UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended November 30, 20172018
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission File Number: 333-161943
SPORT ENDURANCE, INC.
(Exact name of registrant as specified in its charter)
Nevada | 26-2754069 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
222 Broadway, 19th Floor, New York,81 Prospect Street, Brooklyn, NY 1003811201
(Address of principal executive offices) (Zip Code)
(646) 846-4280
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒☐ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter ) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
(Check One):
Large Accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☒ |
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 78,685,30264,478,996 shares of $0.001 par value common stock outstanding as of January 16, 2018.
SPORT ENDURANCE, INC. FORM 10-Q Quarterly Period Ended November 30, 2017
Page | ||
PART I. FINANCIAL INFORMATION | ||
Item 1. | 4 | |
4 | ||
5 | ||
6 | ||
7 | ||
Item 2. | 21 | |
Item 3. | 24 | |
Item 4. | 24 | |
PART II. OTHER INFORMATION | ||
Item 1. | 25 | |
Item 1A. | 25 | |
Item 2. | 25 | |
Item 3. | 25 | |
Item 4. | 25 | |
Item 5. | 25 | |
Item 6. | 26 | |
27 | ||
EXPLANATORY NOTE
Unless otherwise noted, references in this registration statementquarterly report on Form 10-Q (the “Report”) to “Sport Endurance” the “Company,” “we,” “our” or “us” means Sport Endurance, Inc.
PART I – FINANCIAL INFORMATION
November 30, 2017(unaudited) | August 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 92,172 | $ | 1,442 | ||||
| Accounts receivable | - | - | ||||||
| Inventory | 14,855 | 14,882 | ||||||
| Total current assets | 107,027 | 16,324 | ||||||
| Equipment, net of accumulated depreciation | - | - | ||||||
| Total Assets | 107,027 | 16,324 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | 79,238 | 132,566 | ||||||
| Derivative liability | 304,707 | 312,878 | ||||||
| Accrued officer salary | 144,000 | 120,000 | ||||||
| Notes payable and accrued interest - related party | 193,752 | 233,011 | ||||||
| Convertible notes, net of unamortized debt discounts of $169,655 and $153,234 | 600,457 | 400,743 | ||||||
| Total current liabilities | 1,322,154 | 1,199,198 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders' equity (deficit) | ||||||||
| Preferred stock, $0.001 par value, 20,000,000 shares authorized, 1,000 shares issued and outstanding as of November 30, 2017 and August 31, 2017 | 1 | 1 | ||||||
| Common stock, $0.001 par value, 580,000,000 shares authorized 78,685,302 shares issued and outstanding as of November 30, 2017 and 78,226,969 at August 31, 2017 | 78,684 | 78,226 | ||||||
| Additional paid-in capital | 1,930,732 | 1,852,743 | ||||||
| Subscription receivable | (5,372 | ) | (5,372 | ) | ||||
| Accumulated deficit | (3,219,172 | ) | (3,108,472 | ) | ||||
| Total stockholders' equity (deficit) | (1,215,127 | ) | (1,182,874 | ) | ||||
| Total liabilities and stockholders' equity (deficit) | 107,027 | $ | 16,324 | |||||
November 30, | August 31, | |||||||
2018 | 2018 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 23,602 | $ | 199,674 | ||||
Inventory | 9,402 | 9,402 | ||||||
Total current assets | 33,004 | 209,076 | ||||||
Total assets | $ | 33,004 | $ | 209,076 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 61,707 | $ | 106,445 | ||||
Dividends payable | 29,808 | 20,280 | ||||||
Derivative liability | - | 2,317,412 | ||||||
Accrued officer salary | 132,000 | 140,000 | ||||||
Convertible notes, net of unamortized debt discounts of $0 and $752,990, respectively | - | 274,214 | ||||||
Total current liabilities | 223,515 | 2,858,351 | ||||||
Commitments and contingencies | - | - | ||||||
Stockholders' deficit | ||||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, 16,294,000 and 19,194,000 shares undesignated and unissued as of November 30, 2018 and August 31, 2018, respectively | ||||||||
Series A Preferred stock, $0.001 par value 1,000 shares designated, 1,000 shares issued and outstanding as of November 30, 2018 and August 31, 2018 | 1 | 1 | ||||||
Series B Convertible Preferred stock, $0.001 par value, 805,000 shares authorized, 0 and 803,969.73 shares issued and outstanding as of November 30, 2018 and August 31, 2018, respectively | - | 804 | ||||||
Series E Convertible Preferred stock, $0.001 par value, 2,900,000 shares authorized, 2,846,355.54 and 0 shares issued and outstanding as of November 30, 2018 and August 31, 2018, respectively | 2,846 | - | ||||||
Common stock, $0.001 par value, 580,000,000 shares authorized 52,412,342 and 79,683,842 shares issued and outstanding as of November 30, 2018 and August 31, 2018, respectively | 52,412 | 79,683 | ||||||
Additional paid-in capital | 5,308,301 | 3,329,528 | ||||||
Accumulated deficit | (5,554,071 | ) | (6,059,291 | ) | ||||
Total stockholders' deficit | (190,511 | ) | (2,649,275 | ) | ||||
Total liabilities and stockholders' deficit | $ | 33,004 | $ | 209,076 | ||||
See accompanying notes to thesethe unaudited condensed financial statements.
