| · | On January 7, 2020, Boomer Holdings, Inc. executed an Agreement of Merger and Plan of Share Exchange (the “Exchange Agreement”), with BNW, Boomer Naturals Holdings, Inc., a Nevada corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders of Boomer (the “Exchange”). Upon consummation of the transactions set forth in the Exchange Agreement (the “Closing”), the Boomer Holdings, Inc. adopted the business plan of Boomer. Pursuant to the terms of the Agreement, Boomer Holdings, Inc. agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 40,326,913 pre-split shares (the “Exchange Shares”) of the Boomer Holdings, Inc. Common Stock. Pursuant to the terms of the Exchange Agreement, BNW agreed to retire 8,000,000 shares of Boomer Holdings, Inc. Common Stock. As a result of the Exchange, Boomer became a wholly-owned subsidiary of Boomer Holdings, Inc. and following the consummation of the Exchange, the shareholders of Boomer will beneficially own approximately Ninety-Four Percent (94%) of the issued and outstanding Common Stock of Boomer Holdings, Inc.. On January 10, 2020, Boomer Naturals executed a Trademark License Agreement (the “License Agreement”) with Tommy Bahama Group, Inc. (“Tommy Bahama”) a wholly owned subsidiary of Oxford Industries, Inc. Pursuant to the terms of the License Agreement, Tommy Bahama agreed to license the Tommy Bahama trademark and other intellectual property from Tommy Bahama in connection with the manufacture, sale, distribution, advertisement and promotion of Boomer Holdings, Inc. products as more fully set forth in the License Agreement. The License Agreement requires Boomer Holdings, Inc. to pay minimum royalties for each license year and meet minimum net sales requirements of products under the licensed marks each year. The License Agreement may be terminated by Tommy Bahama before the end of the term for several reasons. TABLE OF CONTENTS ITEM 1.
| FINANCIAL STATEMENTS |
CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
| | | | | | | Current Assets:
| | | | | | | Cash | | | $128,115 | | | $152,667 | Accounts receivables, net of allowance for bad debt of $0 | | | 112,251 | | | — | Accounts receivables - related parties | | | 3,401 | | | — | Inventories, net | | | 771,949 | | | 53,724 | Other current assets | | | 313,904 | | | 1,934 | Notes receivables - related parties | | | 25,586 | | | 1,600 | Total current assets | | | 1,355,206 | | | 209,925 | Non-current Assets:
| | | | | | | Property and equipment, net | | | 146,646 | | | 75,928 | Lease asset | | | 1,147,316 | | | — | Total non-current assets | | | 1,293,962 | | | 75,928 | Total assets | | | $2,649,168 | | | $285,853 | TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
| | | | | | | Current Liabilities:
| | | | | | | Accounts payable | | | $743,962 | | | $159,870 | Other current liabilities | | | 180,956 | | | 16,738 | Accrued interest | | | 29,344 | | | — | Current portion of notes payable | | | 2,269,392 | | | — | Current portion of operating lease liabilities | | | 35,515 | | | — | Total current liabilities | | | 3,259,169 | | | 176,608 | Lines of credit - related parties | | | 507,500 | | | 110,000 | Operating lease liabilities, less current portion | | | 1,130,097 | | | — | Notes payable, net of current portion | | | 530,140 | | | — | Notes payable - related parties | | | — | | | 74,000 | Total liabilities | | | 5,426,906 | | | 360,608 | Commitments and contingencies
| | | | | | | Stockholders’ Deficit:
| | | | | | | Common stock, $0.001; 200,0000,000 shares authorized, 128,513,739 shares issued and outstanding, respectively | | | 128,514 | | | 520 | Additional Paid In Capital | | | 2,768,486 | | | 519,480 | Accumulated deficit | | | (5,674,738) | | | (594,755) | Total stockholders’ deficit | | | (2,777,738) | | | (74,755) | Total liabilities and stockholder’s equity | | | $2,649,168 | | | $285,853 |
The accompanying notes are an integral part of these condensed unaudited financial statements.
TABLE OF CONTENTS BOOMER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) Net revenue | | | $1,249,373 | | | $— | | | $1,676,936 | | | $— | Cost of goods sold | | | 782,982 | | | — | | | 936,369 | | | — | Gross profit | | | 466,391 | | | — | | | 740,567 | | | — | Operating expenses:
| | | | | | | | | | | | | Advertising and marketing | | | 427,743 | | | — | | | 1,067,396 | | | — | General and administrative | | | 552,904 | | | — | | | 1,083,610 | | | — | Payroll and payroll taxes | | | 662,656 | | | — | | | 1,566,840 | | | — | Professional fees | | | 582,875 | | | — | | | 1,550,257 | | | — | Research and development | | | 539 | | | — | | | 17,024 | | | — | Depreciation and amortization | | | 11,536 | | | — | | | 19,834 | | | — | Rent | | | 144,910 | | | — | | | 343,005 | | | — | Total operating expenses | | | 2,383,163 | | | — | | | 5,647,966 | | | — | Loss from operations | | | (1,916,772) | | | — | | | (4,907,399) | | | — | Other income (expense):
| | | | | | | | | | | | | Interest expense | | | (91,274) | | | — | | | (175,864) | | | — | Other income | | | 1,790 | | | — | | | 3,280 | | | — | Total other expense, net | | | (89,484) | | | — | | | (172,584) | | | — | Loss before provision for income taxes | | | (2,006,256) | | | — | | | (5,079,983) | | | — | Income tax provision | | | — | | | — | | | — | | | — | Net loss | | | $(2,006,256) | | | $— | | | $(5,079,983) | | | $— | Earnings (loss) per share:
| | | | | | | | | | | | | Basic and diluted | | | $(0.02) | | | $— | | | $(0.04) | | | $— | Weighted average number of common shares outstanding:
| | | | | | | | | | | | | Basic and diluted | | | 128,513,739 | | | — | | | 123,071,192 | | | — |
The accompanying notes are an integral part of these condensed unaudited financial statements.
