NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Note
1 –ORGANIZATION
Himalaya Technologies, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on July 8, 2003. The Company’s
principal historical activities had been the acquisition of a mineral property in the State of New Mexico. During the fiscal year ended
July 31, 2010, the Company began to acquire working interests in a seismic exploration program as well as a drilling program in crude
oil and natural gas properties in Oklahoma. Prior to July 31, 2019 the Company discontinued the exploration and drilling in Oklahoma
and New Mexico. The Company has leases on two properties that were fully depleted prior to July 31, 2021. Over the past few years, the
company generated approximately $1,500 per year of net revenue from these leases. Subsequent to July 31, 2022 the Company reached an
agreement with the Company’s prior CEO to distribute the oil leases in payment of loan from shareholder.
On
June 28, 2021 the Company amended its Articles of Incorporation to change the name of the Company to “Himalaya Technologies, Inc.”
from Homeland Resources Ltd.
The
Company’s business plan includes completing its’ social site Kanab.Club targeting health and wellness based on the
cannabis market, generating revenues from advertising and subscriptions, incorporating social media site into the site, and
marketing its’ 19.9% investment GenBio, Inc.’s health and wellness products targeting anti-inflammatory nutraceuticals
to consumers. Additionally, the Company intends to pursue growth of its 19.9% minority investment in agriculture technology provider
The Agrarian Group, LLC (“TAG”).
Note
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements were prepared in conformity with generally accepted accounting principles in the United States of America
(“US GAAP”) and in conformity with the rules and regulation of the U.S. Securities and Exchange Commission (SEC).
Use
of Estimates
The
preparation of financial statements in conformity with US GAAP requires management to make certain 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant
estimates include accounts payable, the recoverability of long-term assets, and the valuation of derivative liabilities.
Consolidation
The
consolidated financial statements include the accounts and operations of the Company, and its wholly owned subsidiary, KANAB CORP., which
was acquired on July 31, 2021. All material inter-company transactions and accounts have been eliminated in the consolidation.
Cash
Cash
consists of deposits in two large national banks. On July 31, 2022 and 2021, respectively, the Company had $4,141 and $28,618 in cash
in the United States. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its
cash in bank accounts.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Fair
Value of Financial Instruments
For
certain of the Company’s financial instruments, including cash accounts payable, accrued liabilities, short-term debt, and derivative
liability, the carrying amounts approximate their fair values due to their short maturities. We adopted ASC Topic 820, “Fair Value
Measurements and Disclosures,”, which requires disclosure of the fair value of financial instruments held by the Company. ASC Topic
825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair
value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets
for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because
of the short period of time between the origination of such instruments and their expected realization and their current market rate
of interest. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of valuation hierarchy
are defined as follows:
Level
1 input to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are
observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level
3 inputs to the valuation methodology are unobservable in which little or no market data exists, therefore requiring an entity to develop
its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value
drivers are unobservable.
The
Company’s analyses of all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing
Liabilities from Equity,” and ASC 815.
The
Company has recorded the conversion option on notes as a derivative liability because of the variable conversion price, which in accordance
with U.S. GAAP, prevents them from being considered as indexed to our stock and qualified for an exception to derivative accounting.
The
Company recognizes derivative instruments as either assets or liabilities on the accompanying balance sheets at fair value. We record
changes in the fair value of the derivatives in the accompanying statement of operations.
