UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x | ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: DECEMBER 31, | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For transition period from |
Commission File Number 333-157281
GREENFIELD FARMS FOOD, INC. | ||
(Name of small business issuer in its charter) |
NEVADA | 26-2909561 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification Number) |
319 Clematis Street – Suite 7, Silver Springs, Nevada 89429
(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (704) 485-2245
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: ¨Yes xNo
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ¨
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 Days: xYes ¨No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of the Registrant’sRegistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: x
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer:
Large Accelerated Filer | ¨ | Accelerated Filer | ¨ |
Non-Accelerated Filer | ¨ | Smaller Reporting Company | x |
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ¨Yes xNo
The aggregate market value of the voting common equity held by non-affiliates of the issuer as of March 31, 2013 was $439,200,$3,172,763, based on the last sale price of the issuers common stock ($0.00150.0034 per share) as reported by the OTCQB.
The Registrant had 438,068,808933,336,455 shares of common stock outstanding as of March 31, 2013.
Documents incorporated by reference: None
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Plan of Operations
We were founded in 2008 as Sweet Spot Games, Inc., a Nevada corporation on June 2, 2008. We changed our name to Green Field Farms Food, Inc. ("Greenfield") on March 31, 2011. We areIn October 2013, we entered into an Asset Purchase Agreement (the "Agreement") with COHP, LLC, through which the Company acquired certain of the assets and liabilities of COHP including the operations of Carmela's Pizzeria through a newly formed wholly-owned subsidiary Carmela's Pizzeria CO, Inc. Carmela's Pizzeria presently has three Dayton, Ohio area locations offering authentic New York style pizza. Carmela's offers a full service menu for Dine In, Carry out and Delivery as well as pizza buffets in select stores. Carmela's has been noted in Dayton Daily News as one of "The Best Pizzerias" in Dayton.
The Carmela's Pizzeria assets and liabilities were acquired in exchange for 1,000 shares of our newly issued Series C Convertible Preferred Stock ("Series C") that converted on October 31, 2013 into 53,965,942 shares of common stock upon the effective date of a 1 for 100 reverse split. In addition, COHP and its assigns received warrants to purchase a total of 53,965,942 shares of our common stock exercisable for a period of five years in the amounts and exercise prices as follows: 59,962 at $3.00; 59,962 at $6.00; and 59,962 at $7.50. The value of these assets was $1,586,599 at December 31, 2013, which represents the fair market value of the common stock and warrants issued in the acquisition at their issuance dates.
Prior to the acquisition of Carmela's Pizzeria, we operated as a consumer and wholesale driven producer of grassfed beef. The Company currently supplieshad supplied Lowes Food Stores, a North Carolina based grocer with over 100 locations in North and South Carolina on a very limited basis. Greenfield Farms Grassfed Beef and its collective group of producers representrepresented over 2500 acres in pasture under management and approximately 2000 head of cattle.
The company utilizes double versus single blind test with robust sampling both prior to and after certain meat processing procedures to ensure the safest product possible.
For SEC reporting purposes, Carmela's is treated as the continuing reporting entity that acquired GRAS as a result of the Carmela's acquisition transaction. The quarterly and annual reports filed after the transaction, beginning with this report, have been prepared as if Carmela's (accounting acquirer) were the legal successor to the Company's reporting obligation as of the date of the acquisition. Therefore, all financial statements filed subsequent to the transaction reflect the historical financial condition, results of operations and cash flows of Carmela's for all periods prior to the share exchange; and consolidated with the Company announced that it had signed a definitive agreement to acquire 100%from the date of the equity interestshare Exchange. All share and per share amounts of Carmela's have been retroactively adjusted to reflect the legal capital structure of the Company.
3 |
Our Operations
We currently offer two restaurant concepts in Ohio-basedour three Company owned restaurant locations including:
· | A full-service dining room menu comprising a Carmela's Pizzeria and including a limited pizza buffet and alcohol and a Sports Grill. | |
· | A smaller Carmela's Pizzeria with full menu dining room including limited pizza buffet, delivery and carry-out; as well as a drive-thru in certain locations. |
In addition, our locations may offer a "Carmela's Treats" walk-up window offering ice cream style dessert treats offered to both diners within the restaurant or patrons looking for dessert only offerings.
Each concept is designed to offer quality meals at affordable prices with an emphasis on efficiencies in food ordering, preparation and service. We believe that the overall configuration of each concept results in simplified scalable operations, increased efficiency and improved consistency and quality of our food products. Our restaurants may be configured to adapt to a variety of building shapes and sizes by utilizing the restaurant concept that best fits the individual location. This offers the flexibility necessary for our concepts to be operated at a multitude of locations.
In addition to offering New York style pizza for dine-in, carry-out or delivery at select locations, our buffet menu offers a variety of pizza toppings and special combinations of toppings. Stores offering full buffets also offer pasta, salads, comfort foods, and in a family-oriented atmosphere.
During 2015, we added a catering division offered through our stores for everything from simple pick up to full services weddings and other occasions. The catering menu presently offers five different price points ranging from $4.50 per person for salad, pasta and breadsticks to $12 per person for a full meal including roast beef with au jus. Customers can also order from a variety of appetizers, salads, entrée's and sides in portions designed for 8, 15 and 25 plus people including Italian classics and other non-Italian items.
During 2014, we announced and have been working on creating a franchising concept presently planned to involve three separate business elements including:
· | A full-service dining room menu comprising a Carmela's Pizzeria and including a limited pizza buffet and alcohol and a Sports Grill. | |
· | A smaller Carmela's Pizzeria with full menu dining room including limited pizza buffet, delivery and carry-out. | |
· | A Carmela's Pizzeria delivery and carry-out model similar to those of the leading pizza delivery chains and drive-thru access in some cases. |
4 |
Franchising will require development of the Franchise Disclosure Document ("FDD"), the legal document presented to prospective franchise buyers in the presale process. In addition, candidate review and screening for a national franchise director commenced in 2015 but not yet been completed as of the filing of this report. The Company identified a franchising partner to complete the franchise operating system, collateral marketing materials and other supporting legal documentation, however these plans were put on hold pending further review of the costs and actions involved in creating the franchising concept. The Company feels it is important to perfect the Company's business plans and processes in order to establish a viable franchise concept.
One of our long-term objectives is to selectively expand through franchising along with adding a small number of Company-owned restaurants by identifying appropriate opportunities. We believethat developing a domestic network of franchise and Company-owned restaurants will play an important strategic role in a predominately franchised operating structure. Inaddition to generating revenues and earnings, we expect to use domestic Company-owned restaurants as test sites for new products and promotions as well asrestaurant operational improvements and as a forum for training new managers and franchisees. We also believe that as the number of franchise and Company-owned restaurantsincreases, they may add to the economies of scale available for advertising, marketing and other costs for the entire system.
Food and Supply Distribution
We currently purchase our restaurant supplies from local wholesale food distributors in the Dayton, Ohio area. If we are able to expand through franchising, we will identify a suitable partner for outsourcing our warehousing and distribution services to a reputable and experienced restaurant distribution company. There are many regional and national companies to choose from that we believe will offer significant choice to tailor a program necessary for our specific needs. We may also choose to outsource our product sourcing, purchasing, quality assurance, franchisee order and billing services, and logistics support functions. These decisions will be made as we move forward with development of our franchising program in the future.
Advertising
We presently has threeadvertise locally in the Dayton, Ohio area locations offering authentic New York style pizza. In addition, Carmela's offersmainly through direct marketing. As we move to create our franchising concept, we will be required to communicate a fullcommon brand message at the regional, local market and restaurant levels, to create and reinforce a strong, consistentmarketing message to consumers in order to create successful franchise start-ups and garner sufficient market share. It is typical to require franchisees to participate in, and contribute to, an advertising program as part of their franchising fees. Once again, these decisions will be made as we move forward with development of our franchising program in the future.
Government Regulation
We are subject to various federal, state and local laws affecting the operation of our restaurants. Each restaurant is subject to licensing and regulation by a number of governmental authorities, which include health, safety, sanitation, wage and hour, alcoholic beverage, building and fire agencies in the state or municipality in which the restaurant is located. Difficulties in obtaining, or the failure to obtain, required licenses or approvals could delay or prevent the opening of a new restaurant or require the temporary or permanent closing of existing restaurants in a particular area.
We will be subject to Federal Trade Commission ("FTC") regulation and to various state laws regulating the offer and sale of franchises once our planned franchising program commences. The FTC will require us to furnish to prospective franchisees the FDD containing prescribed information. Substantive state laws that regulate the franchise or franchisee relationship presently exist in a number of states, and bills have been introduced in Congress from time to time that would provide for further federal regulation of the franchisor-franchisee relationship in certain respects. Some foreign countries also have disclosure requirements and other laws regulating franchising and the franchisor-franchisee relationship.5 |
Competition
The restaurant industry, and specifically the pizza restaurant industry, is intensely competitive with respect to price, service, menu for Dine In, Carry outlocation and Deliveryfood quality, and there are many well-established competitors with substantially greater brand recognition and financial and other resources than us. Competitors include a large number of easily recognizable international, national and regional restaurant and pizza chains, as well as local restaurants and pizza buffetsoperators. Some of our competitors may be better established in select stores. Detailsthe markets where our restaurants are or may eventually be located. Within the pizza segment of the transaction call forrestaurant industry, we believe currently that our primary competitors are national pizza chains. As we move forward with franchising plans, our competition will potentially include regional chains, local restaurants as well as "take and bake" concept offerings. We also compete against the frozen pizza products available to consumers in all manners of retail stores. A change in the pricing or other market strategies of one or more of our competitors could have an adverse impact on our sales and earnings.
With respect to the potential sale of franchises, we will compete with many franchisors of restaurants and other business concepts. We believe that the principal competitive factors affecting the sale of franchises are franchise entry costs, product quality, price, value, consumer acceptance, franchisor experience and support, and the quality of the equity interests in Carmela's to be acquired by a newly created wholly-owned operating subsidiary of Greenfield in exchangerelationship maintained between the franchisor and its franchisees. In general, there is also active competition for shares of Greenfield common stockmanagement personnel and warrants. Closing of this transaction is subject to, among other things, final due diligence by the parties, completion of audited financial statements, preparation of schedules to the definitive agreement, and any final board of director and/or stockholder approvals as necessary.
Employees
In addition to having significantly less fatour executive officers, as of June 16, 2016 we had twenty-three full-time and cholesterol than regular beef, grass-fed beef has up to twice the amount of omega-3 fatty acids as regular beef, and a more healthful balance between omega-3 and omega-6 fatty acids, according to a review of research by the Grass-Fed Beef projectsixteen part-time employees at California State University’s Chico Department of Agriculture and the University of California Cooperative Extension. Omega-3 fatty acids are thought to help lower blood cholesterol levels and blood pressure, and a type of omega-3 present in grass-fed beef may help reduce the risk of cardiovascular disease, dementia and depression. The proper balance between omega-3 and omega-6 fatty acids may help reduce inflammatory disorders, according to the California project. Grass-fed beef also has been found to have up to 10 times more vitamin A than regular beef, and up to three times as much vitamin E, according to a study cited by the California project.
ITEM 1A. RISK FACTORS
RISKS RELATED TO OUR BUSINESS
The purchase of shares of our common stock is very speculative and involves a very high degree of risk. An investment in our stock is suitable only for the persons who can afford the loss of their entire investment. Accordingly, investors should carefully consider the following risk factors, as well as other information set forth herein, in making an investment decision with respect to securities of Inhibiton.
OUR AUDITORS HAVE NOTED THERE IS CERTAIN DOUBT ABOUT OUR ABILITY TO OPERATE AS A GOING CONCERN
Management has taken steps to revise the Company's operating and financial requirements. The Company is actively pursuing additional funding and a potential merger or acquisition candidate and strategic partners, which would enhance owners' investment. However, there can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
6 |
WE ARE NOT CURRENTLY PROFITABLE AND MAY NEVER BECOME PROFITABLE.
We have a history of significant losses and expect to incur substantialadditional losses and negative operating cash flow for the foreseeable future andas we move to expand our business with franchising plans for our restaurant operations. As a result, we may never achieve or maintain profitability. Even if we succeed in further developing and commercializing our products,franchising plans, we expectmay continue to incur substantial losses for the foreseeable future and may never become profitable. We also expect to continue to incur significant operating and capital expenditures and anticipate that ourthose expenses willmay not be offset by our revenues in any substantial way. As a result, we will need to generate significant revenues or raise additional capital in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our stock.
OUR CURRENT SHAREHOLDERSMANAGEMENT CONTROL OUR BUSINESS AFFAIRS IN WHICH CASE YOU WILL HAVE LITTLE OR NOTNO PARTICIPATION IN OUR BUSINESS
Our principal stockholders own a majoritycurrent management control the company through ownership of our commonpreferred stock. As a result, they will have total control over all matters requiring approval by our stockholders without the approval of minority stockholders. In addition, they willstockholders in some cases. They are also be able to elect all of the members of our Board of Directors, which will allow them to control our affairs and management. They willare also be able to affect mostall corporate matters requiring stockholder approval by written consent, without the need for a duly noticed and duly-held meeting of stockholders. As a result, they will have significant influence and control over all matters requiring approval by our stockholders. Accordingly, you will beare limited in your ability to affect change in how we conduct our business.
WE MAY INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTSREQUIREMENTS..
7 |
RISKS RELATIING TO OUR SECURITIES
THERE IS CURRENTLY A VERY LIMITED MARKET FOR OUR COMMON STOCK AND NO ASSURANCE THAT A MORE LIQUID MARKET WILL DEVELOP.
There is currently a limited trading market for our shares of Common Stock, under the symbol “GRAS.”"GRAS." Any market price for shares of our Common Stock is likely to be very volatile, and numerous factors beyond our control may have a significant adverse effect. In addition, the stock markets generally have experienced, and continue to experience, extreme price and volume fluctuations which have affected the market price of many small capital companies and which have often been unrelated to the operating performance of these companies. These broad market fluctuations, as well as general economic and political conditions, may also adversely affect the market price of our Common Stock. Further, there is no correlation between the present limited market price of our Common Stock and our revenues, book value, assets or other established criteria of value. The present limited quotations of our Common Stock should not be considered indicative of the actual value of the Company or our Common Stock.
