The accompanying
notes are an integral part of these financial statements.
The accompanying
notes are an integral part of these financial statements.
The accompanying
notes are an integral part of these financial statements.
The accompanying notes
are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
1. ORGANIZATION AND LINE BUSINESS
The Company was originally incorporated under
the laws of the state of Nevada on February 25, 2013. The Company is devoting substantially all of its present efforts to establish
a new business and has had minimal revenues from operations to date.
On April 4, 2017, the Company entered into
a license agreement (the “License Agreement”) with Pharma GP APS, a Company controlled by our CEO. (“Pharma GP”)
and acquired an exclusive license to sell certain cosmetic products or ingredients covered by United States Patent No. US 8,637,075
in the territory of the United States.
As a result of the License Agreement, the Company
is currently marketing a line of skin care products on its website at www.vilacto.com. These products include, lotions, skin care
creams and gels, lip balms, foot creams and oils, and similar items.
On November 8, 2018, we entered into an Asset Purchase
Agreement with 9 Heroes APS, a Denmark corporation that is controlled by our CEO, Gert Andersen, to purchase certain patents applications
and intellectual property. We formed a new wholly owned subsidiary, Vilacto BioIP, LLC, to hold the assets acquired in the Asset
Purchase Agreement. (See Note 6 for additional details)
The patent applications and intellectual property
include the following:
-
United States Patent Application # 8,637,075 entitled “Colostrum
Composition”;
-
European Patent Application # EP2341916 entitled “Colostrum Composition”;
-
Hong Kong Patent Application # HK1159997 entitled “Colostrum Composition”;
and
-
Canada Patent Application # 2,773,277 entitled “Colostrum
Composition.”
We plan to use the assets acquired to expand the
reach of our opportunities in doing business internationally. By acquiring these patent applications, we are better presented as
a company with international IP solutions, which we believe will make us more attractive as an international biotech/pharma company
and developer.
2. BASIS OF PRESENTATION AND GOING CONCERN
The accompanying financial statements of the
Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission. In the opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the results of operations for the period presented have
been reflected herein.
Going concern
– The accompanying
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has incurred cumulative net losses of $7,858,045 since its inception,
has incurred recurring operating losses, has negative working capital at March 31, 2019 and requires capital for its contemplated
operational and marketing activities to take place. The Company’s ability to raise additional capital through future issuances
of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated
plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability
to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the
outcome of these aforementioned uncertainties.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
3. SUMMARY OF SIGNIFICANT POLICIES
This summary of significant accounting policies
of Vilacto Bio Inc. is presented to assist in understanding the Company’s financial statements. The financial statements
and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These
accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently
applied in the preparation of the financial statements.
Use of estimates
–
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review
the Company’s impairments and estimations of long-lived assets, allowances for uncollectible accounts, inventory valuation,
and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various
other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates under different assumptions or conditions.
Revenue Recognition
– We recognize revenue in accordance with ASC 606. On agreements for the products we sell on a standardized basis for sale
to the market at a point in time. We recognize revenue at the point in time that the customer obtains control of the good. We use
proof of delivery for large orders, whereas the delivery of most of our products is estimated based on historical averages of in-transit
periods (i.e., time between shipment and delivery).
In situations where arrangements include
customer acceptance provisions based on seller or customer-specified objective criteria, we recognize revenue when we have concluded
that the customer has control of the goods and that acceptance is likely to occur. We generally do not provide for anticipated
losses on point in time transactions prior to transferring control of the equipment to the customer.
For the years ended
March 31, 2019 and 2018 the Company reported revenues of $4,894 and $1,429 respectively, respectively.
Accounts Receivable
– Accounts
receivable is comprised of uncollateralized customer obligations due under normal trade terms. The Company performs ongoing credit
evaluation of its customers and management closely monitors outstanding receivables based on factors surrounding the credit risk
of specific customers, historical trends, and other information. The carrying amount of accounts receivable is reviewed periodically
for collectability. If management determines that collection is unlikely, an allowance that reflects management’s best estimate
of the amounts that will not be collected is recorded. Accounts receivable are presented net of an allowance for doubtful accounts
of $23 and $36 at March 31, 2019, and March 31, 2018, respectively.
Cash and cash equivalents
– For
purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term instruments with original
maturities of three months or less to be cash equivalents. There was $257,218 and $148,767 in cash and no cash equivalents as of
March 31, 2019, and March 31, 2018, respectively.
Concentration Risk
At times throughout
the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of March 31, 2019, the cash
balance in excess of the FDIC limits was $4,871. The Company has not experienced any losses in such accounts and believes it is
not exposed to any significant credit risk in these accounts.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
Fair Value of Financial Instruments
– The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective
fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale.
As required by the Fair Value Measurements
and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the
inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2)
inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable
inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The three levels of the fair value hierarchy
are described below:
Level 1: Unadjusted quoted prices
in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets
that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset
or liability;
Level 3: Prices or valuation techniques
that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market
activity).
Stock-based compensation
– The Company follows the
guidelines in FASB Codification Topic ASC 718-10 “
Compensation-Stock Compensation,
” which provides investors
and other users of financial statements with more complete and neutral financial information, by requiring that the compensation
cost relating to share-based payment transactions be recognized in the financial statements. That cost will be measured based on
the fair value of the equity or liability instruments issued. ASC 718-10 covers a wide range of share-based compensation arrangements,
including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase
plans. On November 15, 2018, our Board of Directors adopted a 2018 Incentive Plan (the “Plan”) The Plan is designed
to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of our
company by providing them the opportunity to acquire a proprietary interest in our company and to align their interests and efforts
to the long-term interests of our stockholders. As of March 31, 2019, the Company has reserved 9,850,000 shares of common
stock under the Plan.
Non-Employee Stock Based Compensation
– The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10,
at either the fair value of the services rendered, or the instruments issued in exchange for such services, whichever is more readily
determinable, using the measurement date guidelines enumerated in ASC 505-50. The Company may issue compensatory shares for services
including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative
consulting services.
Earnings (loss) per share
– The
Company reports earnings (loss) per share in accordance with Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) 260-10 “
Earnings Per Share,
” which provides for calculation
of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is computed
by dividing net income or loss available to common stockholders by the weighted average common shares outstanding for the period.
Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. The calculation
of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their
effect is anti-dilutive.
Long-lived Assets
– In accordance
with the Financial Accounting Standards Board ("FASB") Accounts Standard Codification (ASC) ASC 360-10, "Property,
Plant and Equipment," the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for
the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected
undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess
of the carrying amount of the asset over its estimated fair value.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
Derivative Financial
Instruments
– The Company accounts for derivative instruments in accordance with the provisions of ASC 815 - Derivatives
Hedging: Embedded Derivatives. ASC 815 establishes accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities.