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES
Assets
and liabilities measured at fair value are as follows as of July 31, 2022:
| |
Total | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
Assets | |
| | |
| | |
| | |
| |
Total assets measured at fair value | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Derivative liability | |
| 440,766 | | |
| - | | |
| - | | |
| 440,766 | |
Total liabilities measured at fair value | |
| 440,766 | | |
| - | | |
| - | | |
| 440,766 | |
Assets
and liabilities measured at fair value are as follows as of July 31, 2021:
| |
Total | | |
Level 1 | | |
Level 2 | | |
Level 3 | |
| |
| | |
| | |
| | |
| |
Assets | |
| | | |
| | | |
| | | |
| | |
Total assets measured at fair value | |
| | | |
| | | |
| | | |
| | |
| |
| - | | |
| - | | |
| - | | |
| - | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Derivative liability | |
| 551,892 | | |
| - | | |
| - | | |
| 551,892 | |
Total liabilities measured at fair value | |
| 551,892 | | |
| - | | |
| - | | |
| 551,892 | |
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Earnings
Per Share (EPS)
Basic
EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the
period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been
issued and if the additional common shares were dilutive. Diluted EPS assumes that all dilutive convertible shares and stock options
were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted
method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised
at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common
stock at the average market price during the period. Under the if-converted method, convertible outstanding instruments are assumed to
be converted into common stock at the beginning of the period (or at the time of issuance, if later). During the fiscal years ended July
31, 2022 and 2021, the Company generated no revenues and incurred substantial losses, of which the vast majority were due to mostly non-cash
charges for accrued interest, penalties and derivative charges related to convertible debt instruments. Therefore, the effect of any
common stock equivalents on EPS is anti-dilutive during those periods.
Income
Taxes
The
Company utilizes FASB Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that were included in the financial statements or tax returns. Under
this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets
and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable
to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be realized.
ASC
740 provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain.
When tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while
others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.
The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence,
management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals
or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured
as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated
interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits
is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income.
On
July 31, 2022 and 2021, the Company had not taken any significant uncertain tax positions on its tax returns for the period ended July
31, 2022 and prior years or in computing its tax provisions for any years. Prior management considered its tax positions and believed
that all of the positions taken by the Company in its Federal and State tax returns were more likely than not to be sustained upon examination.
The Company is subject to examination by U.S. Federal and State tax authorities from inception to present, generally for three years
after they are filed. New management, which took control of the Company on June 21, 2021, is currently evaluating prior management’s
decision to not file federal tax returns and plans on filing past returns and related 1099 filings for compensation paid to prior management,
employees, consultants, contractors and affiliates. The Company does not believe it has a material tax liability due to its operating
losses in these periods but is preparing tax filings to bring itself current as it completes and moves forward on announced mergers and
acquisitions.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Concentration
of Credit Risk
Cash
is mainly maintained by one highly qualified institution in the United States. At various times, such amounts are more than federally
insured limits. Management does not believe that the Company is subject to any unusual financial risk beyond the normal risk associated
with commercial banking relationships. The Company has not experienced any losses on our deposits of cash.
Risks
and Uncertainties
The
Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with
financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.
Crude
Oil and Natural Gas Properties
The
Company follows the full cost accounting method to account for crude oil and natural gas properties, whereby costs incurred in the acquisition,
exploration and development of crude oil and natural gas reserves are capitalized. Such costs include lease acquisition, geological and
geophysical activities, rentals on non-producing leases, drilling, completing and equipping of crude oil and natural gas wells and administrative
costs directly attributable to those activities and asset retirement costs. Disposition of crude oil and natural gas properties are accounted
for as a reduction of capitalized costs, with no gain or loss recognized unless, such adjustment would significantly alter the relationship
between capital costs and proved reserves of crude oil and natural gas, in which case the gain or loss is recognized to income.
The
capitalized costs of crude oil and natural gas properties, excluding unevaluated and unproved properties, are amortized using the units-of-production
method based on estimated proved recoverable crude oil and natural gas reserves. Amortization of unevaluated and unproved property costs
begins when the properties become proved or their values become impaired. Impairment of unevaluated and unproved prospects is assessed
periodically based on a variety of factors, including management’s intention with regard to future exploration and development
of individually significant properties and the ability of the Company to obtain funds to finance such exploration and development.
