UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q/A110-Q
[X]☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedSeptemberJune 30, 20182019
[ ]☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
to
Commission File No.000-54917
FUTURE HEALTHCARE OF AMERICA
(Exact
NATUR INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
WYOMING | 45-5547692 | |
|
| |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
5001 Baum Blvd, Suite 770Jachthavenweg 124
Pittsburgh, PA 152131081 KJ Amsterdam
The Netherlands
(Address of principal executive offices)
(Address
Registrant’s telephone number, including area code:011 31 20 578 7700
Securities registered pursuant to Section 12(b) of Principal Executive Offices)the Act:None
Registrant’s Telephone Number: (561) 693-1422
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. (1) Yes [X ]☒ No [ ]☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | Accelerated filer |
Non-accelerated filer | Smaller reporting company |
Emerging Growth company |
If an emerging growth company, indicate by check mark whether the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ]☐ No [X]☒
Securities registered pursuant to Section 12(b) of the Securities and Exchange Act of 1934:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
As of October 31, 2018,August 13, 2019, there were 11,265,631322,230,038 shares of common stock, par value $0.001, of the registrant issued and outstanding.
EXPLANATORY NOTE
This amended Quarterly Report on Form 10-Q/A1 is filed for the sole purpose of updating and correcting certain disclosures about the issuer’s Share Exchange Agreement and Securities Purchase Agreement that were executed on September 21, 2018, and related matters.
PART I - FINANCIAL INFORMATION
The Unaudited Consolidated Financial Statements of Future Healthcare of America,Natur International Corp., a Wyoming corporation (the “Company,” “FHA,“Natur,” “we,” “our,” “us” and words of similar import) were prepared by management and commence on the following page, together with related notes. In the opinion of management, the Unaudited Consolidated Financial Statements fairly present the financial condition of the Company.
Natur International Corp.
Future Healthcare of America
Index to Unaudited Financial Statements
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Unaudited |
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Unaudited | 5 |
Notes to Unaudited | 6 |
NATUR INTERNATIONAL CORP.
2
FUTURE HEALTHCARE OF AMERICA
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2018 (Unaudited) |
| December 31, 2017 |
|
CURRENT ASSETS: |
|
|
|
|
Cash | $ 60,202 |
| $ 144,462 |
|
Accounts receivable, net | 182,360 |
| 198,670 |
|
Prepaid expenses | 13,694 |
| 27,218 |
|
Current asset from discontinued operations | 176,601 |
| 219,696 |
|
Total current assets | 432,857 |
| 590,046 |
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|
|
|
|
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Deferred tax asset, net | - |
| - |
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Total assets | $ 432,857 |
| $ 590,046 |
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|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
Accounts payable | 139,030 |
| 38,559 |
|
Accrued expenses | 660,476 |
| 495,540 |
|
Derivative liability | - |
| 43,726 |
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Notes payable | 279,879 |
| - |
|
Convertible note payable | 1,010,000 |
| 1,010,000 |
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Current liabilities from discontinued operations | 289,983 |
| 130,572 |
|
Total current liabilities | 2,379,368 |
| 1,718,397 |
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Total liabilities | 2,379,368 |
| 1,718,397 |
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COMMITMENTS & CONTINGENCIES | - |
| - |
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STOCKHOLDERS’ DEFICIT |
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Common stock | 11,266 |
| 11,266 |
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Additional paid-in capital | 2,210,420 |
| 1,313,160 |
|
Subscription receivable | (270,005) |
| - |
|
Accumulated deficit | (3,898,192) |
| (2,452,777) |
|
Total stockholders’ deficit | (1,946,511) |
| (1,128,351) |
|
Total liabilities and stockholders’ deficit | $ 432,857 |
| $ 590,046 |
|
NOTES | (unaudited) June 30, | December 31, 2018 | ||||||||
ASSETS | ||||||||||
Current Assets | ||||||||||
Cash and cash equivalents | 1,028,877 | 128,364 | ||||||||
Accounts receivable | 2,628 | 42,744 | ||||||||
Related party receivable | - | 1,833 | ||||||||
Inventories | 24,483 | 179,072 | ||||||||
Other current assets | 5 | 60,274 | 99,535 | |||||||
Current assets held for disposal | 13 | 5,000 | 377,628 | |||||||
Total Current Assets | 1,121,262 | 829,176 | ||||||||
Non-Current Assets | ||||||||||
Intangible asset | 37,353 | 37,353 | ||||||||
Fixed asset | 4 | 58,685 | 523,510 | |||||||
Other asset | - | 201,160 | ||||||||
Non-current assets held for disposal | 13 | - | 51,165 | |||||||
Total Non-Current Assets | 96,038 | 813,188 | ||||||||
TOTAL ASSETS | 1,217,300 | 1,642,364 | ||||||||
LIABILITIES AND MEMBERS’ DEFICIT | ||||||||||
Current Liabilities | ||||||||||
Accounts Payable | 426,891 | 1,127,345 | ||||||||
Accrued expenses & other contingent liabilities | 6 | 106,387 | 583,161 | |||||||
Related party other liabilities | 7 | 2,809,939 | 2,032,705 | |||||||
Related party other notes | 8 | 2,984,017 | 1,072,849 | |||||||
Convertible note payable | 9 | 1,202,849 | 1,600,710 | |||||||
Related party convertible note payable | 10 | - | 11,671,743 | |||||||
Preferred Stock payable | 2,064,736 | - | ||||||||
Current liabilities held for disposal | 13 | 170,469 | 887,126 | |||||||
Total Current Liabilities | 9,765,288 | 18,975,639 | ||||||||
TOTAL LIABILITIES | 9,765,288 | 18,975,639 | ||||||||
Stockholders’ Equity | ||||||||||
Common stock, $0.001 par value, 750,000,000 and 200,000,000 shares authorized as of June 30, 2019 and December 31, 2018, respectively. 310,597,593 and 129,049,192 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. | 310,597 | 129,049 | ||||||||
Preferred stock A, $0.001 par value, 2,397.131 and 2,469.131 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. Convertible to common stock at a 1:33,000 ratio. | 2 | 2 | ||||||||
Preferred stock B, 100,000 shares authorized, Nil and 100,000 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. Convertible to common stock at a 1:1000 ratio. | - | 100 | ||||||||
Preferred stock C, $0.001 par value, Nil issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. Convertible to common stock at a 1:1000 ratio. | - | - | ||||||||
Additional Paid in Capital | 14,924,725 | 5,174,269 | ||||||||
Total Shareholders’ deficit | (23,850,777 | ) | (22,299,570 | ) | ||||||
Accumulated other comprehensive loss | 67,465 | (337,125 | ) | |||||||
TOTAL EQUITY/(DEFICIT) | (8,547,988 | ) | (17,333,274 | ) | ||||||
LIABILITIES AND MEMBERS’ DEFICIT | 1,217,300 | 1,642,364 |
Future Healthcare of America Balance Sheet (Parenthetical) |
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| ||
Statement of Financial Position |
| September 30, 2018 |
| December 31, 2017 |
Allowance for doubtful accounts included in current assets from discontinue operations |
| 45,200 |
| 20,200 |
Common stock authorized |
| 200,000,000 |
| 200,000,000 |
Common stock par value |
| 0.001 |
| 0.001 |
Common stock outstanding |
| 11,265,631 |
| 11,265,631 |
The accompanying notes are an integral part of these consolidated financial statements.
3
FUTURE HEALTHCARE OF AMERICAstatements
NATUR INTERNATIONAL CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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| For the Three Months Ended |
| For the Nine Months Ended |
| ||||
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| September 30, 2018 |
| September 30, 2017 |
| September 30, 2018 |
| September 30, 2017 |
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REVENUE |
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Total Revenue | $ | 363,607 | $ | 423,306 | $ | 1,138,825 | $ | 1,433,838 |
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COST OF SERVICES |
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Total Cost of Services |
| 261,734 |
| 330,294 |
| 853,702 |
| 1,110,667 |
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Gross Profit |
| 101,873 |
| 93,012 |
| 285,123 |
| 323,171 |
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OPERATING EXPENSES |
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Selling expenses |
| 4,168 |
| 4,756 |
| 17,982 |
| 22,999 |
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General and administrative |
| 35,617 |
| 44,259 |
| 122,529 |
| 142,241 |
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Salaries, wages and related expenses |
| 110,829 |
| 100,122 |
| 306,356 |
| 305,352 |
|
Professional and consulting fees |
| 62,324 |
| 7,947 |
| 118,240 |
| 57,775 |
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Total Operating Expenses |
| 212,938 |
| 157,084 |
| 565,107 |
| 528,367 |
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Loss from continuing operations |
| (111,065) |
| (64,072) |
| (279,984) |
| (205,196) |
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OTHER INCOME (EXPENSE): |
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Interest income |
| 85 |
| 161 |
| 162 |
| 232 |
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Gain/(loss) on derivative |
| - |
| (79,124) |
| - |
| (34,065) |
|
Interest expense |
| (25,583) |
| (25,492) |
| (77,065) |
| (76,411) |
|
Other income (expense) |
| - |
| - |
| - |
| - |
|
Total Other Expense |
| (25,498) |
| (104,455) |
| (76,903) |
| (110,244) |
|
Loss from continuing operations before income tax |
| (136,563) |
| (168,527) |
| (356,887) |
| (315,440) |
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Income tax provision |
| - |
| - |
| - |
| - |
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Net loss from continuing operations |
| (136,563) |
| (168,527) |
| (356,887) |
| (315,440) |
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Net income (loss) from discontinued operations, net of tax |
| (158,375) |
| 3,729 |
| (234,994) |
| 33,446 |
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NET LOSS | $ | (294,938) | $ | (164,798) | $ | (591,881) | $ | (281,994) |
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Basic and Diluted Loss Per Common Share from continuing operations | $ | (0.01) | $ | (0.02) | $ | (0.03) | $ | (0.03) |
|
Basic and Diluted Income (Loss) Per Common Share from discontinued operations | $ | (0.02) | $ | 0.000 | $ | (0.02) | $ | 0.00 |
|
Basic and Diluted Loss Per Common Share | $ | (0.03) | $ | (0.02) | $ | (0.05) | $ | (0.03) |
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Basic and Diluted Weighted Average Common Shares Outstanding |
| 11,265,631 |
| 11,265,631 |
| 11,265,631 |
| 11,265,631 |
|
For the Three Months | For the Six Months | |||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||
REVENUE | 8,134 | 414,716 | 72,553 | 942,433 | ||||||||||||
COST OF GOODS SOLD - RELATED PARTY | 2,679 | 224,682 | 33,560 | 425,036 | ||||||||||||
COST OF GOODS SOLD | 2,240 | 58,718 | 66,136 | 132,116 | ||||||||||||
4,919 | 283,400 | 99,696 | 557,152 | |||||||||||||
GROSS MARGIN | 3,215 | 131,316 | (27,143 | ) | 385,281 | |||||||||||
OPERATING EXPENSES | ||||||||||||||||
Wages & Salaries | 108,335 | 349,298 | 373,064 | 792,679 | ||||||||||||
Selling, General & Administrative | 1,243,061 | 904,599 | 2,645,471 | 2,019,466 | ||||||||||||
Amortization , depreciation and impairment | 3,609 | 30,268 | 275,798 | 83,584 | ||||||||||||
Total operating expenses | 1,355,005 | 1,284,165 | 3,294,333 | 2,895,729 | ||||||||||||
LOSS FROM OPERATIONS | (1,351,790 | ) | (1,152,849 | ) | (3,321,476 | ) | (2,510,448 | ) | ||||||||
Interest expense | 862 | 34,413 | 40,095 | 63,261 | ||||||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (1,352,652 | ) | (1,187,262 | ) | (3,361,571 | ) | (2,573,709 | ) | ||||||||
Income taxes | - | - | - | - | ||||||||||||
INCOME FROM CONTINUING OPERATIONS | (1,352,652 | ) | (1,187,262 | ) | (3,361,571 | ) | (2,573,709 | ) | ||||||||
Discontinued operations (NOTE 13) | ||||||||||||||||
Gain (loss) on disposal of subsidiary | 1,591,187 | - | 1,891,985 | - | ||||||||||||
Loss from operations of discontinued Component | (42,211 | ) | (302,964 | ) | (81,621 | ) | (1,095,701 | ) | ||||||||
NET PROFIT (LOSS) AVAILABLE/ATTRIBUTE TO MEMBERS | 196,324 | (1,490,226 | ) | (1,551,207 | ) | (3,669,410 | ) | |||||||||
Basic earnings/(loss) per share | 0.00 | (0.01 | ) | (0.00 | ) | (0.03 | ) | |||||||||
Diluted earnings/(loss) per share | 0.00 | (0.01 | ) | (0.00 | ) | (0.03 | ) | |||||||||
COMPREHENSIVE INCOME | ||||||||||||||||
Net Profit (Loss) | 196,324 | (1,490,226 | ) | (1,551,207 | ) | (3,669,410 | ) | |||||||||
Other comprehensive income | 50,677 | - | 404,590 | - | ||||||||||||
COMPREHENSIVE PROFIT (LOSS) | 247,001 | (1,490,226 | ) | (1,146,617 | ) | (3,669,410 | ) |
The accompanying notes are an integral part of these consolidated financial statements.statements
NATUR INTERNATIONAL CORP.
