Filed Pursuant to Rule 253(g)(2)
File
No. 024-11594
NUTRANOMICS, INC.
SUPPLEMENT NO. 3 DATED JULY 7, 2022
TO
THE OFFERING CIRCULAR DATED SEPTEMBER 28, 2021
This
document supplements, and should be read in conjunction with, the
Offering Circular of NutraNomics, Inc., a Wyoming corporation (the
"Company", "we", "our", or "us") dated September 28, 2021, and
filed by us with the Securities and Exchange Commission (the
"Commission") on said date. Unless otherwise defined in this
supplement, capitalized terms used in this supplement shall have
the same meanings as set forth in the Offering Circular.
The
purpose of this supplement is to amend the pricing of the offering
to $0.00026 per share. All other aspects of the Offering as
qualified by the SEC remain unchanged.
SEC
Disclaimer
The Offering
Circular has been filed with the Commission. The Commission has
qualified that Offering Circular, which only means that the Company
may make sales of the securities described by that Offering
Circular. It does not mean that the Commission has approved, passed
upon the merits, or passed upon the accuracy or completeness of the
information in the Offering Circular. You should read the Offering
Circular and all corresponding supplements and/or amendments before
making any investment.
SIGNATURES
This Offering
Circular Supplement is submitted pursuant to Rule 253(g)(2) on
behalf of the Company by the undersigned, thereunto duly
authorized, on July 7, 2022.
NutraNomics, Inc.
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By:
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/s/ Jonathan
Bishop
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Jonathan Bishop
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Principal Executive Officer and
Director
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1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 1-A POS
REGULATION A OFFERING CIRCULAR UNDER THE SECURITIES ACT OF
1933
Nutranomics, Inc.
(Exact
name of issuer as specified in its charter)
Wyoming
(State of other jurisdiction of incorporation or organization)
605
Portland Ave. Suite 154
Gladstone, Oregon 97027
866-561-6679
(Address, including zip code, and telephone number,
including area code of issuer's principal executive office)
Jeff Turner
897 W Baxter Dr.
South Jordan, UT 84095
801-810-4465
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
2020
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98-0603540
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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This
Preliminary Offering Circular shall only be qualified upon order of
the Commission, unless a subsequent amendment is filed indicating
the intention to become qualified by operation of the terms of
Regulation A.
2
PART II - OFFERING CIRCULAR - FORM 1-A POS: TIER 1
Dated: July 7, 2022
PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933
Nutranomics, Inc.
605
Portland Ave. Suite 154
Gladstone, Oregon 97027
866-561-6679
50,000,000,000 Shares of Common Stock at $0.00026 per Share
Minimum Investment: $250 (961,538 Shares)
Maximum Offering: $13,000,000
See
The Offering - Page 6 and Securities Being Offered - Page 26 For
Further Details. None of the Securities Offered Are Being Sold By
Present Security Holders. This Offering Will Commence Upon
Qualification of this Offering by the Securities and Exchange
Commission and Will Terminate 365 days from the date of
qualification by the Securities And Exchange Commission, Unless
Extended or Terminated Earlier By The Issuer
AN
OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING
CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE
OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS
PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION
OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION
UNDER THE LAWS OF ANY SUCH STATE.
PLEASE REVIEW ALL RISK FACTORS ON PAGES 7 THROUGH PAGE 15 BEFORE
MAKING AN INVESTMENT IN THIS COMPANY. AN INVESTMENT IN THIS COMPANY
SHOULD ONLY BE MADE IF YOU ARE CAPABLE OF EVALUATING THE RISKS AND
MERITS OF THIS INVESTMENT AND IF YOU HAVE SUFFICIENT RESOURCES TO
BEAR THE ENTIRE LOSS OF YOUR INVESTMENT, SHOULD THAT OCCUR.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT
PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES
OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE
ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING
LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION
FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS
NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED
HEREUNDER ARE EXEMPT FROM REGISTRATION.
Because these
securities are being offered on a "best efforts" basis, the
following disclosures are hereby made:
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Price to Public
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Commissions (1)
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Proceeds to
Company (2)
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Proceeds to
Other Persons (3)
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Per Share
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$0.00026
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$0
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$0.00026
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None
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Minimum
Investment
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$250.00
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$0
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$250.00
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None
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Maximum Offering
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$13,000,000
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$0
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$13,000,000
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None
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(1) The Company shall
pay no commissions to underwriters for the sale of securities under
this Offering.
(2)
Does not reflect payment of expenses of this Offering, which are
estimated to not exceed $25,000.00 and which include, among other
things, legal fees, accounting costs, reproduction expenses, due
diligence, marketing, consulting, administrative services other
costs of blue sky compliance, and actual out-of-pocket expenses
incurred by the Company selling the Shares, but which do not
3
include fees to be paid to the escrow
agent and technology providers. This amount represents the proceeds
of the offering to the Company, which will be used as set out in
"USE OF PROCEEDS TO ISSUER."
(3)
There are no finder's fees or other fees being paid to third
parties from the proceeds. See 'PLAN OF DISTRIBUTION.'
This
Offering (the "Offering") consists of Common Stock (the "Shares" or
individually, each a "Share") that is being offered on a "best
efforts" basis, which means that there is no guarantee that any
minimum amount will be sold. The Shares are being offered and sold
by Nutranomics, Inc., a Wyoming Corporation (the "Company"). There
are 50,000,000,000 Shares being offered at a price of $0.00026 per
Share with a minimum purchase of $250.00 per investor. The Shares
are being offered on a best efforts basis to an unlimited number of
accredited investors and an unlimited number of non-accredited
investors only by the Company. The maximum aggregate amount of the
Shares offered is 50,000,000,000 of Common Stock ($13,000,000).
There is no minimum number of Shares that needs to be sold in order
for funds to be released to the Company and for this Offering to
close.
The
Shares are being offered pursuant to Regulation A of Section 3(b)
of the Securities Act of 1933, as amended, for Tier 1 offerings.
The Shares will only be issued to purchasers who satisfy the
requirements set forth in Regulation A. The offering is expected to
expire on the first of: (i) all of the Shares offered are sold; or
(ii) the close of business 365 days from the date of qualification
by the Commission, unless sooner terminated or extended by the
Company's CEO. Pending each closing, payments for the Shares will
be paid directly to the company. Funds will be immediately
transferred to the Company where they will be available for use in
the operations of the Company's business in a manner consistent
with the "USE OF PROCEEDS TO ISSUER" in this Offering Circular.
THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS CONCERNING THE
COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR, AND
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS
OFFERING CIRCULAR, OR OF ANY PRIOR OR SUBSEQUENT COMMUNICATIONS
FROM THE COMPANY OR ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES, AS
INVESTMENT, LEGAL, FINANCIAL OR TAX ADVICE.
NASAA UNIFORM
LEGEND
FOR RESIDENTS OF ALL STATES: THE PRESENCE OF A LEGEND FOR ANY
GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT
STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE
MADE IN A PARTICULAR STATE. IF YOU ARE UNCERTAIN AS TO WHETHER OR
NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU
ARE HEREBY ADVISED TO CONTACT THE COMPANY. THE SECURITIES DESCRIBED
IN THIS OFFERING CIRCULAR HAVE NOT BEEN REGISTERED UNDER ANY STATE
SECURITIES LAWS (COMMONLY CALLED 'BLUE SKY' LAWS).
IN
MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED
THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
4
NOTICE TO FOREIGN
INVESTORS
IF THE PURCHASER LIVES OUTSIDE THE UNITED STATES, IT IS THE
PURCHASER'S RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY
RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES IN
CONNECTION WITH ANY PURCHASE OF THE SECURITIES, INCLUDING OBTAINING
REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER
REQUIRED LEGAL OR OTHER FORMALITIES. THE COMPANY RESERVES THE RIGHT
TO DENY THE PURCHASE OF THE SECURITIES BY ANY FOREIGN
PURCHASER.
Forward Looking
Statement Disclosure
This Form 1-A POS, Offering Circular, and any documents
incorporated by reference herein or therein contain forward-looking
statements and are subject to risks and uncertainties. All
statements other than statements of historical fact or relating to
present facts or current conditions included in this Form 1-A POS,
Offering Circular, and any documents incorporated by reference are
forward-looking statements. Forward-looking statements give the
Company's current reasonable expectations and projections relating
to its financial condition, results of operations, plans,
objectives, future performance, and business. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as 'anticipate,' 'estimate,' 'expect,'
'project,' 'plan,' 'intend,' 'believe,' 'may,' 'should,' 'can
have,' 'likely' and other words and terms of similar meaning in
connection with any discussion of the timing or nature of future
operating or financial performance or other events. The
forward-looking statements contained in this Form 1-A POS, Offering
Circular, and any documents incorporated by reference herein or
therein are based on reasonable assumptions the Company has made in
light of its industry experience, perceptions of historical trends,
current conditions, expected future developments and other factors
it believes are appropriate under the circumstances. As you read
and consider this Form 1-A POS, Offering Circular, and any
documents incorporated by reference, you should understand that
these statements are not guarantees of performance or results. They
involve risks, uncertainties (many of which are beyond the
Company's control) and assumptions. Although the Company believes
that these forward-looking statements are based on reasonable
assumptions, you should be aware that many factors could affect its
actual operating and financial performance and cause its
performance to differ materially from the performance anticipated
in the forward-looking statements. Should one or more of these
risks or uncertainties materialize, or should any of these
assumptions prove incorrect or change, the Company's actual
operating and financial performance may vary in material respects
from the performance projected in these forward- looking
statements. Any forward-looking statement made by the Company in
this Form 1-A POS, Offering Circular or any documents incorporated
by reference herein speaks only as of the date of this Form 1-A
POS, Offering Circular or any documents incorporated by reference
herein. Factors or events that could cause our actual operating and
financial performance to differ may emerge from time to time, and
it is not possible for the Company to predict all of them. The
Company undertakes no obligation to update any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as may be required by
law.
About This
Form 1-A POS and Offering Circular
In
making an investment decision, you should rely only on the
information contained in this Form 1-A POS and Offering Circular.
The Company has not authorized anyone to provide you with
information different from that contained in this Form 1-A POS and
Offering Circular. We are offering to sell, and seeking offers to
buy the Shares only in jurisdictions where offers and sales are
permitted. You should assume that the information contained in this
Form 1-A POS and Offering Circular is accurate only as of the date
of this Form 1-A POS and Offering Circular, regardless of the time
of delivery of this Form 1-A POS and Offering Circular. Our
business, financial condition, results of operations, and prospects
may have changed since that date. Statements contained herein as to
the content of any agreements or other documents are summaries and,
therefore, are necessarily selective and incomplete and are
qualified in their entirety by the actual agreements or other
documents.
5
TABLE OF CONTENTS
6
OFFERING
SUMMARY, PERKS AND RISK FACTORS
OFFERING
SUMMARY
The following summary is qualified in its entirety by the more
detailed information appearing elsewhere in this Offering Circular
and/or incorporated by reference in this Offering Circular. For
full offering details, please (1) thoroughly review this Form 1-A
POS filed with the Securities and Exchange Commission (2)
thoroughly review this Offering Circular and (3) thoroughly review
any attached documents to or documents referenced in, this Form 1-A
POS and Offering Circular.
Type of Stock
Offering:
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Common Stock
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Price Per Share:
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$0.00026
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Minimum
Investment:
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$250.00 per investor
(961,538 Shares of Common Stock at Maximum Offering Price)
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Maximum Offering:
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$13,000,000. The
Company will not accept investments greater than the Maximum
Offering amount.
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Maximum Shares
Offered:
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50,000,000,000 Shares
of Common Stock
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Use of Proceeds:
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See the description
in section entitled "USE OF PROCEEDS TO ISSUER" on page 18
herein.
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Voting Rights:
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The Shares have full
voting rights.
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Length of
Offering:
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Shares will be
offered on a continuous basis until either (1) the maximum number
of Shares or sold; (2) 365 days from the date of qualification by
the Commission, (3) the Company in its sole discretion withdraws
this Offering.
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The Offering
Common Stock
Outstanding prior to this Offering (1)
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5,851,316,410
Shares
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Common Stock in this
Offering
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50,000,000,000
Shares
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Stock to be
outstanding after the offering (2)
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55,851,316,410
Shares
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(1)The
Company has also authorized 25,000,000 shares of Preferred Stock,
of which 1,000,000 are issued and outstanding. No Preferred
Stock is being sold in this offering.
(2)The
total number of Shares of Common Stock assumes that the maximum
number of Shares are sold in this Offering. The Company may not be
able to sell the Maximum Offering Amount. The Company will conduct
one or more closings on a rolling basis as funds are received from
investors. The net proceeds of the Offering will be the gross
proceeds of the Shares sold minus the expenses of the offering. We
are not listed on any trading market or stock exchange, and our
ability to list our stock in the future is uncertain. Investors
should not assume that the Offered Shares will be listed. A
consistent public trading market for the shares may not
develop.
7
Investment
Analysis
There
is no assurance Nutranomics, Inc. will be profitable, or that
management's opinion of the Company's future prospects will not be
outweighed by the unanticipated losses, adverse regulatory
developments and other risks. Investors should carefully consider
the various risk factors below before investing in the Shares.
RISK
FACTORS
The
purchase of the Company's Common Stock involves substantial risks.
You should carefully consider the following risk factors in
addition to any other risks associated with this investment. The
Shares offered by the Company constitute a highly speculative
investment and you should be in an economic position to lose your
entire investment. The risks listed do not necessarily comprise all
those associated with an investment in the Shares and are not set
out in any particular order of priority. Additional risks and
uncertainties may also have an adverse effect on the Company's
business and your investment in the Shares. An investment in the
Company may not be suitable for all recipients of this Offering
Circular. You are advised to consult an independent professional
adviser or attorney who specializes in investments of this kind
before making any decision to invest. You should consider carefully
whether an investment in the Company is suitable in the light of
your personal circumstances and the financial resources available
to you.
The
discussions and information in this Offering Circular may contain
both historical and forward- looking statements. To the extent that
the Offering Circular contains forward-looking statements regarding
the financial condition, operating results, business prospects, or
any other aspect of the Company's business, please be advised that
the Company's actual financial condition, operating results, and
business performance may differ materially from that projected or
estimated by the Company in forward-looking statements. The Company
has attempted to identify, in context, certain of the factors it
currently believes may cause actual future experience and results
may differ from the Company's current expectations.
Before investing, you should carefully read and carefully consider
the following risk factors:
Risks Relating to
the Company and Its Business
The Company has a limited operating history.
The
Company has a limited operating history. There can be no assurance
that the Company's proposed plan of business can be realized in the
manner contemplated and, if it cannot be, shareholders may lose all
or a substantial part of their investment. There is no guarantee
that it will ever realize any significant operating revenues or
that its operations will ever be profitable.
The Company is dependent upon its management, key personnel,
and consultants to execute its business plan.
The
Company's success is heavily dependent upon the continued active
participation of the Company's current executive officer. Loss of
this individual could have a material adverse effect upon the
Company's business, financial condition, or results of operations.
Further, the Company's success and achievement of the Company's
growth plans depend on the Company's ability to recruit, hire,
train and retain other highly qualified technical and managerial
personnel. Competition for qualified employees among companies in
the fintech sector, and the loss of any of such persons, or an
inability to attract, retain and motivate any additional highly
skilled employees required for the expansion of the Company's
activities, could have a materially adverse effect on its ability
to operate. The inability to attract and retain the necessary
personnel, consultants and advisors could have a material adverse
effect on the Company's business, financial condition, or results
of operations.
Although dependent upon certain key personnel, the Company
does not have any key man life insurance policies on any such
people.
The
Company is dependent upon management in order to conduct its
operations and execute its business plan. However, the Company has
not purchased any insurance policies with respect to those
individuals in the event of their death or disability. Therefore,
should any of these key personnel, management, or founders die or
become disabled,
8
the Company will not receive any
compensation that would assist with such person's absence. The loss
of such person could negatively affect the Company and its
operations.
The Company is subject to income taxes as well as non-income
based taxes such as payroll, sales, use, value-added, net worth,
property, and goods and services taxes.
Significant judgment is required in determining our provision for
income taxes and other tax liabilities. In the ordinary course of
our business, there are many transactions and calculations where
the ultimate tax determination is uncertain. Although the Company
believes that our tax estimates will be reasonable: (i) there is no
assurance that the final determination of tax audits or tax
disputes will not be different from what is reflected in our income
tax provisions, expense amounts for non-income based taxes and
accruals and (ii) any material differences could have an adverse
effect on our financial position and results of operations in the
period or periods for which a determination is made.
The Company is not subject to Sarbanes-Oxley regulations and
lacks the financial controls and safeguards required of public
companies.
The
Company does not have the internal infrastructure necessary, and is
not required, to complete an attestation about our financial
controls that would be required under Section 404 of the
Sarbanes-Oxley Act of 2002. There can be no assurances that there
are no significant deficiencies or material weaknesses in the
quality of our financial controls. The Company expects to incur
additional expenses and diversion of management's time if and when
it becomes necessary to perform the system and process evaluation,
testing and remediation required to comply with the management
certification and auditor attestation requirements.
The Company has engaged in certain transaction with related
persons.
Please see the section of this Offering Circular entitled "Interest
of Management and Others in Certain Related-Party Transactions and
Agreements"
Changes in employment laws or regulation could harm the
Company’s performance.
Various federal and state labor laws govern the Company's
relationship with our employees and affect operating costs. These
laws may include minimum wage requirements, overtime pay,
healthcare reform and the implementation of various federal and
state healthcare laws, unemployment tax rates, workers'
compensation rates, citizenship requirements, union membership and
sales taxes. A number of factors could adversely affect our
operating results, including additional government-imposed
increases in minimum wages, overtime pay, paid leaves of absence
and mandated health benefits, mandated training for employees,
changing regulations from the National Labor Relations Board and
increased employee litigation including claims relating to the Fair
Labor Standards Act.
The Company's bank accounts will not be fully
insured.
The
Company's regular bank accounts have federal insurance that is
limited to a certain amount of coverage. It is anticipated that the
account balances in each account may exceed those limits at times.
In the event that any of the Company's banks should fail, the
Company may not be able to recover all amounts deposited in these
bank accounts.
The Company's business plan is speculative.
The
Company's present business and planned business are speculative and
subject to numerous risks and uncertainties. There is no assurance
that the Company will generate significant revenues or profits.
The Company will likely incur debt.
The
Company will incur debt and expects to incur future debt in order
to fund operations. Complying with obligations under such
indebtedness may have a material adverse effect on the Company and
on your investment.
9
The Company's expenses could increase without a corresponding
increase in revenues.
The
Company's operating and other expenses could increase without a
corresponding increase in revenues, which could have a material
adverse effect on the Company's financial results and on your
investment. Factors which could increase operating and other
expenses include, but are not limited to (1) increases in the rate
of inflation, (2) increases in taxes and other statutory charges,
(3) changes in laws, regulations, or government policies which
increase the costs of compliance with such laws, regulations, or
policies, (4) significant increases in insurance premiums, and (5)
increases in borrowing costs.
The Company may not be able to maintain or enhance its
product image.
It is
important that the Company maintains and enhances the image of its
existing and new products. The image and reputation of the
Company's products may be impacted by litigation, negative product
review, the nature of the products, the industry in which the
Company operates, and various other reasons. Such concerns, even
when unsubstantiated, could be harmful to the Company's image and
the reputation of its products. From time to time, the Company may
receive complaints from customers regarding products purchased from
the Company. The Company may receive correspondence from customers
requesting reimbursement. Certain dissatisfied customers may
threaten legal action against the Company if no reimbursement is
made. Any resulting litigation could be costly for the Company,
divert management attention, and could result in increased costs of
doing business, or otherwise have a material adverse effect on the
Company's business, results of operations, and financial condition.
Any negative publicity generated as a result of customer complaints
about the Company's products could damage the Company's reputation
and diminish the value of the Company's brand, which could have a
material adverse effect on the Company's business, results of
operations, and financial condition, as well as your investment.
Deterioration in the Company's brand equity (brand image,
reputation and product quality) may have a material adverse effect
on its financial results as well as your investment.
If we are unable to effectively protect our intellectual
property, we may lose our ability to operate our business and
compete in this industry.
Our
success will depend on our ability to obtain and maintain
meaningful intellectual property protection for any such
intellectual property. The names and/or logos of Company brands
(whether owned by the Company or licensed to us) may be challenged
by holders of trademarks who file opposition notices, or otherwise
contest trademark applications by the Company for its brands.
Similarly, domains owned and used by the Company may be challenged
by others who contest the ability of the Company to use the domain
name or URL. Such challenges could have a material adverse effect
on the Company's financial results as well as your investment.
A breakdown of computer/information systems or the Company’s
websiste could affect the Company’s ability to conduct
business.
Computer, website and/or information system breakdowns as well as
cyber security attacks could impair the Company's ability to
service its customers leading to reduced revenue from sales and/or
reputational damage, which could have a material adverse effect on
the Company's financial results as well as your investment.
Changes in the economy could have a detrimental impact on the
Company.
Changes in the general economic climate could have a detrimental
impact on consumer expenditure and, therefore, on the Company's
revenue. It is possible that recessionary pressures and other
economic factors (such as declining incomes, future potential
rising interest rates, higher unemployment and tax increases) may
adversely affect customers' confidence and willingness to spend.
Any of such events or occurrences could have a material adverse
effect on the Company's financial results and on your
investment.
10
The amount of capital the Company is attempting to raise in
this Offering is not enough to sustain the Company’s current
business plan.
In
order to achieve the Company's near and long-term goals, the
Company will need to procure funds in addition to the amount raised
in the Offering. There is no guarantee the Company will be able to
raise such funds on acceptable terms, if at all. If we are not able
to raise sufficient capital in the future, we will not be able to
execute our business plan, our continued operations will be in
jeopardy and we may be forced to cease operations and sell or
otherwise transfer all or substantially all of our remaining
assets, which could cause you to lose all or a portion of your
investment.
Additional financing may be necessary for the
implementation of our growth strategy.
The
Company may require additional debt and/or equity financing to
pursue our growth and business strategies. These include, but are
not limited to enhancing our operating infrastructure and otherwise
respond to competitive pressures. Given our limited operating
history and existing losses, there can be no assurance that
additional financing will be available, or, if available, that the
terms will be acceptable to us. Lack of additional funding could
force us to substantially curtail our growth plans. Furthermore,
the issuance by us of any additional securities pursuant to any
future fundraising activities undertaken by us would dilute the
ownership of existing shareholders and may reduce the price of our
Shares.
Our operating plan relies in large part on assumptions and
analysis developed by the Company. If these assumptions prove to be
incorrect, the Company’s actual operating results may be materially
different from our forecasted results.
Whether actual operating results and business developments will be
consistent with the Company's expectations and assumptions as
reflected in its forecast depends on a number of factors, many of
which are outside the Company's control, including, but not limited
to:
·whether the Company can obtain
sufficient capital to sustain and grow its business
·our ability to manage the
Company's growth
·demand for the Company's
products and services
·the timing and costs of new and
existing marketing and promotional efforts
·competition
·the Company's ability to retain
existing key management, to integrate recent hires and to attract,
retain and motivate qualified personnel
·the overall strength and
stability of domestic and international economies
·consumer spending
habits
Unfavorable changes in any of these or other factors, most of which
are beyond the Company's control, could materially and adversely
affect its business, results of operations and financial
condition.
To date, the Company has minimal operating history and may
not be profitable for the foreseeable future. The Company cannot
accurately predict when it might become profitable.
The
Company has minimal operating history. The Company may not be able
to generate significant revenues in the future. In addition, the
Company expects to incur substantial operating expenses in order to
fund the expansion of the Company's business. As a result, the
Company expects to continue to experience substantial negative cash
flow for the foreseeable future and cannot predict when, or even
if, the Company might become profitable.
11
The Company may be unable to manage its growth or implement
its strategy.
The
Company may not be able to expand its product and service
offerings, markets, or implement the other features of the
Company's business strategy at the rate or to the extent presently
planned. Rapid, significant growth will place a strain on the
Company's administrative, operational, and financial resources. If
the Company is unable to successfully manage its future growth,
establish and continue to upgrade its operating and financial
control systems, recruit and hire necessary personnel, or
effectively manage unexpected expansion difficulties, the Company's
financial condition and results of operations could be materially
and adversely affected.
