10-QUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2017

 

[_] Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________to ________________

 

Commission file number 333-198993

 

GREEN MEADOW PRODUCTS, INC.

(Name of small business issuer in its charter)

 

 

1010 Industrial Road, Ste. 70

Boulder City, Nevada 89005

www.GreenMeadowProducts.com

702-769-4529

(Address and telephone number of registrant's principal executive offices and principal place of business)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]      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 (ss.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 shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

 

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

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [_]    No [X]

 

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

 

 

GREEN MEADOW PRODUCTS, INC.

TABLE OF CONTENTS

INDEX

 

  

GREEN MEADOW PRODUCTS, INC.
CONDENSED BALANCE SHEETS

(UNAUDITED)

See accompanying notes to condensed unaudited financial statements.

GREEN MEADOW PRODUCTS, INC.
CONDENSED STATEMENTS OF OPERATIONS 
(Unaudited)

 * denotes income or (loss) of less than $.01 per share.

 

See accompanying notes to condensed unaudited financial statements.

 

 

GREEN MEADOW PRODUCTS, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)

 

 

See accompanying notes to condensed unaudited financial statements.

 

 

 

GREEN MEADOW PRODUCTS, INC.

NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS AS OF MARCH 31, 2017

AND JUNE 30, 2016 AND FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2017 AND 2016

 

Note 1 – NATURE OF OPERATIONS

 

Green Meadow Products, Inc. ("the Company", "GMP", "we", "us" or "our") was incorporated under the laws of the State of Wyoming on June 22, 2012. The Company's goal from the outset was to establish itself as a "Green" Company where our focus would be on products that were environmentally friendly.

 

Our current focus is on the sales of licensing rights to our Green Meadow PR formula and the manufacturing and sales of our Green Meadow PR formula, both of which are organic products, as well as the manufacturing and sales of our PawPal product and our recently acquired stress relief formula. We have also tested and sold organic dog treats which contain our pain relief formula and are currently seeking funding sources for the manufacturing of the dog treats as well as our pain relief product for dogs.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

 

BASIS OF PRESENTATION

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

 

 

 

 

In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. The operating results for the three and nine-month period ended March 31, 2017 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2017 or for any future period.

 

These unaudited condensed financial statements and notes should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended June 30, 2016.

 

RECLASSIFICATION

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

CUSTOMER AND PURCHASE CONCENTRATION

During the quarter ended March 31, 2017 we had sales of Optec Products of $12,000 on March 10, 2017 with 60 day terms which accounted for 100% of our revenue of which $1,000 was paid in March. During the nine months ended March 31, 2017 we had sales of Optec Products of $12,000 which accounted for 49% of our revenue and sub license agreements of $12,200 which accounted for 51% of our revenue;

 

 

NET INCOME (LOSS) PER SHARE OF COMMON STOCK

 

The Company computes net income (loss) per share in accordance with ASC 105, "Earnings per Share" which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

The Company has no potentially dilutive debt or equity instruments issued and outstanding during the quarters ended March 31, 2017 or 2016.   

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

 

 

 

 

Note 3– GOING CONCERN

 

 

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

Note 4 – REVENUE RECOGNITION

The Company recognizes revenue in accordance with Accounting Standards Codification No. 605, "Revenue Recognition" ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

The Company's revenues have been generated primarily through sublicense and distribution agreements related to our Paw Pal product and our pain relief products. In the three months ended March 31, 2017 we acquired 7 Optec Fuel maximizer devices for vehicles for testing and for resale. The terms of these agreements generally consist solely of upfront, nonrefundable payments for licensing and distribution rights. Revenues from non-refundable licensing and distribution fees are recognized upon receipt of the payment if the license has stand-alone value and we do not have ongoing involvement or obligations. 

 

For the year ended June 30, 2016 and the nine period ended March 31, 2017, all license payments met the above criteria or in the case of one contract, the only continuing involvement was to sell our products to the distributor at pricing that is consistent with market transactions, thereby allowing for the recognition of revenue for the licensing and distribution arrangements upon receipt. 

 

When non-refundable license fees do not meet this criteria, the license revenues are recognized over the expected period of performance. We periodically review for any expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license fees. If ever applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement.

 

 

 

Note 5 - INCOME TAXES

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

For the three month and nine month periods ended March 31, 2017, we did not recognize a tax expense, due to utilization of net operating loss carryforwards.

 

Note 6 – SUBSEQUENT EVENTS

 

Management has reviewed events between March 31, 2017 to the date that the financials were issued, and there were no significant events identified for disclosure.

 

 

 

 

 

 

GENERAL

 

Green Meadow Products, Inc. ("the Company", "GMP", "we", "us" or "our") was incorporated under the laws of the State of Wyoming on June 22, 2012. 

 

The Company's goal from the outset was to establish itself as a "Green" Company where our focus would be on products that were environmentally friendly. We have developed products for the pet natural health supplement and related fields; with a focus on natural pet pain relief formulas and pet pain preventative products.