FUTURE SALESISSUANCES OF OUR COMMON STOCK COULD PUT DOWNWARD SELLING PRESSURE ON OUR CHASESSHARES AND ADVERSELY AFFECT THE STOCK PRICE. THERE IS A RISK THAT THIS DOWNWARD PRESSURE MAY MAKE ITIMPOSSIBLE FOR AN INVESTOR TO SELL HIS SHARES AT ANY REASONABLE PRICE
Future salesissuances of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could put downward selling pressure on our shares, and adversely affect the market price of our common stock. Such sales could be made pursuant to Rule 144 under the Securities Act of 1933, as amended, as shares become eligible for sale under the Rule.
Because our shares are deemed high risk “penny"penny stocks,”" you may have difficulty selling them in the secondary trading market. The Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price (as therein defined) less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Additionally, if the equity security is not registered or authorized on a national securities exchange, the equity security also constitutes a "penny stock." As our common stock falls within the definition of penny stock, these regulations require the delivery, prior to any transaction involving our common stock, of a risk disclosure schedule explaining the penny stock market and the risks associated with it. These regulations generally require broker-dealers who sell penny stocks to persons other than established customers and accredited investors to deliver a disclosure schedule explaining the penny stock market and the risks associated with that market. Disclosure is also required to be made about compensation payable to both the broker-dealer and the registered representative and current quotations for the securities. These regulations also impose various sales practice requirements on broker-dealers. In addition, monthly statements are required to be sent disclosing recent price information for the penny stocks. The ability of broker/dealers to sell our common stock and the ability of shareholders to sell our common stock in the secondary market is limited. As a result, the market liquidity for our common stock is severely and adversely affected. We can provide no assurance that trading in our common stock will not be subject to these or other regulations in the future, which would negatively affect the market for our common stock.
IF A STEADY MARKET DEVLEOPS FOR OUR SEUCIRITESSECURITIES THERE COULD BE SIGNIFICANT VOLATILITY AND THE SECURITIES MAY NOT APPRECIATE IN VALUE
8 |
WE HAVE NEVER PAID DIVIDENDS ON OUR COMMON STOCK AND YOU MAY NEVER RECEIVE DIVIDENDS. THERE IS A RISK THAT AN INVESTOR IN OUR COMPANY WILL NEVER SEE A RETURN ON INVESTMENT AND THE STOCK MAY BECOME WORTHLESS.
We have never paid dividends on our common stock. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be at the discretion of the Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors. Future dividends may also be affected by covenants contained in loan or other financing documents, which may be executed by us in the future. Therefore, there can be no assurance that cash dividends of any kind will ever be paid.
IF A MARKET DEVELOPS FOR OUR SECURITIES IT COULD BE VOLATILE AND MAY NOT APPRECIATE IN VALUE.
Because of the size of our Company and its status as a "penny stock" as well as the current economy and difficulties in companies our size finding adequate sources of funding, we have been forced to raise capital through the issuance of convertible notes and other debt instruments. These debt instruments carry favorable conversion terms to their holders of up to 65% discounts to the market price of our common stock on conversion and in manymost cases provide for the immediate sale of our securities into the open market. Accordingly, this has caused dilution to our stockholders and will continue to do so in 20132015 and the foreseeable future. As of December 31, 2012,2015, we had approximately $213,500$352,000 in convertible debt outstanding. This convertible debt balance as well as any additional convertible debt we incur in the future couldis very likely to cause substantial and sustained dilution to our current stockholders.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES.
The Company maintains offices 7315 E Peakview Avenue, Englewood, Colorado 80111 inoffice facilities provided by our Chief ExecutiveFinancial Officer. During 2012,2014 and 2015, there were notno rents or other amounts paid for these facilities although that will not preclude the company from paying reasonable rental rates or reimbursement for use of these facilities in the future.
The Company leases its restaurant under certain leases with varied expiration dates. Certain leases provide for the payment of taxes and operating costs, such as insurance and maintenance in addition to the base rental payments.
Location | Sq Ft | Lease End | |||||
Brookville | 2,400 | July 2018 | |||||
New Carlisle | 3,700 | February 2024 | |||||
West Manchester | 2,000 | December 2019 |
Aggregate minimum annual rental payments under the non-cancelable operating leases are as follows:
Year ended December 31, 2016 |
| $ | 57,600 |
|
2017 |
|
| 58,350 |
|
2018 |
|
| 51,450 |
|
2019 |
|
| 43,200 |
|
Total |
| $ | 210,600 |
|
9 |
ITEM 3. LEGAL PROCEEDINGS.
We are not presently involved in any litigation that is material to our business. We are not aware of any pending or threatened legal proceedings. In addition, none of our officers, directors, promoters or control persons has filed or been involved for the past five years:
· | in any conviction of a criminal proceeding or involved in a pending criminal proceeding (excluding traffic violations and minor Offenses) |
· | is subject to any order, judgment or decree enjoining, barring |
· | Suspending or otherwise limiting their involvement in any type of business, securities, or banking activities, |
· | or has been found to have violated a federal or state securities or commodities law. |
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. MARKET FOR REGISTRANT’SREGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Trading Market for Common Equity
There is currently a limited market for the Company's Common Stock, which is traded over-the-counter and quoted under the trading symbol “GRAS""GRAS". During 2011, trading did not commence until April and was very limited for most of that year.
Future sales of our common stock could put downward selling pressure on our shares, and adversely affect the stock price. There is a risk that this downward pressure may make it impossible for an investor to sell his shares at any reasonable price.
The Company's Common Stock is not listed on any exchange; however, market quotes for the Company’sCompany's common stock may be obtained from the OTC Markets "QB""Pink" platform (“OTCQB”("OTCPink"). The OTCQBOTCPink is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter (“OTC”("OTC") securities. The following table sets forth, for the indicated fiscal periods, the high and low sales prices (as reported by the OTCQB)OTCPink) for the Company’sCompany's common stock.
Price | ||||||||
High | Low | |||||||
Fiscal year ended December 31, 2012 | ||||||||
Quarter ended December 31, 2012 | $ | 0.0035 | $ | 0.001 | ||||
Quarter ended September 30, 2012 | $ | 0.0074 | $ | 0.0012 | ||||
Quarter ended June 30, 2012 | $ | 0.04 | $ | 0.0045 | ||||
Quarter ended March 30, 2012 | $ | 0.056 | $ | 0.027 |
Fiscal year ended December 31, 2011 | ||||||||
Quarter ended December 31, 2011 | $ | 0.058 | $ | 0.031 | ||||
Quarter ended September 30, 2011 | $ | 0.58 | $ | 0.058 | ||||
Quarter ended June 30, 2011 | $ | 0.58 | $ | 0.13 | ||||
Quarter ended March 30, 2011 | None | None |
|
| Price |
| |||||
|
| High |
|
| Low |
| ||
Fiscal year ended December 31, 2015 |
|
|
|
|
|
| ||
Quarter ended December 31, 2015 |
| $ | 0.0002 |
|
| $ | 0.00005 |
|
Quarter ended September 30, 2015 |
| $ | 0.005 |
|
| $ | 0.00005 |
|
Quarter ended June 30, 2015 |
| $ | 0.006 |
|
| $ | 0.001 |
|
Quarter ended March 30, 2015 |
| $ | 0.04 |
|
| $ | 0.001 |
|
Fiscal year ended December 31, 2014 |
|
|
|
|
|
| ||
Quarter ended December 31, 2014 |
| $ | 0.18 |
|
| $ | 0.03 |
|
Quarter ended September 30, 2014 |
| $ | 0.30 |
|
| $ | 0.06 |
|
Quarter ended June 30, 2014 |
| $ | 0.84 |
|
| $ | 0.24 |
|
Quarter ended March 30, 2014 |
| $ | 1.80 |
|
| $ | 0.30 |
|
Trading in the common stock in the over-the-counter market has been limited and sporadic and the quotations set forth above are not necessarily indicative of actual market conditions. Further, these prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions.
10 |
Holders
The number of record holders of our common stock as of June 16, 2016, was 118 according to our transfer agent. This amount excludes an indeterminate number of shareholders whose shares are held in "street" or "nominee" name at a brokerage firm.
Dividends
We have never paid a cash dividend on our common stock. The payment of dividends may be made at the discretion of our Board of Directors, and will depend upon, among other things, our operations, capital requirements, and overall financial condition. There are no contractual restrictions on our ability to declare and pay dividends.
Securities Authorized for Issuance under Equity Compensation Plans
As of the date of this Report, we have not authorized any equity compensation plan, nor has our Board of Directors authorized the reservation or issuance of any securities under any equity compensation plan.
Transfer Agent
Our transfer agent is West Coast Stock Transfer, Inc. located at 2010 Hancock Avenue, Suite A, and San Diego, California 92110. Their telephone number is (619) 664-4780.
Recent Sales of Unregistered Equity Securities
During the three month period from October 1, 2015 to December 31, 2015 we issued 400,959,340 shares of our common stock upon the conversion of $16,963 in principal and interest on our various convertible notes and debentures, or $0.00004 per share prior to any loss on conversions.
We offered and sold the securities in reliance on an exemption from federal registration under Section 4(2) of the Securities Act of 1933 and Rule 506 promulgated thereunder. We relied on this exemption and rule based on the fact that there were a limited number of investors, all of whom were accredited investors and (i) either alone or through a purchaser representative, had knowledge and experience in financial and business matters such that each was capable of evaluating the risks of the investment, and (ii) we had obtained subscription agreements from such investors indicating that they were purchasing for investment purposes only. The securities were not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The disclosure contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company, and is made only as permitted by Rule 135c under the Securities Act.
11 |
The nature of our business makes predicting the future trends of our revenues, expenses, and net income difficult. Thus, our ability to predict results or the actual effect of our future plans or strategies is inherently uncertain. The risks and uncertainties involved in our business could affect the matters referred to in any forward-looking statements and it is possible that our actual results may differ materially from the anticipated results indicated in these forward-looking statements. Important factors that could cause actual results to differ from those in the forward-looking statements include, without limitation, the factors discussed in the section entitled "Risk Factors" and the following:
· | The effect of political, economic, and market conditions and Geopolitical events; |
· | Legislative and regulatory changes that affect our business; |
· | The availability of funds and working capital; |
· | The actions and initiatives of current and potential competitors; |
· | Investor sentiment; and | |
· | Our reputation. |
We do not undertake any responsibility to publicly release any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by any forward-looking statements.
The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto as filed with the SEC and other financial information contained elsewhere in this Form 10-K.
Overview
Our operations consist of Carmela's Pizzeria, which presently has three Dayton, Ohio area locations offering authentic New York style pizza. Carmela's offers a consumerfull service menu for Dine In, Carry out and wholesale driven producer of grassfed beef. The company has USDA-FSIS approval to market and label its product as “Grassfed Beef”. The company distributes our product on a very limited basis to Lowes Foods Stores which has approximately 100 locations throughout North and South Carolina. We are a newly created company with very limited resources and as a result, our deliveries of grassfed beef in 2012 were also very limited. We are hopeful that our change in business plan through a new licensing program will allow us to expand our business and enhance our market and brand presence. With this program, the Company will phase away from our traditional business model of taking cattle from farm to market thus eliminating all of the capital and startup costs required for such operations by expanding our brand presence with capable cattle producers and marketers. The Company also believes that the trademark licensing concept will allow for more rapid market penetration with minimal risk and the ability to more easily ascertain assumed returns. In the first quarter of 2013 we signed our first licensee, Hill Meadow Foods, Inc., in an exclusive agreement until December 31, 2013, at which time it will become non-exclusive. We believe this time will allow us to properly develop the parameters of the licensing programDelivery as well as explore other business opportunities, including our potential acquisitionpizza buffets and sports grills in select stores. Carmela's has been noted in Dayton Daily News as one of Carmelo's Pizzerias announced"The Best Pizzerias" in the first quarter of 2013.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 20122015 AND 2011
12 |
Total operating expenses were $319,317$628,368 for the year ended December 31, 20122015 versus $336,865$631,900 for the year ended December 31, 20112014 resulting in loss from operations of $319,259$382,353 and $352,227$373,835 in the 20122015 and 20112014 periods, respectively. We experiencedMuch like the sales increase, these numbers remained fairly consistent from 2015 to 2014 with no significant variations in any one area of expense. There was a significantslight decrease in wages and taxes with the closing of a location in 2012 that was partially offset by an increase in consulting fees as well as an increase in general and administrative expenses. The decrease in wages was the result of the resignation of our CEO and Vice President in June 2012. General and administrative expense included $52,500 in management fee expense recorded for our new CEO appointed in June 2012. Generally, most remaining operating expenses were lower in 2012 as compared to 2011 as we scaled back our operations due to lack of working capital.
Other expenses were $216,031$338,448 for the year ended December 31, 20122015 as compared to $6,617$667,282 for the year ended December 31, 2011.2014. This significant increase isdecrease was due primarily to the addition of convertible promissory notes in 2012 includinglower expense for the correspondingchange in derivative liability interestand amortization of expense on discount of debt with lower costs for loss on conversions of debt and fewer notes becoming convertible in 2015 for lower amortization of the debt discountdiscount. The decreased expense from convertible notes and the corresponding derivative liabilities is the primary reason for the decrease in net loss for 2015 versus 2014. As the Company is currently dependent on this type of financing for a portion of its working capital, fluctuations in the amount of convertible debt as well as loss onnotes being converted will continue to affect the conversionCompany's results of debt due to differenceoperations, that could include higher expense from these derivative liabilities in the conversion price as compared to the market price at issuance.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. Overall, wethe Company had a net loss of $535,290$725,227 for the year ended December 31, 2012 as compared to $358,844 for the year ended December 31, 2011.2015. During the year ended December 31, 2012,2015, we had cash flow used by operations of $147,054,$297,918, net cash provided byused in investing activities of $10,097,$26,543, and cash flows provided by financing activities of $132,600.$319,041. At the end of the year ended December 31, 2012,2015, our cash balance was $97.
