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EX-32.1 - EXHIBIT 32.1 - IHO-AGRO INTERNATIONAL INC. | v461973_ex32-1.htm |
EX-31.1 - EXHIBIT 31.1 - IHO-AGRO INTERNATIONAL INC. | v461973_ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: December 31, 2016
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to___________
Commission File Number: 000-55653
IHO-Agro International, Inc. |
(Exact name of registrant as specified in its charter) |
Nevada | 98-1191860 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3101 Portofino Point, Unit 04 Coconut Creek, FL |
33066 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (416) 854-2433
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 at the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Number of the Registrant’s common stock outstanding as of March 20, 2017: 35,281,502 common shares
Special Note Regarding Forward-Looking Information
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: the Company’s future financial performance, the Company’s business prospects and strategy, anticipated trends and prospects in the industries in which the Company’s businesses operate and other similar matters. These forward-looking statements are based on the Company’s management's expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others, the risk factors set forth below. Other unknown or unpredictable factors that could also adversely affect the Company’s business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of the Company’s management as of the date of this quarterly report. The Company does not undertake to update these forward-looking statements
In this quarterly report on Form 10-Q, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in the Company’s capital stock.
An investment in the Company’s common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report on Form 10-Q in evaluating the Company and its business before purchasing shares of the Company’s common stock. The Company’s business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in the Company’s common stock only if you can afford to lose your entire investment.
Table of Contents
PART I – FINANCIAL INFORMATION | |||||
ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) | 3 | |||
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 4 | |||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 8 | |||
ITEM 4. | CONTROLS AND PROCEDURES | 8 | |||
PART II – OTHER INFORMATION | |||||
ITEM 1. | LEGAL PROCEEDINGS | 9 | |||
ITEM 1A. | RISK FACTORS | 9 | |||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 9 | |||
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 9 | |||
ITEM 4. | MINE SAFETY DISCLOSURES | 9 | |||
ITEM 5. | OTHER INFORMATION | 9 | |||
ITEM 6. | EXHIBITS | 9 |
2
PART I - FINANCIAL INFORMATION
The Company’s unaudited interim financial statements for the three-month period ended December 31, 2016 and for the comparable period in the prior year form part of this quarterly report. They are prepared in accordance with United States generally accepted accounting principles.
IHO-Agro International Inc.
December 31, 2016
(Expressed in U.S. dollars)
(Unaudited)
Index | |
Balance Sheets (Unaudited) | F–1 |
Statements of Operations (Unaudited) | F–2 |
Statements of Cash Flows (Unaudited) | F–3 |
Notes to the Unaudited Financial Statements | F–4 |
3
IHO-Agro International Inc.
(Expressed in U.S. dollars)
(Unaudited)
December 31, 2016 $ | September 30, 2016 $ | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | 93 | 1,041 | ||||||
Accounts receivable | 30,516 | 37,667 | ||||||
Other receivable | 1,372 | 1,028 | ||||||
Prepaid expenses with related party | 45,505 | 45,505 | ||||||
Total current assets | 77,486 | 85,241 | ||||||
Equipment, net of accumulated depreciation | 850 | 1,063 | ||||||
Total Assets | 78,336 | 86,304 | ||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | 13,513 | 16,798 | ||||||
Due to shareholders | 74,613 | 63,483 | ||||||
Total Liabilities | 88,126 | 80,281 | ||||||
Stockholders’ (Deficit) Equity | ||||||||
Common stock, 40,000,000 shares authorized, $0.0001
par value 35,281,502 and 34,981,502 shares issued and outstanding at December 31, 2016 and September 30, 2016, respectively | 3,529 | 3,499 | ||||||
Additional paid-in capital | 811,680 | 721,710 | ||||||
Accumulated deficit | (824,999 | ) | (719,186 | ) | ||||
Total Stockholders’ (Deficit) Equity | (9,790 | ) | 6,023 | |||||
Total Liabilities and Stockholders’ (Deficit) Equity | 78,336 | 86,304 |
(The accompanying notes are an integral part of these unaudited financial statements)
F-1
IHO-Agro International Inc.
