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EX-32.2 - CERTIFICATION - Nate's Food Co.nhmd_ex322.htm
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EX-31.1 - CERTIFICATION - Nate's Food Co.nhmd_ex311.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

x

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

 

For the quarterly period ended August 31, 2016

 

 

or

 

 

o

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________to______________

 

Commission File Number 000-52831

 

Nate's Food Co.

(Exact name of registrant as specified in its charter)

 

Colorado

 

46-3403755

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

15151 Springdale Street, Huntington Beach, California

 

92649

(Address of principal executive offices)

 

(Zip Code)

 

(949) 381-1834

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x YES    o 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

x YES    o NO

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small 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

o

Accelerated filer

o

Non-accelerated filer

o

(Do not check if a smaller reporting company)

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)

o YES    x NO

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

o YES    x NO

 

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

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

 

308,861,435 common shares issued and outstanding as of October 17, 2016.

 

 

 
 
 

NATE'S FOOD CO.

 

FORM 10-Q

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

 

3

 

 

 

 

 

 

Item 1.

Financial Statements

 

 

3

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

14

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

 

18

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

 

18

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

19

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

 

19

 

 

 

 

 

 

Item 1A.

Risk Factors

 

 

19

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

19

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

 

19

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

 

19

 

 

 

 

 

 

Item 5.

Other Information

 

 

19

 

 

 

 

 

 

Item 6.

Exhibits

 

 

20

 

 

 

 

 

 

SIGNATURES

 

 

21

 

 

 
2
Table of Contents

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Nate’s Food Co.

Balance Sheets

(Unaudited)

 

 

 

August 31,

 

 

May 31,

 

 

 

2016

 

 

2016

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$1,996

 

 

$525

 

Total current assets

 

 

1,996

 

 

 

525

 

 

 

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

Equipment, net

 

 

385,315

 

 

 

395,195

 

Total non-current assets

 

 

385,315

 

 

 

395,195

 

TOTAL ASSETS

 

$387,311

 

 

$395,720

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$70,703

 

 

$53,098

 

Accrued expense

 

 

47,170

 

 

 

120,714

 

Notes payable

 

 

-

 

 

 

50,000

 

Notes payable - related parties

 

 

240,526

 

 

 

175,508

 

Convertible notes, net of $38,423 and $22,296 debt discount as of August 31, 2016 and May 31, 2016, respectively

 

 

27,943

 

 

 

192,619

 

Derivative liability

 

 

158,942

 

 

 

2,039,179

 

Total current liabilities

 

 

545,284

 

 

 

2,631,118

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Notes payable - long term, net of $12,654 and $15,459 debt discount as of August 31, 2016 and May 31, 2016

 

 

187,346

 

 

 

184,541

 

Total non-current liabilities

 

 

187,346

 

 

 

184,541

 

Total liabilities

 

 

732,630

 

 

 

2,815,659

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Series A Preferred Stock, Par Value $0.0001, 2,000,000 shares authorized, 1,940,103 and 1,940,103 issued and outstanding, respectively

 

 

194

 

 

 

194

 

Series B Preferred Stock, Par Value $0.0001, 150,000 shares authorized, 136,570 and 141,970 issued and outstanding, respectively

 

 

14

 

 

 

14

 

Series C Preferred Stock, Par Value $1.00, 250,000 shares authorized, 58,774 and 58,774 issued and outstanding, respectively

 

 

58,774

 

 

 

58,774

 

Series D Preferred Stock, Par Value $0.0001, 10,000,000 shares authorized, 2,350,000 and 0 issued and outstanding, respectively

 

 

235

 

 

 

-

 

Series E Preferred Stock, Par Value $0.0001, 15,000,000 shares authorized, 10,216,000 and 10,225,000 issued and outstanding, respectively

 

 

1,021

 

 

 

1,022

 

Common Stock, Par Value $0.0001, 500,000,000 shares authorized, 278,266,510 and 251,908,891 issued and outstanding, respectively

 

 

27,827

 

 

 

25,191

 

Additional paid in capital

 

 

2,181,824

 

 

 

1,620,817

 

Accumulated deficit

 

 

(2,615,208)

 

 

(4,125,951)

Total stockholders’ deficit

 

 

(345,319)

 

 

(2,419,939)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$387,311

 

 

$395,720

 

 

See accompanying notes to the unaudited financial statements

 

 
3
Table of Contents

 

Nate’s Food Co.

