UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period EndedSeptember 30, 2017March 31, 2019
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ________ to _________
Commission File Number0-11730000-11730
NABUFITNEWBRIDGE GLOBAL VENTURES, INC.
(Exact name of registrant as specified in its charter)
Delaware |
| 84-1089377 |
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
|
|
|
|
|
|
Orem, Utah |
| 84097 |
(Address of principal executive offices) |
| (Zip Code) |
801-592-3000801-362-2115
(Registrant’s telephone number, including area code)
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.
Yesþ Noo
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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.)
Yesþ Noo
Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of“large accelerated filer,” “accelerated filer,” and“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated fileroþ (Do not check if a smaller reporting company)Smaller reporting companyþ
Emerging growth companyoþ
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. [ ]o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)
Yeso Noþ
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
N/A | N/A | N/A |
As of November 14, 2017,June 30, 2019, the registrant had 3,359,20063,098,055 shares of common stock, par value $0.0001 per share, issued and outstanding.
NABUFIT GLOBAL, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTSExplanatory Note
This Form 10-Q/A revises the Form 10-Q filed on July 11, 2019 (the “Original 10-Q”) to include the XBRL which was omitted from the Original 10-Q.
PART I — FINANCIAL INFORMATIONTABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | ||
ITEM 1. |
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ITEM 2. | 22 | |
ITEM 3 | 24 | |
ITEM 4 | 24 | |
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ITEM 1. | 25 | |
ITEM 1A. | 25 | |
ITEM 2. | 25 | |
ITEM 3. | 25 | |
ITEM 4. | 25 | |
ITEM 5. | 25 | |
ITEM 6. | 26 | |
26 |
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements
NEWBRIDGE GLOBAL VENTURES, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
|
|
|
|
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|
| March 31, |
| December 31, |
|
| 2019 |
| 2018 |
|
| (Unaudited) |
| (As Adjusted) |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
| $38,688 |
| $89,550 |
Prepaid expenses and other current assets |
| 105,587 |
| 17,421 |
Total current assets |
| 144,275 |
| 106,971 |
|
|
|
|
|
Operating lease right-of-use asset |
| 254,199 |
| 258,276 |
Property and equipment, net |
| 7,724,179 |
| 5,247,309 |
Intangible assets, net |
| 2,644,246 |
| - |
Goodwill |
| 9,245,953 |
| 9,245,953 |
Investment in joint venture |
| 39,912 |
| - |
Other assets |
| 4,424 |
| - |
|
|
|
|
|
Total Assets |
| $20,057,188 |
| $14,858,509 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
| $1,886,273 |
| $740,660 |
Accrued liabilities |
| 706,517 |
| 314,715 |
Related party payables |
| 941,584 |
| 106,093 |
Notes payable related parties |
| 872,169 |
| 958,467 |
Current portion of operating lease liability |
| 17,362 |
| 16,935 |
Current portion of notes payable, net of discount |
| 20,109 |
| 23,355 |
Convertible notes payable, net of discount |
| 537,494 |
| - |
Total current liabilities |
| 4,981,508 |
| 2,160,225 |
|
|
|
|
|
Operating lease liability, net of current portion |
| 236,837 |
| 241,341 |
Notes payable, net of current portion and discount |
| 709,781 |
| 710,972 |
|
|
|
|
|
Total Liabilities |
| 5,928,126 |
| 3,112,538 |
|
|
|
|
|
Commitments and Contingencies |
| - |
| - |
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|
|
|
|
STOCKHOLDERS' EQUITY |
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|
Preferred stock, $.0001 par value, 400,000 shares authorized; no shares issued and outstanding |
| - |
| - |
Common stock $.0001 par value, 100,000,000 shares authorized; 59,698,055 and 57,116,055 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively. |
| 5,970 |
| 5,712 |
Additional paid-in capital |
| 19,679,205 |
| 15,209,596 |
Accumulated deficit |
| (5,556,113) |
| (3,469,337) |
Total stockholders' equity |
| 14,129,062 |
| 11,745,971 |
|
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|
|
Total Liabilities and Stockholders' Equity |
| $20,057,188 |
| $14,858,509 |
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|
See accompanying notes to the condensed consolidated financial statements. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited) | ||||
