NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
Note
1 - Organization and Description of Business
Next Meats
Holdings, Inc. (we, us, our, or the "Company"), formerly known as Turnkey Solutions, Inc., was incorporated on April 15, 2020
in the State of Nevada.
On April
15, 2020, Paul Moody was appointed Chief Executive Officer, Chief Financial Officer, and Director of the Company, at the time known as
“Turnkey Solutions, Inc.”
On October
1, 2020, the Company, at the time known as “Turnkey Solutions, Inc.” (the “Company” or “Successor”)
announced on Form 8-K plans to participate in a holding company reorganization (“the Reorganization” or “Merger”)
with Intermedia Marketing Solutions, Inc. (“IMMM” or “Predecessor”) and Intermedia Marketing Solutions Merger
Sub, Inc. (“Merger Sub”) collectively (the “Constituent Corporations”) pursuant to NRS 92A.180, NRS A.200, NRS
92A.230 and NRS 92A.250. Immediately prior to the Reorganization, the Company was a direct and wholly owned subsidiary of Intermedia Marketing
Solutions, Inc. and Intermedia Marketing Solutions Merger Sub, Inc. was a direct and wholly owned subsidiary of the Company.
The effective
date and time of the Reorganization was October 28, 2020 at 4PM PST (the “Effective Time”). The entire plan of Merger is on
file with Nevada Secretary of State (“NSOS”) and included in the Articles of Merger pursuant to NRS 92A.200 Nevada Secretary
of State (“NSOS”) and attached to and made a part thereof to the Articles of Merger pursuant to NRS 92A.200 filed with NSOS
on October 16, 2020. At the Effective Time, Predecessor merged with and into its indirect and wholly owned subsidiary, Merger Sub with
Predecessor as the surviving corporation resulting in Predecessor as a wholly owned subsidiary of the Company.
Concurrently
and after the Effective Time, the Company cancelled all of its stock held in Predecessor resulting in the Company as a stand-alone
and separate entity with no subsidiaries, no assets and negligible liabilities. The assets and liabilities of Predecessor, if any,
remain with Predecessor. The Company abandoned the business plan of its Predecessor and had resumed its former business plan of a
blank check company after completion of the Merger.
Full details
pertaining to the Reorganization can be viewed in the Company’s Form 8-K filed on October 29, 2020.
On
November 18, 2020 our former controlling shareholder, Flint Consulting Services, LLC sold 35,000,000 shares of common stock to Next Meats
Co., Ltd a Japan Company. Collectively, the majority shareholders of Next Meats Co., Ltd are comprised of Ryo Shirai, Hideyuki Sasaki,
and Koichi Ishizuka. The Purchase Price was paid with personal funds of the majority shareholders of NMC.
On
the same day, November 18, 2020, Paul Moody resigned from his position of Chief Executive Officer, Chief Financial Officer, President,
Secretary, Treasurer and Director.
Simultaneous
to Paul Moody’s resignations Ryo Shirai was appointed as our Chief Executive Officer and Director, Hideyuki Sasaki as our Chief
Operating Officer and Director, and Koichi Ishizuka as our Chief Financial Officer.
On January
8, 2021 our majority shareholder, Next Meats Co., Ltd., a Japan Company, along with our Board of Directors, comprised of Mr. Koichi Ishizuka,
Mr. Ryo Shirai, and Mr. Hideyuki Sasaki, took action to ratify, affirm, and approve a name change of the Company from Turnkey Solutions,
Inc., to Next Meats Holdings, Inc. The Company filed a Certificate of Amendment with the Nevada Secretary of State (“NVSOS”)
to enact the name change with an effective date of January 19, 2021. This was previously disclosed in the Form 8-K we filed on January
25, 2021.
Also on
January 8, 2021, our majority shareholder Next Meats Co., Ltd., along with our Board of Directors took action to ratify, affirm, and approve
a change of the Company’s ticker symbol from TKSI to NXMH.
Pursuant
to the above, the Company carried out a FINRA corporate action. As a result of the aforementioned actions the Company’s CUSIP number
was changed from 90043H102 to 65345L 100. The change in CUSIP, name change, and symbol change were posted on the FINRA daily list on January
25, 2021 with a market effective date of January 26, 2021.
On January 28, 2021, our majority
shareholder, Next Meats Co., Ltd., along with our Board of Directors took action to ratify, affirm, and approve the issuance of 452,352,298
shares of restricted common stock to Next Meats Co., Ltd. The shares were issued for services rendered to the Company. Following this
issuance we had 500,000,000 shares of common stock issued and outstanding. On June 9, 2021 the Company entered into a “Share Cancellation
and Exchange Agreement” (referred to herein as “the Agreement”) with Next Meats Co., Ltd.