The Company does not
use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms in agreements are reviewed to
determine whether or not they contain embedded derivatives that are required under ASC 815 to be accounted for and separated from
the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities is required to be
revalued at each reporting date, with the corresponding changes in fair value recorded in current period operating results.
Inventory
– Substantially
all inventory consists of finished goods and are valued based upon first-in first-out ("FIFO") cost, not in excess of
market. The cost of our inventory includes the amount we pay to our suppliers to acquire inventory, freight costs incurred in connection
with the delivery of product to our distribution centers. Net realizable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in marketing, selling and distribution. The Company evaluates potentially
excess and slow-moving inventories on a quarterly basis by evaluating turn rates, inventory levels and other factors, and records
lower of cost or market reserves for such identified excess and slow-moving inventories. As of March 31, 2019, and March 31, 2018,
no such reserve had been recorded.
Income taxes
–
The Company accounts for its income taxes in accordance with FASB Codification Topic ASC 740-10, “
Income Taxes
”,
which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the enactment date.
Segment Reporting
–
Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated
regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess
performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company's
core business.
Recently Issued Accounting Pronouncements
– In June 2018, the FASB issued ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee
Share-Based Payment Accounting," which modifies the accounting for share-based payment awards issued to nonemployees to largely
align it with the accounting for share-based payment awards issued to employees. ASU 2018-07 is effective is effective for fiscal
years beginning after December 15, 2018. We will plan to adopt ASU 2018-07 effective April 1, 2019. Upon adoption of the standard
is not expected to have an impact on our financial position or results of operations for the years ending March 31, 2019 and 2018.
In February 2016, the FASB issued ASU 2016-02,
“Leases” (“ASC 842”). The guidance requires lessees to recognize almost all leases on their balance sheet
as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases
to be classified as either operating or finance. Lessor accounting is similar to the current model, but updated to align with certain
changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for
real estate, is replaced with a new model applicable to both lessees and lessors. ASC 842 is effective for fiscal years beginning
after December 15, 2018.
We will plan to adopt ASC 842 effective April
1, 2019 using the optional transition method of recognizing a cumulative-effect adjustment to the opening balance of retained earnings
on April 1, 2019. Therefore, comparative financial information will not be adjusted and will continue to be reported under the
prior lease accounting guidance in ASC 840. We plan to elect the transition relief package of practical expedients, and as a result,
we will not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or
expired leases, and 3) whether lease origination costs qualified as initial direct costs. We will also elect the short-term lease
practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less.
The Company has evaluated all other recent
accounting pronouncements and believes that none of them will have a material effect on the Company's financial position, results
of operations or cash flows.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
4. INVENTORY
Inventory consist of the following as of March
31, 2019 and March 31, 2018:
|
|
March
31, 2019
|
|
March
31, 2018
|
Raw materials
|
|
$
|
—
|
|
|
$
|
—
|
Finished Goods
|
|
|
119,045
|
|
|
|
100,413
|
Total
|
|
$
|
119,045
|
|
|
$
|
100,413
|
5. PREPAID EXPENSES
Prepaid expenses consist of the following as
of March 31, 2019 and March 31, 2018:
|
|
March 31, 2019
|
|
March 31, 2018
|
Prepaid Marketing
|
|
$
|
—
|
|
|
$
|
59,568
|
Total prepaid expenses
|
|
$
|
—
|
|
|
$
|
59,568
|
6. INTANGIBLE ASSETS
Patents and trademarks and other intangible
assets are capitalized at their historical cost and are amortized over their estimated useful lives.
Intangible assets consist of the following
as of March 31, 2019 and March 31, 2018:
|
|
March 31, 2019
|
|
March 31, 2018
|
Patents and trademarks
|
|
$
|
135,850
|
|
|
$
|
920
|
Website
|
|
|
21,394
|
|
|
|
—
|
Less: accumulated amortization
|
|
|
(7,164
|
)
|
|
|
(24)
|
Intangible assets, net of accumulated amortization
|
|
$
|
150,080
|
|
|
$
|
896
|
Amortization expense for the years ended March
31, 2019 and 2018 was $7,164 and $24, respectively.
On November 8, 2018, we entered into an Asset Purchase
Agreement with 9 Heroes APS, a Denmark corporation that is controlled by our CEO, Gert Andersen, to purchase certain patents applications
and intellectual property. We formed a new wholly owned subsidiary, Vilacto BioIP, LLC, to hold the assets acquired in the Asset
Purchase Agreement.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
The patent applications and intellectual property
include the following:
-
United States Patent Application # 8,637,075 entitled “Colostrum
Composition”;
-
European Patent Application # EP2341916 entitled “Colostrum Composition”;
-
Hong Kong Patent Application # HK1159997 entitled “Colostrum Composition”;
and
-
Canada Patent Application # 2,773,277 entitled “Colostrum
Composition.”
These
patent applications are describing the particle, development and use, of a nanoparticle composition comprised of (1) colostrum
and (2) at least one agent selected from a group of hydrocolloids
,
such as hyaluronic acid, which is useable for a wide range of applications.
We also secured domains names including Lactoactive and Vilact.
In consideration for the assets, we agreed to pay
9 Heroes APS the purchase price of $3,360,000 USD, payable in an 8% secured promissory note (the “Note”) with a face
amount of $2,000,000 and the balance in our common stock, consisting of 8,500,000 shares of our common stock. We closed the transaction
on November 8, 2018.
In accordance with US GAAP the Company recorded the
assets on the books of the Company at costs basis due to fact that our CEO commonly controlled both entities involved in the transaction.
The difference between the historical costs basis of the assets and the fair value of the consideration paid has been recorded
as a loss on assets acquired from related parties of $3,242,070.
The
Note matures in five years from execution. Interest is due and payable on a semiannual basis with the first payment due on January
1, 2019 and future payments due every six-months afterwards until maturity. At the sole option of the note holder interest may
be converted into the Company’s common stock. The conversion price shall be equal to the average of the closing market prices
for the Company’s common stock on the OTCQB during the five (5) trading days immediately preceding the due date for such
payment.
The note is secured by the current and future assets of the Company.