The Company's business model is evolving.
The
Company's business model is unproven and is likely to continue to
evolve. Accordingly, the Company's initial business model may not
be successful and may need to be changed. The Company's ability to
generate significant revenues will depend, in large part, on the
Company's ability to successfully market its products to potential
users who may not be convinced of the need for the Company's
products and services or who may be reluctant to rely upon third
parties to develop and provide these products. The Company intends
to continue to develop the its business model as the Company's
market continues to evolve.
The Company needs to increase brand awareness.
Due
to a variety of factors, the Company's opportunity to achieve and
maintain a significant market share may be limited. Developing and
maintaining awareness of the Company's brand name, among other
factors, is critical. Further, the importance of brand recognition
will increase as competition in the Company's market increases.
Successfully promoting and positioning the Company's brand,
products and services will depend largely on the effectiveness of
the Company's marketing efforts. Therefore, the Company may need to
increase the Company's financial commitment to creating and
maintaining brand awareness. If the Company fails to successfully
promote its brand name or if the Company incurs significant
expenses promoting and maintaining its brand name, it would have a
material adverse effect on the Company's results of operations.
The Company faces competition from companies of varying
sizes, some of which have greater access to financial resources,
research and development, and other resources.
In
many cases, the Company's competitors have longer operating
histories, established ties to the market and consumers, greater
brand awareness, and greater financial, technical and marketing
resources. The Company's ability to compete depends, in part, upon
a number of factors outside the Company's control, including the
ability of the Company's competitors to develop alternatives that
are superior. If the Company fails to successfully compete in its
markets, or if the Company incurs significant expenses in order to
compete, it would have a material adverse effect on the Company's
results of operations.
The Company's employees may engage in misconduct or improper
activities.
The
Company, like any business, is exposed to the risk of employee
fraud or other misconduct. Misconduct by current and/or future
employees could include intentional failures to comply with laws or
regulations, provide accurate information to regulators, comply
with applicable standards, report financial information or data
accurately or disclose unauthorized activities to the Company. In
particular, sales, marketing and business arrangements are subject
to extensive laws and regulations intended to prevent fraud,
misconduct, kickbacks, self-dealing and other abusive practices.
These laws and regulations may restrict or prohibit a wide range of
pricing, discounting, marketing and promotion, sales commission,
customer incentive programs and other business arrangements.
Employee misconduct could also involve improper or illegal
activities which could result in regulatory sanctions and serious
harm to the Company's reputation.
12
Limitation on director liability.
The
Company may provide for the indemnification of directors to the
fullest extent permitted by law and, to the extent permitted by
such law, eliminate or limit the personal liability of directors to
the Company and its shareholders for monetary damages for certain
breaches of fiduciary duty. Such indemnification may be available
for liabilities arising in connection with this Offering. Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been
informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
We sell our products and services in highly competitive
markets, which results in pressure on our profit margins and limits
our ability to maintain or increase the market share of our
services.
The
nutraceuticals industry is subject to significant competition and
pricing pressures. We experience significant competitive pricing
pressures as well as competitive products. Several significant
competitors offer products with prices that match or are lower than
ours. We believe that the products we offer are generally
competitive with those offered by other supplement and
nutraceuticals companies. It is possible that one or more of our
competitors could develop a significant research advantage over us
that allows them to provide superior products or pricing, which
could put us at a competitive disadvantage. Continued pricing
pressure or improvements in research and shifts in customer
preferences away from natural supplements could adversely impact
our customer base or pricing structure and have a material and
adverse effect on our business, financial condition, results of
operations and cash flows.
Our future growth is largely dependent upon our ability to
successfully compete with new and existing competitors by
developing or acquiring new products that achieve market acceptance
with acceptable margins.
Our
business operates in markets that are characterized by rapidly
changing products, evolving industry standards and potential new
entrants. For example, a number of new companies with innovative
products, which promise significant health benefits are established
every year and are competitive with our products. If these
companies gain market acceptance, our ability to grow our business
could be materially and adversely affected. Accordingly, our future
success depends upon a number of factors, including our ability to
accomplish the following: identify emerging health trends in our
target end-markets; develop, acquire and maintain competitive
products; enhance our products by adding innovative features that
differentiate us from our competitors; and develop or acquire and
bring products to market quickly and cost-effectively. Our ability
to develop or acquire new products based on quality research
can affect our competitive position and requires the investment of
significant resources. These acquisitions and development efforts
divert resources from other potential investments in our
businesses, and they may not lead to the development of new
research or products on a timely basis. New or enhanced products
may not satisfy consumer preferences and potential product failures
may cause consumers to reject these products. As a result, these
products may not achieve market acceptance and our brand image
could suffer. In addition, our competitors may introduce superior
designs or business strategies, impairing our brand and the
desirability of our products, which may cause consumers to defer or
forego purchases of our products. Also, the markets for our
products and services may not develop or grow as we anticipate. The
failure of our products to gain market acceptance, the potential
for product defects or the obsolescence of our products could
significantly reduce our revenue, increase our operating costs or
otherwise adversely affect our business, financial condition,
results of operations or cash flows.
We may be exposed to material product liability claims, which
could increase our costs and adversely affect our reputation and
business.
As a
marketer and distributor of products designed for human
consumption, we could be subject to product liability claims if the
use of our products is alleged to have resulted in injury. Our
products consist of vitamins, minerals, herbs and other ingredients
that are classified as dietary supplements and in most cases are
not subject to pre-market regulatory approval in the United States
or internationally. Previously unknown adverse reactions resulting
from human consumption of these ingredients could occur.
13
We
have not had any product liability claims filed against us, but in
the future we may be subject to various product liability claims,
including among others that our products had inadequate
instructions for use, or inadequate warnings concerning possible
side effects and interactions with other substances. The cost of
defense can be substantially higher than the cost of settlement
even when claims are without merit. The high cost to defend or
settle product liability claims could have a material adverse
effect on our business and operating results.
We may be subject to intellectual property rights claims,
which are costly to defend, could require us to pay damages and
could limit our ability to sell some of our products.
Our
industry is characterized by vigorous pursuit and protection of
intellectual property rights, which has resulted in protracted and
expensive litigation for several companies. Third parties may
assert claims of misappropriation of trade secrets or infringement
of intellectual property rights against us or against our end
customers or partners for which we may be liable.
As
our business expands, the number of products and competitors in our
markets increases and product overlaps occur, infringement claims
may increase in number and significance. Intellectual property
lawsuits are subject to inherent uncertainties due to the
complexity of the technical issues involved, and we cannot be
certain that we would be successful in defending ourselves against
intellectual property claims. Further, many potential litigants
have the capability to dedicate substantially greater resources
than we can to enforce their intellectual property rights and to
defend claims that may be brought against them. Furthermore, a
successful claimant could secure a judgment that requires us to pay
substantial damages or prevents us from distributing products or
performing certain services.
We have no manufacturing capacity and anticipate continued
reliance on third-party manufacturers for the development and
commercialization of our products.
We do not currently operate manufacturing
facilities for production of our products. We lack the resources
and the capabilities to manufacture our products on a commercial
scale. We do not intend to develop facilities for the manufacture
of products in the foreseeable future. We rely on third-party
manufacturers to produce bulk products required to meet our sales
needs. We plan to continue to rely upon contract manufacturers to
manufacture commercial quantities of our products.
Our
contract manufacturers’ failure to achieve and maintain high
manufacturing standards, in accordance with applicable regulatory
requirements, or the incidence of manufacturing errors, could
result in consumer injury or death, product shortages, product
recalls or withdrawals, delays or failures in product testing or
delivery, cost overruns or other problems that could seriously harm
our business. Contract manufacturers often encounter difficulties
involving production yields, quality control and quality assurance,
as well as shortages of qualified personnel. Our existing
manufacturers and any future contract manufacturers may not perform
as agreed or may not remain in the contract manufacturing business.
In the event of a natural disaster, business failure, strike or
other difficulty, we may be unable to replace a third-party
manufacturer in a timely manner and the production of our products
would be interrupted, resulting in delays, additional costs and
reduced revenues.
Risks Relating
to This Offering and
Investment
The Company may undertake additional equity or debt financing
that may dilute the Shares in this Offering.
The
Company may undertake further equity or debt financing, which may
be dilutive to existing shareholders, including you, or result in
an issuance of securities whose rights, preferences and privileges
are senior to those of existing shareholders, including you, and
also reducing the value of Shares subscribed for under this
Offering.
An investment in the Shares is speculative and there can be
no assurance of any return on such investment.
An
investment in the Company's Shares is speculative, and there is no
assurance that investors will obtain any return on their
investment. Investors will be subject to substantial risks involved
in an investment in the Company, including the risk of losing their
entire investment.
14
The Shares are offered on a “best efforts” basis and the
Company may not raise the maximum amount being offered.
Since
the Company is offering the Shares on a "best efforts" basis, there
is no assurance that the Company will sell enough Shares to meet
its capital needs. If you purchase Shares in this Offering, you
will do so without any assurance that the Company will raise enough
money to satisfy the full Use Of Proceeds To Issuer which the
Company has outlined in this Offering Circular or to meet the
Company's working capital needs. If the maximum Offering amount is
not sold, we may need to incur additional debt or raise additional
equity in order to finance our operations. Increasing the amount of
debt will increase our debt service obligations and make less cash
available for distribution to our shareholders. Increasing the
amount of additional equity that we will have to seek in the future
will further dilute those investors participating in this
Offering.
We have not paid dividends in the past and do not anticipate
paying them in the future. You return on investment, if any, will
be limited to the market value of the Shares you
purchase.
We
have never paid cash dividends on our Shares and do not anticipate
paying cash dividends in the future. Since we do not pay dividends,
our Shares may be less valuable because a return on your investment
will only occur if the market value of the Shares appreciates
beyond your purchase price. While the Company may choose to pay
dividends at some point in the future to its shareholders, there
can be no assurance that cash flow and profits will allow such
distributions to ever be made.
The Company may not be able to obtain additional
financing.
Even
if the Company is successful in selling the maximum number of
Shares in the Offering, the Company may require additional funds to
continue and grow its business. The Company may not be able to
obtain additional financing as needed, on acceptable terms, or at
all, which would force the Company to delay its plans for growth
and implementation of its strategy which could seriously harm its
business, financial condition and results of operations. If the
Company needs additional funds, the Company may seek to obtain them
primarily through additional equity or debt financings. Those
additional financings could result in dilution to the Company's
current shareholders and to you if you invest in this Offering.
The offering price has been arbitrarily
determined.
The
offering price of the Shares has been arbitrarily established by
the Company based upon its present and anticipated financing needs
and bears no relationship to the Company's present financial
condition, assets, book value, projected earnings, or any other
generally accepted valuation criteria. The offering price of the
Shares may not be indicative of the value of the Shares or the
Company, now or in the future.
The management of the Company has broad discretion in
application and use of Offering proceeds.
The
management of the Company has broad discretion to adjust the
application and allocation of the net proceeds of this Offering in
order to address changed circumstances and opportunities. As such,
the success of the Company will be substantially dependent upon the
discretion and judgment of the management of the Company with
respect to the application and allocation of the net proceeds of
the Offering.
An investment in the Company Shares could result in a loss of
your entire investment.
An
investment in this Offering involves a high degree of risk and you
should not purchase the Shares if you cannot afford the loss of
your entire investment. You may not be able to liquidate your
investment for any reason in the near future.
15
Sales of a substantial number of shares of our Common Stock
may cause the price of our Common Stock to decline.
If
our shareholders sell substantial amounts of our Shares in the
public market, Shares sold may cause the price to decrease below
the current offering price. These sales may also make it more
difficult for us to sell equity or equity-related securities at a
time and price that we deem reasonable or appropriate.
The Shares in this Offering have no protective
provisions.
The
Shares in this Offering have no protective provisions. As such, you
will not be afforded protection by any provision of the Shares or
as a Shareholder in the event of a transaction that may adversely
affect you, including a reorganization, restructuring, merger or
other similar transaction involving the Company. If there is a
'liquidation event' or 'change of control' the Shares being offered
do not provide you with any protection. In addition, there are no
provisions attached to the Shares in the Offering that would permit
you to require the Company to repurchase the Shares in the event of
a takeover, recapitalization or similar transaction.
You will not have significant influence on the management of
the Company.
Substantially all decisions with respect to the management of the
Company will be made exclusively by the officers, directors,
managers or employees of the Company. You will have a very limited
ability, if at all, to vote on issues of Company management and
will not have the right or power to take part in the management of
the Company and will not be represented on the board of directors
or by managers of the Company. Accordingly, no person should
purchase Shares unless he or she is willing to entrust all aspects
of management to the Company.
No guarantee of return on investment.
There
is no assurance that you will realize a return on your investment
or that you will not lose your entire investment. For this reason,
you should read this Form 1-A POS, Offering Circular, and all
exhibits and referenced materials carefully and should consult with
your own attorney and business advisor prior to making any
investment decision.
Our
subscription agreement identifies the State of Wyoming for purposes
of governing law.
The Company’s
Subscription Agreement for shares issued under this Regulation A
offering contains a choice of law provision stating, “all questions
concerning the construction, validity, enforcement and
interpretation of the Offering Circular, including, without
limitation, this [Subscription] Agreement, shall be governed by and
construed and enforced in accordance with the laws of the State of
Wyoming.” As such, excepting matters arising under federal
securities laws, any disputes arising between the Company and
shareholders acquiring shares under this Offering shall be
determined in accordance with the laws of the state of Wyoming.
Furthermore, the Subscription Agreement establishes the state and
federal courts located in the city of Cheyenne, Wyoming as having
jurisdiction over matters arising between the Company and
shareholders.
These provisions
may discourage shareholder lawsuits or limit shareholders’ ability
to obtain a favorable judicial forum disputes with the company and
its directors, officers or other employees.
IN
ADDITION TO THE RISKS LISTED ABOVE, BUSINESSES ARE OFTEN SUBJECT TO
RISKS NOT FORESEEN OR FULLY APPRECIATED BY THE MANAGEMENT. IT IS
NOT POSSIBLE TO FORESEE ALL RISKS THAT MAY AFFECT THE COMPANY.
MOREOVER, THE COMPANY CANNOT PREDICT WHETHER THE COMPANY WILL
SUCCESSFULLY EFFECTUATE THE COMPANY'S CURRENT BUSINESS PLAN. EACH
PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE RISKS
AND MERITS OF AN INVESTMENT IN THE SECURITIES AND SHOULD TAKE INTO
CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHER FACTORS, THE
RISK FACTORS DISCUSSED ABOVE.
16
DILUTION
The
term 'dilution' refers to the reduction (as a percentage of the
aggregate Shares outstanding) that occurs for any given share of
stock when additional Shares are issued. If all of the Shares in
this Offering are fully subscribed and sold, the Shares offered
herein will constitute approximately 89.5% of the total Shares of
stock of the Company. The Company anticipates that subsequent to
this Offering the Company may require additional capital and such
capital may take the form of Common Stock, other stock or
securities or debt convertible into stock. Such future fund raising
will further dilute the percentage ownership of the Shares sold
herein in the Company.
If you purchase shares in this Offering, your ownership interest in
our Common Stock will be diluted immediately, to the extent of the
difference between the price to the public charged for each share
in this Offering and the net tangible book value per share of our
Common Stock after this Offering.
Our historical net tangible book value as of April 30, 2021 was
$(6,559,758). Historical net tangible book value per share equals
the amount of our total tangible assets, less total liabilities,
divided by the total number of shares of our Common Stock
outstanding, all as of the date specified.
The following table illustrates the per share dilution to new
investors discussed above, assuming the sale of 100% of the shares
offered for sale in this Offering at $0.00026 per share (before
deducting estimated offering expenses of $25,000):
Percentage of shares offered that are sold
|
100%
|
|
|
Price
to the public charged for each share in this Offering
|
$0.00026
|
|
|
Historical net tangible book value per share (1)
|
$(0.0011)
|
|
|
Increase in net tangible book value per share attributable to new
investors in this Offering (2)
|
$0.0014
|
|
|
Net
tangible book value per share, after this Offering
|
$
0.0002
|
|
|
Dilution per share to new investors
|
$0.0002
|
(1)
Net tangible book value per share is an estimate based on net
tangible shareholders equity book value as of April 30, 2021 of
$(6,559,758) and 5,851,316,410 outstanding shares of Common Stock
on August 13, 2021.
(2)
Before deducting estimated offering expenses of $25,000.
There is no material
disparity between the price of the Shares in this Offering and the
effective cash cost to officers, directors, promoters and
affiliated persons for shares acquired by them in a transaction
during the past year, or that they have a right to acquire.
PLAN OF DISTRIBUTION
We
are offering a Maximum Offering of up to 50,000,000,000 in Shares
of our Common Stock. The offering is being conducted on a
best-efforts basis without any minimum number of shares or amount
of proceeds required to be sold. There is no minimum subscription
amount required (other than a per investor minimum purchase) to
distribute funds to the Company. The Company will not initially
sell the Shares through commissioned broker-dealers, but may do so
after the commencement of the offering. Any such arrangement will
add to our expenses in connection with the offering. If we engage
one or more commissioned sales agents or underwriters, we will
supplement this Form 1-A POS to describe the arrangement.
Subscribers have no right to a return of their funds. The Company
may terminate the offering at any time for any reason at its sole
discretion, and may extend the Offering past the termination date
of 365 days from the date of qualification by the Commission in the
absolutely discretion of the Company and in accordance with the
rules and provisions of Regulation A of the JOBS Act. None of the
Shares being sold in this Offering are being sold by existing
securities holders.
17
After
the Offering Statement has been qualified by the Securities and
Exchange Commission (the "SEC"), the Company will accept tenders of
funds to purchase the Shares. No escrow agent is involved and the
Company will receive the proceeds directly from any subscription.
You will be required to complete a subscription agreement in order
to invest.
At
this time no broker-dealer registered with the SEC and a member of
the Financial Industry Regulatory Authority ("FINRA"), is being
engaged as an underwriter or for any other purpose in connection
with this Offering. This Offering will commence on the
qualification of this Offering Circular, as determined by the
Securities and Exchange Commission and continue for a period of 365
days. The Company may extend the Offering for an additional time
period unless the Offering is completed or otherwise terminated by
us, or unless we are required to terminate by application of
Regulation A of the JOBS Act. Funds received from investors will be
counted towards the Offering only if the form of payment, such as a
check or wire transfer, clears the banking system and represents
immediately available funds held by us prior to the termination of
the subscription period, or prior to the termination of the
extended subscription period if extended by the Company.
If
you decide to subscribe for any Common Stock in this Offering, you
must deliver a funds for acceptance or rejection. The minimum
investment amount for a single investor is a principal amount of
$250, equal to 961,538 Shares of Common Stock at the maximum
offering price. All subscription checks should be sent to the
following address:
Nutranomics,
Inc.
605 Portland
Ave. Suite 154
Gladstone,
Oregon 97027
866-561-6679
In
such case, subscription checks should be made payable to
Nutranomics, Inc. If a subscription is rejected, all funds will be
returned to subscribers within ten days of such rejection without
deduction or interest. Upon acceptance by the Company of a
subscription, a confirmation of such acceptance will be sent to the
investor. The Company maintains the right to accept or reject
subscriptions in whole or in part, for any reason or for no reason.
The Company maintains the right to accept subscriptions below the
minimum investment amount or minimum per share investment amount in
its discretion. All monies from rejected subscriptions will be
returned by the Company to the investor, without interest or
deductions.
This
is an offering made under "Tier 1" of Regulation A, and the shares
will not be listed on a registered national securities exchange
upon qualification. Therefore, the shares will be sold only to a
person if the aggregate purchase price paid by such person is no
more than 10% of the greater of such person's annual income or net
worth, not including the value of his primary residence, as
calculated under Rule 501 of Regulation D promulgated under Section
4(a)(2) of the Securities Act of 1933, as amended. In the case of
sales to fiduciary accounts (Keogh Plans, Individual Retirement
Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or
Trusts), the above suitability standards must be met by the
fiduciary account, the beneficiary of the fiduciary account, or by
the donor who directly or indirectly supplies the funds for the
purchase of the shares. Investor suitability standards in certain
states may be higher than those described in this Form 1-A POS
and/or Offering Circular. These standards represent minimum
suitability requirements for prospective investors, and the
satisfaction of such standards does not necessarily mean that an
investment in the Company is suitable for such persons. Different
rules apply to accredited investors.
Each
investor must represent in writing that he/she/it meets the
applicable requirements set forth above and in the Subscription
Agreement, including, among other things, that (i) he/she/it is
purchasing the shares for his/her/its own account and (ii)
he/she/it has such knowledge and experience in financial and
business matters that he/she/it is capable of evaluating without
outside assistance the merits and risks of investing in the shares,
or he/she/it and his/her/its purchaser representative together have
such knowledge and experience that they are capable of evaluating
the merits and risks of investing in the shares. Broker-dealers and
other persons participating in the offering must make a reasonable
inquiry in order to verify an investor's suitability for an
investment in the Company. Transferees of the shares will be
required to meet the above suitability standards.
18
The
shares may not be offered, sold, transferred, or delivered,
directly or indirectly, to any person who (i) is named on the list
of "specially designated nationals" or "blocked persons" maintained
by the U.S. Office of Foreign Assets Control ("OFAC") at
www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise
published from time to time, (ii) an agency of the government of a
Sanctioned Country, (iii) an organization controlled by a
Sanctioned Country, or (iv) is a person residing in a Sanctioned
Country, to the extent subject to a sanctions program administered
by OFAC. A "Sanctioned Country" means a country subject to a
sanctions program identified on the list maintained by OFAC and
available at www.ustreas.gov/offices/enforcement/ofac/sdn or as
otherwise published from time to time. Furthermore, the shares may
not be offered, sold, transferred, or delivered, directly or
indirectly, to any person who (i) has more than fifteen percent
(15%) of its assets in Sanctioned Countries or (ii) derives more
than fifteen percent (15%) of its operating income from investments
in, or transactions with, sanctioned persons or Sanctioned
Countries.
The
sale of other securities of the same class as those to be offered
for the period of distribution will be limited and restricted to
those sold through this Offering. Because the Shares being sold are
not publicly or otherwise traded, the market for the securities
offered is presently stabilized.
USE OF
PROCEEDS TO ISSUER
The
Use of Proceeds is an estimate based on the Company's current
business plan. We may find it necessary or advisable to reallocate
portions of the net proceeds reserved for one category to another,
or to add additional categories, and we will have broad discretion
in doing so.
The
maximum gross proceeds from the sale of the Shares in this Offering
are $13,000,000. The net proceeds from the offering, assuming it is
fully subscribed, are expected to be approximately $19,975,000
after the payment of offering costs such as printing, mailing,
marketing, legal and accounting costs, and other compliance and
professional fees that may be incurred. The estimate of the budget
for offering costs is an estimate only and the actual offering
costs may differ from those expected by management.
Management of the Company has wide latitude and discretion in the
use of proceeds from this Offering. Ultimately, management of the
Company intends to use substantially all of the net proceeds for
general working capital, repayment of outstanding debt obligations,
and acquisitions. At present, management's best estimate of the use
of proceeds, at various funding milestones, is set out in the chart
below. However, potential investors should note that this chart
contains only the best estimates of the Company's management based
upon information available to them at the present time, and that
the actual use of proceeds is likely to vary from this chart based
upon circumstances as they exist in the future, various needs of
the Company at different times in the future, and the discretion of
the Company's management at all times.
A
portion of the proceeds from this Offering may be used to
compensate or otherwise make payments to officers or directors of
the issuer. The officers and directors of the Company may be paid
salaries and receive benefits that are commensurate with similar
companies, and a portion of the proceeds may be used to pay these
ongoing business expenses.