| For the | For the | |||||||
| Three Months Ended | Three Months Ended | |||||||
| November 30, | November 30, | |||||||
| 2017 | 2016 | |||||||
| Revenue | $ | 214 | $ | 230 | ||||
| Cost of good sold | 27 | 34 | ||||||
| Net revenue | 187 | 196 | ||||||
| Operating expenses: | ||||||||
| General and administrative | 43,718 | 66,153 | ||||||
| Professional fees | 41,525 | 17,973 | ||||||
| Total operating expenses | 85,243 | 84,126 | ||||||
| Net Operating Loss | (85,056 | ) | (83,930 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | (136,925 | ) | (183,705 | ) | ||||
| Change in fair value of derivative liability | 111,281 | 67,072 | ||||||
| Total other income (expense), net | (25,644 | ) | (116,633 | ) | ||||
| Loss before provision for income taxes | (110,700 | ) | (200,563 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net loss | $ | (110,700 | ) | $ | (200,563 | ) | ||
| Net loss per share - basic | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Net loss per share - diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average shares outstanding - basic | 78,409,661 | 77,775,303 | ||||||
| Weighted average shares outstanding - diluted | 78,409,661 | 77,775,303 | ||||||
For the Three | For the Three | |||||||
Months Ended | Months Ended | |||||||
November 30, | November 30, | |||||||
2018 | 2017 | |||||||
Revenue | $ | - | $ | 214 | ||||
Cost of goods sold | - | 27 | ||||||
Gross profit | - | 187 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 147,523 | 85,243 | ||||||
Total operating expenses | 147,523 | 85,243 | ||||||
Operating loss | (147,523 | ) | (85,056 | ) | ||||
Other income (expense): | ||||||||
Interest expense | (133,545 | ) | (136,925 | ) | ||||
Gain on exchange of debt and equity | 472,267 | - | ||||||
Gain on change in fair value of derivative liability | 314,021 | 111,281 | ||||||
Total other income (expense), net | 652,743 | (25,644 | ) | |||||
Net income (loss) before tax | 505,220 | (110,700 | ) | |||||
Provision for income tax | - | - | ||||||
Net income (loss) | $ | 505,220 | $ | (110,700 | ) | |||
Preferred stock dividend | (41,147 | ) | - | |||||
Net income (loss) available to common shareholders | $ | 464,073 | $ | (110,700 | ) | |||
Net income (loss) per share: basic | $ | 0.01 | $ | (0.00 | ) | |||
Net income (loss) per share: diluted | $ | 0.00 |
| $ | (0.00 | ) | ||
Weighted average shares outstanding - basic | 79,084,468 | 78,409,661 | ||||||
Weighted average shares outstanding - diluted | 119,765,896 | 78,409,661 | ||||||
See accompanying notes to thesethe unaudited condensed financial statements.
| For the | For the | |||||||
| Three Months Ended | Three Months Ended | |||||||
| November 30, | November 30, | |||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (110,700 | ) | $ | (200,563 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Change in fair value of derivative liability | (111,281 | ) | (67,072 | ) | ||||
| Amortization of discount on convertible debt | 118,886 | 172,735 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | - | 45 | ||||||
| Inventory | 27 | (8,814 | ) | |||||
| Accrued officer salary | 24,000 | 24,000 | ||||||
| Interest payable - related party | 241 | - | ||||||
| Accounts payable and accrued liabilities | (32,193 | ) | 70,436 | |||||
| Net cash used in operating activities | (111,020 | ) | (9,233 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Payments to acquire assets | 0 | 0 | ||||||
| Net cash used in investing activities | 0 | 0 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from notes payable - related party | 35,500 | - | ||||||
| Repayments of notes payable - related party | (75,000 | ) | - | |||||
| Proceeds from convertible debt | 241,250 | - | ||||||
| Net cash provided by financing activities | 201,750 | - | ||||||
| Net increase in cash and cash equivalents | 90,730 | (9,233 | ) | |||||
| Cash and cash equivalents at beginning of period | 1,442 | 10,197 | ||||||
| Cash and cash equivalents at end of period | $ | 92,172 | $ | 964 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | 950 | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Common stock issued for conversion of notes payable and accrued interest | $ | 55,000 | $ | - | ||||
| Discount on beneficial conversion feature | $ | 126,557 | $ | - | ||||
| Settlement of derivative | $ | 23,447 | $ | - | ||||
For the Three | For the Three | |||||||
Months Ended | Months Ended | |||||||
November 30, | November 30, | |||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | 505,220 |
| $ | (110,700 | ) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Gain on exchange of debt and equity transaction | (472,267 | ) | - | |||||
Change in fair value of derivative liabilities | (314,022 | ) | (111,281 | ) | ||||
Amortization of discount on convertible debt | 118,708 | 118,886 | ||||||
Changes in assets and liabilities: | ||||||||
Inventory | - | 27 | ||||||
Accrued officer salary | (8,000 | ) | 24,000 | |||||
Interest payable - related party | - | 241 | ||||||
Accounts payable and accrued liabilities | 21,560 | (32,193 | ) | |||||
Net cash used in operating activities | (148,801 | ) | (111,020 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | - | - | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Cash paid for the purchase of common stock | (27,271 | ) | - | |||||
Proceeds from notes payable - related party | - | 35,500 | ||||||
Repayments of notes payable - related party | - | (75,000 | ) | |||||
Proceeds from convertible debt | - | 241,250 | ||||||
Net cash (used in) provided by financing activities | (27,271 | ) | 201,750 | |||||
Net (decrease) increase in cash and cash equivalents | (176,072 | ) | 90,730 | |||||
Cash and cash equivalents at beginning of period | 199,674 | 1,442 | ||||||
Cash and cash equivalents at end of period | $ | 23,602 | $ | 92,172 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Interest paid | $ | - | $ | 950 | ||||
Income taxes paid | $ | - | $ | - | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Common stock issued for conversion of notes payable | $ | - | $ | 55,000 | ||||
Preferred Stock Series E issued for cancellation of convertible notes payable, accrued interest, Series B Preferred Stock and warrants | $ | 2,022,766 | $ | - | ||||
Discount on notes payable due to beneficial conversion feature | $ | - | $ | 126,557 | ||||
Settlement of derivative | $ | 2,003,390 | $ | 23,447 | ||||
Accrued preferred stock dividends | $ | 41,147 | $ | - | ||||
See accompanying notes to thesethe unaudited condensed financial statements.
Sport Endurance, Inc.
(Unaudited)
Note 1 – Nature of Business and Significant Accounting Policies
Nature of Business
We were incorporated in the State of Nevada on January 3,in 2001, and in 2009 changed our name to Sport Endurance, Inc.
Mr. David Lelong has been the Company’s President and Chief Executive Officer since February 4, 2016 and the Company’s sole director since April 25, 2016.
On March 14, 2018, the Company, through its wholly-owned subsidiary Yield Endurance, Inc. (“Inception”Yield”), entered into a series of agreements under which Yield borrowed $5 million of bitcoin (“BTC”). The Company was dormant untilsimultaneously entered into transactions with Madison Partners LLC and Prism Funding Co. LP to lend the BTC to third parties. On August 21, 2018, the Company entered into a series of restructuring agreements to unwind the BTC transactions thereby exiting the BTC and cryptocurrency markets.
Previously, the Company marketed for sale three sport nutritional products which it was revived in 2009 with a name changesuspended when the Company elected to Sport Endurance, Inc. on August 6, 2009. enter into the BTC lending business.
