NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the Nine Months ended September 30,
2020
(Unaudited)
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
Bio-En Holdings Corp. (formerly Olivia
Inc.) is a Delaware corporation, incorporated on August 2, 2011. The Company initially intended to participate in the
bio-fuel technology industry. The Company held a license agreement for a portfolio of patents including Gravity Pressure Vessels
and supporting appurtenances (“Licensed Technology”).
The Company planned to design and execute
agreements to build, operate and maintain a bio-mass to energy facility on the Island of Malta, utilizing the Licensed Technology
(“Facility”).
The Company was not successful in obtaining
the full funding required to establish the Facility. The Company is no longer seeking to exploit the Licensed Technology and/or
pursuing the establishment of the Facility.
As a result of discontinuing its prior
operations relating to the proposed building of the Facility and exploitation of the Licensed Technology, the Company became a
shell company. The Company’s current business plan is to seek and identify a privately-held operating company desiring to
become a publicly held company by combining with the Company through a reverse merger or acquisition type transaction. Private
companies wishing to have their securities publicly traded may seek to merge or effect an exchange transaction with a shell company
that is reporting and eligible for quotation on the over-the-counter market. As a result of the merger or exchange transaction,
the stockholders of the private company will hold a majority of the issued and outstanding shares of the shell company. Typically,
the directors and officers of the private company become the directors and officers of the shell company. Often the name of the
private company becomes the name of the shell company.
Although the Company has not yet determined
what private company, business or assets to acquire, the Company’s Chief Executive Officer is involved in several business
ventures and may ask the board to consider acquiring one or more of such business ventures. Alternatively, the Company may seek
to acquire a private company, business or assets from an unrelated third party.
Basis of Presentation
The Company maintains its accounting records
on an accrual basis in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
These financial statements are presented in U.S. dollars.
Fiscal Year End
The Corporation has adopted a fiscal year
end of December 31.
Unaudited Interim Financial Statements
The interim financial statements of the
Company as of September 30, 2020, and for the periods then ended are unaudited. However, in the opinion of management, the
interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly
the Company’s financial position as of September 30, 2020, and the results of its operations and its cash flows for
the period ended September 30, 2020. These results are not necessarily indicative of the results expected for the calendar
year ending December 31, 2020. The accompanying financial statements and notes thereto do not reflect all disclosures required
under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements
as of December 31, 2019, filed with the SEC, for additional information, including significant accounting policies.
Functional and Reporting Currency
The Company's reporting currency is the
U.S. dollar. The Company’s functional currency is U.S. dollars. Items in the income statement and cash flow statement are
translated into U.S. Dollars using the average rates of exchange for the periods involved. The resulting translation adjustments
are recorded as a separate component of other comprehensive income/(loss) within stockholders’ equity.
NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The principal accounting policies are
set out below, these policies have been consistently applied to the period presented, unless otherwise stated:
Use of Estimates
The preparation of the interim financial
statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts or revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Going Concern
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
liquidation of liabilities in the normal course of business. As at September 30 2020 the Company has a working capital deficit
of $468,093 and a loss from operations of $46,172 and a Provision for Write Down of Investment of $235,000 and an accumulated deficit
of $829,319 and has earned no revenues since inception. The Company intends to fund operations through equity financing arrangements,
which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31,
2020.
This current inability to generate revenue
raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
We are a shell company that is seeking
to acquire an operating business and may fail to do so and, even if we are successful, that business may never achieve profitability.
We need additional capital to maintain our company as a public reporting company and to seek acquisition opportunities and the
failure to raise additional capital could place our continued viability in question.
We have no agreement for a business combination
and we do not have any minimum requirements for a business combination.
The loss of the services of Baruch Adika,
our Chief Executive Officer and Director, would adversely affect our ability to implement our business plan.
Conflicts of interest may arise between
us and our stockholders, and our chief executive officer, Mr. Adika, during the implementation of our business plan which
may have a negative impact on our ability to consummate a business transaction. Although no determination has been made regarding
the operating business that we plan to acquire, it is possible that we may acquire an operating company that Mr. Adika has
an ownership interest in or that he is an officer or director of. Mr. Adika is involved in several different business ventures
and he may propose to our company that we acquire one or more of such ventures. If we do acquire any business affiliated with Mr. Adika,
we may not be able to do so on terms that would be arrived at if the transaction were negotiated on an arms-length basis. As a
result, the stockholders of our company may be adversely affected as compared to a similar transaction with an independent third
party.
Depending upon the nature of a proposed
transaction, our stockholders, other than Mr. Adika, may not be afforded the opportunity to approve or consent to a particular
transaction.
