Notes to the Condensed Consolidated Financial Statements
June 30, 2021
Expressed in United States Dollars
(Unaudited)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Phoenix Rising Companies. (“we,” “us,” “our,” the “Company “PRCX”) is a Nevada corporation incorporated on June 25, 2012 under the name Resort Savers, Inc. On May 28, 2020, the Company’s corporate name was changed to Phoenix Rising Companies. It is based in Puchong, Malaysia. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.
The Company makes investments and acquisitions into sound, transparent markets and industries throughout the world. The Company is principally engaged in the trading of oil, gas and lubricant. From January 1, 2020, the Company deconsolidated the operations in nutrition and health products.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company prepares its condensed consolidated financial statements in accordance with rules and regulations of the U.S. Securities and Exchange Commission (SEC) and generally accepted accounting principles (“GAAP”) in the United States of America. The accompanying consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X and presented in United States dollars.
In the opinion of the Company’s management, the accompanying unaudited interim consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2021 and the results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited interim consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on June 1, 2021.
Principles of Consolidation
At June 30, 2021, the principal subsidiaries of the Company were listed as follows:
|
Entity Name
|
|
Acquisition
Date
|
|
Ownership
|
|
|
Jurisdiction
|
|
Investments
Held By
|
|
Nature of
Operation
|
|
Fiscal
Year
|
|
|
Xing Rui International Investment Holding Group Co., Ltd. (“Xing Rui”)
|
|
December 22, 2014
|
|
|
100
|
%
|
|
Seychelles
|
|
PRCX
|
|
Holding Company
|
|
January 31
|
|
|
Xing Rui International Investment Group Ltd. (“Xing Rui HK”)
|
|
December 22, 2014
|
|
|
100
|
%
|
|
Hong Kong, the PRC
|
|
Xing Rui
|
|
Holding Company
|
|
January 31
|
|
|
Huaxin Changrong (Shenzhen) Technology Service Co., Ltd. (“Huaxin”) *
|
|
August 27, 2015
|
|
|
100
|
%
|
|
the PRC
|
|
Xing Rui
|
|
Holding Company
|
|
December 31
|
|
|
Beijing Yandong Tieshan Oil Products Co., Ltd. (“Tieshan Oil”) *
|
|
January 29, 2016
|
|
|
51
|
%
|
|
the PRC
|
|
Huaxin
|
|
Trading of oil products
|
|
December 31
|
|
|
|
|
May 16, 2018
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
_______
|
*
|
The English names used are translated only.
|
These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated upon the consolidation.
Use of Estimates and Assumptions
The preparation of condensed consolidated financial statements in conformity with 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.
Foreign Currency Translation and Re-measurement
The Company translates its foreign operations to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”.
The Company’s functional currency and reporting currency is the U.S. dollar, and our subsidiaries’ functional currency is the Chinese Yuan Renminbi (“CNY”), and Hong Kong Dollar (“HKD”).
The Company translates the foreign subsidiaries’ records into U.S. dollar as follows:
|
|
·
|
Assets and liabilities at the rate of exchange in effect at the balance sheet date
|
|
|
·
|
Equities at historical rate
|
|
|
·
|
Revenue and expense items at the average rate of exchange prevailing during the period
|
Concentrations of Credit Risk
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company also reviews its accounts receivable in a timely manner. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Tieshan Oil
During the six months ended June 30, 2021 and 2020, two customers accounted for 100% of revenues (86% and 16%) and one customer accounted for 100% of revenues.
During the six months ended June 30, 2021 and 2020, one vendor accounted for 100% of total purchases.
As of June 30, 2021 and December 31, 2020, two customers accounted for 100% (82% and 18%) and 0% of accounts receivable, and two vendors accounted for approximately 99% and 96% of accounts payable, respectively.
Earnings Per Share of Common Stock
The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying consolidated financial statements, basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
NOTE 3 - GOING CONCERN
The Company’s condensed consolidated financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet had sufficient revenues to cover its operating cost, and requires additional capital to commence its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – ACCOUNTS RECEIVABLE
The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivables are reflected as a current asset and no allowance for bad debt has been recorded as of June 30, 2021 and December 31, 2020. As at June 30, 2021 and December 31, 2020, the Company had accounts receivable of $7,143,980 and $0, respectively.