(Expressed in U.S. dollars)
(Unaudited)
For the | For the | |||||||
Three Months Ended | Three Months Ended | |||||||
December 31, | December 31, | |||||||
2016 | 2015 | |||||||
$ | $ | |||||||
Revenue, net of related party cost of sales | – | 58,556 | ||||||
Operating Expenses | ||||||||
General and administrative | 105,813 | 67,450 | ||||||
Total Operating Expenses | 105,813 | 67,450 | ||||||
Net Loss | (105,813 | ) | (8,894 | ) | ||||
Net Loss Per Common Share, Basic and Diluted | (0.00 | ) | (0.00 | ) | ||||
Weighted Average Common Shares Outstanding, Basic and Diluted | 35,066,285 | 34,472,589 |
(The accompanying notes are an integral part of these unaudited financial statements)
F-2
IHO-Agro International Inc.
(Expressed in U.S. dollars)
(Unaudited)
For the | For the | |||||||
Three Months Ended | Three Months Ended | |||||||
December 31, | December 31, | |||||||
2016 | 2015 | |||||||
$ | $ | |||||||
Operating Activities | ||||||||
Net loss | (105,813 | ) | (8,894 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 213 | 213 | ||||||
Stock-based compensation | 90,000 | – | ||||||
Changes in operating assets and liabilities | ||||||||
Prepaid expenses with related party | – | 37,928 | ||||||
Accounts receivable | 7,151 | (68,429 | ) | |||||
Other receivable | (344 | ) | – | |||||
Accounts payable and accrued expenses | (3,285 | ) | 5,766 | |||||
Due to shareholder | 11,130 | 7,815 | ||||||
Net Cash Used In Operating Activities | (948 | ) | (25,601 | ) | ||||
Financing Activities | ||||||||
Proceeds from common stock issued or subscribed | – | 45,000 | ||||||
Net Cash Provided By Financing Activities | – | 45,000 | ||||||
(Decrease) Increase in Cash | (948 | ) | 19,399 | |||||
Cash, Beginning of Period | 1,041 | 33,753 | ||||||
Cash, End of Period | 93 | 53,152 | ||||||
Supplemental Disclosures: | ||||||||
Interest paid | – | – | ||||||
Income taxes paid | – | – |
(The accompanying notes are an integral part of these unaudited financial statements)
F-3
IHO-Agro International Inc.
Notes to the Financial Statements
(Expressed in U.S. dollars)
(Unaudited)
1. | Basis of Presentation |
IHO-Agro International Inc. (the “Company”) was incorporated under the laws of the State of Nevada, U.S. on July 29, 2014. The Company’s principal business is the marketing and distribution of all natural mineral based fertilizers. The Company has limited operations and to date has been primarily involved in organizing activities. Since inception through December 31, 2016 the Company has not generated sufficient revenues to cover operating cost and has accumulated losses of $824,999.
The interim unaudited financial statements as of December 31, 2016, and for the three months ended December 31, 2016 and 2015, have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended September 30, 2016 filed in a Form 10-K.
Concentrations
During the three months ended December 31, 2016, the Company’s did not recognize any revenue. 87% of the accounts receivable as of December 31, 2016 was from this single customer.
All fertilizer to fulfill customer orders is manufactured and shipped by a single related party vendor, Industrias y Manufacturas Bionaturales S.A., which is owned by the Company’s sole officer and sole director.
Going Concern
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has generated minimal revenue since its inception and losses are anticipated in the development of its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and public issuance of common stock. Our success is dependent upon commercializing our product and our ability to obtain adequate future financing. There can be no assurance that we will be able to obtain future financing or, if obtained, what the terms of such future financing may be, or that any amount that we are able to obtain will be adequate to support our working capital requirements until we achieve profitable operations. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
F-4
2. | Equipment |
Equipment is stated at cost and is depreciated over their estimated useful lives on a three year straight-line basis.