4
FUTURE HEALTHCARE OF AMERICA
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| Nine Months Ended | ||
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| September 30, | ||
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| 2018 |
| 2017 |
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Cash Flows from Operating Activities |
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Net loss from continuing operations | $ | (356,887) | $ | (315,440) |
Adjustments to reconcile net loss from continuing operations to net cash used by operating activities: |
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Loss on derivative instruments |
| - |
| 34,065 |
Change in assets and liabilities: |
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Accounts receivable |
| 16,310 |
| 69,514 |
Prepaid expenses |
| 62,675 |
| 46,125 |
Accounts payable |
| 100,470 |
| 7,806 |
Accrued expense |
| 164,936 |
| 100,130 |
Net Cash Used in continuing operations |
| (12,496) |
| (57,800) |
Net Cash Used in discontinued operations |
| (32,487) |
| (19,546) |
Net Cash Used in Operating Activities |
| (44,983) |
| (77,346) |
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Cash Flows from Investing Activities: |
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Net Cash Used in Investing Activities |
| - |
| - |
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Cash Flows from Financing Activities: |
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Payments on subscription receivable |
| (270,005) |
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Proceed from note payable |
| 270,005 |
| - |
Proceed from related party advance |
| 23,000 |
| - |
Re-payment of related party advance |
| (23,000) |
| - |
Re-payment of insurance financing |
| (39,277) |
| (15,420) |
Net Cash Used in Financing Activities |
| (39,277) |
| (15,420) |
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Net Decrease in Cash |
| (84,260) |
| (92,766) |
Cash at Beginning of Period |
| 144,462 |
| 206,352 |
Cash at End of Period | $ | 60,202 | $ | 113,586 |
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Supplemental Disclosures of Cash Flow Information |
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Cash paid during the periods for: |
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Interest |
| 1,315 |
| 735 |
Income taxes |
| - |
| - |
SHAREHOLDERS’ DEFICIT
Supplemental Disclosures of Non-Cash Investing and Financing
Common Stock | Preferred stock A | Preferred stock B | Preferred stock C | |||||||||||||||||||||||||||||||||||||||||||||
Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Other Paid in Capital | Retained deficit | Accumulated OCI | Total | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 129,049 | 129,049,192 | 2 | 2,469.131 | 100 | 100,000 | - | - | 5,174,269 | (22,299,570 | ) | (337,125 | ) | (17,333,275 | ) | |||||||||||||||||||||||||||||||||
Net Loss | (1,747,531 | ) | (1,747,531 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 403,162 | 403,162 | ||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Preferred A to Common Stock | 2,376 | 2,376,002 | (-) | (72 | ) | (2,376 | ) | (-) | ||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive gain/(loss) | 353,913 | 353,913 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | 131,425 | 131,425,194 | 2 | 2,397.131 | 100 | 100,000 | - | - | 5,575,055 | (24,047,101 | ) | 16,788 | (18,323,731 | ) | ||||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Profit | 196,324 | 196,324 | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | 685,044 | 685,044 | ||||||||||||||||||||||||||||||||||||||||||||||
Debt Converted to Common Stock | 340 | 340,000 | 13,218 | 13,558 | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of Preferred B to Common Stock | 100,000 | 100,000,000 | (100 | ) | (100,000 | ) | (99,900 | ) | - | |||||||||||||||||||||||||||||||||||||||
Issuance of Preferred C Stock | 79 | 78,832 | 8,830,061 | 8,830,140 | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of Preferred C to Common Stock | 78,832 | 78,832,399 | (79 | ) | (78,832 | ) | (78,753 | ) | - | |||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive gain/(loss) | 50,677 | 50,677 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 310,597 | 310,597,593 | 2 | 2,397 | - | - | - | - | 14,924,725 | (23,850,777 | ) | 67,465 | (8,547,988 | ) |
Activities:
|
| For the Nine Months Ended | ||
|
| September 30, | ||
NON-CASH EXPENDITURES |
| 2018 |
| 2017 |
Prepaid insurance premiums financed |
| 49,151 |
| 22,216 |
Common Stock | Preferred stock A | Preferred stock B | Preferred stock C | |||||||||||||||||||||||||||||||||||||||||||||
Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Amount ($.001 par) | Number of Shares | Other Paid in Capital | Retained deficit | Accumulated OCI | Total | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 115,760 | 115,759,999 | - | - | - | - | - | - | 3,316,560 | (15,250,748 | ) | (1,114,812 | ) | (12,933.240 | ) | |||||||||||||||||||||||||||||||||
Net Loss | (2,179,184 | ) | (2,179,184 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive gain/(loss) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2018 | 115,760 | 115,759,999 | - | - | - | - | - | - | 3,316,560 | (17,429,932 | ) | (1,114,812 | ) | (15,112,424 | ) | |||||||||||||||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Profit | (1,490,226 | ) | (1,490,226 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive gain/(loss) | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | 115,760 | 115,759,999 | - | - | - | - | - | - | 3,316,560 | (18,920,158 | ) | (1,114,812 | ) | (16,602,650 | ||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.statements
NATUR INTERNATIONAL CORP.
5UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months | ||||||||
June 30, 2019 | June 30, 2018 | |||||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||||||
Net Loss | (1,551,207 | ) | (3,669,410 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Amortization, depreciation and impairment | 275,798 | 32,015 | ||||||
Share Based Compensation | 1,088,206 | - | ||||||
Gain on Disposal of Subsidiaries | (1,891,985 | ) | ||||||
Changes in: | ||||||||
- Accounts receivable | 37,592 | (252,278 | ) | |||||
- Related party receivable | 24 | (20,802 | ) | |||||
- Inventories | 44,516 | (436,965 | ) | |||||
- Other current assets | (1,124 | ) | 33,911 | |||||
- Accounts payable | (23,411 | ) | 1,951,766 | |||||
- Accrued expenses | (178,008 | ) | (416,304 | ) | ||||
- Accrued expenses - related parties | 110,391 | (124,643 | ) | |||||
Net cash used in operating activities | (2,089,208 | ) | (2,902,710 | ) | ||||
Net cash (used in) from operating activities - Discontinued operations | - | 210,652 | ||||||
CASH FLOW FROM INVESTING ACTIVITIES | ||||||||
Cash paid for purchase of fixed assets | - | - | ||||||
Cash received for sale of property and equipment | - | - | ||||||
Net cash used in investing activities | - | - | ||||||
Net cash used in investing activities – Discontinued operations | 51,165 | - | ||||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||
Related party loan additions | - | 1,799,213 | ||||||
Related party loan repayments | - | (240,503 | ) | |||||
Cash received from subscription of Preferred Stock | 2,064,736 | |||||||
Third party convertible note additions | 560,915 | 52,266 | ||||||
Related party convertible loan additions | - | - | ||||||
Net cash provided from financing activities | 2,625,651 | 1,610,976 | ||||||
Net cash from financing activities - Discontinued Operations | - | - | ||||||
Effect of foreign exchange rate changes on cash and cash equivalents | 312,905 | - | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 900,513 | (1,081,082 | ) | |||||
CASH AND CASH EQUIVALENTS beginning of period | 128,364 | 1,082,734 | ||||||
CASH AND CASH EQUIVALENTS end of period | 1,028,877 | 1,652 | ||||||
NON-CASH TRANSACTIONS | ||||||||
Preferred stock C issued for debt conversion | 79 | |||||||
Common stock issued for debt conversion | 340 | |||||||
Preferred stock A conversion | 2,376 | |||||||
Preferred stock C conversion | 78,832 | |||||||
Preferred stock B conversion | 100,000 | |||||||
Debt transferred from RP other liabilities to RP other notes payable | 672,370 |
FUTURE HEALTHCARE OF AMERICA
The accompanying notes are an integral part of these consolidated financial statements
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
Natur International Corp. was formerly named Future Healthcare of America. In November 2018, Natur Holding B.V. was acquired to continue the company as a provider of cold pressed juice beverages and healthy snacks. The original business of Future Healthcare of America, founded in 2012, was as a provider of home healthcare services, which had declined and is expected to be fully closed and liquidated in the third quarter of 2019.
The current name of the company is Natur International Corp., which was effected on January 7, 2019. The trading symbol for our common stock became NTRU as of that date and trades on The OTC Market.
Natur International Corp., is a Wyoming corporation, and operates its beverage business through a number of direct and indirect subsidiaries, of which the current principal one is Natur BPS B.V. (known by the trade name Natur Functionals), and is the successor to the business of Natur Holding B.V. (“we”, “our”, “the Company” or “Natur”). Our beverage business commenced in late 2015, with product distribution in Northern Europe. Currently, our operational headquarters is in Amsterdam, the Netherlands.
At the onset of 2019, our product line up centered on a range of cold pressed juices and healthy snacks. These products were sold either directly or through distribution partners in the Netherlands and the United Kingdom. Beginning in the fourth quarter of 2018, and throughout the first half of 2019, the Company focus shifted from dependence on the legacy fruit and vegetable juices and snacks toward innovating a new line of hemp-derived natural food and beverage products. The Company product value proposition is to provide affordable, culturally relevant, authentic, fresh fruit, vegetable and hemp-derived supplemented consumer products to democratize clean, healthy, eating and drinking, with plans to address the growing needs for products that address other personal needs in health, wellness and beauty care.
Through third party contract manufacturers, we apply patented technology to proprietary nutrient dense blends of fruit and vegetables, adding hemp-derived supplements. These are bottled or packed with technically advanced food and product safety measures and in some cases cold high-pressure processing to bring fresh tasting fruit, vegetable and hemp-derived supplemented blends to market through more than fifteen product types. These newly innovated products are brought to market, in Europe, through Natur’s distribution channels of direct-to-business, direct-to-consumer and through select distributors.
Natur operated as a private enterprise in the Netherlands from its founding in 2015 through November 13, 2018, when it was acquired as a wholly owned subsidiary in a share exchange transaction by Future Healthcare of America, pursuant to that certain Share Exchange Agreement, among the Company and the former shareholders of Natur Holding, B.V. (the “Share Exchange Transaction”). In connection with the Share Exchange Transaction, the former shareholders of Natur received the equivalent of 215,759,999 shares of the Common Stock (the “Common Stock”), which was issued in part as 115,760,000 shares of Common Stock and in part as 100,000 shares of voting, convertible Series B Preferred Stock (the “Series B Preferred Stock”) representing 100,000,000 shares of Common Stock upon conversion. The Share Exchange Transaction was accounted for as a reverse capitalization with Natur Holding B.V. being treated as the accounting acquirer. As such, the historical information for all periods presented prior to the merger date relate to Natur Holding B.V. Subsequent to the Share Exchange Transaction consummation date, the information in this report relates to the consolidated entities of Natur, including Natur Holding B.V. and successor subsidiary and the former subsidiaries of Future Healthcare of America, the latter of which are currently in the process of being wound down and presented as discontinued operations.
In connection with the Share Exchange Transaction, net cash received was $2,000,000 and costs incurred were $399,381 including professional fees for legal, accounting services and finance commission. Immediately after the Share Exchange Transaction, the former Natur shareholders collectively owned the controlling position among the shareholders of the Company.
On May 1, 2019, Natur Holding B.V. filed a Petition in the Netherlands Court for the District of Amsterdam (“Petition”) for the liquidation of the company and the transfer of certain assets and retained liabilities to Natur BPS B.V., a wholly owned subsidiary of Natur International Corp., which operates under the trade name Natur Functionals. This court process allowed the historical business of the Company’s beverage business to be continued and eliminates a substantial amount of the liabilities of the Company. The Petition permits the Company to focus on activities that will drive growth and future profits. As a result of the Petition the control of Natur International Corp. over Natur Holding B.V. is compromised for financial reporting purposes, and its investment in it will be deconsolidated as of May 1, 2019.
The Series B Preferred Stock was automatically converted upon the Company increasing the number of shares of Common Stock of its authorized capital, which happened on June 26, 2019. At the same time the Series C Preferred Stock was automatically converted to 78,832,399 shares of Common Stock. As of June 30, 2019, the total number of outstanding shares amounted to 310,597,593 shares of Common Stock with an authorized share capital of 750,000,000 shares of common Stock.
During the first half of the 2019 fiscal year, in addition to pursuing the Petition to reorganize certain of its liabilities, the Company successfully has negotiated to convert a further $6,114,790 of debt into 149,516,865 shares of common stock to be issued in due course. More importantly, it has been conducting substantial fund-raising activities. It has obtained new funding through a series of securities purchase agreements that have been funded in the amount of $2,064,736 or are subject to signed commitments for funding in the amount of $3,283,904 that is expected to be completed during the third fiscal quarter of 2019. The securities to be sold will be a mix of several new series of preferred stock convertible into up to 96,289,473 shares of Common Stock and warrants exercisable for up to 177,404,377 shares of Common Stock.
6
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS - continued
On June 30, 2019, the Company expressed its interest in pursuing a transaction with Share International Holding B.V. on a binding basis. The contemplated transaction would be an acquisition of Share International Holding B.V. (“SIH”) and related assets for the operation of its business by the issuance of shares of Natur. The terms of this potential acquisition have yet to be negotiated and finalized, and the overall transaction is subject to conditions precedent at this time. At the same time as the Company entered into the letter of intent, it lent to SIH the sum $250,000 under a promissory note, due January 4, 2020. The note bears interest at the rate of 10%. The repayment obligation under the Note will be cancelled if no business arrangement is concluded due to a breach by the Company of any agreement for the business arrangement that is concluded in the future, either party to the note experiences a material adverse change, or the business arrangement is not approved by the shareholders or owners of the respective parties to the extent that approval is required. The note also has other standard default provisions under which the Company may declare a default. Also, at the same time as the foregoing letter of intent and loan were concluded, the board of directors of the Company appointed Mr. Paul Bartley as the Chief Executive Officer of the Company; Mr. Bartley is a principal of SIH.
NOTE 1 -2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization – On June 22, 2012, FAB Universal (FAB) formed Future HealthcareBasis of Americapresentation.The Company prepares its financial statements using the accrual basis of accounting in accordance with United States generally accepted accounting principles (“FHA”US GAAP”), a wholly owned subsidiary. On October 1, 2012, FHA operations were spun-off in a 1 for 1 dividend to the shareholders of record of FAB on September 5, 2012, the record date. On November 14, 2014, FHA organized Future Healthcare Services Corp. (“FHS”), and transferred all the shares of Interim to FHS. Interim Healthcare of Wyoming, Inc. (“Interim”), a Wyoming corporation, a wholly owned subsidiary of FHS, was organized on September 30, 1991. Interim operates primarily in the home healthcare and healthcare staffing services in Wyoming and Montana. On April 3, 2007, Interim purchased the operations of Professional Personnel, Inc., d.b.a., Professional Nursing Personnel Pool. .