19
USE
OF PROCEEDS
Assuming $0.00026 Offering Price:
|
10%
|
25%
|
50%
|
75%
|
100%
|
Working
Capital
|
$1,000,000
|
$2,950,000
|
$6,200,000
|
$9,450,000
|
$12,700,000
|
|
|
|
|
|
|
Repayment of Outstanding Debts
|
$300,000
|
$300,000
|
$300,000
|
$300,000
|
$300,000
|
|
|
|
|
|
|
Total
|
$1,300,000
|
$3,250,000
|
$6,500,000
|
$9,750,000
|
$13,000,000
|
|
|
|
|
|
|
The Company reserves the right to change the use of proceeds set
out herein based on the needs of the ongoing business of the
Company and the discretion of the Company's management. The Company
may reallocate the estimated use of proceeds among the various
categories or for other uses if management deems such a
reallocation to be appropriate.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATION
Forward-Looking Statements
Certain statements, other than purely historical information,
including estimates, projections, statements relating to our
business plans, objectives, and expected operating results, and the
assumptions upon which those statements are based, are
forward-looking statements. These forward-looking statements
generally are identified by the words believes, project, expects,
anticipates, estimates, intends, strategy, plan, may, will, would,
will be, will continue, will likely result, and similar
expressions. Forward-looking statements are based on current
expectations and assumptions that are subject to risks and
uncertainties which may cause actual results to differ materially
from the forward-looking statements. Our ability to predict results
or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse effect on
our operations and future prospects on a consolidated basis
include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest
rates, competition, and generally accepted accounting principles.
These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not
be placed on such statements.
Company Overview
and Plan of Operation
Health Education Corporation d/b/a NutraNomics, (the "Company or
Nutranomics") was incorporated under the laws of the State of
Delaware on February 14, 1996. The Company was originally organized
to provide education services, books, cassette tapes and public
presentations. The Company utilized several revenue generating
tools in order to accomplish this goal including Live Blood
Analysis, iridology, bone density screening and other self-help
methods. In 1998, the Company changed its incorporation to the
State of Utah. In 2001, the Company created its own line of
nutritional products that quickly became its leading revenue
source. The Company filed for the d/b/a. of “NutraNomics” in order
to fully prepare and utilize the brand name for expansion. In
retail outlets and to its clientele, the Company is now known as
Nutranomics. The Company sells co-branded supplements direct to the
public, through marketing partners and to third party health
practitioners. The Company maintains multiple trademarks, trade
names and patents.
Merger
On
September 13, 2013, Buka Ventures, Inc. ("Buka"), a Nevada
corporation since March 15, 2007 and the Company, executed and
delivered a Share Exchange Agreement (the "Share Agreement") and
all required or necessary documentation to complete a merger
(collectively, the "Transaction Documents"), whereby Buka became
the parent company and Nutranomics became the wholly-owned
subsidiary on the closing of the Share Agreement. Prior to the
closing of this transaction and pursuant to the Share Exchange
Agreement, Buka canceled 25,000,000 of its 46,500,000 issued and
outstanding common shares and simultaneously issued 25,005,544
shares of its common stock in exchange for 8,994,800 shares of
Nutranomics common stock. The merger was treated as a reverse
acquisition and a recapitalization of a public company.
Accordingly, the historic financial statements of the Company are
the historic financial statements of Nutranomics,. Buka’s name was
formally changed to “Nutranomics, Inc.” in connection with the
transaction. The “Company” hereinafter refers to Nutranomics, Inc.,
the Nevada parent corporation, or Health Education Corporation
d/b/a Nutranomics, the Utah subsidiary corporation, as the context
requires (Health Education Corporation d/b/a Nutranomics terminated
its legal entity status in Utah on December 31, 2013).
20
Change of State of
Incorporation
On
September 9, 2019 the Company filed Articles of Continuance with
the Secretary of State of Wyoming, which changed the corporate
registration from Nevada to Wyoming in accordance with the
resolution of the Company’s board of directors dated May 23,
2019.
Overview of our
Current Business
Since
1997, the Company has formulated more than 480 nutritional
supplements, including formulating vitamin, mineral, herbal, and
probiotic supplements. The Company has established an array of
complementary services and education programs. To distribute our
products, the Company has engaged sales representatives with access
to all of North America.
The
Company uses all-natural, plant-based products and no fillers, and,
are one of the few supplement companies to exclusively use
carcinogen-free 100%-pure cellulose capsules for our products.
Despite these additional expenses, the Company’s products are
competitively priced to provide value to consumers who are seeking
the highest quality products rather than the lowest price.
Products and
Services
The
Company offers a number of nutritional products which incorporate
other proven nutrient enhancement products. The company has
currently begun reformulation of the applicable product line to
incorporate nano technology delivery in a pre-digestive format in
products that would provide benefit from nano focused
reformulation.
Wholesale Materials has positioned itself to provide contract
services to the agricultural community and the farmer for biomass
wholesale offerings. This offering encompasses guidance on market
demand strains to maximize value and salability. Genetic services
and agriculture strategies will be offered to help experienced
farmers transition to the hemp cultivation space in all or portions
of their crops.
Raw Materials,
Production and Fulfillment
The
Company outsources all production and fulfillment to carefully
selected third parties to maintain management’s focus on new
product and market development. However, our commitment to the
quality and consistency of our products is reflected in the
selection and monitoring of all aspects of production. All of the
Company’s supplements are processed by manufacturers with which to
the best of our knowledge, follows the strictest Good Manufacturing
Practices (GMPs) and quality controls to ensure purity in all of
our products.
Through the company’s contract services offerings, the Company had
relevance and viability to work with the hemp processing community
to purchase biomass for processing to isolate, distillate and crude
in order to fulfill contracts held by processors. Processing
community provides access to end use extract products to take to
market for any product not produced on consignment.
Sales and
Marketing
The
highly fragmented, competitive nature of the nutraceutical market
makes sales and marketing efforts within the sector largely
relationship driven. The Company uses a number of tools to reach
its target market including direct to consumer sales, marketing
partners and medical practioners to deliver products to end
users.
We
have a Social Media partner that promotes Nutranomics products,
multiple times daily, through Facebook, Twitter, LinkedIn,
Pinterest, and other social media sites. Through this medium we are
able to obtain referral customers, new customers, and educate our
customers.
Nutranomics is rebranding existing product lines to encompass nano
technology in formulations that can be taken pre-digestive. Label
conventions are nearing completion and work has started on
renaming. Products are prioritized based on previous market demand.
E- commerce platforms will be established on completion of
reformulation to compliment the wholesale approach. Additional
direct retail opportunities are being vetted.
21
Wholesale/Outlet
Wholesale is focused on small to medium sized medical and health
practices. Sales to this market are the highest volume with a
satisfactory margin. We believe that the educational component of
this segment of the wholesale market is critical to our long-term
success. Not only does it provide customers with a true “value,”
but it also enables participating retailers to differentiate
themselves from competitors.
Wholesale Materials Division now provides direct access to hemp and
hemp related products for sale to appropriate end use customers,
including laboratories and alternative fiber companies needing
biomass as well as companies who produce products that require
isolate, distillate, or crude for further refinement into saleable
products.
Custom
Formulations
We
can develop a product line specifically tailored to a customer’s
needs. To date, we have formulated products for numerous clients,
including vitamins, enzymes, antioxidants, minerals, amino acids,
cosmetics, and toiletries. The company can now offer custom
formulation utilizing nano approach for superior
bio-availability.
New
Formulas
Nutranomics is nearing completion on the reformulation of a series
of best selling products in tandem with the finalization of new and
novel approaches to nutrient delivery utilizing nanotization. The
initial formulas that were redesigned are in final beta testing. An
all new line of traditional vitamins with unique approach to
ingredients as well as the method of delivery is ready and
undergoing final packaging review. Nutranomics will be releasing a
separate line of CBD infused products featuring the nano delivery
system, as well as a traditional line of CBD products. A website is
under development to launch the release in Q4 of 2020.
Growth
Strategy
The
Company has developed a multi-lateral strategy for growth,
comprised of the following tactics:
· Increase Sales of Existing
Products in Existing Market
· Execute Launch of
Practitioner Partnerships
· Expand Product and Service
Offerings
· Continue to Build the
Wholesale Materials Division
Management is reviewing potential investment with joint venture
investors to expand the product lines into oils and tinctures
within the health and lifestyle markets.
Competition
The
U.S. nutritional supplements retail industry is a large, highly
fragmented and growing industry, with no single industry
participant accounting for a majority of total industry retail
sales. We believe competition is based on price, quality and
assortment of products, customer service, marketing support and
availability of new products. In addition, the market is highly
sensitive to the introduction of new products.
22
Intellectual
Property
We
originally acquired the rights; via license with our founder to US
patent #7,235,390 B2 for the Assimilation Enhancing System
(AESTM) (there is also a patent pending for the
AESTM in Japan). The AESTM is a combination
of enzymes and their co-factors that are designed to break down or
digest nutrients more quickly so that the nutrients can be absorbed
faster and more completely into the blood stream than if the
AESTM were not present. We also have various trademarks
and logo registrations in several countries (e.g., China trademark
for Nutranomics logo, application #9729947). After extensive
analysis and market review, combined with the nano approach to new
product reformulation, it was that NutraNomics would not renew the
patent nor include it in the reformulated lines when released.
Government
Regulations
The
manufacture, packaging, labeling, advertising, promotion,
distribution and sale of our products are subject to regulation by
one or more federal agencies, including the FDA, Consumer Product
Safety Commission, or CPSC, and the U.S. Department of Agriculture,
or USDA. Advertising and other forms of promotion and methods of
marketing are subject to regulation primarily by the U.S. Federal
Trade Commission, or FTC, which regulates these activities under
the Federal Trade Commission Act, or FTCA. The foregoing matters
regarding our products are also regulated by various state and
local agencies as well as those of each foreign country to which we
distribute our products.
The
Dietary Supplement Health and Education Act of 1994, or DSHEA,
amended the Federal Food, Drug, and Cosmetic Act, or FFDC Act, to
establish a new framework governing the composition, safety,
labeling, manufacturing and marketing of dietary supplements. All
of the products we market are regulated as dietary supplements
under the FFDC Act.
Results of
Operations
Nine Months Ended April 30, 2021 Compared to Nine Months
Ended April 30, 2020
We
generated $0 in revenues for the Nine Months ended April 30, 2021,
as compared to $871 for the Nine Months ended April 30, 2020. This
decrease was due to limited operations.
Gross
profits for the Nine Months ended April 30, 2021 were $0, as
compared to $(407) for the Nine Months ended April 30, 2020.
This change was also due to limited operations.
Salary and Wage Expenses for the Nine Months ended April 30, 2021
were $180,000, as compared to $111,315 for the Nine Months ended
April 30, 2020.
Professional Fees for the Nine Months ended April 30, 2021 were
$26,890, as compared to $82,497 for the Nine Months ended April 30,
2020.
Marketing and Advertising Expenses for the Nine Months ended April
30, 2021 were $0, as compared to $4,439 for the Nine Months ended
April 30, 2020.
General and Administrative Expenses were $4,042 for the Nine Months
ended April 30, 2021, as compared to $124,557 for the Nine Months
ended April 30, 2020.
Liquidity
and Capital Resources
Net
Profit (Loss) for the Nine Months ended April 30, 2021 was $323,546
as compared to $(653,182) for the Year Ended April 30, 2020.
This was primarily due to one time write offs of
liabilities.
Net
Cash used in Operating Activities for the Nine Months ended April
30, 2021 was $2,609, as compared to $576,425 for the Nine Months
ended April 30, 2020. This change was primarily due to the
difference in net profit as discussed above.
Net
Cash provided in Financing Activities for the Nine Months ended
April 30, 2021 was $1,300 as compared to $578,484 for the Nine
Months ended April 30, 2020. This change was primarily due to
proceeds from profit share partner received in 2020.
23
Year Ended July 31, 2020 and Year Ended July 31,
2019.
We
generated $871 in revenues for the Year ended July 31, 2020, as
compared to $59,544 for the Year ended July 31, 2019.
Gross
profits for the Year ended July 31, 2020 were $(407) as compared to
$21,565 for the Year ended July 31, 2019.
Salary and Wage Expenses for the Year ended July 31, 2020 were
$170,288, as compared to $71,557 for the Year ended July 31,
2019.
Professional Fees for the Year ended July 31, 2020 were $83,108, as
compared to $434,583 for the Year ended July 31, 2019.
Marketing and Advertising Expenses for the Year ended July 31, 2020
were $15,439, as compared to $9,626 for the Year ended July 31,
2019.
General and Administrative Expenses were $326,267 for the Year
ended July 31, 2020, as compared to $79,412 for the Year ended July
31, 2019.
Liquidity and Capital Resources
Net
Profit (Loss) for the Year ended July 31, 2020 was $(950,795) as
compared to $(570,270) for the Year Ended April 30, 2020.
Net
Cash used in Operating Activities for the Year ended July 31, 2020
was $570,270, as compared to $167,847 for the Year ended July 31,
2019.
Net
Cash provided in Financing Activities for the Year ended July 31,
2020 was $570,874as compared to $167,977 for the Year ended July
31, 2019.
Current Position
As of
April 30, 2020, the Company had $34 in cash to fund its operations.
The Company does not believe its current cash balance will be
sufficient to allow the Company to fund its planned operating
activities for the next twelve months. 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 or
substantially curtail some of its planned activities. These
conditions raise substantial doubt as to the Company's ability to
continue as a going concern. The accompanying financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets and
classification of liabilities should the Company be unable to
continue as a going concern.
As
the Company continues to incur losses, achieving profitability is
dependent on achieving a level of revenues adequate to support the
Company's cost structure. The Company may never achieve
profitability, and unless and until it does, the Company will
continue to need to raise additional capital. Management
intends to fund future operations through additional private or
public equity offering and may seek additional capital through
arrangements with strategic partners of from other sources.
There can be no assurances, however, that additional funding
will be available on terms acceptable to the Company, or at all.
Any equity financing may be dilutive to existing
shareholders.
Off Balance
Sheet Arrangements
As of
April 30, 2021, there were no off balance sheet arrangements.
24
Going Concern
For the nine months ended April
30,2021 the Company has incurred net lincome of $323,546 and used
cash of $2,609 in operations. Further, the Company has negative
working capital of $6,559,758, a shareholders’ deficit of
$6,559,758 and an accumulated deficit of $12,049,092 at April
30,2021 and does not have the requisite liquidity to pay its
current obligations. Most of the debt obligations are currently in
default. These factors, among others, raise substantial doubt about
its ability to continue as a going concern. Management will seek to
increase revenues and reduce costs, while raising capital through
the sale of its stock. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Critical
Accounting Policies
We
have identified the policies outlined below as critical to our
business operations and an understanding of our results of
operations. The list is not intended to be a comprehensive list of
all of our accounting policies. In many cases, the accounting
treatment of a particular transaction is specifically dictated by
accounting principles generally accepted in the United States, with
no need for management's judgment in their application. The impact
and any associated risks related to these policies on our business
operations is discussed throughout Management's Discussion and
Analysis of Financial Condition and Results of Operation where such
policies affect our reported and expected financial results. Note
that our preparation of the financial statements requires us to
make estimates and assumptions that affect the reported amount of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of our financial statements, and the
reported amounts of revenue and expenses during the reporting
period. There can be no assurance that actual results will not
differ from those estimates.
Additional Company Matters
The
Company has not filed for bankruptcy protection nor has it ever
been involved in receivership or similar proceedings.
On
August 15, 2019 Typenex Co-Invesment LLC (Typenex) obtained a
default judgement for $559,367, plus interest of 22% and legal
costs against the Company from the Third Judicial Court of Salt
Lake County State of Utah. The judgement stems from legal
action by Typenex to collect outstanding principal, interest and
default penalties from the December 2, 2014, secured convertible
promissory note in the amount of $224,000. The note terms
provided for an initial tranche of $59,000 and 3 additional
tranches of $55,000. The note tranche of $59,000 was funded
and other tranches were not funded. The Company is in ongoing
negotiations with Typenex to resolve the matter and believes that
any eventual settlement is included in settlement reserves as
discussed in the financial statements. All other known legal
matters are disclosed and discussed in footnotes to the financial
statements.
DIRECTORS,
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
On
November 7, 2017, Jonathan Bishop was named the Chief Executive
Officer of the Company. Mr. Bishop combines over twenty years
of experience in marketing, sales, logistics and senior management
following a 20 year career in telecommunications marketing, sales,
management and logistics. He has been integral in creating change
and growing companies for over 15 years. Starting his career in
Boston, Mr. Bishop expanded to New Jersey and New York before being
promoted to President of a technology company in Portland, Oregon
in 2009. During that time, he increased new revenue streams by
adding new markets and developing cutting edge training while being
responsible for reorganizing and restructuring the entire
organization. Jonathan Bishop has been a creative business leader
since his graduation from University of Massachusetts at Dartmouth
in 1997. His broad-based background in highly competitive and
dynamic organizations has allowed him to be recognized as an
intuitive, decisive leader with proven success in adapting to many
companies
On
May 14, 2019 Lisa Demmons resigned as member of the Board of
Directors and Jonathan Bishop was appointed as her replacement.
25
New
Executives
Over the last year and a half, the
Company has engaged the services of several professionals on an
independent consulting basis. In order to grow the executive team
in a responsible manner while simultaneously growing the business,
a series of seven professionals were utilized at the senior level.
Their performance and ability to produce in their specific scope of
work has brought forward the right strategy for the right
individual into an offer of a permanent management position within
the company. In preparation of advancing and investment into our
wholesale model the organization will be transitioning Geoff
Bazegian to the position of Chief Operations Officer, Geoff’s
extensive experience in wholesale services both domestically and
internationally will play a key role in Nutranomics’s next
chapters. Laura Riffel will continue to be available to the company
for her expertise in marketing and finish goods.
Compensation of Directors and Executive
Officers
For
the present directors, only expenses are reimbursed for their
participation on the board of directors. The Company may
choose to compensate its directors in the future at the Company's
discretion.
Stock Incentive Plan
In
the future, we may establish a management stock incentive plan
pursuant to which stock options and awards may be authorized and
granted to our directors, executive officers, employees and key
employees or consultants. Details of such a plan, should one be
established, have not been decided yet. Stock options or a
significant equity ownership position in us may be utilized by us
in the future to attract one or more new key senior executives to
manage and facilitate our growth.
Board of Directors
Our
board of directors currently consists of one director. None
of our directors are "independent" as defined in Rule 4200 of
FINRA's listing standards. We may appoint additional independent
directors to our board of directors in the future, particularly to
serve on committees should they be established.
Committees of the Board of Directors
We
may establish an audit committee, compensation committee, a
nominating and governance committee and other committees to our
Board of Directors in the future, but have not done so as of the
date of this Offering Circular. Until such committees are
established, matters that would otherwise be addressed by such
committees will be acted upon by the Board of Directors.
Director Compensation
We do
not pay our directors any compensation for their services as board
members, with the exception of reimbursing and board related
expenses. In the future, we may compensate directors, particularly
those who are not also employees and who act as independent board
members, on either a per meeting or fixed compensation basis.
Limitation of Liability and Indemnification of Officers and
Directors
Our
Bylaws limit the liability of directors and officers of the Company
to the maximum extent permitted by Wyoming law. The Bylaws state
that the Company shall indemnify and hold harmless each person who
was or is a party or is threatened to be made a party to, or is
otherwise involved in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a
director or an officer of the Company or such director or officer
is or was serving at the request of the Company as a director,
officer, partner, member, manager, trustee, employee or agent of
another company or of a partnership, limited liability company,
joint venture, trust or other enterprise.
The
Company believes that indemnification under our Bylaws covers at
least negligence and gross negligence on the part of indemnified
parties. The Company also may secure insurance on behalf of any
officer, director, employee or other agent for any liability
arising out of his or her actions in connection with their services
to us, regardless of whether our Bylaws permit such
indemnification.
26
The
Company may also enter into separate indemnification agreements
with its directors and officers, in addition to the indemnification
provided for in our Bylaws. These agreements, among other things,
may provide that we will indemnify our directors and officers for
certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by a director or executive officer in
any action or proceeding arising out of such person's services as
one of our directors or officers, or rendering services at our
request, to any of its subsidiaries or any other company or
enterprise. We believe that these provisions and agreements are
necessary to attract and retain qualified persons as directors and
officers.
There
is no pending litigation or proceeding involving any of our
directors or officers as to which indemnification is required or
permitted, and we are not aware of any threatened litigation or
proceeding that may result in a claim for indemnification.
For
additional information on indemnification and limitations on
liability of our directors and officers, please review the
Company's Bylaws, which are attached to this Offering Circular.
SECURITY
OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The
following table sets forth information regarding beneficial
ownership of our Stock as of July 31, 2020. None of our
Officers or Directors are selling stock in this Offering.
Beneficial ownership and percentage ownership are determined in
accordance with the rules of the Securities and Exchange Commission
and includes voting or investment power with respect to Shares of
stock. This information does not necessarily indicate beneficial
ownership for any other purpose.
Unless otherwise indicated and subject to applicable community
property laws, to our knowledge, each Shareholder named in the
following table possesses sole voting and investment power over
their Shares of Stock. Percentage of beneficial ownership before
the offering is based on 5,851,316,410 Shares of Common Stock
outstanding and 1,000,000 shares of Preferred Stock outstanding as
of July 31, 2020.
Name and
Position
|
|
Shares Beneficially Owned Prior to Offering
|
|
Shares Beneficially Owned After Offering
|
|
|
|
|
|
Jonathan Bishop, CEO,
CFO, Treasurer, Secretary, & Director1
|
|
1,000,000 Preferred Series A Shares
|
|
1,000,000 Preferred Series A Shares
|
(1) On
May 14, 2019, Lisa Demmons sold 1,000,000 Preferred Series A shares
to Jonathan Bishop.
The
table above reflects Shares beneficially owned by our Officers and
Directors as of July 31, 2020.
SECURITIES
BEING OFFERED
The
Company is offering Shares of its Common Stock. Except as otherwise
required by law, the Company's Articles of Incorporation or Bylaws,
each Shareholder shall be entitled to one vote for each Share held
by such Shareholder on the record date of any vote of Shareholders
of the Company. The Shares of Common Stock, when issued, will be
fully paid and non-assessable. Since it is anticipated that at
least for the next 12 months the majority of the Company's voting
power will be held by Management, the holders of Common Stock
issued pursuant to this Offering Circular should not expect to be
able to influence any decisions by management of the Company
through the voting power of such Common Stock.
The
Company does not expect to create any additional classes of Common
Stock during the next 12 months, but the Company is not limited
from creating additional classes which may have preferred dividend,
voting and/or liquidation rights or other benefits not available to
holders of its common stock.
27
The
Company does not expect to declare dividends for holders of Common
Stock in the foreseeable future. Dividends will be declared, if at
all (and subject to rights of holders of additional classes of
securities, if any), in the discretion of the Company's Board of
Directors. Dividends, if ever declared, may be paid in cash, in
property, or in shares of the capital stock of the Company, subject
to the provisions of law, the Company's Bylaws and the Certificate
of Incorporation. Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such
sums as the Board of Directors, in its absolute discretion, deems
proper as a reserve for working capital, to meet contingencies, for
equalizing dividends, for repairing or maintaining any property of
the Company, or for such other purposes as the Board of Directors
shall deem in the best interests of the Company.
There
is no minimum number of Shares that needs to be sold in order for
funds to be released to the Company and for this Offering to hold
its first closing.
The minimum subscription that will be accepted from an
investor is $250.00 for the purchase of six hundred twenty five
thousand (961,538) Shares at the maximum offering price (the
'Minimum Subscription').
A
subscription for $250.00 or more in the Shares may be made only by
tendering to the Company the executed Subscription Agreement
(electronically or in writing) delivered with the subscription
price in a form acceptable to the Company, via check, wire, credit
or debit card, or ACH. The execution and tender of the documents
required, as detailed in the materials, constitutes a binding offer
to purchase the number of Shares stipulated therein and an
agreement to hold the offer open until the Expiration Date or until
the offer is accepted or rejected by the Company, whichever occurs
first.
The
Company reserves the unqualified discretionary right to reject any
subscription for Shares, in whole or in part. The Company reserves
the unqualified discretionary right to accept any subscription for
Shares, in an amount less than the Minimum Subscription. If the
Company rejects any offer to subscribe for the Shares, it will
return the subscription payment, without interest or reduction. The
Company's acceptance of your subscription will be effective when an
authorized representative of the Company issues you written or
electronic notification that the subscription was accepted.
