Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended November 30, 2017
☐ TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the
transition period from ___ to ____
Commission
file number: 000-55590
HEMP NATURALS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of incorporation or
organization)
|
47-5604166
(I.R.S.
Employer Identification No.)
|
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16950
North Bay Road, Suite 1803
Sunny Isles Beach, Florida
(Address
of principal executive offices)
|
33160
(Zip
Code)
|
Registrant’s
telephone number, including area code: (347) 301-8431
Securities
registered pursuant to Section 12(b) of the Act:
None
Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, no par
value
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act.
Yes
☐ No ☒
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.
Yes
☒ 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). Yes ☒ No ☐
Indicate
by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. Yes ☒ 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. See definitions of “large accelerated
filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange
Act.
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
Non-accelerated
filer
|
☐ (Do not check if a smaller reporting
company)
|
Smaller reporting company
|
☒
|
|
|
|
Emerging
growth company
|
☒
|
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act).
Yes
☐ No ☒
The
aggregate market value of the voting stock held by non-affiliates
of the registrant as of May 31, 2017 was $81,830 based on the price
at which our common stock was last sold, $0.03 per share, on
October 19, 2017.
The
number of shares outstanding of the issuer’s classes of
Common Stock as of July 9, 2018 was 324,125,983.
HEMP NATURALS, INC.
FORM 10-K
For the Year Ended November 30, 2017
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2
PART I
ITEM 1. BUSINESS
When
used in this Form 10-K, the words "expects," "anticipates,"
"estimates" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to risks
and uncertainties, including those set forth below under "Risks and
Uncertainties," that could cause actual results to differ
materially from those projected. These forward-looking statements
speak only as of the date hereof. Hemp Naturals, Inc. expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances
on which any statement is based. This discussion should be read
together with the financial statements and other financial
information included in this Form 10-K. Readers should carefully
review the risk factors described in other
documents the Company files from time to
time with the Securities and Exchange
Commission, including the Quarterly Reports on Form
10-Q to be filed by the Company subsequent to this Annual
Report on Form 10-K and any Current Reports on Form 8-K
filed by the Company.
Background
Hemp
Naturals, Inc., a Delaware corporation (“the Company”)
was incorporated on November 13, 2015 under the laws of the state
of Delaware. We have performed limited business operations and have
generated no revenue to date.
Our Business
Hemp
Naturals, Inc. is an early stage company that plans to research,
develop, acquire and sell products made of industrial hemp. While
the company will have a wide range of products and supplementary
goods to go with our primary line up, the focus will be, at least
initially, upon rolling papers made out of industrial hemp.
Currently our rolling papers are available to purchase in
twenty-five retail establishments comprised of gas stations,
convenience stores, tobacco shops and liquor stores. At the date of
this filing, all sales have been at a promotional rate with no
revenues realized by the Company. Our expectation is that the
promotional phase of rolling paper sales will transition to
profitable operations during the second or third quarter of the
2018 fiscal year. In the future, additional products may include,
but not be limited to, hemp clothing, nutritional hemp health
supplements, hemp shakes and/or foods, and beauty supply products
with hemp as the key ingredient.
One of
the keys to the success of our future business will be establishing
positive and long lasting relationships with companies which
manufacture products made out of industrial hemp. If we can acquire
these products wholesale and at low prices, we will be able to
subsequently resell them under the Hemp Naturals name to the
general population at a significant profit. Currently, the Company
is collaborating with one rolling papers wholesaler to develop a
new design for and produce our product. We expect the newly
designed product to be available to sell in the second or third
quarter of the 2018 fiscal year.
The
growing demand and need for hemp products gives us an ideal
environment in which to enter the already competitive hemp
industry. As the demand grows, and indeed as it has continued to
grow steadily over the past several years, so too does the need for
high quality goods. Through an aggressive marketing plan which will
primarily utilize social media, but may also rely on print media,
radio spots, and other as of yet unnamed methods, we aim to become
the first retailer that enters an individual’s mind when they
think of hemp goods. We have set up our company website,
Hempofnaturals.com,
and are currently working on setting up an additional website,
RollingNaturals.com, to sell our product directly to consumers
online.
3
There
has been some controversy surrounding industrial hemp, due to the
fact that it comes from the same plant as marijuana. Due to these
concerns, and the illegal nature of the sale of marijuana in the
majority of states within the United States, Hemp Naturals, Inc.
plans to follow all federal regulations and statutes pertinent to
the sale of hemp-based goods. Hemp Naturals does not intend to
import or export any products containing THC. The U.S. Customs
Service has a “zero tolerance standard” for the
importation of industrial hemp, meaning that a product cannot have
any potentially dangerous substances contained in it or it will be
considered adulterated and unfit for human consumption, and thus
illegal to possess or use per U.S. Federal Law. In 2001 the DEA
elaborated on this and clarified that any product with any quantity
of THC in it at all cannot be imported into the United States.
Since no hemp based products containing THC are legally permitted
in the United States these products are not allowed to be exported
out of the United States either. Because of the strict laws that
exist with the U.S. importation and exportation of industrial hemp
products, our business could be adversely affected and even if our
products contain no THC there exists the possibility that any
hemp-based products could be deemed illegal if a change in law were
to occur. There are no foreign countries, to our knowledge, that
have laws which could negatively affect the importation or
exportation of our hemp based products since they will not contain
any THC.
Business Progress
To
date, our operations have consisted of developing our website and
producing, distributing and selling hemp-based rolling papers as
promotion for the Company with the expectation of profitable
operations in the next fiscal year.
We have
two part time employees, Levi Jacobson our Chief Executive Officer
and Maryna Bleier our Secretary. Currently, both Mr. Jacobson and
Ms. Bleier have the flexibility to work on our business up to 25 to
30 hours per week, but are prepared to devote more time if
necessary. We do not presently have pension, health, annuity,
insurance, stock options, profit sharing, or similar benefit plans;
however, we may adopt plans in the future. There are presently no
personal benefits available to our officer and director. During the
initial implementation of our business plan, we intend to hire
independent consultants to assist in the development and execution
of our business operations.