Consolidation- The financial statements presented reflect the accounts of FHA, FHSNatur International Corp and Interim.its direct and indirect subsidiaries. All inter-company transactions have been eliminated in consolidation.
AccountingUse of Estimates in Financial Statement Preparation. - The preparation of financial statements in conformity with generally accepted accounting principlesUS GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosuresdisclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management made assumptions and estimates for determining reserve for accounts receivable, obsolete inventory and in determining the impairment of definite life intangible assets and goodwill. Actual results could differ from those estimated by management.estimates.
Cash and Cash EquivalentsEquivalents. – The Company considersCash equivalents include all highly liquid investments with an original maturity datematurities of three months or less when purchased to be cash equivalents. At September 30, 2018, the Company had no cash balances in excess of federally insured limits.less.
Accounts ReceivableReceivable. - Accounts receivable consistare comprised of trade receivables arising in the normal course of business. At September 30, 2018, theunsecured amounts due from customers. The Company hascarries its accounts receivable at their face amounts less an allowance for doubtful accounts of $45,200 in discontinued operations, which reflects the Company’s bestbad debts. The allowance for bad debts is recognized based on management’s estimate of probablelikely losses inherent in the accounts receivable balance. The Company determines the allowanceper year, based on known troubled accounts, historicalpast experience and other currently available evidence. Duringreview of customer profiles and the nine months ended September 30, 2018 and 2017, the Company recorded bad debt expenseaging of $25,000 and $0, respectively.receivable balances.
NATUR INTERNATIONAL CORP.
Depreciation - Depreciation of property and equipment is provided on the straight-line method over the estimated useful lives.
Income /(Loss) Per Share - The Company computes income (loss) per share in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share, which requires the Company to present basic earnings per share and diluted earnings per share when the effect is dilutive (see Note 9).
Leases - The Company accounts for leases in accordance with Financial FASB ASC Topic 840, (formerly Statement of Financial Accounting Standards SFAS No. 13 “Accounting for Leases”). Leases that meet one or more of the capital lease criteria of standard are recorded as a capital lease, all other leases are operating leases.
Income Taxes - The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes. This topic requires an asset and liability approach for accounting for income taxes (see Note 7).
Advertising Costs - Advertising costs are expensed as incurred and amounted to $19,391 and $27,653 for the periods ending September 30, 2018 and 2017, respectively.
6
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Inventory.Inventory, consisting of raw materials, work in progress and finished goods, is valued at the lower of the inventory’s costs or net realizable value, using the first in, first out method to determine the cost. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.
Property and Equipment. Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows:
Category | Estimated Useful lives | |
Building and improvements | 5 years | |
Machines and installations | 5 years | |
Furniture and fixtures | 7 years | |
Hardware and software | 3 years |
Intangible Assets and Long-Lived Assets.The Company recognizes an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or when it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their useful lives. Impairment losses are recognized if the carrying amount of an intangible asset subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds its fair value.
The Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Long lived assets are evaluated on a yearly basis and no impairment losses were incurred during the six months ended June 30, 2019.
Related Party Transactions.The Board of Directors has adopted a Related Party Transaction Policy for the review of related person transactions. Under these policies and procedures, the management reviews related person transactions in which we are or will be a participant to determine if they are fair and beneficial to the Company. Financial transactions, arrangements, relationships or any series of similar transactions, arrangements or relationships in which a related person has or will have a material interest and that exceeds the lesser of: (i) $10,000, and (ii) one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, in the aggregate per year are subject to the boards review. Any member of the board who is a related person with respect to a transaction under review may not participate in the deliberation or vote requesting approval or ratification of the transaction. Transactions that are subject to the policy include any transaction, arrangement or relationship (including indebtedness or guarantees of indebtedness) in which the Company is a participant with a related person. The related person may have a direct or indirect material interest in the transaction. It is Company policy that the board shall approve any related party transaction before the commencement of the transaction. However, if the transaction is not identified before commencement, it must still be presented to the board for their review and ratification.
8
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenue Recognition. Beginning on January 1, 2018, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product.
The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time.
Share-Based Payment Arrangements. The Company measures the cost of employee services received in exchange for an award of equity instruments (share-based payments, or SBP) based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the SBP award—the requisite service period (vesting period). For SBP awards subject to conditions, compensation is not recognized until the performance condition is probable of occurrence. The grant-date fair value of share options is estimated using the Black-Scholes-Merton option-pricing model. The Company adopted ASU 2018-07 in the first quarter of 2019 which aligns the accounting for share-based payment awards issued to employees and non-employees.
The fair value of each option granted during the period ended June 30, 2019 was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the weighted average assumptions in the following table:
2019 | 2018 | |||||||
Expected dividend yield | 0 | % | - | |||||
Expected option term (years) | 6 | - | ||||||
Expected volatility | 382 | % | - | |||||
Risk-free interest rate | 3 | % | - |
The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected volatility was based on the volatility in the trading of the Company’s common stock. The assumed discount rate was the default risk-free six-year interest rate in the Netherlands.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Revenues do not include sales or other taxes collected from customers.
The Company’s products are sold and distributed through various channels, which include selling directly to retail stores and other outlets such as food markets, institutional accounts and independent outlets. The Company typically collects payment from customers within 30 days from the date of sale. The following table presents our continued revenues disaggregated by geographical region for the six-month period ended June 30, 2019:
June 30, 2019 | June 30, 2018 | |||||||
Netherlands | 72,553 | 942,433 | ||||||
France | - | - | ||||||
Iceland | - | - | ||||||
Total | 72,553 | 942,433 |
The Company sells its products and extends credit, generally without requiring collateral, based on an ongoing evaluation of the customer’s business prospects and financial condition. The Company evaluates the collectability of its trade accounts receivable based on a number of factors, including the Company’s historic collections pattern and changes to a specific customer’s ability to meet its financial obligations. The Company has established an allowance for doubtful accounts to adjust the recorded receivable to the estimated amount the Company believes will ultimately be collected.
The nature of the Company’s contracts does not give rise to variable consideration, such as prospective and retrospective rebates.
The Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates less than 1% of sales could be at risk for return by customers. As the company do not deem this amount to be material no provision was recorded for the period ended 30 June, 2019. Returned product is recognized as a reduction of net sales.
Recent Accounting Pronouncements
Compensation—Stock Compensation:On June 20, 2018, the FASB issued ASU No. 2018-07,Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting,which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The adoption had no impact on the Company’s historic financial statements.
Leases:In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This update requires the recognition of lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous guidance. The accounting for finance leases (capital leases) was substantially unchanged. The original guidance required application on a modified retrospective basis with adjustments to the earliest comparative period presented. In August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842,” which included an option to not restate comparative periods in transition and elect to use the effective date of ASU No. 2016-02 as the date of initial application, which the Company elected. As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, and continues to be reported under previous guidance that did not require the recognition of operating lease liabilities and corresponding lease assets on the consolidated balance sheet. As a result of the adoption of ASU No. 2016-02 on January 1, 2019, the Company recorded operating lease right-of-use assets of $580,310 and operating lease liabilities of $578,007.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Foreign Currency Translation.The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.
The financial records of the Company are maintained in its local currency, the euro (“EUR”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Translation of amounts from EUR into U.S. dollars has been made at the following exchange rates for the respective periods:
June 30, 2019 | December 31, 2018 | |||||||
Balance Sheets | 0.8849 | 0.8734 | ||||||
Statements of operations and comprehensive income (loss) | 0.8895 | 0.8464 | ||||||
Equity | 0.9037 | 0.9037 |
Cost of Revenues. Cost of revenue includes all direct expenses incurred to produce the revenue for the period. This includes, but is not limited to, costs for finished products, pick packing costs, storage costs and transportation costs. Cost of revenues are recorded in the same period as the resulting revenue.
Employee Benefits. Wages, salaries, bonuses and social security contributions are recognized as an expense in the year in which the associated services are rendered by employees. For any unused portion of vacation leave, an accrual is recorded for carry over to the following year.
Income Taxes. The Company is subject to US corporation tax. The US combined federal and state corporate tax rate is 23%. The company’s United States net operating losses totaled $3,483,928 as of December 31, 2017 and begin to expire in tax years 2032 and following. Net losses from US operating totaled $157,386 for 2018 and may be carried forward indefinitely. The company is subject to US Internal Revenue Code rules limiting the use of US net operating losses after the merger with Future Health Care of America during 2018 (described in Note 17). This limitation has no effect on the Company’s financial statements because the Company has recognized no deferred tax asset with respect to its net operating loss carryforwards. The NOLs are the cumulative NOL’s per the Company’s 2017 federal income tax return. The 382 limit will not be factored in until the company has income and the limit is therefore applicable.
Natur BPS B.V., the Dutch subsidiary of Natur International Corp is structured as a Dutch limited liability company. Tax on the result is calculated based on the result before tax in the profit and loss account, considering losses available for set-off from previous years (to the extent that they have not already been included in the deferred tax assets) and exempt profit components and after the addition of non-deductible costs. Due account is also taken of changes which occur in the deferred tax assets and deferred tax liabilities in respect of changes in the applicable tax rate.
The corporate tax rate for profits above $238,812 (or €200,000) amounts to 25%. Below that amount the rate is 20%. Future profits can be carried back to prior year losses for a maximum of 9 years for the full amount of losses incurred.
In the financial statements of group companies, a tax charge is calculated on the basis of the accounting result. The corporate income tax that is due by these group companies is charged into the current accounts of the company.
Because of the compensable losses no deferred taxes are included in the financial statements. From incorporation of the company only the Corporation Tax return of 2015/2016 has been filed. All years are still subject to examination.
Fair Value of Financial InstrumentsInstruments. – The Companycarrying value of short-term instruments, including cash, accounts forpayable and accrued expenses, and short-term notes approximate fair value measurementsdue to the relatively short period to maturity for financial assets and financial liabilities in accordance with FASB ASC Topic 820.these instruments. The authoritative guidance, which, among other things, defineslong-term debt approximate fair value establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. since the related rates of interest approximate current market rates.
Fair value is defined as the exitexchange price representing the amount that would either be received to sellfor an asset or be paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As such,participants on the measurement date. Valuation techniques used to measure fair value is a market-based measurement that should be determined based on assumptions that market participants wouldmaximize the use in pricing an asset or liability. As a basis for considering such assumptions,of observable inputs and minimize the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:use of unobservable inputs.
•
Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;
•
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
•
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable and accrued expenses approximates their recorded values due to their short-term maturities.
Revenue Recognition - On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers,” which includes clarifying ASUs issued in 2015, 2016 and 2017 (“new revenue standard”). The new revenue standard did not have a material impact on revenue recognition. The Company does not expect the impact of the adoption of the new standardhave any assets or liabilities that are required to be materialmeasured and recorded at fair value on a recurring basis.
Income /(Loss) Per Share- The Company computes income (loss) per share in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share, which requires the Company to net income on an ongoing basis.
Revenue is recognized when performance obligations with the customer are satisfied which occurs when services are provided to the customer. Revenue is measured as the amount of consideration expected to be received in exchange for providing services. The Company’s sales contain performance obligations satisfied at a point in timepresent basic earnings per share and diluted earnings per share when the services are provided.effect is dilutive (see Note 12).
NATUR INTERNATIONAL CORP.
Generally, the time between when revenue is recognized and when payment is due is not significant. Pre-payments received prior to satisfaction of performance obligations through the Recovery Audit Program or RAP payments from Medicare are recorded as a deferred revenue liability. Given the insignificant days between revenue recognition and receipt of payment, financing components do not exist between the Company and its customers.
The following table disaggregates revenue by category:
|
| For the nine months ended September 30, 2018 | |||||||||
| Medicare | Private Pay | Medicaid | Staffing | Ins. | Total | |||||
Montana | - |
| 215,015 |
| 138,629 |
| 704,591 |
| 80,590 |
| 1,138,825 |
7
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued3 – GOING CONCERN
|
| For the three months ended September 30, 2018 |
| |||||||||
| Medicare | Private Pay | Medicaid | Staffing | Ins. | Total | ||||||
Montana | - |
| 70,194 |
| 46,975 |
| 219,286 |
| 27,152 |
| 363,607 |
|
Derivative Financial Instruments – In July 2017, the FASB issued ASU No. 2017-11, (Part I) Accounting for Certain Financial Instruments
The Company considered its going concern disclosure requirements in accordance with Down Round Features, (Part II) ReplacementASC 240-40-50. We have had material operating losses, working capital deficit and have not yet created positive cash flows. These factors raise substantial doubt as to our ability to continue as a going concern. The Company concluded, in spite of the Indefinite Deferraldecreased cash flow from operations, both the elimination of certain debt and the successful raising of new capital and obtaining new capital commitments during the second quarter of 2019, that it has materially improved its capital so as to continue as going concern. The Company implemented a plan in the second quarter of 2019 to further structurally improve the conditions for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests withits continuing as a Scope Exception. The new standard applies to issuers of financial instruments with down-round features. A down-round provision is a term in an equity-linked financial instrument (i.e. a freestanding warrant contract or an equity conversion feature embedded within a host debt or equity contract) that triggers a downward adjustment to the instrument’s strike price (or conversion price) if equity shares are issued at a lower price (or equity-linked financial instruments are issued at a lower strike price) than the instrument’s then-current strike price. The purpose of the feature is typically to protect the instrument’s counterparty from future issuances of equity shares at a more favorable price. The ASU amends (1) the classification of such instruments as liabilities or equity by revising the certain guidance relative to evaluating if they must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of freestanding equity-classified instruments. Forgoing concern; (i) the Company this ASU is effective January 1, 2019, with early adoption permitted.