Cost | Accumulated Depreciation | December 31, 2016 Net Carrying Value | September 30, 2016 Net Carrying Value | |||||||||||||
Computer Equipment | $ | 2,550 | $ | 1,700 | $ | 850 | $ | 1,063 |
3. | Related Party Transactions |
(a) | Accounts payable includes $2,650 (September 30, 2016 - $2,350) of rent owed to a shareholder for the offices of the Company. |
(b) | As of December 31, 2016, the Company had a balance of $19,754 (September 30, 2016 - $10,956) owing to a significant shareholder for a shareholder loan. The loan is unsecured, due on demand and bears no interest. The shareholder provides consulting services to the Company at no cost. |
(c) | As of December 31, 2016, the Company also had a balance of $4,080 (September 30, 2016 - $1,748) owed to another significant shareholder for reimbursement of Company expenses paid on its behalf. The shareholder provides consulting services to the Company at no cost. |
(d) | The Company entered into a management consulting agreement with the Company’s sole officer and director which commenced on July 29, 2014 for consulting and other services in support of the business operations. Pursuant to the agreement, the Company paid $2,500 per month for the first two months and $6,000 per month thereafter. In addition, the Company’s sole officer and director receives a $1,000 monthly car allowance. This agreement was terminated effective September 30, 2016. As of December 31, 2016, there is a balance of $45,779 (September 30, 2016 - $45,779) owed for these services. |
(e) | All fertilizer shipped to customers was manufactured and shipped by a Panamanian entity called Industrias y Manufacturas Bionaturales S.A., which is owned by the Company's sole officer and director. The Company shall pay Industrias y Manufacturas Bionaturales S.A. a license fee of $5,000 per year and 5% of all sub-licensing revenue. As of December 31, 2016, the $5,000 has been accrued as due to shareholder. The Company makes advance payments to this entity to cover future sales orders. As of December 31, 2016, the aggregate prepaid balance to this related party was $45,505 (September 30, 2016 - $45,505). |
4. | Common Stock |
The Company has 40,000,000 common shares authorized with a par value of $ 0.0001 per share.
During the three months ended December 31, 2016, the Company had the following issuances:
(a) | In December 2016, the Company issued 300,000 shares of common stock for services valued in total at $90,000. |
F-5
5. | Share Purchase Warrants |
Each Selling Shareholder has a warrant to purchase up to 50% of the shares owned with an exercise price of $0.60 per shares with the warrant termination on the one year anniversary of the first day that the Common Stock is traded on the OTCQB marketplace.
A summary of the changes in the Company’s common share purchase warrants is presented below:
Number | Weighted Average Exercise Price | |||||||
Balance September 30, 2016 | 692,525 | $ | 0.60 | |||||
Issued | – | – | ||||||
Balance December 31, 2016 | 692,525 | $ | 0.60 |
As at December 31, 2016, the following common share purchase warrants were outstanding and exercisable:
Number of Warrants | Exercise Price | Expiry Date | ||||||
692,525 | $ | 0.60 | One year from the first day that the Common Stock is traded on the OTCQB marketplace |
F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included in Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ materially from those discussed below.
Overview.
The Company was organized under the laws of the State of Nevada on July 29, 2014 and is a marketer and distributor of very unique all natural mineral based fertilizers. We do not produce the fertilizer. The Company strives to be environmentally friendly in the production of a fertilizer that we believe will reduce the worldwide dependence on chemical fertilizers and provide a safe and healthy alternative to help in the worldwide production of food.
In the fertilization process, there are more than 60 different minerals present in plant tissue. Farmers are well aware of the consequences of low levels of minerals in pastures, which is why animal feed is enriched with minerals. In most cases, the elements needed by a plant are also needed by animals. There are seven minerals needed in the diet of animals, and they are iron, copper, zinc, manganese, iodine, cobalt and selenium. If these elements are not present, the health of the animal is affected through slower development and depressed immune systems.
Products
There are two (2) fertilizer products.
“IHO – Agro Mineral,” a fertilizer consisting of mineral extracts from various salts, including sea salt, found naturally on the surface of the Earth; and
“IHO-Bio,” a fertilizer consisting of a mixture of mineral extracts from various salts, including sea salt, as well as various plant extracts, including seaweed. It contains all the micronutrients present in “IHO – Agro Mineral”, plus plant extracts rich in amino acids, vitamins and natural plant hormones.
