has a one year term. The Holder is entitled to convert any or all of the principal amount of this Note and any accrued interest,
late fee, and extension fee, if applicable, into such number of shares of the Company’s shares of common stock, par value
$.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount of this Note plus any accrued interest
by $0.01 per share. The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company
recorded the derivative liability at its fair value of $126,612 based on the Black Scholes Merton pricing model and a corresponding
debt discount of $126,612 to be amortized utilizing the interest method of accretion over the term of the note. On October 3,
2016, the Company converted $10,000 of the principal balance into 1,000,000 shares of common stock. As of December 31, 2016,
the Company fair valued the derivative at $96,088 resulting in a gain on the change in the fair value of $30,524. In addition,
$32,260 of the debt discount has been amortized to interest expense.
On September
29, 2016, the Company issued a Convertible Promissory Note in the principal amount of $84,373.25 to Evolution Equities Corporation,
a related company, as consideration for $84,373.25 in expenses paid on behalf of the Company. This Convertible Promissory Note
bears interest at the rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the principal
amount of this Note and any accrued interest, late fee, and extension fee, if applicable, into such number of shares of the Company’s
shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount
of this Note plus any accrued interest by $0.01 per share. The company bifurcated the conversion feature and accounted for it
as a derivative liability. The Company recorded the derivative liability at its fair value of $66,766 based on the Black Scholes
Merton pricing model and a corresponding debt discount of $66,766 to be amortized utilizing the interest method of accretion over
the term of the note. As of December 31, 2016, the Company fair valued the derivative at $54,048 resulting in a gain on the change
in the fair value of $12,718. In addition, $17,012 of the debt discount has been amortized to interest expense.
On September
23, 2016, the Company issued two Convertible Promissory Notes in the principal amounts of $10,000 and $25,000 to Enpos Sports,
LLC as consideration for $35,000 in cash advances to the Company. These convertible Promissory Notes bear interest at the rate
of 6.00% per annum and have a one year term. The Holder is entitled to convert any or all of the principal amount of these Notes
and any accrued interest, late fees, and extension fees, if applicable, into such number of shares of the Company’s shares
of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount of the
Notes plus any accrued interest at the lesser of (i) 70% of the lowest closing bid price over the 5 trading days prior to conversion
or (ii) $0.10 per share. Due to the variable nature of the conversion feature which has no explicit limit on the number of shares
that could be required to be issued, the company bifurcated the conversion feature and accounted for it as a derivative liability
on both notes. The Company recorded the derivative liability at its fair value of $27,673 based on the Black Scholes Merton pricing
model and a corresponding debt discount of $27,673 to be amortized utilizing the interest method of accretion over the term of
the note. As of December 31, 2016, the Company fair valued the derivative at $22,421 resulting in a gain on the change in the
fair value of $5,275. In addition, $7,506 of the debt discount has been amortized to interest expense.
On October 14,
2016, the Company issued a Convertible Promissory Note in the principal amount of $8,594.48 to Enpos Sports, LLC as consideration
for $8,594.48 in cash advances to the Company. The convertible Promissory Note bears interest at the rate of 6.00% per annum and
has a one year term. The Holder is entitled to convert any or all of the principal amount of this Note and any accrued interest,
late fees, and extension fees, if applicable, into such number of shares of the Company’s shares of common stock, par value
$.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount of the Note plus any accrued interest
at the lesser of (i) 70% of the lowest closing bid price over the 5 trading days prior to conversion or (ii) $0.10 per share.
Due to the variable nature of the conversion feature which has no explicit limit on the number of shares that could be required
to be issued, the company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded
the derivative liability at its fair value of $6,744 based on the Black Scholes Merton pricing model and a corresponding debt
discount of $6,744 to be amortized utilizing the interest method of accretion over the term of the note. As of December 31, 2016,
the Company fair valued the derivative at $5,768 resulting in a gain on the change in the fair value of $976. In addition, $1,460
of the debt discount has been amortized to interest expense.
A summary of
outstanding convertible notes as of December 31, 2016, is as follows:
Note Holder
|
|
Issue
Date
|
|
Maturity
Date
|
|
Stated
Interest
Rate
|
|
Principal
Balance
12/31/2016
|
Williams Ten, LLC
|
|
9/29/2016
|
|
9/29/2017
|
|
|
6
|
%
|
|
$
|
111,000
|
|
Strips Nutrition, Inc.