NOTE 5 – INVENTORIES
Inventories at June 30, 2021 and December 31, 2020 consist of the following:
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Finished goods
|
|
$
|
9,277,703
|
|
|
$
|
5,309,894
|
|
NOTE 6 – CONVERTIBLE NOTE
At June 30, 2021 and December 31, 2020, convertible loans consisted of the following:
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Convertible Notes - originated in November 22, 2019
|
|
$
|
4,064
|
|
|
$
|
4,064
|
|
|
Convertible Notes - issued during fiscal year 2020
|
|
|
605,000
|
|
|
|
893,656
|
|
|
Convertible Notes - issued during fiscal year 2021
|
|
|
513,500
|
|
|
|
-
|
|
|
Total convertible notes payable
|
|
|
1,122,564
|
|
|
|
897,720
|
|
|
Less: Unamortized debt discount
|
|
|
(309,265
|
)
|
|
|
(428,365
|
)
|
|
Total convertible notes
|
|
|
813,299
|
|
|
|
469,355
|
|
|
Less: current portion of convertible notes
|
|
|
536,833
|
|
|
|
287,298
|
|
|
Long-term convertible notes
|
|
$
|
276,466
|
|
|
$
|
182,057
|
|
For the six months ended June 30, 2021 and 2020, the interest expense on convertible notes was $51,578 and $37,599, penalty of $31,500 and $15,000, and amortization of discount, including interest expense, of $537,600 and $248,678, respectively. As of June 30, 2021 and December 31, 2020, the accrued interest was $74,562 and $54,299, respectively.
Conversion
During the six months ended June 30, 2021, the Company converted notes with principal amounts and accrued interest of $351,470 into 12,866,170 shares of common stock. The corresponding derivative liability at the date of conversion of $1,074,208 was credited to additional paid in capital.
Convertible Notes – Issued during the six months ended 30 June 2021
During the six months ended June 30, 2021, the Company issued a total principal amount of $513,500 convertible note for cash proceeds of $473,500. The terms of convertible note are summarized as follows:
|
|
•
|
Term: 12 months - 18 months;
|
|
|
•
|
Annual interest rates: 8%;
|
|
|
•
|
Convertible at the option of the holders at any time or 180 days from issuance
|
|
|
•
|
Conversion prices are based on discounted (35% - 40% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.
|
Convertible Notes – Issued during the year ended December 31, 2020
During the year ended December 31, 2020, the Company issued a total principal amount of $1,034,750 convertible note for cash proceeds of $912,000. The terms of convertible note are summarized as follows:
|
|
•
|
Term: a range from 9 months to 18 months;
|
|
|
•
|
Annual interest rates: 8% - 13%;
|
|
|
•
|
Convertible at the option of the holders at any time or 180 days from issuance;
|
|
|
•
|
Conversion prices are based on discounted (10% - 50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.
|
|
|
•
|
Certain note allows the principal amount will increase by $15,000 and the discount rate of conversion price will decrease by 20% if the conversion price is less than $0.10 or $0.01. As a result, the discount rate of conversion price changed from 50% to 70% and the Company recognized the penalty of $15,000 and recorded principal amount of $15,000.
|
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Stock” and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.
The Company valued the conversion feature and warrant using the Black Scholes valuation model. The fair value of the derivative liability for all warrant and the notes that became convertible, including the notes issued in prior years, during the six months ended June 30, 2021 amounted to $702,157. $378,500 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $323,657 was recognized as a “day 1” derivative loss.
NOTE 7 – WARRANTS
A summary of activity regarding warrants issued as follows:
|
|
|
Warrants Outstanding
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
Contractual life
|
|
|
|
|
Shares
|
|
|
Exercise Price
|
|
|
(in years)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, December 31, 2020
|
|
|
245,232,491
|
|
|
$
|
0.0069
|
|
|
|
4.35
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Reset feature
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Exercised
|
|
|
(5,077,060
|
)
|
|
|
0.0072
|
|
|
|
-
|
|
|
Forfeited/canceled
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Outstanding, June 30, 2021
|
|
|
240,155,431
|
|
|
$
|
0.0070
|
|
|
|
3.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable warrant at June 30, 2021
|
|
|
240,155,431
|
|
|
$
|
0.0069
|
|
|
|
3.89
|
|
The Company determined that the warrants qualify for derivative accounting due to the reset feature of warrants, which led to no explicit limit to the number of shares to be delivered upon future settlement of the exercised warrants.
Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at June 30, 2021 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of June 30, 2021 is $9,494,256.
NOTE 8 – DERIVATIVE LIABILITIES
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.
ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2021. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the six months ended June 30, 2021 and the year ended December 31, 2020:
|
|
|
Six Months Ended
|
|
|
Year ended
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Expected term
|
|
|
0.09 - 4.47 years
|
|
|
|
0.04 - 5.00 years
|
|
|
Expected average volatility
|
|
|
166% - 363
|
%
|
|
|
175% - 494
|
%
|
|
Expected dividend yield
|
|
|
-
|
|
|
|
-
|
|
|
Risk-free interest rate
|
|
|
0.02% - 0.92
|
%
|
|
|
0.08% - 1.47
|
%
|
The following table summarizes the changes in the derivative liabilities during the six months ended June 30, 2021:
|
Fair Value Measurements Using Significant Observable Inputs (Level 3)
|
|
|
|
|
|
|
|
Balance - December 31, 2020
|
|
$
|
16,614,368
|
|
|
Addition of new derivatives recognized as debt discounts
|
|
|
378,500
|
|
|
Addition of new derivatives recognized as loss on derivatives
|
|
|
323,657
|
|
|
Settled on issuance of common stock
|
|
|
(1,796,172
|
)
|
|
Gain on change in fair value of the derivative
|
|
|
(3,606,262
|
)
|
|
Balance - June 30, 2021
|
|
$
|
11,914,091
|
|
The following table summarizes the (gain) loss on derivative liability included in the income statement for the six months ended June 30, 2021 and 2020, respectively.
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Day one loss due to derivative liabilities on convertible notes
|
|
$
|
323,657
|
|
|
$
|
88,918
|
|
|
Change in fair value of the derivative liabilities
|
|
|
(3,606,262
|
)
|
|
|
2,870,558
|
|
|
|
|
$
|
(3,282,605
|
)
|
|
$
|
2,959,476
|
|
NOTE 9 - STOCKHOLDERS’ DEFICIT
The capitalization of the Company consists of the following classes of capital stock as of June 30, 2021:
Preferred Stock
The Company has authorized 15,000,000 shares of preferred stock with a par value of $0.0001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. No shares of preferred stock have been issued.
Series A Preferred Stock
The Company is designated to issue 1,500,000 shares of Series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock shall have liquidation preference over any other class of stock and voting rights on the basis of one hundred votes for each shares of Series A Preferred Stock. The Preferred Stock can be converted to common stock, at a conversion rate of 100 common shares for each preferred stock.
As at June 30, 2021 and December 31, 2020, the Company had 1,500,000 preferred shares issued and outstanding.
Common Stock
The Company has authorized 1,000,000,000 shares of common stock with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
During the six months ended June 30, 2021, the Company issued 18,756,708 shares of common stock as follows;
|
|
·
|
12,866,170 shares of common stock issued for conversion of debt of $351,470.
|
|
|
|
|
|
|
·
|
5,890,538 shares of common stock issued for cashless exercise of warrant.
|
As at June 30, 2021 and December 31, 2020, the Company had 139,926,076 shares and 121,169,368 common shares issued and outstanding.
Subscription receivable
On February 24, 2020, the Company entered into a Purchase Agreement (the “Agreement”) with Mr. Liu FaKuan (“Seller”), the sole owner of Henan Wandi Mining Product Development Co., Ltd. (“Wandi”), a corporation organized in the People’s Republic of China (“PRC”), pursuant to which the Company will effect an acquisition of Wandi by acquiring from the Seller all outstanding equity interests of Wandi. Wandi owns 49% of a coal mine known as You Zhou Shenhuo Kuanfa Mining Company Ltd., (the “Mine”), with Zhengshou Yshong Coal Industry Co., Ltd. (a State-owned enterprise) owning the remaining 51% of the Mine.