Under
full cost accounting rules for each cost center, capitalized costs of evaluated crude oil and natural gas properties, including asset
retirement costs, less accumulated amortization and related deferred income taxes, may not exceed an amount (the “cost ceiling”)
equal to the sum of (a) the present value of future net cash flows from estimated production of proved crude oil and natural gas reserves,
based on current economic and operating conditions, discounted at 10%, plus (b) the cost of properties not being amortized, plus (c)
the lower of cost or estimated fair value of any unproved properties included in the costs being amortized, less (d) any income tax effects
related to differences between the book and tax basis of the properties involved. If capitalized costs exceed this limit, the excess
is charged to earnings.
Given
the volatility of crude oil and natural gas prices, it is reasonably possible that the estimate of discounted future net cash flows from
proved crude oil and natural gas reserves could change in the near term. If crude oil and natural gas prices decline in the future, even
if only for a short period of time, it is possible that additional impairments of crude oil and natural gas properties could occur. In
addition, it is reasonably possible that additional impairments could occur if costs are incurred in excess of any increases in the present
value of future net cash flows from proved crude oil and natural gas reserves, or if properties are sold for proceeds less than the discounted
present value of the related proved crude oil and natural gas reserves.
The
crude oil and gas properties were fully depleted prior to July 31, 2019.
Revenue
Recognition
The
Company recognizes revenues in accordance with Accounting Standards Codification (“ASC”) 606 – Contracts with
Customers. Revenue from sales of products is recognized when the related performance obligation is satisfied. The Company’s performance
obligation is satisfied upon the shipment or delivery of products to customers.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Stock-Based
Compensation
The
Company accounts for all stock-based compensation using a fair value-based method. The fair value of equity-classified awards granted
to employees is estimated on the date of the grant using the Black-Scholes option-pricing model and the related stock-based compensation
expense is recognized over the vesting period during which an employee is required to provide service in exchange for the award.
Intangible
Assets
The
Company’s intangible assets include the Kanab.Club website, which was developed for external use. The Company carries these intangibles
at cost, less accumulated amortization. Amortization is recorded on a straight-line basis over the estimated useful lives, estimated
to be 5 years. Costs that are incurred to produce the finished product after technological feasibility has been established are capitalized
as an intangible asset. The company performs periodic reviews to ensure that unamortized program costs remain recoverable from future
revenue.
Goodwill
and Other Acquired Intangible Assets
The
Company initially records goodwill and other acquired intangible assets at their estimated fair values and reviews these assets periodically
for impairment. Goodwill represents the excess of the purchase price over the fair value of identifiable tangible and intangible assets
acquired and liabilities assumed in a business combination and is tested at least annually for impairment, historically during our fourth
quarter.
Derivative
Liabilities
The
Company assessed the classification of its derivative financial instruments as of July 31, 2022 and 2021, which consist of convertible
instruments and warrants in the Company’s common stock and determined that such derivatives meet the criteria for liability classification
under ASC 815.
ASC
815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and
account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic
characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and
risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is
not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument
is deemed to be conventional, as described.
The
Company uses judgment in determining the fair value of derivative liabilities at the date of issuance and at every balance sheet thereafter
and in determining which valuation method is most appropriate for the instrument, the expected volatility, the implied risk-free interest
rate, as well as the expected dividend rate, if any.
Earnings
Per Share (EPS)
Basic
EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the
period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number
of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been
issued and if the additional common shares were dilutive. Diluted EPS assumes that all dilutive convertible shares and stock options
were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted
method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised
at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common
stock at the average market price during the period. The effect of any common stock equivalents on EPS is anti-dilutive during the years
ended July 31, 2021 and 2022.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Recently
Issued Accounting Pronouncements
In
June 2016, the FASB issued the update Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments, which changes the estimation of credit losses from an “incurred loss” methodology to one that reflects “expected
credit losses” (the Current Expected Credit Loss model, or CECL) which requires consideration of a broader range of reasonable
and supportable information to inform credit loss estimates. Measurement under CECL is based on relevant information about past events,
including historical experience, current conditions, and reasonable and supportable forecasts that affect collectability of reported
amounts. The amendments in the update are effective for fiscal years beginning after December 15, 2021, including interim periods within
those fiscal years. The Company continues to evaluate the impact, if any, the implementation of the CECL model will have on our financial
statements.