Competition
The
industry in which Hemp Naturals, Inc. competes is highly
competitive. Many Companies offer hemp-based goods such as clothes,
cosmetics, and foods and at competitive prices. As we are small and
have very limited resources we may not be able to compete with our
larger, better financed competitors. We may also not be able to
offer our goods at as low of prices as our competitors, making it
difficult to make sales and increase brand awareness. We will also
be in competition with non-hemp-based products.
4
ITEM 1A. RISK
FACTORS
This
item is inapplicable because we are a "smaller reporting company"
as defined in Exchange Act Rule 12b-2.
ITEM 1B. UNRESOLVED STAFF
COMMENTS
This
item is inapplicable because we are a "smaller reporting company"
as defined in Exchange Act Rule 12b-2.
ITEM 2. PROPERTIES
We do
not own any property. Our main office space is provided by our
Secretary, Maryna Bleier at $5,000 per month which is accounted for
as contributed capital. Additional office space has been contracted
through May 7, 2024. The owners of this space have been compensated
with common shares issued.
ITEM 3. LEGAL
PROCEEDINGS
Hemp
Naturals, Inc. is not a party to any material pending legal
proceeding.
ITEM 4. MINE SAFETY
DISCLOSURES
Not
applicable.
5
PART II
ITEM 5. MARKET FOR
REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
(a) Market information and
issuance of unregistered securities
There
exists no market for the trading of our common stock, par value
$0.001 per share (the "Common Stock"). While management believes
that our Common Stock may be eligible for a quotation on the Over
the Counter Market, there can be no assurance that any such
quotation ever is obtained. Moreover, in the event a quotation is
obtained, there can be no guarantee that a liquid trading market in
our Common Stock will ever develop.
(b) Holders
As of
July 9, 2018, there were 46 record holders of common
stock.
(c) Dividends
The
Company has not paid any dividends on its common stock. The
Company currently intends to retain any earnings for use in its
business, and therefore does not anticipate paying cash dividends
in the foreseeable future.
(d) Equity Compensation
Plans
None
(e) Company repurchases of
common stock during the year ended November 30,
2017
None
(f) Performance
Graphic
The
Company is not required to provide a performance graph since it is
a "smaller reporting company" as defined in Regulation S-K Rule
10(f).
(g) Recent Sales of
Unregistered Securities
On
March 1, 2016, our Offering Statement on Form 1-A was qualified by
the Securities and Exchange Commission. During the month of March
2016 an aggregate of 1,805,983 shares of common stock were sold to
37 purchasers at a purchase price of $0.03 per share for an
aggregate gross proceeds of $55,030.
On
October 11, 2017 170,000 shares of common stock were sold to 1
purchaser at a purchase price of $0.03 per share for gross proceeds
of $5,000.
On
October 18, 2017 1,250,000 shares of common stock were sold to 1
purchaser at a purchase price of approximately $.03 per share for
gross proceeds of $37,500.
ITEM 6. SELECTED FINANCIAL
DATA
As a
smaller reporting company, we are not required to respond to this
item.
6
ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Critical Accounting Policies and Estimates
Use of estimates.
In preparing financial statements in conformity with
accounting principles generally accepted in the United States of
America, management makes estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and
expenses during the reporting periods. These accounts and estimates
include, but are not limited to, the valuation of accounts
receivable, inventories, deferred income taxes and the estimation
on useful lives of property, plant and equipment. Actual results
could differ from those estimates.
Plan of Operations
We had
a loss from operations for the year ended November 30, 2017 of
$3,973,404 including professional fees of $146,244, share-based
compensation of $3,600,000 and organization and related expenses of
$227,180. This is compared to a loss of $36,379 for the year ended
November 30, 2016, which included professional fees of $9,115 and
organization and related expenses of $27,264. The increase in net
loss is due to increases in professional fees, rent and
compensation. We project we will continue to have losses from
operations until such time as we have sales from
operations.
There
can be no assurance that our efforts to implement our business plan
will be successful or that we will obtain revenues or
profitability.
Information
included in this report includes forward looking statements, which
can be identified by the use of forward-looking terminology such as
may, expect, anticipate, believe, estimate, or continue, or the
negative thereof or other variations thereon or comparable
terminology. The statements in "Risk Factors" and other statements
and disclaimers in this report constitute cautionary statements
identifying important factors, including risks and uncertainties,
relating to the forward-looking statements that could cause actual
results to differ materially from those reflected in the
forward-looking statements.
Our
activities have mostly been devoted to seeking capital and
development of a business plan. Our auditors have included an
explanatory paragraph in their report on our financial statements,
relating to the uncertainty of our business as a going concern, due
to our lack of operating history or current revenues, its nature as
a start-up business, management's limited experience and limited
funds. We do not believe that conventional financing, such as bank
loans, is available to us due to these factors. We have no bank
line of credit available to us. Management believes that it will be
able to raise the required funds for operations from one or more
future offerings, in order to fully implement our business
plan.
Our
future operating results are subject to many facilities,
including:
●
Our
success in developing new hemp-based products;
●
The
success of marketing and distributing those products;
●
Our
ability to obtain additional financing; and
●
Other
risks which we identify in future filings with the
SEC.
Any or
all of our forward looking statements in this prospectus and in any
other public statements we make may turn out to be wrong. They can
be affected by inaccurate assumptions we might make or by known or
unknown risks and uncertainties. Consequently, no forward looking
statement can be guaranteed. In addition, we undertake no
responsibility to update any forward-looking statement to reflect
events or circumstances which occur after the date of this
prospectus.
7
Contractual Obligations and Off-Balance Sheet
Arrangements
We do
not have any contractual obligations or off balance sheet
arrangements.
Liquidity and Capital Resources
Our
accountants have issued, in their audit report, a going concern
opinion reflecting a conclusion that our operations may not be able
to continue because of a lack of financial resources.
