UNITED STATES
Washington, D.C. 20549
FORM 10-K
Amendment No. 1
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended September 30, 2017
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission File No.000-1621697
NATURAL HEALTH FARM HOLDINGS INC
(Exact name of registrant as specified in its charter)
NEVADA | 98-1032170 | |
(State or Other Jurisdiction of Incorporation of Organization) | (I.R.S. Employer Identification No.) |
No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park
48000 Rawang, Selangor, Malaysia
(Address and telephone number of principal executive offices)
+60(3) 6091 6321
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.001 per share | NHEL | OTC Markets Group |
Securities registered pursuant to Section 12(g)12 (g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐ No☒
Indicate by check mark if the registrant is not required to file report pursuant to Section 13 or Section 15(d) of the Act. Yes☒ No☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☒ |
Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)
The number of shares of Common Stock, $0.001 par value, of the registrant outstanding at September 9, 2019 was 162,186,300
DOCUMENTS INCORPORATED BY REFERENCE
None.
Explanatory Note
The sole purpose of this Amendment No. 1 to the Annual Report on Form 10-K of Natural Health Farm Holdings Inc. for the year ended September 30, 2018, originally filed with the Securities and Exchange Commission on December 28, 2017,2018 (the “Form 10-K”), is to restate its previously reported consolidated financial statements as at September 30, 2018. The restatement of the registrant had 150,150,000 sharescompany’s consolidated financial statements followed an internal review of common stock issuedthe company’s consolidated financial statements and outstanding. accounting records that inadvertently excluded the financials reporting for NHF International Limited and its subsidiaries, Natural Tech R&D Sdn. Bhd. and NHF Management & Business Sdn. Bhd. This restatement has presented the periodic consolidated earnings of the company as a group.
The following sections in the Original Filing are revised in this Form 10-K/A, solely as a result of, and to reflect, the restatement:
Part I - Item 1 - Financial Statements
Part I - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
Part II - Item 6 – Exhibits
Subsequent to the filing of this revised Annual Report on Form 10-K/A, we expect to file the Quarterly Report on Form 10-Q for period ended December 31, 2018. This report will include restatement of the consolidated financial statements (and related disclosures) for the periods described therein, as set forth in those reports.
No market value hasother changes have been computed based uponmade to the fact that no active trading market has been establishedForm 10-K. This Amendment No. 1 to the Form 10-K speaks as of December 28, 2017.
TABLE OF CONTENTS
PART I | ||
Page No. | ||
ITEM 1 | Description of Business | |
ITEM 1A | Risk Factors | |
ITEM 2 | Description of Property | |
ITEM 3 | Legal Proceedings | |
ITEM 4 | Mine Safety Disclosures | |
PART II | ||
ITEM 5 | Market for Common Equity and Related Stockholder Matters | |
ITEM 6 | Selected Financial Data | |
ITEM 7 | Management's Discussion and Analysis of Financial Condition and Results of Operations | |
ITEM 7A | Quantitative and Qualitative Disclosures about Market Risk | |
ITEM 8 | Financial Statements and Supplementary Data | |
ITEM 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |
ITEM 9A. (T) | Controls and Procedures | |
PART III | ||
ITEM 10 | Directors, Executive Officers, Promoters and Control Persons of the Company | |
ITEM 11 | Executive Compensation | |
ITEM 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
ITEM 13 | Certain Relationships and Related Transactions | |
ITEM 14 | Principal Accountant Fees and Services | |
PART IV | ||
ITEM 15 | Exhibits |
PART I
ITEM 1. DESCRIPTION OF BUSINESS
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use ofusing terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Background
The Company is a development stage company and has limited operating history and is expected to experience losses in the near term.
Natural Health Farm Holdings Inc., incorporated in the State of Nevada on JuneJuly 10, 2014 (inception date), has developed and intendedlaunched itself into the healthcare industry. The company started as a nutritional consulting service provider by offering a web based naturopathic learning management system that allows distributors, chiropractors and consumers to offer local guided tours via our web platform. Our future web site will connect travelers with freelance guidesbe educated on health-related aspects of various diseases. The company has positioned itself to facilitatebe a fully integrated nutraceutical biotechnology company offering products and related services through healthcare practitioners and direct-to-consumers. The company now owns a research & development laboratory in Malaysia, franchisee management services company and an Australia manufacturing facility producing practitioner only naturopathic and homeopathic medicines.
On January 31, 2018, the creationcompany acquired the total outstanding share of NHF International Limited at USD$1. Upon the completion of the acquisition, its subsidiaries, both Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd become wholly subsidiaries of the Group. As this transaction is business combination under common control, as deliberated and determined by Directors of the Company, difference between purchase considerations and net tangible assets acquired is recorded in merger reserves which amounted to $517,300. Natural Tech R&D Sdn Bhd, a BioNexus Status Company in Malaysia, specializes in research and development, cultivation, extraction and commercialization of private tours aroundnutraceuticals based on medicinal fungi and NHF Management & Business Sdn Bhd, providing franchisee management services and consultation, such as point-of-sales system, resources, branding and marketing.
On December 3, 2018, the world. Customers will simply enterCompany agreed to purchase 51% of the issued and outstanding capital stock of Prema Life Pty Ltd and 60% of the issued and outstanding capital stock of GGLG Properties Pty Ltd, collectively in exchange for 304,500 shares of the Company’s common stock. On December 28, 2018, the parties mutually agreed to extend the closing date of the purchase transaction on January 1, 2019. The Company issued 304,500 shares of its common stock on December 3, 2018 in good faith for consummating the purchase. Prema Life, who has more than 30 years operations, is an Australia manufacturer and supplier of functional foods and supplements, especially practitioner only medicines in naturopathic and homeopathic industry.
Natural Health Farm Holdings Inc. – NHEL- exists to enable healthier life for everyone and believes that a complete healthcare eco-system from farm, research & development, manufacturing, distribution and professional support is necessary of consumers and shall make NHEL a global player in this industry.
Employees
Currently the Company has no employees other than its President/CEO and Secretary who devote approximately 65% and 50%, respectively, of their destination, choose a tour with favorite guide and in just a few clicks, customers can book tour directly with the local guide. Before booking customers can check the guide's profile, see their feedbacks and even message the guide to customize a tour, tailored to customer needs. We intend to offer guided tours in Europe and North America (USA and Canada), and we plan to run our business from outside the United States during the first year of operation. Currently we have only testing version of our website. Whether customer is looking for a city tour, wine tasting experiences, walking tours, bicycle tours or any other activity he/she wants to do together with a local, our web site will help customer to connect with locals all over the world.
Jumpstart Our Business Startups Act
In April 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law. The JOBS Act provides, among other things: Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to tour guide.
(i) | the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more, | |
(ii) | the completion of the fiscal year of the fifth anniversary of the company’s IPO; | |
(iii) | the company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period; or | |
(iv) | the company becoming a “larger accelerated filer” as defined under the Securities Exchange Act of 1934. |
The Company meets the definition of an emerging growth company will be affected by some of the changes provided in the JOBS Act and certain of the new exemptions. The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.
Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the advertisement needs to be made or if they would like to add more link ads. WeSecurities Act of 1933 will follow up eitherdiffer from registration statements filed by telephoning our clients or directlyother companies as follows:
(i) | audited financial statements required for only two fiscal years; | |
(ii) | selected financial data required for only the fiscal years that were audited; | |
(iii) | executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter) |
However, the requirements for financial disclosure provided by arranging an appointment with oneRegulation S-K promulgated by the Rules and Regulations of the managers.
Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.
The JOBS Act also exempts the marketing service providerCompany’s independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.
The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company. As full compensationCompany’s accounting firm or for a supplemental auditor report about the promoter performanceaudit.
Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the Company’s independent registered public accounting firm to file a report on the Company’s internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company’s internal control over financial reporting.
Section 102(a) of the JOBS Act goes on to exempt emerging growth companies from the requirements in 1934 Act § 14A(e) for companies with a class of securities registered under the agreement,1934 Act to hold shareholder votes for executive compensation and golden parachutes.
Other Items of the promoter will get 10%JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition, the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the total prices paid by customer via Company web site.
Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market for online tourismthe fact that it is highly competitive. Numerous online tourism sites will competeseeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a road show.
Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with us. Our competitors are substantially larger and more experienced than us andnew or revised financial accounting standards until private companies (that is, those that have longer operating histories, and have materially greater financial and other resources than us. The competition in the online we will face comes from online web sites:
The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any insurance, if we are a partysuch an election to opt out is irrevocable. The Company has elected not to opt out of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us, which could cause us to cease operations.
Subsidiaries- The Company owns 100% of NHF International Limited and its subsidiaries, Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd, 51% of Prema Life Pty Ltd, an Australian corporation and 60% of GGLG Properties Pty Ltd, an Australian corporation.
Employees and Employment Agreements
At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.
ITEM 1A. RISK FACTORS
Not applicable to smaller reporting companies.
ITEM 2. DESCRIPTION OF PROPERTY
The Company owns no real estate. We currently maintain our corporate office at No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park, 48000 Rawang, Selangor, Malaysia. We believe that this current office space is adequate for our current operations and we do not ownanticipate that we will require any real estate or other properties.