TABLE OF CONTENTS CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(UNAUDITED) Balances - July 31, 2019 | | | 30,000 | | | $520 | | | $519,480 | | | $(594,755) | | | $(74,755) | Issuance of stock | | | 128,483,739 | | | 127,994 | | | 2,249,006 | | | — | | | 2,377,000 | Net loss | | | — | | | — | | | — | | | (5,079,983) | | | (5,079,983) | Balances - April 31, 2020 | | | 128,513,739 | | | $128,514 | | | $2,768,486 | | | $(5,674,738) | | | $(2,777,738) |
Balances - January 31, 2020 | | | 128,513,739 | | | $128,514 | | | $3,059,454 | | | $(3,668,482) | | | $(480,514) | Common stock adjustment | | | — | | | — | | | (290,968) | | | — | | | (290,968) | Net loss | | | — | | | — | | | — | | | (2,006,256) | | | (2,006,256) | Balances - April 30, 2020 | | | 128,513,739 | | | $128,514 | | | $2,768,486 | | | $(5,674,738) | | | $(2,777,738) |
The accompanying notes are an integral part of these condensed unaudited financial statements.
TABLE OF CONTENTS CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) Cash flows from operating activities:
| | | | | | | Net loss | | | $(5,079,983) | | | $— | Adjustments to reconcile net loss to net cash used in operating activities:
| | | | | | | Depreciation expense | | | 19,834 | | | — | Noncash lease expense | | | 18,296 | | | — | Changes in assets and liabilities:
| | | | | | | Accounts receivables, net | | | (112,251) | | | — | Accounts receivables, net - related parties | | | (3,401) | | | — | Other current assets | | | (311,970) | | | — | Inventories, net | | | (718,225) | | | — | Accounts payable | | | 584,092 | | | — | Other current liabilities | | | 164,218 | | | | Accrued interest | | | 29,344 | | | | Net cash used in operating activities | | | (5,410,046) | | | — | | | | | | | | Cash flows from investing activities:
| | | | | | | Purchases of property and equipment | | | (90,552) | | | — | Loans made to related parties | | | (23,986) | | | | Net cash used in investing activities | | | (114,538) | | | — | | | | | | | | Cash flows from financing activities:
| | | | | | | Borrowing on line of credit - long term | | | 1,630,238 | | | — | Repayment on line of credit - long term | | | (1,232,738) | | | — | Borrowing on loans - current term | | | 2,641,377 | | | — | Repayment on loan - current term | | | (371,985) | | | — | Borrowing on loans - long term | | | 1,553,258 | | | — | Repayment on loan - long term | | | (1,023,118) | | | — | Borrowing current portion of notes payable - related parties | | | 64,400 | | | — | Repayment Notes payable - related parties | | | (138,400) | | | — | Proceeds from issuance of common stock | | | 2,377,000 | | | — | Net cash provided by financing activities | | | 5,500,032 | | | — | Net decrease in cash | | | (24,552) | | | — | Cash – beginning of period | | | 152,667 | | | — | Cash – end of period | | | $128,115 | | | $— | Supplemental disclosures of cash flow information
| | | | | | | Cash paid during the period for:
| | | | | | | Interest | | | $146,520 | | | $— | Income taxes | | | $800 | | | $— |
The accompanying notes are an integral part of these condensed unaudited financial statements.
TABLE OF CONTENTS NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Organization Boomer Holdings, Inc. (the “Company”), through its wholly owned subsidiary, Boomer Naturals, Inc., engages in the development and sale of the proprietary CB5 wellness formula in the United States of America and internationally. All of the Company’s sales relate to CB5 and its related products. Boomer Naturals, Inc. was incorporated in June 2019 and is headquartered in Las Vegas, Nevada. Share Exchange Between Boomer Natural Holdings and Boomer Naturals, Inc. Boomer Naturals, Inc. (“Naturals”) was incorporated as a Nevada corporation on June 7, 2019. Boomer Natural Holdings, Inc. (“Boomer”) was incorporated as a Nevada corporation on January 7, 2020 and was a non-operating company. On or about the same day, Naturals completed its share exchange with Boomer, whereby, the shareholders of Naturals became shareholders of Boomer and all of common stock shares of Boomer Naturals, Inc. was exchanged to Boomer by the shareholder of Boomer Naturals, Inc. for newly-issued shares of Boomer common stock resulting in Boomer Naturals, Inc. becoming a wholly-owned subsidiary of Boomer. The transaction is accounted for as a “reverse merger” and recapitalization since the stockholder of Boomer Naturals, Inc. owned a majority of the outstanding shares of the common stock of Boomer immediately following the completion of the transaction, the stockholders of Boomer Naturals, Inc. will have the significant influence and the ability to elect or appoint or to remove a majority of the members of the governing body of Boomer, and Boomer Naturals, Inc.’s senior management will dominate the management of Boomer immediately following the completion of the transaction. Accordingly, Boomer Naturals, Inc. will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of Boomer. Share Exchange Between Remaro Group Corp and Boomer Naturals Holdings On December 12, 2019, Marina Funt, the former principal shareholder, Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and Director of Remaro Group Corp. (the “Company”), consummated the sale of Ms. Funt’s 24,000,000 shares (the “Shares”) of the Registrant’s common stock, par value $0.001 per share (the “Common Stock”) to Boomer Natural Wellness, Inc. (“BNW”). The acquisition of the Shares, which represent approximately 76% of the Company’s shares of outstanding Common Stock, resulted in a change in control of the Registrant. In connection with the sale of the Shares, Ms. Funt waived, forgave and discharged any indebtedness of any kind owed to her by the Company. On January 7, 2020, the Company, then named Remaro Group Corp., executed and consummated an Agreement of Merger and Plan of Share Exchange (the “Exchange Agreement”), with Boomer Natural Wellness, Inc. (“BNW”), Boomer Naturals Holdings, Inc., a Nevada corporation (“Boomer”), Boomer Naturals, and the shareholders of Boomer (the “Exchange”). Upon consummation of the transactions set forth in the Exchange Agreement (the “Closing”), the Company adopted the business plan of Boomer Naturals. Pursuant to the terms of the Exchange Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares (the “Exchange Shares”) of the Company’s Common Stock and BNW agreed to retire 24,000,000 shares of the Company’s Common Stock. As a result of the Exchange, Boomer became a wholly-owned subsidiary of the Company and the Company adopted the business plan of Boomer Naturals. Following the consummation of the Exchange, the Boomer Shareholders beneficially owned approximately Ninety-Four (94%) of the issued and outstanding Common Stock of the Company. On January 7, 2020, the Company approved an amendment to its Articles of Incorporation (the “Amendment”) to: change the name of the Company to Boomer Holdings Inc.; effect a forward stock split on the basis of three-to-one (3:1); and to increase the number of authorized shares of capital stock to 210,000,000 of which 200,000,000 shares shall be Common Stock and 10,000,000 shares will be blank-check preferred stock, par value $0.001 per share. The transaction above will be accounted for as a “reverse merger” and recapitalization since the stockholder of Boomer will own a majority of the outstanding shares of the common stock of Company immediately following TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION(continued)