For the
year ended November 30, 2017, the Company recorded a loss of
$3,973,404 compared to a loss of $36,379 for the year ended
November 30, 2016. The change in operating expenses is due to
increased professional fees and increased organizational and
related expenses, which consisted primarily of office rent expense
and officer compensation. A total of 250,700,000 shares of common
shares were issued as compensation for services rendered to the
Company and prepayment for consulting and office rent. These shares
were valued at the most recent sales price of $.03 per
share.
For the
year ended November 30, 2017, the Company used $164,292 cash in
operating activities, compared to $10,793 used for the year ended
November 30, 2016. The change in cash flow is due to increased
operating expenses for the period.
For the
year ended November 30, 2017, the Company financing activities
provided $118,286, compared to $56,710 for the year ended November
30, 2016. The increase in 2017 was primarily due to an increase in
issues of common stock for services rendered to the Company, as
compared to the previous fiscal year.
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November
30,
2017
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November
30,
2016
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Cash
|
$11
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$46,017
|
The
decrease in cash of $46,006 since the end of fiscal year 2016 was
due to increased expenses. There are no limitations on our ability
to access our cash.
ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are
a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
8
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Board of Directors and Stockholders
Hemp Naturals, Inc.
Sunny Isles Beach, Florida
We have audited the accompanying balance sheet of Hemp Naturals,
Inc. (the “Company”) as of November 30, 2016, and the
related statement of operations, changes in stockholders’
equity, and cash flows for the year ended November 30, 2016. These
financial statements are the responsibility of the entity’s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control
over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hemp
Naturals, Inc. as of November 30, 2016, and the results of its
operations and its cash flows for the year ended November 30, 2016,
in conformity with accounting principles generally accepted in the
United States of America.
February 17, 2017
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Hemp
Naturals, Inc.
Opinion on the Financial Statements
We have
audited the accompanying balance sheet of Hemp Naturals, Inc. (the
Company) as of November 30, 2017, and the related statements of
operations, changes in stockholders’ equity, and cash flows
for the year then ended, and the related notes (collectively
referred to as the financial statements). In our opinion, the
financial statements present fairly, in all material respects, the
financial position of the Company as of November 30, 2017 and the
results of its operations and its cash flows for the year then
ended, in conformity with accounting principles generally accepted
in the United States of America.
Emphasis-of-a-matter
The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As described in Note
3 to the financial statements the
Company has not generated any revenue since inception. For the year
ended November 30, 2017, the Company had a net loss of $3,720,404
and an accumulated deficit of $4,034,102 as of November 30,
2017. These factors, among others, raise substantial doubt
regarding the Company’s ability to continue as a going
concern. Management’s plans in regard to these matters are
also described in Note 3 to the accompanying financial statements.
The accompanying financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audit. We are a
public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audit, we are required to obtain an understanding of
internal control over financial reporting, but not for the purpose
of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis
for our opinion.
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/s/
Paritz & Company, P.A.
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We have
served as the Company’s auditor since 2018.
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Hackensack,
New Jersey
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August
7, 2018
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F-2
HEMP NATURALS, INC.
BALANCE SHEETS
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November 30,
2017
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November 30,
2016
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ASSETS
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Current
Assets
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Cash
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$11
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$46,017
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Deposits
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-
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1,530
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Inventory
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-
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999
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Prepaid
Expenses
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3,720,725
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-
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Total
Current Assets
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3,720,736
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48,586
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TOTAL ASSETS
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$3,720,736
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$48,586
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LIABILITIES
& STOCKHOLDERS’ EQUITY
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Current
Liabilities
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Accrued
Expenses
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$9,074
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$2,765
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Total
Current Liabilities
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9,074
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2,765
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TOTAL
LIABILITIES
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9,074
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2,765
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Stockholders’ Equity
|
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Preferred
stock, $.0001 par value, 20,000,000 shares authorized; none issued
and outstanding as of November 30, 2017 and 2016
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-
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-
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Common
stock , $.0001 par value, 500,000,000 shares authorized,
266,125,983 and 14,005,983 and shares issued and outstanding as of
November 30, 2017 and 2016, respectively
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26,613
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1,401
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Additional
Paid in Capital
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7,709,151
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95,078
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Accumulated
Deficit
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(4,024,102)
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(50,698)
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Total
Stockholders’ Equity
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3,711,622
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45,781
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TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
|
$3,720,736
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$48,586
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The accompanying notes are an integral part of these financial
statements.
F-3
HEMP NATURALS, INC.
STATEMENTS OF OPERATIONS
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For the year ended November 30,
2017
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For the year ended
November 30,
2016
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Operating Expenses
|
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General
and Administrative
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$3,973,404
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$36,379
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Total Operating Expenses
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3,973,404
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36,379
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Loss Before Income Tax Provision
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$(3,973,404)
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$(36,379)
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Income Tax Provision
|
-
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-
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Net Loss
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$(3,973,404)
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$(36,379)
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Basic and Diluted Net loss Per Common Stock
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$(0.09)
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$(0.00)
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Weighted average number of common stock outstanding – basic
and diluted
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45,180,120
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13,476,181
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The
accompanying notes are an integral part of these financial
statements.
F-4
Hemp Naturals, Inc.
Statements of Changes in Stockholder Equity
For the years ended November 30, 2017 and 2017
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Common
Stock
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Shares
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Amount
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Additional
Paid-in Capital
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Accumulated
Deficit
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Total
Stockholder Equity (Deficit)
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Balances, November
30, 2015
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12,200,000
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$1,220
|
$10,100
|
$(14,319)
|
$(2,999)
|
|
|
|
|
|
|
|
|
Proceeds from the
sale of common shares
|
1,805,983
|
181
|
54,849
|
-
|
55,030
|
|
Cash contribution
from related party
|
-
|
-
|
1,680
|
-
|
1,680
|
|
Contributed capital
from related parties
|
-
|
-
|
28,449
|
-
|
28,449
|
|
Net
Loss
|
-
|
-
|
-
|
(36,379)
|
(36,379)
|
|
Balances, November
30, 2016
|
14,005,983
|
1,401
|
95,078
|
(50,698)
|
45,781
|
|
|
|
|
|
|
|
|
Proceeds from the
sale of common shares
|
1,420,000
|
142
|
42,358
|
-
|
42,500
|
|
Shares issued for
services
|
250,700,000
|
25,070
|
7,495,930
|
-
|
7,521,000
|
|
Contributed capital
from related parties
|
-
|
-
|
75,785
|
-
|
75,785
|
|
Net
loss
|
-
|
-
|
-
|
(3,973,404)
|
(3,973,404)
|
|
Balances, November
30, 2017
|
266,125,983
|
$26,613
|
$7,709,151
|
$(4,024,103)
|
$3,711,662
|
The
accompanying notes are an integral part of these financial
statements.