Statements of Operations

(Unaudited)

 

 

 

Three Months Ended August 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Sales

 

$2,734

 

 

$-

 

Sales - related party

 

 

-

 

 

 

21,068

 

Cost of Goods Sold

 

 

-

 

 

 

12,800

 

Gross Profit

 

 

2,734

 

 

 

8,268

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

Selling, general and administrative

 

$38,794

 

 

$66,683

 

Depreciation

 

 

9,880

 

 

 

-

 

Food development/research

 

 

-

 

 

 

1,850

 

Total operating expenses

 

 

48,674

 

 

 

68,533

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

(45,940)

 

 

(60,265)

 

 

 

 

 

 

 

 

 

Other (Income) Expense

 

 

 

 

 

 

 

 

Other income

 

 

(1,290)

 

 

-

 

(Gain) loss on derivative

 

 

(1,668,865)

 

 

23,624

 

Interest Expenses

 

 

112,938

 

 

 

41,534

 

Total other expenses

 

 

(1,557,217)

 

 

65,158

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$1,511,277

 

 

$(125,423)

 

 

 

 

 

 

 

 

 

Deemed dividend on Series B convertible preferred stock

 

 

(534)

 

 

-

 

Net income (loss) attributable to common stockholders

 

$1,510,743

 

 

$(125,423)

 

 

 

 

 

 

 

 

 

Net income (loss) per common share,

 

 

 

 

 

 

 

 

Basic

 

$0.01

 

 

$(0.00)

Dilutive

 

$(0.00)

 

$(0.00)

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding, basic and diluted

 

 

 

 

 

 

 

 

Basic

 

 

267,939,823

 

 

 

77,200,000

 

Dilutive

 

 

563,862,781

 

 

 

77,200,000

 

 

See accompanying notes to the unaudited financial statements

 

 
4
Table of Contents

 

Nate’s Food Co.

Statements of Cash Flows

(Unaudited)

 

 

 

Three Months Ended August 31,

 

 

 

2016

 

 

2015

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net Income (Loss)

 

$1,511,277

 

 

$(125,423)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

9,880

 

 

 

-

 

Amortization of debt discount

 

 

40,308

 

 

 

35,976

 

(Gain) loss on derivative liability

 

 

(1,668,865)

 

 

23,624

 

Stock issued for compensation

 

 

-

 

 

 

59,862

 

Amortization of deferred financing cost

 

 

-

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Inventory

 

 

-

 

 

 

(4,800)

Accounts payable and accrued liabilities

 

 

25,623

 

 

 

15,759

 

Accrued expenses

 

 

(61,877)

 

 

5,558

 

Deferred revenue – related party

 

 

-

 

 

 

(21,068)

Net cash used in operating activities

 

 

(143,654)

 

 

(10,512)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Cash paid for purchase of fixed assets

 

 

-

 

 

 

(99,068)

Net cash used in investing activities

 

 

-

 

 

 

(99,068)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Payment of deferred financing costs

 

 

-

 

 

 

(14,000)

Proceeds from Series D Preferred Stock

 

 

235,000

 

 

 

-

 

Proceeds from convertible notes

 

 

-

 

 

 

140,000

 

Payment of convertible notes

 

 

(146,875)

 

 

-

 

Proceeds from notes payable - related party

 

 

57,000

 

 

 

1,500

 

Net cash provided by financing activities

 

 

145,125

 

 

 

127,500

 

 

 

 

 

 

 

 

 

 

Net cash increase (decrease) for the period

 

 

1,471

 

 

 

17,920

 

Cash at beginning of period

 

 

525

 

 

 

109

 

Cash at End of Period

 

$1,996

 

 

$18,029

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Interest paid in cash

 

$134,506

 

 

$-

 

Taxes paid in cash

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

NON CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Debt discount from derivative liability

 

$53,630

 

 

$158,500

 

Conversion of Series B Preferred stock into common stock

 

$540

 

 

$-

 

Conversion of convertible notes and accrued interest into common stock

 

$63,341

 

 

$-

 

Settlement of derivative liability to additional paid in capital

 

$265,002

 

 

$-

 

Convertible note exchanged for note payable and accrued interest

 

$53,630

 

 

$-

 

Cancellation of Series E Preferred Stock

 

$1

 

 

$-

 

Reclassification of accounts payable to notes payable - related party

 

$8,018

 

 

$-

 

 

See accompanying notes to the unaudited financial statements

 

 
5
Table of Contents

 

NATE’S FOOD CO.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

Note 1 – Basis of Presentation

 

Nate’s Food Co. (“we”, “us”, “our”, the "Company" or the "Registrant") was incorporated in the state of Colorado on January 12, 2000. Nate’s Food Co. is domiciled in the state of Colorado, and its corporate headquarters are located in Huntington Beach, California. The Company selected May 31 as its fiscal year end. On May 12, 2014, Nate’s Pancakes Inc. was incorporated in the state of Indiana. On May 19, 2014, the Company completed a reverse merger with Nate’s Pancakes, Inc. Nate’s Pancakes was the surviving Company. In May 2014, the Company changed its name from Capital Resource Alliance to Nate’s Food Co.

