The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS AND HISTORY –
Historical Information
The Healing Company Inc. (formerly “Lake Forest Minerals) a Nevada corporation, (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on June 23, 2008. The Company was originally formed to engage in the acquisition, exploration and development of natural resource properties of merit.
Commencing in February 22, 2010, our purpose has been to serve as a vehicle to acquire an operating business.
Current Information
During January 2021, our then sole officer and director, Mr. Jeffrey Taylor sold his 32,000,000 shares of common stock of the Company, representing 73% of the issued and outstanding shares, to certain third parties in a series of private transactions for cash consideration of $300,000. Concurrently Mr. Taylor resigned all positions and Mr. Larson Elmore was appointed to fill ensuing vacancies.
In cooperation with the new majority shareholders, the Company determined to redefine its acquisition objectives to establish a platform of companies that source, harvest and utilize the most natural compounds for holistic nutrition from around the world. In doing so, the Company intends to offer the best natural remedies to connect humans with nature, and prevent and heal lifestyle diseases on a broad scale.
On April 29, 2021, the sole director and our majority shareholder approved a name change of our Company from Lake Forest Minerals Inc. to The Healing Company Inc.
Concurrently the board and majority shareholder approved a resolution to effect a forward stock split of our authorized and issued and outstanding shares of common stock on a four (4) new shares for one (1) share held. Upon effectiveness of the forward split, our authorized capital became 300,000,000 shares of stock and our issued and outstanding shares of common stock increased from 11,000,000 to 44,000,000 shares of common stock, all with a par value of $0.001. The Certificate of Amendment to effect the forward split and the change of name was filed with the Nevada Secretary of State on April 29, 2021. The name change and forward stock split were subsequently reviewed and approved by the Financial Industry Regulatory Authority (FINRA) with an effective date of June 2, 2021. The impact of the forward split has been retroactively applied to all share and per share information contained herein.
On October 7, 2021, the sole director and majority shareholder approved the adoption of our Amended and Restated Articles of Incorporation, which replace our prior articles of incorporation in their entirety. Among other things, the Amended and Restated Articles of Incorporation authorized us to issue (a) 290,000,000 shares of common stock, $0.001 par value per share and (b) 10,000,000 shares of preferred stock, $0.001 par value per share, and establish 5,000,000 Seed Preferred Shares as a first series of such preferred stock.
A Certificate of Amendment was filed with the Nevada Secretary of State on October 7, 2021.
Effective January 10, 2022, Mr. Larson Elmore resigned as the President, Chief Executive Officer and director of the company. Mr. Elmore remains as the Company’s Chief Financial Officer, Treasurer and Secretary. Concurrently, Mr. Simon Belsham was appointed to fill the ensuing vacancies and each of Steven Bartlett, Poonacha Machaiah and Anabel Oelmann were appointed to the Company’s board of directors.
On March 10, 2022, the company entered into and closed a share purchase agreement with Anabel Oelmann pursuant to which the company acquired 100% of the issued and outstanding capital stock of NOEO GmbH, a German company (“NOEO”), involved in direct-to-consumer brand focusing on adaptogenic herbs and currently focused on three key products which include joint, memory and digestive complexes derived from mushrooms, in exchange for cash consideration of EUR25,000 (USD$29,800). Ms. Oelmann is a director of the Company and the sole shareholder of NOEO. On closing, NOEO became a wholly owned subsidiary of the Company, and the Company exited from shell status.
On March 23, 2022, the Board of Directors appointed Kay Koplovitz to the Board of Directors and as Chairman of the Board effective April 1, 2022.
All adjustments necessary for fair statement of the results for the periods have been made and all adjustments are of a normal recurring nature.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States (“US GAAP”). The Company's fiscal year end is June 30. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in the condensed financial statements for the three and nine months ended March 31, 2022, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s Form 10-K for the Company’s fiscal year ended June 30, 2021, as filed with the Securities and Exchange Commission (“SEC”).
USE OF ESTIMATES - The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America 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 amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.
INCOME TAXES - The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2021, and 2020 the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.