ITEM 3. LEGAL PROCEEDINGS
On 25 January 2019, Craig Popplestone obtained default judgment in Magistrates Court of Queensland proceedings no. M205, M206 and M207 (Magistrates Court Proceedings) against Prema Life Pty Ltd for alleged unpaid invoices. The default judgments were irregularly obtained on the basis that the Uniform Civil Procedure Rules 1999 have not been complied with and Prema Life Pty Ltd was never served with any document filed in the proceedings. The irregular Default Judgments were set aside by the Magistrates Court on 21 June 2019. Prema Life Pty Ltd has a defence to the proceeding on the basis that the parties entered into a Deed of Release in respect of the debt and accordingly, no debt is owed by Prema Life Pty Ltd to Mr Popplestone. Mr Popplestone has until 19 July 2019 to file any claim and statement of claim in the proceeding should he elect to pursue his claim against Prema Life Pty Ltd. To date no such claim and statement of claim has been served on Prema Life Pty Ltd.
On 11 March 2019, Mr Popplestone served a statutory demand on Prema Life Pty Ltd demanding payment of Australian Dollar 49,733 (approximately $34,500),the amount owed pursuant to the default judgments awarded in the Magistrates Court Proceedings. On 1 April 2019, Prema Life Pty Ltd filed an application in the Supreme Court of Queensland proceeding no. 3472 of 2019 seeking to have the statutory demand set aside due to the statutory demand being defective and on the basis that there is a genuine dispute about the nature of the debt. The proceeding has been adjourned to a date to be agreed to by the parties post the hearing of the application to have the default judgments obtained in the Magistrates Court Proceedings set aside as once these default judgments are set aside there will be no debt able to be relied upon by Mr Popplestone for the purpose of the statutory demand.
On March 6, 2019, the company has executed a term sheet to acquire a majority interest in Biodelta (Pty) Ltd (“Biodelta”) and on May 14, 2019, announced termination of the term sheet. The company is investigating the indebtedness of Biodelta regarding the repayment of refundable deposit of $160,000 for the acquisition of the shares and other business assets in Biodelta. Biodelta failed or neglected to repay the funds on demand when the transaction did not occur. A letter of demand has been issued on May 22, 2019 and June 17, 2019 respectively against Biodelta which Biodelta disputes the obligation to repay. The decision has been made to pursue both civil and criminal proceedings against Biodelta and its director Leon Giese. The legal proceedingsrepresentative has been authorized to which we are a party ortravel to which any of our property isSouth Africa to commence the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
ITEM 4. MINE SAFETY DISCLOSURES
None.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
Public Market for Common Stock
On March 17, 2018, our common shares. Our common shares are quotedstock was approved for quotation on the OTC Markets under the trading symbol “NHEL,” however an active“NHEL”. The OTC Markets is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. The OTC Markets securities are traded by a community of market hasmakers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges and any prices quoted may not yet developed forbe a reliable indication of the value of our common stock.
On December 27, 2018, the closing price of our common stock reported on the OTC Markets was $2.48 per share. The following table sets forth, for each of the quarterly periods indicated, the high and low sales prices of our common stock, as reported on the OTCQB.
Year 2018 | High Bid | Low Bid | ||||||
Quarter Ended March 31, 2018 | $ | 5.00 | $ | 0.20 | ||||
Quarter Ended June 30, 2018 | 2.00 | 1.20 | ||||||
Quarter Ended September 30, 2018 | 2.40 | 2.00 | ||||||
October 1 to December 27, 2018 | 6.00 | 2.42 |
As of December 27, 2018, there were approximately 72 shareholders of record of our 161,859,500 shares common stock based upon the shareholders’ listing provided by our transfer agent.
Dividends
We cannot assure youhave never paid cash dividends on our common stock. We intend to keep future earnings, if any, to finance the expansion of our business, and we do not anticipate that thereany cash dividends will be a marketpaid in the foreseeable future. Our future payment of dividends will depend on our earnings, capital requirements, expansion plans, financial condition and other relevant factors that our board of directors may deem relevant. Our retained earnings deficit currently limits our ability to pay dividends.
Shares Available for our common stock.
Approximately 81% of September 30, 2017, noall outstanding shares of our common stock have traded.
Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, shell companies, like us, unless the following conditions are met:
● | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
● | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
● | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and |
● | at least one year has elapsed from the time that the issuer filed current comprehensive disclosure with the SEC reflecting its status as an entity that is not a shell company. |
On February 1, 2018, the Company notified the SEC by through the filing of a Form 8-K that is was no longer a “shell” corporation. In view of this, any time after February 1, 2019, and assuming the Company has been current in its required filings pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, and all other requirements set forth above are met, shareholders may utilize Rule 144 for the sale of their shares.
Penny Stock Regulations
Our common stock is deemed to be “penny stock” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.
Because of these regulations, broker-dealers may encounter difficulties in their attempt to buy or sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock even if our common stock becomes publicly traded. In addition, the liquidity for our common stock may be decreased, with a corresponding decrease in the price of our common stock. Our shares are likely to be subject to such penny stock rules for the foreseeable future.
Repurchases of Equity Securities
None
Reports to Stockholders
We are currently subject to the Company increased the authorized share capital from 75,000,000 shares of common stock to 500,000,000 shares of common stock. In addition, the Company effectuated a 30:1 forward stock splitinformation and reporting requirements of the Securities Exchange Act of 1934 and will continue to file periodic reports, and other information with the SEC. We intend to send annual reports to our stockholders containing audited financial statements.
Transfer Agent
Transhare Corporation, 15500 Roosevelt Boulevard, Suite 301, Clearwater, FL 33760 is the registrar and transfer agent for the Company’s common stock.
Recent Sales of common stock for cash proceeds of $20,100.
None
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Annual Report Form 10-K contains forward-looking statements that reflect our plans, estimates and beliefs.statements. Our actual results could differ materially from those discussedset forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. OurThe following discussion and analysis of our financial condition and results of operations should be read together with the audited financial statements are statedand accompanying notes and the other financial information appearing elsewhere in United States Dollarsthis report. The analysis set forth below is provided pursuant to applicable Securities and are preparedExchange Commission regulations and is not intended to serve as a basis for projections of future events. Refer also to “Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” in accordanceItem 1 above.
Natural Health Farm Holdings Inc., incorporated in the State of Nevada on July 10, 2014 (inception date), has developed and launched itself into the healthcare industry. The company started as a nutritional consulting service provider by offering a web based naturopathic learning management system that allows distributors, chiropractors and consumers to be educated on health-related aspects of various diseases. The company has positioned itself to be a fully integrated nutraceutical biotechnology company offering products and related services through healthcare practitioners and direct-to-consumers. The company now owns a research & development laboratory in Malaysia, franchisee management services company and an Australia manufacturing facility producing practitioner only naturopathic and homeopathic medicines.
On January 31, 2018, the company acquired the total outstanding share of NHF International Limited at USD$1. Upon the completion of the acquisition, its subsidiaries, both Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd become wholly subsidiaries of the Group. As this transaction is business combination under common control, as deliberated and determined by Directors of the Company, difference between purchase considerations and net tangible assets acquired is recorded in merger reserves which amounted to $517,300. Natural Tech R&D Sdn Bhd, a BioNexus Status Company in Malaysia, specializes in research and development, cultivation, extraction and commercialization of nutraceuticals based on medicinal fungi and NHF Management & Business Sdn Bhd, providing franchisee management services and consultation, such as point-of-sales system, resources, branding and marketing.
On December 3, 2018, the Company agreed to purchase 51% of the issued and outstanding capital stock of Prema Life Pty Ltd and 60% of the issued and outstanding capital stock of GGLG Properties Pty Ltd, collectively in exchange for 304,500 shares of the Company’s common stock. On December 28, 2018, the parties mutually agreed to extend the closing date of the purchase transaction on January 1, 2019. The Company issued 304,500 shares of its common stock on December 3, 2018 in good faith for consummating the purchase.
Prema Life Pty Ltd is a manufacturer and supplier of functional foods, vitamins and supplements, of practitioner only naturopathic and homeopathic medicines in Australia. The Company hosts regular educational webinars and seminars for practitioners to learn about the natural products. The Company operates from a Hazard Analysis and Critical Control Point (“HACCP”) certified manufacturing facility and has the capacity to produce a wide range of powder and liquid products to requirements.
GGLG Properties Pty Ltd. owns industrial property and factory at Brendale in Brisbane, Queensland, Australia. The Company leases this property to Prema Life Pty Ltd, and incurs costs in connection with United States Generally Accepted Accounting Principles.
From inception, through the date of this annual report, we reported revenues and incurred expenses and accumulated operating losses, as part of our development activities. We have incurred recurring losses to date. Our financial statements have been prepared assumingrecorded a net loss of $948,614 for the year ended September 30, 2018, working capital deficiency of $213,742, and an accumulated deficit of $1,067,080 at September 30, 2018.
We anticipate that we will need substantial working capital over the next 12 months to continue as a going concern and accordingly, do not include adjustmentsto expand our operations to distribute, sell and market naturopathic learning management system together with online learning courses. Our independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. Unless we are able to generate sufficient cash flows from operations and/or obtain additional financing, there is a substantial doubt as to the ability of the Company to continue as a going concern. We intend to make an equity offering of our common stock for the acquisition and operation expenses. If we cannot raise the required cash, we will issue additional shares of our common stock in lieu of cash.