We plan to use the assets acquired to expand the
reach of our opportunities in doing business internationally. We currently only have a license from Pharma GP to reach customers
in the United States. By acquiring these patent applications, we are better presented as a company with international IP solutions,
which we believe will make us more attractive as an international biotech/pharma company and developer.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
7. CONVERTIBLE NOTES PAYABLE
Convertible Notes Payable at consists of the following:
|
|
March 31,
|
|
March 31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Auctus Fund, LLC
On February 26, 2018, we entered into a Securities
Purchase Agreement (the “Auctus SPA”), under which we agreed to sell a 12% convertible promissory note in an aggregate
principal amount of $167,750 (the “Auctus Note”) to Auctus Fund, LLC (“Auctus”). The Auctus Note bears
interest at a rate of 12% per annum and matured on November 26, 2018. The net proceeds of the sale of the Auctus Note, after deducting
the expenses payable, were $150,000.
At any time after the issue date of the Auctus
Note, Auctus has the option to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest
of the Auctus Note into shares of our common stock at the Conversion Price. The “Conversion Price” is the lesser of
(i) the lowest trading price of our common stock during the twenty-five-day trading period prior to the issue date of the Auctus
Note and (ii) 50% of the lowest trading price of our common stock during the twenty-five-day trading period prior to the conversion.
The Conversion Price is subject to further reduction upon certain events specified in the Auctus Note.
We have the right to prepay the Auctus Note
at any time until the 180th calendar day after the issue date of the Auctus Note, in an amount equal to 150% (or 135% if we prepay
the Auctus Note on or before the date that is 90 days after the issue date of the Auctus Note) of the outstanding balance of the
Auctus Note (including principal and accrued and unpaid interest). We may not prepay the Auctus Note after the 180th calendar day
after the issue date of the Auctus Note. We will be subject to a liquidated damages charge of 25% of the outstanding principal
amount of the Auctus Note if we effect certain exchange transactions in accordance with, based upon or related or pursuant to Section
3(a)(10) of the Securities Act. In addition, the Auctus Note grants Auctus the right to update the terms of the Auctus SPA and
the Auctus Note to incorporate the terms of any future transaction document related to a security issuance by us to a third party
that are more favorable to the third party than the terms of the Auctus SPA and the Auctus Note.
Any amounts due and payable to Auctus under
the terms of the Auctus Note, including any payment on an event of default, default interest, or agreed upon liquidated damages
may, at the Auctus's option, be converted into shares of our common stock at the Conversion Price.
Pursuant to a Registration Rights Agreement,
we are required to register 30,000,000 shares into which the Auctus Note may be converted.
As of March 31, 2019 the note holder had converted
$87,352 in Principal and $25,417 in interest and fees into 74,645,400 shares of the Company’s common stock. (See note 9 for
additional details.)
During the year ended March 31, 2019 the Company
recorded interest of $23,597.
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $147,472 during the year ended March
31, 2019.
|
$
|
80,398
|
|
167,750
|
Unamortized debt discount
|
|
-
|
|
(147,472)
|
Total, net of unamortized discount
|
|
80,398
|
|
20,278
|
EMA Financial, LLC
On February 23, 2018 we entered into a Securities Purchase Agreement
(“EMA SPA”) with EMA Financial, LLC, a Delaware limited liability company (“EMA”), pursuant to which we
issued and sold to EMA a convertible promissory note, dated February 23, 2018 in the principal amount of $125,000 (the “EMA
Note”). In connection with the foregoing, we also entered into a Registration Rights Agreement with the Purchaser dated February
23, 2018 (the “Registration Rights Agreement”).
The EMA Note, as amended, was due February 23, 2019 and bears interest
at the rate of 12% per annum. All principal and accrued interest on the EMA Note is convertible into shares of our common stock
at the election of EMA at any time at a conversion price equal to the lesser of (i) the trading price for our common stock on the
trading day prior to the closing date of the EMA Note, or (ii) a 50% discount to the lowest trading or lowest closing bid price
for our common stock during the 25-trading day period immediately prior to conversion. We have no right to prepay the EMA Note
more than 180 days after the closing date.
The EMA Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties. As a result of claimed defaults, the promissory notes discount
conversion rate was increased to a 80% discount to the lowest trading or lowest closing bid price for our common stock during the
25-trading day period immediately prior to conversion
On July 6, 2018, the Company executed an amendment
to the promissory note to cure certain events of default in which it agreed to increase the principal balance of the note by $37,500
and pay $25,000 in principal to the lender within 5 days of execution of the amendment. The company treated the amendment as a
debt modification under ASC 470 and recorded a corresponding loss on debt modification of $37,500.
During the year ended March 31, 2019 the Company incurred additional
penalties of approximately $120,533 which were added to the principal total owed under the promissory note.
As of March 31, 2019, the note holder had converted
$146,316 in Principal and $16,830 in interest and fees into 115,350,000 shares of the Company’s common stock. (See note 9
for additional details.)
During the year ended March 31, 2019 the Company
recorded interest of $13,614.
In July 2018, the Company made a cash payment of principal and interest
of $60,000 on the then outstanding balance.
The aggregate issue discount feature has been accreted and charged
to interest expenses as a financing expense in the amount of $150,171 during the year ended March 31, 2019.
|
|
76,717
|
|
125,000
|
Unamortized debt discount
|
|
-
|
|
(112,671)
|
Total, net of unamortized discount
|
|
76,717
|
|
12,329
|
|
|
|
|
|
Adar Bays, LLC July 2, 2018 Secured Convertible
Note
On July 2, 2018 we entered into a Secured Convertible
note with Adar Bays, LLC (“Adar”) pursuant to which we issued a convertible promissory note, dated July 2, 2018 in
the principal amount of $150,000 (the “July 2, 2018 Adar Note”).
The July 2, 2018 Adar Note is due July 2, 2019
and bears interest at the rate of 10% per annum. All principal and accrued interest on the July 2, 2018 Adar Note is convertible
into shares of our common stock at the election of Adar six months after the issuance date at a conversion price equal to a 50%
discount to the lowest trading or lowest closing bid price for our common stock during the 25-trading day period immediately prior
to conversion.
We can pay the note in cash within the first
six months of issuance, we have no right to prepay the July 2, 2018 Adar Note six months and one day after issuance.
The July 2, 2018 Adar Note contains customary
default events which, if triggered and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $9,314.
As of March 31, 2019, the note holder had converted
$150,000 in Principal into 90,272,841 shares of the Company’s common stock. (See note 9 for additional details.)
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $150,000 during the year ended March
31, 2019.
|
|
-
|
|
-
|
Unamortized debt discount
|
|
-
|
|
-
|
Total, net of unamortized discount
|
|
-
|
|
-
|
|
|
|
|
|
GS Capital Partners, LLC Convertible Note
On July 11, 2018 we entered into a Convertible note with GS Capital
Bays, LLC (“GS”) pursuant to which we issued a convertible promissory note, dated July 11, 2018 in the principal amount
of $110,000 (the “GS Note”).