 

We sell a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. Our current product is an original flavor of pancake and waffle batter. We are currently in the process of developing additional flavors and products with the goal to have 10 products in development in 2017. Currently, we have developed three flavors for our pancake and waffle mix. We plan to continue to expand into other baked goods and other non-breakfast areas.

 

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's annual report filed with the SEC on Form 10-K, on October 6, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2016 as reported in Form 10-K, have been omitted.

 

Use of Estimates

 

The preparation of financial statements in accounting principles generally accepted in the United States of America 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. A change in managements’ estimates or assumptions could have a material impact on Nate’s Food Co. financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Nate’s Food Co.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

 

Reclassifications

 

Certain amounts in the fiscal 2016 financial statements have been reclassified to conform to the fiscal 2017 presentation. These reclassifications have no impact on net loss/income.

 

Recently Adopted Accounting Standards

 

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The updated guidance requires debt issuance costs to be presented as a direct deduction from the carrying amount of the corresponding debt liability in the balance sheet. The Company adopted the standard on a retrospective basis in the first quarter of fiscal 2017. The adoption of this standard reduced both deferred financing cost and convertible note and note payable long-term by $17,496 on the audited Balance Sheet as of May 31, 2016.

 

 
6
Table of Contents

 

Long-Lived Assets

 

Long-lived assets such as property and equipment are stated at their fair value acquisition cost and reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. Amortization of long-lived assets are calculated by the straight line method over their estimated useful lives. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.

 

Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

 

 

Estimated

 

Useful Lives

Equipment

 

10 years

 

As of August 31, 2016, equipment of $395,195 reflects acquisition costs. During the period ended August 31, 2016 and 2015, depreciation expense was $9,880 and $0, respectively

 

Fair Value of Financial Instruments

 

The Company's financial instruments consist primarily of cash, accounts payable and accrued liabilities, accrued expenses, convertible notes and Note payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

  

The Company adopted ASC Topic 820, Fair Value Measurements ("ASC Topic 820"), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

 

The three-level hierarchy for fair value measurements is defined as follows:

 

·

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

 

 

 

 

·

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

 

 

 

·Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement

  

The following table summarizes fair value measurements by level at August 31, 2016, and May 31, 2016, measured at fair value on a recurring basis:

 

August 31, 2016

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

-

 

 

 

-

 

 

 

158,942

 

 

 

158,942

 

 

May 31, 2016

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

 

-

 

 

 

-

 

 

 

2,039,179

 

 

 

2,039,179

 

 

 
7
Table of Contents

 

Note 2 – Going Concern

 

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses from operations, and does not have an established source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

 

In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital.

 

Historically, it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.

 

Note 3 – Related Party Transactions

 

Notes Payable – Related Parties

 

 

 

August 31, 2016

 

 

May 31, 2016

 

 

 

 

 

 

 

 

Note payable to WB Partners (a company controlled by Joseph Wade)

 

$60,532

 

 

$60,532

 

Note payable to corporate officer

 

 

179,994

 

 

 

114,976

 

Total notes payable

 

 

240,526

 

 

 

175,508

 

Less: current portion of notes payable

 

 

240,526

 

 

 

175,508

 

Total

 

$-

 

 

$-

 

 

During the three months ended August 31, 2016, the Company borrowed $65,018 from our officer for working capital. As at August 31, 2016, the total amount owed to this officer was $179,994. Of this amount, $57,000 of the loan is at 10% interest and to be repaid by June 28, 2017. $71,902 of the loan is at 10% interest, and $51,092 of the loan is at 0% interest. Both of the loans are to be repaid by December 31, 2016.

 

During the three months ended August 31, 2016, the amount the Company borrowed and repaid $0 to WB Partners. The total amount owing was $60,532 as at August 31, 2016. The loan was at 0% interest and is to be repaid by December 31, 2015 and is currently in default.  

 

 
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Note 4 – Notes Payable

 

The Company had the following notes payable at August 31, 2016 and May 31, 2016.