Restatement of Financial Results
The company is restating its previously reported consolidated financial statements as at September 30, 2018. The restatement of the company’s consolidated financial statements followed an internal review of the company’s consolidated financial statements and accounting records that inadvertently excluded the financials reporting for NHF International Limited and its subsidiaries, Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd. This restatement has presented the periodic consolidated earnings of the company as a group.
Results of Operations for the Years Ended September 30, 2018 and 2017
Our results of operations for the year ended September 30, 2018 and 2017 included the operations of the Company, NHF International and its subsidiaries as a common control situation.
Revenues and Cost of Goods Sold
Revenues for the year ended September 30, 2018 were $769,969 ($652,367 from related parties and $117,602 from third parties) compared to $0 for the same comparable period in 2017. Revenues recorded were from licensing fees and other software related revenues relating to web-based naturopathic learning management system and training provided to four customers by NHEL, as well as selling supplements, providing laboratory testing services and providing franchisee and marketing consultation by the recoverabilitysubsidiary companies. Cost of goods sold recorded for the year ended September 30, 2018 was $362,847. No revenues and realizationcost of assetsgoods sold were realized for the year ended September 30, 2017.
Operating Expenses
Operating expenses for the year ended September 30, 2018 and classification2017 were $1,354,462 and $89,359, respectively. Operating expenses for the year ended September 30, 2018 consisted of liabilities that might be necessary shouldus engaging outside consultants and business advisors for professional fees totaling $159,862, legal and filing fees of $51,719 upon becoming a public reporting entity, stock compensation expense of $826,295 for grant of stock options to employees, directors and consultants, and general and administrative expenses of $316,586. Operating expenses for the year ended September 30, 2017 consisted of professional fees of $33,986, legal and filing fees of $9,093, and general and administrative expenses of $46,280.
Other Income (Expense)
Interest expense for the year ended September 30, 2018 and 2017 was $1,026 and $0. On June 5, 2018, we be unableexecuted a promissory note of $40,000 at 8% annual interest, due and payable in full on March 5, 2019. We recorded interest expense of $1,026 for the year ended September 30, 2018.
Net loss
We reported a net loss of $948,614 and $89,359 and for the year ended September 30, 2018 and 2017, respectively.
Liquidity and Capital Resources
Cash and cash equivalents were $439,846 at September 30, 2018 as compared to continue$0 at September 30, 2017. As reported in operation. We expectthe accompanying financial statements, we will require additionalrecorded a net loss of $948,614 for the year ended September 30, 2018. Our working capital to meetdeficit and accumulated deficit at September 30, 2018 was $213,742 and $1,067,080, respectively. These factors and our long term operating requirements. We expectability to raise additional capital through, amongto accomplish our objectives, raises doubt about our ability to continue as a going concern. We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of our current business operations. We anticipate generating only minimal revenues over the next twelve months. Consequently, we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.
We presently do not have any significant credit available, bank financing or other things,external sources of liquidity. Due to our accumulated operating losses, our operations have not been a source of liquidity. We will need to acquire other profitable entities or obtain additional capital in order to expand operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. There can be no assurance that we will be successful in obtaining additional funding.
To the extent that we raise additional capital through the sale of equity or convertible debt securities.
No assurance can be given that sources of financing will be available to us and/or that demand for our equity/debt instruments will be sufficient to meet our capital needs, or that financing will be available on terms favorable to us. If funding is insufficient at any time in the future, we may not be able to take advantage of business opportunities or respond to competitive pressures or may be required to reduce the scope of our planned service development and marketing efforts, any of which could have a negative impact on our business and operating results.
Operating Activities
Net cash flows provided by operating activities for the year ended September 30, 2017 COMPARED TO FISCAL YEAR ENDED SEPTEMBER 30, 2016.
Investing Activities:
Net cash flows from investing activities for the fiscal year ended September 30, 2016. The Company2018 was $137,805 primarily due to cash inflows from merger amounting to $289,208 and net off the purchase of plant and equipment of $57,823 and acquisition of other investments of $93,580. We did not earnrecord any revenues duringcash flows in investing activities for the year ended September 30, 2017.
Financing Activities
Net cash flows provided by financing activities for the year ended September 30, 2018 was $1,032,219, consisting of $11,210 in cash advance from director, drawdowns of borrowings of $40,000 and proceeds from issuance of share of $981,009. Net cash flows provided by financing activities for the year ended September 30, 2017 as compared to revenues of $1,995 earned for the year ended September 30, 2016.
As a result of the fiscalabove activities, we experienced a net increase in cash of $439,846 and $0 for the year ended September 30, 2016, cash flows provided by financing activities was $20,466, consisting of cash proceeds of $20,100 from the sale of our common stock2018 and cash advances of $366 received from our director.
Critical Accounting Policies and anticipated cash flowSignificant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements which we have prepared in accordance with U.S. generally accepted accounting principles. In preparing our financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We have identified the following accounting policies that we believe require application of management’s most subjective judgments, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results could differ from these estimates and such differences could be material.
While our significant accounting policies are described in more details in Note 2 of our annual financial statements included herein, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our financial statements.
JOBS Act Accounting Election
We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not expectedemerging growth companies.
Fair value of Financial Instruments and Fair Value Measurements
ASC 820, “FairValue Measurements and Disclosures”,requires an entity to be adequatemaximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to fund our operations. measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Off-Balance Sheet Arrangements
We have no linesnot engaged in any off-balance sheet arrangements as defined in Item 303(c) of creditthe SEC’s Regulation S-B. We did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special-purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other bank financing arrangements. Generally, wecontractually narrow or limited purposes.
Recent Accounting Pronouncements
We have financed operations to date through the proceeds of the private placement of equityimplemented all new accounting pronouncements that are in effect and advances from directors. In connection withthat may impact our business plan, management anticipates additional increases in operating expensesfinancial statements and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securitiesdo not believe that there are any other new accounting pronouncements that have been issued that might have rights, preferencesa material impact on our financial position or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantageresults of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
Material Commitments
As of the date of this Annual Report, we do not have any material commitments.
Purchase of Significant Equipment
As of the date of this Annual Report, we do not intend to purchase any significant equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Annual Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
GOING CONCERN
The independent auditors' reports accompanying our September 30, 20172018 and September 30, 20162017 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to smaller reporting companies.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page | |
Report of Current Independent Registered Public Accounting Firm | F-1 |
Balance Sheets | |
Statements of Operations | |
Statements of Changes in Stockholders’ Deficits | |
Statements of Cash Flows | |
Notes to Financial Statements |
TOTAL ASIA ASSOCIATES PLT (LLP0016837-LCA & AF002128) A Firm registered with US PCAOB and Malaysian MIA C-3-1, Megan Avenue 1, 189 Off Jalan Tun Razak, 50400 Kuala Lumpur. Tel: (603) 2733 9989 |
To the Shareholders and Board of Directors and Stockholders of Natural Health
No.48 & 49, Jalan Velox 2, Taman Velox,
Rawang Industrial Park
48000 Rawang, Selangor, Malaysia
Opinion on the Financial Statements
We have audited the accompanying balance sheetsheets of Natural Health Farm Holdings Inc. (the “Company”‘Company’) as of September 30, 20172018 and the related statements of operations, change inincome, stockholders’ deficitequity, and cash flows for the year then ended. ended of September 30, 2018 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018 and the results of its operations and its cash flows for the year ended September 30, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audit.
We conducted our audits in accordance with the standards generally accepted inof the United States of America.PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits we are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, for the year ended September 30, 2018 the Company has sustained recurringincurred a net lossesloss and negative cash flows from operations thatworking capital deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regardingin regard to these matters are also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Kuala Lumpur, Malaysia | |
September 20, 2019 |
September 30, 2017 | September 30, 2016 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | - | $ | - | ||||
Prepaid expense | - | 696 | ||||||
Total Current Assets | - | 696 | ||||||
Total Assets | $ | - | $ | 696 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current Liabilities | ||||||||
Advance from affiliate | $ | 80,137 | $ | - | ||||
Advance from director | - | 5,703 | ||||||
Total Current Liabilities | 80,137 | 5,703 | ||||||
Total Liabilities | 80,137 | 5,703 | ||||||
Stockholders' Deficit | ||||||||
Common Stock, $0.001 par value, 500,000,000 shares authorized, 150,150,000 shares issued and outstanding | 150,150 | 150,150 | ||||||
Additional Paid in Capital | (111,821 | ) | (126,050 | ) | ||||
Accumulated Deficit | (118,466 | ) | (29,107 | ) | ||||
Total Stockholders' Deficit | (80,137 | ) | (5,007 | ) | ||||
Total Liabilities and Stockholders' Deficit | $ | - | $ | 696 |
NATURAL HEALTH FARM HOLDINGS INC.