the completion of the transaction, the stockholders of Boomer will have the significant influence and the ability to elect or appoint or to remove a majority of the members of the governing body of the combined entity, and Boomer’s senior management will dominate the management of the combined entity immediately following the completion of the transaction. Accordingly, Boomer will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of the Company. Accordingly, the assets and liabilities and the historical operations that are reflected in the financial statements are those of the Boomer and are recorded at the historical cost basis of the Company. As a result, Boomer is the surviving company and the financial statements presented are historical financial accounts of Boomer Holdings, Inc. and its wholly owned subsidiary, Boomer Naturals, Inc. Financial Reporting As a result of share exchanges occurred amongst Company, Boomer, Boomer Naturals, Inc., and shareholders of the amongst companies, the consolidated financial statements include historical financial information of Boomer Holdings, Inc. and its wholly owned subsidiary, Boomer Naturals Inc. (combined companies referred as the “Company”) since June 7, 2019. Products Boomer Naturals Holdings Inc., through its wholly-owned subsidiary Boomer Naturals, Inc., a Nevada corporation, provides wellness solutions to multiple target markets through multiple sales channels, including PPE products, retail locations, e-commerce, and wholesale distribution networks. Boomer sells health and wellness products and services geared toward alleviating pain, anxiety and improving general wellness through our proprietary lines of CB5 products. CB5 formula is an FDA-compliant alternative that fully supports the body’s endocannabinoid system (ECS). This revolutionary breakthrough combines five natural and powerful ingredients that target the ECS. The CB5 products were developed by neurosurgeon, Dr. Mark Chwajol https://boomernaturalwellness.com/larry-mccleary-md/. The Boomer CB5 products contain a powerful combination of terpenes that interact with three known cannabinoid receptors and possibly a fourth, while the standard products in the industry interact only with one. The product contains all-natural ingredients which are all listed on the Generally Recognized as Safe list of the Food and Drug Administration and was developed by a practicing brain surgeon who is an expert in natural ingredients and CB receptors. Boomer focuses on wellness solutions for the 50 and older age demographic through the development of products using the Boomer proprietary CB5 formula. The CB5 formula includes a variety of terpenes that are compliant with FDA guidelines as all ingredients are listed on the Generally Recognized as Safe list. The solutions include products to alleviate pain, reduce anxiety, increase sleep quality, as well as offer cosmetic benefits. In addition, Boomer offers a full line of products to benefit the health of pets, including those suffering from seizures. Unaudited Interim Financial Information These unaudited interim financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending July 31, 2020. The balance sheets and certain comparative information as of July 31, 2019 are derived from the audited financial statements and related notes for the year ended July 31, 2019. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representation of the company’s management who are responsible for the integrity and objectivity of the financial statements. These accounting policies confirm to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America. The consolidated financial statements include the account of Boomer Holdings, Inc. and the following subsidiary: Boomer Naturals, Inc. | | | 100% |
All intercompany accounts, transactions, and profits have been eliminated upon consolidation. The consolidated financial statements were prepared and presented in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the estimated useful lives of property and equipment, patent and trademark, the ultimate collection of accounts receivable and accrued expenses. Actual results could materially differ from those estimates. Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations or cash flows. Revenue Recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured, and delivery has occurred or services have been rendered. The Company offers the CB5 proprietary formula various channels, PPE products, e-commerce, and brick and mortar retail. The Company includes shipping and handling costs in cost of sales. Amounts billed for shipping and handling are included with revenues in the statement of operation. The Company recognizes an allowance for estimated future sales returns in the period revenue is recorded, based on pending returns and historical return data, among other factors. Management did not believe any allowance for sales returns was required at April 30, 2020. Advertising Expense Advertising costs are expensed as incurred. Advertising expense amounted to $1,067,936 and $427,743 for the nine and three months ended April 30, 2020, respectively. Accounts Receivable Accounts receivable are carried at original invoice amount less the allowance for doubtful accounts based on a review of all outstanding amounts at year end. Management determines the allowance for doubtful accounts based on a combination of write-off history, aging analysis, and any specific known troubled accounts. Trade receivables are written off when deemed uncollectible. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