 

 

 

August 31, 2016

 

 

May 31, 2016

 

 

 

 

 

 

 

 

Note payable to Tarpon Bay partners

 

$-

 

 

$50,000

 

Note payable to SouthCorp Capital

 

 

200,000

 

 

 

200,000

 

 

 

 

200,000

 

 

 

250,000

 

Less: deferred financing cost

 

 

(12,654)

 

 

(15,459)

 

 

 

 

 

 

 

 

 

Less: current portion of notes payable

 

 

-

 

 

 

50,000

 

Total

 

$187,346

 

 

$184,541

 

 

Note payable to Tarpon Bay partners

 

On October 8, 2015, the Company issued a Promissory Note (the “Note”) to Tarpon Bay Partners LLC, for $50,000, due April 30, 2016. The Note carries an annual interest rate of 10%. On August 9, 2016, the Company entered into the new agreement which the company issued a convertible note of $53,630 for payment of the Note of $50,000 and accrued interest of $3,630 and the company recognized this transaction as debt modification.

 

Note payable to SouthCorp Capital

 

On October 20, 2015, the Company issued a Promissory Note to SouthCorp Capital, for $200,000, due October 20, 2017 for a payment for purchase of equipment of $177,712 and financing cost of $22,288 related to the purchase of the equipment. The Note carries an annual interest rate of 8%. As of August 31, 2016, the Company owes $214,519, of which $14,519 is accrued interest. The company recognized amortization expense related to the deferred financing cost of $2,805 for the three months ended August 31, 2016.

 

Note 5 – Convertible Debt

 

The Company had the following convertible notes payable outstanding as of August 31, 2016 and May 31, 2016:

 

 

 

August 31, 2016

 

 

May 31, 2016

 

Typenex Co

 

$20,060

 

 

$39,688

 

EMA Financial

 

 

-

 

 

 

39,967

 

BOU Trust

 

 

-

 

 

 

60,260

 

Fourth Man, LLC

 

 

-

 

 

 

55,000

 

Lucosky Brookman

 

 

-

 

 

 

20,000

 

Tarpon Bay

 

 

46,306

 

 

 

-

 

 

 

 

66,366

 

 

 

214,915

 

Less: debt discount and deferred financing cost

 

 

(38,423)

 

 

(22,296)

 

 

 

27,943

 

 

 

192,619

 

Less: current portion of convertible notes payable

 

 

27,943

 

 

 

192,619

 

Long-term convertible notes payable

 

$-

 

 

$-

 

 

Typenex Co

 

On July 24, 2015, the Company received financing in the amount of $93,000 from TypenexCo-Investment, LLC with $13,000 cash discount to the lender and incurred $8,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method. The $93,000 bears an 8% interest and matures in nine months. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is 50% of the average of the three lowest closing bid prices for the 15 previous consecutive trading days prior to the payment date. The Company may prepay the note at any time at an amount equal to 120% of the outstanding principal and the accrued and unpaid interest. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method. On July 8, 2016, the Company made a payment of 50% of the balance then due in the amount of $57,000. The payment of $57,000 was applied to an interest penalty and accrued interest.  The Company entered into a Forbearance Agreement with Typenex regarding conversion of the balance of $57,000 debt into Shares of Common Stock at an agreed upon discount and frequency of conversions. During the three months ended August 31, 2016, a portion of the note of $19,628 was converted into 4,000,000 shares of common stock.

 

 
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EMA Financial

 

On August 14, 2015, the Company received financing in the amount of $65,500 from EMA Financial, LLC with $5,500 cash discount to the lender and incurred $6,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method resulting in $1,085 of interest expense for the three months ended August 31, 2016. The $65,500 bears 10% interest and matures in twelve months. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the less of closing sale price of $0.035 and 60% of the lowest trade occurring during the 15 consecutive trading days immediately preceding the conversion date. The Company may prepay the note at any time during the first 120 days, at an amount equal to 125% of the outstanding principal and the accrued and unpaid interest, but no prepayment permitted thereafter. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $7,164 of interest expense for the three months ended August 31, 2016. On June 21, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $74,382.

 

BOU Trust

 

On September 25, 2015, the Company received financing in the amount of $68,250 from BOU Trust with $3,250 cash discount to the lender and incurred $6,500 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method. The $68,250 bears 10% interest and matures on March 25, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 60% of the lowest traded price, determined on the then current trading market for the Company’s common stock, for the 20 trading days prior to conversion. The Company may prepay any portion of the principal amount at 130% of such amount along with any accrued interest of this note at any time upon send days written notice to the holder. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method. During the three months ended August 31, 2016, a portion of the note of $8,352 was converted into 11,600,000 shares of common stock. On June 24, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $75,000.