BALANCE SHEETS
September 30, 2018 | September 30, 2017 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 439,846 | $ | - | ||||
Account receivables – Third parties | 162,275 | - | ||||||
Account receivables – Related parties | 169,292 | - | ||||||
Other receivables and deposits | 2,061 | - | ||||||
Tax assets | 5,221 | - | ||||||
Total Current Assets | 778,695 | - | ||||||
Non-Current Assets | ||||||||
Plant and equipment, net | 159,479 | - | ||||||
Other investments | 93,580 | - | ||||||
Total Non-Current Assets | 253,059 | - | ||||||
Total Assets | $ | 1,031,754 | $ | - | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current Liabilities | ||||||||
Account payables | $ | 71,678 | $ | - | ||||
Accrued expenses | 36,720 | - | ||||||
Other payables – related parties | 299,309 | 80,137 | ||||||
Deferred revenue - related parties | 57,341 | - | ||||||
Deferred revenue - third parties | 48,694 | - | ||||||
Note payable | 40,000 | - | ||||||
Advance from director | 11,210 | - | ||||||
Total Current Liabilities | 564,952 | 80,137 | ||||||
Non-Current Liabilities | ||||||||
Deferred tax liabilities | 8,159 | - | ||||||
Total Liabilities | 573,111 | 80,137 | ||||||
Commitments and Contingencies (Note 9) | ||||||||
Stockholders' Deficit | ||||||||
Common Stock, $0.001 par value, 500,000,000 shares authorized, 161,555,000 shares and 150,150,000 shares issued and outstanding at September 30, 2018 and 2017, respectively | 161,555 | 150,150 | ||||||
Additional paid in capital | 1,387,112 | (111,821 | ) | |||||
Accumulated deficit | (1,067,080 | ) | (118,466 | ) | ||||
Foreign currency translation reserve | (22,944 | ) | - | |||||
Total Stockholders' Equity | 458,643 | (80,137 | ) | |||||
Total Liabilities and Stockholders' Deficit | $ | 1,031,754 | $ | - |
The accompanying notes are an integral part of these financial statements.
For the Year Ended September 30, | ||||||||
2017 | 2016 | |||||||
Revenues | $ | - | $ | 1,995 | ||||
Cost of Goods Sold | - | - | ||||||
Gross Profit | - | 1,995 | ||||||
Operating Expenses: | ||||||||
Filing fees | 9,093 | - | ||||||
Professional fees | 63,278 | 20,905 | ||||||
General and Administrative | 16,988 | 1,287 | ||||||
Total Operating Expenses | 89,359 | 22,192 | ||||||
Loss from Operations | (89,359 | ) | (20,197 | ) | ||||
Other Income (Expenses) | - | - | ||||||
Loss Before Income Tax | (89,359 | ) | (20,197 | ) | ||||
Provision for Income Tax | - | - | ||||||
Net Loss | $ | (89,359 | ) | $ | (20,197 | ) | ||
Basic and Dilutive Net Loss Per Share | $ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted | 150,150,000 | 137,760,246 |
NATURAL HEALTH FARM HOLDINGS INC.
STATEMENTS OF OPERATIONS
For the Year Ended September 30, | ||||||||
2018 | 2017 | |||||||
Revenues - related parties | $ | 652,367 | $ | - | ||||
Revenues - non-related parties | 117,602 | - | ||||||
Total Revenues | 769,969 | - | ||||||
Cost of goods sold | (362,847 | ) | - | |||||
Gross Profit | 407,122 | - | ||||||
Operating Expenses: | ||||||||
Consulting fees | (159,862 | ) | (33,986 | ) | ||||
Legal and filing fees | (51,719 | ) | (9,093 | ) | ||||
Stock compensation | (826,295 | ) | - | |||||
Other general and administrative | (316,586 | ) | (46,280 | ) | ||||
Total Operating Expenses | (1,354,462 | ) | (89,359 | ) | ||||
Loss from Operations | (947,340 | ) | (89,359 | ) | ||||
Other Income (Expense) | ||||||||
Other operating income | 1,418 | - | ||||||
Interest expense | (1,026 | ) | - | |||||
Total Other Income (expense) | 392 | - | ||||||
Loss Before Provision for Income Tax | (946,948 | ) | (89,359 | ) | ||||
Provision for Income Tax | (1,666 | ) | - | |||||
Net Loss | $ | (948,614 | ) | $ | (89,359 | ) | ||
Other comprehensive expenses | ||||||||
Foreign currency translation differences | (22,944 | ) | - | |||||
Total comprehensive expense for the year | (971,558 | ) | (89,359 | ) | ||||
Basic and Dilutive Net Loss Per Share | $ | (0.01 | ) | $ | (0.00 | ) | ||
Weighted Average Number of Shares Outstanding - Basic and Diluted | 154,691,466 | 150,150,000 |
The accompanying notes are an integral part of these financial statements.
NATURAL HEALTH FARM HOLDINGS INC.
Statements of Changes in Stockholders' Deficit
Common Stock | Additional | Accumulated | ||||||||||||||||||
Number ** | Amount | Paid-in Capital | Deficit | Total | ||||||||||||||||
Balance, September 30, 2015 | 120,000,000 | $ | 120,000 | $ | (116,000 | ) | $ | (8,910 | ) | $ | (4,910 | ) | ||||||||
Shares issued for cash | 30,150,000 | 30,150 | (10,050 | ) | - | 20,100 | ||||||||||||||
Net Loss | - | - | - | (20,197 | ) | (20,197 | ) | |||||||||||||
Balance, September 30, 2016 | 150,150,000 | $ | 150,150 | $ | (126,050 | ) | $ | (29,107 | ) | $ | (5,007 | ) | ||||||||
Forgiveness of advance by former directors | - | - | 14,229 | - | 14,229 | |||||||||||||||
Net loss | - | - | - | (89,359 | ) | (89,359 | ) | |||||||||||||
Balance, September 30, 2017 | 150,150,000 | $ | 150,150 | $ | (111,821 | ) | $ | (118,466 | ) | $ | (80,137 | ) |
Common Stock | Additional | Accumulated | Foreign Currency | |||||||||||||||||||||
Number ** | Amount | Paid-in Capital | Deficit | Translation Reserve | Total | |||||||||||||||||||
Balance, September 30, 2016 | 150,150,000 | $ | 150,150 | $ | (126,050 | ) | $ | (29,107 | ) | - | $ | (5,007 | ) | |||||||||||
Forgiveness of advance by former directors | - | - | 14,229 | - | - | 14,229 | ||||||||||||||||||
Net loss | - | - | - | (89,359 | ) | - | (89,359 | ) | ||||||||||||||||
Balance, September 30, 2017 | 150,150,000 | 150,150 | (111,821 | ) | (118,466 | ) | - | (80,137 | ) | |||||||||||||||
Stock subscriptions received | - | - | 39,404 | - | - | 39,404 | ||||||||||||||||||
Shares issued to consultants for services | 1,050,000 | 1,050 | 103,950 | - | - | 105,000 | ||||||||||||||||||
Stock options granted to employees, directors and consultants | - | - | 526,295 | - | - | 526,295 | ||||||||||||||||||
Stock compensation expense | 150,000 | 150 | 299,850 | - | - | 300,000 | ||||||||||||||||||
Shares sold for cash | 10,205,000 | 10,205 | 105 | - | - | 10,310 | ||||||||||||||||||
Reserves arising from merger of subsidiaries | 529,329 | - | - | |||||||||||||||||||||
Net loss | - | - | - | (948,614 | ) | (22,944 | ) | (971,558 | ) | |||||||||||||||
Balance, September 30, 2018 | 161,555,000 | $ | 161,555 | $ | 1,387,112 | $ | (1,067,080 | ) | (22,944 | ) | $ | 458,643 |
** Adjusted for 30:1 forward stock split on November 4, 2016.
The accompanying notes are an integral part of these financial statements.
For the Year Ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Loss | $ | (89,359 | ) | $ | (20,197 | ) | ||
Adjustment to reconcile net loss to net cash used in operating activities | ||||||||
Changes in operating assets and liabilities | ||||||||
(Increase) decrease in prepaid expense | 696 | (696 | ) | |||||
Net Cash Used in Operating Activities | (88,663 | ) | (20,893 | ) | ||||
Cash Flows from Investing Activities | - | - | ||||||
Cash Flows from Financing Activities | ||||||||
Proceeds from sale of common stock | - | 20,100 | ||||||
Advance from affiliate | 80,137 | - | ||||||
Cash advance from director | 8,526 | 366 | ||||||
Net Cash Provided by Financing Activities | 88,663 | 20,466 | ||||||
Net Increase in Cash and Cash Equivalents | - | (427 | ) | |||||
Cash and Cash Equivalents, Beginning of the Period | - | 427 | ||||||
Cash and Cash Equivalents, End of the Period | $ | - | $ | - | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid for Income Taxes | $ | - | $ | - | ||||
Cash paid for Interest | $ | - | $ | - | ||||
Supplemental disclosures of non-cash investing and financing activities: | ||||||||
Forgiveness of debt by a former director | $ | 14,229 | $ | - |
NATURAL HEALTH FARM HOLDINGS INC.