There
are no liquidation rights, preemptive rights, conversion rights,
redemption provisions, sinking fund provisions, impacts on
classification of the Board of Directors where cumulative voting is
permitted or required related to the Common Stock, provisions
discriminating against any existing or prospective holder of the
Common Stock as a result of such Shareholder owning a substantial
amount of securities, or rights of Shareholders that may be
modified otherwise than by a vote of a majority or more of the
shares outstanding, voting as a class defined in any corporate
document as of the date of filing. The Common Stock will not be
subject to further calls or assessment by the Company. There are no
restrictions on alienability of the Common Stock in the corporate
documents other than those disclosed in this Offering Circular. The
Company has engaged Transfer Online to serve as the transfer agent
and registrant for the Shares. For additional information regarding
the Shares, please review the Company's Bylaws, which are attached
to this Offering Circular.
Excepting matters arising under federal securities laws, any
disputes between the Company and shareholders shall be governed in
reliance on the laws of the state of Wyoming. Furthermore, the
Subscription Agreement for this Regulation A offering appoints the
state and federal courts located in Cheyenne, Wyoming as having
jurisdiction over any disputes related to this Regulation A
offering between the Company and shareholders.
28
DISQUALIFYING EVENTS DISCLOSURE
Recent changes to Regulation A promulgated under the Securities Act
prohibit an issuer from claiming an exemption from registration of
its securities under such rule if the issuer, any of its
predecessors, any affiliated issuer, any director, executive
officer, other officer participating in the offering of the
interests, general partner or managing member of the issuer, any
beneficial owner of 20% or more of the voting power of the issuer's
outstanding voting equity securities, any promoter connected with
the issuer in any capacity as of the date hereof, any investment
manager of the issuer, any person that has been or will be paid
(directly or indirectly) remuneration for solicitation of
purchasers in connection with such sale of the issuer's interests,
any general partner or managing member of any such investment
manager or solicitor, or any director, executive officer or other
officer participating in the offering of any such investment
manager or solicitor or general partner or managing member of such
investment manager or solicitor has been subject to certain
"Disqualifying Events" described in Rule 506(d)(1) of Regulation D
subsequent to September 23, 2013, subject to certain limited
exceptions. The Company is required to exercise reasonable care in
conducting an inquiry to determine whether any such persons have
been subject to such Disqualifying Events and is required to
disclose any Disqualifying Events that occurred prior to September
23, 2013 to investors in the Company. The Company believes that it
has exercised reasonable care in conducting an inquiry into
Disqualifying Events by the foregoing persons and is aware of the
no such Disqualifying Events.
It is
possible that (a) Disqualifying Events may exist of which the
Company is not aware and (b) the SEC, a court or other finder of
fact may determine that the steps that the Company has taken to
conduct its inquiry were inadequate and did not constitute
reasonable care. If such a finding were made, the Company may lose
its ability to rely upon exemptions under Regulation A, and,
depending on the circumstances, may be required to register the
Offering of the Company's Common Stock with the SEC and under
applicable state securities laws or to conduct a rescission offer
with respect to the securities sold in the Offering.
ERISA
CONSIDERATIONS
Trustees and other fiduciaries of qualified retirement plans or
IRAs that are set up as part of a plan sponsored and maintained by
an employer, as well as trustees and fiduciaries of Keogh Plans
under which employees, in addition to self-employed individuals,
are participants (together, "ERISA Plans"), are governed by the
fiduciary responsibility provisions of Title 1 of the Employee
Retirement Income Security Act of 1974 ("ERISA"). An investment in
the Shares by an ERISA Plan must be made in accordance with the
general obligation of fiduciaries under ERISA to discharge their
duties (i) for the exclusive purpose of providing benefits to
participants and their beneficiaries; (ii) with the same standard
of care that would be exercised by a prudent man familiar with such
matters acting under similar circumstances; (iii) in such a manner
as to diversify the investments of the plan, unless it is clearly
prudent not do so; and (iv) in accordance with the documents
establishing the plan. Fiduciaries considering an investment in the
Shares should accordingly consult their own legal advisors if they
have any concern as to whether the investment would be inconsistent
with any of these criteria.
Fiduciaries of certain ERISA Plans which provide for individual
accounts (for example, those which qualify under Section 401(k) of
the Code, Keogh Plans and IRAs) and which permit a beneficiary to
exercise independent control over the assets in his individual
account, will not be liable for any investment loss or for any
breach of the prudence or diversification obligations which results
from the exercise of such control by the beneficiary, nor will the
beneficiary be deemed to be a fiduciary subject to the general
fiduciary obligations merely by virtue of his exercise of such
control. On October 13, 1992, the Department of Labor issued
regulations establishing criteria for determining whether the
extent of a beneficiary's independent control over the assets in
his account is adequate to relieve the ERISA Plan's fiduciaries of
their obligations with respect to an investment directed by the
beneficiary. Under the regulations, the beneficiary must not only
exercise actual, independent control in directing the particular
investment transaction, but also the ERISA Plan must give the
participant or beneficiary a reasonable opportunity to exercise
such control, and must permit him to choose among a broad range of
investment alternatives.
29
Trustees and other fiduciaries making the investment decision for
any qualified retirement plan, IRA or Keogh Plan (or beneficiaries
exercising control over their individual accounts) should also
consider the application of the prohibited transactions provisions
of ERISA and the Code in making their investment decision. Sales
and certain other transactions between a qualified retirement plan,
IRA or Keogh Plan and certain persons related to it
(e.g., a plan sponsor, fiduciary, or service provider)
are prohibited transactions. The particular facts concerning the
sponsorship, operations and other investments of a qualified
retirement plan, IRA or Keogh Plan may cause a wide range of
persons to be treated as parties in interest or disqualified
persons with respect to it. Any fiduciary, participant or
beneficiary considering an investment in Shares by a qualified
retirement plan IRA or Keogh Plan should examine the individual
circumstances of that plan to determine that the investment will
not be a prohibited transaction. Fiduciaries, participants or
beneficiaries considering an investment in the Shares should
consult their own legal advisors if they have any concern as to
whether the investment would be a prohibited transaction.
Regulations issued on November 13, 1986, by the Department of Labor
(the "Final Plan Assets Regulations") provide that when an ERISA
Plan or any other plan covered by Code Section 4975 (e.g.,
an IRA or a Keogh Plan which covers only self-employed persons)
makes an investment in an equity interest of an entity that is
neither a "publicly offered security" nor a security issued by an
investment company registered under the Investment Company Act of
1940, the underlying assets of the entity in which the investment
is made could be treated as assets of the investing plan (referred
to in ERISA as "plan assets"). Programs which are deemed to be
operating companies or which do not issue more than 25% of their
equity interests to ERISA Plans are exempt from being designated as
holding "plan assets." Management anticipates that we would clearly
be characterized as an "operating" for the purposes of the
regulations, and that it would therefore not be deemed to be
holding "plan assets."
Classification of our assets of as "plan assets" could adversely
affect both the plan fiduciary and management. The term "fiduciary"
is defined generally to include any person who exercises any
authority or control over the management or disposition of plan
assets. Thus, classification of our assets as plan assets could
make the management a "fiduciary" of an investing plan. If our
assets are deemed to be plan assets of investor plans, transactions
which may occur in the course of its operations may constitute
violations by the management of fiduciary duties under ERISA.
Violation of fiduciary duties by management could result in
liability not only for management but also for the trustee or other
fiduciary of an investing ERISA Plan. In addition, if our assets
are classified as "plan assets," certain transactions that we might
enter into in the ordinary course of our business might constitute
"prohibited transactions" under ERISA and the Code.
Under
Code Section 408(i), as amended by the Tax Reform Act of 1986, IRA
trustees must report the fair market value of investments to IRA
holders by January 31 of each year. The Service has not yet
promulgated regulations defining appropriate methods for the
determination of fair market value for this purpose. In addition,
the assets of an ERISA Plan or Keogh Plan must be valued at their
"current value" as of the close of the plan's fiscal year in order
to comply with certain reporting obligations under ERISA and the
Code. For purposes of such requirements, "current value" means fair
market value where available. Otherwise, current value means the
fair value as determined in good faith under the terms of the plan
by a trustee or other named fiduciary, assuming an orderly
liquidation at the time of the determination. We do not have an
obligation under ERISA or the Code with respect to such reports or
valuation although management will use good faith efforts to assist
fiduciaries with their valuation reports. There can be no
assurance, however, that any value so established (i) could or will
actually be realized by the IRA, ERISA Plan or Keogh Plan upon sale
of the Shares or upon liquidation of us, or (ii) will comply with
the ERISA or Code requirements.
The
income earned by a qualified pension, profit sharing or stock bonus
plan (collectively, "Qualified Plan") and by an individual
retirement account ("IRA") is generally exempt from taxation.
However, if a Qualified Plan or IRA earns "unrelated business
taxable income" ("UBTI"), this income will be subject to tax to the
extent it exceeds $1,000 during any fiscal year. The amount of
unrelated business taxable income in excess of $1,000 in any fiscal
year will be taxed at rates up to 36%. In addition, such unrelated
business taxable income may result in a tax preference, which may
be subject to the alternative minimum tax. It is anticipated that
income and gain from an investment in the Shares will not be taxed
as UBTI to tax exempt shareholders, because they are participating
only as passive financing sources.
30
INVESTOR
ELIGIBILITY STANDARDS
The
Shares will be sold only to a person who is not an accredited
investor if the aggregate purchase price paid by such person is no
more than 10% of the greater of such person's annual income or net
worth, not including the value of his primary residence, as
calculated under Rule 501 of Regulation D promulgated under Section
4(a)(2) of the Securities Act of 1933, as amended. In the case of
sales to fiduciary accounts (Keogh Plans, Individual Retirement
Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or
Trusts), the above suitability standards must be met by the
fiduciary account, the beneficiary of the fiduciary account, or by
the donor who directly or indirectly supplies the funds for the
purchase of Shares. Investor suitability standards in certain
states may be higher than those described in this Offering
Circular. These standards represent minimum suitability
requirements for prospective investors, and the satisfaction of
such standards does not necessarily mean that an investment in the
Company is suitable for such persons.
Each
investor must represent in writing that he/she meets the applicable
requirements set forth above and in the Subscription Agreement,
including, among other things, that (i) he/she is purchasing the
Shares for his/her own account and (ii) he/she has such knowledge
and experience in financial and business matters that he/she is
capable of evaluating without outside assistance the merits and
risks of investing in the Shares, or he/she and his/her purchaser
representative together have such knowledge and experience that
they are capable of evaluating the merits and risks of investing in
the Shares. Transferees of Shares will be required to meet the
above suitability standards.
31
PART III:
EXHIBITS
Index to Exhibits
Description
|
|
Item
|
|
Exhibit
|
Articles of
Incorporation filed with the State of Nevada on March 15,
20072
|
|
Item
17.2
|
|
1A-2A1
|
Amendment to
Articles of Incorporation filed with the State of Nevada on October
6, 20153
|
|
Item
17.2
|
|
1A-2A2
|
Amendment to
Articles of Incorporation filed with the State of Nevada on October
6, 2015.ii
|
|
Item
17.2
|
|
1A-2A3
|
Amendment to
Articles of Incorporation filed with the State of Nevada on
December 11, 2015.ii
|
|
Item
17.2
|
|
1A-2A4
|
Amendment to
Articles of Incorporation filed with the State of Wyoming on
September 9, 2019.*
|
|
Item
17.2
|
|
1A-2A5
|
Amendment to
Articles of Incorporation filed with the State of Wyoming on March
17, 2020.*
|
|
Item
17.2
|
|
1A-2A6
|
Amendment to Articles of Incorporation
filed with the State of Wyoming on August 13, 2021.*
|
|
Item
17.2
|
|
1A-2A7
|
Amendment
to Articles of Incorporation filed with the State of Wyoming on
September 14, 2021. *
|
|
Item
17.2
|
|
1A-2A8
|
Bylaws of the Companyi
|
|
Item
17.2
|
|
1A-2B
|
Subscription
Agreement
|
|
Item
17.4
|
|
1A-4
|
Profit
Participation Agreement with AK Investments dated September 20,
2019*
|
|
Item
17.6
|
|
1A-6A1
|
Convertible Note
issued to Trillium Partners LP, dated July 11, 2019*
|
|
Item
17.6
|
|
1A-6A2
|
Convertible Note
issued to Michael Doron, dated July 15, 2019*
|
|
Item
17.6
|
|
1A-6A3
|
Convertible Note issued to
Oscaleta Partners LLC, dated August 1,
2019*
|
|
Item
17.6
|
|
1A-6A4
|
Convertible Note
issued to Trillium Partners LP, dated February 7,
2020*
|
|
Item
17.6
|
|
1A-6A5
|
Convertible Note
issued to Michael Doron, dated February 7, 2020*
|
|
Item
17.6
|
|
1A-6A6
|
Legal Opinion and
Consent of JDT Legal, PLLC*
|
|
Item
17.12
|
|
1A-12
|
2 Incorporated by
reference to the Company's Form S-1 fileed with the Securities and
Exchange Commission on December 19, 2008.
3 Incorporated by
reference to the Company's Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission on December 31, 2015 for the
period ended October 31, 2015.
32
SIGNATURES
Pursuant to the
requirements of Regulation A, the issuer certifies that it has
reasonable grounds to believe that it meets all of the requirements
for this Form 1-A POS and has duly caused this Offering statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, on July 7, 2022.
Nutranomics,
Inc.
By:
/s/
Jonathan
Bishop
Jonathan Bishop
Principal Executive Officer and Director
Dated: July 7, 2022
This Form 1-A POS has
been signed by the following persons in the capacities and on the
dates indicated.
By: /s/
Jonathan Bishop
Jonathan Bishop
Principal Financial Officer
Dated: July 7, 2022
ACKNOWLEDGEMENT ADOPTING TYPED
SIGNATURES
The undersigned
hereby authenticate, acknowledge and otherwise adopt the typed
signatures above and as otherwise appear in this filing and
Offering.
By:
/s/
Jonathan Bishop
Jonathan Bishop
President, Secretary and Treasurer
Dated: July 7, 2022
33
NUTRANOMICS,
INC.
FINANCIAL STATEMENTS
(Unaudited)
NUTRANOMICS, INC.
|
Page
|
April 30, 2021 Financial
Statements:
|
|
|
|
Condensed
Balance Sheets at April 30, 2021 and July 31, 2020
|
35
|
|
|
Condensed
Statements of Operations for the three and nine months ended April
30, 2021 and 2020
|
36
|
|
|
Condensed
Statements of Stockholders' Deficit for the three and nine months
ended April 30,2021 and January 31, 2020
|
37
|
|
|
Condensed
Statements of Cash Flows for the three and nine months ended April
30, 2021 and 2020
|
39
|
|
|
Notes
to Condensed Financial Statements
|
40
|
|
|
July 31, 2020 Financial
Statements:
|
|
|
|
Balance Sheets at July 31, 2020
and
2019
|
53
|
|
|
Statements
of Operations for the years ended July 31, 2020 and
2019
|
54
|
|
|
Statements
of Stockholders' Deficit for the years ended July 31, 2020 and
2019
|
55
|
|
|
Statements
of Cash Flows for the years ended July 31, 2020 and
2019
|
56
|
|
|
Notes
to Financial Statements
|
57
|
34
NUTRANOMICS, INC.
CONDENSED BALANCE SHEETS
April 30, 2021
(Unaudited)
|
|
April 30,
|
|
July 31,
|
ASSETS
|
|
2021
|
|
2020
|
CURRENT
ASSETS
|
|
|
|
|
Cash
|
|
$34
|
|
$1,343
|
Prepaid
expenses
|
|
25,000
|
|
25,000
|
Total Current
Assets
|
|
25,034
|
|
26,343
|
|
|
|
|
|
Total
Assets
|
|
$25,034
|
|
$26,343
|
|
|
|
|
|
IABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts payable
and accrued expenses
|
|
$1,452,973
|
|
$1,349,444
|
Convertible notes
payable, net of discount and premiums
|
|
1,673,268
|
|
1,924,153
|
Settlement
under3(a)(10), including premiums
|
|
1,780,250
|
|
1,780,250
|
Note derivative
liability
|
|
568,060
|
|
538,059
|
Settlement
reserves
|
|
1,110,241
|
|
1,492,549
|
Total Current
Liabilities
|
|
6,584,792
|
|
7,084,455
|
|
|
|
|
|
Total
Liabilities
|
|
6,584,792
|
|
7,084,455
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
Preferred stock; par value of $.001, 25,000,000
shares authorized;
|
|
|
|
|
1,000,000 and 1,000,000 shares issued and
outstanding at
|
|
|
|
|
April 30, 2021 and July 31, 2020,
respectively
|
|
1,000
|
|
1,000
|
Common stock; par value of $.001,
10,000,000,000 shares authorized;
|
|
|
|
|
4,516,264,729 and 4,117,033,449
shares issued and outstanding at
|
|
|
|
|
April 30, 2021 and July 31, 2020,
respectively
|
|
4,516,262
|
|
4,117,031
|
Additional paid in capital
|
|
972,072
|
|
1,196,495
|
Accumulated deficit
|
|
(12,049,092)
|
|
(12,372,638)
|
Total Stockholders' Deficit
|
|
(6,559,758)
|
|
(7,058,112)
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
$25,034
|
|
$26,343
|
The accompanying notes are an integral
part of these condensed financial statements.
35
CONDENSED
STATEMENT OF OPERATIONS
FOR
THE THREE AND NINE MONTHS ENDED APRIL 30, 2021 AND 2020
(Unaudited)
|
|
For
the Three Months Ended
April 30,
|
|
For
the Nine Months Ended
April 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$-
|
|
$-
|
|
$-
|
|
$871
|
COST OF SALES
|
|
-
|
|
-
|
|
-
|
|
1,278
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
-
|
|
-
|
|
-
|
|
(407)
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
158
|
|
48,863
|
|
4,042
|
|
124,557
|
Professional fees
|
|
10,890
|
|
(17,350)
|
|
26,890
|
|
82,497
|
Marketing and
advertising
|
|
-
|
|
4,500
|
|
-
|
|
14,439
|
Salaries and
wages
|
|
60,000
|
|
32,765
|
|
180,000
|
|
111,315
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
71,048
|
|
68,778
|
|
210,932
|
|
332,808
|
|
|
|
|
|
|
|
|
|
OPERATING (LOSS)
|
|
(71,048)
|
|
(68,778)
|
|
(210,932)
|
|
(333,215)
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Other income
|
|
458,516
|
|
-
|
|
458,516
|
|
-
|
Derivative
expense
|
|
-
|
|
(60,140)
|
|
(30,001)
|
|
(60,140)
|
Gain on
extinguishment of debt
|
|
220,390
|
|
-
|
|
220,390
|
|
-
|
Interest expense
|
|
(33,713)
|
|
(52,635)
|
|
(114,427)
|
|
(259,827)
|
|
|
|
|
|
|
|
|
|
Total Other Income
(Expense)
|
|
645,193
|
|
(112,775)
|
|
534,478
|
|
(319,967)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
BEFORE INCOME TAXES
|
|
574,145
|
|
(181,553)
|
|
323,546
|
|
(653,182)
|
Provision for income
taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$574,145
|
|
$(181,553)
|
|
$323,546
|
|
$(653,182)
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED
INCOME (LOSS) PER SHARE
|
|
$0.0001
|
|
$(0.0001)
|
|
$0.0001
|
|
$(0.0002)
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding - Basic and Diluted
|
|
4,126,004,938
|
|
3,371,922,134
|
|
4,119,958,220
|
|
2,855,830,897
|
The accompanying notes are an integral
part of these condensed financial statements.
36
NUTRANOMICS, INC.
CONDENSED
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE THREE AND NINE MONTHS ENDED APRIL 30, 2021 AND 2019
(Unaudited)
For the Three
Months Ended April 30, 2021
|
Preferred Stock
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Total
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid
in Capital
|
|
|
Accumulated
Deficit
|
|
Stockholders'
(Deficit)
|
|
Balance, January 31,
2021
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
4,117,033,449
|
|
|
$
|
4,117,031
|
|
|
$
|
1,196,495
|
|
|
$
|
(12,623,237
|
)
|
$
|
(7,308,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
on conversion of convertible notes
|
|
|
-
|
|
|
|
-
|
|
|
|
399,231,280
|
|
|
|
399,231
|
|
|
|
(224,423
|
)
|
|
|
-
|
|
|
174,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
three months ended April 30, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
574,145
|
|
|
574,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30,
2021
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
4,516,264,729
|
|
|
$
|
4,516,262
|
|
|
$
|
972,072
|
|
|
$
|
(12,049,092
|
)
|
$
|
(6,559,758
|
)
|
For the Three Months Ended April 30,
2020
|
Preferred Stock
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Total
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid
in Capital
|
|
|
Accumulated
Deficit
|
|
Stockholders'
(Deficit)
|
|
Balance, January 31,
2020
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
2,942,869,449
|
|
|
$
|
2,942,867
|
|
|
$
|
2,335,189
|
|
|
$
|
(11,893,472
|
)
|
$
|
(6,614,416
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
conversion of convertible note principal
|
|
|
-
|
|
|
|
-
|
|
|
|
162,000,000
|
|
|
|
162,000
|
|
|
|
(126,531
|
)
|
|
|
-
|
|
|
35,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation from
conversion error
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,300,000)
|
|
|
|
(27,300)
|
|
|
|
27,300
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
settlement of 3(a)(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
494,025,000
|
|
|
|
494,025
|
|
|
|
(494,025
|
)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
three months ended April 30, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(181,553
|
)
|
|
(181,553
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30,
2020
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
3,571,594,449
|
|
|
$
|
3,571,592
|
|
|
$
|
1,741,933
|
|
|
$
|
(12,075,025
|
)
|
$
|
(6,760,500
|
)
|
37
NUTRANOMICS, INC.
CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE THREE AND NINE MONTHS ENDED APRIL 30,2021 AND 2019
(Unaudited)
For the Nine
Months Ended April 30,2021
|
Preferred Stock
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Total
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid
in Capital
|
|
|
Accumulated
Deficit
|
|
Stockholders'
(Deficit)
|
|
Balance, July 31,
2020
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
4,117,033,449
|
|
|
$
|
4,117,031
|
|
|
$
|
1,196,495
|
|
|
$
|
(12,372,638
|
)
|
$
|
(7,058,112
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
conversion of convertible note principal
|
|
|
-
|
|
|
|
-
|
|
|
|
162,000,000
|
|
|
|
162,000
|
|
|
|
(126,531
|
)
|
|
|
-
|
|
|
35,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the
nine months ended April 30, 2021
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
323,546
|
|
|
323,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30,
2021
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
4,516,264,729
|
|
|
$
|
4,516,262
|
|
|
$
|
972,072
|
|
|
$
|
(12,049,092
|
)
|
$
|
(6,559,758
|
)
|
For the Nine
Months Ended April 30, 2020
|
Preferred Stock
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Total
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid
in Capital
|
|
|
Accumulated
Deficit
|
|
Stockholders'
(Deficit)
|
|
Balance, July 31,
2019
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
2,161,787,677
|
|
|
$
|
2,161,785
|
|
|
$
|
2,898,955
|
|
|
$
|
(11,421,843
|
)
|
$
|
(6,360,103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
conversion of convertible note principal
|
|
|
-
|
|
|
|
-
|
|
|
|
826,257,772
|
|
|
|
826,258
|
|
|
|
(573,473
|
)
|
|
|
-
|
|
|
252,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation from
conversion error
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,300,000)
|
|
|
|
(27,300)
|
|
|
|
27,300
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
settlement of 3(a)(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
610,849,000
|
|
|
|
610,849
|
|
|
|
(610,849
|
)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
nine months ended April 30, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(653,182
|
)
|
|
(653,182
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30,
2020
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
3,571,594,449
|
|
|
$
|
3,571,592
|
|
|
$
|
1,741,933
|
|
|
$
|
(12,075,025
|
)
|
$
|
(6,760,500
|
)
|
The accompanying notes are an
integral part of these condensed financial statements.