Pursuant to the Agreement, the Company issued 60,000,000 restricted common shares of stock of the Company to the Seller, valued at $24,522,000. The obligations of the parties to complete the acquisition is subject to the fulfillment (or, in some cases waiver) of due diligence and certain closing conditions. Upon closing of the acquisition Seller shall transfer to Company 100% of the issued and outstanding equity interests of Wandi, which will then become a wholly owned subsidiary of the Company.
As of June 30, 2021, the Company does not have control of Wandi. As a result, the Company determined not to consolidate Wandi and recorded share issuance for acquisition of Wandi as a subscription receivable for $24,522,000, until the common shares of Wandi are delivered.
NOTE 10 – RELATED PARTY TRANSACTIONS
During the six months ended June 30, 2021 and 2020, the Company borrowed $0 and $222,298 from our related parties and repaid $7,950 and $70,574 to our related parties, respectively.
As of June 30, 2021 and December 31, 2020, the Company recorded amounts due to related parties of $99,588 and $107,538, respectively. The loan is non-interest bearing and due on demand.
NOTE 11 - SEGMENTED INFORMATION
At June 30, 2021, the Company operates in one industry segment, oil and gas, and two geographic segments with China being where majority current assets and equipment are located.
At June 30, 2021 and December 31, 2020, segment assets and liabilities were as follows:
|
June 30, 2021
|
|
Holding
Company
|
|
|
Oil
and gas
|
|
|
Total
Consolidated
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
1,433,754
|
|
|
$
|
16,481,744
|
|
|
$
|
17,915,498
|
|
|
Non-current assets
|
|
|
1,979,787
|
|
|
|
-
|
|
|
|
1,979,787
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
12,766,858
|
|
|
|
10,661,191
|
|
|
|
23,428,049
|
|
|
Long term liabilities
|
|
|
276,466
|
|
|
|
-
|
|
|
|
276,466
|
|
|
Net assets
|
|
$
|
(9,629,783
|
)
|
|
$
|
5,820,553
|
|
|
$
|
(3,809,230
|
)
|
|
December 31, 2020
|
|
Holding
Company
|
|
|
Oil
and gas
|
|
|
Total
Consolidated
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
355,490
|
|
|
$
|
9,773,716
|
|
|
$
|
10,129,206
|
|
|
Non-current assets
|
|
|
1,979,787
|
|
|
|
-
|
|
|
|
1,979,787
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
17,138,155
|
|
|
|
3,107,033
|
|
|
|
20,245,188
|
|
|
Long term liabilities
|
|
|
182,057
|
|
|
|
-
|
|
|
|
182,057
|
|
|
Net assets
|
|
$
|
(14,984,935
|
)
|
|
$
|
6,666,683
|
|
|
$
|
(8,318,252
|
)
|
For the six months ended June 30, 2021 and 2020, segment revenue and net income (loss) were as follows:
|
Six Months Ended June 30, 2021
|
|
Holding
Company
|
|
|
Oil
and gas
|
|
|
Total
Consolidated
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
8,464,995
|
|
|
$
|
8,464,995
|
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
(8,420,562
|
)
|
|
|
(8,420,562
|
)
|
|
Operating expenses
|
|
|
(326,025
|
)
|
|
|
(20,747
|
)
|
|
|
(346,772
|
)
|
|
Other income (expenses)
|
|
|
2,661,928
|
|
|
|
(12,801
|
)
|
|
|
2,649,127
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net income
|
|
$
|
2,335,903
|
|
|
$
|
10,885
|
|
|
$
|
2,346,788
|
|
|
Six Months Ended June 30, 2020
|
|
Holding
Company
|
|
|
Oil and
gas
|
|
|
Nutritional
Services
|
|
|
Total
Consolidated
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
5,303,166
|
|
|
$
|
62,381
|
|
|
$
|
5,365,547
|
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
(5,166,080
|
)
|
|
|
(60,546
|
)
|
|
|
(5,226,626
|
)