PRINCIPALS OF CONSOLIDATION - The consolidated financial statements include the accounts of The Healing Company and its 100% controlled subsidiary, NOEO GmBH. All significant intercompany balances and transactions have been eliminated. "The Healing Company", the "Company", "we", "our" or "us" is intended to mean The Healing Company, including the subsidiaries indicated above, unless otherwise indicated.
NET LOSS PER COMMON SHARE - The Company computes net income (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 computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and has not granted any stock options. Accordingly, no stock-based compensation has been recorded to date.
CASH AND CASH EQUIVALENTS - For purposes of Statements of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
FINANCIAL INSTRUMENTS - The carrying amounts of the company's financial instruments including accounts payable and due from related parties approximate fair value due to the relative short period for maturity these instruments.
Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the company. Unobservable inputs are inputs that reflect the company's assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FINANCIAL INSTRUMENTS – (continued)
The Company’s financial instruments consist principally of Accounts payable and accrued liabilities, and amounts due to related parties. Pursuant to ASC 820 and 825, the fair value of our cash and cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The company believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
REVENUE RECOGNITION - The Company follows ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. During the three months ended March 31, 2022, the Company generated modest revenues from selling its wellness products direct to customers using its owned and operated eCommerce website. The Company considers its performance obligations satisfied upon shipment and/or delivery of the purchased products to the customer. The Company evaluates returns from customers purchasing product using its eCommerce site on a case-by-case basis and generally will issue replacement product in the limited cases of product returns. The Company has no policy requiring cash refunds.
COST OF SALES - Cost of sales includes actual product cost, labor, if any, and direct overheard, which is applied on a per unit basis.
FOREIGN CURRENCY TRANSLATION - The Company uses the U.S. Dollar as the reporting currency for its financial statements. Functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of the Company’s wholly owned subsidiary, NOEO, is the Euro.
Assets and liabilities of the Company’s subsidiary are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive income” as a separate component of stockholders’ equity, and in the “Effect of exchange rate changes on cash and cash equivalents,” on the Company’s consolidated statements of cash flows. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “General and Administrative” expenses on the Company’s consolidated statements of operations.
INVENTORY - Inventory consists of finished goods and totaled $7,935 and $0 at March 31, 2022 and December 31, 2021. The Company values inventory at the lower of cost or market value, with cost determined using First-In-First-Out Method.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INTANGIBLE ASSETS - The Company generally recognizes assets for brand recognition, trade secret product formulations, and intellectual property such as finite-lived trade names. Finite-lived intangible assets are carried at acquisition cost less accumulated amortization. Such amortization is recorded on a straight-line basis over the estimated useful lives of the respective assets. Amortization for trade names is recognized in sales and marketing expenses. In the three months ended March 31, 2022, the Company recorded assets acquired from the acquisition of NOEO of approximately $127,420 and expended a further $8,318 on trademark registration. Intangible assets acquired with NOEO included intellectual property and trademarks, an ecommerce website and branding recognition. The Company initially records acquired intangible assets at their estimated fair values and management reviews these assets periodically for impairment.
RECENT ACCOUNTING PRONOUNCEMENTS - The Company has implemented all new accounting pronouncements that are in effects and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3- GOING CONCERN
The Company has negative working capital of $568,839 as at March 31, 2022. The Company has entered into private placement subscription agreements for an additional $8,350,000 of which the Company has collected $7,130,000 in May 2022, with the remaining $1,220,000 expected to be collected in full during the quarter ended June 30, 2022. The Company has commenced limited operations and is conducting due diligence procedures on various potential acquisition targets. Management believes the Company will have sufficient funds to continue operations within one year of the issuance date of this filing, however, there can be no assurance that the Company will receive all of the expected subscription funds or that the Company will be able to raise additional capital beyond the current cash on hand. Management’s plans include seeking additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives. The continuation of the Company as a going concern is also dependent upon the ability to attain profitable operations from the Company's future planned business operations. If the Company is unable to obtain adequate capital as needed, or conduct revenue generating operations, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.
The financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
COVID-19 Pandemic
While it appears the COVID-19 pandemic is subsiding, the impact of COVID-19 could continue to have an adverse impact on the Company going forward. COVID-19 has caused significant disruptions to the global financial markets, which may severely impact the Company’s ability to raise additional capital and to pursue certain acquisitions. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report and is highly uncertain and subject to change. The Company is not able to estimate the potential effects of the COVID-19 outbreak on its operations or financial condition for the next 12 months. There are no assurances that the Company will be able to meet its obligations, raise funds or conclude the acquisition of identified businesses.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 4 – ACQUISITION
On March 10, 2022, the Company closed a Share Purchase Agreement pursuant to which we acquired 100% of the issued and outstanding capital stock of NOEO GmBH, a German corporation, controlled by a member of our board of directors, for total consideration of $28,290 (EUR25,000), paid on closing. NOEO has established a series of wellness products, sold direct-to-consumer focusing on adaptogenic herbs and the marketing of three key products which include joint, memory and digestive complexes taken orally derived from functional mushrooms. The acquisition is in line with the Company’s current mandate of acquiring operating wellness-focused businesses. On closing, the shares of NOEO were transferred to the Company and NOEO became a wholly owned subsidiary of the Company.
The following table sets forth the net assets as of March 10, 2022:
| | March 10, 2022 | |
| | | |
Cash and cash equivalent | | $ | 8,490 | |
Inventory | | | 8,145 | |
Prepaid expenses | | | 69,153 | |
Recoverable value added tax | | | 21,507 | |
Intangible assets | | | 67,530 | |
Accounts payable and accrued liabilities | | | (33,295 | ) |
Advances and accounts payable, related party | | | (8,065 | ) |
Loan payable, related party | | | (158,190 | ) |
Net assets | | | (24,725 | ) |
| | | | |
Consideration: Cash purchase | | | 28,290 | |
| | | | |
Additions to intangible assets | | $ | 53,015 | |
The purchase accounting for the acquisition of NOEO remains incomplete with respect to opening intangible assets and recoverable taxes as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Measurement period adjustments will be recognized prospectively. The measurement period is not to exceed 12 months from the date of acquisition.
NOTE 5. RELATED PARTY TRANSACTIONS
Astutia Venture Capital AG (“AVCG”)
As of January 2021, the Company had received a total of $173,616 in advances from its previous CEO, Jeffrey Taylor. On January 25, 2021, all advances made by the previous CEO were assigned to AVCG for $10. as part of a transaction where under AVCG also acquired a portion of 32,000,000 shares sold in a series of private transactions by Mr. Taylor. Further, during the fiscal year ended June 30, 2021, the Company received a further $29,999 in unsecured advances from AVCG for operational expenses.
During the nine months ended March 31, 2022, a minority shareholder of the Company reimbursed AVCG for advances paid in the amount of $29,999, leaving $173,616 due and payable to AVCG at March 31, 2022, which is reflected on the balance sheets of the Company as Advances Payable – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.
WAOW Advisory Group Gmbh
During the fiscal year ended June 30, 2021, WAOW Entrepreneurship Gmbh ("WAOWE") acquired certain shares of the Company in a series of private transactions with AVCG and Mr. Jeffrey Taylor, our former officer and director.
During the nine months ended March 31, 2022, an affiliated company, WAOW Advisory Group Gmbh (“WAOW”) assumed amounts owing to AVCG in the amount of $29,999 and advanced a further $401,091 to the Company, leaving a balance of $431,090 ($453,803 – December 31, 2021) due and payable.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 5. RELATED PARTY TRANSACTIONS (continued)
WAOW Advisory Group Gmbh (cont’d)
On March 10, 2022 the Company acquired NOEO (See Note 3). At the date of the acquisition, WAOW had outstanding loans with NOEO with a remaining principal balance of $154,807 (EUR139,793). Terms of the loans require interest at rates of 2.5 and 5% per annum, with maturity dates December 31, 2022 and March 30, 2024, respectively. Accrued and unpaid interest at March 31, 2022, totaled $4,060, which is reflected in accounts payable – related parties. .