For the year ended December 31, 2011, we2014, the Company had a net loss of $358,844$1,041,177 with cash flow used by operations of $189,759,$381,935, net cash provided byused in investing activities of $26,002,$4,482, and cash flows provided by financing activities of $168,211.$441,238. At the end of the year ended December 31, 2011,2014, our cash balance was $4,454.
CASH FLOWS FROM OPERATING ACTIVITIES. Net cash flow used in operating activities was $147,054$297,918 which was primarily attributable to our net loss of $535,290,$725,227, offset by non-cash adjustments to derivative liabilities from convertible notes payable totaling $147,665 as well as $73,750 in expense for stock issued for services and 44,629 for loss on conversion of debt.$294,129. The adjustments to reconcile the net loss to net cash for the period ended December 31, 20122013 also included depreciation expense of $5,818$24,267 and loss on salechanges in asset and liabilities of equipment of $10,845.
CASH FLOWS FROM INVESTING ACTIVITIES. For the year ended December 31, 2012,2014, cash flows provided byused in investing activities consisted of $10,097 primarilywas $26,543 from proceeds on the sale of equipment.
CASH FLOWS FROM FINANCING ACTIVITIES. For the year ended December 31, 2012,2015, cash flows from financing activities were $132,600,$319,041 which consisted of proceeds from issuance of notes and convertible notes payable.
For the year ended December 31, 2011,2014, we had cash used in operating activities of $189,759$381,935 including $6,041$22,014 in depreciation expense along with a total of $163,044$(41,974) from changes in assets and liabilities and $653,142 in non-cash expense relating to derivative liabilities. Cash
For the year ended December 31, 2014, cash flows provided byused in investing activities was $26,002 and included $75,000 received in the reverse merger that was offset$4,482 primarily by the purchase of property andfrom equipment of $46,563. purchases for our restaurant locations.
13 |
EXTERNAL SOURCES OF LIQUIDITY. We intend to pursue all potential financing options in 20132016 as we look to secure additional funds to both stabilize and grow our business operations and begin extraction.work on franchising efforts for Carmela's. Our management will review any financing options at their disposal and will judge each potential source of funds on its individual merits. We cannot assure you that we will be able to secure additional funds from debt or equity financing, as and when we need to or if we can, that the terms of such financing will be favorable to us or our existing shareholders. Additionally, we maywill almost certainly need to rely on debt financing that is convertible into shares of our common stock which couldthat will result in continued and significant dilution to our stockholders due to the conversion of that debt at significant discounts to the market price of our common stock.
INFLATION. Our management believes that inflation has not had a material effect on our results of operations, and does not expect that it will in fiscal year 2013.
OFF-BALANCE SHEET ARRANGEMENTS. We do not have any off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and a decline in the stock market. We do not enter into derivatives or other financial instruments for trading or speculative purposes.purposes, however we do issue convertible notes that are subject to changes in the market price of our common stock for conversions to equity. Accordingly, as of December 31, 2014, we had $240,000 face value of convertible debentures bearing fixed interest rates of 8%-10%. All of this fixed rate debt is due on demand or within twelve months from issuance. We have limited exposure to market risks related to changes in interest rates. We do not currently invest in equity instruments of public or private companies for business or strategic purposes.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA NOTES TO FINANCIAL STATEMENTS
The financial statements and related information required to be filed are indexed and begin on page F-1 and are incorporated herein.
CONTROLS AND PROCEDURES
CEO and CFO Certifications
Attached to this annual report, as Exhibits 31.1 and 32.1, are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a- 14(a)/15d-14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a- 14(a)/15d-14(a) Certifications. This information should be read in conjunction with the Rule 13a- 14(a)/15d-14(a) Certifications for a more complete understanding of the topic presented.
Evaluation of Disclosure Controls and Procedures
A review and evaluation was performed by the Company's management, including the Company's Chief Executive Officer (the "CEO") who is also the Chief Financial Officer (the “CFO”"CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on that review and evaluation, the CEO /CFO has concluded that as of December 31, 2012,2015, disclosure controls and procedures, were not effective at ensuring that the material information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported as required in the application of SEC rules and forms.
14 |
Management's Report on Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’scompany's principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. 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.
Our CEO/CFO has evaluated the effectiveness of our internal control over financial reporting as described in Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report based upon criteria established in “Internal"Internal Control-Integrated Framework”Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to the extent possible given the limited personnel resources and technological infrastructure in place to perform the evaluation. Based upon our management’smanagement's discussions with our auditors and other advisors, our CEO/CFO believe that, during the period covered by this report, such internal controls and procedures were not effective as described below.
Due to the small size and limited financial resources, our chief executive officer is the only individual responsible for thewe have inadequate segregation of duties within accounting functions and financial reporting.results in an overall lack of internal control. As a result, there is no segregation of duties in the accounting function, leaving all aspects of financial reporting and physical control of cash in the hands of one individual. This limited segregation of duties represents a material weakness. We will continue periodically review our disclosure controls and procedures and internal control over financial reporting and make modifications from time to time considered necessary or desirable.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’sManagement's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’smanagement's report in this annual report.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’sCompany's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’sCompany's internal controls over financial reporting.
15 |
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
(a)(b)(c) Identification of directors and executive officers
The following table sets forth the name, age, position and office term of each executive officer and director of the Company.
NAME | AGE | POSITION | SINCE | ||||||
Ronald Heineman | 59 | Chief Executive Officer, Principal Executive Officer and Director | October 2013 | ||||||
Henry Fong | 80 | Chief | June 2012 |
Significant employees
NAME | AGE | POSITION | SINCE | ||||||
Darren Dulsky | 59 | President and Chief Operating Officer of Carmela's Pizzeria | October 2013 |
Family relationships
None.
Business experience
RONALD HEINEMAN
Mr.16 |
HENRY FONG
Mr. Fong was president of the Company from June 2012 to October 2013 when he became our CFO; and has been a director of the Company since June 2012. Mr. Fong has been CEO and a director of AlumiFuel Power Corporation, an alternative energy company, since May 2005. Mr. Fong has been a director of FastFunds Financial Corporation, a publicly traded holding company, with limited business operations, since June 2004. Mr. Fong has been a Director of SurgLine International, Inc. (f/k/a China Nuvo Solar Energy, Inc.) since March 2002 and was its president from March 2002 through September 1, 2011. SurgLine is a publicly traded company that sources and distributes high quality FDA approved medical and surgical products at discount prices. Mr. Fong was the Chief Executive Officer of Techs Loanstar, Inc. (and its predecessor companies), a publicly traded Company that provides software technology solutions to the healthcare market, from April 2008 to July 2011. Since July 2009 Mr. Fong has been the sole director, President and Chief Financial Officer of PB Capital International, Inc. (“PBIC”("PBIC"), a blank check shell company that filed Form 10 registration statement which went effective in October 2009. Since July 2010 to September 2013, Mr. Fong has beenwas President and a director of Green Energy TV, Inc., a privately-held owner of "green" websites, most notably greenenergytv.com. Since December 2008, Mr. Fong has been President and a director of Carbon Capture Corporation, a privately held owner of certain carbon based intellectual property. Since June 2012, Mr. Fong has been President and a director of Greenfield Farms Food, Inc., a publicly-traded purveyor of grass-fed beef. From 1959 to 1982 Mr. Fong served in various accounting, finance and budgeting positions with the Department of the Air Force. During the period from 1972 to 1981 he was assigned to senior supervisory positions at the Department of the Air Force headquarters in the Pentagon. In 1978, he was selected to participate in the Federal Executive Development Program and in 1981, he was appointed to the Senior Executive Service. In 1970 and 1971, he attended the Woodrow Wilson School, Princeton University and was a Princeton Fellow in Public Affairs. Mr. Fong received the Air Force Meritorious Civilian Service Award in 1982. Mr. Fong has passed the uniform certified public accountant exam. In March 1994, Mr. Fong was one of twelve CEOs selected as Silver Award winners in FINANCIAL WORLD magazine's corporate American "Dream Team."
DARREN DULSKY
Darren Dulsky, President and Chief Operating Officer of Carmela's, has been in restaurant industry since 1976. Mr. Dulsky worked for Friendly Ice Cream for 15 years as Manager, Training Coordinator and District Manager. He then joined Sbarro, Inc., a publicly traded company, in 1991. Mr. Dulsky held several operations positions during the 13 years prior to being named Sr. VP Operations where he had management oversight for over 130 units covering 17 states. Mr. Dulsky developed the Carmela's concept and opened the first location in 2004. Mr. Dulsky attended Sinclair Community College.
Our Bylaws provide that we shall have that number of directors determined by the majority vote of the board of directors. Currently we have one director.two directors. Each director will serve until our next annual shareholder meeting. Directors are elected for one-year terms. Our Board of Directors elects our officers at the regular annual meeting of the Board of Directors following the annual meeting of shareholders. Vacancies may be filled by a majority vote of the remaining directors then in office. Our directors and executive officers are as follows:
Audit committee financial expert
Identification of the audit committee
17 |
Code of Ethics
We have adopted a code of ethic (the "Code of Ethics") that applies to our principal chief executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics is being designed with the intent to deter wrongdoing, and to promote the following:
· | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships |
· | Full, fair, accurate, timely and understandable disclosure in reports and documents that a small business issuer files with, or submits to, the Commission and in other public communications made by the small business issuer |
· | Compliance with applicable governmental laws, rules and regulations |
· | The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code |
· | Accountability for adherence to the code |
The following table and the accompanying notes provide summary information for each of the last three fiscal years concerning cash and non-cash compensation paid or accrued.
General
We currently have onetwo executive officer,officers, our Chief Executive Officer, Mr. Ronald Heineman, who is also our Principal Executive Officer and Mr. Henry Fong, who is also our principal executive officerChief Financial Officer and also our principal financial officer.
Compensation discussion and analysis
18 |
Summary Compensation Table
SUMMARY COMPENSATION TABLE (1)
Name and principal position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Nonqualified (h) | All Other Compensation ($) (i) | Total ($) (j) | |||||||
Ronald | 2015 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
CEO | 2014 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Henry Fong | 2015 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
CFO | 2014 | 0 | 0 | 0 | 0 | 10,000 | 10,000 |
(1) Unless stated otherwise, the business address for each person named is c/o Greenfield Farms Food, Inc. In 2014, other compensation to Mr. Fong is accruing arepresented management feecompensation incurred in the first quarter of $7,500 per month that is paid from the Company's working capital when available. At December 31, 2012, Mr. Fong was owed $42,250.
Name and principal position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Nonqualified Deferred Compensation Earnings ($) (h) | All Other Compensation ($) (i) | Total ($) (j) | |||||||||||||||||||
Henry Fong CEO (4) | 2012 | 52,500 | 0 | 0 | 0 | 0 | 52,500 | |||||||||||||||||||
2011 | N/A | N/A | N/A | N/A | N/A | 0 | ||||||||||||||||||||
Larry Moore CEO (4)(5) | 2012 | 14,120 | 0 | 0 | 0 | 130,000 | 144,120 | |||||||||||||||||||
2011 | 69,965 | 0 | 0 | 50,035 | 0 | 120,000 | ||||||||||||||||||||
Donna Moore VP (4)(5) | 2012 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||
2011 | 13,817 | 0 | 0 | 46,183 | 0 | 60,000 |
We have not entered into any other employment agreements with our employees, Officers or Directors.
Stock Option Plan
We have not implemented a stock option plan at this time and since inception, have issued no stock options, SARs or other compensation. We may decide, at a later date, and reserve the right to, initiate such a plan as deemed necessary by the Board.
Compensation of directors
No compensation is paid to the year ended December 31, 2011, each of our independentCompany's directors (four persons) received compensation of common stock awards valued at $5,250 each. During the year ended December 31, 2012, these same persons each received stock awards valued at $5,250 for their services as independent directors fora director of the period from January until their resignations in June. We have no standard arrangements to compensate our directors for their services to us.
19 |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCK HOLDER MAMATTERS
TTERS
The following table contains certain information as of March 31, 2013June 16, 2016 as to the number of shares of Common Stock beneficially owned by (i) each person known by the Company to own beneficially more than 5% of the Company’sCompany's Common Stock, (ii) each person who is a Director of the Company, (iii) all persons as a group who are Directors and Officers of the Company, and as to the percentage of the outstanding shares held by them on such dates and as adjusted to give effect to this Offering.
Name of Beneficial Owner | Number of Shares Beneficially Owned(1) | Preferred Stock(2) | Total Shares Beneficially Owned | Percent of Class | ||||||||||||
Robert Byrd Stockholder | 40,648,520 | 0 | 40,648,520 | 9.3 | % | |||||||||||
Franklin Lee Stockholder | 40,648,520 | 0 | 40,648,520 | 9.3 | % | |||||||||||
Silvester Pepe Stockholder | 40,000,000 | 0 | 40,000,000 | 9.1 | % | |||||||||||
Stanley Wunderlich Stockholder | 24,000,000 | 0 | 24,000,000 | 5.5 | % | |||||||||||
Henry Fong (2)(3) Chief Executive Officer | 0 | 70,715 | 0 | 0 | % | |||||||||||
All Executive Officers and Directors as a Group (1 person) (2)(3) | 0 | 70715 | 0 | 0 | % |
Name of |
| Number of Shares Beneficially |
|
| Preferred Stock (2) |
|
| Warrants |
|
| Total Shares Beneficially |
|
| Percent of |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Darren Dulsky (4) |
|
| 82,947 |
|
|
| 0 |
|
|
| 85,446 |
|
|
| 168,393 |
|
|
| 0.02 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald Heineman (3)(4) |
|
| 82,947 |
|
|
| 1,000 |
|
|
| 85,446 |
|
|
| 168,933 |
|
|
| 0.02 | % |
Henry Fong (2)(6) |
|
| 0 |
|
|
| 70,715 |
|
|
|
|
|
|
| 0 |
|
|
| 0 | % |
All Executive Officers and Directors as a Group |
|
| 82,947 |
|
|
| 71,715 |
|
|
| 85,446 |
|
|
| 168,933 |
|
|
| 0.02 | % |
_______________
(1) As of June 16,
(2) In March 2011, the Company authorized the issuance of up to 333 shares of $0.001 par value Series A Convertible Voting Preferred Stock (the "Series A Preferred") of which there were 96,623 shares outstanding as of December 31, 2013. Each share of Series A Preferred is convertible into .23 shares of common stock. If all shares of Series A Preferred were to be converted to shares of common stock as of June 16, 2016, a total of 22,223 shares would be issued to the holders of the Series B Preferred including 16,265 that would be beneficially owned by Mr. Fong through his wife. The Series A Preferred also carries voting rights on an "as if converted" basis.