Next Meats Co., Ltd. is a Japanese
Company that operates in the “alternative meat” industry. It currently offers, and plans to continue to offer, amongst other
things, artificial chicken and beef products made from meat substitutes. The product offerings from Next Meats Co., Ltd. are currently
sold to various food distributors, supermarkets, and restaurant groups.
Next Meats Co., Ltd. is referred
to herein as “NMCO”, and Next Meats Holdings, Inc., is referred to herein as “the Company”, and or “NXMH.”
The current shareholders of Next Meats Co., Ltd. are referred to herein as “NMCO shareholders”.
Pursuant to the agreement, at the
effective time of the agreement, NXMH acquired NMCO as a wholly owned subsidiary and commensurate with this action, there was a conversion of
the NXMH Percentile Share Interest in exchange for the Company’s 100% percentile share interest in NMCO. Immediately prior to the
Effective Time, (defined below) each NMCO shareholder canceled and exchanged their percentile share interest in NMCO for an equivalent
percentile share interest in NXMH pursuant to each NMCO shareholder’s pro rata percentage.
On or about
September 17, 2021, we incorporated NextMeats France, a French entity, which will act as a wholly owned subsidiary of the Company. We
intend to utilize NextMeats France to, amongst other things, operate as a reseller and distributor, in France and throughout Europe, of
food products currently offered by Next Meats Co., Ltd. There are currently no agreements in place between Next Meats Co., Ltd. and NextMeats
France, however each entity is currently under common control and shares the same management team.
On December 28, 2021 we filed an
amendment to our Articles of Incorporation with the Nevada Secretary of State, resulting in an increase to our authorized shares of Common
Stock from 500,000,000 to 1,000,000,000.
On December
28, 2021, Ryo Shirai resigned as our Chief Executive Officer and was appointed Chairman of the Board of Directors It should be noted he
was previously a Director, but now also serves as Chairman of the Board of Directors. Previously, there was no designated Chairman of
the Board of Directors.
The resignation
of Mr. Ryo Shirai, as Chief Executive Officer, was not the result of any disagreement with the Company on any matter relating to
its operations, policies, or practices.
On December
28, 2021, Mr. Koichi Ishizuka was appointed Chief Executive Officer of the Company.
There is no
arrangement or understanding among the newly appointed officer, Koichi Ishizuka, or any other person, pursuant to which they were appointed
as an officer of the Company.
In January of
2022, we engaged counsel to incorporate Next Meats USA, Inc. on our behalf. Next Meats USA, Inc. (“NXMH USA”) was incorporated
on January 18, 2022 and is a California Corporation.
On February
7, 2022, the incorporator of Next Meats USA, Inc. was discharged of any further duties. Simultaneously, Koichi Ishizuka and Koki Terui
were appointed as Directors, and Koki Terui was appointed President, Chief Executive Officer, Secretary, Treasurer and Chief Financial
Officer.
On February
7, 2022, NXMH USA issued 100 shares of its common stock to Next Meats Holdings, Inc., a Nevada Corporation, in exchange for $10,000. As
a result of this action, Next Meats Holdings, Inc. became the sole shareholder of NXMH USA. NXMH USA is now a wholly owned subsidiary
of Next Meats Holdings, Inc.
Next Meats
Holdings, Inc., intends to utilize NXMH USA as a means to expand its business operations into the United States. Currently, the Company
offers a wide variety of alternative meat products and it is the Company’s plan to make these products more readily available to
those in the United States via NXMH USA.
On or about February 8, 2022, we incorporated Next
Meats HK Co. Limited (“Next Meats HK”), a Hong Kong Company. Next Meats HK is now a wholly owned subsidiary of the Company.
The Registry Number associated with this entity in Hong Kong is 3126390.
On or about March 2, 2022, we incorporated Next Meats
(S) Pte. Ltd. (“Next Meats Singapore”), a Singapore Company. Next Meats Singapore. is now a wholly owned subsidiary of the
Company. The Company Registration Number in Singapore is 202207295H.
These financial
statements consolidate those of NXMH, NMCO, NextMeats France, NXMH USA, Next Meats HK, and Next Meats Singapore.
On July 12, 2022, Mr. Ryo Shirai resigned as the
Company’s Chairman of the Board of Directors and as a Director. Mr. Shirai's resignations are a result of personal health issues.
The resignations of Mr. Ryo Shirai were not the result of any disagreement with the Company on any matter relating to its operations,
policies, or practices.
The Company’s Board of Directors is now only
comprised of two members.