STATEMENTS OF CASH FLOWS
For the Year Ended September 30, | ||||||||
2018 | 2017 | |||||||
Cash Flows from Operating Activities: | ||||||||
Loss Before Provision for Income Tax | $ | (946,948 | ) | $ | (89,359 | ) | ||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities | ||||||||
Depreciation and Amortization of Plant and Equipment | 35,973 | - | ||||||
Changes in operating assets and liabilities | ||||||||
Account receivables | (207,900 | ) | 696 | |||||
Account payables | 395,584 | - | ||||||
Tax paid | (6,887 | ) | ||||||
Net Cash Flows Provided by (Used in) Operating Activities | (730,178 | ) | (88,663 | ) | ||||
Cash Flows from Investing Activities | ||||||||
Purchase of plant and equipment | (57,823 | ) | - | |||||
Cash inflows from merger | 289,208 | |||||||
Acquisition of other investments | (93,580 | ) | - | |||||
Net Cash Flows From Investing Activities | 137,805 | - | ||||||
Cash Flows from Financing Activities | ||||||||
Cash proceeds from affiliate | - | 80,137 | ||||||
Cash advance from director | 11,210 | 8,526 | ||||||
Drawdowns of borrowings | 40,000 | - | ||||||
Cash proceeds from issuance of shares | 981,009 | - | ||||||
Net Cash Flows Provided by Financing Activities | 1,032,219 | 88,663 | ||||||
Net Increase in Cash and Cash Equivalents | 439,846 | - | ||||||
Cash and Cash Equivalents, Beginning of the Year | - | - | ||||||
Cash and Cash Equivalents, End of the Year | $ | 439,846 | $ | - | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid for Income Taxes | $ | (6,887 | ) | $ | - | |||
Cash paid for Interest | $ | (1,026 | ) | $ | - | |||
Supplemental disclosures of non-cash investing and financing activities: | ||||||||
Forgiveness of debt by a former director | $ | - | $ | 14,229 |
The accompanying notes are an integral part of these financial statements.
NATURAL HEALTH FARM HOLDINGS INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
NOTE 1:1 – NATURE OF OPERATIONS, LIQUIDITY AND GOING CONCERN
Natural Health Farm Holdings Inc. (the “Company”, “We”, “Its”, and “NHFH”“NHEL”) was incorporated under the laws of the State of Nevada on July 10, 2014 (inception)(Inception date). The Company ishas developed web-based business and launched itself into the healthcare industry. The Company has plans to provide through its subsidiaries, retail nutritional supplements, organic foods, personal care, and other health care products. The company has positioned itself to be a fully integrated nutraceutical biotechnology company offering products and related services through healthcare practitioners and direct-to-consumers. The company now owns a research & development stagelaboratory in Malaysia, franchisee management services company and is looking to acquire profitable business operations.
On November 30, 2016, the Company filed a certificate of amendment to its articles of incorporation with the Nevada Secretary of State to change its name from Amber Group Inc. to Natural Health Farm Holdings Inc., and effectuated a 30:1 forward stock split of its common stock and increased its authorized share capital to 500,000,000 (Five Hundred Million). This amendment was unanimously approved by the Company’s board of directors on November 29, 2016, and with the stockholders holding a majority of the Company’s voting power.
On March 16, 2017, Financial Industry Regulatory Authority (FINRA) approved the corporate name change to Natural Health Farm Holdings Inc., approved the increase in the Company’s authorized shares of common stock to 500,000,000 shares, and approved 30:1 forward stock split effective March 17, 2017. The new trading symbol for our common stock is “NHEL”.
On January 31, 2018, the company acquired the total outstanding share of NHF International Limited at USD$1. Upon the completion of the acquisition, its subsidiaries, both Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd become wholly subsidiaries of the Group. As this transaction is business combination under common control, as deliberated and determined by Directors of the Company, difference between purchase considerations and net tangible assets acquired is recorded in merger reserves which amounted to $517,300. Natural Tech R&D Sdn Bhd, a BioNexus Status Company in Malaysia, specializes in research and development, cultivation, extraction and commercialization of nutraceuticals based on medicinal fungi and NHF Management & Business Sdn Bhd, providing franchisee management services and consultation, such as point-of-sales system, resources, branding and marketing.
The corporate structure is depicted below:
F-6 |
Basis of Presentation
These accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the accompanyingUnited States of America (“US GAAP”).
Basis of Consolidation
The condensed consolidated financial statements. Asstatements include the accounts of Natural Health Farm Holdings Inc. and all controlled subsidiaries. All intercompany transactions and balances have been eliminated.
The condensed consolidated financial statements as of September 30, 2017, the Company's total liabilities exceeded its total assets by $80,137. The Company has recorded a net loss of $89,3592018 and for the year ended September 30, 20172018, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the Company's condensed consolidated financial position, results of operations, statements of comprehensive income, and statements of stockholders' equity and cash flows for all periods presented.
Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated small revenues and has sustained cumulative operating losses since July 10, 2014 (Inception Date) to date and allow it to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and affiliates, the ability of the Company to obtain necessary financing to continue operations, and the attainment of profitable operations. The Company recorded a total comprehensive loss of $971,558 for the year ended September 30, 2018 and has an accumulated deficit of $118,466$1,067,080 as of September 30, 2017. Net cash used in operating activities for2018.
These factors, among others, raise a substantial doubt regarding the year ended September 30, 2017 was $88,663. The Company has had difficulty in obtaining working lines of credit from financial institutions and trade credit from vendors, management has been able to (i) obtain concessions on forgiveness of debt of $14,229 from a former officer and director, (ii) obtain advance from affiliate of $80,137Company’s ability to continue its growth.
NOTE 2:2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following summary of Estimates
Use of Estimates
The preparation of financial statements in conformity with 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 revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts receivables, valuation of long-lived assets, accounts payable, accrued liabilities and accrued liabilities.payable to related parties. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company did not have anyhad a cash equivalents asbalance of $439,846 and $0 at September 30, 2018 and 2017, respectively.
Accounts Receivable
Accounts receivable represent income earned from the sale of products for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and 2016, respectively.
Equipment Costs
Equipment costs include direct costs incurred for purchase of fixed assets and liabilities that were measured and recognized at fair value as of September 30, 2016 on a recurring basis:
Commencing upon product release, capitalized computer software costs are amortized on the straight-line method over a thirty-six months period. The Company evaluates the future recoverability of capitalized computer software costs on an annual basis.
Revenue Recognition and Concentrations
We generate revenue recognition criteria established underfrom licensing and other software services from our web-based software to distributors and retailers of nutritional supplements in the SEC's Staff Accounting Bulletin No. 104. The criteriahealthcare industry. We recognize licensing fees and howother software services as revenue over the Company satisfies each element is as follows: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred per the termsperiod of the signed contract; (3)contract at the time that the computer software is delivered and accepted by the customer, the selling price is fixed, and determinable;collection is reasonably assured, provided no significant obligations remain. We consider authoritative guidance on multiple deliverables in determining whether each deliverable represents a separate unit of accounting.
Deferred revenues represent billings or cash received in excess of revenue recognizable on service agreements that are not accounted for as revenues.
Through our subsidiary, Natural Tech R&D Sdn. Bhd., we generate revenue from the sales of health supplement and (4) collectability is reasonable assured.
Concentration of Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high quality banking institutions. The Company does not have the cash balances in excess of Federal Deposit Insurance Corporation limit at September 30, 2018 and 2017, respectively.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method providesprovide that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company follows the provisions of ASC 740,740-10, “Accounting for Uncertain Income TaxesTax Positions.”. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740,740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Management makes estimates and judgments about our future taxable income that are based on assumptions that are consistent with our plans and estimates. Should the actual amounts differ from our estimates, the amount of our valuation allowance could be materially impacted. Any adjustment to the deferred tax asset valuation allowance would be recorded in the income statement for the periods in which the adjustment is determined to be required. The Company does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year.
F-8 |
Earnings (Loss) Per Common Share
The Company computes net earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the statement of operations.income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible note and preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At September 30, 2018 and 2017, respectively, there were options granted to certain employees and 2016, the Company did not have any warrants issued and outstanding convertibleindependent consultants that when vested convert into 300,000 shares of common stock.
Fair value of Credit Risk
ASC 820, “Fair Value Measurements and Disclosures”,requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, accrued expenses and payable to an affiliate. Pursuant to ASC 820, “Fair Value Measurements and Disclosures” and ASC 825, “Financial Instruments”, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company maintains its cash in bankbelieves that the recorded values of all the other financial instruments approximate their current fair values because of their nature and financial institution depositsrespective maturity dates or durations.
The following table presents assets and liabilities that were measured and recognized at times may exceed federally insured limits.fair value as of September 30, 2018 on a recurring basis:
Description | Level 1 | Level 2 | Level 3 | |||||||||
None | $ | - | $ | - | $ | - |
The Company has not experienced any losses in such accounts throughfollowing table presents assets and liabilities that were measured and recognized at fair value as of September 30, 2017 and 2016. The Company’s bank balance did not exceed FDIC insured amounts at September 30, 2017 and 2016, respectively.
Description | Level 1 | Level 2 | Level 3 | |||||||||
None | $ | - | $ | - | $ | - |
Recent Accounting Pronouncements
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017.2018, and interim periods within fiscal years beginning after December 15, 2019. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. The Company is currently inhas not adapted this ASU codification and it does not anticipate that the processadoption of evaluating the impact of ASU 2016-15this guidance will have any material effect on its financial statements.
In FebruaryJune 2016, the FASB issued Accounting Standards Update 2016-02,(“ASU”) 2016-13, “Leases (Topic 842)Financial Instruments - Credit Losses(Topic 326).”. Under this The new standard amends guidance an entity is required to recognize right-of-useon reporting credit losses for assets held at amortized cost basis and lease liabilities on its balance sheet and disclose key information about leasing arrangements.available-for-sale debt securities. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidanceASU is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard will have on our consolidated financial statements.