Duringimplemented certain cost savings, primarily to its overhead requirements, (ii) the period ending September 30, 2018, we adopted the requirements of the new guidance as of January 1, 2018, utilizing the modified retrospective method of transition. As a result, we recorded a cumulative adjustmentCompany will continue to retained earnings as of January 1, 2018, to reflect the effect of the new guidance.
The impact of adopting the new guidance resulted in a decrease in the previously recorded derivative liability, an increase ingenerate additional paid-in capital and a reduction of retained earningsrevenue (and positive cash flows from operations) partly related to the down-round provisions in the Convertible Note PayableCompany’s expansion into new product lines during 2019 and warrants (see Note 4).
The modified retrospective method of transition requires us to disclose the effect of applying the new guidance on each item included in our 2018 financial statements.
Following are the line items from our balance sheet as of September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the balances reported under the new guidance:
| Amounts that | Effects of | Balance |
| would have | applying | As |
| been reported | new guidance | reported |
Assets: | - | - | - |
Liabilities |
|
|
|
Derivative liability | (21,632) | 21,632 | - |
Stockholders’ Deficit |
|
|
|
Accumulated Deficit | 3,022,564 | 875,628 | 3,898,192 |
Additional Paid-In Capital | (1,313,160) | (897,260) | (2,210,420) |
8
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
The following are the line items from the statement of operations for the nine-month period ending September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the amounts reported under the new guidance:
Statement of operations | Amounts that would have been reported | Effects of applying new guidance | Balance As Reported |
Interest expense | 54,971 | 22,094 | 77,065 |
Net income | (569,787) | (22,094) | (591,881) |
The following are the line items from the statement of operations for the three-month period ending September 30, 2018, that were affected, the amounts that would have been reported under the former guidance, the effects of applying the new guidance, and the amounts reported under the new guidance:
Statement of operations | Amounts that would have been reported | Effects of applying new guidance | Balance As Reported |
Interest expense | 9,647 | 15,936 | 25,583 |
Net income | (279,002) | (15,936) | (294,938) |
Recently Enacted Accounting Standards - In February 2016, the FASB issued changespartly related to the accounting for leasesCompany sales initiatives already implemented; and (iii) undertook a reorganization and restructuring program to reduce its debt that primarily affect presentation and disclosure requirements.has now been completed. The new standard will requirecorporate restructuring through the recognition of a rightPetition in May 2019 is further disclosed in Note 13 to use asset and underlying lease liability for operating leases withthese financial statements. These actions have had an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated financial statements.
Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a materialoverall positive impact on the Company’s present or future financial statements.
NOTE 2 - GOING CONCERN
cost-basis of the organization. Notwithstanding the foregoing, the Company will continue to need additional capital from investors to fund its larger business plan and maintain the continuity and growth of its current operations. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principlesassuming that the Company will continue as a going concern.
NOTE 4 – FIXED ASSETS
Property, equipment and intangible assets at June 30, 2019, and December 31, 2018, consisted of the United Statesfollowing:
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Building and improvements | - | 491,847 | ||||||
Machines and installations | - | 65,886 | ||||||
Furniture and fixtures | 60,117 | 200,508 | ||||||
Hardware and software | - | 80,163 | ||||||
60,117 | 838,404 | |||||||
Less: Accumulated Depreciation & Amortization | (1,432 | ) | (314,894 | ) | ||||
58,685 | 523,510 |
NOTE 5 – OTHER CURRENT ASSETS
Other current assets at June 30, 2019 and December 31, 2018 consisted of America,the following:
June 30, 2019 | December 31, 2018 | |||||||
Value Added Tax receivable | 34,878 | 67,388 | ||||||
Prepaid expenses | 25,396 | 32,054 | ||||||
Other Receivables | - | 93 | ||||||
60,274 | 99,535 |
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – ACCRUED EXPENSES & OTHER CONTINGENT LIABILITIES
Accrued expenses & other contingent liabilities at June 30, 2019 and December 31, 2018 consisted of the following:
June 30, 2019 | December 31, 2018 | |||||||
Taxes payable | 21,628 | 352,423 | ||||||
Invoices to be received | 26,018 | 3,972 | ||||||
Holiday Allowance Payable | 2,558 | 24,642 | ||||||
Other accrued expenses & other contingent liabilities | 56,183 | 202,124 | ||||||
106,387 | 583,161 |
NOTE 7 – RELATED PARTY OTHER LIABILITIES
Related party other liabilities at June 30, 2019 and December 31, 2018 consisted of the following:
June 30, 2019 | December 31, 2018 | |||||||
NL Life Sciences B.V. | 2,088,917 | 563,118 | ||||||
STB Family Offices SARL | 227,323 | 200,234 | ||||||
STB Family Offices B.V. | - | 661,432 | ||||||
Stichting Thank You Nature | - | 16,913 | ||||||
Flare Media B.V. | - | 25,458 | ||||||
AMC | 193,632 | 325,382 | ||||||
Management & Board Fees | 278,092 | 142,154 | ||||||
Yoomoo Limited | - | 98,014 | ||||||
TriDutch Holding B.V. | 21,975 | - | ||||||
2,809,939 | 2,032,705 |
For the outstanding amount relating to AMC this transaction relates to the purchase of bottled juices for resale. Total purchases relating to goods sold for the six-month period ended June 30, 2019 and the six-month period ended June 30, 2018 was $41,130, and $797,770, respectively.
For the related party balance liability held from NL Life Sciences, STB Family Offices SARL and TriDutch Holding B.V there is no repayment schedule in place. No interest is being charged. For the related party liability held with Flare Media B.V., STB Family Office B.V. in May 2019 the debt was fully transferred to NL Life Sciences B.V. as part of a debt restructuring. This balance will be converted into equity in the third quarter of 2019.
The other loans consist of the procurement of goods and consulting fees for the management team that have accrued from previous periods. No interest is being charged.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – RELATED PARTY OTHER NOTES
Loan from other related parties at June 30, 2019 and December 31, 2018 consisted of the following:
June 30, 2019 | December 31, 2018 | |||||||
Efficiency Life Fund | 2,984,017 | 400,750 | ||||||
TriDutch Holding B.V. | - | 672,099 | ||||||
2,984,017 | 1,072,849 |
For the loan from TriDutch Holding B.V., in May 2019 the debt was fully transferred to NL Life Sciences B.V. as part of a debt restructuring.
For the loan from Efficiency Life Fund there is a repayment schedule in place to repay the loan in 10 installments from July 2019 to April 2022 and the debt therefore transferred from a related party liability to a loan.
NOTE 9 – CONVERTIBLE NOTE PAYABLE
Convertible loans payable at June 30, 2019 and December 31, 2018 consisted of the following:
June 30, 2019 | December 31, 2018 | |||||||
Convertible loan 1 | 636,614 | 629,750 | ||||||
Convertible loan 2 | - | 970,960 | ||||||
Convertible loan 3 | 566,235 | - | ||||||
1,202,849 | 1,600,710 |
Convertible Loan 1
Party for loan 1 had granted a loan facility in the principle amount of $581,058 or €500,000 with the right, but not the obligation to convert the outstanding loan amounts into shares in the capital of Natur at a company valuation of $17.4 million or €15 million for a term from December 19, 2017, till the maturity date of December 31, 2018, at an interest rate of 10% per annum. In July 2019 the amount was fully converted to common stock of the company.
Convertible Loan 2
On October 20, 2017, an amount of $929,692 or €800,000 was advanced to the Company for a loan agreement that was drafted but never signed. An interest rate of 5% per annum is calculated and the loan has a maturity date of February 28, 2018. Repeated attempts at correspondence was made between the Company and the lender’s attorney in April and May 2019 to discuss converting the balance to Common Stock of the Company on the bankruptcy of Natur Holding B.V. as no response was received the amount remains in Natur Holding B.V. who’s estate is being managed independently by a court issued Curator.
Convertible Loan 3
Natur Holding B.V., the principle subsidiary of Natur International Corp, entered into a loan agreement with Dam! Holding B.V., under which contemplate continuationNatur Holding may borrow up to US$560,915 or €500,000. The final terms of the agreement were concluded on February 18, 2019.The full drawdown of US$560,915 was made in three tranches throughout January and February 2019. It is the company’s intention to fully convert this to common stock in the third quarter of 2019.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – RELATED PARTY CONVERTIBLE NOTE PAYABLE
Related party convertible note payable at June 30, 2019 and December 31, 2018 consisted of the following:
June 30, 2019 | December 31, 2018 | |||||||
Convertible loan Efficiency Life Fund | - | 11,671,743 |
As at June 26, 2019 $8,830,140 of the balance was converted Into Series Preferred C stock, this stock then converted to Common stock after the increase in authorized share capital of NTRU . The remainder of the balance is currently being held as loan with the company as described and shown in note 8.
NOTE 11 – OPTIONS & WARRANTS
On November 13, 2018, the Company closed a subscription agreement and debt conversion agreement with Alpha Capital Anstalt wherein the Company granted the following warrants to purchase:
- | A total of 33,000,000 shares of common stock, at $0.0606060 per share, exercisable for four years. |
- | A total of 6,000,000 shares of common stock, at $0.15 per share, exercisable for four years. |
A summary of the status of the warrants granted is presented below for the three months ended:
June 30, 2019 | December 31, 2018 | |||||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||
Outstanding at beginning of period | 39,000,000 | $ | 0.074 | - | $ | - | ||||||||||
Granted | - | - | 39,000,000 | 0.074 | ||||||||||||
Exercised | - | - | - | - | ||||||||||||
Expired | - | - | - | - | ||||||||||||
Outstanding at end of period | 39,000,000 | $ | 0.074 | 39,000,000 | $ | 0.074 |
On January 16, 2019, the Company completed compensatory arrangements with three board members of Natur International Corp. with the following terms:
Mr. Anthony Joel Bay, through La Bay Ventures Inc., will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of the Company. The option granted by the Company provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of the Company. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.
Mr. Rudolf Derk Huisman, through Pas Beheer B.V., will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of the Company. The option granted by the Company provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of the Company If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.
Ms. Ellen Berkers, through Montrose Executive Management, will be issued an aggregate of 5,800,000 share of options to purchase common stock of the Company as a going concern. However,part of her termination arrangement dated May 30, 2019. The option granted by the Company has incurred losses, an accumulated deficitprovides for the right to exercise the shares at $.030303 per share at any time from April 1, 2022 until March 31, 2025. The option provides for cashless exercise and has a short-term note payable in excess of anticipated cash. These factors raise substantial doubt aboutmay be registered for resale at the abilityelection of the Company.
16
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – OPTIONS & WARRANTS - continued
Mr. Robert A. Paladino, through Cavalier Aire LLC., will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of NTRU. The option granted by the Company provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of the Company. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.
A summary of the status of the share options is presented below for the six months ended:
June 30, 2019 | December 31, 2018 | |||||||||||||||
Shares | Weighted Average Fair Value | Shares | Weighted Average Fair Value | |||||||||||||
Outstanding at beginning of period | - | $ | - | - | $ | - | ||||||||||
Vested | 9,459,688 | 0.071 | - | - | ||||||||||||
Unvested | 18,298,275 | |||||||||||||||
Exercised | - | 0.071 | - | - | ||||||||||||
Expired | - | - | - | - | ||||||||||||
Outstanding at end of period | 27,757,963 | $ | 0.071 | - | $ | - |
The fair value of all stock options outstanding at 30 June, 2019 is $1,970,813 at a weighted average fair value of $0.071 per option.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 – LOSS PER SHARE
At June 30, 2019, the Company had 310,597,593 shares issues and outstanding at a par value of $.001. The Company also has 2,397.130 preferred A shares issued and outstanding. Alpha Capital Anstalt has two outstanding warrants issued on November 13, 2018, each with 4-year terms. The first warrant has an exercise price of $0.060606 for 36,000,000 shares and the second warrant is exercisable for 6,000,000 shares at a $0.15 exercise price. The Company has reserved 16,240,000 shares of Common Stock for management incentive awards. At December 31, 2018, the Company had 129,049,192 shares of common stock issued and outstanding.
NOTE 13 – DISCONTINUED OPERATIONS AND ASSETS/LIABILITIES HELD FOR DISPOSAL
Effective November 30, 2018, the Company closed the London office and shops as part of the restructuring plan. Functionally the operations were shut down before December 31, 2018, and therefore we have qualified it as discontinued operations the sale of assets is in process. The existing support functions were transferred to the headquarters in Amsterdam as part of the centralization of support staff initiative.
As of March 22, 2019, the company Naturalicious UK Limited was put into liquidation and the matters are being dealt with by a qualified administration firm in the United Kingdom. A board meeting was held on March 22, 2019, and it was agreed to liquidate the company. Currently the rights and obligations of the company are handled by the administration firm and the legal obligation over the liabilities are extinguished. As we no longer have any rights or obligations to the indirect subsidiary, it has been removed from the consolidation and the net liability position of the company is released and recognized as a going concern for a period of one year from the issuance of these financial statements. There is no assurance that the Company will be successful in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.gain on disposal.
NOTE 3 – DISCONTINUED OPERATIONS
Effective August 31, 2018, Future Healthcare of Americathe Company offices in Casper, Wyoming were closed at the officestermination of its Casper, Wyoming operations. During 2018, the Company saw a continued decrease in the utilization of our home healthcare services in Casper, Wyoming. Additionally, we have seen an increase in competition, specifically for Medicare service providers in 2018. Also, there has been a shortage of Registered Nurses, Physical Therapists and management personnel, leading to higher costs due to having to source the required talent from staffing companies. Thishealth care operations.. The increase in costs coupled with a decrease in business activity, leadled to the decision to close the Casper, Wyoming operations. In closing the office, the Company transitioned its clients to new service providers, and terminated employees as the transition happened. The month to month lease was terminated with the landlord on August 31, 2018.