(3) Effective September 22, 2014, the Board of Directors of the Company approved the issuance of 1,000 shares of Series D Preferred Stock to Mr. Ronald Heineman, which provide him the right to vote up to 51% of the total voting shares able to vote on any and all shareholder matters.
(4) Includes warrants exercisable until October 2018 at the following exercise prices: 28,482 at $4.50; 28,482 at $0.02; and 28,482 at $0.025.
(5) Includes 82,947 shares held by a trust owned by Mr. Heineman's spouse.
(6) Includes 70,715 shares of Series A Preferred Stock owned by a company controlled by Mr. Fong's spouse.The directors, executive officers, their affiliates, and related parties own, directly or indirectly, beneficially and in the aggregate, the majority of the voting power of the outstanding capital of the Company. Accordingly, directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital and the dissolution, merger or sale of the Company's assets.
Changes in control
Effective September 22, 2014, the Board of Directors of the Company approved the issuance of 1,000 shares of Series AD Preferred Stock owned byto Mr. Ronald Heineman, which provide him the right to two investors including an affiliatevote up to 51% of our current Chief Executive Officer, Mr. Henry Fong.the total voting shares able to vote on any and all shareholder matters; thereby giving him effective control of the Company. We are currently not aware of any other arrangements that could result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Transactions with Related Persons
Entities controlled by the Company acceptedmembers have loaned monies to COHP for working capital purposes. The loans are non-interest bearing and entered into a Debt Settlement and Release Agreement dated June 18, 2012 with Larry and Donna Moore. have no specific terms of repayment. A related party loan from KB Air is secured by all the assets of the Company.
The agreement compensated the Moore’s $130,000 with an initial payment of $80,000 and a Promissory Note from the Company for $50,000 due and payable 120 days from said date. In returnactivity for the compensation received, the Moore’s agreed to forgive $200,004.70 in deferred compensationyears ended December 31, 2015 and other debt owed by2014 for all loans from officers of the Company and will assume approximately $30,933.46 in accounts payable by the Company. Additionally Larry C. Moore was appointed President of the Greenfield Farms Grassfed Beef, Inc. the Company's operating subsidiary and assumed all operational control of the subsidiary.
|
| December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
Beginning balance |
| $ | 321,591 |
|
| $ | 100,687 |
|
Advances, net |
|
| 193,341 |
|
|
| 220,904 |
|
Notes reclassified to non-related party |
|
| (31,000 | ) |
|
| - |
|
|
| $ | 483,932 |
|
| $ | 321,591 |
|
Review, approval or ratification of transactions with related persons
Our entire board of directors is responsible for the review, approval or ratification of transactions with related persons. The board routinely reviews material related party transactions to ensure such transactions are reasonable, appropriate, and in the best interests of the Corporation. We have no written policies with respect to the review and approval of related party transactions and records of such reviews are contained in the minutes and/or reports of the board of directors as appropriate.
Director Independence
Our board of directors has one directortwo directors and has no standing sub-committees at this time due to the associated expenses and the small size of our board. We are not currently listed on a national securities exchange that has requirements that a majority of the board of directors be independent and have no members of our board considered “independent”"independent" under the definition set forth in the listing standards of the NASDAQ Stock Market, Inc., which is the definition that our board has chosen to use for the purposes of the determining independence.
21 |
We do not currently have a standing compensation committee or non-employee directors. When we have non-employee directors on our board, those non-employee directors consider executive officer compensation, and our entire board participates in the consideration of director compensation. Non-employee board members would oversee would compensation policies, plans and programs. Our non-employee board members would further review and approve corporate performance goals and objectives relevant to the compensation of our executive officers; review the compensation and other terms of employment of our Chief Executive Officer and our other executive officers; and administer our equity incentive and stock option plans.
Each of our directors participates in the consideration of director nominees. In addition to nominees recommended by directors, our board will consider nominees recommended by shareholders if submitted in writing to our secretary. Our board believes that any candidate for director, whether recommended by shareholders or by the board, should be considered on the basis of all factors relevant to our needs and the credentials of the candidate at the time the candidate is proposed. Such factors include relevant business and industry experience and demonstrated character and judgment.
Fees Billed For Audit and Non-Audit Services
The following table represents the aggregate fees billed for professional audit services rendered to the independent auditor, Silberstein Ungar, PLLC for our audit of the annual financial statements for the yearsyear ended December 31, 20122013 and 2011.for our current auditor KLJ & Associates, LLP for the year ended December 31, 2014. Audit fees and other fees of auditors are listed as follows:
Year Ended December 31 | 2012 (2) | 2011 (2) | ||||||
Audit Fees (1) | $ | 11,750 | $ | 6,500 | ||||
Audit-Related Fees (3) | - | - | ||||||
Tax Fees (4) | - | - | ||||||
All Other Fees (5) | - | - | ||||||
Total Accounting Fees and Services | $ | 11,750 | $ | 6,500 |
Year Ended December 31 |
| 2015 (2) |
|
| 2014 (2) |
| ||
|
|
|
|
|
|
| ||
Audit Fees (1) |
| $ | 27,800 |
|
| $ | 27,800 |
|
Audit-Related Fees (3) |
|
| - |
|
|
| - |
|
Tax Fees (4) |
|
| - |
|
|
| - |
|
All Other Fees (5) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Total Accounting Fees and Services |
| $ | 27,800 |
|
| $ | 27,800 |
|
(1) | Audit Fees . These are fees for professional services for the audit of our annual financial statements, and for services that are normally provided in connection with statutory and regulatory filings or engagements including review of our quarterly financial | |
(2) | The amounts shown in | |
(3) | Audit-Related Fees . These are fees for the assurance and related services reasonably related to the performance of the audit or the review of our financial statements. | |
(4) | Tax Fees . These are fees for professional services with respect to tax compliance, tax advice, and tax planning. | |
(5) | All Other Fees . These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax Fees. |
Pre-Approval Policy for Audit and Non-Audit Services
We do not have a standing audit committee, and the full Board performs all functions of an audit committee, including the pre-approval of all audit and non-audit services before we engage an accountant. All of the services rendered to us by KLJ & Associates, LLP and Silberstein Ungar, PLLC were pre-approved by our Board of Directors.
22 |
PART IV
ITEM 15. EXHIBITS
Exhibits
Exhibit | Description | |
3.1 | Articles of Incorporation (Incorporated by reference from Exhibit No. 3.1 of the Registrant's Registration Statement on Form S-1 filed on February 12, 2009) | |
3.2 | Bylaws (Incorporated by reference from Exhibit No. 3.2 of the Registrant's Registration Statement on Form S-1 filed on February 12, 2009) | |
3.3 | Certificate of Amendment to Articles of Incorporation (Incorporated by reference from Exhibit No. 3.1 of the Registrant's Current Report on Form 8-K filed on April 5, 2011) | |
4.1 | Certificate of Designation for Series A Preferred Stock (Incorporated by reference from Exhibit No. 4.1 of the Registrant's Current Report on Form 8-K filed on April 5, 2011) | |
4.2 | Certificate of Designation of Series B Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2013 filed on November 14, 2013) | |
4.3 | Certificate of Designation of Series C Convertible Preferred Stock (Incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on November 4, 2013) | |
4.4 | Certificate of Designation of Series D Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on October 10, 2014) | |
10.1 | Debt Settlement and Release Agreement with Larry C. Moore and Donna Moore dated July 18, 2012 (Incorporated by reference from Exhibit No. 10.3 of the Registrant's Current Report on Form 8-K filed on April 5, 2011) | |
10.2 | Asset Purchase Agreement (the "Agreement") by and among COHP, LLC, an Ohio limited liability corporation ("COHP"); and Carmela's Pizzeria CO, Inc., a Colorado corporation ("Carmela's CO"), and its parent Greenfield Farms Food, Inc., a Nevada corporation ("Greenfield") dated October 29, 2013 (Incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on November 4, 2013) | |
14.1 | Code of Ethics (Incorporated by reference from Exhibit No. 14.1 of the Registrant's Registration Statement on Form S-1 filed on February 12, 2009) | |
31.1 | Certification of Principal Executive Officer Sec. 302 (Filed herewith) | |
31.2 | Certification of Principal Financial Officer Sec. 302 (Filed herewith) | |
32.1 | Certification of Chief Executive Officer Sec. 906 (Filed herewith) | |
Certification of Chief Financial Officer Sec. 906 (Filed herewith) | ||
101.INS | XBRL Instance Document (Filed herewith) | |
101.SCH | XBRL Schema Document (Filed herewith) | |
101.CAL | XBRL Calculation Linkbase Document (Filed herewith) | |
101.DEF | XBRL Definition Linkbase Document (Filed herewith) | |
101.LAB | XBRL Label Linkbase Document (Filed herewith) | |
101.PRE | XBRL Presentation Linkbase Document (Filed herewith) |
23 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GREENFIELD FARMS FOOD, INC. | |||
(Registrant) | |||
Dated: July 21, 2016 | By: | /s/ Ronald Heineman | |
Ronald Heineman | |||
Chief Executive Officer and | |||
By: | /s/ Henry Fong | ||
Henry Fong | |||
Chief Financial Officer and |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: July 21, 2016 | By: | /s/ Ronald Heineman | |
Ronald Heineman | |||
Director | |||
By: | /s/ Henry Fong | ||
Henry Fong | |||
Director |
24 | |||
GREENFIELD FARMS FOOD, INC.
Index to Consolidated Financial Statements
Page | |||||
Report of Independent Registered Public Accounting | F-1 | ||||
Consolidated Balance Sheets at December 31, | F-2 | ||||
Consolidated Statements of Operations for the years ended December 31, | F-3 | ||||
Consolidated Statement of Shareholders' Deficit as of December 31, | F-4 | ||||
Consolidated Statements of Cash Flows for the years ended December 31, | F-5 | ||||
Notes to Consolidated Financial Statements | F-6 – |
25 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Silberstein Ungar, PLLC CPAs and Business Advisors
Stockholders of
We have audited the accompanying consolidated balance sheets of GreenfieldofGreenfield Farms Food, Inc. (the “Company”) as of December 31, 20122015 and 20112014 and the related consolidated statements of operations, stockholders’ deficit,stockholders' equity (deficit), and cash flows for the years then ended. TheseGreenfield Farms Food, Inc.'s management is responsible for these consolidated financial statements are the responsibility of the Company's management.statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Companycompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our auditsaudit included consideration 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’scompany's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialconsolidated statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Greenfield Farms Food, Inc. as of December 31, 20122015 and 2011 and2014, the results of itstheir operations, and itstheir cash flows, for the years then ended December 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 11(12) to the consolidated financial statements, the Company has not yet realized significant revenuesincurred losses from operations, has recognized significant losses in 2012 and 2011negative working capital and is in need of workingadditional capital in order to grow its operations. These factors raise substantial doubt about the Company’sCompany's ability to continue as a going concern. Management’sManagement's plans within regard to these matters are also described in Note 11.(12). The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result fromshould the outcome of this uncertainty.
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
December 31, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 97 | $ | 4,454 | ||||
Inventory | - | 5,921 | ||||||
Deferred charges | 1,562 | 9,625 | ||||||
Total Current Assets | 1,659 | 20,000 | ||||||
Property and equipment, net | 15,894 | 40,522 | ||||||
Other Assets | ||||||||
Security deposits | 303 | 2,435 | ||||||
Total Assets | $ | 17,856 | $ | 62,957 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Liabilities | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 91,680 | $ | 40,024 | ||||
Accrued wages and taxes | - | 132,349 | ||||||
Accrued interest | 5,744 | 1,742 | ||||||
Accrued interest – related parties | 6,007 | 1,530 | ||||||
Accrued interest – convertible notes payable | 18,605 | 3,345 | ||||||
Derivative liability | 214,807 | - | ||||||
Notes payable | 50,000 | 50,000 | ||||||
Notes payable – related parties | 81,100 | 31,000 | ||||||
Convertible notes payable, net of debt discount | 129,056 | 82,500 | ||||||
Total Liabilities | 596,999 | 342,490 | ||||||
Stockholders’ Deficit | ||||||||
Preferred stock, par value $.001 | ||||||||
50,000,000 shares authorized; | ||||||||
96,623 series A convertible | ||||||||
shares issued and outstanding | 97 | 97 | ||||||
Common stock, par value $.001 | ||||||||
950,000,000 shares authorized; 345,494,891 and | ||||||||
323,048,520 shares issued and outstanding, respectively | 345,495 | 323,049 | ||||||
Additional paid-in capital | (30,201 | ) | (243,435 | ) | ||||
Accumulated deficit | (894,534 | ) | (359,244 | ) | ||||
Total Stockholders' Deficit | (579,143 | ) | (279,533 | ) | ||||
Total Liabilities and Stockholders’ Deficit | $ | 17,856 | $ | 62,957 |
/s/ KLJ & Associates, LLP | |
KLJ & Associates, LLP | |
Edina, MN | |
July 20, 2016 |
F-1 |
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
| ||||||||
|
|
|
|
|
|
| ||
|
| December 31, |
|
| December 31, |
| ||
ASSETS |
|
|
|
|
|
| ||
Current Assets |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 54,423 |
|
|
| 59,843 |
|
Credit card receivables |
|
| 4,459 |
|
|
| 3,726 |
|
Inventory |
|
| 25,309 |
|
|
| 29,734 |
|
Deferred charges |
|
| 1,834 |
|
|
| 4,063 |
|
Total Current Assets |
|
| 86,025 |
|
|
| 97,366 |
|
|
|
|
|
|
|
|
|
|
Property and Equipment |
|
|
|
|
|
|
|
|
Equipment, computer hardware and software |
|
| 178,771 |
|
|
| 152,871 |
|
Accumulated depreciation |
|
| (118,443 | ) |
|
| (94,819 | ) |
Property and equipment, net |
|
| 60,328 |
|
|
| 58,052 |
|
|
|
|
|
|
|
|
|
|
Other Assets |
|
|
|
|
|
|
|
|
Security deposits |
|
| 4,128 |
|
|
| 4,128 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
| $ | 150,481 |
|
| $ | 159,546 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 72,869 |
|
| $ | 93,883 |
|
Accrued wages and payroll expenses |
|
| 23,444 |
|
|
| 9,695 |
|
Accrued interest |
|
| 32,342 |
|
|
| 13,742 |
|
Accrued interest – related parties |
|
| - |
|
|
| 12,153 |
|
Accrued interest – convertible notes payable |
|
| 48,194 |
|
|
| 18,134 |
|
Derivative liability |
|
| 572,565 |
|
|
| 266,162 |
|
Notes payable |
|
| 81,300 |
|
|
| 50,200 |
|
Notes payable – related parties |
|
| 483,932 |
|
|
| 321,591 |
|
Convertible notes payable, net of debt discount |
|
| 319,384 |
|
|
| 221,994 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
| 1,634,030 |
|
|
| 1,007,554 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit |
|
|
|
|
|
|
|
|
Preferred stock, par value $.001 |
|
|
|
|
|
|
|
|
50,000,000 shares authorized; 96,623 series A convertible shares issued and outstanding |
|
| 97 |
|
|
| 97 |
|
44,000 series B convertible shares issued and outstanding |
|
| 44 |
|
|
| 44 |
|
1,000 series D shares issue and outstanding |
|
| 1 |
|
|
| 1 |
|
Common stock, par value $.001 3,950,000,000 shares authorized; 719,614,372 and 4,930,736 shares issued and outstanding, respectively |
|
| 719,614 |
|
|
| 4,931 |
|
Warrants |
|
| 507,280 |
|
|
| 507,280 |
|
Additional paid-in capital |
|
| 382,933 |
|
|
| 1,007,930 |
|
Accumulated deficit |
|
| (3,093,518 | ) |
|
| (2,368,291 | ) |
|
|
|
|
|
|
|
|
|
Total Stockholders' Deficit |
|
| (1,483,589 | ) |
|
| (848,008 | ) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Deficit |
| $ | 150,481 |
|
| $ | 159,546 |
|
The accompanying notes are an integral part of thethese consolidated financial staements.