We have no cash and no operations and may not have access to
sufficient capital to consummate a business combination.
There may be a scarcity of and/or significant
competition for business opportunities and combinations, which may impede our ability to consummate a merger or acquisition.
Business Segments
The Company had operated in one segment
and therefore segment information is/was not presented.
Cash and cash equivalents
Cash and equivalents include investments
with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions
that are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000.
Accounts payable and accrued liabilities
Accounts payable and accrued liabilities
are carried at amortized cost and represent liabilities for goods and services provided to the Company prior to the end of the
financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of
these goods and services.
Share Based Payments
The Company recognizes compensation expense
for all equity–based payments in accordance with ASC 718 “Share-Based Payments". Under fair value recognition
provisions, the Company recognizes Equity–Based compensation net of an estimated forfeiture rate and recognizes compensation
cost only for those shares expected to vest over the requisite service period of the award.
Share-Based Payments to employees, including
grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values.
That expense is recognized over the period during which an employee is required to provide services in exchange for the award,
known as the requisite service period (usually the vesting period).
The Company accounts for Share–Based
Payments granted to non–employees in accordance with ASC 505, “Equity Based Payments to Non–Employees”.
The Company determines the fair value of the Share–Based Payment as either the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments
issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the
date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date
at which the counterparty’s performance is complete.
Earnings per share
The Company computes net loss per share
in accordance with ASC 260, "Earnings per Share" ASC 260 requires presentation of both basic and diluted earnings
per share (“EPS”) on the face of the income statement. Basic EPS is calculated by dividing the profit or loss attributable
to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS
is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares
outstanding for the effects of all potential dilutive common shares, which comprise options granted to employees.
Common stock equivalents totaling, 30,000
on September 30, 2020 were not included in the computation of diluted earnings per share on the statement of operations due
to the fact that the Company reported a net loss in the first two quarters of 2020 and to do so would be anti-dilutive.
Income taxes
The Company accounts for income taxes under
FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement 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. Under ASC
740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
Fair Value Measurements
The Company measures assets and liabilities
at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents
the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction
between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset
or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value
on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels
of inputs to measure fair value:
- Level 1:
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Quoted prices in active markets for identical instruments;
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- Level 2:
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Other significant observable inputs (including quoted prices in active markets for similar instruments);
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- Level 3:
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Significant unobservable inputs (including assumptions in determining the fair value of certain investments).
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The carrying values for cash and cash equivalents,
accounts receivable, other current assets, accounts payable and accrued liabilities, and deferred revenue approximate their fair
value due to their short maturities.
NOTE 3 - PURCHASED INTANGIBLE ASSETS,
NET
On November 26,
2019, the Company entered into a binding term sheet to merge with Leo Riders Company (“Leo”). Pursuant to the Agreement,
Leo would become a wholly-owned subsidiary of Bio.
Under the Agreement,
Bio would acquire all of the outstanding capital stock of Leo in exchange for shares of Bio common stock to be issued to the shareholders
of Leo in an amount equal to up to 40% of the post-transaction outstanding capital stock the Company. The Company would also provide
interim financing to Leo and will assist Leo in additional capital raising efforts. The combined company, to be led by Barry Adika,
CEO of Bio-En Holdings, would be headquartered in Secaucus, New Jersey. In accordance with the Term Sheet, Leo was to raise up
to $2,000,000 million within 120 days of the merger contemplated by the Agreement.
After signing the final
agreement and before raising the funds, Bio would transfer to Leo up to $460,000 as a loan (the “Loan”), which will
be paid back by Leo upon raising the funds. If Leo would like to terminate the Agreement for any reason, Leo will transfer 50%
of the Leo company shares to Bio as a penalty. If Bio is unable to raise the $2,000,000 for Leo, the $400,000 which has been given
to Leo as a loan will be transferred repaid with the transfer of 5% of the outstanding capital stock of Leo at a $9,000,000 valuation.
$185,000 of the Loan
had been already transferred prior to signature of the Agreement and a further $50,000 was transferred prior to December 31,
2019 resulting in a total advanced of $235,000.
Prior to the date of
the Agreement, Bio had no interactions with Leo, other than the negotiation of the Term Sheet and the Amendment. The agreement
was entered into at an arm’s-length.
However, due to certain information regarding
the financial position of Leo, which has come to light since the announcement of the Term Sheet, Bio has informed Leo that it is
terminating the Term Sheet, and the merger with Leo is not expected to take place. Bio is taking steps to recover from Leo the
monies it has advanced to date. A provision of $235,000 has been made to write down the value of the advances to Leo to $nil.