In
August 2020, the FASB issued ASU 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 on an Entity’s
Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded
conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative
scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU also simplifies the diluted net income
per share calculation in certain areas. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of
the standard on the consolidated financial statements.
In
May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock
Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses
issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment
is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.
Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the standard on the consolidated financial
statements.
Note
3 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America, which contemplate the continuation of the Company as a
going concern. The Company reported an accumulated deficit of $8,059,476 as of July 31, 2022. The Company also had negative working capital
of $1,016,603 on July 31, 2022 and had operating losses of $285,731 and $44,717 for the years ended July 31, 2022 and 2021, respectively.
To date, these losses and deficiencies have been financed principally through the issuance of common stock, loans from related parties
and loans from third parties.
In
view of the matters described, there is substantial doubt as to the Company’s ability to continue as a going concern without a
significant infusion of capital. We anticipate that we will have to raise additional capital to fund operations over the next 12 months.
To the extent that we are required to raise additional funds to acquire properties, and to cover costs of operations, we intend to do
so through additional offerings of debt or equity securities. There are no commitments or arrangements for other offerings in place,
no guaranties that any such financings would be forthcoming, or as to the terms of any such financings. Any future financing may involve
substantial dilution to existing investors.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Note
4 – ACQUISITION OF KANAB CORP.
On
July 31, 2021, the Company acquired 100% interest in KANAB CORP., a cannabis information services company operating a website
Kanab.Club (https://www.kanab.club/). KANAB CORP.’s business plan includes completing
its social site targeting health and wellness products and services in the cannabis market, generating revenues from advertising and
subscriptions, incorporating social media site into the site, and marketing health and wellness products targeting consumers. KANAB
CORP. is a development stage company that does not offer e-commerce services at this time, nor do we touch the cannabis
plant and, given these matters, do not believe regulatory oversight or rules of law are a risk factor to the business. As
consideration for the purchase, we issued 300,000 shares of Class B preferred stock. As KANAB CORP. was acquired from the
Company’s Chief Executive Officer and a company controlled by the Company’s Chief Executive Office, the Company has
accounted for the acquisition as an acquisition under common control, recorded at cost. The historical value of the development
costs at acquisition for the website design was $11,500. As an acquisition under common control, the results of operations for KANAB
CORP. are included in the consolidated results of operations for the year ended July 31, 2021. Although KANAB CORP. has not
generated any revenues, it has developed a website that is currently active and generating traffic. Subsequent to the acquisition,
additional expenses were incurred in further enhancing the Kanab.Club website.
The
following summarizes the acquired intangible assets:
SCHEDULE OF ACQUIRED INTANGIBLE ASSETS
| |
July 31, | | |
July 31, | |
| |
2022 | | |
2021 | |
Intangible assets | |
$ | 17,800 | | |
$ | 11,500 | |
Accumulated amortization | |
| (4,462 | ) | |
| (914 | ) |
Intangible
assets- net | |
$ | 13,338 | | |
$ | 10,586 | |
Note
5 - INVESTMENTS
On
November 28, 2021 the Company issued 99,686 series B preferred shares of stock for 2,036,188 common shares of GenBio, Inc., representing
19.9% ownership. GenBio, Inc is a biotechnology company that researches natural products that act on new molecular pathways, primarily
to suppress inflammation at critical points in these biochemical pathways. Based on a stock price at closing of .0019 and 99,686,000
common stock equivalents, this values the investment at $189,749. The GenBio transaction is being accounted for as an investment on the
Company’s balance sheet. The Company does not consolidate GenBio’s financial statements.
On
January 1, 2022, the Company issued 99,686 series B preferred shares of HMLA stock for 1,242,000 Member Interests of The Agrarian Group,
LLC (“TAG”) representing 19.9% ownership. Based on a stock price at closing of .0012 and 99,686,000 common stock equivalents,
this values the investment at $119,841. The TAG transaction is being accounted for as an investment on the Company’s balance sheet.
We do not consolidate TAG’s financial statements.