The “IHO-Agro Mineral” fertilizer is a natural product that we believe will reduce the use of chemical fertilizers. It’s ecological, which creates healthier conditions while also increasing production and higher profits. We believe the product provides an increase in soil minerals by adding a micronutrient fertilizer. We believe the “IHO-Agro Mineral” fertilizer will help fruit trees increase their production and will be able to be used on crops that are growing in locked, saturated soil. We believe the “IHO-Agro Mineral” fertilizer will be able to be used in pastures to increase mineral content.
We believe the “IHO-Agro Bio” fertilizer will be able to be used for fruit trees that bear no fruit. We believe it will also be able to be used when solids are depleted; we believe it will increase mineralization and increase agricultural production, and also increase germination.
The Company did not itself develop the fertilizer. The Panamanian Entity developed the fertilizer and is owned by the Company’s sole officer and sole director, Mr. Ioan Hossu. The Company has obtained an exclusive license with the Panamanian entity to market and sell the fertilizer.
Benefits of HO-Agro Products vs. Agro-Chemical Fertilizers
Typically, fertilizers represent 30% to 40% of input costs for many key crops. These costs differ from country to country. Most agro-chemical fertilizer prices fluctuate in accordance with international energy costs. In contrast, IHO-Agro products are not oil dependent, and the energy used to manufacture these products is minimal. Even in case of natural disasters, should no electricity be available, the Panamanian entity could continue to manufacture the products, as they are not energy dependent. We do recommend (depending on the crops) two to four gallons of our product to be used for each hectare. While getting additional benefits from IHO-Agro products, we believe the costs of fertilizing will be much lower than using chemical fertilizers. These costs will depend on where the products are used, as different import tariffs and taxes will be applied. Even so, we believe the costs will be significantly lower. Farmers will get the assurance fertilizer costs will not increase due to an increase in the price of oil. We believe the benefits will include:
4
• | Plants more resistant to insects and disease. Farmers may need to use less pesticides and fungicides, therefore the costs associated with dispersing them is diminished or eliminated. |
• | Farmers will not incur any additional costs associated with the usage of IHO-Agro products, as they can readily use their existing farm equipment. |
• | Depending on the extraction method employed in the process, we believe that soils treated with these minerals will meet the standards required in the United States and the European Union for Organic Certification which will allow farmers to charge more for their crops. |
• | We believe there will be no negative impact on the environment as a result of manufacturing, and there will be no environmental pollution associated with the process. We believe that, except for water (and perhaps table salt), the process will not generate any types of residue, or by-products. |
• | Increase in mineral and vitamin content is possible. |
• | We believe that seeds will germinate sooner and thus plants will reach maturity sooner. |
• | We believe the use of our products will lead to longer producing plants, e.g. coffee plants that could start producing earlier, and yield more beans, extending the harvest longer. |
Sales and Marketing
The Company will continue to expand sales to all regions of the world through sales and marketing campaigns and programs using both internal and external resources via various media such as television, radio, printed, digital, website.
• | All authorized distributors through legal distribution agreements will be responsible for various sales targets as defined by IHO-Agro in their respective regions and will be responsible for representing the IHO products in those markets in accordance with such distribution agreements. |
• | IHO-Agro will maintain and further develop the IHO-Agro brand. |
• | Authorized distributors will be responsible for the advertising and marketing costs associated with sales activities specific to their respective authorized territories. |
Results of Operations
For the three months ended December 31, 2016
Revenues
For the quarter ended December 31, 2016 and 2015, we recognized revenue, net of related party cost of 0 and $58,556, respectively. This decrease in revenue is primarily attributable to timing of orders received during this period compared to the same last period.
5
Operating Expenses
For the quarter ended December 31, 2016 and 2015, we incurred operating expenses of $105,813 and $67,450, respectively. This increase in operating expenses is primarily attributable to an increase in consulting services. All expenses incurred from inception have been general and administrative expenses. General and administrative expenses consist of sales and marketing, license and certification of product expenses, consulting and professional fees such as legal, accounting, travel and entertainment, office supplies, computer and software.