F-5
HEMP NATURALS, INC.
STATEMENTS OF CASH FLOWS
|
|
For the
Year
Ended
November
30,
2017
|
For the Year
Ended
November 30,
2016
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
Net
loss
|
$(3,973,404)
|
$(36,379)
|
|
Adjustment
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
Expenses
contributed to capital
|
-
|
28,449
|
|
Stock
based compensation
|
3,800,275
|
-
|
|
Changes
in current assets and liabilities:
|
|
|
|
Deposits
|
1,530
|
(1,530)
|
|
Inventory
|
999
|
(999)
|
|
Accrued
expenses
|
6,308
|
(334)
|
|
Net
cash used in operating activities
|
(164,292)
|
(10,793)
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
Proceeds
from sale of common stock
|
42,500
|
55,030
|
|
Contributed capital from
shareholder
|
75,786
|
1,680
|
|
Net
cash provided by financing activities
|
118,286
|
56,710
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
(46,006)
|
45,917
|
|
Cash
and cash equivalents at beginning of year
|
46,017
|
100
|
|
Cash
and cash equivalents at end of year
|
11
|
46,017
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
Cash
paid for:
|
|
|
|
Interest
|
$-
|
$-
|
|
Income
taxes
|
$-
|
$-
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCIING ACTIVITIES:
|
|
|
|
Common
stock issued recorded as prepaid expense
|
$3,900,000
|
$-
|
The accompanying notes are an integral part of these financial
statements.
F-6
Hemp Naturals, Inc.
Notes to the financial statements
Note 1 – Organization and Description of
Business
Hemp Naturals, Inc. (the Company) was incorporated under the laws
of the State of Delaware on November 13, 2015. The Company intends
to offer consumer goods that are made of industrial hemp and/or the
non-psychoactive ingredients of the cannabis plant.
The Company has elected November 30th as its year end.
Note 2 – Summary of Significant Accounting
Policies
Basis of Presentation
This summary of significant accounting policies is presented to
assist in understanding the Company's financial statements. These
accounting policies conform to accounting principles, generally
accepted in the United States of America, and have been
consistently applied in the preparation of the financial
statements.
Reclassification of Prior Year Presentation
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. An adjustment has been made to
the Statement of Operations for fiscal year ended November 30,
2016, to consolidate professional fees with general and
administrative expense. This change in classification does not
affect previously reported net loss.
Inventories
Inventories, consisting of products available for sale, are
primarily accounted for using the first-in, first-out ("FIFO")
method, and are valued at the lower of cost or market value. This
valuation requires Hemp Naturals, Inc. to make judgments, based on
currently-available information, about the likely method of
disposition, such as through sales to individual customers, returns
to product vendors, or liquidations, and expected recoverable
values of each disposition category.
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 amounts of revenues and expenses during the reporting
period. In the opinion of management, all adjustments necessary in
order to make the financial statements not misleading have been
included. Actual results could differ from those
estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an
original maturity of three months or less when purchased to be cash
equivalents. Cash and cash equivalents at November 30, 2017 and
November 30, 2016 were $11 and $46,017, respectively.
F-7
Income Taxes
The Company accounts for income taxes under ASC 740,
“Income
Taxes.” Under the
asset and liability method of ASC 740, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized
in income in the period the enactment occurs. A valuation
allowance is provided for certain deferred tax assets if it is more
likely than not that the Company will not realize tax assets
through future operations. No deferred tax assets or
liabilities were recognized at November 30,
2017.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in
accordance with ASC Topic 260, Earnings per
Share. Basic earnings (loss)
per share is computed by dividing net income (loss) by the weighted
average number of common shares outstanding during the reporting
period. Diluted earnings (loss) per share reflects the potential
dilution that could occur if stock options and other commitments to
issue common stock were exercised or equity awards vest resulting
in the issuance of common stock that could share in the earnings of
the Company.
The Company does not have any potentially dilutive instruments as
of November 30, 2017 or 2016 and, thus, anti-dilution issues are
not applicable.
Fair Value of Financial Instruments
The Company’s balance sheet includes certain financial
instruments. The carrying amounts of current assets and current
liabilities approximate their fair value because of the relatively
short period of time between the origination of these instruments
and their expected realization.
ASC 820, Fair Value Measurements and
Disclosures, defines fair value
as the exchange price that would be received for an asset or paid
to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date.
ASC 820 also establishes a fair value hierarchy that distinguishes
between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs)
and (2) an entity’s own assumptions about market
participant assumptions developed based on the best information
available in the circumstances (unobservable inputs). The fair
value hierarchy consists of three broad levels, which gives the
highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1) and the lowest priority
to unobservable inputs (Level 3). The three levels of the fair
value hierarchy are described below:
●
Level
1 - Unadjusted quoted prices in active markets that are accessible
at the measurement date for identical, unrestricted assets or
liabilities.
●
Level
2 - Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or
indirectly, including quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or
similar assets or liabilities in markets that are not active;
inputs other than quoted prices that are observable for the asset
or liability (e.g., interest rates); and inputs that are derived
principally from or corroborated by observable market data by
correlation or other means.
●
Level
3 - Inputs that are both significant to the fair value measurement
and unobservable.
Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of
November 30, 2017. The respective carrying value of certain
on-balance-sheet financial instruments approximated their fair
values due to the short-term nature of these instruments. These
financial instruments include accrued expenses.