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Year ended December 31, 2012 | Year ended December 31, 2011 | |||||||
Gross Revenues | $ | 15,659 | $ | 104,576 | ||||
Cost of Goods Sold | 15,601 | 119,938 | ||||||
Gross Profit (Loss) | 58 | (15,362 | ) | |||||
Operating Expenses | ||||||||
Professional fees | 42,501 | 25,701 | ||||||
Rent | 10,206 | 18,330 | ||||||
Wages and taxes | 81,750 | 196,200 | ||||||
Consulting | 48,875 | 4,250 | ||||||
Advertising | - | 15,628 | ||||||
Equipment rental | 5,814 | 14,670 | ||||||
Auto expense | 4,550 | 30,629 | ||||||
Insurance | 754 | 6,746 | ||||||
Telephone and utilities | 4,125 | 7,051 | ||||||
Depreciation | 5,818 | 6,041 | ||||||
General and administrative | 104,079 | 11,619 | ||||||
Loss on sale of equipment | 10,845 | - | ||||||
Total Operating Expenses | 319,317 | 336,865 | ||||||
Loss From Operations | (319,259 | ) | (352,227 | ) | ||||
Other Income (Expenses) | ||||||||
Interest expense | (23,739 | ) | (6,617 | ) | ||||
Change in derivative liability | 147,643 | - | ||||||
Derivative expense | (168,950 | ) | - | |||||
Loss on conversion of debt | (44,629 | ) | - | |||||
Amortization expense on discount of debt | (126,356 | ) | - | |||||
Loss Before Income Taxes | (535,290 | ) | (358,844 | ) | ||||
Provision for Income Taxes | - | - | ||||||
Net Loss | $ | (535,290 | ) | $ | (358,844 | ) | ||
Weighted Average Number of Shares Outstanding: | ||||||||
Basic and Diluted | 329,946,886 | 345,690,693 | ||||||
Net Loss per Share: | ||||||||
Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) |
F-2 |
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
|
|
|
|
|
|
| ||
|
| Year ended |
| |||||
|
| December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
Sales |
|
|
|
|
|
| ||
Food and beverage |
| $ | 1,646,269 |
|
| $ | 1,594,058 |
|
Vending receipts |
|
| 15,322 |
|
|
| 9,430 |
|
Total sales |
|
| 1,661,591 |
|
|
| 1,603,488 |
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold |
|
| 1,420,002 |
|
|
| 1,345,423 |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
| 241,589 |
|
|
| 258,065 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
Telephone and utilities |
|
| 90,380 |
|
|
| 96,280 |
|
Legal, accounting and professional fees |
|
| 132,989 |
|
|
| 124,497 |
|
Rent |
|
| 75,000 |
|
|
| 73,483 |
|
Advertising |
|
| 13,697 |
|
|
| 19,386 |
|
Repairs and maintenance |
|
| 26,083 |
|
|
| 30,677 |
|
Bank and credit card processing charges |
|
| 28,700 |
|
|
| 31,779 |
|
Wages and taxes |
|
| 97,354 |
|
|
| 104,035 |
|
Depreciation |
|
| 24,267 |
|
|
| 22,014 |
|
Other |
|
| 139,898 |
|
|
| 129,749 |
|
Total Operating Expenses |
|
| 628,368 |
|
|
| 631,900 |
|
|
|
|
|
|
|
|
|
|
Loss From Operations |
|
| (386,779 | ) |
|
| (373,835 | ) |
|
|
|
|
|
|
|
|
|
Other Expenses (Income) |
|
|
|
|
|
|
|
|
Interest expense |
|
| 54,260 |
|
|
| 24,689 |
|
Derivative expense |
|
| 419,475 |
|
|
| 265,015 |
|
Change in derivative liability |
|
| (362,572 | ) |
|
| (489,590 | ) |
Loss on conversion of debt |
|
| - |
|
|
| 590,279 |
|
Amortization expense on discount of debt |
|
| 227,285 |
|
|
| 276,889 |
|
Total Other Expenses (Income) |
|
| 338,448 |
|
|
| 667,282 |
|
|
|
|
|
|
|
|
|
|
Loss Before Provision for Income Tax |
|
| (725,227 | ) |
|
| (1,041,117 | ) |
|
|
|
|
|
|
|
|
|
Provision for Income Tax |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
| $ | (725,227 | ) |
| $ | (1,041,117 | ) |
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding: |
|
|
|
|
|
|
|
|
Basic and Diluted |
|
| 187,544,227 |
|
|
| 2,330,889 |
|
Net Loss per Share: |
|
|
|
|
|
|
|
|
Basic and Diluted |
| $ | (0.00 | ) |
| $ | (0.45 | ) |
The accompanying notes are an integral part of thethese consolidated financial staements.
Preferred Stock | Common Stock | Additional Paid in | Accumulated | Total Stockholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
Balance, January 1, 2011 | - | - | 40,000 | 1 | 2,999 | (400) | 2,600 | |||||||||||||||||||||
Effects of the reverse merger | - | - | 1,204,360,000 | 30,109 | 44,891 | - | 75,000 | |||||||||||||||||||||
Exchange of common stock for Series A Preferred stock | 96,623 | 97 | (881,351,480 | ) | (22,034 | ) | 21,937 | - | - | |||||||||||||||||||
Forward stock split 40:1 | - | - | - | 314,973 | (314,973 | ) | - | - | ||||||||||||||||||||
Contributed capital | - | - | - | - | 1,711 | - | 1,711 | |||||||||||||||||||||
Net loss for the year ended December 31, 2011 | - | - | - | - | - | (358,844 | ) | (358,844 | ) | |||||||||||||||||||
Balance December 31, 2011 | 96,623 | 97 | 323,048,520 | 323,049 | $ | (243,435 | ) | (359,244 | ) | $ | (279,533 | ) | ||||||||||||||||
Forgiveness of shareholder debt | - | - | - | - | 98,501 | - | 98,501 | |||||||||||||||||||||
Stock issued for services | - | - | 2,384,259 | 2,384 | 71,366 | 73,750 | ||||||||||||||||||||||
Issuance for note conversion | - | - | 20,062,112 | 20,062 | (1,262 | ) | - | 18,800 | ||||||||||||||||||||
Loss on note conversion | - | - | - | - | 44,629 | - | 44,629 | |||||||||||||||||||||
Net loss for the year ended December 31, 2012 | - | - | - | - | - | (535,290 | ) | (535,290 | ) | |||||||||||||||||||
Balance December 31, 2012 | 96,623 | $ | 97 | 345,494,891 | $ | 345,495 | $ | (30,201 | ) | $ | (894,534 | ) | $ | (579,143 | ) |
F-3 |
GREENFIELD FARMS FOOD, INC. | ||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT | ||||||||||||||||||||||||||||||||
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 | ||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||
|
| Preferred stock |
|
| Common stock |
|
|
|
| Additional |
|
| Accumulated |
|
| Total stockholders' |
| |||||||||||||||
|
| Shares |
|
| Par value |
|
| Shares |
|
| Par value |
|
| Warrants |
|
| capital |
|
| deficit |
|
| deficit |
| ||||||||
Balance at December 31, 2013 (Restated) |
|
| 140,623 |
|
|
| 141 |
|
|
| 485,776 |
|
|
| 486 |
|
|
| 507,280 |
|
|
| 145,247 |
|
|
| (1,327,174 | ) |
|
| (674,020 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to convertible noteholders |
|
| - |
|
|
| - |
|
|
| 4,444,960 |
|
|
| 4,445 |
|
|
| - |
|
|
| 272,405 |
|
|
| - |
|
|
| 276,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial conversion feature recroded for convertible debt |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 590,279 |
|
|
| - |
|
|
| 590,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of series D preferred stock |
|
| 1,000 |
|
|
| 1 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (1,041,117 | ) |
|
| (1,041,117 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014 (Restated) |
|
| 141,623 |
|
| $ | 142 |
|
|
| 4,930,736 |
|
| $ | 4,931 |
|
| $ | 507,280 |
|
| $ | 1,007,930 |
|
| $ | (2,368,291 | ) |
| $ | (848,008 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to convertible noteholders |
|
| - |
|
|
| - |
|
|
| 714,682,976 |
|
|
| 714,682 |
|
|
| - |
|
|
| (624,996 | ) |
|
| - |
|
|
| 89,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to round up reverse split |
|
| - |
|
|
| - |
|
|
| 660 |
|
|
| 1 |
|
|
| - |
|
|
| (1 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (725,227 | ) |
|
| (725,227 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2015 |
|
| 141,623 |
|
| $ | 142 |
|
|
| 719,614,372 |
|
| $ | 719,614 |
|
| $ | 507,280 |
|
| $ | 382,933 |
|
| $ | (3,093,518 | ) |
| $ | (1,483,549 | ) |
The accompanying notes are an integral part of thethese consolidated financial statements.
