Notes
to Unaudited Consolidated Financial Statements
For
the Six Months Ended September 30, 2019
NOTE
1 –Organization and Going Concern
Celexus,
Inc. (the Company)(formerly Telupay International, Inc.; formerly i-Level Media Group Incorporated; formerly Jackson Ventures,
Inc.) was incorporated in the State of Nevada on August 23, 2005 as Jackson Ventures Ltd. and its initial operations included
the acquisition and exploration of mineral resources. In March, 2007 the Company changed its name to i-Level Media Group Incorporated
(“i-Level”) and changed its business to that of developing and operating a digital media network service. This business
ceased operations on December 1, 2008 and its business was wound-up.
On
September 24, 2013, the Company effected the acquisition of Telupay, PLC by way of a reverse merger. As a result of the Merger,
the Company changed its name to Telupay International Inc., effectuated a 1.5-for-1 forward stock split and Telupay became a wholly-owned
subsidiary. Telupay was engaged in the mobile banking and payment processing business primarily in the Philippines, Peru, Indonesia,
Myanmar and the United Kingdom. Telupay PLC was the primary operating subsidiary of the Company accounting for most of our assets
and liabilities. Telupay PLC never reached profitability and was spun out of the Company shortly after December 31, 2014 to the
former directors and officers of the Company whereby the business, including the assets and liabilities of Telupay PLC were transferred
for no consideration. As a result, the Company had no operations.
On
January 18, 2017, Barton Hollow, LLC, a limited liability company, was appointed custodian for the Company by the District Court
of Clark County, Nevada. The Company was reinstated by the Nevada Secretary of State on November 9, 2017 and on September 9, 2018
changed its name to Celexus, Inc. The Company currently is looking to acquire an operating business or develop a business.
Going
Concern
The
Company’s financial statements are prepared using generally accepted accounting principles in the United States of America
applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow
it to continue as a going concern. As of September 30, 2019, the Company had an accumulated deficit of $8,987,103. The ability
of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In
view of these conditions, the ability of the Company to continue as a going concern is in doubt and dependent upon achieving a
profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically,
the Company has relied upon internally generated funds and funds from the sale of shares of stock, issuance of promissory notes
and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary
additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance
that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable
terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount
of capital that it can access. These financial statements do not give effect to any adjustments which will be necessary should
the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities
in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.
NOTE
2 – Summary of Significant Accounting Policies
Use
of Estimates
The
preparation of the Company’s consolidated financial statements requires management to make estimates and use assumptions
that affect the reported amounts of assets, liabilities and expenses. These estimates and assumptions are affected by management’s
application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may
differ materially from these estimates and assumptions.
Cash
Cash
includes amounts held in bank accounts. The Company has no amounts deposited with financial institutions in excess of federally
insured limits.
Fair
Value Measurements
The
Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price)
in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which
prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level
1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.
The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring basis with Level 1 inputs.
Level
2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets
that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full
term of the assets or liabilities. The Company has no assets or liabilities measured and recorded on a recurring or nonrecurring
basis with Level 2 inputs.
Level
3. Valuations based on 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 has no assets or liabilities measured and recorded on a recurring or nonrecurring basis
with Level 3 inputs.
Fair
Value of Financial Instruments
The
carrying value of cash and cash equivalents, accounts payable and interest payable approximate their fair value because of the
short-term nature of these instruments and their liquidity. It is not practical to determine the fair value of the Company’s
debentures payable due to the complex terms. Management is of the opinion that the Company is not exposed to significant interest
or credit risks arising from these financial instruments.
Stock
Based Compensation
When
applicable, the Company will account for stock-based payments to employees in accordance with ASC 718, “Stock Compensation”
(“ASC 718”). Stock-based payments to employees include grants of stock, grants of stock options and issuance
of warrants that are recognized in the consolidated statement of operations based on their fair values at the date of grant.
The
Company accounts for stock-based payments to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Stock-based
payments to non-employees include grants of stock, grants of stock options and issuances of warrants that are recognized in the
consolidated statement of operations based on the value of the vested portion of the award over the requisite service period as
measured at its then-current fair value as of each financial reporting date.