In 2015, the FASB issued ASU No. 2015-17, “Income Taxes”(Topic 740):Balance Sheet Classification of Deferred Taxes, which requires all deferred tax assets and liabilities to be classified as noncurrent in a classified balance sheet. Current US GAAP requires an entity to separate deferred tax assets and liabilities into current and noncurrent amounts in a classified balance sheet. For public entities, ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, ASU 2015-17 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018, and may be applied either prospectively or retrospectively, with early application permitted for financial statements that have not been previously issued. The Company has not yet determined the effect of the adoption of this standard on the Company’s financial position and results of operations.
NOTE 3 – ADVANCE FROM AN AFFILIATEPLANT AND EQUIPMENT
The Company purchased web-based naturopathic learning management system computer software, developed by a third party, to educate users with the health-related products for various illnesses, and how the Company’s learning systems could be used to improve their general wellbeing. The amount capitalized include direct costs incurred in developing the software purchased from the third party.
The following table presents details of our computer software costs as of September 30, 2018 and 2017:
Balance at September 30, 2017 | Additions and consolidated through merger of subsidiaries | Amortization | Balance at September 30, 2018 | |||||||||||||
Plant and equipment | $ | - | $ | 195,452 | $ | (35,973 | ) | $ | 159,479 |
Plant and equipment costs are being amortized on a straight-line basis over their estimated life of three years.
The future amortization expense of equipment costs as of September 30, 2018 are to be recorded in accordance with their estimated useful lives.
NOTE 4 – OTHER INVESTMENTS
Other investments amounting to $93,580 as at September 30, 2018, represents unquoted investments carried at amortized costs.
NOTE 5 – ACCOUNT PAYABLES AND ACCRUED EXPENSES
Account payables as at September 30, 2018 and September 30, 2017 totaled $71,678 and $0, respectively while the accrued expenses as of September 30, 2018 and September 30, 2017 totaled $36,720 and $0, respectively.
F-10 |
NOTE 6 – PAYABLE TO AFFILIATES
The Company has received an advance of $11,210 from a director for its working capital needs as of September 30, 2018 (see NOTE 7).
The Company has received advances from an affiliate for its working capital needs.needs from an entity in which its Chief Executive Officer is also a director in such entity (NOTE 7). The advance received is non-interest bearing, unsecured and payable on demand.
Balance at September 30, 2018 | Balance at September 30, 2017 | |||||||
Other payables – related parties | $ | 299,309 | $ | 80,137 | ||||
Deferred revenue - related parties | 57,341 | - | ||||||
Total | $ | 356,650 | $ | 80,137 |
NOTE 7 – RELATED PARTY TRANSACTIONS
The Company received an advance of $11,210 and $0 from a director for its working capital needs as of September 30, 2018 and 2017, respectively. Funds advanced to the Company by the director are non-interest bearing, unsecured and due on demand is summarized(NOTE 6).
The Company has received advances for its working capital needs from an affiliate in which the Company’s Chief Executive Officer holds the position of director in such entity (see NOTE 6).
On November 20, 2017, the Company sold ten (10) naturopathic learning management system and modules for $29,000 to an entity solely owned by a former director of the Company. The Company received the payment in full of $29,000 on December 21, 2017. The Company recorded $8,303 as follows.
Balance | Balance | |||||
September 30, 2017 | September 30, 2016 | |||||
Advance from an affiliate | $ | 80,137 | $ | - | ||
Total | $ | 80,137 | $ | - |
On December 11, 2017, the Company received cash proceedssold twenty (20) naturopathic learning management systems and modules for $50,000 to an entity in which the Company Chief Executive Officer holds the position of $8,526 from a former director as a short-term advance, for its working capital needs.in such entity. The Company received cash proceedsthe payment of $5,703 from$50,000 on December 28, 2017. The Company recorded $13,356 as revenues earned for the same former director as a short-term advance, during the fiscal year ended September 30, 2016. The entire short-term advance amounting to $14,229 was forgiven by the former director2018 and $36,644 as ofdeferred revenues at September 30, 2017, and is2018. The Company recognizes the revenues earned ratably over a period of thirty-six months period.
On May 30, 2018, the Company granted stock options to three officers/directors to purchase 250,000 shares of common stock at exercise price of $1.50 per share for immediate vesting. The fair value of the options granted to officers/directors using the Black-Scholes option pricing model was $271,061. The Company recorded as a contribution to additional paid in capital ascompensation expense of $271,061 for the year ended September 30, 2017 (Note 6)2018. The key valuation assumptions used consist, in part, of the price of the Company’s common stock of $1.70 at the issuance date; a risk-free interest rate of 2.79% and the expected volatility of the Company’s common stock of 106% (estimated based on the common stock of comparable public entities).
On July 2, 2018, the Company issued 150,000 shares of its common stock to two officers valued at their fair value of $300,000. The Company recorded such issuance as compensation expense (see NOTE 10).
NOTE 8 – NOTE PAYABLE
Note payable consist of:
Balance at September 30, 2018 | Balance at September 30, 2017 | |||||||
Note payable - GHS Investments, Inc. | $ | 40,000 | $ | - | ||||
Total | 40,000 | - | ||||||
Current portion | $ | 40,000 | $ | - |
NOTE 8 – NOTE PAYABLE (CONTINUED)
On June 5, 2018, the Company entered into an Equity Financing Agreement and Registration Rights Agreement with GHS Investments Inc. (“GHS”) pursuant to which GHS agreed to purchase up to $20,000,000 in shares of Company common stock. The obligations of GHS to purchase the shares of Company common stock are subject to the conditions set forth in the Equity Financing Agreement, including, without limitation, the condition that a registration statement on Form S-1 registering the shares of Company common stock to be sold to GHS be filed with the Securities and Exchange Commission and become effective. The Registration Rights Agreement provides that the Company shall use commercially reasonable efforts to file the registration statement within 30 days after the date of the Registration Rights Agreement and have the registration statement become effective within 90 days after it is filed. In connection with the Equity Financing Agreement, the Company executed a promissory note in the principal amount of $40,000 (the “Note”) as payment of the commitment fee for the Equity Financing Agreement. The Note bears interest at the rate of 8% and must be repaid on or before March 5, 2019. The Company has recorded the commitment fee as an expense in the accompanying statements of operations for the year ended September 30, 2018. The Company has accrued the interest expense of $1,026 on the principal balance of $40,000 for the period from June 5, 2018 to September 30, 2018.
NOTE 59 – COMMITMENTS AND CONTINGENCIES
Litigation Costs and Contingencies
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Other than as set forth below, management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.
In the normal course of business, the Company incurs costs to hire and retain external legal counsel to advise it on regulatory, litigation and other matters. The Company expenses these costs as the related services are received. If a loss is considered probable and the amount can be reasonable estimated, the Company recognizes an expense for the estimated loss.
NOTE 6:10: STOCKHOLDERS’ DEFICIT
The Company’s capitalization at September 30, 20172018 was 500,000,000 authorized common shares with a par value of $0.001 per share.
Common Stock
On November 30, 2016, the Company increased the authorized share capital from 75,000,000 shares of common stock to 500,000,000 shares of common stock. In addition, the Company effectuated a 30:1 forward stock split of the common stock.
On February 1, 2018, the fiscal year ended September 30, 2017,Company entered into consulting agreements with two former directorscontractors for providing business advisory and consulting services. The Company issued 1,000,000 shares of common stock valued at $20,000 as the fair market value of the stock.
On March 1, 2018, the Company forgaveentered into a Share Exchange Agreement (the “Agreement”) with its shareholders whereby, the shareholders agreed to exchange, sell, convey, transfer and assign to the Company their short-term advancesshareholdings, free and clear of $4,982all liens, pledges, encumbrances, changes, restrictions or known claims of any kind, nature or description plus pay to the Company an aggregate purchase price of $50 (the “Purchase Price”), and $9,247 totaling $14,229 payablethe Company agreed to them. Such amounts are recorded as additional paidaccept from its shareholders the old shares plus the Purchase Price in capital asexchange for the transfer of old shares the new shares. As of September 30, 2017 (Note 4).
On May 16, 2018, the Company issued 50,000 shares of its common stock for a cash consideration of $50 pursuant to an agreement dated February 15, 2018. In addition, on the same date, the Company issued 105,000 shares of common stock for a cash proceedsconsideration of $20,100.
On May 16, 2018, the Company issued 10,050,000 shares of common stock for a cash consideration of $10,050 pursuant to an agreement dated March 1, 2018. The common shares were valued at $10,050 being their fair value on the date of execution of the agreement.
On June 21, 2018, the Company issued 50,000 shares of common stock to a consultant pursuant to an agreement, for providing consulting and business advisory services to the Company. The common shares were valued at $85,000 being their fair value on the date of execution of the agreement to issue such shares.
NOTE 10: STOCKHOLDERS’ DEFICIT (CONTINUED)
On July 2, 2018, the Company issued 150,000 shares of common stock to its officers/director at their fair value of $300,000 on the date of issuance. The Company recorded such issuance as compensation expense (see NOTE 7).
As a result of all common stock issuances, the Company had 161,155,000 shares and 150,150,000 shares of common stock issued and outstanding as ofat September 30, 2017.
Stock Option Plan
On May 30, 2018, the Board of Directors authorized and approved the 2018 Non-Qualified Stock Option Plan (the “2018 Plan) and reserved 10,000,000 shares of the Company’s common stock intended to be issued to selected officers, directors, consultants and key employees provided that bona fide services shall be rendered by such consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction and do not promote or maintain a market for the yearsCompany’s securities. The Company filed a Registration Statement with the SEC on May 31, 2018 disclosing formation of 2018 Plan.