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| |||
| For the Three Months Ended |
| ||
| March 31, |
| March 31, |
|
| 2019 |
| 2018 |
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|
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Revenue: |
|
|
|
|
Rental income | $- |
| $3,600 |
|
Consulting services | 22,725 |
| - |
|
Total Revenue | 22,725 |
| 3,600 |
|
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|
|
|
|
Operating Expenses: |
|
|
|
|
Selling, general and administrative | 1,765,654 |
| 55,853 |
|
Total Operating Expenses | 1,765,654 |
| 55,853 |
|
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|
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|
Loss from Operations | (1,742,929) |
| (52,253) |
|
|
|
|
|
|
Other Expense: |
|
|
|
|
Loss on investment in joint venture | (12,538) |
| - |
|
Interest expense | (331,309) |
| (4,391) |
|
Total Other Expense | (343,847) |
| (4,391) |
|
|
|
|
|
|
Net Loss | $(2,086,776) |
| $(56,644) |
|
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Net loss per common share - basic and diluted | (0.04) |
| (0.01) |
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Weighted average common shares |
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outstanding - basic and diluted | 58,546,944 |
| 5,173,979 |
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See accompanying notes to the condensed consolidated financial statements. | ||||
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | |||||||||
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Additional |
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| Paid-in | Accumulated | |||||
Shares | Amount | Capital | Deficit | Total | |||||
Balance at December 31, 2017 | 3,695,604 | $370 | $1,961,273 | $(122,253) | $1,839,390 | ||||
Capital contributions for stock | 4,338,750 | 434 | 37,276 | - | 37,710 | ||||
Net loss | - | - | - | (56,644) | (56,644) | ||||
Balance at March 31, 2018 | 8,034,354 | $804 | $1,998,549 | $(178,897) | $1,820,456 | ||||
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| Paid-in | Accumulated | ||||||
Shares | Amount | Capital | Deficit | Total | |||||
Balance at December 31, 2018 | 57,116,055 | $5,712 | $15,209,596 | $(3,469,337) | $11,745,971 | ||||
(as adjusted) | |||||||||
Stock issued for services | 232,000 | 23 | 294,057 | - | 294,080 | ||||
Stock issued in asset acquisition | 2,350,000 | 235 | 3,031,265 | - | 3,031,500 | ||||
Debt discount on convertible debt | - | - | 1,031,040 | - | 1,031,040 | ||||
Share-based compensation | - | - | 113,247 | - | 113,247 | ||||
Net loss | - | - | - | (2,086,776) | (2,086,776) | ||||
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| $5,970 | $19,679,205 | $(5,556,113) | $14,129,062 | ||||
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See accompanying notes to the consolidated financial statements. | |||||||||
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NEWBRIDGE GLOBAL VENTURES, INC. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(Unaudited) | |||||
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| For the Three Months Ended | ||
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| March 31, | ||
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| 2019 |
| 2018 |
Cash Flows From Operating Activities |
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Net loss |
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| $(2,086,776) |
| $(56,644) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
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Depreciation expense |
|
| 18,009 |
| 15,595 |
Amortization expense |
|
| 176,284 |
| - |
Share-based compensation |
|
| 113,247 |
| - |
Stock issued for services |
|
| 294,080 |
| - |
Amortization of debt discount |
|
| 239,040 |
| - |
Loss on investment in joint venture |
|
| 12,538 |
| - |
Noncash lease expense |
|
| 4,077 |
|
|
Operating expenses and interest paid through member contributions |
| - |
| 34,544 | |
Changes in operating assets and liabilities: |
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|
|
|
|
Prepaid expenses and other current assets |
|
| (88,166) |
| - |
Accounts payable |
|
| 27,264 |
| - |
Accrued liabilities |
|
| 465,998 |
| - |
Related party payables |
|
| (75,073) |
| 8,500 |
Operating lease liability |
|
| (4,077) |
| - |
Other assets |
|
| (4,424) |
| - |
Net Cash Provided by (Used in) Operating Activities |
|
| (907,979) |
| 1,995 |
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Cash Flows From Investing Activities |
