NOTES TO THE INTERIM FINANCIAL STATEMENTS
For the Three Months ended March 31, 2021
(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 March 31, 2021, 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 March 31, 2021, and the results of its operations and its cash flows for the period ended March 31, 2021. These results are not
necessarily indicative of the results expected for the calendar year ending December 31, 2021. 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, 2020, 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 (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 March 31, 2021, the Company has a working capital deficit of $456,325 and a loss
from operations of $13,547 and an accumulated deficit of $816,741 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, 2021.
The ability of the Company to realize its business
plan is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan.
In response to these problems, management intends to raise additional funds through public or private placement offerings.
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 March
31, 2021 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 quarter of 2021 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:
|
Quoted prices in active markets for identical instruments;
|
- Level 2:
|
Other significant observable inputs (including quoted prices in active markets for similar instruments);
|
- Level 3:
|
Significant unobservable inputs (including assumptions in determining the fair value of certain investments).
|
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 March 23, 2014, the Company entered into
an Exclusive License Agreement with GeneSyst International, Inc., a Delaware corporation (“Genesyst”), for the acquisition
of the rights to patents for the conversion of cellulose material into energy producing Ethanol. The purchase price included a partial
initial payment of 10% of the common stock of the Company and $330,000 (including VAT) payable in cash.
On November 16, 2017 the Exclusive License
Agreement was cancelled by mutual consent. Consequently, the Net Carrying Amount was written off and the Accumulated Amortization up to
that date was written back. In addition, a loan repayable to GeneSyst was also cancelled. This resulted in a net overall profit of $53,573.
On November 26, 2020, 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 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 came to light after the announcement of the Term Sheet, Bio informed Leo that it was terminating
the Term Sheet, and that the merger with Leo would not take place. Bio is taking steps to recover from Leo the monies it has advanced
to date.
On September 13, 2020 an agreement between
the Company and Leo was signed under which Leo agreed to pay the Company the sum of $72,000 by way of monthly amounts of $5,000 from October 13,
2020 to September 13, 2021 and to pay a further $160,000 by January 13, 2022.
NOTE 4 – LOAN FROM RELATED PARTIES
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
$
|
|
|
$
|
|
Loan from related parties
|
|
|
376,250
|
|
|
|
376,250
|
|
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 March 31, 2021 and December 31, 2020 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.
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
$
|
|
|
$
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Pre-tax loss as reported
|
|
|
(816,741
|
)
|
|
|
(803,194
|
)
|
U.S. statutory tax rate
|
|
|
21
|
%
|
|
|
21
|
%
|
Expected tax expense (benefit)
|
|
|
171,516
|
|
|
|
168,671
|
|
Total deferred tax assets
|
|
|
171,561
|
|
|
|
168,671
|
|
Less: Valuation allowance
|
|
|
(171,561
|
)
|
|
|
(168,671
|
)
|
Net deferred tax assets
|
|
|
-
|
|
|
|
-
|
|
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 March 31, 2021, the
Company had approximately $816,741 in tax loss carryforwards that can be utilized future periods to reduce taxable income, and expire
by the year 2041.
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 March
31, 2021 have been identified as related parties:
Mr. Baruch Adika
|
- President/Director and greater than 10% shareholder
|
Mr. Alon Shany
|
- Director
|
Mr. Shlomi Shany
|
- Greater than 10% shareholder
|
Mr. Ossie Weitzman
|
- CFO
|
The following transactions were carried out with related parties:
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
$
|
|
|
$
|
|
Balance sheet:
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
52,500
|
|
|
|
46,500
|
|
Loan from related party
|
|
|
376,250
|
|
|
|
376,250
|
|
|
|
|
428,750
|
|
|
|
422,750
|
|
From time to time, prior to January 1, 2021,
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 2021 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.