Nowtransit Inc - Quarter Report: 2023 June (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 10-Q

 

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Mark One

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2023

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                            to                          

 

Commission File No. 333-234487

 

NOWTRANSIT INC.

(Exact name of registrant as specified in its charter)

 

Nevada (State or Other Jurisdiction of Incorporation or Organization)

7374 (Primary Standard Industrial Classification Number)

98-1498782 (IRS Employer Identification Number)

 

2722 South West Temple

Salt Lake City, UT 84115

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (801) 949-0791

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

 

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.0001

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated Filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the practicable date:

 

Class	Outstanding as of August 8, 2023
Common Stock: $0.0001 par value	40,392,600

 

TABLE OF CONTENTS

 

PART 1	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Balance Sheets (unaudited)	3
	Statements of Operations (unaudited)	4
	Statement of Changes in Stockholders’ Equity (Deficit) (unaudited)	5
	Statements of Cash Flows (unaudited)	6
	Notes to Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
PART II	OTHER INFORMATION	15
Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
	Signatures	17

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

While the information presented in the accompanying financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the Company's December 31, 2022 audited financial statements and notes thereto. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that can be expected for the year ending December 31, 2023.

 

NOWTRANSIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30,				December 31,
		2023				2022
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	30,317			$	11,569
Accounts receivable, net			15,820				7,761
Inventory			15,830				12,278
Prepaid Expenses			1,000				-
Total current assets			62,967				31,608
Total Assets		$	62,967			$	31,608
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable		$	901			$	3,435
Due to related parties			116,318				45,356
Total current liabilities			117,219				48,791
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: $0.0001 par value, 5,000,000 shares authorized; 1,000,000 designated Series A Convertible			-				-
Preferred stock: $0.0001 par value, 140,000 shares authorized; 140,000 shares issued and outstanding at June 30, 2023 and December 31, 2022			14				14
Common stock: $0.0001 par value, 75,000,000 shares authorized; 40,312,600 and 5,461,500 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively			4,031				546
Additional paid-in capital			274,264				158,840
Accumulated deficit			(332,561	)			(176,583	)
Total stockholders' equity (deficit)			(54,252	)			(17,183	)
Total Liabilities and Stockholders' Equity (Deficit)		$	62,967			$	31,608

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

NOWTRANSIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
Revenues		$	69,465			$	8,049			$	101,802			$	8,328
Cost of goods sold			(9,499	)			(982	)			(14,245	)			(1,047	)
Gross profit			59,966				7,067				87,557				7,281
Operating Expenses:
General and administrative expenses			138,728				8,445				231,035				8,595
Consulting fees			6,500				500				12,500				4,775
Total Operating Expenses			145,228				8,945				243,535				13,370
Loss from Operations			(85,262	)			(1,878	)			(155,978	)			(6,089	)
Net loss		$	(85,262	)		$	(1,878	)		$	(155,978	)		$	(6,089	)
Net loss per common share - basic and diluted		$	(0.01	)		$	(0.00	)		$	(0.01	)		$	(0.00	)
Weighted average common shares outstanding - basic and diluted			39,841,872				9,400,000				26,775,330				7,274,309

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

NOWTRANSIT INC
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED
JUNE 30, 2023 & 2022
(Unaudited)
																		Additional
		Common Stock								Preferred Stock								Paid-in				Accumulated
		Shares				Amount				Shares				Amount				Capital				Deficit				Total
Balance at December 31, 2021			2,890,951			$	289				-			$	-			$	4,836			$	(6,133	)		$	(1,008	)
Common shares issued for services			2,284,556				228				-				-				3,822				-				4,050
Common shares issued to related parties for services			126,920				13				-				-				212				-				225
Net loss			-				-				-				-				-				(4,211	)			(4,211	)
Balance at March 31, 2022			5,302,427				530				-				-				8,870				(10,344	)			(944	)
Net Loss			-				-				-				-				-				(1,878	)			(1,878	)
Balance as June 30, 2022			5,302,427			$	530				-			$	-			$	8,870			$	(12,222	)		$	(2,822	)
Balance at December 31, 2022			5,461,500			$	546				140,000			$	14			$	158,840			$	(176,583	)		$	(17,183	)
Recapitalization March 10, 2023			34,371,100				3,437				-				-				(4,528	)			-				(1,091	)
Net loss			-				-				-				-				-				(70,716	)			(70,716	)
Balance at March 31, 2023			39,832,600				3,983				140,000				14				154,312				(247,299	)			(88,990	)
Common shares issued for cash			480,000				48				-				-				119,952				-				120,000
Net Loss			-				-				-				-				-				(85,262	)			(85,262	)
Balance as June 30, 2023			40,312,600			$	4,031				140,000			$	14			$	274,264			$	(332,561	)		$	(54,252	)