Note
6 – LOANS PAYABLE DUE TO RELATED PARTIES
As
of July 31, 2022 and 2021, the Company’s former chief executive officer had an outstanding balance of $96,400 and $97,000, respectively.
The loan is non-interest bearing and due on demand. The loan has been retired subsequent to July 31, 2022 through the sale of our oil
and gas interests to the note holder.
Note
7 - CONVERTIBLE NOTE PAYABLES
The
Company had convertible note payables with two third parties with stated interest rates ranging between 10% and 12% and 22% default interest
not including penalties. These notes have a conversion feature such that the Company could not ensure it would have adequate authorized
shares to meet all possible conversion demands; accordingly, the conversion option has been treated as a derivative liability in the
accompanying interim financial statements. As of July 31, 2021, the Company had the following third-party convertible notes outstanding:
SCHEDULE OF CONVERTIBLE NOTES OUTSTANDING
Lender | |
Origination | |
Maturity | |
July 31, 2022 | | |
July 31, 2021 | | |
Interest | |
| |
| |
| |
| | |
| | |
| |
KBM Worldwide Inc | |
9/8/14 | |
6/12/15 | |
$ | - | | |
$ | 32,149 | | |
| 22 | % |
KBM Worldwide Inc. | |
12/29/14 | |
10/1/15 | |
| - | | |
| 95,848 | | |
| 22 | % |
GS Capital | |
6/29/21 | |
6/29/22 | |
| 151,500 | | |
| 151,500 | | |
| 24 | % |
| |
| |
| |
| 151,500 | | |
| 279,497 | | |
| | |
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
The
convertible note for GS Capital converts at a price of 60% of the lowest trading price for the twenty (20) days prior to and including
the date of notice of conversion. The number of shares that the loan can be converted into depends on the trading price at the time of
conversion. At July 31, 2022 the note theoretically would convert into 36,594,203 common shares.
The
notes for KBM Worldwide converted at a price of 61% of the average of the lowest five trading price for the last ten (10) trading days
ending on the latest trading date prior to date of conversion to and including the date of notice of conversion. The number of shares
that the loan can be converted into depends on the trading price at the time of conversion. As of July 31, 2022, the KBM notes have been
fully retired.
During
the year ended July 31, 2022, third-party lenders converted $127,997 of principal and interest into 49,466,978 shares of common stock.
During
the year ended July 31, 2021, third-party lenders converted $232,057 of principal and interest into 22,187,901 shares of common stock.
The
variables used for the Black-Scholes model are as listed below:
SCHEDULE OF FAIR VALUE ASSUMPTION OF BLACK-SCHOLES MODEL
|
|
July
31,2022 |
|
July
31, 2021 |
|
|
|
|
|
|
● |
Volatility:
355% |
|
Volatility:
253% - 466% |
|
|
|
|
|
|
● |
Risk
free rate of return: 2.98% |
|
Risk
free rate of return: 1.24%- 1.53% |
|
|
|
|
|
|
● |
Expected
term: 1 year |
|
Expected
term: 1-3 years |
On
June 29, 2021, a third-party loaned the Company $151,500 in a 10% debenture that matures on June 29, 2022. The transaction netted the
Company $125,000.00 after legal fees and due diligence expenses. The third party was also issued 2,500,000 shares of common stock as
a loan incentive. Of the $125,000 proceeds, $93,899 was used to settle $391,196 of third-party debt resulting in debt settlement income
of $297,297.
Note
8 – INCOME TAXES
The
Company did not file its federal tax returns for fiscal years from 2012 through 2022. Management at year-end 2022 believed that it should
not have any material impact on the Company’s financials because the Company did not have any tax liabilities due to net loss incurred
during these years.
Based
on the available information and other factors, management believes it is more likely than not that any potential net deferred tax assets
on July 31, 2022 and 2021 will not be fully realizable.
Note
9 – STOCKHOLDERS ‘EQUITY
Common
Stock
During
the year ended July 31, 2021, the Company increased the authorized shares for common stock of the Company from 100,000,000 to 1,000,000,000.
