GREEN HYGIENICS HOLDINGS INC. - Quarter Report: 2018 January (Form 10-Q)

Nevada		26-2801338
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Large accelerated filer                                           ☐	Accelerated filer                                ☐
Non-accelerated filer                                             ☐            (Do not check if a smaller reporting company)	Smaller reporting company              ☒

PART I - FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements

The interim financial statements included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial position and the results of our operations for the interim periods presented.  Because of the nature of our business, the results of operations for the quarterly period ended January 31, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year.

 

	Index
Condensed Interim Balance Sheets	4
Condensed Interim Statements of Operations and Comprehensive Loss	5
Condensed Interim Statements of Cash Flows	6
Notes to the Condensed Interim Financial Statements	7

GREEN HYGIENICS HOLDINGS INC.

Condensed Interim Balance Sheets

(Expressed in U.S. dollars)

(The accompanying notes are an integral part of these condensed interim financial statements)

 

GREEN HYGIENICS HOLDINGS INC.

Condensed Interim Statements of Operations and Comprehensive Loss

(Expressed in U.S. dollars)

(unaudited)

 

 

(The accompanying notes are an integral part of these condensed interim financial statements)

 

GREEN HYGIENICS HOLDINGS INC.

Condensed Interim Statements of Cash Flows

(Expressed in U.S. dollars)

(unaudited)

 

 

(The accompanying notes are an integral part of these condensed interim financial statements)

 

1. Nature of Operations and Continuance of Business

The accompanying condensed interim financial statements of Green Hygienics Holdings Inc. (the “Company”) should be read in conjunction with the financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2017. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of these condensed interim financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These condensed interim financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at January 31, 2018, the Company has a working capital deficiency of $288,013 and has an accumulated deficit of $40,797,093 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These condensed interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Significant Accounting Policies

(a) Basis of Presentation

These condensed interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars.

(b) Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. Loans Payable

(a) As at January 31, 2018, the Company owes $18,750 (July 31, 2017 - $18,750) to a non-related party, which is non-interest bearing, unsecured, and due on demand.

(b) As at January 31, 2018, the Company owes $30,000 (July 31, 2017 - $30,000) to a non-related party, which is non-interest bearing, unsecured, and due on demand.

4. Related Party Transactions

(a) As at January 31, 2018, the Company owes $56,824 (July 31, 2017 - $56,824) to a former director of the Company which bears interest at 5% per annum, is unsecured, and is due on demand. In the event of default, the holder may convert the unpaid amount of principal and accrued interest at a price of $0.003 per share of the Company’s common stock. As at January 31, 2018, the Company owes $19,320 (July 31, 2017 - $17,888) to the same party which includes accrued interest payable and is included in accounts payable and accrued liabilities.

(b) As at January 31, 2018, the Company owes $5,070 (July 31, 2017 - $5,070) to the former CEO of the Company, which is non-interest bearing, unsecured, and due on demand.

 

4. Related Party Transactions (continued)

(a) On August 1, 2017, the Company entered into a consulting agreement with a company controlled by the President and CEO of the Company, whereby the Company agreed to pay a consulting fee of $2,500 per month for a period of one year.

(b) On August 1, 2017, the Company entered into a consulting agreement with a non-related party, whereby the Company agreed to pay a consulting fee of $7,500 per month for a period of one year.

6. Subsequent Event

On February 15, 2018, non-related parties forgave a total of $39,750 in accounts payable and accrued liabilities owed by the Company.

 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

The information set forth in this section contains certain "forward-looking statements," including, among other things, (i) expected changes in our revenues and profitability, (ii) prospective business opportunities, and (iii) our strategy for financing our business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes," "anticipates," "intends," or "expects." These forward-looking statements relate to our plans, objectives and expectations for future operations.

 

Although we believe that our expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of our knowledge of our business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our” and “our Company” mean Green Hygienics Holdings Inc. and our subsidiary Takedown Fight Media Inc., unless otherwise indicated.

Corporate Overview

Green Hygienics Holdings Inc. (the Company) was incorporated in the State of Nevada on June 12, 2008 as Silver Bay Resources Inc.   On June 30, 2010, the Company changed its name to Takedown Entertainment Inc. On July 24, 2012, the Company changed its name to Green Hygienics Holdings Inc.

 

During the years 2009 thru 2012 the Company was involved in the acquisition, production, licensing, marketing and distribution of mixed martial arts (MMA) content, programming and merchandising for North American and International markets. Due to a lack of funding, the Company was never able to close asset acquisition agreements.

During the year ended July 31, 2014, the Company has made additional trips to Fortaleza in the state of Ceara, Brazil in the furtherance of its Clean Technology Solutions and secured the option to acquire twelve 2 megawatt wind turbines. We have established and continue to advance relationships with local (Brazil) entrepreneurs and businesses with the intention of establishing a wholesale distribution company for cleantech products and to supply or look at building wind and solar farms for power generation. The option holder of the turbines has not met the terms of the Option to Purchase Agreement and the Company and consequently the Company has not proceeded in this business at this time.

 

 

Lack of Revenues

We have limited operational history. From our inception on June 12, 2008 to January 31, 2018 we have generated only nominal revenues, insufficient to meet our financing needs.