 

Lucosky Brookman

 

On November 5, 2015, the Company issued convertible note of $30,000 to Lucosky Brookman, LLC. The Company repays in advance $5,000 per month. The $30,000 bears 0% interest and matures on March 20, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 60% of average of the lowest for 10 trading days prior to conversion at the option of the Holder, in whole at any time and from time to time. Upon the later of the Maturity Date or that date which is six months following the date hereof, this Note shall be convertible into shares of the Company’s common stock. During the three months ended August 31, 2016, the remaining note balance and accrued interest of $21,536 was fully converted into 3,500,000 shares of common stock.

 

Fourth Man, LLC

 

On November 5, 2015, the Company received financing in the amount of $55,000 from Fourth Man, LLC, with $5,000 cash discount to the lender and incurred $4,000 financing costs to third parties. The deferred financing cost is being amortized over the life of the note using the effective interest method resulting in $952 of interest expense for the three months ended August 31, 2016. The $55,000 bears 10% interest and matures on August 4, 2016. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 53% of the lowest daily trading price, determined on the then current trading market for the Company’s common stock, for 10 trading days prior to conversion at the option of the Holder, in whole at any time and from time to time. During the first 90 days subsequent to the date of issuance, the company may prepay any portion of the principal amount at 130% of such amount along with any accrued interest of this debenture at any time upon seven days written notice to the holder. After the first 90 days subsequent to the date of issuance, the company may prepay any portion of the principal amount at 150% of such amount along with any accrued interest of this debenture at any time upon seven days written notice to the holder. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $13,095 of interest expense for the three months ended August 31, 2016. On June 16, 2016, the Company paid off the full balance due including interest and retired this debt entirely for the sum of $75,000.

 

 
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Tarpon Bay

 

On August 9, 2016, the Company issued a convertible note of $53,630 to Tarpon Bay to repay note payable of $50,000 and interest expense of $3,630. The $53,630 bears 10% interest and matures on December 31, 2016. The holder is entitled at any time to convert any portion of the outstanding and unpaid conversion amount in to fully paid and non-assessable shares of Common Stock. Conversion price is the 90% of the lowest closing price for 15 trading days ending on the trading days. Notwithstanding the above, Holder agrees to convert only that portion of the principal and accrued interest of this note that converts into no greater than 1,000,000 shares of common stock for any single Notice of Conversion. The note was discounted for a derivative (see note 6 for details) and the discount is being amortized over the life of the note using the effective interest method resulting in $15,207 of interest expense for the three months ended August 31, 2016. During the three months ended August 31, 2016, a portion of the note and accrued interest of $13,825 were converted into 1,857,619 shares of common stock.

 

Note 6 – Derivative Liability

 

The Company analyzed the conversion options for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability when the conversion option becomes effective and there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.

 

The following table summarizes the derivative liabilities included in the balance sheet at August 31, 2016: 

 

Balance - May 31, 2016

 

$2,039,179

 

Addition of new derivative as debt discount

 

 

53,630

 

Day one loss due to derivative

 

 

22,784

 

(Gain) on change in fair value of the derivative

 

 

(291,906)

(Gain) on change in fair value of the derivative due to cash payoff

 

 

(1,399,743)

Settled upon conversion of debt

 

 

(265,002)

Balance - August 31, 2016

 

$158,942

 

 

The following table summarizes the gain/loss on derivative liability included in the income statement for the periods ended August 31, 2016 and 2015, respectively.

 

 

 

Three Months Ended August 31,

 

 

 

2016

 

 

2015

 

Day one loss due to derivatives on convertible debt

 

$22,784

 

 

$25,617

 

 (Gain) on change in fair value of the derivative

 

 

(1,691,649)

 

 

(1,993)

 

 

$(1,668,865)

 

$23,624

 

 

The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability, as well as the determined value of the option liability at each measurement date:

 

 

 

August 31,

 

 

May 31,

 

 

 

2016

 

 

2016

 

Expected term

 

0.33 - 4.08 years

 

 

0.05 - 5 years

 

Expected average volatility

 

177.92% - 314.75%

 

 

94.21% - 1,097.67%

 

Expected dividend yield

 

 

-

 

 

 

-

 

Risk-free interest rate

 

0.36% - 1.06%

 

 

0.06% - 1.65%

 

 

 
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Note 7 – Equity Transactions

 

Preferred Stock

 

Series A Preferred Stock

 

The Company is authorized to issue 2,000,000 shares of series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock has voting rights equal to 1,000 votes for each 1 share of owned.