NOTE 4 – LOAN FROM RELATED PARTIES
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September 30
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|
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December 31,
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|
|
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2020
|
|
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2019
|
|
|
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(Unaudited)
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|
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(Audited)
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|
|
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$
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|
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$
|
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Loan from related parties
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|
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391,250
|
|
|
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380,287
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The above loan is unsecured and is repayable on demand.
NOTE 5 – STOCKHOLDERS’ DEFICIT
Merger
On August 21, 2014 the Company entered
into a Share Exchange/Merger Agreement, between Company, Serena B. Potash (the “Principal Shareholder”) and Bio-En
Corp., a Delaware corporation. On August 21, 2014, we filed a Certificate of Merger in the State of Delaware whereby Bio-En
Corp. merged with Company, with Company the surviving entity.
In conjunction with the Share Exchange/Merger
Agreement, all of the issued and outstanding shares of Bio-En Corp. at August 21, 2014 were exchanged for 28,980,000 shares
of Company common stock.
Common Stock
For the period from January 6, 2014
to March 31, 2014, the Company issued 4,409,196 shares of common stock at $0.0001 per share for $441.00, for professional
services.
On March 23, 2014 the Company issued
2,548,853 shares of common stock at $0.0001 per share for $255.00, as consideration to purchase license rights to develop and use
patented intellectual property as described in note 3.
For the period between January 6,
2014 and March 31, 2014 the Company issued 23,041,951 shares of common stock to related parties at $0.0001 per share for $2,304.00
to related parties for services.
On March 12, 2018 the Company completed the issuance of
45,000,000 shares of common stock to related parties at $0.00525 per share for $236,250.
Cancellation of Shares
On August 21, 2014, pursuant to the
Share Exchange/Merger Agreement, Ms. Potash, the then principal shareholder of Company owning an aggregate of 7,894,625 shares
of Company common stock, agreed to cancel 6,024,601 of her shareholdings. All cancelled shares of common stock were returned to
the Company’s pool of authorized but unissued shares.
NOTE 6 – INCOME TAXES
The (benefit)/provision for income taxes
for the periods ended September 30, 2020 and December 31, 2019 differ from the amount which would be expected as a result
of applying the statutory tax rates to the losses before income taxes due primarily to changes in the valuation allowance to fully
reserve net deferred tax assets.
Realization of deferred tax assets is dependent
upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to
be available to reduce taxable income.
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September 30,
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|
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December 31,
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|
|
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2020
|
|
|
2019
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|
|
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(Unaudited)
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|
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(Audited)
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$
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|
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$
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Deferred tax assets:
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|
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|
|
|
|
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Pre-tax loss as reported
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829,319
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|
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548,147
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U.S. statutory tax rate
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34
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%
|
|
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34
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%
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Expected tax expense (benefit)
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|
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281,968
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|
|
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186,370
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Total deferred tax assets
|
|
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281,968
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|
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186,370
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Less: Valuation allowance
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|
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(281,968
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)
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(186,370
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)
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Net deferred tax assets
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|
|
-
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|
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-
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The Company has provided a valuation allowance
against the full amount of the deferred tax asset due to management’s uncertainty about its realization. As of September 30,
2020 the Company had approximately $829,319 in tax loss carryforwards that can be utilized future periods to reduce taxable income,
and expire by the year 2039.
NOTE 7 – RELATED PARTY TRANSACTIONS
Parties are considered to be related if
one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions.
A related party transaction is considered
to be a transfer of resources or obligations between related parties, regardless of whether or not a price is charged.
Details of transactions between the Company
and related parties are disclosed below:
The following individuals/entities as of
September 30, 2020 have been identified as related parties:
Mr. Baruch Adika
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- President/Director and greater than 10% shareholder
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Mr. Alon Shany
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- Director
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Mr. Shlomi Shany
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- Greater than 10% shareholder
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September 30
|
|
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December 31,
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|
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2020
|
|
|
2019
|
|
|
|
(Unaudited)
|
|
|
(Audited)
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|
|
|
$
|
|
|
$
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The following transactions were carried out with related parties:
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Balance sheet:
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|
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|
|
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Loan from related party
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|
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391,250
|
|
|
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380,287
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From time to time, prior to January 1,
2020, certain directors of the Company provided advances to the Company for its working capital purposes. These advances do not
carry interest and are due on demand. During 2020 the Directors have made certain payments to suppliers on behalf of the Company.
These amounts are repayable on demand.
NOTE 8 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, Company
management reviewed all material events through the date of this report and determined that there are no additional material subsequent
events to report.