Lee Larson Elmore, Secretary
Effective January 31, 2021, Mr. Jeffrey Taylor resigned as the President, Chief Executive Officer, Chief Financial Officer, Treasurer and director of the Company and Mr. Lee Larson Elmore was appointed President and sole director
On May 1, 2021, Mr. Elmore entered into an agreement with the Company for a six-month term ending October 31, 2021, for a monthly fee of $1,000 plus stock compensation of 15,000 shares at $4.00 per share, or the equivalent cash consideration of $60,000, at Mr. Elmore’s election. As at June 30, 2021, Mr. Elmore had received $2,000 and had accrued expenses of $60,000. On July 1, 2021, Mr. Elmore invoiced the Company an additional $4,000 for services provided prior to the formal agreement of May 1, 2021.
On November 1, 2021, Mr. Elmore entered into a revised compensation agreement with the Company through his controlled company, Administrative Services LLC, whereby services of Mr. Elmore would be invoiced at a rate of $5,000 per month commencing November 1, 2021.
During the three and nine months ended March 31, 2022 and 2021, respectively, Mr. Elmore and his controlled company invoiced $15,000 and Nil and $33,000 and $62,000. A total of $5,000 remained due and payable to Mr. Elmore at March 31, 2022.
Simon Belsham, CEO, President and Director
On November 27, 2021, the Company entered into a two-year employment agreement with Simon Belsham whereby Mr. Belsham was engaged by the Company to provide certain management services and to accept the appointment of Chief Executive Officer, President and Director immediately upon the Board making such appointment. The agreement provides for annual compensation of $400,000 in year one and $500,000 per annum in year two, a $75,000 signing bonus (which amount was paid during the six months ended December 31, 2021) and for the first calendar year completed during Mr. Belsham’s employment an annual bonus, with a maximum pay-out opportunity of one hundred thousand dollars ($100,000). During the second calendar year completed the annual bonus has a maximum pay-out opportunity of two hundred thousand dollars ($200,000). Further, under the terms of the employment agreement, within forty-five days of execution, Mr. Belsham is to be issued a total 1,250,000 shares of restricted common stock, subject to a restricted stock award agreement. As at the date of this report the Company and Mr. Belsham have not agreed on the effective grant date for the shares underlying the stock award, which shares have yet to be issued.
Steven Bartlett, Director
On February 16, 2022, the Company entered into a Board of Directors Services Agreement with Steven Bartlett with a January 1, 2022 start date, whereby Mr. Bartlett will receive an annual fee of $37,500 payable in 12 monthly installments in arrears and will be granted an option to purchase 125,000 shares of the Company’s common stock at the fair market value at the time of such grant pursuant to terms to be set forth in the Company’s Equity Incentive Plan. The Company is currently in the process of completing the establishment of an equity incentive plan. During the quarter ended March 31, 2022 Mr. Bartlett was paid $9,375 under the terms of his contract.
Poonacha Machaiah, Director
On July 16, 2021, the Company entered into an agreement with Poonacha Machaiah, in relation to his proposed appointment to the Board of Directors of the Company. Under the terms of the agreement, retroactive to January 1, 2021, Mr. Machaiah is to receive an annual fee of $37,500 paid in equal monthly installments over 12 months and shall be granted the right to purchase $37,500 worth of the Company’s common stock based on an exercise price per share equal to the fair market value of the Common Stock of the Company at the time of such grant, pursuant to terms to be set forth in the Company’s Equity Incentive Plan. The Company is currently in the process of completing the establishment of an equity incentive plan. During the quarter ended March 31, 2022, Mr. Machaiah was paid $9,375 under the terms of his contract.
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 5. RELATED PARTY TRANSACTIONS (continued)
Anabel Oelmann, Director
On March 10, 2022, the Company entered into and closed a share purchase agreement with Anabel Oelmann pursuant to which the company acquired 100% of the issued and outstanding capital stock of NOEO GmbH, a German company (“NOEO”), involved in direct-to-consumer brand focusing on adaptogenic herbs and currently focused on three key products which include joint, memory and digestive complexes derived from mushrooms, in exchange for cash consideration of EUR25,000 (USD$29,800). Ms. Oelmann is a director of the Company and was the sole shareholder of NOEO. See Note 3.
At March 31, 2022, Ms. Oelmann and one of her controlled corporate entities are owed advances totaling $4,202 by the Company’s wholly owned subsidiary, NOEO.