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

NOWTRANSIT INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		For the Six Months Ended
		June 30,
		2023				2022
Cash Flows From Operating Activities
Net loss		$	(155,978	)		$	(6,089	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock issued to related parties for services			-				225
Stock issued for services			-				4,050
Changes in operating activities:
Accounts receivable			(8,059	)			(772	)
Inventory			(3,552	)			(9,828	)
Prepaid expenses			(1,000	)
Accounts payable			(12,418	)			1,252
Net Cash Used in Operating Activities			(181,007	)			(11,162	)
Cash Flows From Investing Activities			-				-
Cash Flows From Financing Activities
Advances from related parties			180,574				38,292
Repayment to related parties			(109,612	)			(19,002	)
Cash acquired in recapitalization			8,793				-
Stock issued for cash			120,000				-
Net Cash Provided by Financing Activities			199,755				19,290
Net Increase in Cash			18,748				8,128
Cash at Beginning of Period			11,569				100
Cash at End of Period		$	30,317			$	8,228
Supplemental Cash Flow Information:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

NOWTRANSIT INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023

(Unaudited)

 

Note 1 - Nature of Organization

 

Nowtransit Inc. (the “Company,” “us,” “we,” “Nowtransit”) was incorporated in the State of Nevada on July 8, 2019. Through March 10, 2023 we had no operations and had not generated any material revenues since inception. Effective March 10, 2023, we closed on a Share Exchange Agreement with Best 365 Labs Inc. (“Best”), a Nevada corporation, wherein we acquired all of the shares of Best and Best became a wholly owned subsidiary of the Company (see Note 2).

 

Best was incorporated on October 12, 2021 in the State of Nevada. Best sells clinically-tested, affordably priced products to naturally battle the onslaught of bacteria and viruses through online sales and in various other distribution channels. Presently, the Company is selling Be On-Guard Mouth Spray, Be On-Guard Nasal Spray, Be On-Guard Brain Fog Support, ADHD 365 maximum brain support, and EZ Safer Surface Cleaner.

 

Note 2 - Reorganization & Recapitalization

 

On February 13, 2023, Nowtransit entered into a Share Exchange Agreement with Best and the shareholders of Best who collectively owned 9,588,000 shares of Best common stock, or 100% of the outstanding shares of Best common stock. The transaction consummated on March 10, 2023 (the “Closing”).

 

Upon the Closing, the Company issued the Best shareholders 34,371,100 shares of the Company’s common stock (see Note 6), representing approximately 85.39% of the shares of the Company’s common stock to be outstanding, in exchange for all of the shares of Best common stock held by Best shareholders. The transaction was accounted for as a reserve merger by Nowtransit and resulted in a recapitalization with Best being the accounting acquirer and Nowtransit being the accounting acquiree. As such, the consolidated financial statements presented are the historical financial statements of Best with retroactive adjustments to reflect the equity of Nowtransit, and the operations of Nowtransit from March 10, 2023, the effective date of the merger. Since Nowtransit was the legal acquirer, the resulting financial statements are in the name of Nowtransit. All share and per share information in the accompanying condensed consolidated financial statements and footnotes have been retroactively restated to reflect the recapitalization.

 

The following table summarizes the assets acquired and the liabilities assumed at the acquisition date of March 10, 2023:

 

Cash		$	8,793
Accounts Payable			(8,870	)
Credit Card Liability			(1,014	)
Net Assets (Liabilities) Assumed		$	(1,091	)

 

During the three months ended March 31, 2023 the Company reported $0 in revenue and $5,295 in expenses for the accounting acquiree (Nowtransit) since the acquisition date (March 10, 2023). Had Nowtransit and Best been combined since January 1, 2023 they would have reported revenues of $32,337, gross profit of $27,591, total operating expenses of $117,417, and a net loss of $89,826.