Inventories Inventories primarily consist of finished goods and are stated at the lower of cost (first-in-first-out) or market. The Company maintains an allowance for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values. Property and Equipment Property and equipment consist of leasehold improvements, furniture and fixtures, machinery and equipment are stated at cost. Property and equipment are recorded at cost. Depreciation of property and equipment is provided using the straight-line method over the estimated useful lives of the assets, generally 5-7 year. Leasehold improvements are depreciated over the shorter of the useful life of the improvement or the lease term, including renewal periods that are reasonably assured. Impairment of Long-lived Assets In accordance with ASC 360, “Property, Plant, and Equipment,” the Company reviews for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. The Company considers the carrying value of assets may not be recoverable based upon our review of the following events or changes in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount. Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date. The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. As of April 30, 2020, the Company believes that the carrying value of cash, account receivables, accounts payable, accrued expenses, and other current assets and liabilities approximate fair value due to the short maturity of theses financial instruments. The financial statements do not include any financial instruments at fair value on a recurring or non-recurring basis. Income Taxes The Company has elected to be taxed as an S-corporation. Accordingly, except for a minimal state tax, the Company is not taxed at the corporate level; rather, the tax on corporate income is paid and the benefits of losses are recognized at the stockholder level. Therefore, no provision or credit for federal income taxes has been TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
included in the financial statements. Certain transactions of the Company are subject to accounting methods for income tax purposes which differ from the accounting methods used in preparing the financial statements. Accordingly, the net income of the Company reported for federal income tax purposes may differ from the net income reported in these financial statements. The major differences relate to accounting for depreciation on property and equipment, stock compensation, and research credits The Company has adopted ASC 740-10-25, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25 for the three months ended April 30, 2020. The Company is no longer subject to federal and state income tax examination by tax authorities for year ended before 2019, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectable accounts and, as a consequence, believes that its accounts receivable related credit risk exposure beyond such allowance is limited. All of the Company’s revenues are derived from the sale of the proprietary CB5 formula and PPE products, E-commerce accounted for 47% of revenues for the nine months ended April 30, 2020, respectively and brick and mortar retail accounted for 53% of revenues for the nine months ended April 30, 2020, respectively. The Company’s principal market in 2019 was the United States, but the Company plans to expand internationally in 2020. The Company maintains its cash and cash equivalents with various credit institutions. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at FDIC-insured institutions are covered by FDIC insurance. At times, deposits may be in excess of the FDIC insurance limit; however, management does not believe the Company is exposed to any significant related credit risk. Leases Prior to December 31, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective from December 31, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the statement of operations and statement of cash flows. Recent accounting pronouncement ASC 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the IBR as of that date. The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities of $1,147,316 million and $1,165,612, respectively as of April 30, 2020. The difference between the operating lease ROU assets and operating lease liabilities at transition represented tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did materially impact our results of operations, cash flows, or presentation thereof. FASB ASU 2016-02 “Leases (Topic 842)” – In February 2016, the FASB issued ASU 2016-02, which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting but without explicit bright lines. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for the fiscal year beginning after December 15, 2019, including interim periods within those fiscal year beginning after December 15, 2020. The Company adopted ASC 842 (ASU 2016-02). The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities of $1,147,316 million and $1,165,612, respectively as of April 30, 2020. The difference between the operating lease ROU assets and operating lease liabilities at transition represented tenant improvements, and indirect costs that were derecognized. The adoption of ASC 842 did materially impact the Company’s results of operations, cash flows, or presentation thereof. FASB ASU 2016-15 “Statement of Cash Flows (Topic 230)” – In August 2016, the FASB issued 2016-15. Stakeholders indicated that there is a diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 addresses eight specific cash flow issues to reduce the existing diversity in practice. This ASU is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those fiscal year beginning after December 15, 2019. Early adoption is permitted. Adoption of this ASU will not have a significant impact on the Company’s statement of cash flows. FASB ASU 2016-12 “Revenue from Contracts with Customers (Topic 606)” – In May 2016, the FASB issued 2016-12. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 201612 provides clarification on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications. This ASU is effective for quarterly reporting periods beginning after December 15, 2018, and interim periods beginning after December 15, 2019. The Company is currently assessing the potential impact this standard will have on the Company’s financial statements and related disclosures. 3. INVENTORIES Inventories primarily consisted of finished goods in the amount of $771,949 and $53,724 as of April 30, 2020 and July 31, 2019, respectively. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
4. NOTES RECEIVABLES – RELATED PARTIES Notes receivables from related parties consisted of the following: Whale Sports - Loan receivable bearing no interest with unpaid principal balance due on demand. | | | $18,194 | | | $— | Net Tech Investment, LLC - Loan receivable bearing no interest with unpaid principal balance due on demand. | | | 4,185 | | | — | Daniel Capri, President - Loan receivable bearing no interest with unpaid principal balance due on demand. | | | 3,207 | | | 1,600 | Total notes receivables | | | $25,586 | | | $1,600 |
5. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Furniture and Equipment | | | $40,336 | | | $35,838 | Leasehold Improvement | | | 126,144 | | | — | Computer | | | — | | | 40,090 | Total property and equipment | | | 166,480 | | | 75,928 | Less-accumulated depreciation | | | (19,834) | | | — | Total property and equipment, net | | | $146,646 | | | $75,928 |
Depreciation expense on property and equipment amounted to $19,834 and $11,536 for the nine and three months ended April 30, 2020, respectively. 6. LINES OF CREDIT – RELATED PARTIES Lines of credit related parties consisted of the following: July 2019 ($447,500 line of credit) - Line of credit with maturity date of June 30, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | $447,500 | | | $50,000 | July 2019 ($60,000 line of credit) - Line of credit with maturity date of July 29, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 60,000 | | | 60,000 | Total lines of credit | | | 507,500 | | | 110,000 | Less: Short-term portion | | | — | | | — | Total lines of credit, net of current portion | | | $507,500 | | | $110,000 |
July 2019 - $447,500 line of credit On July 1, 2019, the Company entered into a line of credit agreement in the amount of $447,500 with maturity date of June 30, 2021. The line of credit bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company had unused line of credit of $0 as of April 30, 2020. July 2019 - $60,000 line of credit On July 1, 2019, the Company entered into a line of credit agreement in the amount of $60,000 with maturity date of July 29, 2021. The line of credit bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company had unused line of credit of $0 as of April 30, 2020. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
7. NOTES PAYABLE – RELATED PARTIES Notes payable to related parties consisted of the following: July 2019 ($150,000 notes payable) - Notes payable with maturity date of June 30, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the shareholdersmaturity date. | | | $— | | | $74,000 | Total notes payable - related parties | | | $— | | | $74,000 | Less: Short-term portion of Boomer (the “Exchange”). Upon consummationnotes payable - related parties | | | — | | | — | Total notes payable - related parties, net of the transactions set forth in the Exchange Agreement (the “Closing”), the Boomer Holdings, Inc. adopted the business plan of Boomer. Pursuant to the terms of the Agreement, Boomer Holdings, Inc. agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 40,326,913 pre-split shares (the “Exchange Shares”) of the Boomer Holdings, Inc. Common Stock. Pursuant to the terms of the Exchange Agreement, BNW agreed to retire 8,000,000 shares of Boomer Holdings, Inc. Common Stock. As a result of the Exchange, Boomer became a wholly-owned subsidiary of Boomer Holdings, Inc. and following the consummation of the Exchange, the shareholders of Boomer will beneficially own approximately Ninety-Four Percent (94%) of the issued and outstanding Common Stock of Boomer Holdings, Inc..current portion | | | $— | | | $74,000 |
July 2019 - $150,000 notes payable On July 1, 2019, the Company entered into a note payable – related party agreement in the amount of $150,000 with maturity date of June 30, 2021. The loan bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company had unused line of credit of $150,000 as of April 30, 2020. 8. NOTES PAYABLES Notes payables consisted of the following: January 10, 2020 Boomer Naturals executed a Trademark License Agreement (the “License Agreement”)($260,070 notes payable) - Notes payable with Tommy Bahama Group, Inc. (“Tommy Bahama”) a wholly owned subsidiarymaturity date of Oxford Industries, Inc. Pursuant toJanuary 4, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the termsmaturity date. | | | $260,070 | | | $— | January 2020 ($260,070 notes payable) - Notes payable with maturity date of January 4, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the License Agreement, Tommy Bahama agreed to licensematurity date. | | | 260,070 | | | — | April 2020 ($10,000 notes payable) – SBA loan payable with maturity date of April 15, 2050 with 3.75% interest per annum with unpaid principal balance and accrued interest payable on the Tommy Bahama trademarkmaturity date. | | | 10,000 | | | — | January 2020 ($105,375 notes payable) - Notes payable with maturity date of January 4, 2021 with 12% interest per annum with unpaid principal balance and other intellectual property from Tommy Bahama in connectionaccrued interest payable on the maturity date. | | | 105,375 | | | — | February 2020 ($100,000 notes payable) - Notes payable with maturity date of May 9, 2020 with 15% interest per annum with unpaid principal balance and accrued interest payable on the manufacture, sale, distribution, advertisementmaturity date. | | | 69,855 | | | — | February 2020 ($500,000 notes payable) - Notes payable with maturity date of February 24, 2021 with 12% interest per annum with unpaid principal balance and promotionaccrued interest payable on the maturity date. | | | 500,000 | | | — | February 2020 ($90,000 notes payable) - Notes payable with maturity date of Boomer Holdings, Inc. products as more fully set forth inMay 9, 2021 with 15% interest per annum with unpaid principal balance and accrued interest payable on the License Agreement. The License Agreement requires Boomer Holdings, Inc. to pay minimum royalties for each license yearmaturity date. | | | 34,894 | | | — | February 2020 ($50,000 notes payable) - Notes payable with maturity date of May 9, 2020 with 15% interest per annum with unpaid principal balance and meet minimum net sales requirementsaccrued interest payable on the maturity date. | | | 36,253 | | | — | February 2020 ($100,000 notes payable) - Notes payable with maturity date of products underMay 9, 2020 with 15% interest per annum with unpaid principal balance and accrued interest payable on the licensed marks each year. The License Agreement may be terminated by Tommy Bahama beforematurity date. | | | 69,812 | | | — | February 2020 ($100,000 notes payable) - Notes payable with maturity date of February 9, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the end of the term for several reasons.maturity date. | | | 69,177 | | | — |
TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
8. NOTES PAYABLES(continued)