The GS Note is due July 11, 2019 and bears interest at the rate
of 10% per annum. All principal and accrued interest on the GS Note is convertible into shares of our common stock at the election
of GS at any time at a conversion price equal to a 50% discount to the lowest trading or lowest closing bid price for our common
stock during the 25-trading day period immediately prior to conversion.
We have the right to prepay the GS Note within 60 days of the closing
date at a premium of 125% of all amounts owed to GS and at a premium of 135% if prepaid more than 60 but less than 120 days following
the closing date, at a premium of 145% if prepaid more than 120 but less than 180 days following the closing date. We have no right
to prepay the GS Note more than 180 days after the closing date.
The GS Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $7,113
As of March 31, 2019, the note holder had converted
$92,000 in Principal and $5,733 in interest and fees into 65,369,262 shares of the Company’s common stock. (See note 9 for
additional details.)
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $92,000 during the year ended March
31, 2019.
|
|
18,000
|
|
-
|
Unamortized debt discount
|
|
(18,000)
|
|
-
|
Total, net of unamortized discount
|
|
-
|
|
-
|
|
|
|
|
|
Eagle Equities, LLC Convertible Note
On July 20, 2018 we entered into a Convertible note with Eagle Equities,
LLC (“Eagle”) pursuant to which we issued a convertible promissory note, dated July 20, 2018 in the principal amount
of $100,000 (the “Eagle Note”).
The Eagle Note is due July 20, 2019 and bears interest at the rate
of 10% per annum. All principal and accrued interest on the Eagle Note is convertible into shares of our common stock at the election
of Eagle at any time at a conversion price equal to a 50% discount to the lowest trading or lowest closing bid price for our common
stock during the 25-trading day period immediately prior to conversion.
We have the right to prepay the Eagle Note within 90 days of the
closing date at a premium of 135% of all amounts owed to GS and at a premium of 150% if prepaid more than 90 but less than 180
days following the closing date. We have no right to prepay the Eagle Note more than 180 days after the closing date.
The Eagle Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $5,913.
As of March 31, 2019, the note holder had converted
$100,000 in Principal and $5,911 in interest and fees into 68,419,200 shares of the Company’s common stock. (See note 9 for
additional details.)
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $100,000 during the year ended March
31, 2019.
|
|
-
|
|
-
|
Unamortized debt discount
|
|
-
|
|
-
|
Total, net of unamortized discount
|
|
-
|
|
-
|
|
|
|
|
|
Adar Bays, LLC July 23, 2018 Secured Convertible
Note
On July 23, 2018 we entered into a Secured Convertible note with
Adar Bays, LLC (“Adar”) pursuant to which we issued a convertible promissory note, dated July 23, 2018, in the principal
amount of $50,000 (the “Adar Note”).
The Adar Note is due July 23, 2019 and bears interest at the rate
of 10% per annum. All principal and accrued interest on the Adar Note is convertible into shares of our common stock at the election
of Adar at any time at a conversion price equal to a 50% discount to the lowest trading or lowest closing bid price for our common
stock during the 25-trading day period immediately prior to conversion.
We have the right to prepay the Adar Note within 90 days of the
closing date at a premium of 135% of all amounts owed to Adar and at a premium of 150% if prepaid more than 90 but less than 180
days following the closing date. We have no right to prepay the Adar Note more than 180 days after the closing date.
The Adar Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $3,438.
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $34,384 during the year ended March
31, 2019.
|
|
50,000
|
|
-
|
Unamortized debt discount
|
|
(15,616)
|
|
-
|
Total, net of unamortized discount
|
|
34,384
|
|
-
|
|
|
|
|
|
Power UP Lending Group Convertible Note
– October 15, 2018
On October 15, 2018 we entered into a Convertible note with Power
UP Lending Group LTD (“Power UP”) pursuant to which we issued a convertible promissory note, dated October 15, 2018
in the principal amount of $128,000 (the “Power UP Note”).
The Power UP Note is due October 15, 2019 and bears interest at
the rate of 8% per annum. All principal and accrued interest on the Power UP Note is convertible into shares of our common stock
180 days following October 15, 2018 at a conversion price equal to a 37% discount to the lowest trading or lowest closing bid price
for our common stock during the 15-trading day period immediately prior to conversion.
We have the right to prepay the Power UP Note within 30 days of
the closing date at a premium of 112% of all amounts owed to Power UP and at a premium of 117% if prepaid more than 31 but less
than 60 days following the closing date and at a premium of 122% if prepaid more than 61 but less than 90 days following the closing
date and at a premium of 127% if prepaid more than 91 but less than 120 days following the closing date and at a premium of 132%
if prepaid more than 121 but less than 150 days following the closing date and at a premium of 137% if prepaid more than 151 but
less than 180 days following the closing date. We have no right to prepay the Power UP Note more than 180 days after the closing
date.
The Power UP Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $4,685.
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $58,819 during the year ended March
31, 2019.
|
|
128,000
|
|
-
|
Unamortized debt discount
|
|
(69,181)
|
|
-
|
Total, net of unamortized discount
|
|
58,819
|
|
-
|
|
|
|
|
|
Power UP Lending Group Convertible Note
– November 6, 2018
On October 15, 2018 we entered into a Convertible note with Power
UP Lending Group LTD (“Power UP”) pursuant to which we issued a convertible promissory note, dated October 15, 2018,
in the principal amount of $53,000 (the “Power UP Note-2”).
The Power UP Note-2 is due November 6, 2019 and bears interest at
the rate of 8% per annum. All principal and accrued interest on the Power UP Note-2 is convertible into shares of our common stock
180 days following October 15, 2018 at a conversion price equal to a 39% discount to the lowest trading or lowest closing bid price
for our common stock during the 15-trading day period immediately prior to conversion.
We have the right to prepay the Power UP Note within 30 days of
the closing date at a premium of 112% of all amounts owed to Power UP and at a premium of 117% if prepaid more than 31 but less
than 60 days following the closing date and at a premium of 122% if prepaid more than 61 but less than 90 days following the closing
date and at a premium of 127% if prepaid more than 91 but less than 120 days following the closing date and at a premium of 132%
if prepaid more than 121 but less than 150 days following the closing date and at a premium of 137% if prepaid more than 151 but
less than 180 days following the closing date. We have no right to prepay the Power UP Note more than 180 days after the closing
date.
The Power UP Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $1,684.