On May 30, 2018, the Board granted stock options under the 2018 Plan to two directors, an officer and an employee, and three independent consultants to purchase up to 450,000 shares of common stock with a five-year term. The stock options vested immediately upon the issuance date. The exercise price of the stock options to purchase common stock was at $1.50 per share, and the quoted market price of the Company stock on the grant date was $1.70. The option to purchase common stock expires on May 30, 2023. The fair value of options granted was $526,295, calculated using Black-Scholes option pricing model using the assumptions of risk free discount rate of 2.79%, volatility of 106%, 2.5 year-term for employees and directors and 5 year-term for non-employees, and dividend yield of 0%. The Company has recorded stock compensation expense of $526,295 for the year ended September 30, 2018.
NOTE 11 – RELATED PARTIES
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
NOTE 12 – INCOME TAX
For the year ended September 30, 2018 and 2017 the local (United States) and 2016foreign components loss before income taxes were comprised of the following:
September 30, 2018 | September 30, 2017 | |||||||
Local tax jurisdiction | $ | (1,127,212 | ) | $ | (89,359 | ) | ||
Foreign tax jurisdiction: | ||||||||
Malaysia | $ | 180,264 | $ | - | ||||
Loss Before Provision for Income Tax | $ | (946,948 | ) | $ | (89,359 | ) |
Reconciliation of tax expense and the accounting profit multiplied by U.S’s domestic tax rate for 2018 and 2017:
September 30, 2018 | September 30, 2017 | |||||||
Loss Before Provision for Income Tax | $ | (946,948 | ) | $ | (89,359 | ) | ||
Tax at statutory tax rate of 21% (2017: 35%) | (198,859 | ) | (31,276 | ) | ||||
Effect of tax rates in foreign jurisdictions | $ | 12,970 | $ | - | ||||
Temporary difference not recognized | 238,351 | 31,276 | ||||||
Expenses not deductible for tax purposes | 1,785 | |||||||
Tax incentives (#) | (52,581 | ) | ||||||
Provision for Income Tax | $ | 1,666 | $ | - |
NOTE 12 – INCOME TAX (CONTINUED)
The Company is summarizeda U.S. entity and is subject to the United States federal income tax however no provision for income taxes in the United States has been made as follows:
The tax expense of $1,666 (2017: $ Nil) is arising from Malaysian entities carry a corporate tax rate of 18%.
The provision for Federal income tax consists of the following:
September 30, 2017 | September 30, 2016 | ||||||
Federal income tax benefit attributable to: | |||||||
Current Operations | $ | 30,382 | $ | 6,867 | |||
Less: valuation allowance | (30,382 | ) | (6,867 | ) | |||
Net provision for Federal income taxes | $ | - | $ | - |
September 30, 2018 | September 30, 2017 | |||||||
Tax expense | ||||||||
- Local | $ | - | $ | - | ||||
- Foreign (#) | 1,666 | - | ||||||
Provision for Income Tax | $ | 1,666 | $ | - |
(#) Lower effective tax rate is notably from Malaysian entities was due to Natural Tech R&D Sdn. Bhd. was granted BioNexus Status by the Malaysian Biotechnology Corporation Sdn. Bhd. and Malaysia’s Ministry of Finance. With this tax incentives, the entire statutory business income is exempted from tax for a period of 10 consecutive years of assessment with effect from 25th May 2010.
NOTE 13 – RESTATEMENT
On January 31, 2018, the company acquired the total outstanding share of NHF International Limited, an investment holding company, at USD$1 Upon the completion of the acquisition, its subsidiaries, both Natural Tech R&D Sdn Bhd and NHF Management & Business Sdn Bhd, in turn, became wholly-owned subsidiaries of the Company. As this transaction is business combination under common control, as deliberated and determined by Directors of the Company, difference between purchase considerations and net tangible assets acquired is recorded in merger reserves which amounted to $529,329. Natural Tech R&D Sdn Bhd, a BioNexus Status Company in Malaysia, specializes in research and development, cultivation, extraction and commercialization of nutraceuticals based on medicinal fungi and NHF Management & Business Sdn Bhd, providing franchisee management services and consultation, such as point-of-sales system, resources, branding and marketing.
The cumulative tax effect atfollowing balances and amounts in the expected rateinitial financial statements announced on 28 December 2018 were inadvertently reported on the condensed consolidated balance sheets and condensed consolidated statements of 34% of significant items comprising our net deferred tax amount is as follows:
September 30, 2017 | September 30, 2016 | ||||||
Deferred tax asset attributable to: | |||||||
Net operating loss carryover | $ | 40,278 | $ | 9,896 | |||
Less: valuation allowance | (40,278 | ) | (9,896 | ) | |||
Net deferred tax asset | $ | - | $ | - |
F-14 |
Condensed Consolidated Balance Sheets
As previously reported | Adjustments arising from merger of subsidiaries |
As restated | ||||||||||
$ | $ | $ | ||||||||||
Current assets | 28,002 | 750,693 | 778,695 | |||||||||
Non-current assets | 30,781 | 222,278 | 253,059 | |||||||||
Total assets | 58,783 | 972,971 | 1,031,754 | |||||||||
Current liabilities | 285,123 | 279,829 | 564,952 | |||||||||
Non-current liabilities | - | 8,159 | 8,159 | |||||||||
Total liabilities | 285,123 | 287,988 | 573,111 | |||||||||
Share Capital | 161,555 | - | 161,555 | |||||||||
Reserves | (387,895 | ) | 684,983 | 297,088 | ||||||||
Total equity | (226,340 | ) | 684,983 | 458,643 |
Condensed Consolidated Statement of Operations For the financial statements and consist of deferred taxes related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled.
As previously reported | Adjustments arising from merger of subsidiaries |
As restated | ||||||||||
$ | $ | $ | ||||||||||
Revenues – related parties | 21,659 | 630,708 | 652,367 | |||||||||
Revenues – third parties | 32,106 | 85,496 | 117,602 | |||||||||
Total revenues | 53,765 | 716,204 | 769,969 | |||||||||
Cost of Goods Sold | (14,669 | ) | (348,178 | ) | (362,847 | ) | ||||||
Gross Profit | 39,096 | 368,026 | 407,122 | |||||||||
Total Operating Expenses | (1,165,282 | ) | (189,180 | ) | (1,354,462 | ) | ||||||
Loss From Operations | (1,126,186 | ) | 178,846 | (947,340 | ) | |||||||
Other income | - | 1,418 | 1,418 | |||||||||
Finance costs | (1,026 | ) | - | (1,026 | ) | |||||||
Loss Before Tax | (1,127,212 | ) | 180,264 | (946,948 | ) | |||||||
Tax expense | - | (1,666 | ) | (1,666 | ) | |||||||
Net Loss | (1,127,212 | ) | 178,598 | (948,614 | ) | |||||||
Other comprehensive expenses | ||||||||||||
Foreign currency translation differences | - | (22,944 | ) | (22,944 | ) | |||||||
Total comprehensive expense for the year | (1,127,212 | ) | 155,654 | (971,558 | ) |
The above restatements do not have any significant impact to the basic and 2016,dilutive net loss per share as compared to initial announcement on 28 December 2018.
NOTE 14 – SUBSEQUENT EVENTS
On December 3, 2018, the Company had an accumulated deficitagreed to purchase 51% of $118,466the issued and $29,107outstanding capital stock of Prema Life Pty Ltd and 60% of the issued and outstanding capital stock of GGLG Properties Pty Ltd, collectively in exchange for U.S. federal tax purposes available304,500 shares of the Company’s common stock. On December 28, 2018, the parties mutually agreed to offset future taxable income expiringextend the closing date of the purchase transaction on various dates through 2034.January 1, 2019. The Company has recorded a 100% valuation allowance on the deferred tax assets due to the uncertaintyissued 304,500 shares of its realization. The net changecommon stock on December 3, 2018 in good faith for consummating the valuation allowance for the year ended September 30, 2017 and 2016 was an increase of $30,382 and $6,867, respectively.
Management has evaluated the subsequent events that have occurred after the balance sheet date ofthrough September 30, 2017, through2018, the date which the financial statements were available to be issued. Based upon their review,issued, noting no items were identified that would impact the accounting for events or transactions in the current period or require additional disclosures.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of September 30, 20172018 using the criteria established in " Internal Control - Integrated Framework " issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") using the 2013 framework.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2017,2018, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1. | We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is an utmost important entity level control over the Company's financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management's activities. |
2. | We did not maintain appropriate cash controls - As of September 30, |
3. | We did not implement appropriate information technology controls - As at September 30, |
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company's internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 20172018 based on criteria established in Internal Control--Integrated Framework issued by COSO.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of September 30, 2017,2018, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
The name, address and position of our present officers and directors are set forth below:
Name and Address of Executive | ||||||
Officer and/or Director | Age | Position | ||||
Tee Chuen Meng No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | 40 | President, Chief Executive Officer and Director | ||||
Tee Chuen No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | ||||||
Chief Financial Officer | ||||||
Yeoh Sin Tze No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | Secretary |
BIOGRAPHICAL INFORMATION AND BACKGROUND OF OFFICER AND DIRECTOR
Mr. Tee Chuen Meng
Mr.