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Year ended December 31, 2012 | Year ended December 31, 2011 | |||||||
Cash Flows from Operating Activities | ||||||||
Net loss for the year | $ | (535,290 | ) | $ | (358,844 | ) | ||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||
Depreciation | 5,818 | 6,041 | ||||||
Loss on sale of equipment | 10,845 | - | ||||||
Derivative expense | 168,950 | - | ||||||
Amortization of debt discount | 126,356 | - | ||||||
Stock issued for services | 73,750 | - | ||||||
Change in value of derivative liability | (147,643 | ) | - | |||||
Loss on conversion of debt | 44,629 | - | ||||||
Changes in Assets and Liabilities | ||||||||
(Increase) decrease in inventory | 5,921 | (5,921 | ) | |||||
(Increase) decrease in deferred offering costs | 8,063 | (9,625 | ) | |||||
Increase in accounts payable | 79,027 | 39,624 | ||||||
Increase (decrease) in accrued wages and taxes | (11,219 | ) | 132,349 | |||||
Increase in accrued interest | 4,002 | 1,742 | ||||||
Increase in accrued interest – related parties | 4,477 | 1,530 | ||||||
Increase in accrued interest – convertible notes payable | 15,260 | 3,345 | ||||||
Net Cash used in Operating Activities | (147,054 | ) | (189,759 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Purchase of property and equipment | (535 | ) | (46,563 | ) | ||||
Proceeds from sale of equipment | 8,500 | - | ||||||
Cash received in merger | - | 75,000 | ||||||
Security deposits | 2,132 | (2,435 | ) | |||||
Net Cash Provided by Investing Activities | 10,097 | 26,002 | ||||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from notes payable | - | 50,000 | ||||||
Proceeds from notes payable - related parties | 100 | 36,000 | ||||||
Payments on notes payable - related parties | - | (5,000 | ) | |||||
Proceeds from convertible notes payable | 132,500 | 82,500 | ||||||
Proceeds from the sale of common stock | - | 3,000 | ||||||
Contributed capital | - | 1,711 | ||||||
Net Cash Provided by Financing Activities | 132,600 | 168,211 | ||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (4,357 | ) | 4,454 | |||||
Cash and Cash Equivalents – Beginning | 4,454 | - | ||||||
Cash and Cash Equivalents - Ending | $ | 97 | $ | 4,454 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash paid for interest | $ | 40 | $ | - | ||||
Cash paid for income taxes | $ | - | $ | - | ||||
Non-Cash Investing and Financing Activities: | ||||||||
Forgiveness of shareholder debt | $ | 98,501 | $ | - | ||||
Common stock issued for debt conversion | $ | 18,800 | $ | - | ||||
Issuance of note payable to former shareholder | $ | 50,000 | $ | - | ||||
Additional paid in capital | $ | 213,234 | $ | - | ||||
Initial value of debt discount on convertible notes | $ | 193,500 | $ | - |
F-4 |
GREENFIELD FARMS FOOD, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
|
|
|
|
|
|
| ||
|
| Year ended |
| |||||
|
| December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
Net loss for the period |
| $ | (725,227 | ) |
| $ | (1,041,117 | ) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
| 24,267 |
|
|
| 22,014 |
|
Amortization of deferred financing costs |
|
| 9,941 |
|
|
| 10,549 |
|
Amortization of discount on debt |
|
| 227,285 |
|
|
| 276,889 |
|
Change in derivative liability |
|
| (362,572 | ) |
|
| (489,590 | ) |
Initial derivative liability expense |
|
| 419,475 |
|
|
| 265,015 |
|
Loss on conversion of debt |
|
| - |
|
|
| 590,279 |
|
Convertible notes issued for services |
|
| 50,000 |
|
|
| 26,000 |
|
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Decrease in prepaid expense |
|
| - |
|
|
| 3,691 |
|
Increase in inventory |
|
| 4,425 |
|
|
| (21,248 | ) |
Increase in accounts receivable |
|
| (733 | ) |
|
| - |
|
(Increase) decrease in deferred debt charges |
|
| (7,713 | ) |
|
| 299 |
|
Decrease in credit card receivable |
|
| - |
|
|
| 1,192 |
|
Decrease in security deposits |
|
| - |
|
|
| 1,475 |
|
(Decrease) increase in accounts payable |
|
| 10,486 |
|
|
| (18,681 | ) |
Increase (decrease) in accrued expenses |
|
| 52,448 |
|
|
| (8,702 | ) |
Net Cash used in Operating Activities |
|
| (297,918 | ) |
|
| (381,935 | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
| (26,543 | ) |
|
| (4,482 | ) |
Net Cash Provided by (Used in) Investing Activities |
|
| (26,543 | ) |
|
| (4,482 | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from notes payable - related parties |
|
| 354,045 |
|
|
| 520,588 |
|
Proceeds from notes payable |
|
| 300 |
|
|
| 200 |
|
Proceeds from convertible notes payable |
|
| 128,100 |
|
|
| 226,600 |
|
Payments of notes payable - related parties |
|
| (160,704 | ) |
|
| (299,685 | ) |
Payments of notes payable |
|
| (2,700 | ) |
|
| - |
|
Payments on convertible notes payable |
|
| - |
|
|
| (6,465 | ) |
Net Cash Provided by Financing Activities |
|
| 319,041 |
|
|
| 441,238 |
|
|
|
|
|
|
|
|
|
|
Net Increase in Cash and Cash Equivalents |
|
| (5,420 | ) |
|
| 54,821 |
|
Cash and Cash Equivalents – Beginning |
|
| 59,843 |
|
|
| 5,022 |
|
Cash and Cash Equivalents End of Period |
| $ | 54,423 |
|
| $ | 59,843 |
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 1,851 |
|
| $ | 1,851 |
|
Cash paid for income taxes |
|
| - |
|
| $ | - |
|
Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
Interest accrued on convertible notes |
| $ | 32,258 |
|
| $ | 16,002 |
|
Debt discount from fair value of embedded derivatives |
| $ | 249,500 |
|
| $ | 226,600 |
|
Common stock issued for covertible notes and accrued interest |
| $ | 89,686 |
|
| $ | 867,129 |
|
Accounts payable cancelled in exchange for convertible notes |
| $ | 31,500 |
|
| $ | 26,000 |
|
The accompanying notes are an integral part of thethese consolidated financial staements.
F-5 |
NOTE 1 – NATURE OF BUSINESS
Greenfield Farms Food, Inc. (the “Company”("GRAS" or the "Company") was incorporated under the laws of the State of North CarolinaNevada on December 30, 2010. We areJune 2, 2008. In October 2013, the Company entered into an Asset Purchase Agreement (the "Agreement") with COHP, LLC ("COHP") through which the Company acquired certain of the assets and liabilities of COHP including the operations of Carmela's Pizzeria ("Carmela's") through a marketernewly formed wholly-owned subsidiary Carmela's Pizzeria CO, Inc. COHP, LLC was formed on May 1, 2011, under the laws of grass fed beef products tothe State of Ohio. Carmela's Pizzeria presently has three Dayton, Ohio area locations offering authentic New York style pizza. Carmela's offers a variety of grocery chains, retailers,full service menu for Dine In, Carry out and others, primarilyDelivery as well as pizza buffets in the region of Charlotte, NC.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements for the years ended December 31, 2015 and 2014 include the accounts of the Company and Carmela's.
For SEC reporting purposes, Carmela's is treated as the continuing reporting entity that acquired GRAS. The reports filed after the transaction have been prepared as if Carmela's (accounting acquirer) were the legal successor to the Company's reporting obligation as of the date of the acquisition. Therefore, all financial statements filed subsequent to the transaction reflect the historical financial condition, results of operations and cash flows of Carmela's for all periods prior to the share exchange; and consolidated with the Company from the date of the share Exchange. All share and per share amounts of Carmela's have been retroactively adjusted to reflect the legal capital structure of the Company pursuant to FASB ASC 805-40-45-1.
Effective February 20, 2015, the Company effected a 1 for 300 reverse split of its common stock whereby the 1,478,720,693 pre-split shares of common stock outstanding became 4,929,120 shares post-split. There was no change in authorized shares of the Company. The number of shares outstanding, share issuance information and per share information for all prior periods presented have been retroactively adjusted to reflect the new capital structure.
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”("GAAP" accounting). The Company has adopted a December 31 fiscal year end.
Fair Value of Financial Instruments
The carryingestimated fair value of financial instruments has been determined by the Company using available market information and appropriate methodologies; however, considerable judgment is required in interpreting information necessary to develop these estimates. Accordingly, the Company's estimates of fair values are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
The fair values of cash deferred charges,and cash equivalents, current non-related party accounts payable, accrued expenses, accrued interestreceivable, and notesaccounts payable approximate their fair value due tocarrying amounts because of the short periodmaturities of these instruments.
F-6 |
The fair values of notes and loans payable to non-related parties approximate their carrying values because of the short maturities of these instruments. The fair value of long-term debt to non-related parties approximates carrying values, net of discounts applied, based on market rates currently available to the Company.
Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity ("observable inputs") and the reporting entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances ("unobservable inputs").
Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company primarily uses prices and other relevant information generated by market transactions involving identical or comparable assets ("market approach"). The Company also considers the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly.
The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The three hierarchy levels are defined as follows:
Level 1 – Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
The Company has determined that its derivative liabilities fall under Level 2. Derivative liabilities measured at fair value were $572,565 and $266,162 at December 31, 2015 and 2014, respectively.
Credit risk adjustments are applied to reflect the Company's own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company's own credit risk as observed in the credit default swap market.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
F-7 |
Property and Equipment
Property and equipment is stated at historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the three to five year estimated useful lives of the assets.
Revenue Recognition
The Company recognizesrecords revenue when products are fullyall of the following have occurred: (1) persuasive evidence of an arrangement exists, (2) the product/service is delivered, (3) the sales price to the customer is fixed or services have been provideddeterminable, and collection(4) collectability of the related customer receivable is reasonably assured.
Reclassifications
Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period financial statements.
Income Taxes
The Company utilizes the asset and liability method of accounting for income taxes. Under the asset and liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC 718. To date, the Company has not adopted a stock option plan and has not granted any stock options. As of December 31, 2012,2015 and 2014, the Company hashad not issued any stock-based payments to its employees.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’sCompany's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’sCompany's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding asAs of December 31, 2012.
Derivative financial instruments
The Company follows ASC 815-40, Derivatives and Hedging, Contracts in Entity’sEntity's own Equity. The Company’sCompany's convertible debt has conversion provisions based on a discount of the market price of the Company’sCompany's common stock.
F-8 |
Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.
Advertising Costs
The Company’sCompany's policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0$13,697 and $15,628$19,386 during the years ended December 31, 20122015 and 2011,2014, respectively.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Recent Accounting Pronouncements
Recent accounting standardspronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and interpretations issued during 2012, none of whichthe Securities Exchange Commission (the "SEC") did not or are expectednot believed by management to have a material impact on our present or future consolidated financial statements.
NOTE 3 – INVENTORIES
Inventories consist of food and beverages, and are stated at the Company’s financial position, operationslower of cost, or cash flows upon adoption.
NOTE 34 – PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost and consisted of the following at December 31:
2012 | 2011 | |||||||
Vehicles | $ | 20,774 | $ | 41,874 | ||||
Equipment | 4,425 | 4,689 | ||||||
Less: Accumulated depreciation | (9,305 | ) | (6,041 | ) | ||||
Property and equipment, net | $ | 15,894 | $ | 40,522 |
|
| 2015 |
|
| 2014 |
| ||
Equipment |
| $ | 178,771 |
|
| $ | 152,871 |
|
Less: Accumulated depreciation |
|
| (118,443 | ) |
|
| (94,819 | ) |
Property and equipment, net |
| $ | 60,328 |
|
| $ | 58,052 |
|
Depreciation expense was $5,818$24,267 and $6,041$22,014 for the periods ended December 31, 20122015 and 2011.
NOTE 45 – NOTENOTES PAYABLE
During the year ended December 31, 2015, $31,000 in notes that had been classified as related party in previous periods were reclassified to notes payable as the noteholders were no longer considered parties related to the Company. As a result, the $31,000 in principal and $14,587 in accrued interest is now shown in "notes payable" and "accrued interest" on our balance sheets as of December 31, 2015.
F-9 |
NOTE 6 – NOTES PAYABLE – RELATED PARTIES
Entities controlled by the members have loaned monies to COHP for working capital purposes. The loans are non-interest bearing and have no specific terms of repayment. A related party loan from KB Air is secured by all the assets of the Company.
The activity for the years ended December 31, 20122015 and 2011, respectively.
|
| December 31, |
| |||||
|
| 2015 |
|
| 2014 |
| ||
Beginning balance |
| $ | 321,591 |
|
| $ | 100,687 |
|
Advances, net |
|
| 193,341 |
|
|
| 220,904 |
|
Notes reclassified to non-related party |
|
| (31,000 | ) |
|
| - |
|
|
| $ | 483,932 |
|
| $ | 321,591 |
|
NOTE 67 – CONVERTIBLE NOTES PAYABLE
On June 15, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $83,500 with an interest rate of 8% per annum that is due on March 9, 2013. The note iswas convertible by the holder after 180 days at 35% of the lowest trading price in the sixty trading days before the conversion.
On August 1,12, 2012 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $20,000 with an interest rate of 8% per annum due on August 3, 2013. The note iswas convertible by the holder after 180 days at 35% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $20,000 balance along with $1,600 in accrued interest on this note to 188,714 shares at a price of $0.10 per share. The remaining balance of the note after the conversions was $-0-. A $123,850 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions.
F-10 |
On April 15, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $15,500 with an interest rate of 8% per annum due on November 15, 2013. The note is convertible by the holder after 180 days at 40% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $15,500 balance along with $620 in accrued interest on this note to 134,333 shares at a price of $0.12 per share. The remaining balance of the note after the conversions was $-0-. A $51,905 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions.
On May 14, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on February 13, 2014. The note was not yet convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued notices of conversion to convert the entire $32,500 balance along with $1,300 in accrued interest on this note to 250,370 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $111,209 decrease in derivative liability was recorded as a result of Decemberthese conversions.
On June 24, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $7,500 with an interest rate of 8% per annum due on March 19, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2012.
On September 19, 2013 the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $32,500 with an interest rate of 8% per annum due on June 12, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. During the three month period ended March 31, 2014 Asher Enterprises issued a notice of conversion to convert $16,600 in principal on this note to 122,963 shares at a price of $0.14 per share. The remaining balance of the note after those conversions was $15,900. In April 2014, the remaining balance of this note was acquired by CareBourn Capital, which converted the entire remaining balance of $15,900 plus $1,378 in interest into 127,984 shares at a price of $0.14 per share. The remaining balance of this note after these conversions was $-0-. A $52,025 decrease in derivative liability was recorded as a result of these conversions.
On August 21, 2012, the Company issued a convertible promissory note in the amount of $1,500.$1,500 to the Gulfstream 1998 Irrevocable Trust. The note iswas unsecured, due on demand and bearscarried interest at 8% per annum. The note iswas convertible into shares of common stock at the market price.
At December 31, 2013, there was $11,133 outstanding on convertible notes issued to the Gulfstream 1998 Irrevocable Trust. These notes are convertible at 45% of the lowest trading price in the thirty trading days before the conversion. During the year ended December 31, 2014 an additional $18,100 was loaned under the same conversion terms but are not convertible until six months following their issuance date. Also during that period a total of $9,166 was repaid on these notes. During the three month period ended March 31, 2014 the Trust issued a notice of conversion to convert $2,700 in principal on these notes to 20,000 shares at a price of $0.14 per share. A $14,013 decrease in derivative liability was recorded as a result of the conversion. The remaining balance of these notes was $17,367 at December 31, 2014 following these transactions. During the year ended December 31, 2015, a total of $2,500 was repaid on these notes and three notes totaling $13,100 were sold by the Trust to Codes Capital leaving a remaining balance on the notes of $1,767 at December 31, 2015.
At October 1, 2013, an $18,000 unsecured demand promissory note with an interest rate of 8% convertible to common stock at market was outstanding. In October 2013, the conversion terms of this note were changed making it convertible at 45% of the lowest trading price in the thirty trading days before the conversion, creating a derivative liability. The entire principal balance of this note was outstanding at December 31, 2013. During the three month period ended March 31, 2014 the holder of this note issued notices of conversion to convert the entire $18,000 balance on this note plus $138 in accrued interest to 122,144 shares at a price of $0.14 per share. The remaining balance of the note after the conversions was $-0-. A $61,473 decrease in derivative liability was recorded as a result of these conversions.F-11 |
At October 1, 2013, the Company had an outstanding convertible promissory note to CareBourn Capital in the principal amount of $6,000 with an interest rate of 8% per annum due on December 19, 2013. The note was convertible by the holder at any time at 35% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2013, CareBourn Capital converted $3,990 on this note for 26,590 shares at a price of $0.15 per share. A $45,495 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions. The remaining balance of the note after the conversions was $2,010 at December 31, 2013. During the quarter ended March 31, 2014, CareBourn Capital converted the $2,010 balance on this note plus $416 in accrued interest to 26,172 shares at a price of $0.15 per share. The remaining balance of the note after the conversions was $-0-. A $22,915 loss on the conversion of the shares was recorded as the note was in default and a derivative liability was no longer recorded at the time of conversions.