 

Note 3 - Going Concern

 

The condensed consolidated financial statements have been prepared on a going concern basis which assumes the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the condensed consolidated financial statements, the Company had minimal revenues and a net loss during the six months ended June 30, 2023 and is showing total liabilities in excess of total assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is attempting to commence full-scale operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations long-term. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

 

 

Note 4 - Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and with the rules and regulations of the Securities and Exchange Commission, including the instructions to Form 10-Q and19 Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements. The financial statements are presented in US dollars and the Company has adopted a December 31 year end.

 

Use of Estimates

 

The preparation of financial statements in conformity with 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 the financial statements and the reported amount of revenues and expenses. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand, cash in banks and any highly liquid investments with a maturity of three months or less to the extent the funds are not being held for investment purposes. As of June 30, 2023 and December 31, 2022, the Company had no cash equivalents.

 

The Company maintains one account at Wells Fargo Bank. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Accounts and receivables are written off against the allowance after all attempts to collect a receivable have failed. As of June 30, 2023 and December 31, 2022, the allowance for doubtful accounts was $0.

 

Inventory

 

The Company’s inventory is recognized in accordance with Accounting Standards Codification (“ASC”) 303. The Company uses the lower of cost (determined using the first-in, first-out method) or net realizable value for valuing inventories. As of June 30, 2023 and December 31, 2022 the Company had $15,830 and $12,278 of finished goods on hand, respectively.

 

Income Taxes

 

The provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized.

 

 

Revenue Recognition

 

The Company’s revenue is recognized in accordance with Accounting Standards Codification 606. The Company, through its online websites, operates in the Immune health supplement market. In addition to the website the Company has a Seller Central listing with Amazon and sells three products through the Amazon online platform. The Company offers products – Be-OnGuard Nasal Spray used against nasal bacteria, viruses and allergens; Be-OnGuard Mouth Spray used against oral bacteria, viruses and allergens; and Be-OnGuard EZ Safer Air used against airborne bacteria, viruses and allergens; Be On-Guard Brain Fog Support; and ADHD 365 maximum strength brain support. The Company’s performance obligation is to deliver product to customers therefore revenue is recognized once delivery occurs. Customers will remit payment at the time of order placement, therefore payment received by the Company prior to product delivery is recorded as deferred revenue. As of June 30, 2023 and December 31, 2022 deferred revenue was $0. Shipping and handling costs that occur are paid by the customer and is not recorded as revenue.

 

Advertising Costs

 

Advertising costs are expensed as incurred. During the six months ended June 30, 2023 and 2022, the Company incurred advertising costs of $ 47,675 and $0, respectively.

 

Leases

 

The Company follows the provisions of ASC 842, and records right-of-use ("ROU") assets and lease obligations for its operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. If the rate implicit in the Company's leases is not readily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.  The lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

 

The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.

 

As of June 30, 2023, the Company had a month-to-month rental agreement for their office and inventory space and paid rent expense of $3,584 for the six months ended June 30, 2023.

 

Net Income (Loss) per Common Share

 

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. There were no potentially dilutive common shares outstanding as of June 30, 2023 or 2022.

 

Recent Accounting Pronouncements

 

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements and has determined that there have been no standards that had, or will have, a material impact on its consolidated financial statements.

 

Note 5 - Related Party Transactions

 

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. Amounts represent advances or amounts paid in satisfaction of liabilities.

 

During the six months ended June 30, 2023 the Company purchased $19,950 worth of inventory from Ageless Holdings, LLC (“Ageless”), an entity owned and controlled by the Company’s members of management and board of directors, $12,857 was owing as of June 30, 2023. Additionally, the Company received $180,574 worth of advances from Ageless to pay for operating expenses and the Company paid back $109,612 of the advances.

 

 

As of June 30, 2023 and December 31, 2022, the Company owed related parties a total of $116,318 and $45,356, respectively.

 

During the six months ended June 30, 2022 the Company’s CEO advanced the Company $202 and the Company purchased $12,090 worth of inventory from Ageless. Additionally, the Company received $26,000 worth of advances from Ageless to pay for operating expenses. The Company paid back $19,002 of the advances. The Company also issued 126,920 common shares to related parties for consulting services (see Note 6).

 

Note 6 - Equity

 

Common Stock

 

The Company has 75,000,000, $0.0001 par value shares of voting common stock authorized.

