UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. |
FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2014
OR
| [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
COMMISSION FILE NUMBER: 000-55266
HempAmericana, Inc.
(Exact name of registrant as specified in its charter)
(Pink Sheets: HMPQ)
| Delaware | 46-4816984 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| 78 Reade Street, Suite 4FW New York City, NY | 10007 | |
| (Address of principal executive offices) | (Zip Code) | |
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 3 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. [X]Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 3 months (or for such shorter period that the registrant was required to submit and post such files). [X]Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common equity, as of January 20, 2015: 11,860,840 shares of common stock.
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HEMPAMERICANA, INC.
INDEX
PART I-FINANCIAL INFORMATION
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| ITEM 1 | FINANCIAL STATEMENTS |
HEMPAMERICANA, INC.
| As of November 30, 2014 (unaudited) | As of February 28, 2014 | ||||||||
| ASSETS | |||||||||
| Current Assets | |||||||||
| Cash | $ | 24,467 | $ | 100 | |||||
| Inventory | $ | 4,336 | $ | 100 | |||||
| Total Current Assets | $ | 28,803 | $ | 100 | |||||
| TOTAL ASSETS | $ | 28,803 | $ | 100 | |||||
| LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||
| Current Liabilities | |||||||||
| Accounts payable- Related party | $ | 0 | $ | 480 | |||||
| Accounts payable | - | - | |||||||
| Total Current Liabilities | 0 | 480 | |||||||
| TOTAL LIABILITIES | 0 | 480 | |||||||
| Stockholders’ Equity (Deficit) | |||||||||
| Preferred stock ($.001 par value, 20,000,000 shares authorized; none issued and outstanding) | - | - | |||||||
| Common stock ($.001 par value, 1,000,000,000 shares authorized, 11,860,840 shares issued and outstanding as of November 30, 2014 and and 40,000,000 as of February 28, 2014) | 11,861 | 40,000 | |||||||
| Additional paid-in capital | 84,525 | (40,000) | |||||||
| Retained Deficit | (67,583) | (380) | |||||||
| Total Stockholders’ Equity (Deficit) | 28,803 | (380) | |||||||
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 28,803 | $ | 100 | |||||
See Accompanying Notes to Unaudited Financial Statements
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HEMPAMERICANA, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended November 30, 2014 | Nine Months Ended November 30, 2014 | |||||
| Revenue | $ | 1,200 | $ | 1,200 | ||
| Cost of Revenues | $ | 864 | $ | 864 | ||
| Gross Profit | $ | 336 | $ | 336 | ||
| General & Administrative Expenses | $ | 6,099 | $ | 14,079 | ||
| Share-based Comp. - Non Cash | - | 53,460 | ||||
| Total General & Administrative expenses | $ | 6,099 | $ | 67,539 | ||
| Net Loss | $ | (5,763) | $ | (67,203) | ||
| Basic and Diluted Loss Per Share | $ | (0.00) | $ | (0.00) | ||
| Weighted average number of common shares outstanding | 11,860,840 | 80,861,483 |
See Accompanying Notes to Unaudited Financial Statements
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HEMPAMERICANA, INC..
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended November 30, 2014 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net (loss) | $ | (67,203) | |
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | |||
| Common stock issued to Officers for services rendered | 53,460 | ||
| Changes in current assets and liabilities: | |||
| Inventory | (4,336) | ||
| Accounts Payable – related party | (480) | ||
| Net cash (used in) operating activities | (18,559) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Contributions by owners | 27,892 | ||
| Proceeds from Sale of Common Stock | 15,034 | ||
| Net Cash Provided by Financing Activities | 42,926 | ||
| Net change in cash | 24,367 | ||
| Cash at beginning | 100 | ||
| Cash at period end | 24,467 | ||
| NONCASH FINANCING AND INVESTING INFORMATION: | |||
| Cancellation of common stock | 68,872 | ||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
| Interest paid | $ | — | |
| Income taxes paid | $ | — |
See Accompanying Notes to Unaudited Condensed Financial Statements
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HEMPAMERICANA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF NOVEMBER 30, 2014
(UNAUDITED)
NOTE 1—ORGANIZATION AND DESCRIPTION OF BUSINESS ANDBasis of presentation
HempAmericana, Inc. (the “Company”) is a growth company that researches, develops and sells products made of industrial hemp. In essence anything that can be made with plastic can be made with industrial hemp and HempAmericana plans to fill the growing need and demand for hemp based products within the United States. The Company was incorporated under the laws of the State of Delaware on February 10, 2014.
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the period from inception through February 28, 2014 and notes thereto and other pertinent information contained in our Form S-1 the Company has filed with the Securities and Exchange Commission (the “SEC”).
The results of operations for the nine month period ended November 30, 2014 are not necessarily indicative of the results for the full fiscal year ending February 28, 2015.
In the quarter ended November 30, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10,Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements.The adoption of this ASU allows the company to remove the inception to date information and all references to development stage
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
NOTE 2—GOING CONCERN
The accompanying financial statements are prepared on a basis of accounting assuming that the Company is a going concern that contemplates realization of assets and satisfaction of liabilities in the normal course of business. The Company’s management plans to engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue- producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.
NOTE 3—STOCKHOLDER EQUITY
On April 25, 2014, the Company issued 40,000,000 shares of restricted common stock to Elad Enterprise Corp. and 500,000,000 shares of restricted common stock to ETN Services, LLC, both valued at $ .001 for a total of $40,500.
On August 19, 2014 the Company issued 108,000 shares of restricted common stock to Nieves Rosillo for services rendered to the Company as Secretary. No monies were paid for the shares but the value of the shares is estimated at $12,960 at a price of $.12 per share of common stock. During the months of July and August 2014 the Company sold 1,252,840 shares of free trading common stock. The Company received a total of $15,034 from the sale of this common stock.