 

There were no issuances of the Series A Preferred Stock during the three months ended August 31, 2016 

 

Series B Convertible Preferred Stock

 

The Company is authorized to issue 150,000 shares of Series B Preferred Stock at a par value of $0.0001. The Series B Preferred converts into Common Stock at a ratio of 1:1,000. However, the Series B may not be converted for a period of 12 months.

 

During the three months ended August 31, 2016, 5,400 shares of Series B Preferred Stock were converted at rate of 1 preferred share to 1,000 common shares, resulting in the issuance of 5,400,000 shares of common stock, for a value of $540, of which $534 was recorded as a deemed dividend.

 

As of August 31, 2016 and May 31, 2016, 136,570 and 141,970 shares of Series B Preferred Stock were issued and outstanding, respectively.

 

Series C Convertible Preferred Stock

 

The Company is authorized to issue 250,000 shares of Series C Preferred Stock at a par value of $1. The Preferred Stock can be converted to common stock, at a conversion rate of 66 common shares for each preferred stock. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.

 

There were no issuances of the Series C Preferred Stock during the three months ended August 31, 2016.

 

Series D Convertible Preferred Stock

 

On June 13, 2016, pursuant to its Articles of Incorporation and Bylaws, the Board of Directors of the Company, unanimously approved the designation of a new series of preferred stock, "Series D Convertible Preferred Stock.

 

The Company is authorized to issue 10,000,000 shares of Series D Preferred Stock at a par value of $0.0001.

 

Beginning January 1, 2017, each holder of shares of Series D Preferred Stock may, at any time and from time to time, convert each of its shares of Series D Preferred Stock into a 15 of fully paid and nonassessable shares of common stock. Beginning January 1, 2018, the Company may convert shares of Series D Preferred Stock at any time and from time to time, each of its shares of Series D Preferred Stock into a 15 of fully paid and nonassessable shares of common stock.

 

During the three months ended August 31, 2016, the Company issued 2,350,000 share of Series D Preferred Stock for cash of $235,000.

 

As of August 31, 2016 and May 31, 2016, 2,350,000 and 0 shares of Series D Preferred Stock were issued and outstanding, respectively.

 

 
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Series E Preferred Stock

 

The Company is authorized to issue 15,000,000 shares of Series E Preferred Stock at a par value of $0.0001. Beginning October 1, 2016, each share of Series E Preferred Stock is convertible into ten (10) shares of common stock. From October 1, 2016 to October 1, 2018, holders of Series E Preferred Stock may at any time convert to shares of common stock, thereafter, the Company may elect to convert any outstanding stock at any time without notice to the shareholders. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.

 

During the three months ended August 31, 2016, 9,000 shares of Series E Preferred Stock were cancelled by a holder and the company recognized additional paid in capital and reversed Series E Preferred Stock with par value.

 

As of August 31, 2016 and May 31, 2016, 10,216,000 and 10,225,000 shares of Series B Preferred Stock were issued and outstanding, respectively.

 

Common stock

 

During the three months ended August 31, 2016, the Company issued common shares, as follows:

 

·

5,400 shares of Series B Preferred Stock were converted at rate of 1 preferred share to 1,000 common shares, resulting in the issuance of 5,400,000 shares of common stock, for a value of $540, of which $534 was recorded as a deemed dividend.

 

·

20,957,619 common shares were issued for the conversion of debt and accrued interest of $63,341

 

As of August 31, 2016 and May 31, 2016, 278,266,510 and 251,908,891 shares of common stock were issued and outstanding, respectively.

 

Warrants

 

On September 29, 2015, the Company granted 1,000,000 warrants to Vista Capital Investments, LLC, in exchange for interest owed of $12,222, and recognized a loss on debt settlement of $16,778. Warrants are originally exercisable into 1,000,000 shares of common stock, for a period of five years from issuance, at a price of $0.05 per share, with multiple reset provisions when the share price is below $0.05. As a result of the reset features the warrants became exercisable into 2,477,215 shares of common stock at $0.0041 per share.