The Company develops,is currently seeking to enter into the cannabidiol (“CBD”), hemp, or legal marijuana industries and market various products in one of those industries. As of the date of this report, the Company has no written agreements to acquire any businesses. However, on December 17, 2018, the Company used a substantial portion of the proceeds from its recent private placement and acquired a minority interest in a privately-held business engaged in the animal health foods business which markets and distributes quality dietary supplements throughoutsells products using marijuana for veterinary medical purposes. We also are engaged in preliminary discussions to acquire that business. We do not have any binding agreements and in any event we would need to complete a large financing. We cannot assure you we will be successful in making any acquisitions.
In December 2018 we closed on a private placement where we received approximately $2.8 million before fees from the United States.
Our auditors note that the absence of revenues and operations, in the audit report for the year ended August 31, 2018 dated December 21, 2018, is a going concern. The going concern statement opinion issued by the independent auditors is the result of a lack of operations and working capital.
The Company cannot pay its short-term debt and will need to raise capital which concerned the independent auditors because there is insufficient cash for operations for the next 12 months. If we cannot raise sufficient capital, we will cease operations.
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company, have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and reflectare presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all adjustments which, inthe information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, areall adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. All such adjustmentspresentation have been included. Operating results for the three months ended November 30, 2018 are not necessarily indicative of a normal recurring nature.
All amounts referred to in the notes to the financial statements are in United States Dollars ($) unless stated otherwise.
The financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the 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.
Cash and Cash Equivalents
Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. The Company had cash and cash equivalents of $92,172 and $1,442 as ofAt November 30, 20172018 and August 31, 2017, respectively.
Inventory
Inventory consists of finished goods and is stated at the lower of cost or market by the first-in, first-out method.method or net realizable value. The Company is currently marketing three products under the nameshad approximately 2,432 containers of “Ultra Peak T”, “Sports Leg and Lung Formula” and “Pain-Freeze Recovery Gel” which are included in inventory at November 30, 20172018 and August 31, 2017.
Intangible AssetsRevenue Recognition
Adoption of ASU 2014-09, Revenue from business combinations accountedContracts with Customers
On September 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) using the modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning September 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the purchase method.initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our revenue stream was not materially impacted by the adoption of this standard. The Company performs an annual review or more frequently if indicatorsbelieves its business processes, systems, and controls are appropriate to support recognition and disclosure under ASC 606. In addition, the adoption has led to increased footnote disclosures. Overall, the adoption of potential impairment exist, to determine if the recorded intangible assets are impaired.
Revenue RecognitionPolicy
The Company recognizes revenue upon product delivery. All of our products are shipped through a third party fulfillment center to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues.
For revenue from product sales, the Company recognizes revenue in accordance with Financial Accounting Standards Board “FASB” Accounting Standards Codification “ASC” 605-15-05. ASC 605-15-05 requires that four basic criteria606. A five-step analysis a must be met beforeas outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4)when (or as) performance obligations are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts.satisfied.. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.
Contract Assets
The Company defersdoes not have any contract assets such as work-in-process. All trade receivables on the Company’s condensed balance sheet are from contracts with customers.
Contract Costs
Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of November 30, 2018.
Contract Liabilities - Deferred Revenue
The Company’s contract liabilities may consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Income Taxes
The Company accountsutilizes ASC 740, Accounting for income taxes using the asset and liability method,Income Taxes, which requires the establishmentrecognition of deferred tax assets and liabilities for the temporaryexpected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the financial reporting basis and the tax basisbases of the Company’s assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
The Company accounts for uncertain tax positions in effect whenaccordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the consolidated financial statements from such amountsa position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or settled.expected to be taken in a tax return. The effectCompany elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense.
The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets and liabilitiesassets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of a change inincome tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent deferred tax assets may not be recoverable after consideration of the future reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income.
Fair Value of Financial Instruments
Under FASB ASC 820-10-05, the Financial Accounting Standards BoardFASB establishes a framework for measuring fair value in generally accepted accounting principlesGAAP and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short termshort-term nature of the instruments. The Company had no items that required fair value measurement on a recurring basis.
The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurements definesMeasurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosuredisclosures about fair value measurements.
The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below:
Level 1-1 - fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);
Level 2-2 - fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3-3 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial instruments classified as Level 1 - quoted prices in active markets include cash.
These condensed consolidated financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of November 30, 20172018 and August 31, 2017.2018. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and accrued expenses.
Derivative Financial Instruments
ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are recorded onnot clearly and closely related to the condensed consolidated balance sheeteconomic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value. The conversion features of the convertible notes are embedded derivatives and are separately valued and accounted for on the consolidated balance sheetvalue under otherwise applicable generally accepted accounting principles with changes in fair value recognizedreported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.
The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of change as a separate componentthe date of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted market prices. the event that caused the reclassification.
The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 7).
Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method.
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common stock outstanding. Diluted net lossincome (loss) per common share is computed by dividing the net lossincome (loss) adjusted on an “as if converted” basis, by the weighted average number of common stock outstanding plus potential dilutive securities. For the periods presented,At November 30, 2018 and 2017, there were no outstanding potential common stock equivalents94,923,333 and therefore1,578,896 shares issuable, respectively, pursuant to our convertible notes and convertible preferred stock. The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share resultfor the three months ended November 30, 2018, and 2017:
2018 | 2017 | |||||||
Net income (loss) available to common shareholders | $ | 464,073 | $ | (110,700 | ) | |||
Plus: Income impact of assumed conversions | ||||||||
Preferred stock dividends | 29,808 | - | ||||||
Net income (loss) available to common shareholders + assumed conversions | $ | 493,881 | $ | (110,700 | ) | |||
Weighted average common shares outstanding | 79,084,468 | 78,409,661 | ||||||
Plus: Incremental shares from assumed conversions | ||||||||
Series E Convertible Preferred Stock | 40,681,428 | - | ||||||
Dilutive potential common shares | 40,681,428 | - | ||||||
Adjusted weighted average shares | 119,765,896 | 78,409,661 | ||||||
Net income (loss) per share: | ||||||||
Basic | $ | 0.01 | $ | (0.00 | ) | |||
Diluted | $ | 0.00 | $ | (0.00 | ) | |||
The following securities were not included in the same figure.
November 30, 2018 | November 30, 2017 | |||||||
Conversion of notes payable | - | 1,578,896 | ||||||
| - | 1,578,896 | |||||||
Recently Issued Accounting Pronouncements
In JanuaryFebruary 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its unaudited condensed financial statements.