February 2019 ($500,000 notes payable) - Notes payable with maturity date of February 24, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 500,000 | | | — | February 2020 ($50,000 notes payable) - Notes payable with maturity date of May 9, 2020 with 12% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 36,326 | | | — | September 2019 ($200,000 notes payable) - Notes payable with maturity date of September 14, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 200,000 | | | — | September 2019 ($300,000 notes payable) - Notes payable with maturity date of December 14, 2021 with 12% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 300,000 | | | — | April 2020 ($347,700 notes payable) - Paycheck Protection Program payable with maturity date of December 31, 2020 with 1% interest per annum with unpaid principal balance and accrued interest payable on the maturity date. | | | 347,700 | | | — | Total notes payable | | | $2,799,532 | | | $— | Less: current-term portion | | | (2,269,392) | | | — | Total notes payable – net of current portion | | | $530,140 | | | $— |
April 2020 - $347,000 notes payable On April 21, 2020, the Company received loan proceeds in the amount of $347,700 under the Paycheck Protection Program (“PPP”) from Cross River Bank, Inc. (“Lender”). The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, and maintains its payroll levels. Per PPP loan forgiveness guidelines, the Company expects the loan to be forgiven, based on qualifying business expenses. April 2020 - $10,000 notes payable On April 14, 2020, the Company received loan proceeds in the amount of $10,000 from the U.S. Small Business Administration (SBA). The loan maturity date is April 13, 2050, and bears interest at a rate of 3.75% per annum, payable monthly. The following tab provides future minimum payments as of April 30, 2020 2020 | | | $2,269,392 | 2021 | | | 531,140 | 2022 | | | — | 2023 | | | — | 2024 | | | — | Thereafter | | | — | Total | | | $2,799,532 |
9. EARNINGS PER SHARE The Company calculates earnings per share in accordance with ASC 260, “Earnings Per Share,” which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
9. EARNINGS PER SHARE(continued)
weighted average number of shares outstanding during the fiscal year. Dilutive earnings per share is computed on the basis of the weighted average number of shares plus potentially dilutive common shares which would consist of stock options outstanding (using the treasury method), which was none since the Company had net losses and any additional potential shares would be antidilutive. 10. INCOME TAX PROVISION The Company did not have material income tax provision (benefit) because of net loss and valuation allowances against deferred income tax provision for the three months ended April 30, 2020. A reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: Statutory federal rate | | | 21% | | | 21% | State income taxes net of federal income tax benefit and others | | | 0% | | | 0% | Permanent differences for tax purposes and others | | | 0% | | | 0% | Change in valuation allowance | | | -21% | | | -21% | Effective tax rate | | | 0% | | | 0% |
The income tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of 21%, primarily due to the change in the valuation allowance and state income tax benefit, offset by nondeductible expenses. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows: Deferred tax assets: | | | | | | | Net operating loss | | | $(1,099,415) | | | $(47,894) | Other temporary differences | | | — | | | — | Total deferred tax assets | | | (1,099,415) | | | (47,894) | Less - valuation allowance | | | 1,099,415 | | | 47,894 | Total deferred tax assets | | | $— | | | $— |
At April 30, 2020, the Company had available net operating loss carryovers of approximately $5,079,983. Per the Tax Cuts and Jobs Act (TCJA) implemented in 2018, the two-year carryback provision was removed and now allows for an indefinite carryforward period. The carryforwards are limited to 80% of each subsequent year’s net income. As a result, net operating loss may be applied against future taxable income and expires at various dates subject to certain limitations. The Company has a deferred tax asset arising substantially from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred tax asset since it is more likely than not that some or all of the deferred tax asset may not be realized. The Company files income tax returns in the U.S. federal jurisdiction and Nevada and is subject to income tax examinations by federal tax authorities for tax year ended 2019 and later and by not subject to Nevada authorities for tax year ended 2019 and later. The Company currently is not under examination by any tax authority. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of October 31, 2019, the Company has no accrued interest or penalties related to uncertain tax positions. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
10. INCOME TAX PROVISION(continued)
At the nine months ended April 30, 2020, the Company had cumulative net operating loss carryforwards for federal tax purposes of approximately $5,079,983. In addition, the Company had state tax net operating loss carryforwards of approximately $0. The carryforwards may be applied against future taxable income and expires at various dates subject to certain limitations. 11. RELATED PARTY TRANSACTIONS The Company had the following related party transactions: Outside Services – One of the Company’s outside contractor or consultant is Mr. Thomas Ziemann, a shareholder of the Company. Mr. Thomas Ziemann provides various consulting services to the Company. The Company recorded expense of $129,319 for nine months ended April 30, 2020 and $15,000 for three months ended April 30, 2020 and had outstanding balance recorded as accrued expense of $0 as of April 30, 2020. Outside Services – One of the Company’s outside contractor or consultant is Mr. Daniel Capri, a shareholder and President of the Company. Mr. Daniel Capri provides various consulting and management services to the Company. The Company recorded expense of $29,112 for nine months ended April 30, 2020 and $0 for three months ended April 30, 2020 and had outstanding balance recorded as accrued expense of $5,935 as of April 30, 2020. Outside Services – One of the Company’s outside contractor or consultant is Mr. Rob Ekstedt, a shareholder of the Company. Mr. Rob Ekstedt provides various consulting services to the Company. The Company recorded expense of $0 for nine months ended April 30, 2020 and $36,000 for three months ended April 30, 2020 and had outstanding balance recorded as accrued expense of $0 as of April 30, 2020. Notes Receivables – No interest due on demand and the loan was provided primarily to Daniel Capri, the Company’s President. Line of Credit – On July 1, 2019, the Company entered into a line of credit agreement in the amount of $300,000 with Daniel Capri, the owner and founder of Whale Sports and President of the Company. The maturity date of the line of credit is June 30, 2021. As of April 30, 2020, the balance on the line of credit for $326,250, including interest was paid off. Line of Credit – On July 1, 2019, the Company entered into a