 

During the three months ended March 31, 2023, the Company issued 34,371,100 shares of common stock to Best shareholders in exchange for all of the shares of Best common stock (see Note 2) resulting in an increase in common stock of $3,437 and a decrease in additional paid-in-capital of $4,528.

 

During the three months ended June 30, 2023, the Company issued 480,000 common shares for cash proceeds of $120,000.

 

During the three months ended March 31, 2022, the Company issued 2,284,556 shares to third parties for consulting services valued at $4,050 and issued 126,920 shares to related parties for consulting services valued at $225.

 

During the three months ended June 30, 2022 there were no issuances of common stock.

 

As of June 30, 2023 and December 31, 2022, the Company had 40,312,600 and 5,461,500 shares of common stock issued and outstanding, respectfully.

 

Preferred Stock

 

On October 19, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation authorizing up to 5,000,000 shares of Preferred Stock, par value $0.0001 per share, with such rights, preferences and limitations as may be set forth in resolutions adopted by the Board of Directors. On November 1, 2021, the Company filed a Certificate of Designation designating 1,000,000 shares of Preferred Stock as Series A Convertible Preferred Stock (the “Series A”). Each share of the Series A is convertible into three shares of the Company’s common stock at the holder's election, subject to a 4.99% beneficial ownership limitation which may be increased to 9.99% upon 61 days’ notice.

 

During the six months ended June 30, 2023 and 2022 there were no issuances of preferred stock. As of June 30, 2023 and December 31, 2022, the Company had 140,000 shares of Series A Convertible Preferred Stock outstanding.

 

Note 7 - Subsequent Events

 

The Company has evaluated all events that occur after the balance sheet date through August 11, 2023, the date when the financial statements were available to be issued, to determine if they must be reported. Management of the Company determined that there are no material subsequent events to be disclosed other than those described below.

 

Subsequent to June 30, 2023, the Company received advances of $900 from related parties and made repayments of $26,600. On July 20, the Company issued 80,000 common shares for $20,000.

 

 

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

 

Cautionary Note Regarding Forward Looking Statements

 

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our discussions and the anticipated terms of a potential reverse merger pursuant to which we would acquire an operating business, our business plan and our liquidity needs. All statements other than statements of historical facts contained in this Report, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include those described elsewhere in this Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 under “Item 1A. – Risk Factors.” We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

 

Overview

 

We have limited operations since inception other than the expenditures related to running the Company, and we have generated minimal revenues and a net loss during the six months ended June 30, 2023, and is showing total liabilities in excess of total assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company is attempting to commence full-scale operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations long-term. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

 

Plan of Operation

 

On February 13, 2023, Nowtransit Inc. entered into the Exchange Agreement with Best 365 Labs Inc. (“Best”) and the shareholders of Best who collectively owned 9,588,000 shares of Best common stock, or 100% of the outstanding shares of Best common stock. The transaction consummated on March 10, 2023 (the “Closing”).

 

Upon the Closing, the Company issued the Best shareholders 34,371,100 shares of the Company’s common stock, representing approximately 85.39% of the shares of the Company’s common stock to be outstanding, in exchange for all of the shares of Best common stock held by Best shareholders. The transaction was accounted for as a reserve merger. Best was the accounting acquirer and Nowtransit the accounting acquiree. As such, the consolidated financial statements presented are the historical financial statements of Best with retroactive adjustments to reflect the equity of Nowtransit. Since Nowtransit was the legal acquirer, the resulting financial statements are in the name of Nowtransit.

 

During the next 12 month period, the Company will continue to market and sell clinically-tested, affordably priced products to naturally battle the onslaught of bacteria and viruses through online sales and in various other distribution channels. Presently, the Company is marketing Be On-Guard Mouth Spray, Be On-Guard Nasal Spray, EZ Safer Surface Cleaner, Be On-Guard.Brain Fog Support and ADHD 365 maximum strength brain support.

 

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

Management’s discussion and analysis and results of operations are based upon our accompanying financial statements for the six and three months ended June 30, 2023, which have been prepared in conformity with U.S. generally accepted accounting principles, or U.S. GAAP, and which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Note 3. Summary of Significant Accounting Policies, to the financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, describes the significant accounting policies and methods used in the preparation of the Company’s financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. These estimates are the basis for our judgments about the carrying values of assets and liabilities, which in turn may impact our reported revenue and expenses. Our actual results could differ significantly from these estimates under different assumptions or conditions.