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $30,137 during the year ended March
31, 2019.
|
|
53,000
|
|
-
|
Unamortized debt discount
|
|
(30,137)
|
|
-
|
Total, net of unamortized discount
|
|
22,863
|
|
-
|
|
|
|
|
|
Adar Bays, LLC July 2, 2018 Secured Convertible
Note- Back end note
On July 2, 2018 we entered into a Secured Convertible
note with Adar Bays, LLC (“Adar”) pursuant to which we issued a convertible promissory note, dated July 2, 2018, in
the principal amount of $150,000 (the “July 2, 2018 Adar Back end Note”). On off-setting note was issued by the lender
on July 2, 2018, which was released upon funding the July 2, 2018 Adar Back Note on March 2, 2019.
The July 2, 2018 Adar Back Note is due July
2, 2019 and bears interest at the rate of 10% per annum. All principal and accrued interest on the July 2, 2018 Adar Note is convertible
into shares of our common stock at the election of Adar six months after the issuance date at a conversion price equal to a 50%
discount to the lowest trading or lowest closing bid price for our common stock during the 25-trading day period immediately prior
to conversion.
We can pay the note in cash within the first
six months of issuance, we have no right to prepay the July 2, 2018 Adar Note six months and one day after issuance.
The July 2, 2018 Adar Note contains customary
default events which, if triggered and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $941.
As of March 31, 2019, the note holder had converted
$57,807 in Principal into 51,813,209 shares of the Company’s common stock. (See note 9 for additional details.)
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $57,807 during the year ended March
31, 2019.
|
|
92,193
|
|
-
|
Unamortized debt discount
|
|
(92,183)
|
|
-
|
Total, net of unamortized discount
|
|
-
|
|
-
|
|
|
|
|
|
Adar Bays, LLC July 23, 2018 Secured Convertible
Note – Back End Note
On July 23, 2018 we entered into a Secured Convertible note with
Adar Bays, LLC (“Adar”) pursuant to which we issued a convertible promissory note, dated July 23, 2018, in the principal
amount of $50,000 (the “July 23, 2018 Adar Back End Note”). On off-setting note was issued by the lender on July 2,
2018, which was released upon funding the July 23, 2018 Adar Back Note on March 20, 2019.
The July 23, 2018 Adar Back End Note is due July 23, 2019 and bears
interest at the rate of 10% per annum. All principal and accrued interest on the Adar Note is convertible into shares of our common
stock at the election of Adar at any time at a conversion price equal to a 50% discount to the lowest trading or lowest closing
bid price for our common stock during the 25-trading day period immediately prior to conversion.
We have the right to prepay the Adar Note within 90 days of the
closing date at a premium of 135% of all amounts owed to Adar and at a premium of 150% if prepaid more than 90 but less than 180
days following the closing date. We have no right to prepay the Adar Note more than 180 days after the closing date.
The Adar Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $151.
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $1,507 during the year ended March 31,
2019.
|
|
50,000
|
|
-
|
Unamortized debt discount
|
|
(48,493)
|
|
-
|
Total, net of unamortized discount
|
|
1,507
|
|
-
|
|
|
|
|
|
Eagle Equities, LLC Convertible Note –
Back End Note
On July 20, 2018 we entered into a Convertible note with Eagle Equities,
LLC (“Eagle”) pursuant to which we issued a convertible promissory note, dated July 20, 2018, in the principal amount
of $100,000 (the “Eagle Back End Note”). On off-setting note was issued by the lender on July 20, 2018, which was released
upon funding the July 20, 2018 Eagle Back End Note on March 20, 2019.
The Eagle Back End Note is due July 20, 2019 and bears interest
at the rate of 10% per annum. All principal and accrued interest on the Eagle Note is convertible into shares of our common stock
at the election of Eagle at any time at a conversion price equal to a 50% discount to the lowest trading or lowest closing bid
price for our common stock during the 25-trading day period immediately prior to conversion.
We have the right to prepay the Eagle Note within 90 days of the
closing date at a premium of 135% of all amounts owed to GS and at a premium of 150% if prepaid more than 90 but less than 180
days following the closing date. We have no right to prepay the Eagle Note more than 180 days after the closing date.
The Eagle Note contains customary default events which, if triggered
and not timely cured, will result in default interest and penalties.
During the year ended March 31, 2019 the Company
recorded interest of $240.
As of March 31, 2019, the note holder had converted
$30,000 in Principal and $29 in interest and fees into 33,072,177 shares of the Company’s common stock. (See note 9 for additional
details.)
The aggregate issue discount feature
has been accreted and charged to interest expenses as a financing expense in the amount of $30,000 during the year ended March
31, 2019.
|
|
70,000
|
|
-
|
Unamortized debt discount
|
|
(70,000)
|
|
-
|
Total, net of unamortized discount
|
|
-
|
|
-
|
|
|
|
|
|
Total
|
$
|
274,688
|
|
32,607
|
8. FAIR VALUE OF FINANCIAL
INSTRUMENTS AND DERIVATIVE LIABILITIES
The carrying value of cash, accounts
payable and accrued expenses, and debt (See Note 7) approximate their fair values because of the short-term nature of these instruments.
Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.
The carrying amount of the Company’s long-term debt is also stated at fair value of $2,000,000 since the stated rate of interest
approximates market rates.
Fair value is defined as the exchange
price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques
used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes
a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.
|
●
|
|
Level 1
|
|
Quoted prices in active markets for identical
assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving
identical assets.
|
|
●
|
|
Level 2
|
|
Quoted prices for similar assets and liabilities
in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived
valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically
obtained from readily-available pricing sources for comparable instruments.
|
|
●
|
|
Level 3
|
|
Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.