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Purchase of property and equipment |
|
| (307,446) |
| - |
Net Cash Used in Investing Activities |
|
| (307,446) |
| - |
|
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Cash Flows From Financing Activities |
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|
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|
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Proceeds from issuance of convertible notes payable |
|
| 1,304,000 |
| - |
Principal payments on notes payable |
|
| (4,437) |
| - |
Principal payments on unsecured notes payable, related parties |
|
| (135,000) |
| - |
Net Cash Provided by Financing Activities |
|
| 1,164,563 |
| - |
|
|
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|
|
|
Net Increase (Decrease) in Cash |
|
| (50,862) |
| 1,995 |
Cash at Beginning of Period |
|
| 89,550 |
| - |
Cash at End of Period |
|
| $38,688 |
| $1,995 |
Noncash Investing and Financing Information: | ||||||
|
| $3,031,500 | $- | |||
Long-term assets purchased through accounts payable | $1,118,349 | $- | ||||
Long-term assets purchased through related party payables | $910,564 | $- | ||||
Long-term assets contributed to joint venture | $52,450 | $- | ||||
Debt discount on convertible notes payable | $1,031,040 | $- | ||||
Payments on notes payable through member contributions | $- | $3,166 | ||||
Operating expenses paid through member contributions | $- | $34,544 | ||||
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2
PART I - FINANCIAL INFORMATION
NABUFIT GLOBAL, INC. AND SUBSIDIARIES | ||||
|
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|
| September 30, |
| December 31, |
|
| 2017 |
| 2016 |
|
| (Unaudited) |
|
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash |
| $31,594 |
| $9,707 |
Prepaid expenses and other current assets |
| 315,331 |
| 72,250 |
Current assets of discontinued operations |
| - |
| 4,127,562 |
Total current assets |
| 346,925 |
| 4,209,519 |
|
|
|
|
|
Total Assets |
| $346,925 |
| $4,209,519 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
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Current Liabilities |
|
|
|
|
Accounts payable |
| $75,174 |
| $36,998 |
Accrued liabilities |
| 27,752 |
| 63,519 |
Related party payables |
| 5,450 |
| 4,733 |
Convertible notes payable net of debt discount |
| 32,320 |
| - |
Derivative liabilities |
| 39,519 |
| - |
Current liabilities of discontinued operations |
| - |
| 2,493,960 |
Total current liabilities |
| 180,215 |
| 2,599,210 |
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|
|
Total Liabilities |
| $180,215 |
| $2,599,210 |
|
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Commitments and Contingencies |
| - |
| - |
|
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STOCKHOLDERS' EQUITY |
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Preferred stock, $.0001 par value, 400,000 shares authorized; no shares issued and outstanding |
| - |
| - |
Common stock $.0001 par value, 100,000,000 shares authorized; 3,359,200 and 854,338 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively. |
| 336 |
| 85 |
Additional paid-in capital |
| 7,945,990 |
| 6,055,755 |
Accumulated deficit |
| (7,779,616) |
| (4,411,001) |
Accumulated other comprehensive loss |
| - |
| (34,530) |
Total stockholders' equity |
| 166,710 |
| 1,610,309 |
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
| $346,925 |
| $4,209,519 |
|
|
|
|
|
See accompanying notes to the condensed consolidated financial statements |
3
NABUFIT GLOBAL, INC. AND SUBSIDIARIES | |||||||
AND COMPREHENSIVE LOSS | |||||||
(Unaudited) | |||||||
| |||||||
| For the Three Months Ended |
| For the Nine Months Ended | ||||
| September 30, |
| September 30, | ||||
| 2017 |
| 2016 |
| 2017 |
| 2016 |
|
|
|
|
|
|
|
|
Revenue | $ - |
| $ - |
| $ - |
| $ - |
|
|
|
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|
|
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Operating Expenses: |
|
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|
|
|
|
|
Selling, general and administrative | 254,960 |
| 404,954 |
| 864,547 |
| 747,035 |
Total Operating Expenses | 254,960 |
| 404,954 |
| 864,547 |
| 747,035 |
|
|
|
|
|
|
|
|
Loss from Operations | (254,960) |
| (404,954) |
| (864,547) |
| (747,035) |
|
|
|
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|
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Other Income (Expense): |
|
|
|
|
|
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|