38
NUTRANOMICS, INC.
|
|
CONDENSED STATEMENTS OF CASH FLOWS
April 30, 2021 & 2020
(Unaudited)
|
|
|
|
The
Nine Months Ended:
For the Nine Months Ended
|
|
|
|
April 30,
|
|
|
|
2021
|
|
|
2020
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
323,546
|
|
|
$
|
(653,182)
|
|
Adjustments to reconcile net (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Intangible asset impairment charge
|
|
|
-
|
|
|
|
3,703
|
|
Interest expense for note premium
|
|
|
-
|
|
|
|
38,333
|
|
Amortization of debt discount
|
|
|
-
|
|
|
|
9,494
|
|
Short-term notes issued for professional fees and expenses
|
|
|
-
|
|
|
|
25,000
|
|
Stock based expense
|
|
|
3,390
|
|
|
|
3,300
|
|
Derivative expense
|
|
|
30,001
|
|
|
|
60,140
|
|
Gain on extinguishment of debt
|
|
|
(220,390)
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Other current assets
|
|
|
-
|
|
|
|
(200,000)
|
|
Accounts payable and accrued expenses
|
|
|
243,152
|
|
|
|
136,787
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Operating Activities
|
|
|
(2,609)
|
|
|
|
(576,425)
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from
convertible notes
|
|
|
|
|
|
|
20,000
|
|
Proceeds from profit
share partner
|
|
|
-
|
|
|
|
550,874
|
|
Proceeds form officer
loans
|
|
|
1,300
|
|
|
|
7,610
|
|
Net Cash Provided by Financing Activities
|
|
|
1,300
|
|
|
|
578,484
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash
|
|
|
(1,309)
|
|
|
|
2,059
|
|
|
|
|
|
|
|
|
|
|
Cash, Beginning of
Period
|
|
|
1,343
|
|
|
|
739
|
|
|
|
|
|
|
|
|
|
|
Cash, End of
Period
|
|
$
|
34
|
|
|
$
|
2,798
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow
Information:
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Non-cash Investing and Financing
activities:
|
|
|
-
|
|
|
|
|
Common stock for conversion of convertible note
principal
|
|
$
|
171,418
|
|
$
|
253,785
|
|
Reclassification of note to convertible note due
to assignment
|
|
$
|
10,000
|
|
$
|
-
|
|
The accompanying notes are an integral
part of these condensed financial statements.
39
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
NOTE
1- NATURE OF OPERATIONS
Corporate History
Health Education Corporation d/b/a NutraNomics, (the "Company or
Nutranomics") was incorporated under the laws of the State of
Delaware on February 14, 1996. The Company was originally organized
to provide education services, books, cassette tapes and public
presentations. The Company utilized several revenue generating
tools in order to accomplish this goal including Live Blood
Analysis, iridology, bone density screening and other self-help
methods. In 1998, the Company changed its incorporation to the
State of Utah. In 2001, the Company created its own line of
nutritional products that quickly became its leading revenue
source. The Company filed for the d/b/a. of “NutraNomics” in order
to fully prepare and utilize the brand name for expansion. In
retail outlets and to its clientele, the Company is now known as
Nutranomics. The Company sells co-branded supplements direct to the
public, through marketing partners and to third party health
practitioners. The Company maintains multiple trademarks, trade
names and patents.
Merger
On
September 13, 2013, Buka Ventures, Inc. ("Buka"), a Nevada
corporation since March 15, 2007 and the Company, executed and
delivered a Share Exchange Agreement (the "Share Agreement") and
all required or necessary documentation to complete a merger
(collectively, the "Transaction Documents"), whereby Buka became
the parent company and Nutranomics became the wholly-owned
subsidiary on the closing of the Share Agreement. Prior to the
closing of this transaction and pursuant to the Share Exchange
Agreement, Buka canceled 25,000,000 of its 46,500,000 issued and
outstanding common shares and simultaneously issued 25,005,544
shares of its common stock in exchange for 8,994,800 shares of
Nutranomics common stock. The merger was treated as a reverse
acquisition and a recapitalization of a public company.
Accordingly, the historic financial statements of the Company are
the historic financial statements of Nutranomics. Buka’s name
was formally changed to “Nutranomics, Inc.” in connection with the
transaction. The “Company” hereinafter refers to Nutranomics,
Inc., the Nevada parent corporation, or Health Education
Corporation d/b/a Nutranomics, the Utah subsidiary corporation, as
the context requires (Health Education Corporation d/b/a
Nutranomics terminated its legal entity status in Utah on December
31, 2013).
Change of State of Incorporation
On
September 9, 2019 the Company filed Articles of Continuance with
the Secretary of State of Wyoming, which changed the corporate
registration from Nevada to Wyoming in accordance with the
resolution of the Company’s board of directors dated May 23,
2019.
Increase in Authorized Shares of Common Stock
On March 17, 2020,
the Wyoming Secretary of State approved the Company’s increase of
authorized common stock to 10,000,000,000.
NOTE
2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The
accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) for annual financial
information and the rules and regulations of the Securities and
Exchange Commission (“SEC”) for annual financial information. In
the opinion of the Company’s management, the accompanying financial
statements reflect all adjustments, consisting of normal, recurring
adjustments, considered necessary for a fair presentation of the
results for the year ending ended July 31, 2021.
40
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
Going Concern
The
Company’s financial statements are prepared using 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. For the nine months
ended April 30,2021 the Company has incurred net lincome of
$323,546 and used cash of $2,609 in operations. Further, the
Company has negative working capital of $6,559,758, a shareholders’
deficit of $6,559,758 and an accumulated deficit of $12,049,092 at
April 30,2021 and does not have the requisite liquidity to pay its
current obligations. Most of the debt obligations are currently in
default. These factors, among others, raise substantial doubt about
its ability to continue as a going concern. Management will seek to
increase revenues and reduce costs, while raising capital through
the sale of its stock. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Use of Estimates
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America (“US
GAAP”) requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. These estimates and
assumptions are based on management’s best estimates and judgment.
Management evaluates its estimates and assumptions on an ongoing
basis using historical experience and other factors, including the
economic environment, which management believes to be reasonable
under the circumstances. Management adjusts such estimates and
assumptions when facts and circumstances dictate. As future events
and their effects cannot be determined with precision, actual
results could differ from those estimates.
Derivative Liabilities
In
connection with the private placement of certain convertible notes
beginning in January 2014, the Company became contingently
obligated to issue shares of common stock in lieu of cash to
liquidate the notes. The Company values these convertible notes
payable using the multinomial lattice method that values the
derivative liability within the notes based on a probability
weighted discounted cash flow model. The resulting liability is
valued at each reporting date and the change in the liability is
reflected as change in derivative liability in the statement of
operations.
Convertible Notes
with Fixed Rate Conversion Options
The Company may enter into convertible notes, some of which
contain, predominantly, fixed rate conversion features, whereby the
outstanding principal and accrued interest may be converted by the
holder, into common shares at a fixed discount to the market price
of the common stock at the time of conversion. This results in a
fair value of the convertible note being equal to a fixed monetary
amount. The Company records the convertible note liability at its
fixed monetary amount by measuring and recording a premium, as
applicable, on the Note date with a charge to interest expense in
accordance with ASC 480 - “Distinguishing Liabilities from
Equity”.
Revenue Recognition
Our
revenue is derived from wholesale bulk products and retail products
sold to individuals and resellers.
Effective October 1, 2018, the Company adopted Accounting Standards
Codification (“ASC”) 606, Revenue From Contracts With Customers,
which is effective for public business entities with annual
reporting periods beginning after December 15, 2017. This new
revenue recognition standard (new guidance) has a five-step
process: a) Determine whether a contract exists; b) Identify the
performance obligations; c) Determine the transaction price; d)
Allocate the transaction price; and e) Recognize revenue when (or
as) performance obligations are satisfied. The impact of the
Company’s initial application of ASC 606 did not have a material
impact on its financial statements and disclosures and there was no
cumulative effect of the adoption of ASC 606. The Company defers
recognition of revenue until the performance obligations are
fulfilled. Fulfillment is triggered by shipment of the related
product to the contracted customer. Allowances for returns and
retail incentives are deducted from the revenue to be
recognized.
41
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
The
Company also recognizes revenues from the distribution of its
product through trade partners. Related revenues consist of product
costs, distribution fees, testing and labeling costs, as well as
any associated administrative fees. The Company recognizes these
revenues after the product has been shipped from the outsource
manufacturer to the trade partner. The Company has contractual
obligation to pay the outsource manufacturers, and as a principal
in these arrangements the Company includes the total product price
as revenue in accordance with applicable accounting guidance. The
Company has separately negotiated contractual relationships with
its trade partners, and under contracts with these trade partners
the Company assumes the credit risk of product produced by the
outsource manufacturer and dispensed to the trade partner.
Cost of Sales
The
Company includes product costs (i.e. material, direct labor and
overhead costs), shipping and handling expense, insurance on
inventory, production-related depreciation expense and product
license agreement expense in cost of sales.
Net Loss Per
Share
Even
though the Company has incurred income for the nine months ended
April 30, 2021, this arises from one time write offs of
liabilities; the Company will have a net loss for the year ended
July 31, 2021 and with the net loss in 2020, the potentially
dilutive shares are anti-dilutive and are thus not added into the
loss per share calculations.
Basic
loss per share is calculated by dividing the loss attributable to
stockholders by the weighted-average number of shares outstanding
for the period. Diluted loss per share reflects the potential
dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or
resulted in the issuance of common stock that shared in the
earnings (loss) of the Company. Diluted loss per share is computed
by dividing the loss available to stockholders by the weighted
average number of shares outstanding for the period and dilutive
potential shares outstanding unless such dilutive potential shares
would result in anti-dilution. As of April 30, 2021, the
outstanding principal balance of convertible notes, the settlement
balance for the 3(a)(10), and accrued interest of the convertible
notes, totaled $3,504,657 and was convertible into 4,163,335,831
shares of common stock. It should be noted that contractually the
limitations on these notes and warrants limit the number of shares
converted to 4.99% or 9.99% of the outstanding shares.
NOTE 3
– COMMIMENTS, CONTINGENCIES AND LEGAL MATTERS
The
Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain
conditions may exist as of the date the consolidated financial
statements are issued, which may result in a loss to the Company,
but which will only be resolved when one or more future events
occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of
judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or un-asserted
claims that may result in such proceedings, the Company evaluates
the perceived merits of any legal proceedings or un-asserted claims
as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
If
the assessment of a contingency indicates that it is probable that
a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in
the Company’s consolidated financial statements. If the assessment
indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and
material, would be disclosed.
Loss
contingencies considered remote are generally not disclosed unless
they involve guarantees, in which case the guarantees would be
disclosed.
Office Lease
The Company has
a month-to-month lease for a sales and marketing office in
Gladstone, Oregon. Since the lease term is monthly the Company has
determined that the present value of the obligation is equal to the
actual cash settlement no present value has been calculated.
Additionally, no obligation and future service use assets have been
recorded.
42
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
Litigation
On
August 15, 2019, a default judgement was issued to Typenex
Co-Investment, LLC, for $559,367, arising from the Company’s
default on the December 2, 2014, Typenex convertible note. The
Company has reclassified the convertible note principal and accrued
interest balances, along with related derivative balances to
settlement reserves. The court also awarded the former note holder
legal fees and interest of 22% from the date of the judgement until
settled. Management has engaged legal counsel on the matter and has
proposed various settlements with Typenex and believes that a
settlement will be reached during the next fiscal year end.
Management will assess the settlement reserve for adequacy once
legal fees and interest is specified by the plaintiff.
The
plaintiff has filed a motion seeking a court hearing to determine
the existence of any assets to satisfy the default judgement.
Inventory Purchase Commitment and Profit Sharing
Arrangement
On
September 19, 2019, the Company entered into an agreement to
purchase 100,000 pounds of industrial hemp with a CBD content of
14% or greater and THC content of less than .03% with a commercial
hemp farm in California. A purchase deposit of $200,000 was made on
September 25, 2019. The full amount of the deposit was recognized
as expense as of July 31, 2020.
On
September 20, 2019, the Company entered into a financing and
profit-sharing arrangement with a third party to provide the
working capital needed to purchase the hemp described above, from a
vendor selected by the profit sharing party. The arrangement
provided $550,874 for the deposit above on the hemp purchase and
financing for transportation and initial processing into CBD.
Repayment of the initial funding and profit sharing was expected
once the final processing into CBD was complete and the end product
was paid for by the ultimate purchaser. During the year ended
July31, 2020, the Company determined that the hemp vendor could not
meet the delivery obligation under the terms of the agreement. As a
result the Company is in the process of either obtaining the hemp
or a CBD distillate to fulfill the terms of the agreement with the
profit sharing party, which has been informed of the situation. The
Company has discussed various alternatives with the third party to
settle the matter; the profit sharing party recognizes that the
terms of the agreement specify that repayment is predicated on
finished product sales, however the potential for arbitration is
not considered likely but possible and final result is uncertain.
The Company has recognized the full amount of $550,874 as a
liability recorded in settlement reserves, at April 30, 2021.
Other
The
Company believes that it has taken into consideration all material,
asserted claims and unasserted potential claims, in establishing
settlement reserves, including current and legacy obligations under
former management prior to July 2016.
Management of the Company has conducted a diligent search and
concluded that, other than as disclosed herein, there were no
commitments, contingencies, or legal matters pending at the balance
sheet dates that have not been disclosed.
NOTE 4
– PREPAID EXPENSES OTHER CURRENT ASSETS
Prepaid expenses
were recorded for services to be rendered in conjunction with
management’s project to improve financial and operational
structure; a note was issued and recorded as payment for these
services.
|
|
April
30,2021
|
|
July 31,
2020
|
Prepaid
expenses
|
|
$25,000
|
|
$25,000
|
43
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts Payable and Accrued Expenses at October and July31, 2020,
represent the following:
|
|
April
30,2021
|
|
July 31,
2020
|
Accounts payable
|
|
$550,429
|
|
$550,729
|
Accrued
interest
|
|
518,192
|
|
620,896
|
Other
accrued expenses
|
|
384,352
|
|
177,819
|
Total
|
|
$1,452,973
|
|
$1,349,444
|
NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable consisted of the
following:
|
|
April
30, 2021
|
|
July 31, 2020
|
Principal
– Convertible notes issued prior to July 2016
|
|
$491,333
|
|
$592,218
|
Principal
– Convertible notes issued prior to July 2016 under settlement
arrangements
|
|
134,382
|
|
144,382
|
Principal
– Convertible notes issued since July 2016
|
|
555,500
|
|
620,500
|
Principal 3(a)(10)
settlement arrangement
|
|
890,125
|
|
890,125
|
Other Convertible
notes issued since July 2016
|
|
36,250
|
|
36,250
|
Premiums
– Convertible notes issued since July 2016
|
|
1,345,928
|
|
1,420,928
|
Total
– Convertible notes payable, net
|
|
$3,453,518
|
|
$3,704,403
|
Legacy Notes Issued Prior to July 2016 – September 2013 to
July 2016
On
September 27, 2013, the Company issued a convertible note to an
unrelated party for $250,000 that matured on September 27, 2015.
The note bears an interest rate of 10% per annum with a floor of
$.005 per share, and principal is convertible in part or in whole
into shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
maturity date. Evolution Capital Partners, LLC, acquired the note
through an assignment in December 2015. The unconverted balance at
April 30, 2021, was $250,000.
On
October 18, 2013, the Company issued a convertible note to an
unrelated party for $125,000 that matured on October 18, 2015. The
note bears an interest rate of 10% per annum with a floor of $.005
per share, and principal is convertible in part or in whole into
shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
the maturity date. Evolution Capital Partners, LLC, acquired the
note through an assignment in December 2015. The unconverted
balance at April 30,2021, was $68,850.
On
November 22, 2013, the Company issued a convertible note to an
unrelated party for $150,000 that matured on November 22, 2015. The
note bears an interest rate of 10% per annum with a floor of $.005
per share, and principal is convertible in part or in whole into
shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
the maturity date. Evolution Capital Partners, LLC, acquired the
note through an assignment in December 2015. The unconverted
balance at April 30,2021, was $150,000.
On
December 2, 2014, the Company entered into a collateralized secured
convertible promissory note with LG Capital Funding, LLC ("LG"), a
New York limited liability company, for an 8% convertible
promissory note with an aggregate principal amount of $73,500,
which together with any unpaid accrued interest was due on December
2, 2015. This convertible note together with any unpaid accrued
interest is convertible into shares of common stock at the holder's
option at a variable conversion price calculated as 58% of the
average of the lowest three closing bid prices during the
ten-trading day period ending on the conversion date. This note was
funded on December 10, 2014, when the Company received cash in the
amount of $70,000, with the remaining $3,500 being used for LG’s
legal and other origination expenses. The unconverted balance
of the note at April 30,2021, of $67,141 and accrued interest of
$79,193 was
written off and
included in gain on extinguishment of debt.
44
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
December 2, 2014, the Company entered into a convertible promissory
note with JMJ Financial, a Nevada sole proprietorship (“JMJ”), with
a face amount of $350,000, of which the Company is to assume
$35,000 in original interest discount (“OID”), which together with
any unpaid accrued interest was due on Dec 2, 2016. The note
is to be funded by JMJ at its discretion, and the initial tranche
was funded on December 16, 2014, when the Company received cash in
the amount of $55,000. The note balance funded (plus a pro rata
portion of the OID) together with any unpaid accrued interest is
convertible into shares of common stock at a variable conversion
price calculated as 65% of the average of the lowest trade price
during a 25-day period ending on the last complete trading day
prior to the conversion date. On December 16, 2014, the Company
estimated the fair market value of the derivative liability
associated with the bifurcated conversion feature to be $71,321.
The unconverted balance of the note at April 30,2021, of $33,744
and accrued interest of $40,312 was written off and included in
gain on extinguishment of debt.
On
June 2, 2015, the Company entered into a convertible promissory
note with Firehole River Capital, LLC for a 12% convertible
promissory note with an aggregate principal amount of $27,500 which
together with any unpaid accrued interest was due on March 2, 2015.
This convertible note together with any unpaid accrued interest is
convertible into shares of common stock at the holder's option at a
variable conversion price calculated as 58% of the Market Price,
which means the lowest Trading Price (defined as the closing bid
prices) during the 10-trading day period ending on the last
complete trading day prior to the conversion date. On July 8, 2015
the Company received cash in the amount of $17,400, with the
remaining $10,100 being used for legal fees. The Company analyzed
the note on the issuance date and determined that the variable
conversion price exceeded the authorized number of shares resulting
in the need for bifurcation into a separate derivative liability
valued at fair market value. The Company estimated the fair market
value of the derivative liability associated with the bifurcated
conversion feature to be $31,695. The unconverted principal balance
of the note at April 30,2021, was $22,483.
On
September 14, 2015, at the time of former CEO, Mr. Doron’s,
resignation, Mr. Doron received a convertible note from the Company
in the aggregate principal amount of $299,382 in satisfaction of
his accrued salary and stock payables. This note matured on
March 14, 2016 and bears no interest. This convertible note is
convertible into shares of common stock at the holder's option at
100% of the closing bid price of such common stock on the trading
day immediately preceding the conversion. The Company determined
that the variable conversion price exceeded the authorized number
of shares resulting in the need for bifurcation into a separate
derivative liability valued at fair market value. On October 31,
2015, the Company estimated the fair market value of the derivative
liability associated with the bifurcated conversion feature to be
$4,291 and a discount on the note of $4,291. On March 23, 2018, Mr.
Doron sold $25,000 of face value of the note to a third party.
During the year ended July 31, 2019 Mr. Doron sold an additional
$105,000 of face value of the note to a third party (a settlement
arrangement). During the year ended July 31, 2020, Mr. Doron sold
an additional $35,000 of the face value of the note to a third
party. The remaining unconverted balance of the note at April
30,2021, was $134,382.
Notes Issued During Restructuring Period – July 2016 to
Present
On
October 24, 2017, the Company issued a convertible note payable for
$50,000 to Livingston Asset Management LLC for certain services to
be rendered in conjunction with financial and operational
restructuring. The note has an interest rate of 10% and matured on
April 30, 2018. The note is subject to customary default provisions
for similar notes. The note may be converted into common stock at
any time after issuance at a 25% discount to the lowest closing bid
price for the stock during the 30 trading days immediately
preceding the delivery of conversion notice to the Company. The
convertible note was accounted for as stock settled debt under ASC
480 and recorded a premium of $33,333 charged to interest expense.
The note is now covered by the 3(a)(10) settlement.
On
February 14, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $1,200. The note funded
expenses incurred by the Company during restructuring. The note has
debt discount of $200 to be amortized to interest expense over the
life of the note. The note has an interest rate of 12%, matured on
August 31, 2018 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $1,200 was recorded with
a charge to debt discount, which was amortized to interest expense
as of July 31, 2019. The note balance as of April 30,2021, is
$1,200.
On
March 23, 2018, the Company issued a convertible note payable to an
individual investor in the amount of $20,000; the funds from the
note were used for general corporate purposes. The note has an
interest rate of 12%, matured on March 19, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated. A
derivative liability of $27,936 was recorded with charges to
derivative expense of $7,936 and to debt discount of $20,000, which
was fully amortized to interest expense as of April 30,2021. The
note balance as of April 30, 2020, is $20,000.
45
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
May 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on December
31, 2018 and can be converted into common shares at the 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note and accrued interest were converted into 133,917,280
shares of the Company’s common stock on April 28, 2021.
On
June 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on July 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note and accrued
interest were converted into 133,067,960 shares of the Company’s
common stock on April 28, 2021.
On
June 29, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $2,500. The note funded
expenses incurred by the Company during restructuring. The note has
debt discount of $135 to be amortized to interest expense over the
life of the note. The note has an interest rate of 12%, matured on
December 29, 2018 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $3,176 was recorded with
a charge to debt discount of $2,500 to be amortized over the life
of the note and a charge of $976 to derivative expense. The note
balance as of April 30,2021, is $2,500.
On
July 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on February
28, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note and accrued interest were converted into 132,246,040
shares of the Company’s common stock on April 28, 2021.
On
July 20, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $3,500. The note has debt
discount of $12. The note has an interest rate of 12%, matured on
January 21, 2019 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $4,688 was recorded with
a charge to debit discount of $3,500 to be amortized over the life
of the note and a charge of $1,188 to derivative expense. The note
balance as of April 30,2021, is $3,500.
On
August 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on March 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of April 30,2021, is $25,000.
On
August 15, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $7,500. The note has debt
discount of $500. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on February 14, 2019 and can be converted into common
shares at the lesser of: i) 75% of the price of the common stock at
the date the note was issued, or ii) 50% of the lowest bid price
during the 30 trading days immediately preceding the date of the
conversion notice. Due to the variable conversion pricing feature
the note is considered to include a derivative for which a fair
market value was calculated. A derivative liability of $12,018 was
recorded with a charge to debt discount of $7,500 to be amortized
over the life of the note and a charge of $4,518 to derivative
expense. The note balance as of April 30,2021, is $7,500.
On
September 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on April 30,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of April 30,2021, is $25,000.
46
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
September 5, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $5,500. The note has debt
discount of $319. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on March 4, 2019 and can be converted into common shares at
the lesser of: i) 75% of the price of the common stock at the date
the note was issued, or ii) 50% of the lowest bid price during the
30 trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $8,060 was recorded with
a charge to debt discount of $5,500 to be amortized over the life
of the note and a charge of 2,560 to derivative expense. The note
balance as of April 30,2021, is $5,500.
On
September 17, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $3,500. The note has debt
discount of $500. The note proceeds were used for general corporate
purposes. The note has an interest rate of 12%, matured on March
16, 2019 and can be converted into common shares at the lesser of:
i) 75% of the price of the common stock at the date the note was
issued, or ii) 50% of the lowest bid price during the 30 trading
days immediately preceding the date of the conversion notice. Due
to the variable conversion pricing feature the note is considered
to include a derivative for which a fair market value was
calculated. A derivative liability of $5,244 was recorded with a
charge to debt discount of $3,500 to be amortized over the life of
the note and a charge of 1,744 to derivative expense. The note
balance as of April 30,2021, is $3,500.