The Company
has elected April 30th as its year end.
Note
2 - Summary of Significant Accounting Policies
Basis
of Presentation
This summary
of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies
conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation
of the financial statements.
The
accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”)
and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent
Annual Financial Statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for
a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein.
The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes
to the financial statements, which would substantially duplicate the disclosures contained in the audited financial statements for
the most recent fiscal period, as reported in the 2021 Annual Report, have been omitted.
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management,
all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from
those estimates.
Cash
and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Cash and cash equivalents at July 31, 2022 and April 30, 2022 were $83,866 and $620,297, respectively.
Income
Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. 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 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 the enactment
occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize
tax assets through future operations. No deferred tax assets or liabilities were recognized at July 31, 2022 and April 30, 2022.
Basic
Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings
(loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting
period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue
common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of July 31, 2022 and, thus, anti-dilution issues are not applicable.
Fair
Value of Financial Instruments
The
Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate
their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair
Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer
a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market
participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s
own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable
inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the
fair value hierarchy are described below:
- Level
1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level
2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly,
including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities
in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates);
and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
- Level
3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair value
estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31,
2022. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term
nature of these instruments. These financial instruments include accrued expenses.
Related
Parties
The
Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related
party transactions.
Share-Based
Compensation
ASC 718,
“Compensation – Stock Compensation”, prescribes accounting and reporting standards for all share-based payment
transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares,
options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees,
including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values.
That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as
the requisite service period (usually the vesting period).
The Company
accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity
– Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based
on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued.
The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance
completion date.
The
Company had no stock-based compensation plans as of July 31, 2022.
The Company’s
stock-based compensation for the periods ended July 31, 2022 and July 31, 2021 was $0 for both periods.
Recently
Issued Accounting Pronouncements
In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 is amended by ASU 2018-01, ASU2018-10, ASU
2018-11, ASU 2018-20 and ASU 2019-01, which FASB issued in January 2018, July 2018, July 2018, December 2018 and March 2019, respectively
(collectively, the amended ASU 2016-02). The amended ASU 2016-02 requires lessees to recognize on the balance sheet a right-of-use asset,
representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12
months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly
changed from current GAAP. The amended ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP)
and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially
similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amended
ASU 2016-02 also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows
arising from leases. A modified retrospective transition approach is permitted to be used when an entity adopts the amended ASU 2016-02,
which includes a number of optional practical expedients that entities may elect to apply.
We
have no assets or leases that we believe will be impacted in the foreseeable future by the newly adopted accounting standard(s)
mentioned above.
The Company
has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe
that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results
of operations.
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Note
3 - Going Concern
The Company’s
financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates
the realization of assets and liquidation of liabilities in the normal course of business.
The Company
demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following
the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working
capital deficiency, and other adverse key financial ratios.
The
Company has not recorded enough revenue to cover its operating costs. We expect our wholly-owned subsidiary, NextMeats France, and
our other subsidiaries, to increase activity in the next fiscal quarter which we expect will produce revenue to cover at least some
operating costs. We also expect our wholly-owned subsidiary, Next Meats Japan Co. Ltd to improve its operating income in the next
fiscal quarter. However, management plans to fund some operating expenses with related party contributions to capital until there is
sufficient revenue to cover all operating expenses. There is no assurance that management's plan will be successful. The financial
statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Note
4 - Income Taxes
The Company has not recognized an
income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future
periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising
from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits
and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.
As of July 31, 2022, the Company has incurred a net loss of approximately $7,822,882
which resulted in a net operating loss for income tax purposes. The loss results in a deferred tax asset of approximately
$1,642,805 at the effective statutory
rate of 21%. The deferred tax asset has been offset by an equal valuation allowance. Given our inception on April 15, 2020, and our fiscal
year end of April 30, 2022, we have completed three taxable fiscal years.
Note
5 - Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising
from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of July 31, 2022.
Note
6 - Stock
On
July 20, 2021, Catapult Solutions, Inc., a Nevada Corporation (“Catapult”), entered into a Share Purchase Agreement (the “Agreement”)
by and among CRS Consulting, LLC, a Wyoming Limited Liability Company (“CRS”), related party White Knight Co., Ltd., (“WKC”),
and the Company, pursuant to which, on July 23, 2021, (“Closing Date”), for the purchase price of $375,000, CRS sold 10,000
shares of Catapult’s Series Z Preferred Stock, representing approximately 81.20% voting control of the Company; 5,000 shares of
Series Z Preferred Stock were transferred to WKC and 5,000 shares of Series Z Preferred Stock were transferred to the Company. WKC paid
consideration of $187,500 and related party, Next Meats Co., Ltd, paid the remaining $187,500 on behalf of the Company. The consummation
of the transactions contemplated by the Agreement resulted in a change in control of Catapult, with WKC and the Company becoming Catapult’s
largest controlling stockholders, having approximately 80.20% combined voting control over Catapult.