|
The following table presents the
derivative financial instruments, the Company’s only financial liabilities measured and recorded at fair value on the Company’s
balance sheets on a recurring basis, and their level within the fair value hierarchy as of March 31, 2019:
|
|
Amount
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
Embedded conversion derivative liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,227,041
|
Warrant and option derivative liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,227,041
|
The embedded conversion feature
in the convertible debt instruments that the Company issued (See Note 7), was convertible at issuance which qualified them as a
derivative instrument since the number of shares issuable under the note is indeterminate based on guidance in ASC Topic No. 815-15,
“Derivatives and Hedging (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately
account for the conversion features as an embedded derivative contained in the Company’s convertible debt. This convertible
debt tainted all other equity linked instruments including all outstanding non-employee options and warrants on the date that the
instrument became convertible. The Company is required to carry the embedded derivative on its balance sheet at fair value and
account for any unrealized change in fair value as a component of results of operations.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
The Black-Scholes model utilized
the following inputs to value the derivative liabilities at the date of issuance of the convertible note through March 31, 2018
which was the date the derivative liability was terminated:
Fair value assumptions:
|
|
February 23, 2018 through March 31, 2019
|
Risk free interest rate
|
|
|
2.02-2.72%
|
Expected term (years)
|
|
|
0.01-1
|
Expected volatility
|
|
|
170.90%-249.85%
|
Expected dividends
|
|
|
0%
|
The following table presents a
summary of the Company’s derivative liabilities associated with its convertible notes as of March 31, 2019:
|
|
Amount
|
Balance March 31, 2017
|
|
$
|
—
|
Debt discount originated from derivative liabilities
|
|
|
262,500
|
Initial loss recorded
|
|
|
170,924
|
Adjustment to derivative liability due to debt settlement
|
|
|
—
|
Change in fair market value of derivative liabilities
|
|
|
296,313
|
Balance March 31, 2018
|
|
$
|
729,737
|
Debt discount originated from derivative liabilities
|
|
|
824,050
|
Initial loss recorded
|
|
|
755,733
|
Adjustment to derivative liability due to debt settlement
|
|
|
(1,791,931)
|
Change in fair market value of derivative liabilities
|
|
|
709,452
|
Balance March 31, 2019
|
|
$
|
1,227,041
|
9. LOANS PAYABLE
On January 8, 2018, the Company and four lenders
assigned the rights and obligations of a total of $174,500 in promissory notes to a new lender. All the notes now bear interest
at a rate of 5% per annum and are due within two business days of demand notice all other terms we unchanged. During the year ended
March 31, 2019 the Company recorded interest of $10,655.
10. STOCKHOLDERS’ EQUITY
Overview
On January 28, 2019, the Company filed a certificate
of amendment (the “Amendment”) with the Nevada Secretary of State to increase the Company’s authorized common
stock, par value $0.001 per share, from 1,125,000,000 shares to 4,000,000,000 shares. The Amendment also created a class of 10,000,000
shares of blank check preferred stock, par value $0.001 per share.
On January 28, 2019, pursuant to Article III of our
Articles of Incorporation, our Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock,
consisting of up 3,000,000 shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock
will participate on an equal basis per-share with holders of our common stock in any distribution upon winding up, dissolution,
or liquidation. Holders of Series A Preferred Stock are entitled to vote together with the holders of our common stock on all matters
submitted to shareholders at a rate of 1,000 votes for each share held. Holders of Series A Preferred Stock are entitled to convert
each share held for 10 shares of common stock.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
As of March 31, 2019, the Company is authorized
to issue 4,000,000,000 shares of $0.001 par value common stock. All common stock shares have equal voting rights, are non-assessable
and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock
could, if they choose to do so, elect all of the directors of the Company.
As of March 31, 2019, there were 597,064,715
shares of common stock issued and outstanding.
As of March 31, 2019, there were 3,000,000
shares of Preferred stock issued and outstanding.
Issuance of Preferred stock
On January 28, 2019, we issued to Mr. Gert Andersen
3,000,000 shares of our newly created Series A Preferred Stock in exchange for 30,000,000 shares of common stock held by Mr. Andersen.
Termination of Stock purchase agreement
– November 8, 2018
As previously disclosed, on April 19, 2017, we entered
into a Stock Purchase Agreement (the “Purchase Agreement”) with Pharma GP APS, a Denmark corporation (“Pharma
GP”) and its sole shareholder, 9 Heroes APS, a Denmark corporation, pursuant to which we agreed to purchase all of the outstanding
shares of Pharma GP for the purchase price of $6,000,000.00, payable as $3,000,000.00 in cash and the balance in shares of our
common stock.
The closing of the Purchase Agreement was originally
scheduled to occur on May 31, 2017; however, we have been unable to raise money needed to pay the purchase price under the Purchase
Agreement; As a result of the difficulties in raising capital to finance the Purchase Agreement transaction, the parties have decided
to terminate and release each other and otherwise settle, compromise, dispose of, and release with finality, all claims, demands
and causes of action, arising out of the Purchase Agreement dated April 19, 2017.
As such, on November 8, 2018, the parties entered
into a Termination and Release Agreement (the “Termination Agreement”) to terminate the Purchase Agreement and release
each other from the obligations under the Purchase Agreement.
Stock issued for services.
On December 3, 2018, the Company issued a total of
1,500,000 shares of the Company’s common stock to a consultant for services to be rendered over 12 months. The shares were
valued at $0.115 per share or $172,500. The Company will record the expense evenly over the 12 month service period. During the
year ended March 31, 2019 the Company recorded $69,000 as professional fees expense.
On December 11, 2018, the Company issued a total
of 6,000,000 shares of the Company’s common stock to three directors of the Company for services rendered. The shares were
evenly distributed and as a result each director received 2,000,000 shares. The shares were valued at $0.0525 per share or $315,000
which was recorded as professional fees expense.
On March 20, 2019, the Company issued a total of
40,909,089 shares of the Company’s common stock to three directors of the Company for services rendered. The shares were
evenly distributed and as a result each director received 13,636,363 shares. The shares were valued at $0.0022 per share or $90,000
which was recorded as professional fees expense.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
Stock issued upon conversion of debts.