On October 1, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $9,300 with an interest rate of 8% per annum due on June 1, 2014 upon the conversion of $9,300 in accounts payable to Cresthill. This note was convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issuance date. During the quarter ended March 31, 2014 this note was assigned to CareBourn Capital, which converted the entire note balance of $9,300 along with $145 in accrued interest into 89,949 shares of common stock at $0.15 per share. The remaining balance of this note was $-0- after this conversion and a loss on the conversion of $39,683 was recorded for the difference in the market value and the conversion price on the date of conversion.
On October 29, 2013, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $25,000 with an interest rate of 8% per annum due on October 29, 2014 in payment of a $25,000 fee for work performed to complete the acquisition of the assets of Carmela's Pizzeria. This note is convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion beginning six months from the issue date. In the quarter ended December 31, 2014, $12,500 of this note was sold to Beaufort Capital the entire balance of which remained unpaid at both December 31, 2014 and 2015. In the quarter ended June 30, 2015, $6,250 of this note was sold to MM Visionary Consultants, which converted that entire balance to common stock in the quarter ended September 30, 2015 leaving a balance due to MM Visionary Consultants of $0 as of that date. A $31,388 decrease in derivative liability was recorded as a result of these conversions. During the quarter ended September 30, 2015, the remaining $6,250 of this note was sold to Microcap Equity leaving a remaining balance of $0 as of September 30, 2015 payable to Cresthill Associates. During the year ended December 31, 2015, Microcap equity converted $833 of this amount leaving a balance due at that date of $5,417 and a $4,183 decrease in derivative liability was recorded from this conversion.
In November 2013, the Company issued a convertible promissory note to Asher Enterprises in the principal amount of $22,500 with an interest rate of 8% per annum due on August 27, 2014. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. In April 2014, this note was sold and assigned to two entities unaffiliated with Asher or the Company including $9,000 sold to CareBourn Capital and $13,500 sold to Incipix Partners. During the three month period ended September, 2014 Incipix Partners issued a notice of conversion to convert $13,500 in principal and $657 in interest on this note to 209,732 shares at a price of $0.07 per share. A $20,251 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $9,000 payable to CareBourn Capital at both December 31, 2015 and 2014.
On December 9, 2013, the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $5,000 with an interest rate of 8% per annum due on June 9, 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the quarter ended December 31, 2014, CareBourn sold this note to Booski Consulting, an unaffiliated third party, which converted $2,600 in principal on the note to 173,333 shares of common stock at $0.015 per share. A $5,013 decrease in derivative liability was recorded as a result of this conversion. The remaining balance of the note after those conversions was $2,400 at both December 31, 2015 and 2014.
In December 2013, the Company issued two convertible promissory notes to Gulfstream 1998 Trust in the aggregate principal amount of $5,000 with an interest rate of 8% per annum due on demand. These notes were convertible by the holder at any time at 45% of the lowest trading price in the ninety trading days before the conversion. At December 31, 2013, these notes were fully outstanding. During the year ended December 31, 2014 these note were repaid leaving no balance due at December 31, 2014.F-12 |
In January 2014, the Company issued a total of $10,000 in convertible promissory notes to CareBourn Capital with an interest rate of 8% per annum due in July 2014. These notes are convertible by the holder at any time at 45% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $5,000 in principal and $237 in interest on these notes to 158,768 shares at a price of $0.03 per share. An $11,072 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $5,000 at both December 31, 2015 and 2014.
On February 18, 2014, the Company issued $62,500 in a convertible promissory note to CareBourn Capital with an interest rate of 8% per annum due in August 2014. This note is convertible by the holder at any time at 50% of the average of the three lowest trading prices in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $4,590 in principal on these notes leaving a balance due of $57,910 at December 31, 2014. An $8,900 decrease in derivative liability was recorded as a result of these conversions. The remaining balance of the note after conversions was $57,910 at December 31, 2014. During the year ended December 31, 2015, a total of $55,306 in principal on these notes was converted to 513,179,160 shares of common stock at a price equaling $.0001 per share. A $186,096 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $2,604 as of December 31, 2015.
On March 3, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $35,000 with an interest rate of 8% per annum due on February 25, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $16,200 in principal leaving a balance due of $18,800 as of December 31, 2014. During the year ended December 31, 2015, the entire $18,800 in remaining principal and $2,192 in accrued interest on these notes was converted to 126,923,611 shares of common stock at a price equaling $.0002 per share. A $62,323 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $0 at December 31, 2015.
On April 7, 2014, the Company issued a convertible promissory note to Adar Bays in the principal amount of $37,000 with an interest rate of 8% per annum due on April 1, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. During the year ended December 31, 2014 the holder converted $12,004 in principal on these notes leaving a balance due of $24,996 as of December 31, 2014. During the year ended December 31, 2015, a total of $4,543 in principal on these notes was converted to 7,772,000 shares of common stock at a price equaling $.0006 per share. A $39,645 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $20,453 at December 31, 2015.
On April 17, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $25,000 with an interest rate of 10% per annum due on October 17, 2014. The note is convertible by the holder after 180 days at 60% of the lowest closing bid price in the twenty trading days before the conversion. During the year ended December 31, 2014, $10,345 of these notes were converted leaving a balance due of $14,655 as of December 31, 2014 and December 31, 2015, respectively.
On July 15, 2014, the Company issued a convertible promissory note to Gregory Galanis in the principal amount of $13,500 with an interest rate of 8% per annum due on April 15, 2015, in exchange for $13,500 in debt owed Mr. Galanis for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively.
On September 1, 2014, the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $12,500 with an interest rate of 8% per annum due on July 1, 2015, in exchange for $12,500 in debt owed Cresthill for services rendered to the Company. The note is convertible by the holder after 180 days at 45% of the lowest closing bid price in the thirty trading days before the conversion and the entire amount was outstanding at December 31, 2014. In the quarter ended September 30, 2015, the entire balance of this note was sold to Codes Capital, which converted a total of $1,763 in principal on these notes to 3,561,539 shares of common stock at a price equaling $.0005 per share. A $8,854 decrease in derivative liability was recorded as a result of these conversions. The principal balance due on this note was $10,737 at December 31, 2015.
On October 9, 2014, the Company issued a convertible promissory note to LG Funding in the principal amount of $26,500 with an interest rate of 8% per annum due on October 9, 2015. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively.F-13 |
On November 3, 2014, the Company issued a convertible promissory note to Beaufort Capital in the principal amount of $12,500 due on May 3, 2015 with an interest rate of 5% per annum, which accrues only in the event of a default and only from such default date until the note is paid in full. The note is convertible by the holder after 180 days at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2014 and December 31, 2015, respectively.
On February 9, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $73,000 due on December 27, 2015 with an interest rate of 12% per annum. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On April 1, 2015, the Company issued a convertible promissory note to SoFran, LLC in the principal amount of $50,000 due on January 1, 2015 with an interest rate of 12% per annum. This note was issued as part of a consulting contract entered into with SoFran for services to be rendered in connection with the Company's plans to set up a national franchising program. In addition to this note, SoFran was paid $10,000 in April 2015 and is due an additional $5,000. Certain future payments totaling $35,000 may be due to SoFran under the contract upon them reaching certain performance benchmarks. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On April 14, 2015, LG Capital Funding funded a convertible promissory note in the principal amount of $26,500 that was issued on October 9, 2014 and secured at that time by a note payable to the Company with like terms. This note is due on October 9, 2015 with an interest rate of 8% per annum. The note is convertible by the holder at 50% of the lowest closing bid price in the ten trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On May 5, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $16,500 due on November 5, 2015 with an interest rate of 8% per annum, in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On May 27, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $10,500 due on February 27, 2016 with an interest rate of 12% per annum. Debt issuance costs of $3,000 were recorded for net proceeds to the Company of $7,500. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On August 5, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $7,500 due on February 5, 2016 with an interest rate of 8% per annum in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On July 20, 2015 the Company issued a convertible promissory note to CareBourn Capital in the principal amount of $15,500 due on April 20, 2016 with an interest rate of 12% per annum. Debt issuance costs of $3,000 were recorded for net proceeds to the Company of $12,500. The note is convertible by the holder after 180 days at 40% of the three lowest closing bid prices in the ninety trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On July 31, 2015 the Company issued a convertible promissory note to Gulfstream 1998 Irrevocable Trust in the principal amount of $2,500 due on July 31, 2016 with an interest rate of 8% per annum. The note is convertible by the holder after 180 days at 45% of the lowest trading price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.
On November 16, 2015 the Company issued a convertible promissory note to Cresthill Associates in the principal amount of $7,500 due on August 16, 2016 with an interest rate of 8% per annum in exchange for amounts payable to Cresthill for services rendered. The note is convertible by the holder after 180 days at 45% of the lowest last sales price in the thirty trading days before the conversion. The entire balance of this note remained outstanding at December 31, 2015.F-14 |
Total interest expense on these notes was $15,260$32,258 and $3,345$16,002 for the years ended December 31, 20122015 and 2011,2014, respectively.
A summary of debentures payable as of December 31, 2015 and 2014 is as follows:
Face Value |
| Balances 12/31/14 |
|
| Issuance of new convertible notes |
|
| Amortization of discount on convertible Notes |
|
| Debenture conversions & payments year ended 12/31/15 |
|
| Balances 12/31/15 |
| |||||
Notes outstanding at 12/31/2014 |
| $ | 240,128 |
|
|
| - |
|
|
| - |
|
| $ | (89,995 | ) |
| $ | 150,133 |
|
2015 note issuances |
|
| - |
|
| $ | 209,600 |
|
|
| - |
|
|
| - |
|
|
| 209,600 |
|
Note discount |
| $ | (18,134 | ) |
|
| (249,500 | ) |
| $ | 227,285 |
|
|
| - |
|
|
| (40,349 | ) |
Total |
| $ | 221,994 |
|
| $ | (39,900 | ) |
| $ | 227,285 |
|
| $ | (89,995 | ) |
| $ | 319,384 |
|
Face Value |
| Balances 12/31/13 |
|
| Issuance of new convertible notes |
|
| Amortization of discount on convertible Notes |
|
| Debenture conversions & payments year ended 12/31/14 |
|
| Balances 12/31/14 |
| |||||
Notes outstanding at 12/31/2013 |
| $ | 260,294 |
|
| $ | - |
|
| $ | - |
|
| $ | (224,627 | ) |
| $ | 35,667 |
|
2014 note issuances |
|
| - |
|
|
| 252,600 |
|
|
| - |
|
|
| (48,139 | ) |
|
| 204,461 |
|
Note discount |
| $ | (55,423 | ) |
|
| (239,600 | ) |
|
| 276,889 |
|
|
| - |
|
|
| (18,134 | ) |
Total |
| $ | 204,871 |
|
| $ | 13,000 |
|
| $ | 276,889 |
|
| $ | (272,766 | ) |
| $ | 221,994 |
|
NOTE 78 – DERIVATIVE LIABILITY
F-15 |
The beneficial conversion feature included in the notes that became convertible during the year ended December 31, 2015 resulted in initial debtnote discounts of $193,500$249,500 and an initial loss on the valuation of the derivative liabilities of $168,950$419,475 based on the initial fair value of the derivative liabilities of $362,450.$668,975. The fair value of the embedded derivative liabilities for notes not in default were calculated at the conversion commencingcommencement dates utilizing the following assumptions:
Note date | September 7, 2011 | November 14, 2011 | February 13, 2012 | June 15, 2012 | ||||||||||||
Note amount | $ | 50,000 | $ | 32,500 | $ | 27,500 | $ | 83,500 | ||||||||
Stock price at convertible date | $ | 0.035 | $ | 0.011 | $ | 0.035 | $ | 0.001 | ||||||||
Expected life (years) | .5 | .5 | .25 | .25 | ||||||||||||
Risk free interest rate | .14 | % | .15 | % | .10 | % | .07 | % | ||||||||
Volatility | 142.25 | % | 215.97 | % | 234.41 | % | 364.13 | % | ||||||||