 

Results Of Operations

 

THREE MONTHS ENDED JUNE 30, 2023 COMPARED TO JUNE 30, 2022

 

Our net loss for the three months ended June 30, 2023 was $85,262, compared to a net loss of $1,878 during the three months ended June 30, 2022. The Company has generated revenue of $69,465 and $8,049 during the three months ended June 30, 2023 and 2022, respectively.  The increase over time is due to Company growth and increased sales and marketing efforts. The increase in net loss was due to an increase in general administrative expenses including professional fees in connection with the preparation of SEC reports, marketing and promotions and our completion of the reverse merger. Expenses incurred were general administrative expenses of $138,728 during the three months ended June 30, 2023, compared to $8,445 during the three months ended June 30, 2022.

 

SIX MONTHS ENDED JUNE 30, 2023 COMPARED TO JUNE 30, 2022

 

Our net loss for the six months ended June 30, 2023 was $155,978, compared to a net loss of $6,089 during the six months ended June 30, 2022. The Company has generated revenue of $101,802 and $8,328 during the three months ended June 30, 2023 and 2022, respectively. The increase in net loss was due to an increase in general administrative expenses including professional fees in connection with the preparation of SEC reports, marketing and promotions and our completion of the reverse merger. Expenses incurred were general administrative expenses of $231,035, during the six months ended June 30, 2023, compared to $8,595 during the six months ended June 30, 2022.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of June 30, 2023, our total assets were $62,967, consisting of cash, accounts receivable, prepaid expenses, and inventory.

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities since inception. For the six months ended June 30, 2023, net cash flows used in operating activities was $181,007, consisting of our net loss of $155,978 offset by changes in operating activities of $25,029. For the six months ended June 30, 2022, net cash flows used in operating activities was $11,162, consisting of our net loss of $6,089 plus net changes in operating activities of $9,348, offset by stock issued for services of $4,275.

 

Cash Flows from Investing Activities

 

We have not engaged in any investing activities since our inception.

 

Cash Flows from Financing Activities

 

For the six months ended June 30, 2023 net cash flows provided by financing activities was $199,755, consisting of cash acquired in recapitalization of $8,793, advances from related parties of $180,574 offset by repayments to related parties of $109,612, and $120,000 of cash acquired for issuing common stock. For the six months ended June 30, 2022, net cash flows provided by financing activities was $19,290, consisting of $38,292 in advances from related parties offset by repayments to related parties of $19,002.

 

PLAN OF OPERATION AND FUNDING

 

Currently, the Company is in the process of offering a private placement to accredited investors to raise up to $1,000,000. Once the private placement is complete the Company will begin the process of preparing and filing Form 1-A with the SEC.

 

 

The Nowtransit management team plans to focus on gaining traction for its mental health and general wellness products. Best 365 Labs, Inc has filed for a provisional patent on its mental wellness, natural products which is an additional reason we plan to focus and grow this sector of the products. With the Global Mental Health Marketplace currently valued at $383.31 billion annually and with 41 million people holding a prescription for Adderall that the market conditions are idea for us to offer our natural substitute product options (which are also unique). Management believes with adequate advertising and marketing funds that substantial clients could be acquired in these categories.

 

Management believes that several current Adderall users would be open to a dietary supplement alternative, e.g., our ADHD 365 Tablets (www.365ADHD.com). In addition, we believe that the 1-14 Americans currently suffering brain fog will take a serious look at our Be-OnGuard Brain Fog Support (www.Mindfoghelp.com). In addition, we are marketing the product www.NattyAddy.com and believes it has immense potential especially with the college students.

 

To support and test our assumptions the current management team has been building introductory sales channels including Amazon as well as other direct vendors. Return on Ad Spend “ROAS” so far has been initially promising on these test channels, i.e., close to 3:1. Management believes that Google and Amazon sales could be substantially grown through additional advertising spends.

 

In addition, management is under an NDA but is exploring a health and mental wellness app that could offer very compelling data on our suite of products. The psychiatrist we are exploring this concept with has 40 plus years’ experience. As a management team our objective is to deliver unique products at very affordable prices to the masses that enrich and empower their lives.