The following table presents a summary
of the Company’s debt conversions associated with its convertible notes during the year ended March 31, 2019:
Date of conversion
|
|
Effective conversion price
|
|
Principal and interest converted
|
|
Shares issued upon conversion of debts
|
11/20/2018
|
|
|
|
0.0300
|
|
|
|
5,996
|
|
|
|
200,000
|
11/23/2018
|
|
|
|
0.0600
|
|
|
|
6,000
|
|
|
|
100,000
|
11/26/2018
|
|
|
|
0.0455
|
|
|
|
6,370
|
|
|
|
140,000
|
12/4/2018
|
|
|
|
0.0182
|
|
|
|
10,920
|
|
|
|
600,000
|
12/7/2018
|
|
|
|
0.0132
|
|
|
|
33,100
|
|
|
|
2,500,000
|
12/11/2018
|
|
|
|
0.0331
|
|
|
|
13,240
|
|
|
|
400,000
|
12/20/2018
|
|
|
|
0.0145
|
|
|
|
7,250
|
|
|
|
500,000
|
1/4/2019
|
|
|
|
0.0030
|
|
|
|
7,500
|
|
|
|
2,500,000
|
1/7/2019
|
|
|
|
0.0060
|
|
|
|
4,800
|
|
|
|
800,000
|
1/10/2019
|
|
|
|
0.0075
|
|
|
|
15,000
|
|
|
|
2,000,000
|
1/18/2019
|
|
|
|
0.0060
|
|
|
|
4,800
|
|
|
|
800,000
|
1/23/2019
|
|
|
|
0.0075
|
|
|
|
21,063
|
|
|
|
2,808,401
|
1/24/2019
|
|
|
|
0.0075
|
|
|
|
15,771
|
|
|
|
2,102,777
|
1/29/2019
|
|
|
|
0.0053
|
|
|
|
6,384
|
|
|
|
1,200,000
|
1/29/2019
|
|
|
|
0.0043
|
|
|
|
10,675
|
|
|
|
2,500,000
|
1/30/2019
|
|
|
|
0.0045
|
|
|
|
15,000
|
|
|
|
3,333,333
|
2/6/2019
|
|
|
|
0.0014
|
|
|
|
2,880
|
|
|
|
2,000,000
|
2/6/2019
|
|
|
|
0.0018
|
|
|
|
7,385
|
|
|
|
4,102,778
|
2/6/2019
|
|
|
|
0.0013
|
|
|
|
8,288
|
|
|
|
6,400,000
|
2/7/2019
|
|
|
|
0.0018
|
|
|
|
11,540
|
|
|
|
6,411,111
|
2/7/2019
|
|
|
|
0.0018
|
|
|
|
5,699
|
|
|
|
3,165,833
|
2/8/2019
|
|
|
|
0.0018
|
|
|
|
11,366
|
|
|
|
6,314,194
|
2/11/2019
|
|
|
|
0.0018
|
|
|
|
8,026
|
|
|
|
4,458,889
|
2/12/2019
|
|
|
|
0.0014
|
|
|
|
5,760
|
|
|
|
4,000,000
|
2/12/2019
|
|
|
|
0.0013
|
|
|
|
9,639
|
|
|
|
7,650,000
|
2/13/2019
|
|
|
|
0.0018
|
|
|
|
14,491
|
|
|
|
8,050,556
|
2/13/2019
|
|
|
|
0.0018
|
|
|
|
9,513
|
|
|
|
5,284,722
|
2/14/2019
|
|
|
|
0.0018
|
|
|
|
15,573
|
|
|
|
8,651,667
|
2/19/2019
|
|
|
|
0.0018
|
|
|
|
14,817
|
|
|
|
8,231,667
|
2/19/2019
|
|
|
|
0.0014
|
|
|
|
9,216
|
|
|
|
6,400,000
|
2/19/2019
|
|
|
|
0.0018
|
|
|
|
10,586
|
|
|
|
5,881,172
|
2/21/2019
|
|
|
|
0.0018
|
|
|
|
15,557
|
|
|
|
8,642,778
|
2/21/2019
|
|
|
|
0.0014
|
|
|
|
14,137
|
|
|
|
10,116,215
|
2/21/2019
|
|
|
|
0.0013
|
|
|
|
10,836
|
|
|
|
8,600,000
|
2/26/2019
|
|
|
|
0.0015
|
|
|
|
11,953
|
|
|
|
8,243,268
|
2/27/2019
|
|
|
|
0.0011
|
|
|
|
6,480
|
|
|
|
6,000,000
|
2/27/2019
|
|
|
|
0.0014
|
|
|
|
10,608
|
|
|
|
7,577,379
|
2/28/2019
|
|
|
|
0.0008
|
|
|
|
8,131
|
|
|
|
10,100,000
|
3/4/2019
|
|
|
|
0.0012
|
|
|
|
13,809
|
|
|
|
12,007,730
|
3/5/2019
|
|
|
|
0.0012
|
|
|
|
14,046
|
|
|
|
12,213,852
|
3/5/2019
|
|
|
|
0.0008
|
|
|
|
9,821
|
|
|
|
12,200,000
|
3/5/2019
|
|
|
|
0.0012
|
|
|
|
13,837
|
|
|
|
12,032,165
|
3/6/2019
|
|
|
|
0.0009
|
|
|
|
12,880
|
|
|
|
14,000,000
|
3/6/2019
|
|
|
|
0.0011
|
|
|
|
13,816
|
|
|
|
12,014,009
|
3/8/2019
|
|
|
|
0.0007
|
|
|
|
10,000
|
|
|
|
15,231,130
|
3/8/2019
|
|
|
|
0.0011
|
|
|
|
10,633
|
|
|
|
9,246,374
|
3/11/2019
|
|
|
|
0.0008
|
|
|
|
13,765
|
|
|
|
17,100,000
|
3/13/2019
|
|
|
|
0.0006
|
|
|
|
1,813
|
|
|
|
2,931,643
|
3/13/2019
|
|
|
|
0.0012
|
|
|
|
8,092
|
|
|
|
7,036,426
|
3/14/2019
|
|
|
|
0.0012
|
|
|
|
15,000
|
|
|
|
13,043,478
|
3/18/2019
|
|
|
|
0.0009
|
|
|
|
17,620
|
|
|
|
19,152,700
|
3/18/2019
|
|
|
|
0.0011
|
|
|
|
20,258
|
|
|
|
17,630,730
|
3/19/2019
|
|
|
|
0.0008
|
|
|
|
16,100
|
|
|
|
20,000,000
|
3/20/2019
|
|
|
|
0.0012
|
|
|
|
24,136
|
|
|
|
20,987,826
|
3/20/2019
|
|
|
|
0.0011
|
|
|
|
15,000
|
|
|
|
14,285,714
|
3/22/2019
|
|
|
|
0.0008
|
|
|
|
16,088
|
|
|
|
19,152,700
|
3/25/2019
|
|
|
|
0.0011
|
|
|
|
19,258
|
|
|
|
18,340,504
|
3/26/2019
|
|
|
|
0.0010
|
|
|
|
18,671
|
|
|
|
17,781,905
|
3/26/2019
|
|
|
|
0.0007
|
|
|
|
18,375
|
|
|
|
25,000,000
|
3/27/2019
|
|
|
|
—
|
|
|
|
15,029
|
|
|
|
—
|
Total
|
|
|
|
|
|
|
$
|
724,396
|
|
|
|
480,155,626
|
18,786,463 shares of common stock were not yet issued
on March 27, 2019 conversion. The converted amount is thus included in stock payable at March 31, 2019.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
11. RELATED PARTY TRANSACTIONS
In connection with an assumption of the debt
agreement the Company executed a $32,608 promissory note with Mr. Anderson which bears interest at a rate of 10% per annum. During
the year ended March 31, 2019 the Company recorded interest of $3,261.
During the year ended March 31, 2019, Gert
Anderson, the President and CEO of the Company advanced $17,740 to the Company to pay expenses on behalf of the Company. As of
March 31, 2019, $68,106 in advances remain outstanding. The advances bear no interest, are unsecured, and are due on demand.
On July 16, 2018 the Company made a payment of $133,284 to Pharma
GP, an entity controlled by our CEO to settle amounts owned under outstanding accounts payable.