In July 2017, the FASB issued ASU No. 2017-04,
ASU 2018-02 - On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act of 2017). Stakeholders raised a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017. The amendments in this ASU will be applied onUpdate allow a prospective basis.reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this update is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed.
This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting Comprehensive Income (Topic 220), which has been deleted. We are currently assessingevaluating the impact of adopting ASU 2017-13 on our unaudited condensed financial statements.
ASU 2018-05 Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act (H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018) was signed into law. We are currently evaluating the impact of adopting ASU 2017-13 on our unaudited condensed financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this standard will havepronouncement.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement.
The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.
Removals
The following disclosure requirements were removed from Topic 820:
1. | The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy |
2. | The policy for timing of transfers between levels |
3. | The valuation processes for Level 3 fair value measurements |
4. | For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. |
Modifications
The following disclosure requirements were modified in Topic 820:
1. | In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. |
2. | For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. |
3. | The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. |
Additions
The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities:
1. | The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period | |
2. | The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. |
In addition, the amendments eliminate at a minimum from the phrase an entity shall disclose at a minimum to promote the appropriate exercise of discretion by entities when considering fair value measurement disclosures and to clarify that materiality is an appropriate consideration of entities and their auditors when evaluating disclosure requirements.
The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any awards that areremoved or modified oncedisclosures upon issuance of this standardUpdate and delay adoption of the additional disclosures until their effective date.
The impact of this ASU on the Company’s unaudited condensed financial statements is adopted.
There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidatedour unaudited condensed financial position, results of operations or cash flows.
Note 2 – Going Concern
As shown in the accompanying unaudited condensed financial statements, the Company has incurred recurring net losses from operations resulting in an accumulated deficit of $3,219,172$5,554,071 and anet working capital deficitdeficiency of $1,215,127$190,511 as of November 30, 2017.2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations and repay indebtedness. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
The unaudited condensed financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The unaudited condensed financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 – Discontinued Operations
On August 21, 2018, the Company at the request of other parties to the March 2018 agreements cancelled all of the business agreements, related to Yield. The Company’s guaranty of the $5.5 million Note Receivable
Pursuant to the terms of the Restructuring Agreement, the parties agreed to modify the terms of the Former Agreements by (a) assigning to Madison all of the capital stock of Yield to provide for the continuation of the business of Yield as a subsidiary of Madison, (b) terminating the Guaranty Agreement by and between the Company and a third partyPrism, and (c) canceling 15,000,000 of 25,000,000 the warrants issued to Prism in connection with the NPA. On the Effective Date, the Company transferred its capital stock of Yield to Madison (the “Transfer”) and terminated the Guaranty Agreement, thus, the Company’s liability for the Senior Note, as defined below, issued pursuant to the NPA, was extinguished upon the Transfer.
In connection with the Restructuring Agreement, the Company entered into a stock purchase agreement whereSecurities Purchase Agreement with Madison pursuant to which the Company sold 100%transferred to Madison all of the outstandingcapital stock of Yield. Further, the parties released each other from claims with respect to the original purchase of the BTC and the Former Agreements. No payments under the Bitcoin Agreement will be required to be made to the Company.
There are no continuing cash inflows our outflows to or from the discontinued operations.
The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations for the year ended August 31, 2018:
Share income | $ | (48,593 | ) | |
Sales, general and administrative | 368,032 | |||
Interest expense – accrued interest | 117,534 | |||
Interest expense – excess value of warrants | 2,988,090 | |||
Interest expense – amortization of discount on note payable | 5,500,000 | |||
Mark to market BTC | 509,730 | |||
Mark to market derivative liability | (4,051,087 | ) | ||
Reserve for uncollectible note receivable | 4,490,270 | |||
Gain on disposal of discontinued operations | (8,038,065 | ) | ||
Loss from discontinued operations, net of tax | $ | 1,835,911 |
The following table presents the calculation of the gain on the sale of discontinued operations:
Assets of discontinued operations disposed in sale | $ | (9,415 | ) | |
Liabilities of discontinued operations disposed in sale | 9,648,488 | |||
Fair value of warrants to purchase 10,000,000 shares of common stock to buyer | (1,601,008 | ) | ||
Gain on disposal of discontinued operations | $ | 8,038,065 |
Note 4 – Dividends Payable
On May 30, 2018, the Company issued 803,969.73 shares of its shell company, Be Tru Organics, Inc.,Series B Preferred Stock with a Nevada corporation in exchangestated value of $0.99 per share for a $5,000 promissory note, bearing interesttotal stated value of $795,930 (the “Series B Preferred Stock”). The Series B Preferred Stock accrued dividends at the rate of 10% per month and due November 15, 2016.annum on the stated value. During the three monthsyear ended November 2016,August 31, 2018, the Company received $5,000accrued dividends payable in the amount of $20,280 on the Series B Preferred Stock. From the period September 1, 2018 to October 22, 2018, the Company accrued an additional $11,339 in dividends payable. At October 22, 2018, the amount of dividends payable on the Series B Preferred Stock was $31,619. On October 22, 2018, the Company entered into a transaction whereby the Company exchanged all of its convertible debt and all Series B Preferred Stock outstanding for Series E Preferred Stock (the “Exchange Agreement”, see note 10). At October 22, 2018, dividends payable in the amount of $31,619 was outstanding in connection with the Series B Preferred Stock; this amount was converted to Series E Preferred Stock in connection with the Exchange Agreement.
The Company accrued dividends on the Series E Preferred Stock from October 23, 2018 through November 30, 2018 in the repaymentamount of $29,808. This amount appears as dividends payable on the note receivable.
Note 45 – Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following:
November 30, 2018 | August 31, 2018 | |||||||
Trade accounts payable | $ | 48,824 | $ | 39,052 | ||||
Payroll and related | 12,883 | 15,931 | ||||||
Accrued interest | - | 51,462 | ||||||
Total | $ | 61,707 | $ | 106,445 | ||||
| November 30, 2017 | August 31, 2017 | |||||||
| Trade accounts payable | 58,349 | 106,726 | ||||||
| Payroll and related | 11,015 | 9,179 | ||||||
| Accrued interest | 9,874 | 16,661 | ||||||
| Total | 79,238 | 132,566 | ||||||
Note 56 – Related Party Transactions
The Company’s President and CEO, David Lelong, earns a salary in the amount of $8,000 per month. During the three months ended November 30, 2018, the Company paid current period salary in the amount of $24,000 to Mr. Lelong; also during the three months ended November 30, 2018, the Company paid back salary previously accrued to Mr. Lelong in the amount of $8,000. At November 30, 2018, the Company had accrued salary due to Mr. Lelong in the amount of $132,000. During the three months ended November 30, 2017, and 2016, the Company accrued salary in the amount of $24,000 to its PresidentMr. Lelong. At August 31, 2018, the Company had accrued salary due to Mr. Lelong in the amount of $140,000.