In line with the objective to secure the continuity of the Company, it was decided late 2018 to extend the product line with added functional extracts (Nutrigenomics, hemp-derived extracts). For this, the Company established Natur BPS B.V. (formerly Natur CBD B.V.) as a sister company of Natur Holding B.V. at March 13, 2019, wholly owned by Natur International Corp. Based on global developments and following the officesuccess of companies in the USA and Canada, the Company defined new growth objectives with complementary products based on hemp-derived extracts as a new revenue model. Additional funding was closedsought in the same day. We have one part-time employee, working remotely, primarilymarket, but it became apparent that the willingness of new investors to provide the company with funding in debt or equity was dependent on the collection of accounts receivable.
9
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 – DISCONTINUED OPERATIONS
Reconciliationrestructuring of the Carrying Amounts of Major Classes of Asset and Liabilitiesexisting debt on the balance sheet of the Discontinue OperationCompany. As most of this debt is held on the balance sheet of Natur Holding B.V., it was decided to Total Assets and Liabilities That are Presented Separately in the Balance Sheetdevelop a restructuring plan to:
| September 30, 2018 |
| December 31, 2017 |
|
Carrying amounts of major classes of assets included as part of discontinued operations: |
|
|
|
|
Cash | $ 1,044 |
| $ 13,610 |
|
Accounts receivable, net | 170,396 |
| 201,914 |
|
Prepaid expenses | 5,161 |
| 4,172 |
|
Total current assets of discontinued operations | 176,601 |
| 219,696 |
|
Other assets held for sale | - |
| - |
|
Total assets of discontinued operations | $ 176,601 |
| $ 219,696 |
|
|
|
|
|
|
Carrying amounts of major classes of liabilities included as part of discontinue operations: |
|
|
|
|
Accounts payable | 107,626 |
| 65,228 |
|
Accrued expenses | 142,275 |
| 52,512 |
|
Deferred revenue | 40,082 |
| 12,832 |
|
Total current liabilities of discontinued operations | 289,983 |
| 130,572 |
|
Other liabilities held for sale | - |
| - |
|
Total liabilities of discontinued operations | $ 289,983 |
| $ 130,572 |
|
A. | Establish an asset transfer from Natur Holding B.V. to Natur CBD B.V., optimizing the proceeds for these assets and subsequently liquidate Natur Holding B.V.; |
B. | Continue the business in Natur CBD B.V. with an extended portfolio of functional products, including food and beverages infused with hemp-derived extracts and deliver the objectives as set by the Board |
C. | Expeditiously seek new funding in the form of (long-term) or convertible debt or equity. Discussions with Third parties are on-going. |
ReconciliationIn May 2019 we reached agreements with most of the Major Classes of Line Items Constituting Pretax Profit (Loss) of Discontinued Operations That are Presented Separately indebtholders to convert their debt to equity and effective from May 1, 2019, the Statement of Operations
|
| For the Three Months Ended |
| For the Nine Months Ended | ||||
|
| September 30, 2018 |
| September 30, 2017 |
| September 30, 2018 |
| September 30, 2017 |
|
|
|
|
|
|
|
|
|
Major classes of line items constituting pretax income (loss) of discontinued operations |
|
|
|
|
|
|
|
|
Revenue | $ | 123,740 | $ | 416,279 | $ | 763,260 | $ | 1,356,598 |
Cost of Services |
| 229,421 |
| 278,005 |
| 676,169 |
| 908,383 |
Operating Expenses |
| 54,285 |
| 134,522 |
| 323,718 |
| 414,808 |
Other Income |
| (1,591) |
| 23 |
| (1,633) |
| (39) |
Income (loss) of discontinued operations before income tax |
| (158,375) |
| 3,729 |
| (234,994) |
| 33,446 |
Gain on disposal of discontinued operation before tax |
| - |
| - |
| - |
| - |
Total income (loss) on discontinued operations before income tax |
| (158,375) |
| 3,729 |
| (234,994) |
| 33,446 |
Income tax expense or benefit |
| - |
| - |
| - |
| - |
Total profit or loss on discontinue operations that is presented in the statement where net income is presented | $ | (158,375) | $ | 3,729 | $ | (234,994) | $ | 33,446 |
|
|
|
|
|
|
|
|
|
10
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – SHARE EXCHANGE AGREEMENT AND SECURITIES PURCHASE AGREEMENT
(a) On September 21, 2018, the Companyasset transfer between Natur Holding B.V. and its sister company Natur BPS B.V was executed and Natur Holding B.V., a Netherlands-based holding company (“Natur”), and the several shareholders of Natur executed a Share Exchange Agreement (the “SEA”) by which the Company is to acquire all of Natur’s outstanding capital stock in exchange for a number of shares of the Company’s common stock that will constitute approximately 71% of the issued and outstanding capital stock of the Company on a fully-diluted basis after giving effect to the closing of the transactions contemplatedits wholly owned subsidiaries were declared bankrupt by the SEA, and which includesCourt in Amsterdam, the post-closing adoption of an equity award plan reserving upNetherlands. The total debt that was converted to 1,500,000 shares of common stock as equity awards to the Company’s directors, officers, employees and consultants. The remaining 29% of the Company’s outstanding common stock will be owned by its current stockholders, noteholders and lenders. Upon completion of the transaction, Natur will be a wholly-owned subsidiary of the Company, and the former Natur stockholders will collectively own a controlling interest in the Company. The SEA closing has not occurred as of the issuance of these financial statements, since there are conditions precedent yet to be satisfied.issued is $ 6,754,575.
(b) On September 21, 2018,
In June we reached agreement with private investors for the Company also executed a Securities Purchase Agreement (the “SPA”) by which it agreed to privately issuesale of preferred stock and sell and the purchaser identified on the signature page to the SPA (the “Purchaser”) agreed to purchase up to an aggregate of 2,000 shares of Series A Stock for $2,000,000 in cash, of which $270,005 has been advanced as of September 21, 2018, under the terms of a promissory note dated as of that date between the Company and the Purchaser, plus 469.131 shares of Series A Stock by the exchange of outstanding convertible notes held by Alpha Capital Anstalt in the aggregate principal amount of $469,131,warrants. At June 30, 2019, agreements were signed for a total of up to 2,469.131 Series A Stock$2,064,756 against 65,621.283 of to be sold under the SPA. The Series A Stock will be convertible intoissued shares of the Company’s common stock at a conversion priceseveral series of $0.030303 per share. In addition to a certificate representing the number of shares of Series A Stock purchased by the Purchaser, at the closing of the SPA (the “SPA Closing”), the Company is to deliver to the Purchaser: (i) a Warrant to purchase up to a number of shares of the Company’s common stock equal to 50% of the number of shares of common stock into which the Series A Stock is convertible, at an exercise price equal to 200% of the initial conversion price of the Series A Stock; and (ii) a Registration Rights Agreement providing for the registration of the Company common stock issuable upon conversion of the Series A Stock and upon exercise of the Warrant. The SEA closing is a pre-condition to the SPA Closing. The Company can provide no assurance that such condition will be met or that the SPA Closing will occur as contemplated by the parties.preferred stock.
NATUR INTERNATIONAL CORP.
NOTE 5 - NOTES PAYABLE AND CONVERTIBLE DEBENTURE
On September 9, 2013, the Company closed a Subscription Agreement by which one institutional investor purchased a) a Variable Rate Senior Secured Convertible Note payable having a total principal amount of $1,010,000, convertible into common shares of the Company at $0.25 per share and maturing March 9, 2015; b) Warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years, and c) a greenshoe to purchase a total of 2,000,000 shares of common stock at $0.25 per share, exercisable for one year from the closing date. The note and warrants have a down-round provision, wherein if the Company issues common stock or equity-based instruments with lower prices or strike prices, the note and warrants exercise prices will be adjusted to match the lower prices. On September 9, 2014 the greenshoe expired unexercised. On March 9, 2015, the Note matured.
As the note has not been paid nor extended, the outstanding principal, plus accrued but unpaid interest, liquidated damages and other amounts, became due and payable at the election of the holder. The holder has not made such an election. Effective December 14, 2017, the note payable was amended to reduce the conversion price from $0.25 per share to $0.10 per share.
As of September 30, 2018, the Company had accrued interest payable on the debenture of $410,552.
On January 2, 2018, the Company financed the premium for directors’ and officers’ insurance. The Company borrowed $26,921 at 6.00% interest, and the note will be repaid in 10 equal installments of $3,079. As of September 30, 2018, the balance of the note payable was $3,061.
11
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - NOTES PAYABLE13 – DISCONTINUED OPERATIONS AND CONVERTIBLE DEBENTUREASSETS/LIABILITIES HELD FOR DISPOSAL - continued
On January 25, 2018,The following table presents the Company financed the premium for liability insurance. The Company borrowed $22,230 at 6.00% interest, and the note will be repaid in 10 equal installments of $2,287. As of September 30, 2018, the balancecarrying amounts of the note payable was $6,813.major classes of assets and liabilities included in our discontinued operations as presented on our Unaudited Consolidated Balance Sheet as of June 30, 2019.
On September 21, 2018 the Company executed a Promissory Note for $275,000 with Alpha Capital Anstalt (“Alpha”). The value of the note received shall be exchanges for Series A Preferred Stock of the Company at the time of closing of the Share Exchange Agreement between the Company and the shareholders of Natur Holdings, NV, a Netherlands corporation (“Natur”), pursuant to a Securities Purchase Agreement. On September 28, 2018, the Company received $270,005 from Alpha and on the same date, wired $270,005 to Natur. The difference in the face of the note payable and the amount received was due to an error in amount of funds transferred by Alpha.NATUR INTERNATIONAL CORP
UNAUDITED BALANCE SHEET OF DISCONTINUED OPERATIONS
NOTE 6 - CAPITAL STOCK
For the Six Months | December 31, 2018 | |||||||
Current assets | ||||||||
Cash and cash equivalents | - | - | ||||||
Related party receivable | - | 201,907 | ||||||
Accounts receivable | - | 124,016 | ||||||
Inventories | - | - | ||||||
Other current assets | - | 51,705 | ||||||
Total current assets | - | 377,628 | ||||||
Fixed Assets | ||||||||
Tangible fixed assets | - | 27,547 | ||||||
Financial Fixed Assets | - | 23,618 | ||||||
Total fixed assets | - | 51,165 | ||||||
TOTAL ASSETS | - | 428,793 | ||||||
Short term debt | ||||||||
Accounts Payable | 36,894 | 643,616 | ||||||
Accrued expenses & other contingent liabilities | 133,575 | 243,510 | ||||||
Total short-term debt | 170,469 | 887,126 |
NATUR INTERNATIONAL CORP
Common Stock - The Company has authorized 200,000,000 shares of common stock, $0.001 par value. As of September 30, 2018, 11,265,631 shares were issued and outstanding.UNAUDITED INCOME STATEMENT OF DISCONTINUED OPERATIONS
On September 21, 2018, the Company executed a Promissory Note for $275,000 with Natur. The note shall be exchanged for Series A Preferred Stock of the Company at the time of closing of the Share Exchange Agreement between the Company and Natur. On September 28, 2018, the Company received $270,005 from Alpha and on the same date, wired $270,005 to Natur for working capital. The note is recorded as a subscription receivable while the Share Exchange Agreement is pending. See also Note 4.
NOTE 7 – WARRANTS
On September 9, 2013, the Company closed a Subscription Agreement wherein the Company granted warrants to purchase a total of 3,030,000 shares of common stock, at $0.50 per share, exercisable for four years. On September 9, 2017 the expiration date of the warrants was extended to September 9, 2018. On September 9, 2018 the warrants expired.
A summary of the status of the warrants granted is presented below for the three months ended:
| September 30, 2018 |
| December 31, 2017 | |||||||
| Shares |
| Weighted Average Exercise Price |
| Shares |
| Weighted Average Exercise Price | |||
Outstanding at beginning of period | 3,030,000 | $ | 0.50 |
| 3,030,000 | $ | 0.50 | |||
Granted | - |
| - |
| - |
| - | |||
Exercised | - |
| - |
| - |
| - | |||
Expired | 3,030,000 |
| 0.50 |
| - |
| - | |||
Outstanding at end of period | - | $ | - |
| 3,030,000 | $ | 0.50 |
For the Three Months | For the Six Months | |||||||
For the Six Months | December 31, 2018 | |||||||
REVENUE | - | - | ||||||
COST OF GOODS SOLD | - | - | ||||||
GROSS MARGIN | - | - | ||||||
OPERATING EXPENSES | ||||||||
Wages & Salaries | - | - | ||||||
Selling, General & Administrative | (42,211 | ) | (81,621 | ) | ||||
Amortization & depreciation | - | - | ||||||
Total operating expenses | (42,211 | ) | (81,621 | ) | ||||
LOSS FROM OPERATIONS | 42,211 | 81,621 | ||||||
Interest expense | - | - | ||||||
LOSS FROM DISCONTINUED OPERATIONS | 42,211 | 81,621 |
FUTURE HEALTHCARE OF AMERICANATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - INCOME TAXES
The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards.
Because of the uncertainty surrounding the realization of the loss carryforwards and significant changes in the ownership of the Company, a valuation allowance has been established equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The net deferred tax assets are approximately $1,400,000 as of September 30, 2018, with an offsetting valuation allowance of the same amount.
NOTE 9 – LEASES
Operating Lease - The Company leases office space in Billings, Montana for $1,525 a month through May 2020.
The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of September 30, 2018 are as follows:
Twelve months ending September 30 |
|
| Lease Payments |
|
2019 |
|
| 18,300 |
|
2020 |
|
| 12,200 |
|
Total Minimum Lease Payments |
| $ | 30,500 |
|
Lease expense charged to operations was $49,077 and $57,578 for the nine months ended September 30, 2018 and 2017, respectively.