 

Our current focus is on the sales of licensing rights to our Green Meadow PR formula and the manufacturing and sales of our Green Meadow PR formula, both of which are organic products, as well as the manufacturing and sales of our PawPal product and our recently acquired stress relief formula. We have also tested and sold organic dog treats which contain our pain relief formula and are currently seeking funding sources for the manufacturing of the dog treats.We believe it will be able to successfully compete in today's natural supplement and related fields industry by controlling production costs and by limiting its distribution expenses using, primarily, online marketing tools to promote its products and to further develop its digital strategies.

We are currently seeking funding for our pain relief product for dogs as well as our dog treats which contain our pain relief formula.

 

In the three months ended March 31, 2017 we reviewed additional potential products for marketing and distribution in what we consider to be the "Green Sector" or "environmentally friendly". As a result we acquired seven Optec Fuel maximizer devices for vehicles in March of 2017 for testing; comprised of 2 HD Optec Fuel Maximizers, 2 Intermediate Optec Fuel Maximizers, 1 Optec Fuel Maximizer for gas passenger cars, 1 Optec Fuel Maximizer for diesel passenger cars. The Optec Fuel maximizer is an on demand technology designed for computer controlled gasoline and diesel engines for improved fuel efficiency while simultaneously reducing harmful emissions. We believe that the technology can reduce greenhouse gas emissions which in turn could conceivably aid in making the air much healthier in our cities. Should the Company's testing of the devices prove to meet the claims of the manufacturer we may enter into future discussions with Optec for potential licensing rights for the devices. (For further information on Optec Products acquired-www.optecmpg.com)

 

Significant Accounting Policies and Estimates

 

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's financial statements which have been prepared in accordance with accounting principals generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

 

 

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification No. 605, "Revenue Recognition" ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

The Company's revenues have been generated primarily through sublicense and distribution agreements related to our Paw Pal product and our pain relief products. In the three months ended March 31, 2017 we acquired 7 Optec Fuel maximizer devices for vehicles for testing and for resale. The terms of these agreements generally consist solely of upfront, nonrefundable payments for licensing and distribution rights. Revenues from non-refundable licensing and distribution fees are recognized upon receipt of the payment if the license has stand-alone value and we do not have ongoing involvement or obligations. 

 

For the year ended June 30, 2016 and the nine period ended March 31, 2017, all license payments met the above criteria or in the case of one contract, the only continuing involvement was to sell our products to the distributor at pricing that is consistent with market transactions, thereby allowing for the recognition of revenue for the licensing and distribution arrangements upon receipt. 

 

When non-refundable license fees do not meet this criteria, the license revenues are recognized over the expected period of performance. We periodically review for any expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license fees. If ever applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

 

Results of Operations

 

For The Three Months Ended March 31, 2017 Compared To The Three Months Ended March 31, 2016.

 

Revenue

For the three month period ended March 31, 2017, we recognized revenues of $12,000, which was comprised of the sale of the Optec products which we acquired in March of 2017 (See "General" above regarding the details of the transaction with Optec).

For the three month period ended March 31, 2016, we recognized revenues of $6,000, which comprised sale of video work for dogs for a pain relief commercial. 

Cost of Sales

For the three month period ended March 31, 2017, we recognized cost of goods sold of $7,000 relating to the Optec products which we acquired and sold in the period.

For the three month period ended March 31, 2016, we recognized cost of goods of $5,000 for promotional costs associated with commercial for pain relief product for dogs.

 

 

 

Gross Profit 

For the three month period ended March 31, 2017, we had a gross profit of $5,000 from the sale of the Optec products.

For the three month period ended March 31, 2016, we had a gross profit of $6,000 from the sale of video work for dogs for pain relief commercial.

Operating Expenses

For the three month period ended March 31, 2017, we incurred total operating expenses of $6,097 consisting of advertising expense of $4,500 for promotional costs associated with a commercial for pain relief product for dogs, fees of $575, amortization of $1,019, and other fees of $3.

 

For the three month period ended March 31, 2016, we incurred total operating expenses of $10,353, Professional fees of $9,331which were attributable to accounting costs, amortization of $1,019,  and other fees of $3.

Income Tax

For the three month period ended March 31, 2017, we did not recognize tax losses generated in the period that were available to carry back and generate a tax refund in respect of taxable profits generated in the prior year. 

For the three month period ended March 31, 2016, we recognized a tax credit of $(1,403) in respect to tax losses generated in the period that were available to carry back and generate a tax refund in respect of taxable profits generated in a prior year.

 

Net Income (Loss)

For the three month period ended March 31, 2017, we incurred a net profit of $40 due to the factors discussed above.

 

For the three month period ended March 31, 2016, we incurred a net loss of $7,950 due to the factors discussed above.

 

For The Nine Months Ended March 31, 2017 Compared To The Nine Months Ended March 31, 2016.

 

Revenue

For the nine month period ended March 31, 2017, we recognized revenues of $24,200, which were comprised of $12,000 in sales of the Optec products to Autovative Technologies Inc., and $12,200 in sub license agreements.