During the three months ended November 30, 2017, the Company repaid the amount of to $75,000 Mr. Lelong under a note payable; the Company also borrowed principal in the amount of $35,500 from Mr. Lelong. Also during the three months ended November 30, 2017, the Company accrued interest in the amount of $1,191 and CEO, Davidpaid interest in the amount of $950 Mr. Lelong. At November 30, 2017, and August 31, 2017, the Company had accrued salary payableowed Mr. Lelong principal in the amount of $144,000$191,500 and $120,000, respectively,accrued interest in the amount of $2,253 under this note payable. There were no notes outstanding due to Mr. Lelong.
Note 67 – Derivative Liability
The Company entered into convertible note agreements containing beneficial conversion features.features and warrants. One of the features is a ratchet reset provision which allows the note holders to reduce the conversion price should the Company issue equity with an effective price per share that is lower than the stated conversion price in the note agreement (see note 10)8). The Company accounts for the fair value of the conversion feature in accordance with ASC 815, Accounting for Derivatives and Hedging and EITF 07-05, the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcate treated as a derivative liability. 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 in its results of operations.
The Company recognized that the conversion feature embedded within its convertible debts is a financial derivative. The Generally Accepted Accounting Principles (GAAP)GAAP required that the Company’s embedded conversion option be accounted for at fair value. The following schedule shows the change in fair value of the derivative liabilities for the periodthree months ended November 30, 2017:2018:
Derivative | ||||
Liability | ||||
Liabilities Measured at Fair Value | ||||
Balance as of August 31, 2017 | $ | 312,878 | ||
Issuances | 1,565,487 | |||
Conversions / redemptions | (1,207,308 | ) | ||
Reclass from sale of discontinued operations | 1,601,007 | |||
Revaluation loss | 45,348 | |||
Balance as of August 31, 2018 | $ | 2,317,412 | ||
Revaluation gain | (314,022 | ) | ||
Conversion / redemptions | (2,003,390 | ) | ||
Balance as of November 30, 2018 | $ | - | ||
| Derivative | ||||
| Liability | ||||
| Liabilities Measured at Fair Value | ||||
| Balance as of August 31, 2017 | $ | 312,878 | ||
| Issuances | 126,557 | |||
| Conversions / redemptions | (23,447 | ) | ||
| Revaluation | (111,281 | ) | ||
| Balance as of November 30, 2017 | $ | 304,707 | ||
The derivative liabilities incurred valued based upon the following assumptions and key inputs at November 30, 20172018 and August 31, 2017:
| November 30, | August 31, | |||||||
| Assumption | 2017 | 2017 | ||||||
| Expected dividends: | 0 | % | 0 | % | ||||
| Expected volatility: | 135.9 – 246.8 | % | 37.8 – 276.9 | % | ||||
| Expected term (years): | 0.07 – 0.50 | years | 0.04 – 0.50 | years | ||||
| Risk free interest rate: | 0.86 – 1.06 | % | 0.26 – 0.98 | % | ||||
| Stock price | $ | 0.35 – 0.50 | $ | 0.51 – 1.97 | ||||
November 30, | August 31, | |||||||
Assumption | 2018 | 2018 | ||||||
Expected dividends: | 0 | % | 0 | % | ||||
Expected volatility: | 155.0 | % | 121.1– 248.8 | % | ||||
Expected term (years): | 5.00 | 0.21–1.00 | ||||||
Risk free interest rate: | 2.99 | % | 0.97–2.08 | % | ||||
Stock price | $ | 0.21 | $ | 0.35– 1.11 | ||||
Note 78 – Convertible Notes Payable
November 30, 2018 | August 31, 2018 | |||||||
February 2018 Convertible Note
On February 15, 2018, the Company entered into a Securities Purchase Agreement with the Lender. The Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $250,000 (the “February 2018 Convertible Note”). The February 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Lender’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $0.50 per share and have a full reset feature. The February 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Lender 500,000 warrants to purchase 500,000 shares of the Company’s common stock with an exercise price of $0.01. The warrants have a five-year term. A derivative liability in the amount of $667,470 was created with regard to the conversion features and warrants associated with this note; $241,250 was charged to discount on notes payable, and the balance of $426,220 was charged to interest expense during the three months ended February 28, 2018. On March 26, 2018, the Company and the Lender agreed to eliminate the reset feature of this note. During the year ended August 31, 2018, the Company accrued interest in the amount of $13,681 on this note; as of August 31, 2018, principal in the amount of $250,000 was outstanding under the February 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $3,611 on this note. In October 2018, the February 2018 Convertible Note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 9.
During the three months ended November 30 2018 and 2017, the Company charged to interest expense the amounts of $16,298 and $0, respectively, in connection with the amortization of the discount on these notes. | $ | - | $ | 250,000 | ||||
November 30, 2018 | August 31, 2018 | |||||||
March 2018 Convertible Note
On March 9, 2018, the Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $777,202 (the “March 2018 Convertible Note”). The March 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $750,000 net of the 3.5% original issue discount of $27,202. At the Lender’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $0.50 per share. The March 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Lender 1,554,405 warrants to purchase 1,554,405 shares of the Company’s common stock with an exercise price of $0.01. The warrants have a five-year term. A derivative liability in the amount of $771,460 was created with regard to the conversion features and warrants associated with this note, which was charged to discount on notes payable. On May 9, 2018, the Lender transferred their ownership in $497,458 of principal and $18,042 of accrued interest in the March 2018 Convertible Note to a third party. The Company revalued the derivative liability associated with the conversion feature of the March 2018 note at the time of this restructure, and recorded a gain on revaluation in the amount of $40,072. During the year ended August 31, 2018, the Company accrued interest in the amount of $37,780 on the March 2018 Convertible. As of August 31, 2018, principal in the amount of $777,202 was outstanding under the March 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $11,226 on this note. In October 2018, the March 2018 convertible note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 9.