F-8
Related Parties
The Company follows ASC 850, Related Party
Disclosures, for the
identification of related parties and disclosure of related party
transactions.
Share-Based Compensation
ASC 718, “Compensation – Stock
Compensation”, prescribes
accounting and reporting standards for all share-based payment
transactions in which employee services are acquired. Transactions
include incurring liabilities, or issuing or offering to issue
shares, options, and other equity instruments such as employee
stock ownership plans and stock appreciation rights. 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 stock-based compensation issued to
non-employees and consultants in accordance with the provisions of
ASC 505-50, “Equity – Based Payments
to Non-Employees.” Measurement of share-based payment
transactions with non-employees is based on the fair value of
whichever is more reliably measurable: (a) the goods or
services received; or (b) the equity instruments issued. The
fair value of the share-based payment transaction is determined at
the earlier of performance commitment date or performance
completion date.
The Company’s stock based compensation for years ended
November 30, 2017 and November 30, 2016 was $3,600,000 and $0,
respectively.
Note 3 – Going Concern
The Company’s financial statements are prepared in accordance
with generally accepted accounting principles applicable to a going
concern that contemplates the realization of assets and liquidation
of liabilities in the normal course of business.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company has not generated any revenues since inception. For
the year ended November 30, 2017, the Company has a
net loss of $3,720,404 and an accumulated deficit of
$4,024,102 at November 30, 2017. These factors among others raise
substantial doubt about the ability of the Company to continue as a
going concern for a reasonable period of time. . At the date
of this filing, management has spent several months focused on
marketing, both online and at the retail level. The Company’s
website has been developed and our rolling papers are available at
a promotional rate at twenty-five retail operations, with no
revenues realized by the Company to date. Our expectation is that
the promotional phase of rolling paper sales will transition to
profitable operations during the third or fourth quarter of the
2018 fiscal year, however there is no certainty regarding this.
The
accompanying financial statements do not include any adjustments
that might result from the outcome of this
uncertainty.
Note 4 – Income Taxes
Potential benefits of income tax losses are not recognized in the
accounts until realization is more likely than not.
In
assessing the realization of deferred tax assets, management
considers whether it is more likely than not that some portion or
all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those
temporary differences become deductible. The Company has incurred a net operating loss
carryforward of $4,024,102 which begins expiring in 2034. The
Company has adopted ASC 740, “Accounting for Income
Taxes”, as of its inception. Pursuant to ASC 740 the Company
is required to compute tax asset benefits for non-capital losses
carried forward. The potential benefit of the net operating loss
has not been recognized in these financial statements because the
Company cannot be assured it is more likely than not it will
utilize the loss carried forward in future
years.
F-9
Significant components of the Company’s deferred tax assets
are as follows:
|
|
November
30,
|
|
|
|
2017
|
2016
|
|
Deferred tax asset,
generated from net operating loss
|
$1,368,195
|
$17,237
|
|
Valuation
allowance
|
(1,368,195)
|
(17,237)
|
|
|
$—
|
$—
|
The
reconciliation of the effective income tax rate to the federal
statutory rate is as follows:
|
Federal income tax
rate
|
34.0%
|
34.0%
|
|
Increase in
valuation allowance
|
(34.0%)
|
(34.0%)
|
|
Effective income
tax rate
|
0.0%
|
0.0%
|
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed
into law. This legislation reduced the federal corporate tax rate
from the previous 35% to 21%. Tax filings for the Company for the
years 2015 and 2016 are available for examination by tax
authorities.
Due to the change in ownership provisions of the Tax Reform Act of
1986, net operating loss carryforwards for Federal income tax
reporting purposes are subject to annual limitations. Should a
change in ownership occur, net operating loss carryforwards may be
limited as to use in future years.
Note 5 – Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to
report accounting for contingencies. Liabilities for loss
contingencies arising from claims, assessments, litigation, fines
and penalties and other sources are recorded when it is probable
that a liability has been incurred and the amount of the assessment
can be reasonably estimated. There were no commitments or
contingencies as of November 30, 2017 and 2016 other than the
below:
Office Space
The Company contracted the use of 3,000 square feet of space owned
by our Secretary, Maryna Bleier, who has been and will be
contributing the space, valued at $5,000 per month, to the Company
as additional paid-in capital July 1, 2016 until July 1, 2028.
Beginning July 1, 2028, the Company is obligated to pay $5,000
monthly for the use of their office space per the terms of the
rental contract.
Note 6 – Prepaid Expenses
The Company issued 130,000,000 shares of common stock as
compensation for office rent and consulting services. The
$3,720,725 in prepaid expenses consists of approximately $2,617,500
in prepaid consulting services and $1,103,225 in prepaid office
rent.
Note 7 – Shareholder Equity
Preferred Stock
The authorized preferred stock of the Company consists of
20,000,000 shares with a par value of $0.0001. The Company has no
shares of preferred stock issued and outstanding as of November 30,
2017 and 2016.
F-10
Common Stock
The authorized common stock of the Company consists of 500,000,000
shares with a par value of $0.0001. There were 266,125,983 and
14,005,983 shares of common stock issued and outstanding as of
November 30, 2017 and 2016, respectively.
In March 2016, a total of 1,803,983 shares of common stock at par
value of $.0001 were sold to 37 investors for cash of
$55,030.
On
October 11, 2017 170,000 shares of common stock were sold to 1
purchaser at a purchase price of $0.03 per share for gross proceeds
of $5,000.
On
October 18, 2017 1,250,000 shares of common stock were sold to 1
purchaser at a purchase price of $.03 per share for gross proceeds
of $37,500, with $10,905 in cash received and $26,595 recorded as
additional paid-in capital.
In the year ended November 30, 2017, 250,700,000 shares of common
stock were issued to ten shareholders as compensation for office
rent and various professional services, primarily business
development.
The Company does not have any potentially dilutive instruments as
of November 30, 2017 and 2016 and, thus, anti-dilution issues are
not applicable.