On September 18, 2014, at a meeting of our company’s board of directors, and majority shareholders, a resolution was approved to effect the following:
1.) That Salvador Rosillo, the Company’s President, CEO and Director, and Elad Properties Enterprise Corp. will cancel Thirty Five Million Shares (35,000,000) respectively, for a total of approximately Seventy Million Shares (70,000,000), and return these shares to the Company Treasury.
Before this cancelation Salvador Rosillo owned and controlled Forty Million (40,000,000) common shares of restricted stock and Elad Properties Enterprise Corp. owned Forty Million (40,000,000) common shares of restricted stock.
As a result of this Motion Salvador Rosillo and Elad Properties Enterprise Cop. each cancelled Thirty Five Million (35,000,000) common shares of restricted stock and now each beneficially own and control Five Million (5,000,000) common shares of restricted stock. As a result of this motion Seventy Million (70,000,000) shares of common restricted stock total has been canceled and returned to the Company Treasury.
2.) A forward stock split at a ratio of Ten to One (10:1) for the shares owned by all current stockholders and the subsequent cancellation of all shares generated via this stock split for Salvador Rosillo, Elad Properties Enterprise Corp., Nieves Rosillo and ETN Services, LLC. The forward stock split and cancellation of shares was approved.
(The ratio of 10:1 signifies that every one share will become 10 shares); all share and per share amounts have been restated from the first day of the first period presented.
The total outstanding shares of the Company following both events is 11,860,840 shares of common stock. The shares held by non-affiliates excluding ETN Services LLC is now currently 1,252,840. Elad Properties Enterprise Corp and Salvador Rosillo hold 5,000,000 shares each. ETN Services, LLC holds 500,000 shares and Nieves Rosillo holds 108,000 shares. These shares all represent our common stock.
For the nine month period ended November 30, 2014 the Company’s CEO and Director has made owner contributions to the Company in the amount of $27,892.
NOTE 4— RELATED-PARTY TRANSACTIONS
Accounts payable
At November 30, 2014 and February 28, 2014 the company had a related-party payable in the amount of $0 and $480 to its sole officer and director.
Other
We neither rent nor own any properties. Until we pursue a viable business opportunity and recognize sufficient and consistent income, we will not seek office space. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.
NOTE 5—SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment or disclosure.
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| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
PLAN OF OPERATION
The company has plans to further develop its product line by acquiring additional hemp-based products as well as various promotional material to spread awareness of HempAmericana to a larger audience. In addition to the HempAmericana mugs currently available the company has begun preliminary plans to add other promotional material such as company shirts, pens, hats, etc. Our line of hemp-based products will continue to diversify and expand, and the Company intends to seek out arrangements with large nationwide companies who we hope will stock HempAmericana products throughout their stores. Currently our primary hemp based product is HempAmericana rolling paper which we hope to have stocked in tobacco stores and gas stations nationwide.
At this time we have realized revenue in the amount of $1,200. Our cash assets are currently $24,267 however, we will seek additional sources of financing to expand our operations as detailed above. At this time we are investigating potential means and opportunities to launch are hemp based rolling papers into nationally recognized chains however, our limited operations and capital may pose several challenges if is even possible at all to get our products in stores nationwide. Based on our current funds we do not have the financial means to market our products to a large audience. We may be forced to rely on the services and contributions of our CEO and Director Salvador Rosillo for additional financing, but he has no current obligation to do so.
LIQUIDITY
We have no known demands or commitments and are not aware of any events or uncertainties as of November 30, 2014 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.
CAPITAL RESOURCES
We had no material commitments for capital expenditures as of November 30, 2014 and February 28, 2014.
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OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
CRITICAL ACCOUNTING POLICIES
We prepare our condensed financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 4 | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of November 30, 2014. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were ineffective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding disclosure.
Material weaknesses noted were: lack of a functioning audit committee; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives affecting authorization, recordkeeping, custody of assets, and reconciliations; and, management is dominated by a single individual/small group without adequate compensating controls.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Controls over Financial Reporting
There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter ended November 30, 2014, that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.
PART II-OTHER INFORMATION
| ITEM 1 |
|
There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.
| ITEM 1A | RISK FACTORS |
As a “smaller reporting company” defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2 | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
On August 19, 2014 the Company issued 108,000 shares of restricted common stock to Nieves Rosillo for services rendered to the Company as Secretary.
| ITEM 3 | DEFAULTS UPON SENIOR SECURITIES |
None.
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| ITEM 4 | MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5 | OTHER INFORMATION |
None.
| ITEM 6 | EXHIBITS |
| (a) | Exhibits required by Item 601 of Regulation S-K. |
Exhibit No. | Description | |
| 3.1 | Certificate of Incorporation, as filed with the Delaware Secretary of State on February 10, 2014. (1) | |
| 3.2 | By-laws. (1) | |
| 23.1 | Consent of Independent Registered Public Accounting Firm (2) | |
| 31.1 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-Q for the quarter ended November 30, 2014. (2) | |
| 32.1 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2) | |
| 101.INS | XBRL Instance Document (3) | |
| 101.SCH | XBRL Taxonomy Extension Schema (3) | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase (3) | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase (3) | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase (3) | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase (3) | |
____________________
| (1) | Filed as an exhibit to the Company's Registration Statement on Form S-1, as filed with the SEC on April 7, 2014, and incorporated herein by this reference. |
| (2) | Filed herewith. |
| (3) | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability. |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
HempAmericana, Inc.
(Registrant)
By:/s/ Salvador Rosillo
Principal Executive Officer
Principal Financial Officer
Dated: January 20, 2015
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