Net Loss
For the quarter ended December 31, 2016 and 2015, we incurred a net loss of $105,813 and $8,894, respectively. This increase in net loss is primarily attributable to decrease in sales revenue and increase in consulting services.
From inception to December 31, 2016, the Company had been undertaking development stage activities including the ongoing registration and certification of the product in various jurisdictions and countries, testing and lab work, travel and advertising, procuring agreements with qualified distribution and sales partners, accounting and administration work and production and manufacturing design.
The Company’s results of operations are affected by the following factors and/or circumstances: the dependence on its sole officer and director to manage operation requirements in a timely and efficient manner. This is somewhat offset by the assistance on other consulting personnel.
The Company’s financial condition is affected by the following factors and/or circumstances: the delay and/or inability to obtain product registration and certification in certain jurisdictions and countries that could delay or negate potential revenue. The inability to procure adequate quantities of product from the manufacturer or in a timely manner. Market conditions that would erode the selling price of fertilizer in the open market due to competition, supply and demand and increased input/raw material costs.
The following events and uncertainties will have the following impact on future activities; Market conditions that would erode the selling price of fertilizer in the open market due to competition, supply and demand and increased input/raw material costs. The financial condition of the manufacturer could prevent its supply of product to the company.
6
Liquidity and Capital Resources
As at December 31, 2016, the Company has a working capital deficit of $10,640 and an accumulated deficit of $824,999. The Company intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending September 30, 2017.
The ability of the Company to realize its business plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.
The Company’s liquidity will be affected by the following trends; demands, commitments, events or uncertainties; the increase in rent, advertising, testing and certification/license costs, commissions to sales and distribution partners and increase in consulting and professional fees as the company grows. Demands from purchases for open terms or longer credit terms could impact cash flow.
Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties. In the event we seek to raise additional capital through the issuance of debt or its equivalents, this will result in increased interest expense. If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. We cannot provide any assurance that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all.
If we are unable to raise capital as needed, we are required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-balance sheet arrangements:
As of December 31, 2016 the Company had no off-balance sheet arrangements.
Inflation
We do not believe that inflation has had a material effect on our results of operations.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 or revenues and expenses during the reporting period. Actual results could differ from those estimates.
7
Intangible Assets
Identifiable intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives, generally on a straight-line basis, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Share Based Payments
The Company recognizes compensation expense for all equity–based payments in accordance with ASC 718 “Share-based payments". Under fair value recognition provisions, the Company recognizes equity–based compensation net of an estimated forfeiture rate and recognizes compensation cost only for those shares expected to vest over the requisite service period of the award.
Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for share–based payments granted to non–employees in accordance with ASC 505, “Equity Based Payments to Non–Employees”. The Company determines the fair value of the stock–based payment as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.
Recent Accounting Pronouncements
During 2014, the Company elected to early adopt Accounting Standards Update (“ASU”) No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not hold any derivative instruments and do not engage in any hedging activities
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
At the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.
8
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
As a “small reporting company”, we are not required to provide the information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the quarter ended December 31, 2016, the Company issued 300,000 shares of common stock for services valued in total at $90,000.
The shares of common stock were issued in a transaction not involving a public offering in reliance upon an exemption from registration provided by Regulation S and Rule 506 of Regulation D of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
There is no other information required to be disclosed under this item which was not previously disclosed.
Exhibit | Description | |
31.1* | Certification of the Principal Executive Officer and Principal Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1+ | Certification of the Principal Executive Officer of the Registrant pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS* | XBRL Instance | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculations | |
101.DEF* | XBRL Taxonomy Extension Definitions | |
101.LAB* | XBRL Taxonomy Extension Labels | |
101.PRE* | XBRL Taxonomy Extension Presentation |
_______________
* Filed herewith.
+ In accordance with SEC Release 33-8238, Exhibits 32.1 is being furnished and not filed.
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SIGNATURES
In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
IHO-Agro International, Inc. | |||
Dated: March 20, 2017 | By | /s/ Ioan Hossu | |
Ioan Hossu | |||
President, Chief Executive Officer, Chief Financial Officer, and Treasurer |
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