On October 1, 2018 the Company issued a
convertible note payable for financial services to Oscaleta
Partners, LLC in the amount of $25,000. The note has an interest
rate of 10%, matured on May 31, 2019 and can be converted into
common shares at 50% of the lowest bid price during the 30 trading
days immediately preceding the date of the conversion notice. The
convertible note was accounted for as stock settled debt under ASC
480 and recorded a premium of $25,000 with a charge to interest
expense at issuance. The note balance as of April 30,2021, is
$25,000.
On
October 5, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $4,000. The note has an
interest rate of 12%, matured on March 16, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated. A
derivative liability of $5,244 was recorded with a charge to debt
discount of $4,000 to be amortized over the life of the note and a
charge of 1,244 to derivative expense. The note balance as of April
30,2021, is $4,000.
On
November 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on June 30,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of April 30,2021, is $25,000.
On
November 16, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $4,000. The note has debt
discount of $500. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on May 15, 2019 and can be converted into common shares at
the lesser of: i) 75% of the price of the common stock at the date
the note was issued, or ii) 50% of the lowest bid price during the
30 trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $5,244 was recorded with
a charge to debt discount of $3,500 to be amortized over the life
of the note and a charge of 1,744 to derivative expense. The note
balance as of April 30,2021, is $4,000.
On
December 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on July 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of April 30,2021, is $25,000.
On
January 1, 2019 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on August
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note balance as of April 30,2021, is $25,000.
47
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
February 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on September
30, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of April 30,2021, is $25,000.
On
February 2, 2019, the Company issued a convertible note payable to
an individual investor in the amount of $30,000. The note has an
interest rate of 12%, matures on February 2, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated and
recorded. The note balance as of April 30,2021, is $25,000.
On
March 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on October
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of April 30,2021, is $25,000.
On
April 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on November
30, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of April 30,2021, is $25,000.
On
April 4, 2019, the Company issued a convertible note payable for
cash payments of $24,500 with an original issue discount of $2,500
to Oscaleta Partners, LLC in the amount of $27,000. The OID will be
amortized over the life of the loan. The note has an interest rate
of 12%, matures on October 3, 2019 and can be converted into common
shares at the lesser of: $.00075 or 50% of the lowest bid price
during the 30 trading days immediately preceding the date of the
conversion notice. Due to the variable conversion pricing feature
the note is considered to include a derivative for which a fair
market value was calculated and recorded. The note balance as of
April 30,2021, is $27,000.
On
May 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on December
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of April 30,2021, is $25,000.
On
June 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on January
31, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of April 30,2021, is $25,000.
On
June 7, 2019, the Company issued a convertible note payable to an
individual investor in the amount of $20,000. The note has an
interest rate of 12%, matures on June 6, 2020 and can be converted
into common shares 40% of the lowest bid price during the 20
trading days immediately preceding the date of the conversion
notice. The convertible note is accounted for as stock settled debt
under ASC 480 and a premium of $30,000 was charged to interest
expense on the issuance date. The note balance as of April 30,2021,
is $20,000.
On
July 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on February
28, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of April 30,2021, is $25,000.
48
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
July 11, 2019, Trillium Partners LP purchased $20,000 of the note
first issued to the former CEO Michael Doron on September 14, 2015.
Following the sale, the original note balance was reduced to
$169,382. The assignment and restatement of terms provides for
conversion of the principal into common shares at the lower of
$.001 or 50% of the lowest closing bid price during the 30 trading
days immediately preceding the issuance of a conversion notice. Due
to the variable conversion pricing feature the note is considered
to include a derivative for which a fair market value of $80,016,
was calculated and recorded. The original Doron note balance is
$169,382 following the assignment. On September 27, 2019, Trillium
converted $9,500 of principal into 70,666,667 common shares, on
January 16, 2020, Trillium converted $1,700 of principal into
56,000,000, common shares and on February 18, 2020 an additional
$7,000 in principal was converted into common shares. Following the
conversions, the note balance as of April 30,2021, is $1,800.
$45,609 of the derivative liability was reclassified to additional
paid in capital in conjunction with the conversions.
On
July 15, 2019, the Company issued a convertible note payable to an
individual investor in the amount of $15,000. The note has an
interest rate of 12%, matures on July 14, 2020 and can be converted
into common shares at 40% of the lowest bid price during the 20
trading days immediately preceding the date of the conversion
notice. The convertible note is accounted for as stock settled debt
under ASC 480 and a premium of $22,500 was charged to interest
expense on the issuance date. The note balance as of April 30,2021,
is $15,000.
On
August 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on February
28, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of April 30,2021, is $25,000.
On February 7, 2020, the Company issued a
convertible note to an individual in the amount of $20,000. The
note bears interest at 10% per annum, matures on February 7, 2021
and is convertible into common stock. The conversion price is to be
40% of the lowest closing bid price during the twenty days
preceding the conversion notice. Due to the fixed percentage
conversion terms it will be treated as stock settled debt in
accordance with ASC 480.
Court Approved Settlement under Rule 3(a)(10)
On
December 18, 2015, accounts payable totaling $45,000 were converted
into convertible notes in exchange for a 10% one-time fee. Two
$5,000 notes are past due at January 31, 2016 and are convertible
at a 10% discount to the prior day’s closing price. The balance
($35,000) of the notes were due July on 18, 2016 and are
convertible at a 42% discount to the average of the ten prior
trading days’ closing price. $35,000 of derivative liability was
recorded as debt discount upon issuance of the note maturing on
July 18, 2016. The note is now covered by the 3(a)(10) settlement
and reclassified to the 3(a)(10) note along with the related
derivative liability being reclassified as put premium. (See Note
7)
On
October 24, 2017, the Company issued a convertible note payable for
$50,000 to Livingston Asset Management LLC for certain services to
be rendered in conjunction with financial and operational
restructuring. The note has an interest rate of 10% and matured on
April 30, 2018. The note is subject to customary default provisions
for similar notes. The note may be converted into common stock at
any time after issuance at a 25% discount to the lowest closing bid
price for the stock during the 30 trading days immediately
preceding the delivery of conversion notice to the Company. The
convertible note was accounted for as stock settled debt under ASC
480 and recorded a premium of $33,333 charged to interest expense.
The note is now covered by the 3(a)(10) settlement and reclassified
to the 3(a)(10) note. (See Note 7)
Six
past due convertible fee notes totaling $150,000 issued to Oscaleta
Partners LLC for each month from November 1, 2017, to April 1,
2018, were covered in the 3(a)(10) settlement. The convertible
notes were accounted for as stock settled debt under ASC 480 and
premiums of $150,000 were recorded with a charge to interest
expense at issuance. The notes have been reclassified to the
3(a)(10), liability. (See Note 7)
Other Convertible Notes
On
October 15, 2018 an individual investor was issued a convertible
note payable in the amount of $10,000. The note proceeds were used
for general corporate purposes. The note has an interest rate of
10%, matures on October 15, 2020 and can be converted into common
shares at fixed price of $.0004. The note balance as of April
30,2021, is $10,000.
49
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
On
May 16, 2019, the Company issued a note to an individual for
$25,000; cash used for general corporate purposes. The note calls
for monthly principal repayments of $5,000, beginning July 1, 2019.
The payments due have not been made and penalties of $2,500, will
be charged after each 45-day delinquent payment, the payment is to
be additional common shares valued at the market price on the
46th day of delinquency. Additionally, a royalty payment
of 10% of specific product sales capped at approximately $3,000 is
charged in lieu of interest. The note balance as of April 30,2021,
is $25,000. The Company and the note holder have reached an oral
agreement to settle the liability and will execute the final
agreement prior to the end of the fiscal year (July 31, 2021).
The May 16, 2019 note includes a
warrant for $10,000 in common stock at the market price on the date
of issuance. The price of the Company’s stock was $.0009 on the
note issuance date, which equates to 11,111,111 common shares,
resulting in $10,000 recorded as additional paid in capital offset
with derivative liability. Changes to the value of the warrant, if
material will be recorded as fair market values changes to the
derivative liability at each reporting date. The terms of the note
have been amended and will be finalized by July 31,
2021.
NOTE 7 – DEBT SETTLEMENT UNDER COURT ORDER
– 3(a)(10)
On
January 3, 2019, a US District Court approved a settlement that
covered $950,769 of notes, convertible notes and amounts owed to
various creditors (collectively the “Creditors”)”). One Creditor
withdrew from the settlement leaving $890,125 in the final
settlement pool. Livingston Asset Management, LLC, (“LAM”) under
individual agreements with the Creditors, fixed the amount owed and
as such there is no further interest due on these liabilities. As a
result of the change in obligor amounts formerly classified as
notes payable, convertible notes, accrued expenses and accounts
payable have been reclassified into the 3(a)(10) settlement. The
terms of the agreements (including the related agreement between
LAM and the Company) the Company will issue shares directly to LAM
as requested and LAM will sell the shares (unrestricted as allowed
under Section 3(a)(10) of the 1933 Securities Act) on the open
market through unaffiliated brokers. The shares are issued to LAM
at a 50% discount to the sale price, as such the Company has
accounted for the $890,125 settlement amount as stock settled debt
under ASC 480 and recorded a premium of $890,125 with a charge to
loss on debt extinguishment of $673,699. The charge to loss on debt
extinguishment was net of premiums and derivative liabilities
directly associated with the Creditor liabilities as originally
recorded. Sales to liquidate creditor balances have occurred as of
October 31, 2020, however the accounting for the payments and costs
have been delayed due to personnel restrictions during the COVID 19
quarantine, and the balance remains $890,125. (See Note 10)
NOTE
8- DERIVATIVE LIABILITIES
FASB
ASC 820 defines fair value, establishes a framework for measuring
fair value under U.S. generally accepted accounting principles and
enhances disclosures about fair value measurements. Fair value is
defined 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.
Valuation techniques used to measure fair value under FASB ASC 820
must maximize the use of observable inputs and minimize the use of
unobservable inputs. The standard describes a fair value hierarchy
based on three levels of inputs, with the first two inputs
considered observable and the last input considered unobservable,
that may be used to measure fair value as follows:
·
|
Level one —
Quoted market prices in active markets for identical assets or
liabilities;
|
·
|
Level two
– Inputs, other than level one inputs, that are either
directly or indirectly observable; and
|
·
|
Level three —
Unobservable inputs developed using estimates and assumptions,
which are developed
by the
reporting entity and reflect those assumptions that a market
participant would use.
|
Determining which category an asset or liability falls within the
hierarchy requires significant judgment. The Company evaluates its
hierarchy disclosures each quarter and has determined that all
derivative liabilities are level three. The Company has one
liability measured at fair value on a recurring basis, which
consists of a derivative liability on certain convertible notes
payable and warrants. As of April 30,2021, this derivative
liability had an estimated fair value of $568,060. The Company has
no assets that are measured at fair value on a recurring basis.
50
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
The
following table presents information about our derivative liability
related to convertible notes, which was our only financial
instrument measured at fair value on a recurring basis using
significant inputs other than level one inputs that are either
directly or indirectly observable (Level 2) as of April 30,
2021:
|
Total
|
Balance at July 31,
2020
|
538,059
|
Initial derivative
expense
|
30,001
|
|
|
Balance at April 30,
2021
|
$568,060
|
The
fair value of this derivative liability was calculated using the
multinomial lattice models that values the derivative liability
within the notes based on a probability weighted discounted cash
flow model. These models are based on future projections of the
various potential outcomes. The features in the notes that were
analyzed and incorporated into the model included the conversion
feature with the reset provisions; redemption provisions; and the
default provisions. Assumptions used to calculate the fair value of
the derivative liability were as follows:
Expected term in
years
|
0-1
|
Risk-free interest
rates
|
1.7%
|
Volatility
|
235%
|
Dividend yield
|
0%
|
In
addition to the assumptions above, the Company also takes into
consideration whether or not the Company would participate in
another round of financing and if that financing is registered or
not and what that stock price would be for the financing at that
time.
Derivative liabilities for notes that have matured remain at the
historic liability amount unless converted into common shares at
which time the proportionate principal and derivative liability are
decreased. All of the Company’s convertible notes having embedded
conversion features treated as derivative liabilities have matured
and therefore no changes due to fair market valuation have been
calculated during the nine months ended April 30, 2021.
NOTE 9 – SETTLEMENT RESERVES
Certain liabilities and contingencies have been accrued as expense
and are collectively classified as settlement reserves. The balance
at April 30, 2021 of $1,110,241 includes judgement amounts for a
former note holder and $550,874, due to a hemp venture partner,
which has been reclassified to settlement reserves due to the
uncertainty surrounding the ability to procure the hemp for which
the funds were advanced. During the nine months ended April 30,
2021, management has concluded that legal settlement reserves were
more than the expected liabilities and recognized $382,308 of other
income related to the adjustment of reserves.
NOTE
10- STOCKHOLDERS’ DEFICT
There
are 25,000,000 shares of Series A Preferred stock authorized and
1,000,000 outstanding at April 30, 2021.
On March 17, 2020,
the Wyoming Secretary of State approved the Company’s increase of
authorized common stock to 10,000,000,000.
The Company has ten
billion authorized shares. At April 30, 2021, and July 31, 2020,
there are 4,163,335,831 and 4,117,033,449 shares of common stock,
outstanding, respectively.
The
stockholders’ deficit is $6,559,758, at April 30, 2021 and
$7,058,112 at July 31, 2020.
Common Stock Outstanding under 3(a)(10) Settlement
The
total shares issued for the 3(a)(10) as of April 30,2021 is
1,256,288,000. The shares are issued at par with equal offset to
additional paid in capital until proceeds of share sales are
confirmed by the creditor covered under the settlement, at which
time the liability will be reduced with a credit to additional paid
in capital. As of April 30, 2021, no such confirmations have been
received.
51
NUTRANOMICS,
INC.
NOTES TO
CONDENSED FINANCIAL STATEMENTS
April 30,
2021 (Unaudited)
Issuance of Common Stock for Conversion of Notes Payable
On
April 28, 2021, the Company issued 399,231,280 shares of common
stock to Oscaleta Partners LLC in conversion of $75,000, $21,418
and $3,390 of principal, accrued interest and conversion fees
respectively.
NOTE 11- SUBSEQUENT EVENTS
On
May 21, 2021, the Company issued 73.000,000 shares of common stock
to Trillium Partners LP in conversion of $26,800 and $2,400 of
principal and conversion fees respectively. The original note was
dated September 14, 2015 and was issued for officer compensation,
Trillium obtained the notes for cash in a purchase and
assignment.
Between May 1, and May 27, 2021, the Company issued 496,451,514
shares of common stock to Oscaleta Partners LLC in conversion of
$150,000, $38,273 and $6,780 of principal, accrued interest and
conversion fees respectively. The notes were dated from May 1, 2018
through January 1, 2019 for services and fees.
Between May 21, and May 27, 2021, the Company issued 298.405,334
shares of common stock to Oscaleta Partners LLC in conversion of
$58,700, $18,764 and $10,240 of principal and conversion fees
respectively. The notes were dated between February 12, 2018 and
April 4, 2019 and were issued for cash,
Issuance of Convertible Note Payable
On
May 3, 2021, The Company issued a convertible note payable to
Livingston Asset Management LLC, for $45,000 in principal of which
$5,000 is original issue discount (“OID”) and $40,000 cash to be
used for general corporate purposes. The note matures October 31,
2021, bears interest of 10% and is convertible into common stock at
a fixed price of $0.0002 per share.
Management has reviewed all events and contingencies since April
30,2021 through the issuance date of the report and found not
material events or contingencies of a reportable nature.
52
NUTRANOMICS, INC.
BALANCE SHEETS
July 31, 2020 & 2019
(Unaudited)
|
|
July 31,
|
|
July 31,
|
ASSETS
|
|
2020
|
|
2019
|
CURRENT
ASSETS
|
|
|
|
|
Cash
|
|
$1,343
|
|
$739
|
Prepaid
expenses
|
|
25,000
|
|
25,000
|
Total Current
Assets
|
|
26,343
|
|
25,739
|
|
|
|
|
|
INTANGIBLES, net
|
|
-
|
|
3,703
|
|
|
|
|
|
Total
Assets
|
|
$26,343
|
|
$29,442
|
|
|
|
|
|
IABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Accounts payable
and accrued expenses
|
|
$1,349,444
|
|
$1,111,459
|
Convertible notes
payable, net of discount and premiums
|
|
1,924,153
|
|
1,929,237
|
Settlement
under3(a)(10), including premiums
|
|
1,780,250
|
|
1,780,251
|
Note derivative
liability
|
|
538,059
|
|
626,224
|
Warrant derivative
liability
|
|
-
|
|
4,444
|
Settlement
reserves
|
|
1,492,549
|
|
937,930
|
Total Current
Liabilities
|
|
7,084,455
|
|
6,389,545
|
|
|
|
|
|
Total
Liabilities
|
|
7,084,455
|
|
6,389,545
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT
|
|
|
|
|
Preferred stock; par value of $.001, 25,000,000
shares authorized;
|
|
|
|
|
1,000,000 and 1,000,000 shares issued and
outstanding at
|
|
|
|
|
July 31, 2020 and 2019,
respectively
|
|
1,000
|
|
1,000
|
Common stock; par value of $.001,
10,000,000,000 shares authorized;
|
|
|
|
|
4,117,033,449 and 2,161,787,677
shares issued and outstanding at
|
|
|
|
|
July 31, 2020, and 2019,
respectively
|
|
4,117,031
|
|
2,161,785
|
Additional paid in capital
|
|
1,196,495
|
|
2,898,955
|
Accumulated deficit
|
|
(12,372,638)
|
|
(11,421,843)
|
Total Stockholders' Deficit
|
|
(7,058,112)
|
|
(6,360,103)
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
$26,343
|
|
$29,442
|
The accompanying notes are an integral part of these
financial statements.
53
NUTRANOMICS, INC.
STATEMENTS OF OPERATIONS
Years Ended July 31, 2020 and 2019 (Unaudited)
|
|
For the Twelve Months
Ended
July 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
REVENUES
|
|
$871
|
|
$59,544
|
COST OF SALES
|
|
1,278
|
|
37,979
|
|
|
|
|
|
GROSS PROFIT
|
|
(407)
|
|
21,565
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
General and administrative
|
|
326,267
|
|
79,412
|
Advertising and marketing
|
|
15,439
|
|
9,626
|
Professional fees
|
|
83,108
|
|
434,583
|
Salaries and wages
|
|
170,288
|
|
71,557
|
Total Operating Expenses
|
|
595,102
|
|
595,178
|
|
|
|
|
|
OPERATING (LOSS)
|
|
(595,509)
|
|
(573,613)
|
|
|
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
Other
income(expense)
|
|
-
|
|
(22,010)
|
Change in fair value of derivative
|
|
-
|
|
(98,789)
|
Derivative expense
|
|
(60,140)
|
|
(191,580)
|
Interest expense
|
|
(295,146)
|
|
(678,761)
|
Loss on extinguishment
|
|
-
|
|
(673,699)
|
Total Other Income
(Expense)
|
|
(355,286)
|
|
(1,664,839)
|
|
|
|
|
|
NET (LOSS) BEFORE INCOME TAXES
|
|
(950,795)
|
|
(2,238,452)
|
|
|
|
|
|
Provision for income taxes
|
|
-
|
|
-
|
|
|
|
|
|
NET (LOSS)
|
|
$(950,795)
|
|
$(2,238,452)
|
|
|
|
|
|
BASIC AND DILUTED LOSS PER SHARE
|
|
$(0.0003)
|
|
$(0.0016)
|
|
|
|
|
|
Weighted Average Shares Outstanding - Basic and
Diluted
|
|
3,725,474,097
|
|
1,390,624,924
|
The accompanying notes are an integral
part of these financial statements.
54
NUTRANOMICS, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR
THE YEARS ENDED JULY 31, 2020 AND 2019
(Unaudited)
For the Year Ended
July 31, 2020 and 2019
|
Preferred Stock
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Total
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional Paid
in Capital
|
|
|
Accumulated
Deficit
|
|
Stockholders'
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 31,
2018
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
1,300,913,704
|
|
|
|
1,300,911
|
|
|
|
3,421,830
|
|
|
|
(9,183,391
|
)
|
|
(4,459
,650
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of warrants
for debt commitment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
(10,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock for
conversion of convertible note principal
|
|
|
-
|
|
|
|
-
|
|
|
|
760,873,973
|
|
|
|
760,874
|
|
|
|
(412,875
|
)
|
|
|
|
-
|
|
347,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
for 3(a)(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
100,000,000
|
|
|
|
100,000
|
|
|
|
(100,000
|
)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended July 31, 2019
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,238,452
|
)
|
|
(2,238,452
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 31,
2019
|
|
|
1,000,000
|
|
|
|
1,000
|
|
|
|
2,161,787,677
|
|
|
|
2,161,785
|
|
|
|
2,898,955
|
|
|
|
(11,421,843
|
)
|
|
(6,360,103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock for
conversion of convertible notes
|
|
|
-
|
|
|
|
-
|
|
|
|
826,257,772
|
|
|
|
826,258
|
|
|
|
(573,472
|
)
|
|
|
|
|
|
252,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation from
conversion error
|
|
|
|
|
|
|
|
|
|
|
(27,300,000
|
|
)
|
|
(27,300
|
)
|
|
|
27,300
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued
for settlement 3(a)(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
1,156,288,000
|
|
|
|
1,156,288
|
|
|
|
(1,256,288
|
)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year ended July 31, 2020
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(950,795
|
)
|
|
(950,795
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance July 31,
2020
|
|
|
1,000,000
|
|
|
$
|
1,000
|
|
|
|
4,117,033,449
|
|
|
$
|
4,117,031
|
|
|
$
|
1,196,495
|
|
|
$
|
(12,372,638
|
)
|
$
|
(7,058,112
|
)
|
The accompanying notes are an integral
part of these financial statements.
55
NUTRANOMICS, INC.
|
|
STATEMENTS OF CASH FLOWS
For the Years ended July 31, 2020 and
2019 (Unaudited)
|
|
|
|
The
Year Ended
|
|
|
|
July 31,
|
|
|
|
2020
|
|
|
2019
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net (Loss)
|
|
$
|
(950,795
|
)
|
|
$
|
(2,238,452
|
)
|
Adjustments to reconcile net (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Loss on debt extinguishment
|
|
|
-
|
|
|
|
673,699
|
|
Impairment charge for
intangible asset
|
|
|
3,703
|
|
|
|
-
|
|
Stock based expense
|
|
|
3,300
|
|
|
|
-
|
|
Interest expense for note premium
|
|
|
38,333
|
|
|
|
490,000
|
|
Amortization of debt discount
|
|
|
9,494
|
|
|
|
63,652
|
|
Short-term notes issued for professional fees & expenses
|
|
|
25,000
|
|
|
|
300,000
|
|
Changes in fair market value of derivatives
|
|
|
-
|
|
|
|
98,789
|
|
Derivative expense
|
|
|
60,140
|
|
|
|
213,076
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
-
|
|
|
|
24,000
|
|
Other assets
|
|
|
-
|
|
|
|
23,267
|
|
Inventory
|
|
|
-
|
|
|
|
25,234
|
|
Deferred revenue
|
|
|
-
|
|
|
|
(222)
|
|
Accounts payable and accrued expenses
|
|
|
240,555
|
|
|
|
159,110
|
|
Net Cash (Used in) Operating Activities
|
|
|
(570,270
|
)
|
|
|
(167,847
|
)
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from profit
share partner
|
|
|
550,874
|
|
|
|
-
|
|
Proceeds from
convertible debt issued
|
|
|
20,000
|
|
|
|
167,977
|
|
Net Cash Provided by Financing Activities
|
|
|
570,874
|
|
|
|
167,977
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Cash and Cash Equivalents
|
|
|
604
|
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents, Beginning of Year
|
|
|
739
|
|
|
|
609
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents, End of Year
|
|
$
|
1,343
|
|
|
$
|
739
|
|
Supplemental Disclosures of Cash Flow
Information:
|
|
|
|
|
|
|
|
|
Cash paid during the period
for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-cash Investing
and Financing activities:
|
|
|
|
|
|
|
|
|
Debt discount
|
|
$
|
-
|
|
|
$
|
28,946
|
|
Conversion of debt to common stock
|
|
$
|
252,786
|
|
|
$
|
-
|
|
Convertible debt premium
|
|
$
|
38,332
|
|
|
$
|
562,705
|
|
Derivative liability reclassified to settlement reserve (2020) and
debt premium
|
|
$
|
4,444
|
|
|
$
|
54,608
|
|
The accompanying notes are an integral
part of these financial statements.