line of credit agreement in the amount of $89,000 with NetTech Investments owned by Daniel Capri, the Company’s President. The maturity date of the line of credit is July 1, 2029 bearing interest of 6% per annum. As of April 30, 2020, the balance on the line of credit for $64,400 was paid off. Line of Credit – On July 1, 2019, the Company entered into a line of credit agreement in the amount of $447,500 with Michael Quaid, Chief Executive Officer of the Company. The maturity date of the line of credit is June 30, 2021. Line of Credit – On July 1, 2019, the Company entered into a line of credit agreement in the amount of $60,000 with Debra Ziemann, a shareholder and the spouse of the Company’s Chief Operating Officer and Director. The maturity date of the line of credit is July 29, 2021. Line of Credit – On July 1, 2019, the Company entered into a line of credit agreement in the amount of $150,000 with Giang Hoang, a shareholder of the Company. The maturity date of the line of credit is June 30, 2021. As of April 30, 2020, the balance on the line of credit for $171,880 including interest was paid off. Notes Payable (related parties) – The Company entered into various notes payable with related parties who are also shareholders of the Company. Refer to Notes Payable – Related Parties for additional information. TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
12. COMMITMENTS AND CONTINGENCIES Operating Leases The Company entered into the following operating facility lases: Cheyenne Fairways – On July 25, 2019, the Company entered into an operating facility lease for its corporate office located in Las Vegas with 84 months term and with option to extend from 2 years to 5 years at the market rate. The lease started on September 1, 2019 and expires on August 31, 2026. Cheyenne Technology Center – On September 16, 2019, the Company entered into an operating facility lease for its retail and warehouse located in Las Vegas for 37 months expiring on November 31, 2022. The two facility leases for two separate locations dated on July 25, 2019 and September 16, 2019. Rent expense paid under the lease agreements for the nine months ended April 30, 2020 was $343,005. For operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments as of the date of adoption using the incremental borrowing rate. The adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities of $1,147,316 million and $1,165,612 million as of April 30, 2020. The difference between the operating lease ROU assets and operating lease liabilities at transition represented existing deferred rent expenses and tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially impact our results of operations, cash flows, or presentation thereof. In accordance with ASC 842, the components of lease expense were as follows: Operating lease expense | | | $68,702 | | | $11,151 | | | $79,853 | Total lease expense | | | $68,702 | | | $11,151 | | | $79,853 |
In accordance with ASC 842, maturities and operating lease liabilities as of April 30, 2020 were as follows: Undiscounted cash flows:
| | | | | | | | | | 2020 | | | $63,173 | | | $7,274 | | | $70,447 | 2021 | | | 231,441 | | | 29,971 | | | 261,411 | 2022 | | | 235,520 | | | 31,169 | | | 266,689 | 2023 | | | 242,077 | | | 10,596 | | | 252,673 | 2024 | | | 248,635 | | | — | | | 248,635 | Thereafter | | | 540,986 | | | — | | | 540,986 | Total undiscounted cash flows | | | 1,561,831 | | | 79,010 | | | 1,640,841 | Discounted cash flows:
| | | | | | | | | | Lease liabilities - current | | | 29,977 | | | 5,538 | | | 35,515 | Lease liabilities - long-term | | | 1,065,635 | | | 64,462 | | | 1,130,097 | Total discounted cash flows | | | 1,095,612 | | | 70,000 | | | 1,165,612 | Difference between undiscounted and discounted cash flows | | | $466,219 | | | $9,010 | | | $475,229 | | | | | | | | | | |
TABLE OF CONTENTS BOOMER HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(continued)
12. COMMITMENTS AND CONTINGENCIES(continued)
In accordance with ASC 842, future minimum lease payments as of April 30, 2020 were as follows: Minimum lease payments
| | | | | | | | | | 2020 | | | $57,763 | | | $6,864 | | | $64,627 | 2021 | | | 196,605 | | | 26,574 | | | 223,179 | 2022 | | | 177,447 | | | 25,017 | | | 202,464 | 2023 | | | 161,860 | | | 7,957 | | | 169,817 | 2024 | | | 147,534 | | | — | | | 147,534 | Thereafter | | | 267,288 | | | — | | | 267,288 | Present values of minimum lease payments | | | $1,008,497 | | | $66,412 | | | $1,074,909 |
Contingencies The Company is subject to various legal proceedings from time to time as part of its business. As of April 30, 2020, the Company was not currently party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse effect on its business, financial condition and results of operations. 13. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after April 30, 2020 up through the date the financial statements were available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed as of and for the year ended April 30, 2020 except for the following: Effective July 20, 2020, the Company issued an aggregate of 7,743,156 shares of common stock to various shareholders for subscriptions, services other consideration. $840,270 and 916,600, of the shares were issued for subscriptions received in the aggregate amount of $0 and 6,826,556 of the shares were issued for services. TABLE OF CONTENTS Boomer Holdings Inc. PROSPECTUS Prospectus dated October 15, 2020 PROSPECTUS
Prospectus dated March 11, 2020
TABLE OF CONTENTS
INFORMATION NOT REQUIRED IN PROSPECTUS Item 13. Other Expenses of Issuance and Distribution.
Item 13.
| Other Expenses of Issuance and Distribution. |
The following table sets forth an estimate of the costs and expenses payable by us in connection with the offering described in this registration statement. All of the amounts shown are estimates except the Securities and Exchange Commission registration fee: | | SEC registration fee | | | $1,6349,562 | Legal fees and expenses | | | 20,000 | Accounting fees and expenses | | | 5,000 | Printing and engraving expenses | | | 2,500 | Transfer agent and registrar fees and expenses | 1,000 | Other expenses | 2,000 | | | TotalOther expenses | $ 32,634 | | 2,000 | Total | | | |
Item 14. Indemnification of Directors and Officers.
Item 14.
| Indemnification of Directors and Officers. |
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of her position, if she acted in good faith and in a manner she reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which she is to be indemnified, we must indemnify her against all expenses incurred, including attorney'sattorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada. Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable. Item 15.