|
|
9/29/2016
|
|
9/29/2017
|
|
|
6
|
%
|
|
|
13,850
|
|
Mr. Fred Lee
|
|
9/29/2016
|
|
9/29/2017
|
|
|
6
|
%
|
|
|
13,769
|
|
Mr. Brent McMahon
|
|
9/29/2016
|
|
9/29/2017
|
|
|
6
|
%
|
|
|
150,000
|
|
Evolution Equities Corporation
|
|
9/29/2016
|
|
9/29/2017
|
|
|
6
|
%
|
|
|
84,373
|
|
Enpos Sports, LLC
|
|
9/23/2016
|
|
9/23/2017
|
|
|
6
|
%
|
|
|
35,000
|
|
Enpos Sports, LLC
|
|
10/14/2016
|
|
10/14/2017
|
|
|
6
|
%
|
|
|
8,594
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
416,586
|
|
Less debt discount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(185,843
|
)
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
230,743
|
|
A summary of
the activity of the derivative liability for the notes above is as follows:
Balance at March 31, 2016
|
$
|
100,000
|
Increase to derivative due to new issuances
|
|
249,651
|
Derivative (gain) due to mark to market adjustment
|
|
(82,529)
|
Balance at December 31, 2016
|
$
|
267,122
|
NOTE 7 –
LOANS PAYABLE
On July 22,
2015, the Company obtained a loan from a third party in the amount of $25,000. This loan was non-interest bearing, was unsecured
and had no fixed terms of repayment. The loan was repaid in its entirety on September 29, 2016.
During the fiscal
year ended March 31, 2016, the Company obtained a loan from a third party in the amount of $4,175. A further $9,990 was loaned
to the Company in the six months ended September 30, 2016. This loan is non-interest bearing, is unsecured and has no fixed terms
of repayment.
In the three
month period ended March 31, 2016, the Company obtained loans from a third party in the total amount of $11,350. In the three
month period ended June 30, 2016, the Company received a further $2,500 in loans from this same third party. These loans totaling
$13,850 were non-interest bearing, unsecured and had no fixed terms of repayment. On September 29, 2016 these loans were settled
through the issuance of a Convertible Promissory Note as described in item 6(2) above.
On December
30, 2016, the Company obtained a loan from a third party in the amount of $30,000. This loan is non-interest bearing, is unsecured
and has no fixed terms of repayment.
NOTE 8 –
COMMON STOCK
The Company has 75,000,000 common
shares authorized with a par value of $0.001 per share.
During the period December 20, 2012
(inception) to March 31, 2013, the Company sold a total of 3,000,000 shares of common stock for total cash proceeds of $3,000.
In November and December 2013, the Company sold a total of 1,235,000 shares of common stock for total cash proceeds of $24,700.
During the period December 20, 2012 (inception) to March 31, 2014, the Company sold a total of 4,235,000 shares of common stock
for total cash proceeds of $27,700.
On February 9, 2015, the Company
affected a seven for one forward split of its common stock. As a result of this forward split, the Company had 29,645,000 common
shares issued and outstanding at March 31, 2015.
During the twelve month period ended
March 31, 2016, the Company sold a total of 302,000 common shares for total cash consideration of $265,006. The Company had 29,947,000
common shares issued and outstanding at March 31, 2016.
During the three month period ended
December 31, 2016 the Company issued 2,000,000 common shares on the conversion of $20,000 of the convertible Promissory Notes
described in item 6. In addition, the Company issued 10,000 common shares to as required under the terms of the original Promissory
Note with Williams Ten LLC as described in item 6.
The Company had 31,957,000 common
shares issued and outstanding at December 31, 2016.
NOTE 9 –
RELATED PARTY TRANSACTIONS
From inception through September
29, 2016, the Directors loaned the Company $84,374 net of repayments to pay for incorporation costs, general and administrative
expenses and professional fees, the acquisition of sales and distribution licenses and advances to Cure Pharmaceutical. On
September 29, 2016, this amount was settled through the issuance of a convertible promissory note as described item 6 above.
On September 29, 2016, the Company
entered into a consulting agreement with the Company’s sole officer and director for the provision of management and financial
services. This agreement calls for a one time payment of $10,000 on signing of the agreement, and payments of $5,000 per month
for six months, terminating on March 30, 2017. In addition, an amount of $5,000 for services provided in September, 2016 is payable
on either the termination of the contract or completion of a minimum $500,000 financing. As of December 31, 2016, $15,500.00 had
been paid and $15,500.00 was payable pursuant to this contract. In addition, if financing of greater than $200,000 is obtained
during the term of this contract, the consultant has agreed to exchange 21,000,000 shares registered in his name for 6,000,000
newly issued restricted shares.
NOTE 10 –
SUBSEQUENT EVENTS
In
accordance with ASC 855-10, the Company has analyzed its operations from October 1, 2016 to February 7, 2017 and has determined
that it has no other material subsequent events to disclose in these financial statements.
END OF
NOTES TO FINANCIAL STATEMENTS