Initial derivative value | $ | 78,107 | $ | 58,991 | $ | 39,363 | $ | 185,989 |
Note convertible date |
| 1/1/15 |
|
| 3/1/15 |
|
| 3/1/15 |
|
| 4/14/15 |
|
| 4/14/15 |
|
| 8/10/15 |
|
| 8/25/15 |
|
| 10/1/15 |
|
| 10/19/15 |
|
| 11/5/15 |
| ||||||||||
Note amount |
| $ | 5,000 |
|
| $ | 13,500 |
|
| $ | 12,500 |
|
| $ | 26,500 |
|
| $ | 26,500 |
|
| $ | 73,000 |
|
| $ | 10,500 |
|
| $ | 50,000 |
|
| $ | 15,500 |
|
| $ | 16,500 |
|
Stock price at convertible date |
| $ | .06 |
|
| $ | .03 |
|
| $ | .0046 |
|
| $ | .00065 |
|
| $ | .00065 |
|
| $ | .0003 |
|
| $ | .0002 |
|
| $ | .0002 |
|
| $ | .0001 |
|
| $ | .0001 |
|
Expected life (years) |
|
| 1.0 |
|
|
| .25 |
|
|
| .25 |
|
|
| .52 |
|
|
| .52 |
|
|
| .38 |
|
|
| .51 |
|
|
| .50 |
|
|
| .50 |
|
|
| .25 |
|
Risk free interest rate |
|
| .13 | % |
|
| .02 | % |
|
| .10 | % |
|
| .11 | % |
|
| .11 | % |
|
| .25 | % |
|
| .20 | % |
|
| .11 | % |
|
| .20 | % |
|
| .14 | % |
Volatility |
|
| 202 | % |
|
| 212 | % |
|
| 375 | % |
|
| 382 | % |
|
| 382 | % |
|
| 237 | % |
|
| 388 | % |
|
| 291 | % |
|
| 273 | % |
|
| 378 | % |
Initial derivative value |
| $ | 11,639 |
|
| $ | 32,526 |
|
| $ | 21,608 |
|
| $ | 113,520 |
|
| $ | 113,520 |
|
| $ | 75,285 |
|
| $ | 20,007 |
|
| $ | 221,223 |
|
| $ | 31,043 |
|
| $ | 28,604 |
|
The beneficial conversion feature for notes that became convertible in 2014 resulted in initial debt discounts of $239,600 and not in default. All convertible notes in default no longer were valued for the derivative liability and aan initial loss on the conversionvaluation of stock will be recorded at the timederivative liabilities of any future conversion.$504,615 based on the initial fair value of the derivative liabilities of $265,015. The fair value of the embedded derivative liabilityliabilities for notes not in default were calculated at the conversion commencement dates utilizing the following assumptions:
Note convertible date |
| 1/9/14 |
|
| 1/16/14 |
|
| 2/18/14 |
|
| 3/19/14 |
|
| 4/29/14 |
|
| 6/5/15 |
|
| 7/30/14 |
|
| 8/5/14 |
|
| 8/21/14 |
|
| 9/3/14 |
|
| 10/7/14 |
| |||||||||||
Note amount |
| $ | 5,000 |
|
| $ | 5,000 |
|
| $ | 62,500 |
|
| $ | 32,500 |
|
| $ | 25,000 |
|
| $ | 22,500 |
|
| $ | 5,000 |
|
| $ | 5,100 |
|
| $ | 5,000 |
|
| $ | 35,000 |
|
| $ | 37,000 |
|
Stock price convertible date |
| $ | .003 |
|
| $ | .0021 |
|
| $ | .0023 |
|
| $ | .0013 |
|
| $ | .0011 |
|
| $ | .0008 |
|
| $ | .0004 |
|
| $ | .0006 |
|
| $ | .0005 |
|
| $ | .0004 |
|
| $ | .0003 |
|
Expected life (years) |
|
| .50 |
|
|
| .50 |
|
|
| .50 |
|
|
| .23 |
|
|
| .25 |
|
|
| .23 |
|
|
| .24 |
|
|
| .25 |
|
|
| .25 |
|
|
| .48 |
|
|
| .48 |
|
Risk free interest rate |
|
| .07 | % |
|
| .07 | % |
|
| .07 | % |
|
| .12 | % |
|
| .02 |
|
|
| .12 | % |
|
| .03 | % |
|
| .03 | % |
|
| .03 | % |
|
| .05 | % |
|
| .04 | % |
Volatility |
|
| 420 | % |
|
| 420 | % |
|
| 402 | % |
|
| 157 | % |
|
| 97 | % |
|
| 106 | % |
|
| 105 | % |
|
| 106 | % |
|
| 105 | % |
|
| 138 | % |
|
| 406 | % |
Initial derivative value |
| $ | 16,621 |
|
| $ | 12,122 |
|
| $ | 191,384 |
|
| $ | 54,688 |
|
| $ | 43,040 |
|
| $ | 27,907 |
|
| $ | 6,218 |
|
| $ | 17,571 |
|
| $ | 13,530 |
|
| $ | 62,323 |
|
| $ | 59,211 |
|
At December 31, 2015, the following notes remained convertible and not fully converted. All convertible notes beyond their maturity dates totaling $236,533 in principal payable are valued assuming a six month term for purposes of calculating the derivative liability.The fair value of the embedded derivative liabilities on the outstanding convertible notes was calculated at December 31, 20122015 utilizing the following assumptions:
Note date | June 15, 2012 | |||
Note amount | $ | 83,500 | ||
Stock price at convertible date | $ | 0.0022 | ||
Expected life (years) | .21 | |||
Risk free interest rate | .05 | % | ||
Volatility | 518.08 | % | ||
Initial derivative value | $ | 214,807 |
Note convertible date |
| 8/25/15 |
|
| 10/1/15 |
|
| 10/19/15 |
|
| 11/5/15 |
|
| Matured |
| |||||
Note amount |
| $ | 10,500 |
|
| $ | 50,000 |
|
| $ | 15,500 |
|
| $ | 16,500 |
|
| $ | 236,533 |
|
Stock price at convertible date |
| $ | .0001 |
|
| $ | .0001 |
|
| $ | 0.001 |
|
| $ | .0001 |
|
| $ | 0.0001 |
|
Expected life (years) |
|
| .16 |
|
|
| .25 |
|
|
| .30 |
|
|
| .10 |
|
|
| .50 |
|
Risk free interest rate |
|
| .01 | % |
|
| .26 | % |
|
| .26 | % |
|
| .17 | % |
|
| .55 | % |
Volatility |
|
| 267 | % |
|
| 247 | % |
|
| 388 | % |
|
| 31 | % |
|
| 285 | % |
12/31/15 derivative value |
| $ | 17,503 |
|
| $ | 86,736 |
|
| $ | 28,997 |
|
| $ | 20,169 |
|
| $ | 419,160 |
|
At December 31, 2014, the following notes remained convertible and not fully converted or in default. All convertible notes beyond their maturity dates totaling $128,332 in principal payable are valued assuming a six month term for purposes of calculating the derivative liability.The fair value of the embedded derivative liabilities on the outstanding convertible notes was calculated at December 31, 2014 utilizing the following assumptions:
Note convertible date |
| 3/3/14 |
|
| 10/7/14 |
|
| Matured |
| |||
Note amount |
| $ | 18,800 |
|
| $ | 24,996 |
|
| $ | 128,332 |
|
Stock price at convertible date |
| $ | .0001 |
|
| $ | .0001 |
|
| $ | .0001 |
|
Expected life (years) |
|
| .15 |
|
|
| .25 |
|
|
| .50 |
|
Risk free interest rate |
|
| .04 | % |
|
| .11 | % |
|
| .11 | % |
Volatility |
|
| 236 | % |
|
| 236 | % |
|
| 197 | % |
12/31/14 derivative value |
| $ | 21,832 |
|
| $ | 31,528 |
|
| $ | 212,802 |
|
F-16 |
NOTE 89 – CAPITAL STOCK
Common Stock
The Company has authorized capital of Company is 950,000,0003,950,000,000 common shares with a par value of $0.001 per share of whichshare.
Effective February 20, 2015, the Company haseffected a 1 for 300 reverse split of its common stock whereby the 1,478,720,693 pre-split shares of common stock outstanding became 4,929,120 shares post-split. There was no change in authorized shares of the Company. The share issuance information and per share information for all prior periods presented have been retroactively adjusted to reflect the new capital structure.
2015 Common Stock Issuances
During the year ended December 31, 2015, the Company issued 345,494,891 shares. 714,682,976 shares of common stock upon conversion of $89,686 in principal and interest on convertible notes representing a value of $0.0001 per share..
2014 Common Stock Issuances
During the year ended December 31, 2014, the Company issued 4,444,960 shares of common stock upon conversion of $276,850 in principal and interest payable on convertible notes representing a value of $0.06 per share. In addition, we incurred loss on conversion of certain of the shares totaling $590,279 for a total cost to the Company of $867,129.
Preferred Stock
The Company has also authorized 50,000,000 shares of preferred stock par value $0.001 and designated$0.001.
The Company authorized 100,000 of these shares as Series A Convertible Preferred Stock of whichpreferred shares and issued 96,623 are currently issued and outstanding. Each preferred Series A share is entitledshares. The Series A shares have immediate voting rights equivalent to vote the equivalent of 7,000 shares of common stock.
On July 15, 2013, the board of directors of the Company authorized the creation of the Series B Convertible Preferred Stock, which consists of up to 100,000 shares of preferred stock with par value of $0.001 per share and a stated value of $1.00 per share. A total of 44,000 shares of Series B Preferred Stock were issued 40,000on the conversion of debt payable by the Company, including $40,000 to the Company's then Chief Financial Officer, Henry Fong. The Series B Convertible Preferred is convertible to common stock at 100% of the stated value divided by 45% of the lowest trading price of the Company's common stock for the 90 trading days immediately preceding the Conversion Date. The Series B Preferred Stock has voting rights on an as if converted basis on the date of any vote to come before the Company's shareholders. As of December 31, 2015, all 44,000 shares remain outstanding.
F-17 |
Warrants
In connection with the acquisition in 2013 of the assets of Carmela's Pizzeria, COHP, LLC and converted those shares in 1,714 Series A preferred shares; Mr. Gregory Galanis (formerly CEOits assigns received warrants to purchase a total of Sweet Spot Games) has canceled 38,000,000179,886 shares of the Company's common stock and converted those shares into 5,430 Series A preferred shares; and Mr. Larry Moore (former President of the Company) has canceled 800,000,000 shares of common stock and converted those shares into 85,000 Series A preferred shares
A summary of the activity of the Company's outstanding warrants at December 31, 2013 and 2011.
|
| Warrants |
|
| Weighted-average exercise price |
|
| Weighted-average grant date fair value |
| |||
Outstanding and exercisable at December 31, 2013 |
|
| 179,886 |
|
| $ | 5.50 |
|
| $ | 2.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
| - |
|
|
| - |
|
|
| - |
|
Expired/Cancelled |
|
| - |
|
|
| - |
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding and exercisable at December 31, 2014 |
|
| 179,886 |
|
| $ | 5.50 |
|
| $ | 2.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
| - |
|
|
| - |
|
|
| - |
|
Expired/Cancelled |
|
| - |
|
|
| - |
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding and exercisable at December 31, 2015 |
|
| 179,886 |
|
| $ | 5.50 |
|
| $ | 2.82 |
|
The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives of the warrants by groups as of December 31, 2014:
Exercise price range |
|
| Number of warants outstanding |
|
| Weighted-average exercise price |
|
| Weighted-average remaining life | ||||
|
|
|
|
|
|
|
|
|
| ||||
$ | 3.00 |
|
|
| 59,962 |
|
| $ | 3.00 |
|
| 2.8 years | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
$ | 6.00 |
|
|
| 59,962 |
|
|
| 6.00 |
|
| 2.8 years | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
$ | 7.50 |
|
|
| 59,962 |
|
|
| 7.50 |
|
| 2.8 years | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| 179,886 |
|
| $ | 5.50 |
|
| 2.8 years |
F-18 |
NOTE 10 – COMMITMENTS
The Company leases its restaurant facilities under certain leases with varied expiration dates. Certain leases provide for the payment of taxes and operating costs, such as insurance and maintenance in addition to the base rental payments.
Aggregate minimum annual rental payments under the non-cancelable operating leases are as follows:
Year ended December 31, 2016 |
| $ | 57,600 |
|
2017 |
|
| 58,350 |
|
2018 |
|
| 51,450 |
|
2019 |
|
| 43,200 |
|
Total |
| $ | 210,600 |
|
Rent expense was $75,000 and $73,483 for the years ended December 31, 2015 and 2014.
NOTE 1011 – RELATED PARTY TRANSACTIONS
As more fully disclosed in the accompanying statement of operations for the year ended December 31, 2011.
NOTE 1112 – GOING CONCERN
F-19 |
NOTE 1213 – INCOME TAXES
As of December 31, 20122015 and 20112014 the Company had net operating loss carry-forwards of approximately $700,012$1,865,653 and $359,243$1,429,039, respectively, which will expire beginning in 2030.2032. This represents the historical net operating loss carry-forwards of the Company for the fiscal years ended December 31, 2015 and 2014. A valuation allowance has been provided for the deferred tax asset as it is uncertain whether the Company will have future taxable income. A reconciliation of the benefit for income taxes with amounts determined by applying the statutory federal income rate of (34%) to the loss before income taxes is as follows:
2012 | 2011 | |||||||
Net Operating Loss | $ | (535,290 | ) | $ | (358,844 | ) | ||
Benefit for income taxes computed using the statutory rate of 34% | 182,000 | 122,007 | ||||||
Permanent Differences | (66,139 | ) | - | |||||
Change in valuation allowance | (115,861 | ) | (122,007 | ) | ||||
Provision for income taxes | $ | - | $ | - |
|
| 2015 |
|
| 2014 |
| ||
Net Operating Loss |
| $ | (725,227 | ) |
| $ | (1,041,117 | ) |
Benefit for income taxes computed using the statutory rate of 34% |
|
| 245,073 |
|
|
| 353,979 |
|
Permanent Differences |
|
| (96,624 | ) |
|
| (218,481 | ) |
Change in valuation allowance |
|
| (148,449 | ) |
|
| (135,498 | ) |
Provision for income taxes |
| $ | - |
|
| $ | - |
|
Significant components of the Company's deferred tax liabilities and assets at December 31, 20122013 and 20112012 are as follows:
2012 | 2011 | |||||||
Total deferred tax assets | $ | 238,004 | $ | 122,143 | ||||
Valuation allowance | (238,004 | ) | (122,143 | ) | ||||
$ | - | $ | - |
|
| 2015 |
|
| 2014 |
| ||
Total deferred tax assets |
| $ | 634,322 |
|
| $ | 485,873 |
|
Valuation allowance |
|
| (634,322 | ) |
|
| (485,873 | ) |
|
| $ | - |
|
| $ | - |
|
NOTE 1314 – SUBSEQUENT EVENTS
During the period from January 1, 2016 to the filing of this report, a total of 213,722,083 shares of common stock were issued upon the conversion of $10,040 in principal and interest due on certain of the Company's convertible promissory notes representing an average conversion price of $.00005 per share. In addition, the Company announced that it had signedissued a definitive agreement to acquire 100%new convertible promissory note totaling $33,000 in face value. This note is convertible at 45% of the equity interest in Ohio-based Carmela's Pizzeria. Carmela's presently has three Dayton, Ohio area locations offering authentic New York style pizza. In addition, Carmela's offers a full service menu for Dine In, Carry out and Delivery as well as pizza buffets in select stores. Detailsmarket price of the transaction call for all of the equity interests in Carmela's to be acquired by a newly created wholly-owned operating subsidiary of Greenfield in exchange for shares of GreenfieldCompany's common stock, bears interest at 12% per annum, and warrants. Closing of this transaction is subject to, among other things, final due diligence by the parties, completion of audited financial statements, preparation of schedules to the definitive agreement, and any final board of director and/or stockholder approvals as necessary.
In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to December 31, 20122015 to the date these financial statements were issued, and has determined that there are no furtherit does not have any material subsequent events to disclose in these financial statements other than the events describedthose disclosed above.