Item 15.
| Recent Sales of Unregistered Securities |
On July 29, 2020, the Issuer issued approximately 2,956,416 shares of Unregistered Securitiescommon stock. As the number of shares was less than five percent (5%) of the number of outstanding shares of the Effective July 20, 2020, the Company issued an aggregate of 7,743,156 shares of common stock to various shareholders for subscriptions, services other consideration. 916,600 of the shares were issued for subscriptions received in the aggregate amount of $840,270 and 6,826,556 of the shares were issued for services. On January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the “Exchange Agreement”), with Boomer Naturals Holdings, Inc., a Nevada corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders of Boomer (the “Exchange”). Upon consummation of the transactions set forth in the Exchange Agreement (the “Closing”), the Company adopted the business plan of Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares of the Company’s Common Stock. On August 5, 2020, the Company sold 24,000,000 shares of Company’s common stock, par value $0.001 per share (the “Common Stock”)to its founder Marina Funt for $8,000. In connection with each of the followingpreceding unregistered sales and issuances of securities, except as otherwise provided below, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder for transactions not involving a public offering.
TABLE OF CONTENTS Item 16. Exhibits and Financial Statement Schedules
Item 16.
| Exhibits and Financial Statement Schedules |
| | | Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 16, 2020). | | | | | 5.1 | | | By-laws of the Registrant (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed on December 9, 2016). | | | | | | | | Opinion of McCarter & English LLP.* | | | | | 10.1 | 2020 Employee Equity Incentive Plan.* | | | 10.2 | Agreement and Plan of Share Exchange (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 8, 2020) | | | | | 10.3 | | | Trademark License Agreement between Tommy Bahama Group, Inc. and Boomer Naturals, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2020) | | | | | 23.1 | | | Lease between Boomer Natural Wellness, Inc. and Ali Forootan LLC dated June 26, 2019 | | | | | | | | Employment Agreement with Michael Quaid | | | | | | | | Employment Agreement with Daniel Capri | | | | | | | | Employment Agreement with Thomas Ziemann | | | | | | | | Promissory Note from Boomer Naturals, Inc. in the amount of $300,000 in favor of Michael Quaid dated July 1, 2019 | | | | | | | | Promissory Note from Boomer Naturals, Inc. in the amount of $600,000 in favor of Net Tech Investments LLC dated July 1, 2019 | | | | | | | | Promissory Note from Boomer Naturals, Inc. in the amount of $60,000 in favor of Debra Ziemann dated July 1, 2019 | | | | | | | | Promissory Note from Boomer Naturals, Inc. the amount of $150,000 in favor of Giang Hoang dated July 1, 2019 | | | | | | | | Promissory Note from Boomer Naturals, Inc. in the amount of $300,000 in favor of Whale Sports LLC dated July 1, 2019 | | | | | | | | Exclusive Distributorship Agreement between Boomer Naturals, Inc. and PhamVan Trading Co., Ltd. Dated April 9, 2020 | | | | | | | | Amended Employment Agreement with Michael R. Quaid dated September 4, 2020 | | | | | | | | Consent of Benjamin & Ko | | | | | | | | Consent of McCarter & English LLP (included as part of Exhibit 5.1)* | | | | | | | | Power of Attorney (included on signature page to this Registration Statement) |
TABLE OF CONTENTS Item 17.
| | 101.INS | XBRL Instance Document* | | | 101.SCH | XBRL Taxonomy Extension Schema Document* | | | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | | | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document*Undertakings |
| * | To be filed by amendment. |
Item 17. Undertakings
The undersigned registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
1.
| To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
i.
| To include any prospectus required by section 10(a)(3) of the Securities Act; |
| ii.
| To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
iii.
| iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement,provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in the registration statement. 39 |
2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shallbe deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
4. That, for the purpose of determining liability under the Securities Act to any purchaser:
2.
| That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
3.
| To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
4.
| That, for the purpose of determining liability under the Securities Act to any purchaser: |
i.
| If the registrant is relying on Rule 430B (Section 430B of this chapter): |
| A.
| Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| B.
| Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
| ii.
| If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in |
TABLE OF CONTENTS the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. 5.
| That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, asregardless of the date it is firstunderwriting method used after effectiveness. Provided, however, that no statement made in a registration statementto sell the securities to the purchaser, if the securities are offered or prospectus that is partsold to such purchaser by means of any of the registration statementfollowing communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale priorsell such securities to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.purchaser: |
5. That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| i.
| Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| ii.
| Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| iii.
| The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| iv.
| Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
6.
| Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
6. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Boomer Holdings Inc., a Nevada corporation, has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, Nevada, on March 11,October 15, 2020. | | | BOOMER HOLDINGS INC. | | | | | | | | By: | | | By: | | | | | | | | | | Name: Michael Quaid | | | | | | | Title: Chief Executive Officer |
Each person whose signature appears below constitutes and appoints Michael Quaid and Daniel Capri and each of them singly, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to Rule 462(b) of the Securities Act and to file the same, with all exhibits thereto and all other documents in connection therewith, with the SEC, granting unto each said attorney-in-fact and agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or either of them or their, his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the capacities indicated. | | | | | | | | | | /s/ Daniel Capri .Daniel Capri.
| | | President, Treasurer and Chairman
(Principal Financial Officer) | March 11, | | October 15, 2020 | Daniel Capri. | | |
| | | | | | | /s/ Michael Quaid Michael Quaid
| | | Chief Executive Officer, Director
(Principal Executive Officer) | March 11, | | October 15, 2020 | Michael Quaid | | | /s/ Thomas Ziemann
Thomas Ziemann
| Chief Operating Officer, Director | March 11, 2020 | | | | | /s/ Giang Thi Hoang | | | Director | | | October 15, 2020 | Giang Thi Hoang | |
|