NOTE 10 – INCOME/ (LOSS) PER SHARE
At September 30, 2018 and 2017, the Company had zero and 3,030,000, respectively, warrants to purchase common stock of the Company at $0.50 per share, and a convertible debenture payable wherein the holder could convert the note and underlying accrued interest into a minimum of 10,100,000 and 4,040,000, respectively shares of common stock which were not included in the loss per share computation because their effect would be anti-dilutive.
13
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – COMMITMENTS AND CONTINGENCIES
On June 17, 2016 a complaint was filed with the Wyoming State Department of Labor against the Company, alleging discrimination on the basis of sex and disability. The complaint did not seek any specific monetary relief. The complaint was mediated by the Wyoming State Department of Labor. The Wyoming State Department of Labor issued a notice of dismissal for the complaint. On February 9, 2018, this former employee filed a lawsuit against Interim Healthcare of Wyoming, claiming wrongful termination. After reviewing the facts and circumstances, the Company believes the claims made are weak, at best, and the Company has retained counsel and intends to continue a vigorous defense.
At this time, management cannot reasonably estimate the cost to defend or the outcome of the complaints, and we do not expect it will have a material financial impact on the Company.
On June 30, 2016 a complaint was filed with the Federal Equal Employment Opportunity Commission (EEOC) against the Company, alleging wage discrimination on the basis of sex.
On June 1, 2018, The U.S. EEOC made a determination that Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964) by paying a male employee more than female employees. The EEOC has determined that back wages for these individuals plus liquidated damages total $43,593, and the Company has recorded an accrual for $17,593 of this amount, as the remainder is in dispute. The company has voluntarily entered into the Conciliation Process with the EEOC to reach a resolution of the matter. On September 19, 2018, the Company attended the Conciliation meeting, which the EEOC presented a revised settlement of $133,575 for back wages plus liquidated damages. The Company and the EEOC did not agree to a resolution. On September 28, 2018, the EEOC filed in the U.S. District Court for the District of Wyoming a complaint claiming Interim Healthcare of Wyoming violated the wage discrimination laws (Title VII of the Civil Rights Act of 1964) by paying a male employee more than female employees. The Company recorded an accrual totaling $133,575 related to this matter. This accrual is included in the discontinued operations of the Company.
NOTE 12 – RELATED PARTY
During the first six months of 2018, an officer of the Company advanced $23,000 to the company for operating purposes. The advance bears no interest or maturity. The advance was repaid during the third quarter of 2018.
NOTE 13 -14 – SUBSEQUENT EVENTS
In July 2019 the Company reached agreement with certain non-US private investors to invest in total $1,765,605 to acquire 46,947.368 of the Series G Preferred Stock. These preferred shares have registration rights.
On October 23, 2018July 25, 2019 the Company amended its Articlesentered into a Purchase and Recapitalization Agreement (“Recapitalization Agreement”) with DRBG Holdco, LLC, a Delaware limited liability company, Temple Turmeric, Inc., a Delaware corporation, Daniel Sullivan, Tim Quick, and TQ Holdings LLC, a New Hampshire limited liability company to acquire the business of Incorporation as follows. TheTemple. Under the Recapitalization Agreement the Company authorized 2,469.131acquired 15,121,984 shares of Series A Convertible Preferred Stock $.001of Temple from DRBG for a nominal amount and acquired from TQH a promissory note in the principal amount of $100,000, plus all accrued and unpaid interest. As part of the transaction Temple issued to DRBG a warrant to acquire a percentage of the Temple equity. The Temple board of directors will have three of the five directors appointed by the Company pursuant to the terms of the Series A Shares. The Series A Shares represent an approximate 52% of the equity of Temple, on a fully diluted basis.
Under the Recapitalization Agreement the Company will provide working capital to Temple in the amount of not less than $150,000 but up to $250,000. The Company will acquire additional equity ownership of Temple for this investment based on a valuation of Temple of $1,000,000. This further investment will increase the controlling position of the Company in combination with its ownership of the Series A Shares.
The Temple warrant is exercisable for the greater of 1,493,735 shares of common stock of Temple or 2.5% of the equity of Temple on a fully diluted basis. The exercise price per share is the par value of the common stock to be acquired upon exercise of the Temple warrant. The exercise period is ten years, but not later than the earlier of the consummation of the initial public offering by Temple or a sale transaction of Temple, as defined in the Warrant. The Temple warrant has a cashless conversion right and $1,000 stated value.has typical anti-dilution rights for dividends, reverse splits and changes in the capitalization of Temple.
On July 19, 2019, the board of directors of the Company appointed Mr. Paul Bartley as the Chief Executive Officer of the Company and appointed him to be a director of the Company, filling one of the existing vacancies on the Board of Directors. On June 30, 2019, the Company lent to Share International Holding B.V. a company of which Mr. Bartley is a principal, the sum $250,000 under a promissory note, due January 4, 2020. The note bears interest at the rate of 10%. SIH requested the loan to finance the costs relating to the conclusion of the merger such as extensive travel, third party consultancy fees and legal costs. Natur International Corp. was willing to provide the loan pending the outcome of the merger discussions.
The repayment obligation under the note will be cancelled if no business arrangement is concluded due to a breach by the Company authorized of any agreement for the business arrangement that is concluded in the future, either party to the note experiences a material adverse change, or the business arrangement is not approved by the shareholders or owners of the respective parties to the extent that approval is required. The note also has other standard default provisions under which the Company may declare a default.
On July 29, 2019, $639,784 of an outstanding loan facility in the principle amount of $581,058 or €500,000 plus accrued interest, at an interest rate of 10% per annum, was converted to common stock of the company. On this date the debt was converted and 11,632,445 of common stock was issued to the borrower.
NATUR INTERNATIONAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 – RECAPITALIZATION
As discussed in Note 1 – Organization and nature of business, effective November 13, 2018, Future Healthcare of America entered into a reverse capitalization transaction with Natur Holding B.V. In conjunction with the transaction the Company was recapitalized, resulting in the capital structure outlined below. The main purpose of the transaction was to raise additional capital for the purposes of growth. The historical number of common shares of Nature Holding B.V. presented in our financial statements were converted to post-acquisition shares on a 1 to 112 basis.
The following shares of common stock were issued in connection with the reverse capitalization transaction. Natur shareholders had a controlling voting percentage of 94% subsequent to the transaction:
- | 115,759,999 shares of common stock were issued to the Natur shareholders. |
- | 2,023,562 shares of common stock were issued to two of the former management of the Company for their cancellation and release of accrued salaries |
- | 2,469,131 shares of Series A Preferred Stock were issued for a cash capital investment of $2,000,000 and debt forgiveness of $469,131. The shares of Series A Preferred Stock will convert at a ratio of 1 share to 33,000 common shares. |
- | 100,000 shares of Series B Preferred Stock were issued to the Natur Holding B.V. shareholders. These shares convert at a ratio of 1 share to 1,000 common shares. |
NOTE 16 – STOCKHOLDERS’ DEFICIT
On November 13, 2018, Future Healthcare of America completed a transactions pursuant to the Share Exchange Agreement discussed in Note 1. In connection with the Share Exchange Transaction, the Company issued the equivalent of 215,759,999 shares of the Common Stock to the former shareholders of Nature Holding B.V., which was issued in part as 115,760,000 shares of Common Stock and in part as 100,000 shares of voting, convertible Series B Preferred Stock $.001 par value and $1,000 stated value.
The Series A Convertible(the “Series B Preferred Stock have no voting rights with liquidation rights of stated value plus unpaid dividends and damages. The Series A Convertible Preferred Stock is convertible into common shares at $0.030303 per common shares subject to limitations. A total of 757.575 are convertible at the option of the holder at any time after the original issue date, and a total of 1,711.556 are convertible at any time after the original issue date upon the Corporation amending its Articles of Incorporation to adjust the number ofStock”) representing 100,000,000 shares of Common Stock sufficient for the conversion of the 1,711.556 the Preferred Stock.
14
FUTURE HEALTHCARE OF AMERICA
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - SUBSEQUENT EVENTS - Continued
upon conversion. The Series B Preferred Stock has voting rights equal toconverted automatically into the number of whole shares of Common Stock into whichon June 26, 2019, when the shares would be converted as of the record date with liquidation rights $.01 per share after the rights of the Series A Preferred Shareholders have been satisfied. Each share of Series B Preferred Stock is convertible into 1,000 shares of common stock. Each share of Series B Preferred Stock will convert automatically, without any further action on the part of the holder, upon the Corporation amendingCompany increased its Articles of Incorporation to adjust the number of authorized shares of Common Stock to permit the Corporation to issue acapital in sufficient number of shares of Common Stock in conversion of the Series B Preferred Stock. The Corporation undertakes to use its best efforts to adjust the number of authorized shares of Common Stock so asamount to permit the conversion of the Series B Preferred Stock. At closing the number of common shares, issued and outstanding was 322,230,038. Per the OTC listing the shares were officially converted on the July 2, 2019.
On September 21, 2018, Parent Company also executed a Securities Purchase Agreement (the “SPA”) by which it agreed to privately issue and sell to Alpha Capital Anstalt (the “Alpha”) 2,469.131 shares of non-voting, convertible Series A Preferred Stock, withineach share convertible into approximately 33,000 shares of Common Stock, based on a per common share conversion rate of $.030303. Alpha also purchased two warrants, one yearpursuant to the SPA that is exercisable for 33,000,000 shares of Common Stock at $.060606 per share and another one pursuant to a debt cancellation agreement exercisable for 6,000,000 shares of Common Stock at $.15 per share. The aggregate purchase price for the Series A Preferred Stock and the warrant for 33,333,000 shares of common stock was $2,000,000 in cash and conversion of $469,131 of outstanding debt. The other warrant was issued for conversion of outstanding interest due Alpha under a prior loan agreement to Future Healthcare of America. Prior to the acquisition of Natur Holding, B.V., Alpha also had cancelled approximately $651,000 of debt principle and interest due from the Company. These transactions eliminated $1,420,000 of debt principle and interest of the issuanceCompany and improved its balance sheet. As part of the SPA transaction, Alpha has also agreed to reimburse up to $100,000 of the liabilities of Parent Company existing at the closing date, which has not yet been paid.
On March 19, 2019, the holder of the Series BA Preferred Stock.Stock converted 72 of such shares with a stated value of $72,000 for 2,376,002 shares of common stock. The applicable conversion price per common share was $0.030303. The Company did not receive any payment on this conversion, having received the consideration for the Series A Preferred Shares on November 12, 2018. There are remaining an aggregate of 2,397.131 shares of Series A Preferred Stock issued and outstanding. The shares of common stock issued on conversion are registered for resale by the holder.
On April 4, 2019, the Company filed an Articles of Amendment in the State of Wyoming to create a new class of Series C Preferred Stock, which was returned as of April 9, 2019. The Series C Preferred Stock was converted into 78,832,399 shares of Common Stock on June 26, 2019. Per the OTC listing the shares were officially converted on the July 2, 2019.
In June 2019, the Company has entered into a series of agreements under which it will be required to issue the following different series of preferred stock, subject to certain conditions precedent.
· | Series Preferred Stock D: 15,789.473 preferred shares, conversion to common shares at a ratio of 1:1,000. price per share of $31.70, no voting rights and a warrant reflecting the right to buy 20,000,000 shares at an exercise price of $0.06 |
· | Series Preferred Stock E: 56,443.551 preferred shares, conversion to common shares at a ratio of 1:1,000, price per share of $30,40, no voting rights and a warrant reflecting the right to buy 56,443,551 shares at an exercise price of $0.0304 |
· | Series Preferred Sock F: 49,342.105 preferred shares, conversion to common shares at a ratio of 1:1,000, price per share $0.0304, registration rights, and warrant reflecting the right to buy 740,130,158 shares at an exercise price of $0.0304. |
· | Series Preferred Sock G: 46,947.368 preferred shares, conversion to common shares at a ratio of 1:1,000, price per share of $0.038, registration rights and a warrant reflecting the right to buy 46,947,368 shares at an exercise price of $0.076. |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..
General
Safe Harbor Statement.
Statements made in this Form 10-Q which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company, including, without limitation, (i) our ability to gain a larger share of the home healthcare industry,markets in which we offer our ability to continue to develop services acceptable to our industry,beverage and other products, our ability to retain our business relationships, and our ability to raise capital and the growth of the home healthcare industry,our ability to consolidate our business operations, acquisitions and (ii) statementsgrow our product offerings to meet consumer demands, Statements preceded by, followed by or that include the words “may”, “would”, “could”, “should”, “expects”, “projects”, “anticipates”, “believes”, “estimates”, “plans”, “intends”, “targets”, “tend” or similar expressions.expressions indicate forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company’s control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in the Company’s reports on file with the Securities and Exchange Commission: general economic or industry conditions nationally and/or in the national and local communities in which the Company conducts business and sells its products, changes in the interest rate environment, legislation or regulatory requirements conditions ofthat affect our products and their composition and the securities markets, changes in the home healthcare industry,locations through and to which they can be transported and sold, the development of servicesproducts that may be superior to the servicesthose offered by the Company, competition in our product segments, changes in the quality or composition of the Company’s services,products, our ability to develop new services,products, our ability to raise capital, conditions in the securities markets that may affect the price and trading of our securities held by investors, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism,and other economic, competitive, governmental, regulatory and technical factors affecting the Company’s operations, services and prices.operations.
Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.
New Vision & Mission
The Company is committing to meet the demands of the burgeoning market for healthy food & beverage products beyond our award-winning fruit and vegetable juices and snacks. The Company is preparing for launch of a wider range of foods and beverages that are effectively functional. With consumers in increasing numbers eating more frequently, eating socially and being focused on the wellness derived from their choices, we are offering choices that can boost their immune system, support a sense of equilibrium in a stressful life, help to resist foods that are not healthy, and more.