Pertinent Rights and Privileges
Holders of shares of Common Stock are entitled to one vote for each
share held to be used at all stockholders’ meetings and for
all purposes including the election of directors. Common Stock does
not have cumulative voting rights. Nor does it have preemptive or
preferential rights to acquire or subscribe for any unissued shares
of any class of stock.
Holders of shares of Preferred Stock are entitled to voting rights
where every one share of Preferred Stock has voting rights equal to
one hundred shares of Common Stock.
Additional Paid In Capital
During the year ended November 30, 2016, our CEO contributed cash
of $1,680 to the Company to pay for expenses and paid $2,599 in
operating expenses on behalf of the Company which is recorded as
additional paid in capital. Two shareholders also paid operating
expenses on behalf of the Company totaling $850 which are recorded
as additional paid in capital. Our Secretary provided rental space
to the company totaling $25,000 for the 2016 fiscal year, which is
recorded as additional paid in capital.
During the year ended November 30, 2017, our CEO contributed cash
of $6,976 to the Company to pay for expenses and paid $8,810 in
operating expenses on behalf of the Company which is recorded as
additional paid in capital. Our Secretary provided rental space to
the company totaling $60,000 for the 2017 fiscal year, which is
recorded as additional paid in capital.
Note 8 – Related-Party Transactions
Equity
On November 17, 2017, the Company issued 120,000,000 shares to our
CEO as compensation for development of the business
plan.
On November 17, 2017, the Company issued 45,000,000 shares to Blue
Car Enterprise as compensation for a 2 year agreement to provide
consulting to the Company. Blue Car Enterprise is an entity solely
owned by our CEO.
F-11
Contributed Capital
As of November 30, 2017, our CEO has provided the Company
contributed capital in the form of cash and payment of expenses on
behalf of the Company totaling $15,786 and our Secretary has
provided the Company contributed office space valued at
$60,000.
As of November 30, 2016, our CEO has provided the Company
contributed capital in the form of cash and payment of expenses on
behalf of the Company totaling $4,279, our Secretary has provided
the Company contributed office space valued at $25,000 and two
shareholders have provided the Company contributed capital totaling
$850.
Office Space
At this time our main office space is provided to us rent free by
our Secretary Maryna Bleier which is accounted for as contribution
of $5,000 monthly. Our main office space is located at 16950 North
Bay Road, Suite 1803 Sunny Isles Beach, Florida 33160. After July
1, 2028, the Company is obligated to pay $5,000
monthly.
Note 9 – Subsequent Events
On January 10, 2018, the Company issued 29,000,000 shares of
restricted common stock to a related party in exchange for
consulting services for two years.
On January 14, 2018, the Company issued 29,000,000 shares of
restricted common stock to a related party for services rendered to
the Company.
On February 28, 2018, the Company issued a convertible redeemable
note, payable in full in one year, to Adar Bays, LLC in the amount
of $78,750 at 8% annual interest.
F-12
ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
(a) Previous independent registered public accounting
firm
(i)
On
March 14, 2018, Hemp Naturals, Inc., (the Company”) was
notified that its independent registered public accounting firm,
MaloneBailey, LLP, had resigned as its independent
auditors.
(ii)
The
reports of MaloneBailey, LLP on the Company's financial statements
as of and for the fiscal years ended November 30, 2016 and 2015
contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting
principle except to indicate that there was substantial doubt about
the Company ability to continue as a going concern.
(iii)
The
Company's Board of Directors participated in and approved the
decision to change independent registered public accounting
firms.
(iv)
During
the fiscal years ended November 30, 2016 and 2015 and through March
14, 2018, there have been no disagreements with MaloneBailey, LLP
on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of MaloneBailey,
LLP would have caused them to make reference thereto in connection
with their report on the financial statements for such
years.
(v)
The Company requested that MaloneBailey, LLP
furnish it with a letter addressed to the SEC stating whether or
not it agrees with the above statements. A copy of the letter
provided by MaloneBailey, LLP was filed as Exhibit 16.1 to the
Form 8-K filed with the SEC on
March 20, 2018.
(b) New independent registered public accounting firm
(i)
On
March 27, 2018 the Company engaged Paritz & Company, P.A. as
its new independent registered public accounting firm. During the
two most recent fiscal years and through March 14, 2018, the
Company had not consulted with Morison Cogen LLP regarding any of
the following:
(ii)
The
application of accounting principles to a specific transaction,
either completed or proposed;
(iii)
The
type of audit opinion that might be rendered on the Company’s
financial statements, and none of the following was provided to the
Company: (a) a written report, or (b) oral advice that Paritz &
Company, P.A. concluded was an important factor considered by the
Company in reaching a decision as to accounting, auditing or
financial reporting issue; or
(iv)
Any
matter that was subject of a disagreement, as that term is defined
in Item 304(a)(1)(iv) of Regulation S-K.
9
ITEM 9A. CONTROLS AND
PROCEDURES
Disclosure Controls and Procedures
Under
the supervision and with the participation of our management,
including our principal executive officer and the principal
financial officer, we are responsible for conducting an evaluation
of the effectiveness of the design and operation of our internal
controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the fiscal year covered by this report. Disclosure controls and
procedures means that the material information required to be
included in our Securities and Exchange Commission
(“SEC”) reports is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms
relating to our company, including any consolidating subsidiaries,
and was made known to us by others within those entities,
particularly during the period when this report was being prepared.
Based on this evaluation, our principal executive officer and
principal financial officer concluded as of the evaluation date
that our disclosure controls and procedures were not effective as
of November 30, 2017.
Management’s Annual Report on Internal Control over Financial
Reporting
As of
November 30, 2017, management assessed the effectiveness of our
internal control over financial reporting. The Company's management
is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Internal control
over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934, as amended,
as a process designed by, or under the supervision of, the
Company’s principal executive officer and the principal
financial officer and effected by the Company’s Board of
Directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP in the United States of America and includes
those policies and procedures that:
●
Pertain to the
maintenance of records that in reasonable detail accurately and
fairly reflect our transactions and dispositions of our
assets;
●
Provide reasonable
assurance our transactions are recorded as necessary to permit
preparation of our financial statements in accordance with GAAP,
and that receipts and expenditures are being made only in
accordance with authorizations of our management and directors;
and
●
Provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a
material effect on the financial statement.