During the three months ended November 30 2018 and 2017, the Company charged to interest expense the amounts of $102,410 and $0, respectively, in connection with the amortization of the discount on these notes. | $ | - | $ | 777,202 | ||||
Total | $ | - | $ | 1,027,202 | ||||
Less: Unamortized discount | - | (752,988 | ) | |||||
Total, net of discount | $ | - | $ | 274,214 | ||||
Current portion | $ | - | $ | 1,027,202 | ||||
Long term | - | - | ||||||
Total | $ | - | $ | 1,027,202 | ||||
March 2018 Note to Prism
Under the terms of a series of agreements (the “Former Agreements”), Yield issued Prism Funding Co, LP (“Prism”) a 10% OID Senior Secured Convertible Notes
Note to extend the due date to December 27, 2017 in exchange for $10. At August 31, 2017, three of the January and February 2017 Convertible Notes were outstanding in the aggregate amount of $553,976; these notes are due December 27, 2017. During the three months ended November 30, 2017, the holders of the January and February 2017 Convertible Notes converted an aggregate of $33,865 in principal and $21,248 in accrued interest into 458,333 shares of common stock. As of November 30, 2017, there was an aggregate amount of $520,111 outstanding under the January and February 2017 Convertible Notes.
Preferred stock
The Company is authorized to issue 20,000,000 shares of $0.001 par value preferred stock as of November 30, 20172018 and August 31, 2017. 2018.
The Company has issued and outstanding 1,000 shares of Series A preferred stock issued and outstanding as of November 30, 20172018 and August 31, 2017.
Series B Convertible Preferred Stock
On May 30, 2018, the Company authorized 805,000 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock is convertible at a rate of $0.03 per share, has a stated value of $0.99 per share, and accrues dividends at the rate of 10% per annum on the stated value. The Series B Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series B Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On May 31, 2018, the Company issued 803,969.73 shares of Series B Convertible Preferred Stock for the conversion of debt. The Company began to accrue dividends on the Series B Convertible Preferred Stock on June 1, 2018. From June 1, 2018 through August 31, 2018, the Company accrued dividends in the amount of $20,280 on the Series B Convertible Preferred Stock; from September 1, 2018 through October 22, 2018, the Company accrued dividends in the amount of $11,339 on the Series B Convertible Preferred Stock. On October 22, 2018, all 803,969.73 outstanding shares of the Series B Convertible Preferred Stock and accrued dividends in the amount of $31,619 were exchanged for shares of the Company’s Series E Convertible Preferred Stock. At November 30, 2018, and August 31, 2018, there were 0 and 803,969.73 shares of the Series B Convertible Preferred Stock outstanding.
Series E Convertible Preferred Stock
On October 22, 2018, the Company authorized 2,900,000 shares of its Series E Convertible Preferred Stock. The Series E Convertible Preferred Stock is convertible at a rate of $0.03 per share, has a stated value of $0.99 per share, and accrues dividends at the rate of 10% per annum on the stated value. The Series E Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series E Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On October 22, 2018, the Company entered into an Exchange Agreement whereby the following were exchanged for 2,846,355.54 shares of Series E Convertible Preferred Stock: (i) Convertible debt and accrued interest in the amounts of $1,027,202 and $66,299, respectively; (ii) 803,969.73 of Series B Convertible Preferred stock; (iii) accrued dividends in the amount $31,619 on the Series B Convertible Preferred Stock; and (iv) outstanding warrants to purchase 12,054,405 shares of the Company’s common stock. A derivative liability in the amount of $2,003,390 related to the convertible debt and was also settled pursuant to the Exchange Agreement. The Company valued the 2,846,355.14 shares of Series E Convertible Preferred Stock at $2,022,766, and recorded a gain in the amount of $472,267 on the Exchange Agreement during the three months ended November 30, 2018.
Common stock
The Company is authorized to issue 580,000,000 shares of $0.001 par value common stock as of November 30, 20172018 and August 31, 2017.2018. The Company has 78,685,302had 52,412,342 and 78,226,96979,683,842 shares of common stock issued and outstanding as of November 30, 20172018 and August 31, 2017.
Three Months Ended November 30, 2018
On November 28, 2018, the Company repurchased 27,271,500 shares of the Company’s common stock from two shareholders in a series of private transactions. The Shares were repurchased by the Company for the par value of the Shares or a total of $27,271.
Three Months Ended November 30, 2017 and 2016
On September 28, 2017, the Company issued 208,333 shares of common stock, for the conversion of $16,347 of principal and $8,653 of accrued interest of convertible notes payable.
On November 16, 2017, the Company issued 250,000 shares of common stock, for the conversion of $17,518 of principal and $12,482 of accrued interest of convertible notes payable.
Warrants
The Company has no warrants outstanding at November 30, 2018. Transactions involving warrants are summarized as follows:
Number of | Weighted Average | |||||||
Warrants | Exercise Price | |||||||
Warrants outstanding at August 31, 2018 | 12,054,405 | $ | 0.01 | |||||
Granted | - | - | ||||||
Exercised | - | - | ||||||
Cancelled / Expired | (12,054,405 | ) | 0.01 | |||||
Warrants outstanding at November 30, 2018 | - | $ | - | |||||
During the three months ended November 30, 2018, the Company exchanged all the warrants with the Series E Convertible Preferred Stock.
Note 10 – Fair Value of Financial Instruments
Under FASB ASC 820-10-05, the Financial Accounting Standards BoardFASB establishes a framework for measuring fair value in generally accepted accounting principlesGAAP and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short termshort-term nature of the instruments. The Company had no other items that required fair value measurement on a recurring basis.
The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
The following summarized the Company’s financial liabilities that are recorded at fair value on a recurring basis at November 30, 20172018 and August 31, 2017.
| November 30, 2017 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | - | $ | - | $ | 304,707 | $ | 304,707 | ||||||||
| August 31, 2017 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities | $ | - | $ | - | $ | 312,878 | $ | 312,878 | ||||||||
August 31, 2018 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 2,317,412 | $ | 2,317,412 | ||||||||
November 30, 2018 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | - | $ | - | ||||||||
Note 1111 – Subsequent Events
On January 17,December 13, 2018, one of our lenders (the “Lender”) purchased the convertible notes that were due on December 27, 2017, and we entered into an agreement with the Lender to extend the debt for one year and reducing the conversion price to $0.03 per share. Accordingly, we issued the Lender a new secured 10% convertible note with the principal sum of $542,343. The Lender has expressed interest in converting the note to a new series of preferred stock once we obtain shareholder approval to clarify that our Board of Directors (the “Board”) of the Company elected Michael Young to serve as Chairman of the Board, which became effective upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2018 on December 21, 2018.