NOTE 6. COMMITMENTS AND CONTINGENCIES
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.
NOTE 7. STOCKHOLDERS’ DEFICIT
One April 29, 2021, the Company’s board of directors approved a forward stock split of authorized and issued and, outstanding shares of common stock on four (4) new shares for one (1) share held. Upon effectiveness of the forward split, the authorized shares increased to 300,000,000 shares of common stock and the issued and outstanding shares of common stock increased to 44,000,000 shares of common stock, all with a par value of $0.001.
The forward stock split was approved by the Financial Industry Regulatory Authority (FINRA) with an effective date of June 2, 2021 as such all capital transaction have been retroactively restated to show the effect of the stock split.
On October 7, 2021, the Company amended its authorized capital to 290,000,000 common shares and 10,000,000 preferred shares of which 5,000,000 are designated as Seed Preferred Shares, each with a par value of $0.001 per share.
Common Stock
The Company did not issue any shares of common stock during the six months ended December 31, 2021.
On March 7, 2022, the Company issued 4,920 shares of our common stock subscribed for under definitive agreements with 41 non-U.S. persons in a private transaction (the “Transaction”). Under the terms of the Transaction, the company sold 4,920 Common Shares at $2.00 per share for aggregate proceeds of $9,840. At March 31, 2022, the Company was awaiting shortfall payments from two subscribers totaling $477, which amount is reflected on the balance sheets as Subscription Receivable.
As at March 31, 2021 and December 31, 2021, the Company has a total of 44,004,920 and 44,000,000 shares of common stock issued and outstanding, respectively.
Seed Preferred Stock
During the six months ended December 31, 2021, the company entered into definitive agreements with non-U.S. persons to issue a total of 5,000,000 shares of Seed Preferred stock in private transactions (the “Transactions”). Under the terms of the Transactions, the company agreed to sell an aggregate of 5,000,000 Seed Preferred Shares at $2.00 per share for proceeds of $10,000,000. Prior to December 31, 2021, the Company received proceeds of $1,650,000 against the subscriptions and issued a total of 325,000 shares of Seed Preferred Stock. The remaining 500,000 shares of Seed Preferred Stock were issued in the three months ended March 31, 2022.
At March 31, 2022 and December 31, 2021, the Company had a total of 825,000 and 325,000 shares of Seed Preferred Stock issued and outstanding, respectively
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 8. OTHER COMMITMENTS
| (a) | On November 15, 2021, with an effective date of November 27, 2021, the Company entered into an employment agreement with Kelly Zuar. Under the terms of the agreement, Ms. Zuar with fill the position of executive business partner, reporting to the Company’s CEO. The agreement provides for an annual salary of $105,000 and a stock option for the purchase 100,000 shares of common stock in accordance with the terms of the Company’s stock incentive plan, once in place. At March 31, 2022 the Company has not yet adopted a stock option plan under which to grant the aforementioned stock options. |
| | |
| (b) | Effective December 28, 2021, the Company entered into a two year Board Advisory Agreement with Deepak Chopra LLC for services to the Advisory Board of the Company. As consideration, Deepak Chopra LLC will receive $12,500 for each fiscal quarter and shall be granted a total of 200,000 non-statutory stock options with an exercise price set to the most recent Fair Market Value (FMV) at the time of the effective date of this agreement. Such options shall have a term of 10 years, with 25% of such Options to be fully vested as of (6) months from the Effective Date of this Agreement and the remainder vesting in three (3) equal installments every six (6) months thereafter until all Options have vested on the second anniversary of the Effective Date. At March 31, 2022 the Company has not yet adopted a stock option plan under which to grant the aforementioned stock options. Further under the agreement, the Company is to make an annual donation to The Chopra Foundation for Fifty Thousand Dollars ($50,000.00), with the first annual donation to be paid within thirty (30) days of the date of execution of the agreement. The Company remitted the required donation in April 2022. |