56
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
NOTE
1- NATURE OF OPERATIONS
Corporate History
Health Education Corporation d/b/a NutraNomics, (the "Company or
Nutranomics") was incorporated under the laws of the State of
Delaware on February 14, 1996. The Company was originally organized
to provide education services, books, cassette tapes and public
presentations. The Company utilized several revenue generating
tools in order to accomplish this goal including Live Blood
Analysis, iridology, bone density screening and other self-help
methods. In 1998, the Company changed its incorporation to the
State of Utah. In 2001, the Company created its own line of
nutritional products that quickly became its leading revenue
source. The Company filed for the d/b/a. of “NutraNomics” in order
to fully prepare and utilize the brand name for expansion. In
retail outlets and to its clientele, the Company is now known as
Nutranomics. The Company sells co-branded supplements direct to the
public, through marketing partners and to third party health
practitioners. The Company maintains multiple trademarks, trade
names and patents.
Merger
On
September 13, 2013, Buka Ventures, Inc. ("Buka"), a Nevada
corporation since March 15, 2007 and the Company, executed and
delivered a Share Exchange Agreement (the "Share Agreement") and
all required or necessary documentation to complete a merger
(collectively, the "Transaction Documents"), whereby Buka became
the parent company and Nutranomics became the wholly-owned
subsidiary on the closing of the Share Agreement. Prior to the
closing of this transaction and pursuant to the Share Exchange
Agreement, Buka canceled 25,000,000 of its 46,500,000 issued and
outstanding common shares and simultaneously issued 25,005,544
shares of its common stock in exchange for 8,994,800 shares of
Nutranomics common stock. The merger was treated as a reverse
acquisition and a recapitalization of a public company.
Accordingly, the historic financial statements of the Company are
the historic financial statements of Nutranomics. Buka’s name
was formally changed to “Nutranomics, Inc.” in connection with the
transaction. The “Company” hereinafter refers to Nutranomics,
Inc., the Nevada parent corporation, or Health Education
Corporation d/b/a Nutranomics, the Utah subsidiary corporation, as
the context requires (Health Education Corporation d/b/a
Nutranomics terminated its legal entity status in Utah on December
31, 2013).
Change of State of Incorporation
On
September 9, 2019 the Company filed Articles of Continuance with
the Secretary of State of Wyoming, which changed the corporate
registration from Nevada to Wyoming in accordance with the
resolution of the Company’s board of directors dated May 23,
2019.
Increase in Authorized Shares of Common Stock
On
March 17, 2020, the Wyoming Secretary of State approved the
Company’s increase of authorized common stock to
10,000,000,000.
NOTE
2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The
accompanying unaudited financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”) for annual
financial information and the rules and regulations of the
Securities and Exchange Commission (“SEC”) for annual financial
information. In the opinion of the Company’s management, the
accompanying financial statements reflect all adjustments,
consisting of normal, recurring adjustments, considered necessary
for a fair presentation of the results for the year ending ended
July 31, 2020.
57
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
Going Concern
The
Company’s financial statements are prepared using 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. For the year ended
July 31, 2020 the Company has incurred net losses of $950,795 and
used cash of $570,270 in operations. Further, the Company has
negative working capital of $7,058,112, shareholders’ deficit of
$7,058,112 and an accumulated deficit of $12,372,638 at July 31,
2020 and does not have the requisite liquidity to pay its current
obligations. Most of the debt obligations are currently in default.
These factors, among others, raise substantial doubt about its
ability to continue as a going concern. Management will seek to
increase revenues and reduce costs, while raising capital through
the sale of its stock. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Use of Estimates
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America (“US
GAAP”) requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. These estimates and
assumptions are based on management’s best estimates and judgment.
Management evaluates its estimates and assumptions on an ongoing
basis using historical experience and other factors, including the
economic environment, which management believes to be reasonable
under the circumstances. Management adjusts such estimates and
assumptions when facts and circumstances dictate. As future events
and their effects cannot be determined with precision, actual
results could differ from those estimates.
Derivative Liabilities
In
connection with the private placement of certain convertible notes
beginning in January 2014, the Company became contingently
obligated to issue shares of common stock in lieu of cash to
liquidate the notes. The Company values these convertible notes
payable using the multinomial lattice method that values the
derivative liability within the notes based on a probability
weighted discounted cash flow model. The resulting liability is
valued at each reporting date and the change in the liability is
reflected as change in derivative liability in the statement of
operations.
Convertible Notes
with Fixed Rate Conversion Options
The Company may enter into convertible notes, some of which
contain, predominantly, fixed rate conversion features, whereby the
outstanding principal and accrued interest may be converted by the
holder, into common shares at a fixed discount to the market price
of the common stock at the time of conversion. This results in a
fair value of the convertible note being equal to a fixed monetary
amount. The Company records the convertible note liability at its
fixed monetary amount by measuring and recording a premium, as
applicable, on the Note date with a charge to interest expense in
accordance with ASC 480 - “Distinguishing Liabilities from
Equity”.
Revenue Recognition
Our
revenue is derived from wholesale bulk products and retail products
sold to individuals and resellers.
Effective October 1, 2018, the Company adopted Accounting Standards
Codification (“ASC”) 606, Revenue From Contracts With Customers,
which is effective for public business entities with annual
reporting periods beginning after December 15, 2017. This new
revenue recognition standard (new guidance) has a five-step
process: a) Determine whether a contract exists; b) Identify the
performance obligations; c) Determine the transaction price; d)
Allocate the transaction price; and e) Recognize revenue when (or
as) performance obligations are satisfied. The impact of the
Company’s initial application of ASC 606 did not have a material
impact on its financial statements and disclosures and there was no
cumulative effect of the adoption of ASC 606. The Company defers
recognition of revenue until the performance obligations are
fulfilled. Fulfillment is triggered by shipment of the related
product to the contracted customer. Allowances for returns and
retail incentives are deducted from the revenue to be
recognized.
58
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
The
Company also recognizes revenues from the distribution of its
product through trade partners. Related revenues consist of product
costs, distribution fees, testing and labeling costs, as well as
any associated administrative fees. The Company recognizes these
revenues after the product has been shipped from the outsource
manufacturer to the trade partner. The Company has contractual
obligation to pay the outsource manufacturers, and as a principal
in these arrangements the Company includes the total product price
as revenue in accordance with applicable accounting guidance. The
Company has separately negotiated contractual relationships with
its trade partners, and under contracts with these trade partners
the Company assumes the credit risk of product produced by the
outsource manufacturer and dispensed to the trade partner.
Cost of Sales
The
Company includes product costs (i.e. material, direct labor and
overhead costs), shipping and handling expense, insurance on
inventory, production-related depreciation expense and product
license agreement expense in cost of sales.
Net Loss Per
Share
As
the Company has incurred losses for the year ended July 31, 2020
and 2019, the potentially dilutive shares are anti-dilutive and are
thus not added into the loss per share calculations.
Basic
loss per share is calculated by dividing the loss attributable to
stockholders by the weighted-average number of shares outstanding
for the period. Diluted loss per share reflects the potential
dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or
resulted in the issuance of common stock that shared in the
earnings (loss) of the Company. Diluted loss per share is computed
by dividing the loss available to stockholders by the weighted
average number of shares outstanding for the period and dilutive
potential shares outstanding unless such dilutive potential shares
would result in anti-dilution. As of July 31, 2020, the outstanding
principal balance, the settlement balance for the 3(a)(10),
including accrued interest of the convertible debt, totaled
$2,844,942 and was convertible into 38,706,635,236 shares of common
stock. It should be noted that contractually the limitations on
these notes and warrants limit the number of shares converted to
3,328,950,351. The total dilutive potential shares of
38,706,635,236 exceed the number of common shares authorized and
unissued.
NOTE 3
– COMMIMENTS, CONTINGENCIES AND LEGAL MATTERS
The
Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain
conditions may exist as of the date the consolidated financial
statements are issued, which may result in a loss to the Company,
but which will only be resolved when one or more future events
occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of
judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or un-asserted
claims that may result in such proceedings, the Company evaluates
the perceived merits of any legal proceedings or un-asserted claims
as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
If
the assessment of a contingency indicates that it is probable that
a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in
the Company’s consolidated financial statements. If the assessment
indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be
estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and
material, would be disclosed.
Loss
contingencies considered remote are generally not disclosed unless
they involve guarantees, in which case the guarantees would be
disclosed.
Office Lease
The Company has
a one year lease for a sales and marketing office with Coast
Huntington LLC for $1,162 monthly payments. Since the lease term is
for one year and may be cancelled with a sixty day notice the
Company has determined that the present value of the obligation is
equal to the actual cash settlement no present value has been
calculated. Additionally, no obligation and future service use
assets have been recorded.
59
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
Litigation
On
August 15, 2019, a default judgement was issued to Typenex
Co-Investment, LLC, for $559,367, arising from the Company’s
default on the December 2, 2014, Typenex convertible note. The
Company has reclassified the convertible note principal and accrued
interest balances, along with related derivative balances to
settlement reserves. The court also awarded the former note holder
legal fees and interest of 22% from the date of the judgement until
settled. Management has engaged legal counsel on the matter and has
proposed various settlements with Typenex and believes that a
settlement will be reached prior to the next fiscal year end.
Management will assess the settlement reserve for adequacy once
legal fees and interest is specified by the plaintiff.
The
plaintiff has filed a motion seeking a court hearing to determine
the existence of any assets to satisfy the default judgement.
Management has retained counsel and has filed a motion to dismiss
the default judgement on the grounds that the summons to answer the
default complaint was not presented to the Company due to no fault
of the Company. The Court upheld the default judgement.
Inventory Purchase Commitment and Profit Sharing
Arrangement
On
September 19, 2019, the Company entered into an agreement to
purchase 100,000 pounds of industrial hemp with a CBD content of
14% or greater and THC content of less than .03% with a commercial
hemp farm in California. A purchase deposit of $200,000 was made on
September 25, 2019. A reserve for the full amount of the deposit
was recognized in the balance sheet as of July 31, 2020.
On
September 20, 2019, the Company entered into a financing and
profit-sharing arrangement with a third party to provide the
working capital needed to purchase the hemp described above, from a
vendor selected by the profit sharing party. The arrangement
provided $550,874 for the deposit above on the hemp purchase and
financing for transportation and initial processing into CBD.
Repayment of the initial funding and profit sharing was expected
once the final processing into CBD was complete and the end product
was paid for by the ultimate purchaser. During the year ended
July31, 2020, the Company determined that the hemp vendor could not
meet the delivery obligation under the terms of the agreement. As a
result the Company is in the process of either obtaining the hemp
or a CBD distillate to fulfill the terms of the agreement with the
profit sharing party, which has been informed of the entire
situation. The Company is discussing various alternatives with the
third party to settle the matter; however the potential for
arbitration is possible but uncertain. The Company has
recognized the full amount of $550,874 as a liability, recorded in
settlement reserves, at July 31, 2020.
Other
The
Company believes that it has taken into consideration all material,
asserted claims and unasserted potential claims, in establishing
settlement reserves, including current and legacy obligations under
former management prior to July 2016.
Management of the Company has conducted a diligent search and
concluded that, other than as disclosed herein, there were no
commitments, contingencies, or legal matters pending at the balance
sheet dates that have not been disclosed.
NOTE 4
– PREPAID EXPENSES OTHER CURRENT ASSETS
Prepaid expenses
were recorded for services to be rendered in conjunction with
management’s project to improve financial and operational
structure; a note was issued and recorded as payment for these
services.
|
July 31, 2020
|
July 31, 2019
|
Prepaid
expenses
|
$ 25,000
|
$ 25,000
|
60
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts Payable and Accrued Expenses at July31, 2020 and 2019
represent the following:
|
|
July 31,
2020
|
|
July 31,
2019
|
Accounts payable
|
|
$ 550,729
|
|
$ 527,229
|
Accrued
interest
|
|
620,896
|
|
499,717
|
Other
accrued expenses
|
|
177,819
|
|
84,513
|
Total
|
|
$ 1,349,444
|
|
$ 1,111,459
|
NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable consisted of the
following:
|
|
July
31, 2020
|
|
July 31, 2019
|
Principal
– Convertible notes issued prior to July 2016
|
|
$592,218
|
|
$592,218
|
Principal
– Convertible notes issued prior to July 2016 under settlement
arrangements
|
|
144,382
|
|
250,343
|
Principal
– Convertible notes issued since July 2016
|
|
620,500
|
|
568,700
|
Principal 3(a)(10)
settlement arrangement
|
|
890,125
|
|
890,125
|
Other Convertible
notes issued since July 2016
|
|
36,250
|
|
35,000
|
Premiums
– Convertible notes issued since July 2016
|
|
1,420,928
|
|
1,382,596
|
Unamortized discounts
– Convertible notes issued since July 2016
|
|
-
|
|
(9,494)
|
Total
– Convertible notes payable, net
|
|
$3,704,403
|
|
$3,709,488
|
Legacy Notes Issued Prior to July 2016 – September 2013 to
July 2016
On
September 27, 2013, the Company issued a convertible note to an
unrelated party for $250,000 that matured on September 27, 2015.
The note bears an interest rate of 10% per annum with a floor of
$.005 per share, and principal is convertible in part or in whole
into shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
maturity date. Evolution Capital Partners, LLC, acquired the note
through an assignment in December 2015. The unconverted balance at
July 31, 2020, was $250,000.
On
October 18, 2013, the Company issued a convertible note to an
unrelated party for $125,000 that matured on October 18, 2015. The
note bears an interest rate of 10% per annum with a floor of $.005
per share, and principal is convertible in part or in whole into
shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
the maturity date. Evolution Capital Partners, LLC, acquired the
note through an assignment in December 2015. The unconverted
balance at July 31, 2020, was $68,850.
On
November 22, 2013, the Company issued a convertible note to an
unrelated party for $150,000 that matured on November 22, 2015. The
note bears an interest rate of 10% per annum with a floor of $.005
per share, and principal is convertible in part or in whole into
shares of the Company's common stock using the average closing
prices for five trading days directly preceding the conversion
date. Interest is not convertible and is due upon conversion or at
the maturity date. Evolution Capital Partners, LLC, acquired the
note through an assignment in December 2015. The unconverted
balance at July 31, 2020, was $150,000.
On
December 2, 2014, the Company entered into a collateralized secured
convertible promissory note with LG Capital Funding, LLC ("LG"), a
New York limited liability company, for an 8% convertible
promissory note with an aggregate principal amount of $73,500,
which together with any unpaid accrued interest was due on December
2, 2015. This convertible note together with any unpaid accrued
interest is convertible into shares of common stock at the holder's
option at a variable conversion price calculated as 58% of the
average of the lowest three closing bid prices during the
ten-trading day period ending on the conversion date. This note was
funded on December 10, 2014, when the Company received cash in the
amount of $70,000, with the remaining $3,500 being used for LG’s
legal and other origination expenses. The unconverted balance
of the note at July 31, 2020, was $67,141.
61
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
December 2, 2014, the Company entered into a convertible promissory
note with JMJ Financial, a Nevada sole proprietorship (“JMJ”), with
a face amount of $350,000, of which the Company is to assume
$35,000 in original interest discount (“OID”), which together with
any unpaid accrued interest was due on Dec 2, 2016. The note
is to be funded by JMJ at its discretion, and the initial tranche
was funded on December 16, 2014, when the Company received cash in
the amount of $55,000. The note balance funded (plus a pro rata
portion of the OID) together with any unpaid accrued interest is
convertible into shares of common stock at a variable conversion
price calculated as 65% of the average of the lowest trade price
during a 25-day period ending on the last complete trading day
prior to the conversion date. On December 16, 2014, the Company
estimated the fair market value of the derivative liability
associated with the bifurcated conversion feature to be $71,321.
The unconverted balance of the note at July 31, 2020, was
$33,744.
On
June 2, 2015, the Company entered into a convertible promissory
note with Firehole River Capital, LLC for a 12% convertible
promissory note with an aggregate principal amount of $27,500 which
together with any unpaid accrued interest was due on March 2, 2015.
This convertible note together with any unpaid accrued interest is
convertible into shares of common stock at the holder's option at a
variable conversion price calculated as 58% of the Market Price,
which means the lowest Trading Price (defined as the closing bid
prices) during the 10 trading day period ending on the last
complete trading day prior to the conversion date. On July 8, 2015
the Company received cash in the amount of $17,400, with the
remaining $10,100 being used for legal fees. The Company analyzed
the note on the issuance date and determined that the variable
conversion price exceeded the authorized number of shares resulting
in the need for bifurcation into a separate derivative liability
valued at fair market value. The Company estimated the fair market
value of the derivative liability associated with the bifurcated
conversion feature to be $31,695. The unconverted principal balance
of the note at July 31, 2020, was $22,483.
Convertible notes issued prior to 2016 under private settlement
arrangements
On
June 27, 2019, KBM Worldwide and Vis Vires Group, Inc. reached a
settlement with the Company for two convertible notes in default.
The KBM note was originally issued on May 15, 2015 and the Vis
Vires note was originally issued on March 17, 2015. The note
balances and accrued interest were $57,196 and $71,751. The KBM
note was settled for $51,705 and the Vis Vires note was settled for
$66,256, gain on debt extinguishment was credited for $5,491 and
$5,495 respectively.
On
July 31, 2014, the Company entered into a convertible promissory
note with KBM Worldwide, Inc. ("KBM") a New York corporation for an
8% convertible promissory note with an aggregate principal amount
of $63,000 which together with any unpaid accrued interest is due
on February 2, 2015. This convertible note together with any unpaid
accrued interest is convertible into shares of common stock at a
variable conversion price calculated as 58% of the Market Price,
which means the average of the lowest three Trading Prices (defined
as the closing bid prices) during the three trading day period
ending on the last complete trading day prior to the conversion
date with a floor of $.00005 as stated in the conversion feature.
In May 2014, the Company received cash in the amount of $42,500,
with the remaining $17,500 being used for legal fees. The Company
analyzed the note on the issuance date on April 30, 2014. The
Company determined that the variable conversion price and the floor
exceeded the authorized number of shares resulting in the need for
bifurcation into a separate derivative liability valued at fair
market value. On April 30, 2014, the Company estimated the fair
market value of the derivative liability associated with the
bifurcated conversion feature to be $56,591 and a discount on the
note of $56,591. On June 6, 2015, KBM Worldwide issued a Notice of
Default, which resulted in the principle due being increased to
150% of the principal balance due to the Company’s filing its
quarterly SEC report after the filing deadline, and the loan
balance increased by $25,055 to $75,165. The unconverted balance of
the note including default penalties and accrued interest is
subject to a settlement arrangement. At July 31, 2020, the note
liability including all default penalties and accrued interest was
fully converted. The related derivative liability was fully
extinguished and reclassified as additional paid in capital.
On
March 17, 2015, the Company entered into a convertible promissory
note with Vis Vires Group, Inc., a New York Corporation, for an 8%
convertible promissory note with an aggregate principal amount of
$33,000 which together with any unpaid accrued interest was due on
December 19, 2015. This convertible note together with any unpaid
accrued interest is convertible into shares of common stock at a
variable conversion price calculated as 58% of the Market Price,
which means the average of the lowest three Trading Prices (defined
as the closing bid prices) during the three trading day period
ending on the last complete trading day prior to the conversion
date with a floor of $.00005 as stated in the conversion feature.
On April 1, 2015 the Company received cash in the amount of
$20,000, with the remaining $13,000 being used for legal fees. The
Company analyzed the note on the issuance date on March 17, 2015.
The Company determined that the variable conversion price and the
floor exceeded the authorized number of shares resulting in the
need for bifurcation into a separate derivative liability valued at
fair market value. On October 31, 2015, the Company estimated the
fair market value of the derivative liability associated with the
bifurcated conversion feature to be $35,444 and a discount on
the note of $33,000. The unconverted balance of the note
including default penalties and accrued interest is subject to a
settlement arrangement. At July 31, 2020, the note liability
including all default penalties and accrued interest was fully
converted. The related derivative liability was fully extinguished
and reclassified as additional paid in capital.
62
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
September 14, 2015, at the time of former CEO, Mr. Doron’s,
resignation, Mr. Doron received a convertible note from the Company
in the aggregate principal amount of $299,382 in satisfaction of
his accrued salary and stock payables. This note matured on
March 14, 2016 and bears no interest. This convertible note is
convertible into shares of common stock at the holder's option at
100% of the closing bid price of such common stock on the trading
day immediately preceding the conversion. The Company determined
that the variable conversion price exceeded the authorized number
of shares resulting in the need for bifurcation into a separate
derivative liability valued at fair market value. On October 31,
2015, the Company estimated the fair market value of the derivative
liability associated with the bifurcated conversion feature to be
$4,291 and a discount on the note of $4,291. On March 23, 2018, Mr.
Doron sold $25,000 of face value of the note to a third party.
During the year ended July 31, 2019 Mr. Doron sold an additional
$105,000 of face value of the note to a third party (a settlement
arrangement). During the year ended July 31, 2020, Mr. Doron sold
an additional $25,000 of the face value of the note to a third
party. The remaining unconverted balance of the note at July 31,
2020, was $144,382.
Notes Issued During Restructuring Period – July 2016 to
Present
On
October 24, 2017, the Company issued a convertible note payable for
$50,000 to Livingston Asset Management LLC for certain services to
be rendered in conjunction with financial and operational
restructuring. The note has an interest rate of 10% and matured on
April 30, 2018. The note is subject to customary default provisions
for similar notes. The note may be converted into common stock at
any time after issuance at a 25% discount to the lowest closing bid
price for the stock during the 30 trading days immediately
preceding the delivery of conversion notice to the Company. The
convertible note was accounted for as stock settled debt under ASC
480 and recorded a premium of $33,333 charged to interest expense.
The note is now covered by the 3(a)(10) settlement.
On
February 14, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $1,200. The note funded
expenses incurred by the Company during restructuring. The note has
debt discount of $200 to be amortized to interest expense over the
life of the note. The note has an interest rate of 12%, matured on
August 31, 2018 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $1,200 was recorded with
a charge to debt discount, which was amortized to interest expense
as of July 31, 2019. The note balance as of July 31, 2020, is
$1,200.
On
March 23, 2018, the Company issued a convertible note payable to an
individual investor in the amount of $20,000; the funds from the
note were used for general corporate purposes. The note has an
interest rate of 12%, matured on March 19, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated. A
derivative liability of $27,936 was recorded with charges to
derivative expense of $7,936 and to debt discount of $20,000, which
was fully amortized to interest expense as of July 31, 2020. The
note balance as of January 31, 2020, is $20,000.
On
May 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on December
31, 2018 and can be converted into common shares at the 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note balance as of July 31, 2020, is $25,000.
On
June 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on July 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
On
June 29, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $2,500. The note funded
expenses incurred by the Company during restructuring. The note has
debt discount of $135 to be amortized to interest expense over the
life of the note. The note has an interest rate of 12%, matured on
December 29, 2018 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $3,176 was recorded with
a charge to debt discount of $2,500 to be amortized over the life
of the note and a charge of $976 to derivative expense. The note
balance as of July 31, 2020, is $2,500.
63
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
July 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on February
28, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note balance as of July 31, 2020, is $25,000.
On
July 20, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $3,500. The note has debt
discount of $12. The note has an interest rate of 12%, matured on
January 21, 2019 and can be converted into common shares at the
lesser of: i) 75% of the price of the common stock at the date the
note was issued, or ii) 50% of the lowest bid price during the 30
trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $4,688 was recorded with
a charge to debit discount of $3,500 to be amortized over the life
of the note and a charge of $1,188 to derivative expense. The note
balance as of July 31, 2020, is $3,500.