Pursuant
to the Agreement, on July 23, 2021, the former Directors of Catapult resigned their positions and, on that same date, our CFO and Director,
Mr. Koichi Ishizuka, was appointed as Catapult’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer,
and Director.
On or about July 1, 2022, the Company sold 5,000 shares of Series Z Preferred
Stock of Dr. Foods, Inc. FKA Catapult Solutions, Inc., a Nevada Company (“DRFS”), to WKC at a price of approximately $147,624
USD (20,000,000 Japanese Yen) (“The Share Purchase Agreement”). The purchase of shares was made for investment purposes. The
consummation of the transaction contemplated by the Share Purchase Agreement resulted in the Company no longer having an equity position
in DRFS and with WKC becoming the largest controlling shareholder of DRFS. Following the aforementioned transaction, WKC owns approximately
79.22% voting control of DRFS.
NXMH intends to use the proceeds from the aforementioned sale for working
capital.
The Board of Directors of NXMH, WKC, and DRFS unanimously approved the
above transaction.
Note
7 - Accrued Expenses
Accrued expenses and other payables
totaled $645,169 and $558,360
as of July 31, 2022 and April 30, 2022, respectively, and consisted primarily of accrued professional fees, non-trade accounts payable to NMCO and consumption
tax receipts held by NMCO.
Note
8 - Shareholders’ Equity
Preferred
Stock
The authorized preferred stock of the
Company consists of 20,000,000 shares with a par value of $0.001. There were no shares of preferred stock issued and outstanding as
of July 31, 2022 and April 30, 2022.
Common
Stock
The authorized
common stock of the Company consists of 1,000,000,000 shares with a par value of $0.001. There were 502,255,600 shares of common stock
issued and outstanding as of July 31, 2022 and April 30, 2022.
On or about December 29, 2021, we
sold 270,929 shares of restricted Common Stock to Demic Co., Ltd.., a Japanese Company, at a price of $2.00 per share of Common Stock.
The total subscription amount paid by Demic Co., Ltd. was approximately $541,858. Demic Co., Ltd is not considered a related party to
the Company.
On or about December 29, 2021, we
sold 882,257 shares of restricted Common Stock to Kiyoshi Kobayashi, a Japanese Citizen, at a price of $2.00 per share of Common Stock.
The total subscription amount paid by Kiyoshi Kobayashi was approximately $1,764,513. Kiyoshi Kobayashi is not considered a related party
to the Company.
On or about February 4, 2022, we
sold 208,855 shares of restricted Common Stock to Daisuke Kuroika, a Japanese Citizen, at a price of $2.10 per share of Common Stock.
The total subscription amount paid by Daisuke Kuroika was approximately $438,596. Daisuke Kuroika is not considered a related party to
the Company.
On or about March 7, 2022, we sold
668,780 shares of restricted Common Stock to Yakuodo Co., Ltd., a Japanese Company, at a price of $1.30 per share of Common Stock. The
total subscription amount paid by Yakuodo Co., Ltd. was approximately $869,414. Yakuodo Co., Ltd. is a Japan-based holding company mainly
engaged in the retail of pharmaceuticals, cosmetics, food products, miscellaneous goods and other life related products. The Company operates
through the healthcare business, beauty care business, home care business and convenience care business.
On or about March 29, 2022, we sold 133,779 shares of restricted Common
Stock to Hidemi Arasaki, a Japanese Citizen, at a price of $1.30 per share of Common Stock. The total subscription amount paid by Hidemi
Arasaki was approximately $173,913. Hidemi Arasaki is not a related party to the Company.
On or about April 5, 2022, we sold 91,000 shares of restricted Common Stock
to Interwoos Co., Ltd., a Japanese Company, at a price of $0.90 per share of Common Stock. The purchase of Common Stock by Interwoos Co.,
Ltd. was authorized by its Chief Executive Officer Mr. Nobutaka Yoshii. The total subscription amount paid by Interwoos Co., Ltd. was
approximately $81,900. Interwoos Co., Ltd. is not a related party to the Company.
The proceeds from the above sales
of shares are to be used by the Company for working capital.
Note
9 - Related-Party Transactions
Office
Space
We utilize
office space and equipment of our management at no cost.
Note
10 - Subsequent Events
None.
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