 

For the nine month period ended March 31, 2016, we recognized revenues of $24,360, which were comprised of $3,360 in Swap Meet sales of Petaprin, the pain relief product for dogs, which were sold as a market test for the product at a street fair, and $6,000 in producing a video for commercial for pain relief for dogs and $5,000 from Wholesale 4 You, Inc. for purchase of pain relief products, and $10,000 from Mountain

High for sale of licensing rights to our pain relief formula.

 

 

 

Cost of Sales

For the nine month period ended March 31, 2017, we recognized cost of goods sold of $7,000 relating to the Optec products.

For the nine month period ended March 31, 2016, we recognized cost of goods sold of $2,000 relating to the Mountain High Bar Treat Product.

Gross Profit

For the nine month period ended March 31, 2017 we recognized a gross profit of $17,200 from the sale of certain licensing rights and distribution rights for our pain relief formula for dogs sold in the period due to the factors discussed above and from sale of the Optec products.

For the nine month period ended March 31, 2016 we recognized a gross profit of $22,360 from the sale of certain licensing rights and distribution rights for our pain relief formula for dogs sold in the period due to the factors discussed above.

  

Operating Expenses

For the nine month period ended March 31, 2017, we had total operating expenses of $17,160 consisting of marketing fees of $575, advertising expense of $4,500, amortization fees of $3,057, professional fees of $9,022 attributable to accounting costs and other fees of $6.

For the nine month period ended March 31, 2016, we had total operating expenses of $47,569 consisting of consulting Fees of $11,000 associated with sales of our pain relief formula and Petaprin product, video expense of $5,000 for a dog commercial for pain relief for dogs, amortization fees of $3,057, professional fees of $27,728 attributable to accounting costs and other fees of $784.

 

Income Tax

For the nine month period ended March 31, 2017, we did not recognize a tax credit.

 

For the nine month period ended March 31, 2016, we recognized a tax credit of $3,781 in respect of tax losses generated in the period that were available to carry back and generate a tax refund in respect of taxable profits generated in the prior year.

Net Income (Loss)

For the nine month period ended March 31, 2017, we incurred a net profit of $40 due to the factors discussed above.

For the nine month period ended March 31, 2016, we incurred a net loss of $21,428 due to the factors discussed above.

 

 

 

Liquidity and Capital Resources

 

For The Nine Months Ended March 31, 2017 Compared To The Nine Months Ended March 31, 2016.

As at March 31, 2017, the Company had cash on hand of $1,974 which was generated from revenue from the sale of rights to our pain relief formula and sale of Optec products, total assets of $27,739, total liabilities of $7,000 from an account payable for Optec products and stockholders' equity of $32,711. 

As at March 31, 2016, the Company had cash on hand of $8,977 which was generated from revenue from the sale of rights to our pain relief formula and sale of product, total assets of $25,699, total liabilities of $5,000 and stockholders' equity of $32,751. 

 

The change in shareholders' equity in the nine months ended March 31, 2017 was largely attributable to operating profit incurred in the period.

 

Operating Activities

For the nine month period ended March 31, 2017, we used $(7,003) cash in operating activities compared to using $(22,450) in cash from operating activities in the nine months ended March 31, 2016.

 

During the nine months ended March 31, 2017, we incurred a profit of $40. 

 

During the nine months ended March 31, 2016, we incurred a loss of $21,428.

 

Investing Activities 

For the nine month period ended March 31, 2017 and 2016 we had no investment activity.

Financing  Activities

 

During the nine months ended March 31, 2017 and 2016, we neither generated nor used any funds in financing activities.

 

Our auditor's report states the following with regard to our ability to continue as a going concern, "has yet to establish a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern".

 

The Company believes it may have sufficient cash resources available to fund its primary operation for the next twelve (12) months. The Company has no agreements in place with its shareholders, officer and director or with any third parties to fund operations beyond the end of the Company's March 31, 2017 quarter. The Company has not negotiated nor has available to it any other third party sources of liquidity.

 

The Company has no, current, off balance sheet arrangements and does not anticipate entering into any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

 

 

Item 4. Controls and Procedures

   

Evaluation of Disclosure Controls and Procedures

 

Our chief executive officer and chief financial officer are responsible for establishing and maintaining our disclosure controls and procedures. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1933 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to the our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1933) as of March 31, 2015. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the evaluation date, such controls and procedures were effective.

 

Changes in internal controls

 

There were no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company was not subject to any legal proceedings during the three and nine month periods ended March 31, 2017 or 2016 and to the best of our knowledge and belief no proceedings are currently threatened or pending.

 

Item 1A. Risk Factors

 

 As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

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

 

No unregistered equity securities were issued sold during the three and nine months ended March 31, 2017. 

 

Item 3. Defaults upon Senior Securities

 

No senior securities were issued and outstanding during the three and nine months ended March 31, 2016.

 

Item 4. Mining Safety Disclosures

 

Not applicable to our Company.

 

Item 5. Other Information

 

None.

 

ITEM 6. EXHIBITS

 

** Filed Herewith

 

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