During
the year ended July 31, 2021, third-party lenders converted $232,057 of principal and interest into 22,187,901 shares of common stock.
During
the year ended July 31, 2022, third-party lenders converted $127,997 of principal and interest into 49,466,978 shares of common stock.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Preferred
Stock
During
the year ended July 31, 2021, the Company increased the authorized shares for preferred stock of the Company from 10,000,000 to 250,000,000.
The preferred shares are in three classes:
| ● | Class
A shares which, 130,000,000 authorized are convertible into 50 shares of common shares for
each share, these shares have voting rights of 1 vote per share. At July 31, 2022 and 2021,
there were 0 shares issued and outstanding. |
| ● | Class
B shares, 20,000,000 authorized, which are convertible into 1,000 shares of common shares
for each share, these shares have voting rights of 1,000 votes per share. At July 31, 2022
and 2021, there were 536,876 and 300,000 shares issued and outstanding which equates into
536,876,000 and 300,000,000 votes, respectively. |
| ● | Class
C shares, 1,000,000 authorized, which are convertible into 1 share of common shares for each
share. These shares have voting rights of 100,000 votes per share. At July 31, 2022 and 2021
there were 1,000,000 shares outstanding which equates into 100,000,000,000 votes. These shares
represent the controlling votes of the Company. These shares are all issued to the Company
CEO. There are 99,000,000 shares of preferred shares authorized that have not been assigned
a class at this time for future requirements. |
On
July 31, 2021 the Company issued 300,000 shares of Class B Preferred for the acquisition of KANAB CORP. at $0.04 per share.
On
July 31, 2021 the Company issued 1,000,000 shares of Class C preferred to the Company’s CEO at $0.0001 per share.
During
the year ended July 31, 2022, the Company issued 22,000 shares of Class B Preferred for services. These shares were valued at the value
of the as-if converted common shares on the date of issuance.
During
the year ended July 31, 2022, the Company issued 15,504 shares of Class B Preferred to the Company’s CEO for the conversion of
accrued compensation of $80,000.
On
November 28, 2021 the Company issued 99,686 series B preferred shares of its stock for 2,036,188 common shares of GenBio, Inc., representing
19.9% ownership. GenBio, Inc is a biotechnology company that researches natural products that act on new molecular pathways, primarily
to suppress inflammation at critical points in these biochemical pathways. Based on a stock price at closing of .0019 and 99,686,000
common stock equivalents, this values the investment at $189,749.
On
January 1, 2022, the Company issued 99,686 series B preferred shares of its’ stock for 1,242,000 Member Interests of The Agrarian
Group, LLC (“TAG”) representing 19.9% ownership. Based on a stock price at closing of .0012 and 99,686,000 common stock equivalents,
this values the investment at $119,841.
Warrants
On
June 29, 2021, the Company issued 15,000,000 warrants as to GS Capital Group as part of the convertible debenture financing to fund operations.
These warrants have a three-year expiration and a strike price of $0.01
On
June 28, 2021, the Company issued 50,000,000 warrants with a five-year expiration and $.0001 exercise price to FOMO Advisors LLC for
future advisory services.