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| (c) | On January 1, 2022, the Company entered into an independent contractor agreement with KET Consulting LLC (“KET”) to provide various marketing services, brand and go-to-market strategy and other operational services at the direction of the Board and the CEO. The contract has an initial term of 18 months and is renewable by mutual consent for a further term. Compensation is $240,000 per annum commencing January 1, 2022, payable monthly in arrears. Further, under the agreement KET will be granted an option to purchase a total of 700,000 shares of the common stock of the Company to be granted under the Company’s Equity Incentive Plan, exercisable at $0.28 per share and vesting over a period of 48 months, with 25% to vest on January 1, 2023, and the remaining options shall vest monthly. At March 31, 2022 the Company has not yet adopted a stock option plan under which to grant the aforementioned stock options. |
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| (d) | On January 2, 2022, the Company entered into a 24 month services agreement with Flight Story Limited (“FSL”), whereby FSL will provide various services. Under the terms of the agreement, FST will be paid fees based on projects totaling $180,000 per annum and will receive 675,000 stock options, exercisable at $0.28 per share upon execution of the contract with a further 1,500,000 stock options at $2.00 per share which shall vest, 25% upon completion of an up-round capital raise in 2022, 25% on share prices sustaining an average market capitalization above $200 million for 30 days, 25% on the Company being listed on NASDAQ and the final 25% upon share prices sustaining an average market capitalization above $400 million for 30 days The options will expire 5 years from an IPO being completed by the Company. At March 31, 2022, the Company has not yet adopted a stock option plan under which to grant the aforementioned stock options. |
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| (e) | On February 2, 2022, the Company entered into a non-binding letter of intent to provide a Credit Facility Term Sheet with i80 Group (“Group”) whereby Group will provide credit facilities initially in an amount up to $75,000,000 with an option at Group’s discretion to provide a further $75,000,000 to a newly formed wholly-owned subsidiary to be incorporated by the Company. A definitive agreement has not yet been concluded, however the initial review deposit of $50,000 has been remitted to the Group. |
| (f) | The Company entered into a letter agreement dated January 18, 2022with R Agency to provide public relations services. Consideration for the services to be provided are $15,750 per month commencing at the date of execution of the letter agreement. The agreement will expire on July 16, 2022, unless terminated earlier upon 60 days written notice. |
The Healing Company Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2022
NOTE 8. OTHER COMMITMENTS (continued)
| (g) | On March 23, 2022, the Board of Directors approved a Board Service Agreement (the “Agreement”) and appointed Kay Koplovitz to the Board of Directors and as Chairman of the Board effective April 1, 2022. Under the agreement to commence April 1, 2022, Ms. Koplovitz will be paid an annual fee of $50,000 for Director’s services (the “Director’s Fee”), which shall be payable quarterly, in arrears, as long as Director continues to fulfill her duties and provide the services. As further retainer payment for the Director’s provision of the services and subject to approval by the Board, the Company shall grant to Director options (the “Option”) to purchase two-hundred fifty thousand (250,000) shares of common stock. The Option and underlying shares shall be issued in accordance with the terms of the Company’s stock incentive plan and its standard director’s stock option agreement, which shall vest in accordance with the terms and conditions outlined in the plan and agreement. The Option shall be exercisable at the fair market value of the Common Stock as determined by the Company’s 2021 409A valuation ($0.28) and shall have a term of ten years. The shares underlying the Option (“Shares”) shall vest ratably over the two (2) year period commencing on the Effective Date of the Agreement (“Vesting Start Date”) as follows: 1/8th of the total shares shall vest each quarter, such that 100% of the Shares shall be vested as of the second anniversary of the Vesting Start Date, provided that Director is still a Director for the Company on each such vesting date. At March 31, 2022 the Company has not yet adopted a stock option plan under which to grant the aforementioned stock options. |
NOTE 9 - SUBSEQUENT EVENTS
Subsequent to March 31, 2022, the Company received cash proceeds of $7,130,000 from non-US persons in respect to its private offering of Seed Preferred Shares for the purchase of 3,565,000 shares of Seed Preferred stock. The Private Offering of up to 5,000,000 Seed Preferred shares is fully subscribed, with $1,120,000 remaining proceeds expected to be received prior to the close of May 2022.
The Company’s management has reviewed all material subsequent events through the date these financial statements were issued in accordance with ASC 855-10.