Mr. Young will receive $25,000 in annual compensation for his services as a director and Chairman. In connection with his appointment Mr. Young has also received five-year options to purchase 500,000 shares of the powerCompany’s common stock (the “Young Options”) at the exercise price of $0.26 per share. The Young Options will vest in four quarterly installments over a one-year period starting on January 1, 2019, and will immediately become fully vested should Mr. Young resign from his positions with the Company.
In December 2018, Mr. Young also acquired 12,000,000 shares of the Company’s common stock pursuant to issue preferred stock without further shareholder approval. We expect to have that approval in mid to late February 2018. Because we have no bindinga securities purchase agreement with David Lelong, the Lender,Chief Executive Officer and director of the conversionCompany, for a total purchase price of $120,000.
The Company also granted Mr. Lelong five-year options to preferredpurchase 500,000 shares at the exercise price of $0.26 per share (the “Lelong Options”). The Lelong Options which will vest in four quarterly installments over a one-year period starting on January 1, 2019 and will immediately become fully vested should Mr. Lelong resign from his positions with the Company.
In December 2018, the Company closed on a private placement where it received proceeds of approximately $2.8 million before fees from the sale of units of common stock may not occur.
On December 17, 2018 the Company acquired a minority interest in TruPet, a limited liability company that provides nutritional food, supplements, and pet care products for dogs, cats, and horses. The Company invested $2.2 million into TruPet and acquired a Series A Membership Interest equal to approximately 6.7% of the Membership Interests. The Company is entitled to appoint one of the five managers and certain preferential informational rights.
In January 2019, the Company acquired for cancellation 24,333,333 shares of common stock from its President and CEO for cash at the par value of the shares, or $24,333.
We evaluated subsequent events after the balance sheet date through the date the unaudited condensed financial statements were issued. We did not identify any additional material events or transactions occurring during this subsequent event reporting period that required further recognition or disclosure in these unaudited condensed financial statements.
OVERVIEW AND OUTLOOK
Sport Endurance Inc. (“Sport Endurance”) is a Nevada corporation that is currently develops, markets,seeking to enter into the cannabidiol (“CBD”), hemp, or legal marijuana industries and distributes quality dietarymarket various products in one of those industries. As of the date of this report, the Company has no written agreements to acquire any businesses. We cannot assure you we will be successful in making any acquisitions.
On December 17, 2018 the Company acquired a minority interest in TruPet, a limited liability company that provides nutritional food, supplements, throughoutand pet care products for dogs, cats, and horses. On December 28, 2018, the United States.
For the three months ended November 30, 2017,2018, we had a net lossincome of $110,700$505,220 compared to a net loss of $200,563$110,700 for the three months ended November 30, 2016.2017. Our accumulated deficit as of November 30, 20172018 was $3,219,151.$5,554,071. These conditions raise substantial doubt about our ability to continue as a going concern over the next twelve12 months.
Results of Operations for the Three Months Ended November 30, 2017 2018and 2016
Revenues
The Company had sales of $214$0 during the three months ended November 30, 20172018 compared to $230$214 for the three months ended November 30, 2016.2017. The Company had cost of goods sold relatedin the amount of $0 for gross profit of $0 during the three months ended November 30, 2018 compared to salescost of goods sold in the amount of $27 for net revenuegross profit of $187 during the three months ended November 30, 2017 compared to cost of goods sold related to sales in the amount of $342017.
Selling, general and administrative expenses
General and administrative expenses were $147,523 for net revenue of $196 during the three months ended November 30, 2016.
Interest expense
Net interest expense for the three months ended November 30, 20172018 was $136,925$133,545 compared to $183,705 for the three months ended November 30, 2016, a decrease of $46,780. The increase in net interest expenses$136,925 for the three months ended November 30, 2017, compared to 2016a decrease of $3,380. The decrease was due primarily to the decrease innon-cash expense of the amortization of discounts on notes payable during the discountperiod.
Gain on our convertible notes payable.
During the three months ended November 30, 2018, the Company recorded a gain in the amount of $472,267 on exchange of debt and equity to preferred stock. There were no such comparable transactions during the three months ended November 30, 2017.
Change in Fair Valuefair value of Derivative Liability
The Company had a non cashnon-cash gain of $111,281$314,021 on revaluation of derivative liabilities during the three months ended November 30, 20172018, an increase of $202,740 compared to $67,072a non-cash gain of $111,281 in the three months ended November 30, 2016.2017. The increase in the gain was due primarily to the restructuring ofmark to market adjustments on our debt during the current period.
Net loss
For the reasons above, our net lossincome for the three months ended November 30, 20172018 was $110,700$505,220, an increase of $615,920 compared to $200,563a net loss of $110,700 for the three months ended November 30, 2016, a decrease in our net loss of $89,863..
Liquidity and Capital Resources
The following table summarizes total current assets, liabilities and working capital at November 30, 20172018 compared to August 31, 2017.
November 30, 2017 | August 31, 2017 | |||||||
| Current Assets | $ | 107,027, | $ | 16,324 | ||||
| Current Liabilities | $ | 1,322,154 | $ | 1,199,198 | ||||
| Working Capital (Deficit) | $ | (1,215,127 | ) | $ | (1,182,874 | ) | ||
November 30, 2018 | August 31, 2018 | |||||||
Current Assets | $ | 33,004 | $ | 209,076 | ||||
Current Liabilities | $ | 223,515 | $ | 2,858,351 | ||||
Working Capital (Deficit) | $ | (190,511 | ) | $ | (2,649,275 | ) | ||
The Company had cash used in operating activities of $111,020.$148,801 during the three months ended November 30, 2018. This primarily consisted of the Company’s net lossincome of $110,700,$505,220, decreased by non-cash gain on exchange of debt and equity of $472,267 and by a change in fairthe market value of derivative liabilities in the amount of $111,281 and the$314,022, offset by amortization of discount on convertible debt in the amount of $118,886.$118,708. The Company’s cash position also decreased $7,925increased by $13,560 as a result of changes in components of current assets and current liabilities.