 

Currently management is looking to raise $1 million dollars at $0.25 cents a share in a private placement for accredited investors. Management believes that these resources will place the company on a $10 million revenue trajectory. Once this raise is completed the plan is to raise an additional $6 million in capital through a REG A offering. Though no price on the REG A has been set it still has to be written up and cleared by the SEC, management’s initial plan is for those shares to be offered at $1.50 to $2 per share. The Company then plans to work to get the Company on a $25 million revenue trajectory and work toward a NASDAQ listing which is a management objective for mid-2024.

 

Currently, the Best 365 Labs Inc. suite of products are not drugs and not under the FDA. The products are considered Dietary Supplements and General Wellness products and are governed under the DSHEA. We do have a medical director who is a practicing and license with 40 years of experience and a Respiratory Therapist. We are not against prescription drugs we are for health, wellness, longevity and having people take ownership of their health and wellness. We our potential patent protection, uniqueness, and effectiveness especially in the mental health and wellness category management truly believes the opportunity for growth is immense. Further management believes that if they can secure the funding that the plan.

 

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.

 

Going Concern

 

There is no historical financial information about us upon which to base an evaluation of our performance. We have minimal operations, cumulative losses, and have generated minimal revenues. Our business is subject to risks inherent in marketing products in a competitive market as we continue to sell clinically-tested, affordably priced products to naturally battle the onslaught of bacteria and viruses through online sales and in various other distribution channels. Presently, the Company is marketing Be On-Guard Mouth Spray, Be On-Guard Nasal Spray,EZ, Safer Surface Cleaner, Be On-Guard Brain Fog Support and ADHD 365 maximum strength brain support, while also having limited capital resources and expecting possible cost overruns due to price and cost increases in services and products.

 

There can be no assurance that future financing will be available to us on acceptable terms or at all. If financing is not available on satisfactory terms as and when needed, we may be unable to commence, develop or expand our operations. Equity financing could result in additional dilution to existing stockholders.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not required.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

As of June 30, 2023 (the “Evaluation Date”), the Company’s management evaluated, with participation of its principal executive officer, the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the Company’s principal executive officer concluded that the Company’s disclosure controls and procedures were ineffective as of June 30, 2023.

 

Management assessed the effectiveness of its internal control over financial reporting as of the Evaluation Date based on criteria for effective internal control over financial reporting described in Internal Control—Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. The material weaknesses identified during management’s assessment were (i) a lack of sufficient internal accounting resources; (ii) a lack of segregation of duties to ensure adequate review of financial statement preparation, (iii) lack of an independent board of directors or audit committee, and (iv) lack of written documentation of our internal control policies and procedures. In light of these material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting at the Evaluation Date. We plan to rectify these weaknesses by establishing written policies and procedures for our internal control of financial reporting and hiring additional accounting personnel at such time as we raise sufficient capital to do so. There were no changes in controls during the quarter ended June 30, 2023.

 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

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

 

On June 2, 2023, the Company issued 80,000 common shares of cash proceeds of $20,000.

 

On June 15, 2023, the Company issued 400,000 common shares for cash proceeds of $100,000.

 

On July 20, 2023, the Company issued 80,000 common shares for cash proceeds of $20,000. 

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Not applicable.

 

 

Item 6. Exhibits

 

Exhibit #		Exhibit Description		Incorporated By Reference			Filed or Furnished Herewith
				Form	Date	Number
3.1(a)		Articles of Incorporation		S-1	11/4/2019	3.1
3.1(b)		Amendment to Articles of Incorporation		10-K	11/26/2021	3.1B
3.2		Bylaws		S-1	11/4/2019	3.2
10.1		Stock purchase agreement dated August 29, 2022*					Filed
10.2		Stock purchase Agreement dated October 19, 2022*					Filed
10.3		Stock purchase Agreement dated December 20, 2022					Filed
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)					Filed
32.1		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002					Furnished**
101		Inline Interactive data files pursuant to Rule 405 of Regulation S-T					Filed
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Certain schedules, appendices and exhibits have been omitted in accordance with Item 601 of Regulation S-K. A copy of any omitted schedule, appendix and/or exhibit will be furnished supplementally to the Staff of the Securities and Exchange Commission upon request.

**This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

 

 

SIGNATURES

 

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

 

	Nowtransit Inc.
Dated: August 11, 2023	By:	/s/ Darren Lopez
		Darren Lopez Chief Executive Officer (Principal Executive Officer)

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name		Title		Date
/s/ Darren Lopez		Principal Executive Officer and Director		August 11, 2023
Darren Lopez