The Company brings the forces of nature, existing naturally and organically, as functional supplements in our branded foods and beverages. The first of nature’s superfoods to join our line is hemp. We are preparing for the launch of our line of juices and snacks infused with hemp-derived extracts that are intended to offer improvement in quality of life. The human body’s endo-cannabinoid system is starved for sources of external cannabinoids. When fed, this system fires up the forces of immunity, pain management, heart health, a sense of equilibrium and much more. The Forces of Nature, from the industrial hemp plant, in their purest form, provide the best source for these important cannabinoids. These hemp-derived extracts are the non-psychoactive cannabinoid in the hemp plant that, in increasing numbers, is gain consumer fans for its potential role in treating many common health issues, including pain, inflammation, anxiety, depression, acne and heart disease.
Anticipating growing demand, Natur is developing collaborations in hemp cultivation, extraction and innovation – with growers, greenhouses, research and development scientists driving new products in the fields of hemp-derived medication, edibles and beverages, human and animal topicals and wellness products.
Business Highlights
FHA’s subsidiary, Interim Healthcare of Wyoming, Inc., a Wyoming corporation (“Interim”), is an independent franchisee of Interim HealthCare that has been serving its community for over 20 years, providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 independent home health agencies that comprise the Interim HealthCare network. Our business consists of providing healthcare services for those in need. We record all revenue and expenses and provide all services under one umbrella. Below is a description of our Home Healthcare and Staffing operations.
Our business is driven by a number of different factors and fluctuates significantly as they change.
Our revenue during the first nine months of 2018 has decreased significantly from the previous year. The decrease in business has been driven by the following factors.
As the need for labor diminishes with the gas and oil wells shutting down in Wyoming, our business has seen dramatic negative impacts with the resulting decrease in population, both in number of clients as well as available personnel. Historically, as the price of gas decreases, the drilling operations stop, and the population has moved to another area to support themselves. Our operations are also heavily influenced by increases in minimum wage as well as starting wages being offered by all employers in the region. With the multiple businesses paying higher starting wages, we have seen a decrease in individuals wanting and needing to take employment in the healthcare profession, and we have been unable to continue increasing our starting wages. Additionally, we have seen an increase in direct competition in the market place for the business and clients we serve.
We have also seen the impact of turn-over in senior management with our clients. As these positions are filled by new personnel, their decisions on utilization of services impacts our businesses, and we have seen a significant decrease in the utilization of our services.
16
As a result of financial impact of these factors, we closed the operations in Casper, Wyoming on August 31, 2018.
During the nine monthsquarter ended June 30, 2019, the Company focused its efforts on the restructuring of 2018, FHA’s continuing operations experienced a 21% decreaseits business in revenue overthe Netherlands and the restructuring of the debt, at the same time the first nine monthssteps were set to activate the new business plan. Discussions with potential merger partners and private investors took considerable time during this quarter
For the quarter, while sales revenues were considerably lower year over year, operating losses were also lower. Contributing to negative margins was the reduction of 2017. This was driven by decreases in both our Billings, Montana businesses. We do not foresee a change in this trendinventories through the endliquidation.
Results of 2018. We continue to see increased costs to provide servicesOperations and decreases in reimbursement rates, reducing margins, and difficulty in retaining qualified personnel, making it difficult to cover overhead costs. This can be seen in our results during the first nine months of 2018.Financial Condition
Three Months Ended 30 June, 2019 versus Three Months Ended 30 June 2018
During the nine months of 2018, we have seen a significant decrease in the utilization staffing services in Billings, Montana as facilities that use our services receive directives to remove and reduce the use of staffing services. We’ve also seen significant decreases within our home healthcare services. As for our operations, we anticipate the trends seen in the first nine months of 2018 to continue throughout 2018. We anticipate a continued slowing of the use of our staffing services. We also anticipate a continued slowing of the utilization of our home healthcare business. As such, we are evaluating other options outside the home healthcare industry. Promotional activities and operations are being managed as the offices experience fluctuations in the day-to-day activities and as we embark on new business opportunities.
Home Healthcare
Through trained health care professionals, the Company provides home care services including senior care and pediatric nursing; physical, occupational and speech therapy. The Company offices deliver quality home care and treat each patient with genuine compassion, kindness and respect. The Company provides health care professionals at all skill levels, including registered nurses, therapists, LPN’s and certified home health aides. FHA derives is revenue from multiple payer sources. These include Medicare, Medicaid, Insurance, Medicaid LTW, and Private Payers. Because our offices are located in areas that do not contain a large population base (less than 200,000 residents), we continually explore opportunities to increase our revenue with our current payer sources and expand through new sources of revenue. The healthcare team is utilized across all payer sources, including staffing services. Our customer base comes from referrals from hospitals, rehab facilities, nursing homes, assisted living facilities and previous patients.
In additional to our professional team, we employ a management team at each facility to handle the day to day operations of the office. This is completed by our Administrators in each location. We also have a Director of Nursing in each location. This person is responsible for the day to day oversight of the service providers and ensuring the certified professionals obtain the necessary training to maintain their certificates as well as the training necessary to be in compliance with all regulating organizations.
Staffing
Interim offices provide nurses, nurse aides and management services to hospitals, prisons, schools, corporations and other health care facilities. Interim’s success is based on our ability to recruit the best health care professionals and the responsiveness of our local managers to fill the needs of our clients in a timely manner. Additionally, we work with our clients should they decide they would like to hire our service professionals on a full time basis. Another key to our success is the personal relationship that our management and sales team build with each of our existing and new clients. As noted previously, in order to reduce turnover of our service team by providing as many hours as possible, similar to the hours of a full-time employee, we utilize the same service team members across all payer sources.
As each of our businesses is located in smaller based population areas of the country, the competition is significantly heightened and the relationships maintained with our clients become very critical to the continued success of our operations.
As we provide diversified services and accept payments from multiple payer sources, we are not heavily dependent on a few clients in order for our business to be successful.
17
Results of Operations
Nine Months Ended September 30, 2018 and 2017.
During the ninethree months ended SeptemberJune 30, 2018, FHA2019, Natur recorded revenues of $1,138,825,$8,134, a 21%98% decrease over revenues of $1,433,838$414,716 for the same period in 2017.2018. The decrease forin 2019 is attributed to the decision the Company made to discontinue selling to less profitable customers while developing its new culturally relevant product lines. It should be noted that in Q2 2018, was drivenrevenues were generated by a significant decreasetwo large customers. Both of these customers proved to be less beneficial to the business than planned and by the beginning of Q1 2019 sales to these customers were discontinued.
With the lower revenues in the use of our staffing services and our home healthcare services in Billings, Montana. The Casper, Wyoming location was closed on August 31, 2018.
For the nine months ended September 30, 2018,quarter, cost of servicesgoods sold included unleveraged warehousing, inventory reduction and product discard costs and totaled $853,702,$4,919, a 23%99% decrease as compared to $1,110,667$283,400 in the comparable period of 2017.2018. Natur posted a gross profit of $3,215 during the second quarter 2019, versus a gross loss of $131,316 for the second quarter of 2018.
Six Months Ended 30 June, 2019 versus Six Months Ended 30 June 2018
During the six months ended June 30, 2019, Natur recorded revenues of $72,553, a 92% decrease over revenues of $942,433 for the same period in 2018. The decrease in 2019 is attributed to the decision the company made to discontinue selling to less profitable customers while developing its new culturally relevant product lines. It should be noted that in first half of 2018, the introduction of two large customers generated initial opening orders, filling the supply chain. Both of these customers proved to be less beneficial to the business than planned and by the beginning of Q1 2019 sales to these customers were discontinued.
With the lower revenues in the six-month period, cost of goods sold included unleveraged warehousing, inventory reduction and product discard costs and totaled $99,696, an 82% decrease as compared to $557,152 in the comparable period of 2018. Natur posted a gross loss of $27,143 during the first half of 2019, versus a gross profit of $385,281 for the first half of 2018.
Natur continued to make year over year improvements in some controllable costs while recording total operating expenses of $3,294,333 during the first half of 2019, a 14% increase as compared to operating expenses of $2,895,729 in the same period of 2018. Wages & Salaries showed a strong improvement, totaling $373,064 in the first half of 2019 versus $792,679 in the first half of 2018, a decrease of 53% driven by significantly streamlined head-count compared to 2018. An additional strong contributing factor is the discontinuation of retail store activities in both the UK and the Netherlands. Selling, General & Administrative costs increased to $2,645,471 from $2,019,466 when comparing the first half of 2019 versus 2018, or 31%. This was driven mainly by an increase in the overall costs incurred by the business due to the administration costs of maintaining a public listing such as legal, board and accountancy fees. The Company also introduced a stock option scheme in 2019 with no similar such costs in the first half of 2018 with costs totaling $1,088,206 for 2019 . Amortization depreciation and impairment costs increased to $275,798 from $83,584 when comparing the first half of 2019 versus 2018, or 230%. This was driven mainly by the Company taking a prudent measure to write down all assets in the retail stores (approximately $200,000) to Nil. As the Company could not comfortably assume we would receive any proceeds for these assets it will therefore only take gains on disposal in future periods should they be realized. These assets are now with the Curator pursuant to the Petition who is dealing with the liquidation of Natur Holding B.V.
Natur’s net loss available to common shareholders was $1,551,207 for the first half of 2019. This represents a reflection58% decrease from our net loss of $3,669,410 in the first half of 2018. The decrease in the loss was partially offset due to the liquidation of the UK business and a number of the subsidiaries in the Netherlands which allowed a gain on disposal of $1,891,985 to be realized.
Three Months Ended 30 June, 2019 versus Three Months Ended 31 March 2019
During the three months ended June 30, 2019, Natur recorded revenues of $8,134, an 87% decrease over revenues of $64,419 for the preceding period. The decrease against the quarters was driven by the fact that the companies focus for the quarter was on restructuring and seeking funding that would allow the business to continue as a going concern. The focus moving forward into the second half of the year is to engage revenues as part of the Company’s new strategic focus.
For the quarter ended June 30, 2019, cost of goods sold totaled $4,919, a 91% decrease as compared to $94,777 in the preceding period of 2019. This reflects the costs associated with the overall reduction of revenue. FHArevenue and due to the reduction in sales the Company had experienced higher marginal costs for our warehousing in the first quarter which have now been largely reduced. We also experienced higher disposal costs due to the perishable nature of our products in the first quarter of 2019. Natur posted a gross profit of $285,123$3,215 during the first nine months of 2018,second quarter 2019, versus a gross profitloss of $323,171$30,358 for the first nine monthspreceding quarter of 2017, a decrease of 12%. 2019.
FHA
Natur recorded total operating expenses of $565,107$1,355,005 during the first nine monthssecond quarter of 2018,2019, a 7% increase30% decrease as compared to operating expenses of $528,367$1,939,328 in the same period of 2017. General and administrative expensespreceding period. Wages & Salaries totaled $122,529$108,335 in the first nine monthssecond quarter of 20182019 versus $142,241$264,729 in the first nine months of 2017,preceding quarter a decrease of 14%,59% driven by significantly streamlined head-count compared to the first quarter. An additional strong contributing factor is the discontinuation of retail store activities in both the UK and the Netherlands. Selling, General & Administrative costs decreased to $1,243,061 from $1,402,410 when comparing the preceding quarter, or 11%. This was driven mainly by a decrease in recruiting expense. Consulting fees increasedthe overall costs incurred by the business due to the administration costs of maintaining a public listing as processes have been strengthened and we have undertaken less advisory work in the quarter. The was slightly offset by the fact that the Company also introduced a stock option scheme in 2019 with higher costs in the second quarter due to the termination agreement with Ms. Ellen Berkers. Amortization depreciation & impairment costs decreased to $3,609 from $57,775 to $118,240$272,189 when comparing the second quarter of 2019 versus the first nine monthsquarter of 2017 versus 2018,2019, or 99%. This was driven mainly by an increasethe Company taking a prudent measure to write down all assets in legal fees. Salaries, wages and related expenses increased 0%the retail stores (roughly $200k) to $306,356Nil in the first nine monthsquarter. As the Company could not comfortably assume we would receive any proceeds for these assets it will therefore only take gains on disposal in future periods should they be realized. These assets are now with the Curator pursuant to the Petition who is dealing with the liquidation of 2018 from $305,352 in 2017. Selling expenses in the first nine months of 2018 were $17,982 versus $22,999 in the comparable period of 2017, driven by a decrease in advertising.company.
For the first nine months of 2018, other expense included $77,065 of interest expense on the notes payable. By way of comparison, for the first nine months of 2017, other income and expense included $34,065 for recognition of a loss on the derivative liability and $76,411 of interest expense on the notes payable.
FHA’sNatur’s net lossprofit available to common shareholders was $591,881$196,324 for the first nine monthssecond quarter of 2018.2019. This represents a 110% increasestrong improvement from our net loss of $281,994$1,747,531 in the first nine monthsquarter of 2017.2019. The gain was partially by the corporate restructuring and the decision to close the UK business and a number of the company’s subsidiaries in the Netherlands which allowed a gain on disposal of $1,891,985 to be realized.
Three Months Ended SeptemberRestructuring Activities
Debt restructuring - Effective June 30, 2019 the Company and most of its debtholders have agreed and executed contracts to settle the amounts owed by the Company to the holders under individual the debt agreements, including principle, interest expenses, penalties and other charges of whatsoever nature, all in an amount equal to $6,754,575 in exchange for and in consideration of the issuance to by the Company of an aggregate of 161,149,309 shares of Common Stock.