During the three months ended November 30, 2017 the Company’s President and CEO, David Lelong, loaned2018, the Company $35,500 represented by four notes payable in September and October 2017. In addition the Company repaid Mr. Lelong $75,950 which includes $75,000 principal in addition to $950 in accrued interest duringhad no cash flows from investing activities.
During the three months ended November 30, 2017.
With the proceeds of $241,250 netthe Company’s recent private placement and after the making of a $2.2 million equity investment in TruPet, the 3.5% original issue discountCompany had $297,858 of $8,750. At the Holders option the principal and accrued interest under the note are convertible into common stock at a rate of $0.50 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. As of November 30, 2017 there was an aggregate amount of $250,000 outstanding under the November 2017 Convertible Note. We also owed $520,111 under the convertible notes we issued in January and February 2017. After the holder of the November 2017 Convertible Notes purchased these notes, we have refinanced the notes and issued the holder of the November 2017 Convertible Note a new note in the principal sum of $542,343 which is due on January 16, 2019 and is convertible into common stock at $0.03 per share.
We anticipate that we will incur operating losses in the next 12 months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management of growth. To address these risks we must, among other things, expanddescribed in our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effectForm 10-K filed on our business prospects, financial condition and results of operations.
Cautionary Note Regarding Forward Looking Statements
This Report contains forward-looking statements including statements regarding our generation of revenues, our increasing expenses, the availability of future financing,changing the direction of our business, our ability to acquire TruPet, the availability of future financing, and our liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, business strategy, the acquisition of TruPet, and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include our lack of workingthose relating to the capital the failure to generate sufficient revenue, the reluctance of consumers to purchase products, difficulties we may encounter in raising capital based upon our current financial conditionmarkets summarized under Liquidity and lack of material revenues,Capital Resources and the condition of the securities markets in general and for microcap companies in particular, competition for any future alternative business or acquisition we may pursue, and our lack of experience in the business or industry we may acquire or enter. Further information on our risk factors is contained in our filings with the SEC, including the Form 10-K for the year ended August 31, 2017 which was for a prior business.fiscal 2018. Any forward-looking statement made by us in this report speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.
Going concern.
Our unaudited condensed financial statements are prepared using accounting principles generally accepted in the United States of AmericaGAAP applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $3,219,172$5,554,071 and anet working capital deficit of $1,215,127$190,511 at November 30, 2017,2018, and have reported negative cash flows from operations since inception.Inception. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.
Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that are material to investors.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. These estimates and assumptionsthat affect the reported amountsamount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenuesamounts of revenue and expenses. Accountingexpenses during the reported periods. The more critical accounting estimates that areinclude estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the most important to the presentation of our results of operations and financial condition, and which require the greatest use of judgment by management, are designated as our critical accounting estimates. We have the following critical accounting estimates:
Recently Issued Accounting Standards
There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Note 1 to our unaudited condensed financial statements appearing elsewhere in this report includes Recent Accounting Pronouncements.
This item is not applicable as we are currently considered a smaller reporting company.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit pursuant to the requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (“SEC”)’s rules and forms. Disclosure controls and procedures include, among other things, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer, David Lelong, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. Based on the evaluation, Mr. Lelong concluded that our disclosure controls and procedures are not effective in timely alerting them to material information relating to us that is required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure, for the following reasons:
● | The Company does not have an independent board of directors or audit committee or adequate segregation of duties; |
● | All of our financial reporting is carried out by our financial consultant; |
● | We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company. |
We plan to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of this Report to our knowledge, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations and there are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
This item is not applicable to a smaller reporting company.
We have previously disclosed all sales of securities without registration under the Securities Act of 1933 (the “Act”), other than the following:
None.
None.
None.
| Incorporated by reference | ||||||
| Exhibit | Exhibit Description | Filed herewith | Form | Exhibit | Filing date | |
| 3.1 | S-1 | 3.1 | 09/16/09 | |||
| 3.2 | 10-Q | 3.2 | 07/14/17 | |||
| 3.3 | 8-K | 3.2 | 4/29/16 | |||
| 3.4 | S-1/A | 3.3 | 12/31/09 | |||
| 4.1 | 8-K | 4.1 | 5/13/16 | |||
| 4.2 | 8-K | 4.1 | 11/20/17 | |||
| 4.3 | 8-K | 4.2 | 11/20/17 | |||
10.1 | X | |||||
10.2 | X | |||||
| 31.1 | X | |||||
| 31.2 | X | |||||
| 32.1 | X | |||||
| 101.INS | XBRL Instance Document | X | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||
|
|
|
| Incorporated by reference | ||
Exhibit |
| Exhibit Description | Filed herewith | Form | Exhibit | Filing date |
3.1 |
|
| S-1 | 3.1 | 09/16/09 | |
3.2 |
|
| 10-Q | 3.2 | 07/14/17 | |
3.3 |
|
| 8-K | 3.1 | 3/22/18 | |
3.4 |
|
| 8-K | 3.2 | 4/29/16 | |
3.5 |
|
| S-1/A | 3.3 | 12/31/09 | |
3.6 |
| Certificate of Designation for the Series B Convertible Preferred Stock |
| 8-K | 3.1 | 6/01/18 |
3.7 |
| Certificate of Designation for Series E Convertible Preferred Stock |
| 8-K | 3.1 | 10/25/18 |
4.1 |
|
| 8-K | 4.1 | 12/13/18 | |
10.1 |
|
| 8-K | 10.1 | 10/25/18 | |
10.2 |
|
| 8-K | 10.1 | 12/13/18 | |
10.3 |
|
| 8-K | 10.2 | 12/13/18 | |
31.1 |
| Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X |
|
|
|
31.2 |
| Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act | X |
|
|
|
32.1 |
| X |
|
|
| |
101.INS |
| XBRL Instance Document | X |
|
|
|
101.SCH |
| XBRL Taxonomy Extension Schema Document | X |
|
|
|
101.CAL |
| XBRL Taxonomy Extension Calculation Linkbase Document | X |
|
|
|
101.DEF |
| XBRL Taxonomy Extension Definition Linkbase Document | X |
|
|
|
101.LAB |
| XBRL Taxonomy Extension Label Linkbase Document | X |
|
|
|
101.PRE |
| XBRL Taxonomy Extension Presentation Linkbase Document | X |
|
|
|
+ Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission staff upon request.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
SPORT ENDURANCE, INC. | |||
Date: January | By: | /s/ David Lelong | |
David Lelong | |||
President, Chief Executive Officer, Director (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) | |||