Expenses

Our expenses for the three months ended January 31, 2018 were $44,372 compared to $1,444 during the same period in 2017.  Our expenses for the six months ended January 31, 2018 were $76,483 compared to $2,944 during the same period in 2017.  Expenses in the current periods have increased mainly due to consulting fees incurred relating to agreements entered into on August 1, 2017.

Net Loss

Our net loss for the three months ended January 31, 2018 was $44,372 compared to a net loss of $1,444 during the same period in 2017.  Our net loss for the six months ended January 31, 2018 was $76,483 compared to a net loss of $2,944 during the same period in 2017.  Expenses in the current periods have increased mainly due to consulting fees incurred relating to agreements entered into on August 1, 2017.

Liquidity and Capital Resources

  

 

 

This cash balance is insufficient to fund our levels of operations for the next twelve months.

 

The Company has incurred a net loss of $40,797,093 for the period from June 12, 2008 (inception) to January 31, 2018 and has generated no revenues. The future of our company is dependent upon its ability to obtain financing and upon future profitable operations from the development of acquisitions.

 

We are continuing to raise capital to finance our business plans. There can be no assurance that we will be successful in raising the required financing. Our position to obtain financing has been enhanced with the support of one of our principle shareholders. The Company now has the exclusive option to purchase twelve unused 2 megawatt wind turbines at a substantial discount to market.

 

 

We estimate that our expenses over the next 12 months will be approximately $220,000 as described in the table below.  These estimates may change significantly depending on the performance of our products in the marketplace and our ability to raise capital from shareholders or other sources.

 

 

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financings by way of private placements, public offering and convertible debentures which we are working on.  We currently do not have any arrangements in place to complete sufficient financings and there is no assurance that we will be successful in completing any financings on terms that will be acceptable to us.  We may not raise sufficient funds to fully carry out our business plan.

 

Future Financings

 

We will require additional financing in order to enable us to proceed with our plan of operations, as discussed above, including approximately $220,000 over the next 12 months to pay for our ongoing expenses. These expenses include legal, accounting and audit fees as well as general and administrative expenses.  These cash requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing in order to continue operations and to repay our liabilities and to exercise the wind turbine option. There is no assurance that any party will advance additional funds to us in order to enable us to sustain our plan of operations, exercise the wind turbine option or to repay our liabilities.

 

We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

 

We presently do not have any arrangements for additional financing and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Critical Accounting Policies

 

Use of Estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Our company regularly evaluates estimates and assumptions related to the fair value of stock-based compensation and deferred income tax asset valuation allowances. Our company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (also our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of January 31, 2018 we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (who is also our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (also our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this quarterly report due to certain deficiencies that existed in the design or operation of our internal controls over financial reporting and that may be considered to be material weaknesses.

 

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended January 31, 2018 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities

None.

 

Item 4. Mine Safety Disclosures

None.

 

 

Item 5. Other Information

None

 

Item 6. Exhibits

Exhibit Number		Description
(3)		(i) Articles of Incorporation; (ii) By-laws
3.1		Articles of Incorporation (Incorporated by reference to our Registration Statement on Form S-1 filed on September 17, 2008).
3.2		By-laws (Incorporated by reference to our Registration Statement on Form S-1 filed on September 17, 2008).
3.3		Certificate of Amendment (Incorporated by reference to our Current Report on Form 8-K filed on July 1, 2010).
(10)		Material Contracts
10.1		Convertible Loan Agreement dated January 31, 2011 between our company and Triumph Capital Inc. (Incorporated by reference to our Current Report on Form 8-K filed on February 8, 2011).
10.2		Director Agreement dated May 1, 2011 between our company and Dr. Allan Noah Fields (Incorporated by reference to our Current Report on Form 8-K filed on May 5, 2011).
10.3		Consulting Agreement dated May 1, 2011 between our company and Dr. Allan Noah Fields (Incorporated by reference to our Current Report on Form 8-K filed on May 5, 2011).
10.4		Advertising Agreement dated May 12, 2011 between our company and Dr. Diego Allende (Incorporated by reference to our Current Report on Form 8-K filed on May 12, 2011).
10.5		Consulting Agreement dated August 11, 2011 between our company and Radius Consulting, Inc. (Incorporated by reference to our Current Report on Form 8-K filed on August 18, 2011).
10.6		Share Cancellation Agreement dated August 30, 2011 between our company and Peter Wudy (Incorporated by reference to our Current Report on Form 8-K filed on August 31, 2011).
10.7		Consulting Agreement dated September 7, 2011 between our company and Radius Consulting, Inc. (Incorporated by reference to our Current Report on Form 8-K filed on September 23, 2011).
10.8		Stock Option Plan (Incorporated by reference to our Current Report on Form 8-K filed on September 8, 2011).
10.9		Form of Stock Option Agreement (Incorporated by reference to our Current Report on Form 8-K filed on September 8, 2011).
(21)		Subsidiaries of the Registrant
21.1		Takedown Fight Media Inc.
(31)		Section 1350 Certifications
31.1*		Section 302 Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.
(32)		Section 906 Certifications
32.1*		Section 906 Certification of Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.
101		Interactive Data Files
101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE		XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

  

 

SIGNATURES

 

In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.