12. ROYALTY AGREEMENT
License agreement
On April 4, 2017, we entered into a license
agreement (the “License Agreement”) with Pharma GP APS, a Company controlled by our CEO. (“Pharma GP”)
and acquired an exclusive license to sell certain cosmetic products or ingredients covered by United States Patent No. US 8,637,075
in the territory of the United States.
For the license, we agreed to pay to GP a royalty
of eight percent (8%) on the selling price (irrespective of any taxes, custom duties, costs of insurance, transportation costs
or other costs) for all licensed product we sell in the United States (if in excess of the agreed minimum royalty) or pay the agreed
minimum royalty of $10,000 per month. During the year ended March 31, 2019, the Company recorded royalty expense of $80,000 related
to this agreement.
Under the License Agreement, we have the ability
to sublicense to third parties under the royalty arrangement described above.
On November 8, 2018, the Royalty agreement
was cancelled as a result of the assets purchase described in Note 6. (See note 6 for additional details.)
13. INCOME TAXES
Significant components
of the Company’s deferred tax assets and liabilities for federal and state income taxes as of March 31, 2019 and 2018 are
as follows:
|
|
March 31,
|
|
|
2019
|
|
2018
|
Deferred tax assets:
|
|
|
|
|
|
|
|
Net operating loss tax basis
|
|
$
|
1,077,790
|
|
|
$
|
107,332
|
Provisions and accrued liabilities
|
|
|
—
|
|
|
|
—
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
Total deferred tax asset
|
|
|
1,077,790
|
|
|
|
107,332
|
|
|
|
|
|
|
|
|
Less valuation allowance
|
|
|
(1,077,790
|
)
|
|
|
(107,332)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
As of March 31, 2019, and 2018, the Company
had gross federal net operating loss carryforwards of approximately $1,077,790 and $107,332, respectively. The Company expects
the limitation placed on the federal net operating loss carryforwards prior to the ownership change will likely expire unused.
As of March 31, 2019, all tax years are open for examination by the taxing authorities.
Due to the enactment of the Tax Reform Act
of 2017, the corporate tax rate for those tax years beginning with 2018 has been reduced to 21%.
VILACTO BIO INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2019
(AUDITED)
14. SUBSEQUENT EVENTS
The Company has evaluated events subsequent
to the balance sheet through the issuance date of these financial statements in accordance with FASB ASC 855 and has determined
that there are no such events that would require adjustment to, or disclosure in, the financial statements except as disclosed
below.
Stock issued upon conversion of debts.
The following table presents a summary
of the Company’s debt conversions associated with its convertible notes between April 1, 2019 and June 4, 2019:
Date of Conversion
|
|
Effective conversion price
|
|
Principal and interest converted
|
|
Shares issued upon conversion of debts
|
4/1/2019
|
|
|
|
0.00070
|
|
|
|
19,366
|
|
|
|
29,793,253
|
4/1/2019
|
|
|
|
0.00050
|
|
|
|
15,493
|
|
|
|
29,793,500
|
4/1/2019
|
|
|
|
0.00070
|
|
|
|
19,292
|
|
|
|
29,680,076
|
4/2/2019
|
|
|
|
0.00050
|
|
|
|
13,423
|
|
|
|
29,500,000
|
4/8/2019
|
|
|
|
0.00060
|
|
|
|
22,860
|
|
|
|
35,169,231
|
4/10/2019
|
|
|
|
0.00060
|
|
|
|
10,891
|
|
|
|
16,755,385
|
4/10/2019
|
|
|
|
0.00050
|
|
|
|
15,925
|
|
|
|
35,000,000
|
4/22/2019
|
|
|
|
0.00100
|
|
|
|
25,000
|
|
|
|
25,000,000
|
4/22/2019
|
|
|
|
0.00100
|
|
|
|
25,000
|
|
|
|
25,000,000
|
4/23/2019
|
|
|
|
0.00110
|
|
|
|
25,000
|
|
|
|
22,727,273
|
4/24/2019
|
|
|
|
0.00100
|
|
|
|
25,000
|
|
|
|
26,315,789
|
4/25/2019
|
|
|
|
0.00050
|
|
|
|
19,793
|
|
|
|
43,500,000
|
4/26/2019
|
|
|
|
0.00080
|
|
|
|
15,000
|
|
|
|
18,292,683
|
4/29/2019
|
|
|
|
0.00050
|
|
|
|
16,249
|
|
|
|
30,687,785
|
4/29/2019
|
|
|
|
0.00060
|
|
|
|
13,000
|
|
|
|
22,087,561
|
5/1/2019
|
|
|
|
0.00050
|
|
|
|
14,400
|
|
|
|
30,000,000
|
5/2/2019
|
|
|
|
0.00040
|
|
|
|
17,150
|
|
|
|
49,000,000
|
5/6/2019
|
|
|
|
0.00030
|
|
|
|
17,315
|
|
|
|
54,110,000
|
5/8/2019
|
|
|
|
0.00020
|
|
|
|
12,985
|
|
|
|
53,000,000
|
5/13/2019
|
|
|
|
0.00020
|
|
|
|
14,269
|
|
|
|
59,454,800
|
5/16/2019
|
|
|
|
0.00020
|
|
|
|
10,474
|
|
|
|
65,465,500
|
5/20/2019
|
|
|
|
0.00020
|
|
|
|
10,600
|
|
|
|
44,166,667
|
5/20/2019
|
|
|
|
0.00020
|
|
|
|
10,600
|
|
|
|
44,166,667
|
5/21/2019
|
|
|
|
0.00020
|
|
|
|
10,600
|
|
|
|
44,166,667
|
5/22/2019
|
|
|
|
0.00010
|
|
|
|
7,245
|
|
|
|
69,000,000
|
5/22/2019
|
|
|
|
0.00020
|
|
|
|
7,900
|
|
|
|
43,888,889
|
5/23/2019
|
|
|
|
0.00020
|
|
|
|
8,000
|
|
|
|
44,444,444
|
5/28/2019
|
|
|
|
0.00020
|
|
|
|
13,311
|
|
|
|
83,194,900
|
5/28/2019
|
|
|
|
0.00020
|
|
|
|
7,420
|
|
|
|
41,222,222
|
5/31/2019
|
|
|
|
0.00010
|
|
|
|
7,152
|
|
|
|
89,403,250
|
6/4/2019
|
|
|
|
0.00010
|
|
|
|
2,336
|
|
|
|
33,376,857
|
|
|
|
|
Total
|
|
|
|
453,049
|
|
|
|
1,267,363,399
|