Subsequent to September 30, 2017,2018, the following two persons were appointed as Directors and/or officer on November 28, 2017:
Dr. Jessie Chung, MDTee Chuen Hau
and gas and high-tech industries, and led consulting engagements in the area of Medicine - Clinical Integrative Chinese Medicinestrategy formulation and Western Medicine—Oncology (Guangzhoubusiness transformation. Mr. Tee received his MBA from the University of Chinese Medicine, China). Dr. Cheung holds a Master ofOf Chicago Booth School Of Business Administrationand his B.Eng. degree in Chemical Engineering (Honors) from the University of South Australia. She obtained a Bachelor of Science in Acupuncture and Oriental Medicine (Oriental Medical Institute, Hawaii, USA). Dr. Cheung is a Board Certified Naturopathic Doctor (American Naturopathic Medical Certification Board, ANMCB), CNC (Certified Nutritional Consultant AANC, USA), President of Natural Health Naturopathic Centre, President of Natural Health Naturopathic Academy, President of Malaysia Naturopathic Association, Vice president of Malaysia Anti-Cancer Association (MACA), Registered Chinese Medical Doctor of Malaysia TCM Practitioners Association, Registered Homeopathic Doctor of Malaysian Homeopathic Doctors Association.
Judy LeeYeoh Sin Tze
There were no understandings between the Company and either Tee Chuen Meng Dr. Jessie Chung or Judy Lee concerning their respective appointments as Director.
Mr. Tee Chuen Meng was selected to be a Company director because he has managed several businesses successfully and thus brings management, organizational, operational and administrative experience to our Board.
Family Relationships
Tee Chuen Hau is the brother of Tee Chuen Meng, the CEO and director of the Company.
During the past ten years, none of our present executive officers or directors have been the subject of the following events:
1. | A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
2. | Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
3. | The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities; associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
· | (i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or |
· | (ii) Engaging in any type of business practice; or |
· | (iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
4. | The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3 (i) in the preceding paragraph or to be associated with persons engaged in any such activity; |
5. | Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
6. | Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
7. | Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
i) | Any Federal or State securities or commodities law or regulation; or |
ii) | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or |
iii) | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
8. | Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Our common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, our officers, directors, and principal stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
CODE OF ETHICS
We have not yet adopted a code of ethics that applies to our sole officer and directors, or persons performing similar functions because we are in the start-up phase and are in the process of establishing our operations. We plan to adopt a code of ethics as and when our Company grows to a sufficient size to warrant such adoption.
AUDIT COMMITTEE
We have not established an audit committee as at the date of this registration statement, nor do we have plans to establish an audit committee until such time as we have established our full operations and retained sufficient independent directors as members of our board of directors willing to be appointed to the audit committee and carry out the customary functions of an audit committee.
DIRECTOR NOMINEES
We do not have a nominating committee. Our directors will in the future select individuals to stand for election as members of our board of directors. The Company does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our board has determined that it is in the best position to evaluate our Company's requirements as well as the qualifications of each candidate when it considers a nominee for a position on our board. If security holders wish
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Our common stock is not registered pursuant to recommend candidates directly to our board, they may do so by communicating directly with our officers and directors at the address specified on the coverSection 12 of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The following tables set forth certain information about compensation paid, earned or accrued for services by our President, and Secretary (collectively, the "Named Executive Officer") from inception on November 12, 2013 untilfor the years ended September 30, 2016, 2017 and for the year ended September 30, 2017:
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||
Vadims Furss, | 2016 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||
Former President, Treasurer | 2017 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||
Tee Chuen Meng | 2016 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||
President, Treasurer | 2017 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Name and Principal Position | Year
| Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Plan ($) | Nonqualified ($) | All Other ($) | Total ($) | |||||||||
Vadims Furss, | 2016 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||
Former President, | 2017 2018 | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | |||||||||
Tee Chuen Meng | 2016 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||
President, Treasurer | 2017 2018 | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- |
There are no current employment agreements between the Company and Mr. Tee Chuen Meng.any of its officers and/or directors. The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officer. There are no other stock option plans, retirement, pension, or profit sharingprofit-sharing plans for the benefit of our officers and directors other than as described herein.
CHANGE OF CONTROL
As of September 30, 2017,December 28, 2018, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change in our control.
Outstanding Equity Awards at September 30, 2018
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | |||||||||||||
Tee Chuen Meng | 100,000 | - | - | 1.50 | May 30, 2023 | |||||||||||||
Yeoh Sin Tze | 50,000 | - | - | 1.50 | May 30, 2023 |
Stock Option Plan
On May 30, 2018, the Board of Directors authorized and approved the 2018 Non-Qualified Stock Option Plan (the “2018 Plan) and reserved 10,000,000 shares of the Company’s common stock intended to be issued to selected officers, directors, consultants and key employees provided that bona fide services shall be rendered by such consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction and do not promote or maintain a market for the Company’s securities. The Company filed a Registration Statement with the SEC on May 31, 2018 disclosing formation of 2018 Plan.
On May 30, 2018, the Board granted stock options under the 2018 Plan to two directors, an officer and an employee, and three independent consultants to purchase up to 450,000 shares of common stock with a five-year term. The stock options vested immediately upon the issuance date. The exercise price of the stock options to purchase common stock was at $1.50 per share, and the quoted market price of the Company stock on the grant date was $1.70. The option to purchase common stock expires on May 30, 2023.
The following table provides information with respect to options outstanding under our Plan:
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance | |||||||||
Equity compensation plans approved by security holders | -0- | $ | -0- | -0- | ||||||||
Equity compensation plans not approved by security holders | 10,000,000 | 1.50 | 9,550,000 | |||||||||
Total | 10,000,000 | $ | 1.50 | 9,550,000 |
The purpose of our Plan is to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial achievements. The Plan will be administered by the Compensation Committee of our Board of Directors, once established, or by the full board, which may determine, among other things, the (a) terms and conditions of any option or stock purchase right granted, including the exercise price and the vesting schedule, (b) persons who are eligible to receive options and stock purchase rights and (c) the number of shares to be subject to each option and stock purchase right. The types of equity awards that may be granted under the Plan are: (i) incentive stock options (“ISOs”) and non-incentive stock options (“Non-ISOs”); (ii) share appreciation rights (“SARs”); (iii) restricted shares, restricted share units (which are shares granted after certain vesting conditions are met) and unrestricted shares; (iv) deferred share units; and (v) performance awards.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table provides certain information regarding the ownership of our common stock, as of September 30, 2017 by:
* each of our executive officers;
* each director;
* each person known to us to own more than 5% of our outstanding common stock; and
* all of our executive officers and directors and as a group.
Title of Class | Name Beneficial Owner | Amount and Nature of Beneficial | Percentage | |||
Common Stock | Tee Chuen Meng No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | 5.99% | ||||
|
Common Stock | Jeffrey Chung Sheun Thai No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | 105,100,000 share of common stock (direct) (1) | 64.74% | |||
Common Stock | Patricia Yeoh No.48 & 49, Jalan Velox 2, Taman Velox, Rawang Industrial Park 48000 Rawang, Selangor, Malaysia | | ||||
Common Stock |
* less than 1%
(1) Includes 100,000 shares upon exercise of options
(2) Includes 50,000 shares upon exercise of options
The percent of class is based on 150,150,000162,186,300 shares of common stock issued and outstanding as of the date of this annual report.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The company and subsidiaries received advances from directors for working capital needs as of September 30, 2018. Funds advanced to us by the director are non-interest bearing, unsecured and due on demand.
The company received advances for working capital needs from an affiliate in which our Chief Executive Officer holds the position of director in such entity.
On November 20, 2017, we sold ten (10) naturopathic learning management system and modules for $29,000 to an entity solely owned by a former director of our Company. We received the payment in full of $29,000 on December 21, 2017.
On December 11, 2017, we sold twenty (20) naturopathic learning management systems and modules for $50,000 to an entity in which our Chief Executive Officer holds the position of director in such entity. We received the payment of $50,000 on December 28, 2017.
On May 30, 2018, we granted stock options to three officers/directors to purchase 250,000 shares of our common stock at exercise price of $1.50 per share for immediate vesting.
During the year ended September 30, 2017,2018, we had not entered into any transactions with our sole officer or director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed for the most recently completed fiscal year ended September 30, 20172018 and for the fiscal year ended September 30, 20162017 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Year Ended | ||||||||
September 30, 2017 | September 30, 2016 | |||||||
Audit Fees | $ | 7,500 | $ | 8,000 | ||||
Audit Related Fees | - | - | ||||||
Tax Fees | 1,225 | 1,200 | ||||||
All Other Fees | - | - | ||||||
Total | $ | 8,725 | $ | 9,200 |
Year Ended | ||||||||
September 30, 2018 | September 30, 2017 | |||||||
Audit Fees | $ | 15,250 | $ | 7,500 | ||||
Audit Related Fees | - | - | ||||||
Tax Fees | - | 1,225 | ||||||
All Other Fees | - | - | ||||||
Total | $ | 15,250 | $ | 8,725 |
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors' independence.
ITEM 15. EXHIBITS
31.1 | |
31.2 | |
32 | |
101 | Interactive data files pursuant to Rule 405 of Regulation S-T |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NATURAL HEALTH FARM HOLDINGS INC | ||
Dated: | By: /s/ Tee Chuen Meng | |
Tee Chuen Meng, President and Chief | ||
Executive Officer and Chief Financial | ||
Officer |
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