The
Company calculates the fair value of option grants and warrant issuances utilizing the Black-Scholes pricing
model. The amount of stock-based compensation recognized during a period is based on the value of the portion of
the awards that are ultimately expected to vest. ASC 718 requires forfeitures to be estimated at the time stock
options are granted and warrants are issued to employees and non-employees, and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from
“cancellations” or “expirations” and represents only the unvested portion of the surrendered stock
option or warrant. The Company estimates forfeiture rates for all unvested awards when calculating the expense for
the period. In estimating the forfeiture rate, the Company monitors both stock option and warrant exercises as
well as employee termination patterns. The resulting stock-based compensation expense for both employee and
non-employee awards is generally recognized on a straight-line basis over the period in which the Company expects to receive
the benefit, which is generally the vesting period.
Loss
per Share
The
computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding
during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted
EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued
assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of
diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive
effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive
securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect
under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise
price of the options or warrants (they are in the money). See “NOTE 5 - Net Loss Per Share” for further discussion.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established
when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized
tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated
interest and penalties are recorded as a component of interest expense or other expense, respectively.
Business
segments
ASC
280, “Segment Reporting” requires use of the “management approach” model for segment reporting.
The management approach model is based on the way a company’s management organizes segments within the company for making
operating decisions and assessing performance. The Company determined it has one operating segment.
Recent
Accounting Pronouncements
From
time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date.
If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have
a material impact on the Company’s financial statements upon adoption.
NOTE
3 – Debt – Related Party
On
January 18, 2017, the Company entered into a Revolving Demand Note (the “Revolving Demand Note”) with Securities Compliance
Group, Ltd. (the “Creditor”). Pursuant the Revolving Demand Note, the Company borrowed $25,000 at an annual interest
rate of 9.5% with a default rate of 22%. The Revolving Demand Note may be converted into common stock at an exercise price of
par, or $0.001 per share at the discretion of the Creditor. The Revolving Demand Note does not have a maturity date.
The
debt discount attributable to the fair value of the beneficial conversion feature amounted to $17,500 and was accreted on the
date of issuance due to no maturity date of the Revolving Demand Note.
During
the Six Months ended September 30, 2019 and 2018, the Company recognized $1,501 and $1,366 of interest expense related to the
Convertible Debenture.
A
shareholder who is a related party has loaned the corporation $58,500 as of March 31, 2019 and an additional $20,669 through September
30, 2019. The note bears no interest and is payable on demand.
NOTE
4 – Common Stock
On
December 10, 2018 it was RESOLVED by the board of director of the corporation that the name change of the corporation be changed
to Celexus and that the outstanding shares of stock of the corporation be reverse split on a 1 for 90 basis without change to
authorized shares. The name change and 1-90 reverse took place open of business April 9, 2019. The 1-90 reverse split has been
retroactively accounted for, accordingly.
At
September 30, 2019, the Company had 1,500,000,000 authorized shares of common stock with a par value of $0.001 per share and 6,287,384
shares of common stock outstanding.
NOTE
5 - Net Loss Per Share
During
the six months ended September 30, 2019 and 2018, the Company recorded a net loss. Basic net loss per share is computed by dividing
the net loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects
of convertible debt on net loss per share because to do so would be antidilutive.
Following
is the computation of basic and diluted net loss per share for the six months ended September 30, 2019 and 2018:
|
|
Six months Ended September 30, 2019
|
|
Six months Ended September 30, 2018
|
Basic and Diluted EPS Computation
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Loss available to common stockholders'
|
|
$
|
(54,393
|
)
|
|
$
|
(2,614
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
6,288,457
|
|
|
|
6,288,457
|
|
Basic and diluted EPS
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
The shares listed below were not included in the computation of diluted losses
|
|
|
|
|
|
|
|
|
per share because to do so would have been antidilutive for the periods presented:
|
|
|
|
|
|
|
|
|
Convertible debt
|
|
|
32,303,000
|
|
|
|
30,802,000
|
|
NOTE
6 – Subsequent Events
Management
has reviewed material events subsequent of the period ended September 30, 2019 and through the date of filing of financial statements
in accordance with FASB ASC 855 “Subsequent Events”.
On
May 13, 2019, Celexus has entered into a definitive agreement by which it will acquire a related entity, HempWave f/k/a Bio Distributions,
upon the completion of an appraisal satisfactory to management of both companies. On July 31, 2019 the Exchange Agreement between
Celexus and Hempwave was Amended until January 3, 2020 subject to the conditions of the agreement. During December 2019 the date
of the merger completion was subsequently changed to May 31, 2020 or sooner.