In
evaluating the effectiveness of our internal control over financial
reporting, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) in Internal Control – Integrated
Framework. Based on that evaluation, completed only by Levi
Jacobson, our President and sole director, who also serves as our
principal executive officer, principal financial officer and
principal accounting officer, Mr. Jacobson concluded that, as of
November 30, 2017, such internal controls and procedures were not
effective to detect the inappropriate application of US GAAP rules
as more fully described below.
This
was due to deficiencies that existed in the design or operation of
our internal controls over financial reporting that adversely
affected our internal controls and that may be considered to be
material weaknesses.
10
The
matters involving internal controls and procedures that our
management considered to be material weaknesses under the standards
of the Public Company Accounting Oversight Board were: (i) lack of
a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors
on our board of directors, resulting in ineffective oversight in
the establishment and monitoring of required internal controls and
procedures; (ii) inadequate segregation of duties consistent with
control objectives; and (iii) ineffective controls over period end
financial disclosure and reporting processes. The aforementioned
material weaknesses were identified by our President and sole
director, who also serves as our principal executive officer,
principal financial officer and principal accounting officer, in
connection with the review of our financial statements as of
November 30, 2017.
Management
believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors
results in ineffective oversight in the establishment and
monitoring of required internal controls and procedures, which
could result in a material misstatement in our financial statements
in future periods.
This
annual report does not include an attestation report of the
Company’s registered public accounting firm regarding
internal control over financial reporting. Management’s
report was not subject to the attestation by the Company’s
registered public accounting firm pursuant to temporary rules of
the SEC that permit the Company to provide only management’s
report in this annual report.
Changes in Internal Control Over Financial Reporting.
There
were no changes in the Company’s internal control over
financial reporting that occurred during the year ended November
30, 2017 that have materially affected, or that are reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
ITEM 9B. OTHER
INFORMATION
Not
applicable.
11
PART III
ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
The
sole member of the Board of Directors of Hemp Naturals, Inc. serves
until the next annual meeting of stockholders, or until his
successors have been elected. The officers serves at the pleasure
of the Board of Directors. The following table is the director and
executive officers of Hemp Naturals, Inc.
|
Name
|
|
Age
|
|
Position
|
|
Levi
Jacobson
|
|
25
|
|
Chief
Executive Officer, Chief operations Officer, Chief Financial
Officer, Chief Accounting Officer, Director
|
|
Maryna
Bleier
|
|
30
|
|
Secretary
|
Levi Jacobson- Chief Executive Officer, Chief operations Officer,
Chief Financial Officer, Chief Accounting Officer,
Director
Mr.
Jacobson studied business and economics at Touro College from 2010
to 2014, when he graduated. After graduation, Mr. Jacobson worked
for Blue Car Enterprise as a Manager/Director specializing in sales
and ad management until August 2015.
Maryna Bleier- Secretary
Mrs.
Bleier graduated from the National Institute of Business in Ukraine
with an International Business and Entrepreneurial Degree in 2008.
From 2009 until 2014 Mrs. Bleier was self-employed as an importer
of Ukrainian goods. The goods she has successfully imported into
the United States have been distributed throughout the Country with
a particular emphasis on Brighton Beach in Brooklyn.
Code of Ethics
Hemp
Naturals, Inc. has not adopted a code of ethics which applies to
the chief executive officer, or principal financial and accounting
officer, because of our level of operations of the public entity in
2017. Hemp Naturals, Inc. intends to adopt a code of ethics
during calendar year 2018.
Audit Committee Financial Expert
Hemp
Naturals, Inc. does not have either an Audit Committee or a
financial expert on the Board of Directors. The Board
of Directors believes that obtaining the services of an audit
committee financial expert is not economically rational at this
time in light of the costs associated with
identifying and retaining an individual who would
qualify as an audit committee financial
expert, the limited scope of our operations and the
relative simplicity of our financial statements
and accounting procedures .
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Exchange Act
requires Hemp Naturals, Inc.'s officers,
directors and persons who own more than ten
percent of a registered class of our equity securities to file
reports of ownership and changes in
ownership with the SEC. Officers, directors and ten percent
stockholders are required by regulation to furnish Hemp Naturals,
Inc. with copies of all Section 16(a) forms they file. During
the year ended November 30, 2017, Hemp Naturals, Inc. believes that
all such persons failed to file the reports required by Section
16(a) of the Exchange Act, including Forms 3, 4 and 5. Based on
representations submitted by such people, Hemp Naturals, Inc. does
not believe that such individuals purchased or sold any Hemp
Naturals, Inc. Common Stock during 2017.
12
Item 11. EXECUTIVE
COMPENSATION
Officer
compensation for the year ended November 30, 2017 totaled $42,520.
The CEO, Levi Jacobson, was paid $23,235 and the Secretary, Maryna
Bleier, was paid $19,285, as compared to the year ended November
30, 2016 when neither Mr. Jacobson nor
Ms. Bleier received compensation, cash or otherwise. These
payments to the officers were made with cash available from sales
of common shares. In addition, our CEO received 120,000,000 shares
of common stock at $.03 as compensation for work performed for the
Company. Due to the current lack of product sales, Mr.
Jacobson and Ms. Bleier are not receiving any regular compensation,
cash or otherwise, for their services until such times as revenues
are forthcoming. Mr. Jacobson is the sole director. There is
no option or non-cash compensation plan at this time. No amounts
are paid or payable to the director for acting as such. In the year
ended November 30, 2017, Hemp Naturals, Inc. had no board of
directors meetings. In the year ended November 30, 2016, the
Company had one board of directors meeting. No Board committees
have been established. Due to the small size of Hemp Naturals,
Inc.’s operations, the entire Board of Directors functions as
the audit committee; Mr. Jacobson is not a “financial
expert” as defined in Regulation S-K 407. We have no
independent director.