The
Company estimates the fair value of each award on the date of grant using a Black-Scholes option valuation model that uses the assumptions
noted in the table below. Since Black-Scholes option valuation models incorporate ranges of assumptions for inputs, those ranges are
disclosed. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data
to estimate award exercise and employee termination within the valuation model, whereby separate groups of employees that have similar
historical exercise behavior are considered separately for valuation purposes. The expected term of granted awards is derived from the
output of the option valuation model and represents the period of time that granted awards are expected to be outstanding; the range
given below
results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of
the award is based on the U.S. Treasury yield curve in effect at the time of grant.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
These
FOMO Advisors LLC warrants were valued at $450,000 and are being recognized over the life of the agreement. At July 31, 2022, the
Company had recognized $99,616 and $350,384 was unrecognized. The following are the assumptions utilized in valuing the warrants:
SCHEDULE
OF ASSUMPTIONS UTILIZED IN VALUING WARRANTS
Volatility |
|
465% |
Expected
life |
|
5
years |
Risk
free rate |
|
3% |
Dividend
yield |
|
0% |
The
following table sets forth common share purchase warrants outstanding as of July 31, 2022 and 2021:
SCHEDULE
OF PURCHASE WARRANTS OUTSTANDING
| |
| | |
Weighted Average | | |
Intrinsic | |
| |
Warrants | | |
Exercise Price | | |
Value | |
Outstanding, August 1, 2021 | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Warrants granted | |
| 65,000,000 | | |
$ | 0.0024 | | |
| - | |
Warrants exercised | |
| - | | |
| - | | |
| - | |
Warrants forfeited | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Outstanding, July 31, 2021 | |
| 65,000,000 | | |
| 0.0024 | | |
| 430,000 | |
| |
| | | |
| | | |
| | |
Warrants granted | |
| - | | |
| - | | |
| - | |
Warrants exercised | |
| - | | |
| - | | |
| - | |
Warrants forfeited | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | |
Outstanding, July 31, 2022 | |
| 65,000,000 | | |
$ | 0.0024 | | |
$ | 105,000 | |
Note
10 - COVID-19 PANDEMIC UPDATE
In
March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus. The COVID-19
pandemic adversely affected the company’s financial performance in the third and fourth quarters of fiscal year 2020 and could
have an impact throughout fiscal year 2021. In response to the COVID-19 pandemic, government health officials have recommended and mandated
precautions to mitigate the spread of the virus, including shelter-in-place orders, prohibitions on public gatherings and other similar
measures. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company’s
operations, supply chain and demand for its products. As a result, the ultimate impact on the company’s business, financial condition
or operating results cannot be reasonably estimated at this time.
Note
11 – COMMITMENTS AND CONTINGENCIES
On
August 1, 2021, the Board of Directors approved compensation to Vikram Grover CEO of $10,000 per month, broken down as $2,500 cash $7,500
stock if the Company is not SEC current, and $5,000 cash $5,000 stock when brought SEC current. Mr. Grover can elect to take the entire
amount in Series B Preferred shares priced off the 20-day moving average closing bid price of HMLA common stock (1-1000 ratio) upon written
notice at any time.
During
the year ended July 31, 2022, the Company accrued $120,000 in compensation expense under this agreement, of which $80,000 was converted
into 15,504 shares of Class B preferred stock.
Himalaya
Technologies, Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
JULY
31, 2022 AND 2021
Note
12 – SUBSEQUENT EVENTS
On
August 11, 2022, the remaining $40,000 accrued under the employment agreement with the Company CEO was 9,090 shares of Class B preferred
stock.
On
August 15, 2022, the Company entered into a convertible note agreement 1800 Diagonal Lending LLC for $39,250, due on August 15, 2023
and bearing interest at 8%. The convertible note is convertible at 61% multiplied by the lowest trading price for the common stock during
the ten-trading day period ending on the latest complete trading day prior to the conversion date.
On
October 10, 2022, FOMO Corp. extended the maturity on its $50,000 loan to the Company to December 31, 2023 and waived all default provisions
under section 8 (a) through (n). All other provisions of the loan remain in effect.
On
October 28, 2022, the Company signed a binding purchase agreement to acquire the assets of a training software provider based in the
Midwest and founded in 1980 (the “Target”) that creates customized training programs for its clients. The total agreed purchase
price is up to $280,000, including $120,000 cash due on closing by November 30, 2022, subject to mutual extension, promissory notes of
$70,000 due January 1, 2023 and $40,000 due January 1, 2024, and a $50,000 performance based earn-out.
On
November 8, 2022, the Company reached an agreement with its former CEO to sell the Company’s interest in all of its crude
oil and natural gas properties for $112,000, representing the amounts due to the Company’s prior CEO.
On
September 8, 2022, we amended our Articles of Incorporation to increase our authorized common shares from one billion to two billion.