Corporate restructuring - In line with the objective to secure the continuity of the Company, it was decided in late 2018 to extend the product line with the addition of functional extracts (Nutrigenomics, hemp-derived extracts). For this, the Company established Natur CBC B.V. at March 13, 2019, wholly owned by Natur International Corp. Based on global developments and 2017.following the success of companies in the USA and Canada, the Company defined new growth objectives with complementary products based on hemp-derived extracts as a new revenue model. Additional funding was sought in the market, but it became apparent that the willingness of new investors to provide the company with funding in debt or equity was dependent on the restructuring of the existing debt of the Company. As most of this debt exists at the level of Natur Holding B.V., it was decided to develop a restructuring plan to: establish an asset transfer from Natur Holding B.V. to Natur CBD B.V., optimizing the proceeds for these assets and subsequently liquidate Natur Holding B.V. and continue the business in Natur CBD B.V. with an extended portfolio of functional products, including food and beverages infused with hemp-derived extracts and deliver the objectives as set by the Board.
DuringIn May 2019 we reached agreements with most of the three months ended September 30, 2018, FHA recorded revenues of $363,607, a 14% decrease over revenues of $423,306debtholders to convert their debt to equity and effectively May 1, 2019 the asset transfer between Natur Holding B.V. and its sister company Natur Functionals B.V. was executed and Natur Holding B.V. and its wholly owned subsidiaries were declared bankrupt by the Court in Amsterdam, the Netherlands. The total Debt that was converted to Shares to be issued is $6,754,575.
In June we reached agreement with private investors for the samesale of Preferred Stock and Warrants. At June 30, 2019 agreements were signed for a total of $2,064,756 against 65,621.283 of to be issued Preferred Shares.
Accounting Policies
ASC 842: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This update requires the recognition of lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous guidance. The accounting for finance leases (capital leases) was substantially unchanged. The original guidance required application on a modified retrospective basis with adjustments to the earliest comparative period presented. In August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842,” which included an option to not restate comparative periods in 2017. The decrease for 2018transition and elect to use the effective date of ASU No. 2016-02 as the date of initial application, which the Company elected. As a result, the consolidated balance sheet prior to January 1, 2019 was driven by a decrease innot restated, and continues to be reported under previous guidance that did not require the userecognition of our staffing servicesoperating lease liabilities and our home healthcare services in Billings, Montana.
Forcorresponding lease assets on the quarter ended September 30, 2018, cost of services totaled $261,734, a 21% decrease as compared to $330,294 in the comparable period of 2017. This is a reflection of the costs associated with the overall reduction of revenue. FHA posted gross profit of $101,873 during the third quarter 2018, versus a gross profit of $93,012 for the third quarter of 2017, an increase of 10%.
FHA recorded total operating expenses of $212,938 during the third quarter of 2018, a 36% increase as compared to operating expenses of $157,084 in the same period of 2017. General and administrative expenses totaled $35,617 in the third quarter of 2018 versus $44,259 in the third quarter 2017, a decrease of 20% driven by a decrease in liability insurance and recruiting fees. Consulting fees increased to $62,324 from $7,947 when comparing the third quarter of 2018 versus 2017, driven by an increase in legal fees. Salaries, wages and related expenses increased to $110,829 in the third quarter of 2018 from $100,122 in 2017, an increase of 11%, driven by an increase in accrued wages. Selling expenses in the third quarter of 2018 were $4,168 versus $4,756 in the comparable quarter of 2017.
FHA’s net loss available to common shareholders was $294,938 for the third quarter of 2018. This represents a 79% increase from our net loss of $164,798 in the third quarter of 2017.
Liquidity and Capital Resources.
Cash on hand was $60,202 at September 30, 2018, a decrease of $84,260 from the $144,462 on hand at December 31, 2017. Cash used in operations for the nine months ended September 30, 2018, was $44,983, versus cash used in
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operation of $77,346 for the nine months ended September 30, 2017. The decrease isconsolidated balance sheet. As a result of the increase collectionadoption of accounts receivables, coupled with our operating results.
On September 21, 2018, in connection with the execution of the Share Exchange Agreement (the “SEA”) betweenASU No. 2016-02 on January 1, 2019, the Company Natur Holding B.V., a Netherlands-based holding company (“Natur”),recorded operating lease right-of-use assets of $580,310 and operating lease liabilities of $578,007. The adoption of ASU No. 2016-02 had an immaterial impact on the several stockholdersCompany’s condensed consolidated statement of Natur,income and consolidated statement of cash flows for the six-month period ended June 30, 2019. In addition, the Company executed a Promissory Note for $275,000 with Natur. The note shall be exchanged for Series A Preferred Stockelected the package of practical expedients permitted under the Company attransition guidance within the time of closing of the Share Exchange Agreement between the Company and Natur. On September 28, 2018, the Company received $270,005 from Alpha and on the same date, wired $270,005 to Natur for working capital. The note is recorded as a subscription receivable while the Share Exchange Agreement is pending. The execution of the SEA was disclosed in the Company’s Current Report on Form 8-K dated September 21, 2018, and filed with the Securities and Exchange Commission on September 24, 2018.
The Company has insufficient cash to finance operations and continues to incur losses and accumulated deficit and has a short-term note payable in default in excess of anticipated cash. These factors raise substantial doubt about the ability ofnew standard, which allowed the Company to continue as a going concern. There is no assurancecarry forward the historical lease classification, not reassess prior conclusions related to expired or existing contracts that are or that contain leases, and not reassess the Company will be successful in achieving profitable operations or finding additional equity or debt financing.accounting for initial direct costs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required for smaller reporting companies.
Item 4. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), which we refer to as disclosure controls, are controls and procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any control system. A control system, no matter how well conceived and operated, can provide only reasonable assurance that its objectives are met. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.
As of SeptemberJune 30, 2018,2019, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of such date, the design and operation of these disclosure controls were effectiveineffective to accomplish their objectives at the reasonable assurance level.
(b) Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), occurred during the fiscal quarter ended September 30, 2018June, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.reporting
PART II - OTHER INFORMATION
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes included in Part I, Item 1. Legal Proceedings.1 of this Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those described below. You should read the “Risk Factors” section of this Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Certain figures, such as interest rates and other percentages included in this section have been rounded for ease of presentation. Percentage figures included in this section have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our consolidated financial statements or in the associated text. Certain other amounts that appear in this section may similarly not sum due to rounding.
ITEM 1 – LEGAL PROCEEDINGS
On June 17, 2016 and June 30, 2016 two complaints were filed, one with the Federal Equal Employment Opportunity Commission (“EEOC”) and one with the Wyoming State Department of Labor against the Company, alleging discrimination on the basis of sex and disability. The complaints dodid not seek any specific monetary relief. The complaints are beingwere mediated by the Wyoming State Department of Labor, and the U.S. Equal Employment
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Opportunity Commission. The Wyoming State Department of Labor issued a notice of dismissal for one of the complaints. After reviewing the facts and circumstances, the Company believes the claims made are weak, at best, and the Company has retained counsel and intends to continue a vigorous defense. On March 6, 2018, a complaint was filed with the Wyoming Court of Natrona County, alleging violation of the Wyoming Fair Employment Practices Act of 1965 for discrimination based upon sex, disability and retaliation. The complaint does not seek any specific monetary relief. At this time, management cannot reasonably estimate the cost to defend or the outcome of the complaints.
On June 1, 2018, The U.S. EEOC made a determinationdecided that Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964) by paying a male employee more than female employees. The EEOC has determinedinitially claimed that back wages for these individuals plus liquidated damages total $43,593, and the Company has recorded an accrual for $17,593 of this amount, as the remainder is in dispute. The company has voluntarily entered into the Conciliation Process with the EEOC to reach a resolution of the matter.$43,593. On September 19, 2018, the Company attended thea Conciliation meeting, at which the EEOC presented a revised settlement of $133,575 for back wages plus liquidated damages. The Company and the EEOC did not agree to a resolution. On September 28, 2018, the EEOC filed a in the U.S. District Court for the District of Wyoming a complaint claiming Interim Healthcare of Wyoming violated the Wage discrimination laws (Title VII of the Civil Rights Act of 1964) by paying a male employee more than female employees. It is too early to provide an educated opinion on the chances of a favorable outcome in this matter. There was a wage disparity present at Interim such that a male RN nurse employee was earning $1-$2 more per hour than all other RN nurse employees who were female. Interim employed approximately 6 female RN nurses, and this wage disparity existed for approximately 1 year of operation. We have asserted that this wage disparity was the result of market factors and not illegal gender discrimination, however whether we will be able to marshal sufficient evidence to overcome the presumption that arises from the admitted wage disparity. The Company recorded an accrual totaling $133,575 related to this matter.matter in the period ended December 31, 2018.
Item 1A. Risk FactorsITEM 1A – RISK FACTORS.
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of ProceedsITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None;None, not applicable.
Item 3. Defaults Upon Senior SecuritiesITEM 3 – DEFAULTS UPON SENIOR SECURITIES.
None;None, not applicable.
Item 4. Mine Safety DisclosuresITEM 4 – MINE SAFETY DISCLOSURES.
None;None, not applicable.
Item 5. Other InformationITEM 5 – OTHER INFORMATION.
(a)ITEM 6 – EXHIBITS
On September 21, 2018, the Company and Natur and the stockholders of Nature Holding B.V., a Netherlands-based holding company (“Natur”), executed executed the SEA, by which the Company is to acquire all of Natur’s outstanding capital stock in exchange for a number of shares of the Company’s common stock that will constitute approximately 71% of the issued and outstanding capital stock of the Company on a fully-diluted basis after giving effect to the closing of the transactions contemplated by the SEA, and which includes the post-closing adoption of an equity award plan reserving up to 1,500,000 shares of common stock as equity awards to the Company’s directors, officers, employees and consultants. As disclosed in the Company’s Current Report on Form 8-K dated September 21, 2018, and filed with the Securities and Exchange Commission on September 24, 2018, the closing of the SEA is subject to certain pre-conditions and the Company can provide no assurance that such conditions will be met or that the SEA closing will occur as contemplated by the parties. See the Company’s Current Report on Form 8-K dated September 21, 2018, and filed with the Securities and Exchange Commission on September 24, 2018.
Exhibit No. | Description | |
31.1 | 302 Certification of Paul Bartley | |
31.2 | 302 Certification of Ruud Huisman | |
32 | 906 Certification. | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation | |
101.DEF | XBRL Taxonomy Extension Definition | |
101.LAB | XBRL Taxonomy Extension Labels | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
On September 28, 2018, the Company filed Amended and Restated Articles of Incorporation (the “Amended Articles”) with the Wyoming Secretary of State. The Amended Articles designate two series of preferred stock as follows:
(i) The Amended Articles designated 2,469.131 shares of Series A Convertible Preferred Stock (the “Series A Stock”) having a par value of $0.001 per share and a Stated Value equal to $1,000. Holders have the option to
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convert their Series A Stock into the number of shares of common stock that is equal to the Stated Value divided by the Conversion Price of $0.030303 (subject to adjustment as set forth in the Amended Articles). The Series A Stock has no voting rights. Holders of Series A Stock are entitled to receive dividends as declared and paid on the Company’s common stock on an as-converted basis.
(ii) The Amended Articles designated 100,000 shares of Series B Preferred Stock (the “Series B Stock”) having a par value of $0.001 per share. Each share of Series B Stock will convert automatically into 1,000 shares of the Company’s common stock upon the filing by the Company of an amendment to its Articles of Incorporation to adjust the number of authorized shares of common stock to permit the Company to issue a sufficient number of common shares upon conversion of the Series B Stock. Each holder of Series B Stock is entitled to cast the number of votes that is equal to the number of shares of common stock into which the shares of Series B Stock held by such holder are convertible. Holders of Series B Stock are entitled to receive dividends as declared and paid on the Company’s common stock on an as-converted basis. See the Company’s Current Report on Form 8-K dated September 28, 2018, and filed with the Securities and Exchange Commission on October 3, 2018.
On October 18, 2018, the Company filed its Second Amended and Restated Articles of Incorporation (the “Second Amended Articles”) with the Wyoming Secretary of State. The Second Amended Articles amended the rights and preferences of the Series A Stock as follows:
(i) Of the 2,469.131 authorized shares of Series A Stock, a total of 757.575 shares shall be convertible at any time after their original issue date at the option of the holder thereof. A total of 1,711.556 such shares shall be convertible at any time upon the Company amending its Second Amended Articles to adjust the number of authorized shares of common stock to permit the Company to issue a sufficient number of common shares in conversion of such 1,711.556 shares of Series A Stock.
(ii) From the original issue date of the Series A Stock, the Company shall reserve underlying shares of common stock issuable upon conversion of 757.575 shares of Series A Stock. From and after the date of the amendment to the Second Amended Articles to adjust the number of authorized shares of common stock to permit the Company to issue a sufficient number of common shares in conversion of the remaining 1,711.556 shares of Series A Stock, the Company shall reserve underlying common shares issuable upon conversion of such 1,711.556 shares of Series A Stock. See the Company’s Current Report on Form 8-K dated October 18, 2018, and filed with the Securities and Exchange Commission on October 23, 2018.
(b) During the quarterly period ended September 30, 2018, there were no changes to the procedures by which shareholders may recommend nominees to the Company’s board of directors.
Item 6. Exhibits.
Exhibit No.
Description
302 Certification of Christopher J. Spencer
302 Certification of John Busshaus
906 Certification.
Documents incorporated by reference.
8-K Current Report dated September 21, 2018, filed on September 24, 2018, regarding Natur Holding Share Exchange Agreement and Securities Purchase Agreement.
8-K Current Report dated September 28, 2018, filed on October 3, 2018, regarding Amended and Restated Articles of Incorporation.
8-K Current Report dated October 18, 2018, filed on October 23, 2018, regarding Second Amended and Restated Articles of Incorporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FUTURE HEALTHCARE OF AMERICA
NATUR INTERNATIONAL CORP. | |||||
Date: 8/14/19 |
| By: | /s/ | ||
| |||||
Chief Executive Officer |
Date: 8/14/19 |
| /s/ | ||
| ||||
Chief Financial Officer |
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