 

The following table summarizes information relating to outstanding and exercisable warrants as of August 31, 2016:

 

Warrants Outstanding

 

 Warrants Exercisable

 Number of Shares

 

 Weighted Average Remaining Contractual life

(in years)

 

 Weighted Average Exercise Price

 

 Number of Shares

 

 Weighted Average Exercise Price

2,477,215

 

4.01 years

 

$0.0041

 

2,477,215

 

$0.0041

 

The following table summarizes warrant activity for the three months ended August 31, 2016:

 

 

 

Number

 

 

Weighted Average Exercise Price

 

 

Weighted Average Life (years)

 

Outstanding, May 31, 2016

 

 

4,062,633

 

 

$0.0025

 

 

4.33 years

 

Granted

 

 

-

 

 

 

-

 

 

 

-

 

Reset features

 

 

(1,585,418)

 

 

0.0025

 

 

4.08 years

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding, August 31, 2016

 

 

2,477,215

 

 

$0.0025

 

 

4.08 years

 

   

Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company's stock exceeded the exercise price of the stock options at August 31, 2016, for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). As of August 31, 2016, the aggregate intrinsic value of options outstanding was approximately $16,000 based on the closing market price of $0.0088 on August 31, 2016.

 

Note 8 – Subsequent Events

 

Subsequent to August 31, 2016, a total of $92,076 convertible debts and accrued interest was converted, resulting in the issuance of 30,594,925 common shares.

 

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

 

FORWARD LOOKING STATEMENTS

 

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained herein involve risks and uncertainties, including statements as to:

 

·our future operating results;
·our business prospects;
·our contractual arrangements and relationships with third parties;
·the dependence of our future success on the general economy;
·our possible financings; and
·the adequacy of our cash resources and working capital.

 

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this report. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this report, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

 

General Overview

 

We were incorporated under the laws of the State of Colorado on January 12, 2000, under the name Capital Resources Alliance, Inc. At inception, we were a development stage company in the business of mining and exploration. On May 19, 2014 our company completed a reverse merger with Nate’s Pancakes, Inc., an Indiana company, with Nate’s Pancakes being the surviving entity. In May 2014, we changed our name from Capital Resource Alliance, Inc. to Nate’s Food Co.

 

In connection with the reverse merger, we became a food manufacturing and product company, and in May 2014, we executed a licensing agreement with Nate’s Pancakes to market and sell “Nate’s Homemade”, exclusively throughout the world.

 

Our Current Business

 

We are a food manufacturing and product company that manufactures, distributes and sells ready-to-use, pre-mixed pancake and waffle batter. We hold a 20 year worldwide exclusive license agreement for Nate’s Homemade. 

 

On August 23, 2016, we entered in to an arrangement with one of California's largest aerosol producers to begin pilot production runs of Nate's Homemade Pancake and Waffle Batter in order to start supplying Southern California grocery stores. This will enable our company to expand our current online sales activity to include distribution to regional grocery chains without impacting our ongoing development activities with ABCO Laboratories Inc. in Northern California.

 

 
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Results of Operations

 

Three Months Ended August 31, 2016 Compared to the Three Months Ended August 31, 2015

 

 

 

Three Months Ended August 31,

 

 

 

 

 

 

 

 

 

2016

 

 

2015

 

 

Change

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$2,734

 

 

$-

 

 

$2,734

 

 

 

-

 

Sales - related party

 

 

-

 

 

 

21,068

 

 

 

(21,068)

 

(100%)

 

Cost of Goods Sold

 

 

-

 

 

 

12,800

 

 

 

(12,800)

 

(100%)

 

Gross profit

 

 

2,734

 

 

 

8,268

 

 

 

(5,534)

 

(67%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

38,794

 

 

 

66,683

 

 

 

(27,889)

 

(42%)

 

Depreciation

 

 

9,880

 

 

 

-

 

 

 

9,800

 

 

 

-

 

Food development/research

 

 

-

 

 

 

1,850

 

 

 

(1,850)

 

(100%)

 

Total operating expenses

 

 

48,674

 

 

 

68,533

 

 

 

(19,859)

 

(29%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

(1,290)

 

 

-

 

 

 

(1,290)

 

 

-

 

Loss on derivative

 

 

(1,668,865)

 

 

23,624

 

 

 

(1,692,489)

 

(7,164%)

 

Interest Expenses

 

 

112,938

 

 

 

41,534

 

 

 

71,404

 

 

 

172%

Net Loss

 

$1,511,277

 

 

$(125,423)

 

$1,636,700

 

 

(1,305%)

 

 

Revenue

 

Our company generated $2,734 in revenue with a gross profit of $2,734 or 100%, for the three months ended August 31, 2016 as compared to $21,068 in revenue with a gross profit of $8,268, or 39%, for the three months ended August 31, 2015.

 

Operating Expenses

 

Operating expenses were relatively unchanged for the three months ended August 31, 2016 as compared to the same period in 2015.