On
August 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on March 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
On
August 15, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $7,500. The note has debt
discount of $500. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on February 14, 2019 and can be converted into common
shares at the lesser of: i) 75% of the price of the common stock at
the date the note was issued, or ii) 50% of the lowest bid price
during the 30 trading days immediately preceding the date of the
conversion notice. Due to the variable conversion pricing feature
the note is considered to include a derivative for which a fair
market value was calculated. A derivative liability of $12,018 was
recorded with a charge to debt discount of $7,500 to be amortized
over the life of the note and a charge of $4,518 to derivative
expense. The note balance as of July 31, 2020, is $7,500.
On
September 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on April 30,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
On
September 5, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $5,500. The note has debt
discount of $319. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on March 4, 2019 and can be converted into common shares at
the lesser of: i) 75% of the price of the common stock at the date
the note was issued, or ii) 50% of the lowest bid price during the
30 trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $8,060 was recorded with
a charge to debt discount of $5,500 to be amortized over the life
of the note and a charge of 2,560 to derivative expense. The note
balance as of July 31, 2020, is $5,500.
On
September 17, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $3,500. The note has debt
discount of $500. The note proceeds were used for general corporate
purposes. The note has an interest rate of 12%, matured on March
16, 2019 and can be converted into common shares at the lesser of:
i) 75% of the price of the common stock at the date the note was
issued, or ii) 50% of the lowest bid price during the 30 trading
days immediately preceding the date of the conversion notice. Due
to the variable conversion pricing feature the note is considered
to include a derivative for which a fair market value was
calculated. A derivative liability of $5,244 was recorded with a
charge to debt discount of $3,500 to be amortized over the life of
the note and a charge of 1,744 to derivative expense. The note
balance as of July 31, 2020, is $3,500.
On
October 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on May 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
64
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
October 5, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $4,000. The note has an
interest rate of 12%, matured on March 16, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated. A
derivative liability of $5,244 was recorded with a charge to debt
discount of $4,000 to be amortized over the life of the note and a
charge of 1,244 to derivative expense. The note balance as of July
31, 2020, is $4,000.
On
November 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matured on June 30,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
On
November 16, 2018 the Company issued a convertible note payable to
Oscaleta Partners, LLC in the amount of $4,000. The note has debt
discount of $500. The note proceeds were paid directly to vendors
for services rendered. The note has an interest rate of 12%,
matured on May 15, 2019 and can be converted into common shares at
the lesser of: i) 75% of the price of the common stock at the date
the note was issued, or ii) 50% of the lowest bid price during the
30 trading days immediately preceding the date of the conversion
notice. Due to the variable conversion pricing feature the note is
considered to include a derivative for which a fair market value
was calculated. A derivative liability of $5,244 was recorded with
a charge to debt discount of $3,500 to be amortized over the life
of the note and a charge of 1,744 to derivative expense. The note
balance as of July 31, 2020, is $4,000.
On
December 1, 2018 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on July 31,
2019 and can be converted into common shares at 50% of the lowest
bid price during the 30 trading days immediately preceding the date
of the conversion notice. The convertible note was accounted for as
stock settled debt under ASC 480 and recorded a premium of $25,000
with a charge to interest expense at issuance. The note balance as
of July 31, 2020, is $25,000.
On
January 1, 2019 the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on August
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note was
accounted for as stock settled debt under ASC 480 and recorded a
premium of $25,000 with a charge to interest expense at issuance.
The note balance as of July 31, 2020, is $25,000.
On
February 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on September
30, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of July 31, 2020, is $25,000.
On
February 2, 2019, the Company issued a convertible note payable to
an individual investor in the amount of $30,000. The note has an
interest rate of 12%, matures on February 2, 2019 and can be
converted into common shares at the lesser of: i) 75% of the price
of the common stock at the date the note was issued, or ii) 50% of
the lowest bid price during the 30 trading days immediately
preceding the date of the conversion notice. Due to the variable
conversion pricing feature the note is considered to include a
derivative for which a fair market value was calculated and
recorded. The note balance as of July 31, 2020, is $25,000.
On
March 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on October
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of July 31, 2020, is $25,000.
On
April 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on November
30, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of July 31, 2020, is $25,000.
65
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
April 4, 2019, the Company issued a convertible note payable for
cash payments of $24,500 with an original issue discount of $2,500
to Oscaleta Partners, LLC in the amount of $27,000. The OID will be
amortized over the life of the loan. The note has an interest rate
of 12%, matures on October 3, 2019 and can be converted into common
shares at the lesser of: $.00075 or 50% of the lowest bid price
during the 30 trading days immediately preceding the date of the
conversion notice. Due to the variable conversion pricing feature
the note is considered to include a derivative for which a fair
market value was calculated and recorded. The note balance as of
July 31, 2020, is $27,000.
On
May 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on December
31, 2019 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of July 31, 2020, is $25,000.
On
June 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on January
31, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note is
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of July 31, 2020, is $25,000.
On
June 7, 2019, the Company issued a convertible note payable to an
individual investor in the amount of $20,000. The note has an
interest rate of 12%, matures on June 6, 2020 and can be converted
into common shares 40% of the lowest bid price during the 20
trading days immediately preceding the date of the conversion
notice. The convertible note is accounted for as stock settled debt
under ASC 480 and a premium of $30,000 was charged to interest
expense on the issuance date. The note balance as of July 31, 2020,
is $20,000.
On
July 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on February
28, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 was charged to interest expense on the issuance date. The
note balance as of July 31, 2020, is $25,000.
On
July 11, 2019, Trillium Partners LP purchased $20,000 of the note
first issued to the former CEO Michael Doron on September 14, 2015.
Following the sale, the original note balance was reduced to
$169,382. The assignment and restatement of terms provides for
conversion of the principal into common shares at the lower of
$.001 or 50% of the lowest closing bid price during the 30 trading
days immediately preceding the issuance of a conversion notice. Due
to the variable conversion pricing feature the note is considered
to include a derivative for which a fair market value of $80,016,
was calculated and recorded. The original Doron note balance is
$169,382 following the assignment. On September 27, 2019, Trillium
converted $9,500 of principal into 70,666,667 common shares, on
January 16, 2020, Trillium converted $1,700 of principal into
56,000,000, common shares and on February 18, 2020 an additional
$7,000 in principal was converted into common shares. Following the
conversions the note balance as of July 31, 2020, is $1,800.
$45,609 of the derivative liability was reclassified to additional
paid in capital in conjunction with the conversions.
On
July 15, 2019, the Company issued a convertible note payable to an
individual investor in the amount of $15,000. The note has an
interest rate of 12%, matures on July 14, 2020 and can be converted
into common shares at 40% of the lowest bid price during the 20
trading days immediately preceding the date of the conversion
notice. The convertible note is accounted for as stock settled debt
under ASC 480 and a premium of $22,500 was charged to interest
expense on the issuance date. The note balance as of July 31, 2020,
is $15,000.
On
August 1, 2019, the Company issued a convertible note payable for
financial services to Oscaleta Partners, LLC in the amount of
$25,000. The note has an interest rate of 10%, matures on February
28, 2020 and can be converted into common shares at 50% of the
lowest bid price during the 30 trading days immediately preceding
the date of the conversion notice. The convertible note will be
accounted for as stock settled debt under ASC 480 and a premium of
$25,000 will be charged to interest expense on the issuance date.
The note balance as of July 31, 2020, is $25,000.
On
February 7, 2020, the Company issued a convertible note to an
individual in the amount of $20,000. The note bears interest at 10%
per annum, matures on February 7, 2021 and is convertible into
common stock. The conversion price is to be 40% of the lowest
closing bid price during the twenty days preceding the conversion
notice. Due to the fixed percentage conversion terms it will be
treated as stock settled debt in accordance with ASC 480.
66
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
Court Approved Settlement under Rule 3(a)(10)
On
December 18, 2015, accounts payable totaling $45,000 were converted
into convertible notes in exchange for a 10% one-time fee. Two
$5,000 notes are past due at January 31, 2016 and are convertible
at a 10% discount to the prior day’s closing price. The balance
($35,000) of the notes were due July on 18, 2016 and are
convertible at a 42% discount to the average of the ten prior
trading days’ closing price. $35,000 of derivative liability was
recorded as debt discount upon issuance of the note maturing on
July 18, 2016. The note is now covered by the 3(a)(10) settlement
and reclassified to the 3(a)(10) note along with the related
derivative liability being reclassified as put premium.
On
October 24, 2017, the Company issued a convertible note payable for
$50,000 to Livingston Asset Management LLC for certain services to
be rendered in conjunction with financial and operational
restructuring. The note has an interest rate of 10% and matured on
April 30, 2018. The note is subject to customary default provisions
for similar notes. The note may be converted into common stock at
any time after issuance at a 25% discount to the lowest closing bid
price for the stock during the 30 trading days immediately
preceding the delivery of conversion notice to the Company. The
convertible note was accounted for as stock settled debt under ASC
480 and recorded a premium of $33,333 charged to interest expense.
The note is now covered by the 3(a)(10) settlement and reclassified
to the 3(a)(10) note.
Six
past due convertible fee notes totaling $150,000 issued to Oscaleta
Partners LLC for each month from November 1, 2017, to April 1,
2018, were covered in the 3(a)(10) settlement. The convertible
notes were accounted for as stock settled debt under ASC 480 and
premiums of $150,000 were recorded with a charge to interest
expense at issuance. The notes have been reclassified to the
3(a)(10), liability.
Other Convertible Notes
On
October 15, 2018 an individual investor was issued a convertible
note payable in the amount of $10,000. The note proceeds were used
for general corporate purposes. The note has an interest rate of
10%, matures on October 15, 2020 and can be converted into common
shares at fixed price of $.0004. The note balance as of July 31,
2020, is $10,000.
On
May 16, 2019, the Company issued a note to an individual for
$25,000; cash used for general corporate purposes. The note calls
for monthly principal repayments of $5,000, beginning July 1, 2019.
The payments due have not been made and penalties of $2,500, will
be charged after each 45 day delinquent payment, the payment is to
be additional common shares valued at the market price on the
46th day of delinquency. Additionally, a royalty payment
of 10% of specific product sales capped at approximately $3,000 is
charged in lieu of interest. The note balance as of July 31, 2020,
is $25,000. The Company and the note holder have reached an oral
agreement to settle the liability and will execute the final
agreement prior to the end of the fiscal year (July 31, 2020)
The May 16, 2019 note includes a
warrant for $10,000 in common stock at the market price on the date
of issuance. The price of the Company’s stock was $.0009 on the
note issuance date, which equates to 11,111,111 common shares,
resulting in $10,000 recorded as additional paid in capital offset
with derivative liability. Changes to the value of the warrant, if
material will be recorded as fair market values changes to the
derivative liability at each reporting date. The terms of the note
have been amended and will be finalized by October 31,
2020.
NOTE 7 – DEBT SETTLEMENT UNDER COURT ORDER
– 3(a)(10)
On
January 3, 2019, a US District Court approved a settlement that
covered $950,769 of notes, convertible notes and amounts owed to
various creditors (collectively the “Creditors”)”). One Creditor
withdrew from the settlement leaving $890,125 in the final
settlement pool. Livingston Asset Management, LLC, (“LAM”) under
individual agreements with the Creditors, fixed the amount owed and
as such there is no further interest due on these liabilities. As a
result of the change in obligor amounts formerly classified as
notes payable, convertible notes, accrued expenses and accounts
payable have been reclassified into the 3(a)(10) settlement. The
terms of the agreements (including the related agreement between
LAM and the Company) the Company will issue shares directly to LAM
as requested and LAM will sell the shares (unrestricted as allowed
under Section 3(a)(10) of the 1933 Securities Act) on the open
market through unaffiliated brokers. The shares are issued to LAM
at a 50% discount to the sale price, as such the Company has
accounted for the $890,125 settlement amount as stock settled debt
under ASC 480 and recorded a premium of $890,125 with a charge to
loss on debt extinguishment of $673,699. The charge to loss on debt
extinguishment was net of premiums and derivative liabilities
directly associated with the Creditor liabilities as originally
recorded. Sales to liquidate creditor balances have occurred as of
July 31, 2020, however the accounting for the payments and
costs have been delayed due to personnel restrictions during the
COVID 19 quarantine, and the balance remains $890,125.
67
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
NOTE
8- DERIVATIVE LIABILITIES
FASB
ASC 820 defines fair value, establishes a framework for measuring
fair value under U.S. generally accepted accounting principles and
enhances disclosures about fair value measurements. Fair value is
defined 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.
Valuation techniques used to measure fair value under FASB ASC 820
must maximize the use of observable inputs and minimize the use of
unobservable inputs. The standard describes a fair value hierarchy
based on three levels of inputs, with the first two inputs
considered observable and the last input considered unobservable,
that may be used to measure fair value as follows:
·
|
Level one —
Quoted market prices in active markets for identical assets or
liabilities;
|
·
|
Level two
– Inputs, other than level one inputs, that are either
directly or indirectly observable; and
|
·
|
Level three —
Unobservable inputs developed using estimates and assumptions,
which are developed
by the
reporting entity and reflect those assumptions that a market
participant would use.
|
Determining which category an asset or liability falls within the
hierarchy requires significant judgment. The Company evaluates its
hierarchy disclosures each quarter and has determined that all
derivative liabilities are level three. The Company has one
liability measured at fair value on a recurring basis, which
consists of a derivative liability on certain convertible notes
payable and warrants. As of July 31, 2020, this derivative
liability had an estimated fair value of $538,059. The Company has
no assets that are measured at fair value on a recurring basis.
The
following table presents information about our derivative liability
related to convertible notes, which was our only financial
instrument measured at fair value on a recurring basis using
significant inputs other than level one inputs that are either
directly or indirectly observable (Level 2) as of July 31,
2020:
|
|
Notes
|
|
Warrants
|
|
Total
|
Balance at July 31,
2018
|
|
$445,790
|
|
$90,703
|
|
$536,493
|
New warrants
issued
|
|
|
|
10,000
|
|
10,000
|
Convertible notes
issued, derivative expense
|
|
191,580
|
|
|
|
191,580
|
Convertible notes
issued, debt discount
|
|
97,115
|
|
|
|
97,115
|
Conversions
|
|
(149,252)
|
|
|
|
(149,252)
|
Change in fair value
of derivatives
|
|
104,345
|
|
(5,556)
|
|
98,789
|
Net reclassifications
to premium on stock settled debt
|
|
(18,507)
|
|
|
|
(18,507)
|
Reclassification to
settlement reserves
|
|
(44,847)
|
|
(90,703)
|
|
(135,550)
|
Balance at July 31,
2019
|
|
626,224
|
|
4,444
|
|
630,668
|
Reclassification of
warrant related liability
|
|
|
|
(4,444)
|
|
(4,444)
|
Initial derivative
expense
|
|
60,140
|
|
-
|
|
60,140
|
Extinguishment by
conversion
|
|
(148,305)
|
|
-
|
|
(148,305)
|
|
|
|
|
|
|
|
Balance at July 31,
2020
|
|
$538,059
|
|
$-
|
|
$538,059
|
The
fair value of this derivative liability was calculated using the
multinomial lattice models that values the derivative liability
within the notes based on a probability weighted discounted cash
flow model. These models are based on future projections of the
various potential outcomes. The features in the notes that were
analyzed and incorporated into the model included the conversion
feature with the reset provisions; redemption provisions; and the
default provisions. Assumptions used to calculate the fair value of
the derivative liability were as follows:
Expected term in
years
|
|
|
0-1
|
|
Risk-free interest
rates
|
|
|
1.7%
|
|
Volatility
|
|
|
235%
|
|
Dividend yield
|
|
|
0%
|
|
In addition to the
assumptions above, the Company also takes into consideration
whether or not the Company would participate in another round of
financing and if that financing is registered or not and what that
stock price would be for the financing at that time. The Company
notes that the notes have matured and is no longer calculating a
derivative value for these notes.
68
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
Derivative liabilities for notes that have matured remain at the
historic liability amount unless converted into common shares at
which time the proportionate principal and derivative liability are
decreased. All of the Company’s convertible notes having embedded
conversion features treated as derivative liabilities have matured
and therefore no changes due to fair market valuation have been
calculated during the year ended July 31, 2020.
NOTE 9 – SETTLEMENT RESERVES
Certain liabilities and contingencies have been accrued as expense
and are collectively classified as settlement reserves. The balance
at July 31, 2020 of $1,492,549 includes judgement amounts for a
former note holder, various demand letters, threatened litigation
and estimated penalties under various debt covenants that have not
been asserted. In addition, $550,874, due to a hemp venture partner
has been reclassified to settlement reserves due to the uncertainty
surrounding the ability to procure the hemp for which the funds
were advanced. The Company assesses the adequacy of the reserve
amount on a quarterly basis, and believes the current reserve
reflects the contingent and actual liabilities in all material
respects at July 31, 2020.
NOTE
10- STOCKHOLDERS’ DEFICT
There
are 25,000,000 shares of Series A Preferred stock authorized and
1,000,000 outstanding at July 31, 2020.
On
March 17, 2020, the Wyoming Secretary of State approved the
Company’s increase of authorized common stock to
10,000,000,000.
The
Company has ten billion authorized shares. At July 31, 2020, and
2019, there are 4,117,033,449 and 2,161,787,677 shares of common
stock, outstanding, respectively.
The
stockholders’ deficit is $7,058,112, at July 31, 2020 and
$6,360,103 at July 31, 2019.
In
conjunction with the Company’s convertible note issued to Typenex,
the Company issued four warrants for a total number of shares equal
to $112,000 ($29,500 for the first warrant corresponding to funding
on December 10, 2014, and $27,500 for the other three warrants
corresponding to the future tranches of funding by Typenex to the
Company) divided by the conversion market price in the Typenex
convertible note. The warrants have an exercise price of $0.06,
subject to adjustment, and expire on December 2, 2019. Each of the
warrants is only exercisable after the corresponding tranche of
funding by Typenex to the Company has been paid. Therefore, the
first warrant is currently exercisable, but the other three
warrants are not. The first warrant for $29,500 expired and the
related derivative liability was reclassified to the settlement
reserves.
Common Stock Issued
Common Stock Issued for 3(a)(10) Settlement
During the year ended July 31, 2020, the Company issued
1,156,288,000, shares of common stock to Livingston Asset
Management LLC under the terms of the 3(a)(10) settlement approved
by the court. The total shares issued for the 3(a)(10) as of July
31, 2020 is 1,256,288,000. The shares are issued at par with equal
offset to additional paid in capital until proceeds of share sales
are confirmed by the creditor covered under the settlement, at
which time the liability will be reduced with a credit to
additional paid in capital. As of July 31, 2020, no such
confirmations have been received.
Common Stock Issued for Conversions of Convertible Notes
Payable
On
August 2, 2019, the Company issued 59,523,810 common shares at
$.00021 per share to KBM Worldwide for conversion of $12,500 of
principal related to the settlement agreement for the defaulted
convertible note issued May 15, 2015 as discussed above. The
balance due under the settlement agreement following the conversion
was $14,205.
On
August 29, 2019, the Company issued 83,558,414 common shares at
$.00017 per share to KBM Worldwide for conversion of $14,205 of
principal related to the settlement agreement for the defaulted
convertible note issued May 15, 2015 as discussed above. The
balance due under the settlement agreement following the conversion
was $0.
On
September 3, 2019, the Company issued 47,058,824 common shares at
$.00017 per share to Vis Vires Group Inc. for conversion of $8,000
of principal related to the settlement agreement for the defaulted
convertible note issued March 17, 2015 as discussed above. The
balance due under the settlement agreement following the conversion
was $46,256.
69
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020 (Unaudited)
On
September 25, 2019, the Company issued 117,647,059 common shares at
$.00017 per share to Vis Vires Group Inc. for conversion of $20,000
of principal related to the settlement agreement for the defaulted
convertible note issued March 17, 2015 as discussed above. The
balance due under the settlement agreement following the conversion
was $26,256.
On
September 27, 2019, the Company issued 70,666,667 common shares to
Trillium Partners for conversion of $9,500 of principal and $1,100
conversion fees related to the September 14, 2015 convertible note
(fourth partial assignment of the Doron note) at the contracted
price of $.00015per share. The note assigned note balance was
$10,500 following the conversion.
On
January 16, 2020, the Company issued 56,000,000 common shares to
Trillium Partners for conversion of $1,700 of principal and $1,100
conversion fees related to the September 14, 2015 convertible note
(fourth partial assignment of the Doron note) at the contracted
price of $.00005 per share, derivative liabilities of $6,801 were
reclassified to additional paid in capital. The note assigned note
balance was $8,800 following the conversion.
On
February 24, 2020, Trillium Partners LP, returned. 27,300,000,
common shares that were issued for prior period conversions of
convertible notes payable. An error was made by Trillium in the
conversion calculation. When Trillium discovered the error they
reported it to the Company and the transfer agent. When the shares
were returned, the transfer agent cancelled them.
On
February 25, 2020, the Company issued 162,000,000, common shares to
Trillium Partners LP for conversion of $7,000, in principal of the
July 11, 2019, note assignment of the original note issued to
Michael Doron. Conversion fees of $1,100 were also charged.
Following the conversion the principal balance of the assigned note
was $1,800. The shares were issued at $.00005, the contracted
price.
NOTE 11 – PROVISION FOR INCOME
TAXES
The provision for income taxes
consists of the following:
|
|
July 31,
|
|
|
2020
|
|
2019
|
Federal income tax expense
|
|
$-
|
|
$-
|
State income tax expense
|
|
-
|
|
-
|
Less change in valuation
allowance
|
|
-
|
|
-
|
Net income tax expense
|
|
$-
|
|
$-
|
A reconciliation of income taxes
computed at the federal statutory rate of 21% for July 31, 2020 and
2019 is as follows:
|
|
2019
|
|
2018
|
Federal income taxes at 21%
|
|
$(199,667)
|
|
$(470,075)
|
State income tax, net of federal
benefit
|
|
-
|
|
-
|
Change in net operating loss
|
|
-
|
|
-
|
Tax effect on non-deductible expenses and
credits
|
|
25,229
|
|
-
|
Changes in valuation allowance
|
|
174,438
|
|
470,075
|
|
|
$-
|
|
$-
|
70
NUTRANOMICS,
INC.
NOTES TO
FINANCIAL STATEMENTS
July 31, 2020
(Unaudited)
The
tax effects of temporary differences which give rise to deferred
tax assets and liabilities consists of the following:
|
|
July 31,
|
|
July 31,
|
|
|
2020
|
|
2019
|
Deferred tax asset attributable
to:
|
|
|
|
|
Net operating loss carryover
|
|
$9,133,338
|
|
$9,133,338
|
Temporary differences
|
|
654,345
|
|
594,345
|
Less, valuation allowance
|
|
(10,023,993)
|
|
(9,727,683)
|
Net deferred tax asset
|
|
$-
|
|
$-
|
|
|
|
|
|
Deferred tax liability attributable
to:
|
|
|
|
|
Depreciation
|
|
$-
|
|
$-
|
Net deferred tax liabilities
|
|
$-
|
|
$-
|
The Company sustained net operating
losses in 2020 in the accompanying statements of operations. No
deferred tax asset or income tax benefits are reflected in the
financial statements for net deductible temporary differences or
net operating loss carryforwards, because the likelihood of
realization of the related tax benefits cannot be established.
Accordingly, a valuation allowance has been recorded to reduce the
net deferred tax asset to zero, and consequently there is no income
tax provision or benefit presented for the fiscal years ended July
31, 2020 and 2019. The valuation allowance increased by $296,310 to
$10,023,993 in 2020.
As of July 31, 2020, the Company had
net operating loss carryforwards for tax reporting purposes of
approximately $9,369,648. These net operating loss carryforwards,
if unused, begin to expire in 2024. As of July 31, 2020, and 2019,
the Company has no liabilities for unrecognized tax benefits. The
Company’s policy is to recognize potential interest and penalties
accrued related to unrecognized tax benefits within income tax
expense. For the years ended July 31, 2020, and 2019, the Company
did not recognize any interest or penalties in its statement of
operations, nor did it have any interest or penalties accrued in
its balance sheet at July 31, 2020 and 2019 relating to
unrecognized tax benefits.
NOTE 12-
SUBSEQUENT EVENTS
Management has reviewed all events and contingencies since July 31,
2020 through the issuance date of the report and found not material
events or contingencies of a reportable nature.
71
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