|
|
Operating expenses
|
|
|
(2,659,638
|
)
|
|
|
(22,509
|
)
|
|
|
(156,685
|
)
|
|
|
(2,838,832
|
)
|
|
Other income (expenses)
|
|
|
(3,245,753
|
)
|
|
|
-
|
|
|
|
64,599
|
|
|
|
(3,181,154
|
)
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
(16,534
|
)
|
|
|
-
|
|
|
|
(16,534
|
)
|
|
Net income (loss)
|
|
$
|
(5,905,391
|
)
|
|
$
|
98,043
|
|
|
$
|
(90,251
|
)
|
|
$
|
(5,897,599
|
)
|
For the three months ended June 30, 2021 and 2020, segment revenue and net income (loss) were as follows:
|
Three Months Ended June 30, 2021
|
|
Holding
Company
|
|
|
Oil
and gas
|
|
|
Total
Consolidated
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
4,192,154
|
|
|
$
|
4,192,154
|
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
(4,165,831
|
)
|
|
|
(4,165,831
|
)
|
|
Operating expenses
|
|
|
(200,024
|
)
|
|
|
(10,613
|
)
|
|
|
(210,637
|
)
|
|
Other income (expenses)
|
|
|
11,226,889
|
|
|
|
(10,981
|
)
|
|
|
11,215,908
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Net income
|
|
$
|
11,026,865
|
|
|
$
|
4,729
|
|
|
$
|
11,031,594
|
|
|
Three Months Ended June 30, 2020
|
|
Holding
Company
|
|
|
Oil and
gas
|
|
|
Nutritional
Services
|
|
|
Total
Consolidated
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
4,420,255
|
|
|
$
|
19,635
|
|
|
$
|
4,439,890
|
|
|
Cost of goods sold
|
|
|
-
|
|
|
|
(4,362,036
|
)
|
|
|
(7,023
|
)
|
|
|
(4,369,059
|
)
|
|
Operating expenses
|
|
|
(2,484,050
|
)
|
|
|
(11,563
|
)
|
|
|
(60,367
|
)
|
|
|
(2,555,980
|
)
|
|
Other expenses
|
|
|
(3,080,862
|
)
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
(3,081,062
|
)
|
|
Provision for income taxes
|
|
|
-
|
|
|
|
(13,138
|
)
|
|
|
-
|
|
|
|
(13,138
|
)
|
|
Net income (loss)
|
|
$
|
(5,564,912
|
)
|
|
$
|
33,518
|
|
|
$
|
(47,955
|
)
|
|
$
|
(5,579,349
|
)
|
NOTE 12 – EARNINGS (LOSS) PER SHARES
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods. Diluted net income per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of convertible preferred stock and convertible notes that are computed using the if-converted method, and outstanding warrants that are computed using the treasury stock method.
|
|
|
Three months ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
11,031,594
|
|
|
$
|
(7,578,722
|
)
|
|
$
|
2,346,788
|
|
|
$
|
(7,896,972
|
)
|
|
Change in fair value of derivative liabilities
|
|
|
(11,515,726
|
)
|
|
|
-
|
|
|
|
(3,282,605
|
)
|
|
|
-
|
|
|
Interest on convertible debts
|
|
|
(285,800
|
)
|
|
|
-
|
|
|
|
(265,803
|
)
|
|
|
-
|
|
|
Net income (loss) - diluted
|
|
$
|
(769,932
|
)
|
|
$
|
(7,578,722
|
)
|
|
$
|
(1,201,620
|
)
|
|
$
|
(7,896,972
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
136,634,606
|
|
|
|
23,070,367
|
|
|
|
136,330,560
|
|
|
|
14,140,124
|
|
|
Effect of dilutive shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Preferred Stock
|
|
|
150,000,000
|
|
|
|
-
|
|
|
|
150,000,000
|
|
|
|
-
|
|
|
Convertible notes
|
|
|
30,563,831
|
|
|
|
-
|
|
|
|
27,083,110
|
|
|
|
-
|
|
|
Warrants
|
|
|
216,644,488
|
|
|
|
-
|
|
|
|
221,183,684
|
|
|
|
-
|
|
|
Diluted
|
|
|
533,842,925
|
|
|
|
23,070,367
|
|
|
|
534,597,354
|
|
|
|
14,140,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.08
|
|
|
$
|
(0.33
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.56
|
)
|
|
Diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.56
|
)
|
For the three and six months ended June 30, 2020, the convertible instruments are anti-dilutive and therefore, have been excluded from earnings (loss) per share.