The
following table sets forth the compensation of the Company's sole
executive officer for the years ended November 30, 2017 and
2016.
|
Name:
|
|
Fiscal
Year:
|
Salary, Fees,
Commissions ($):
|
Bonus
($):
|
Stock Awards
($):
|
Stock Options
($):
|
All Other
Compensation ($):
|
Total
($):
|
|
Levi
Jacobson
|
|
2017
|
--
|
--
|
$3,600,000
|
--
|
25,235
|
37,235
|
|
CEO, Director
|
|
2016
|
--
|
--
|
--
|
--
|
--
|
--
|
|
Maryna
Bleier
|
|
2017
|
--
|
--
|
--
|
--
|
19,285
|
19,285
|
|
Secretary
|
|
2016
|
--
|
--
|
--
|
--
|
--
|
--
|
Item 12. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
The
following table sets forth information relating to the beneficial
ownership of Company common stock as of the date of this report by
(i) each person known by Hemp Naturals, Inc. to be the beneficial
owner of more than 5% of the outstanding shares of common stock,
and (ii) each of Hemp Naturals, Inc. ' directors and executive
officers. Unless otherwise noted below, Hemp Naturals, Inc.
believes that all persons named in the table have sole voting and
investment power with respect to all shares of common stock
beneficially owned by them. For purposes hereof, a person is deemed
to be the beneficial owner of securities that can be acquired by
such person within 60 days from the date hereof upon the exercise
of warrants or options or the conversion of convertible securities.
Each beneficial owner's percentage ownership is determined by
assuming that any warrants, options or convertible securities that
are held by such person (but not those held by any other person)
and which are exercisable within 60 days from the date hereof, have
been exercised.
|
Name
|
Common Stock
|
Percentage (1)
|
|
Levi
Jacobson
|
126,000,000
|
47.35%
|
|
Maryna
Bleier
|
6,000,000
|
2.25%
|
|
All
officers and directors as a group (2 persons)
|
132,000,000
|
49.60%
|
|
Mazel
Property Enterprise
|
40,000,000
|
15.03%
|
|
Blue
Car Enterprise
|
45,000,000
|
16.90%
|
|
Jewish
Enrichment Center
|
45,000,000
|
16.90%
|
(1)
Based on 266,125,983 shares issued and outstanding as of November
30, 2017.
13
Item 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
On
November 18, 2015 the Company issued 6,000,000 shares of restricted
common stock to Levi Jacobson and 6,000,000 shares of restricted
common stock to Maryna Bleier. The shares were issued in exchange
for developing the Company’s business plan. The fair value of
the shares issued as compensation was $0.0001 per share. The
Company recorded 1,220 in stock based compensation. On November 17,
2017 the Company issued 120,000,000 shares of restricted common
stock to Mr. Jacobson as compensation for developing the business
plan. The fair value of the shares issued as compensation was $0.03
per share. The Company recorded $3,600,000 in stock based
compensation. On November 17, 2017,
the Company issued 45,000,000 shares to Blue Car Enterprise as
compensation for a 2 year agreement to provide consulting to the
Company. Blue Car Enterprise is an entity solely owned by our
CEO. The fair value of the shares issued as compensation was
$0.03 per share. $1,323,750 was posted as prepaid consulting and
$26,250 was recorded as consulting fees.
Director Independence
Currently,
the Company does not have any independent directors. Since the
Company’s Common Stock is not currently listed on a national
securities exchange, we have used the definition of
“independence” of the NASDAQ Stock Market to make
this determination.
Under
NASDAQ Listing Rule 5605(a)(2), an "independent director" is a
"person other than an officer or employee of the company or any
other individual having a relationship which, in the opinion of the
company's board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director."
We do
not currently have a separately designated audit, nominating or
compensation committee. However, we do intend to comply with
the independent director and committee composition requirements in
the future.
Item 14. PRINCIPAL ACCOUNTANT FEES
AND SERVICES.
Audit Fees
During
the period covering the fiscal year ended November 30, 2016, our
former principal accounting firm MaloneBailey, LLP was paid $10,000
for audit and review fees. Review fees to MaloneBailey, LLP were
$6,605 for the period ended November 30, 2017. We were billed $6,000
by Paritz & Company P.A. for the audit of our financial
statements for the year ending November 30,
2017.
No tax
consultant or other fees were paid.
Audit Committees pre-approval policies and procedures
We do
not have an audit committee. Our engagement of Pariz &
Co., P.A. as our independent registered public accounting firm was
approved by the Board of Directors.
14
PART IV
Item 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES
Exhibits.
The following exhibits of the Company are included
herein.
|
Articles
of Incorporation (1)
|
|
|
Bylaws(1)
|
|
|
Certification
Pursuant to Rule 13a-14(a)/15d-14(a) Certifications Section 302 of
the Sarbanes-Oxly Act of 2002. Filed herewith.
|
|
|
Certification
Pursuant to Rule 13a-14(a)/15d-14(a) Certifications Section 302 of
the Sarbanes-Oxly Act of 2002. Filed herewith.
|
|
|
Certificate
pursuant to section 18 U.S.C. Pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. Filed
herewith.
|
|
|
Certificate
pursuant to section 18 U.S.C. Pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. Filed
herewith.
|
|
|
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
|
|
__________________
(1) Incorporated by reference to such exhibit as filed with the
Company’s Form 1-A Offering Statement, file number 024-10523,
filed on January 29, 2016.
|
All
other Exhibits called for by Rule 601 of Regulation S-K are
inapplicable to this filing.
15
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.
|
|
|
HEMP
NATURALS, INC.
|
|
|
|
|
|
|
|
Date:
|
|
/s/ Levi
Jacobson
|
|
|
|
|
Levi
Jacobson, Chief Executive Officer,
Chief
Financial Officer, and Director
|
|
|
|
|
|
|
Pursuant to the
requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates
indicated.
|
|
|
|
|
|
Date:
|
|
/s/ Levi
Jacobson
|
|
|
|
|
Levi
Jacobson, Chief Executive Officer,
Chief
Financial Officer, and Director
|
|
|
|
|
|
|
16