 

During the period ended August 31, 2016, we incurred general and administrative expenses of $38,794 compared to $66,683 incurred during the period ended August 31, 2015. The decrease was primarily the result of a decrease in stock based compensation of $59,862 and an increase in license fee of $22,000 and professional fee of $5,500.

 

 
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Liquidity and Capital Resources

 

Balance Sheet Date

 

August 31, 2016

 

 

May 31, 2015

 

 

Change

 

 

%

 

Cash

 

$1,996

 

 

$525

 

 

$1,471

 

 

 

280%

Total Assets

 

$387,311

 

 

$395,720

 

 

$(8,409)

 

(2%)

 

Total Liabilities

 

$732,630

 

 

$2,815,659

 

 

$(2,083,029)

 

(74%)

 

Stockholders' Deficit

 

$(345,319)

 

$(2,419,939)

 

$2,074,620

 

 

(86%)

 

 

 

 

August 31, 2016

 

 

May 31, 2015

 

 

Change

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

$1,996

 

 

$525

 

 

$1,471

 

 

 

280%

Current Liabilities

 

$545,284

 

 

$2,631,118

 

 

$(2,085,834)

 

(79%)

 

Working Capital Deficiency

 

$(543,288)

 

$(2,630,593)

 

$2,087,305

 

 

(79%)

 

 

As of August 31, 2016 our company had $1,996 in cash, and $385,315 in equipment and a total of $387,311 in assets. In management’s opinion, our company’s cash position is insufficient to maintain our operations at the current level for the next 12 months. Any expansion may cause our company to require additional capital until such expansion begins generating revenue. It is anticipated that the raising of additional funds will principally be through the sales of our securities.

 

As of August 31, 2016, our total current liabilities were $545,284 which primarily consisted of $240,526 in notes payable – related parties, $158,942, in derivative liability, $70,703 in accounts payable and accrued liabilities and $27,943 in convertible notes as compared to May 31, 2016, with total current liabilities of $2,631,118 which primarily consisted of $2,039,179 in derivative liability, $175,508 in notes payable - related parties, $53,098 in accounts payable and accrued liabilities and $192,619 in convertible notes.

 

Accounting and Audit Plan

 

We estimate that our operating expenses and working capital requirements for the next 12 months to be as follows:

 

Estimated Net Expenditures During The Next Twelve Months

 

 

 

 

 

General, administrative expenses

 

$980,000

 

Research and development

 

 

110,000

 

Total

 

$1,090,000

 

 

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.

The continuation of our business is dependent upon obtaining further financing and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.

 

 
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There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our 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, and capital expenditures or capital resources that are material to stockholders.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

 

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 of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Long-Lived Assets

 

Long-lived assets such as property and equipment are stated at their fair value acquisition cost and reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. Amortization of long-lived assets are calculated by the straight line method over their estimated useful lives. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, our company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.

 

As of August 31, 2016, equipment of $385,315 reflects acquisition costs. During the period ended August 31, 2016 and 2015, depreciation expense was $9,880 and $0, respectively

 

Recent Accounting Pronouncements

 

Our company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and 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.

 

 
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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

 

Management’s Report on 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 chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

 

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of August 31, 2016, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and (ii) that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
18
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PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

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

 

The above statement notwithstanding, shareholders and prospective investors should be aware that certain risks exist with respect to our company and our business, including those risk factors contained in our most recent Registration Statements on Form 10, as amended. These risks include, among others: limited assets, lack of significant revenues and only losses since inception, industry risks, dependence on third party manufacturers/suppliers and the need for additional capital. Our company’s management is aware of these risks and has established the minimum controls and procedures to insure adequate risk assessment and execution to reduce loss exposure.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

 
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Item 6. Exhibits

 

Exhibit Number

Description

 

 

 

(31)

Rule 13a-14 (d)/15d-14d) Certifications

31.1*

Section 302 Certification by the Principal Executive Officer

 

Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer

(32)

Section 1350 Certifications

32.1*

Section 906 Certification by the Principal Executive Officer

 

Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer

101*

Interactive Data File

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

__________ 

* Filed herewith.

 

 
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Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

NATE'S FOOD CO.

(Registrant)

 

Dated: October 21, 2016

/s/ Nate Steck

Nate Steck

President, Chief Executive Officer and Director

(Principal Executive Officer)

 

 

 

 

Dated: October 21, 2016

/s/ Marc Kassoff

Marc Kassoff

Vice-President, Chief Financial Officer and Director

(Principal Financial Officer and Principal Accounting Officer)

 

 

21