Interest expense | (89,190) |
| - |
| (199,962) |
| - |
Loss on debt settlement | (416,809) |
| - |
| (416,809) |
| - |
Gain on derivative | 21,907 |
| - |
| 40,972 |
| - |
Total Other Income (Expense) | (484,092) |
| - |
| (575,799) |
| - |
|
|
|
|
|
|
|
|
Net loss from continuing operations | (739,052) |
| (404,954) |
| (1,440,346) |
| (747,035) |
Discontinued operations |
|
|
|
|
|
|
|
Gain on sale of subsidiary | 9,866 |
| - |
| 9,866 |
| - |
Discontinued operations year-to-date | (375,309) |
| (598,429) |
| (1,938,134) |
| (1,594,978) |
Net loss from discontinued operations | (365,443) |
| (598,429) |
| (1,928,268) |
| (1,594,978) |
|
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Net Loss | $ (1,104,495) |
| $ (1,003,383) |
| $ (3,368,614) |
| $ (2,342,013) |
|
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Net loss per common share - basic and diluted: |
|
|
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|
|
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Continuing operations | (0.70) |
| (0.57) |
| (1.50) |
| (1.12) |
Discontinued operations | (0.35) |
| (0.85) |
| (2.01) |
| (2.40) |
Total | $ (1.05) |
| $ (1.42) |
| $ (3.51) |
| $ (3.52) |
|
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Weighted average common shares outstanding - basic and diluted | 1,051,253 |
| 706,955 |
| 959,244 |
| 665,208 |
|
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Comprehensive Loss: |
|
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|
|
|
|
Net Loss | $ (1,104,495) |
| $ (1,003,383) |
| $ (3,368,614) |
| $ (2,342,013) |
|
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|
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|
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Other Comprehensive Income |
|
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|
|
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|
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Translation adjustments | (25,577) |
| 12,144 |
| 34,530 |
| 39,650 |
Total Comprehensive Loss | $ (1,130,072) |
| $ (991,239) |
| $ (3,334,084) |
| $ (2,302,363) |
|
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|
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|
See accompanying notes to the condensed consolidated financial statements |
4
NABUFIT GLOBAL, INC. AND SUBSIDIARIES | |||||
(Unaudited) | |||||
|
|
|
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|
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|
|
| For the Nine Months Ended | ||
|
|
| September 30, | ||
|
|
| 2017 |
| 2016 |
|
|
|
|
|
|
Net Loss |
|
| $(3,368,614) |
| $(2,342,013) |
Net loss from discontinued operations |
|
| (1,928,268) |
| (1,594,978) |
Net loss from continuing operations |
|
| (1,440,346) |
| (747,035) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
Share-based compensation |
|
| 81,339 |
| - |
Shares issued for services |
|
| 158,721 |
| 613,675 |
Amorization of debt discount |
|
| 167,281 |
| - |
Gain on derivative |
|
| (40,972) |
| - |
Loss on debt settlement |
|
| 416,809 |
| - |
Foreign currency transaction loss |
|
| 24,353 |
| - |
Changes in operating assets and liabilities: |
|
|
|
|
|
Prepaid expenses and other current assets |
|
| (243,081) |
| 120,000 |
Accounts payable |
|
| 38,893 |
| 30,060 |
Accrued liabilities |
|
| (35,767) |
| 3,000 |
Net Cash Used in Operating Activities - Continuing Operations |
|
| (872,770) |
| 19,700 |
Net Cash Used in Operating Activities - Discontinued Operations |
|
| (1,659,022) |
| (2,210,690) |
Net Cash Used in Operating Activities |
|
| (2,531,792) |
| (2,190,990) |
|
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
|
|
Proceeds from issuance of common stock for cash |
|
| 559,752 |
| 1,433,726 |
Proceeds from issuance of convertible notes payable |
|
| 595,040 |
| - |
Net Cash Provided by Financing Activities - Continuing Operations |
|
| 1,154,792 |
| 1,433,726 |
Net Cash Provided by Financing Activities - Discontinued Operations |
|
| - |
| - |
Net Cash Provided by Financing Activities |
|
| 1,154,792 |
| 1,433,726 |
Effect of exchange rate changes on cash |
|
| 5,968 |
| 37,089 |
|
|
|
|
|
|
Net Decrease in Cash |
|
| (1,371,032) |
| (720,175) |
Cash at Beginning of Period |
|
| 1,402,626 |
| 1,133,247 |
Cash at End of Period |
|
| $31,594 |
| $413,072 |
|
|
|
|
|
|
Noncash Investing and Financing Information: |
|
|
|
|
|
Beneficial conversion features on convertible debt |
|
| $87,686 |
| $- |
Derivative liabilities on convertible debt |
|
| 107,334 |
| - |
Conversion of notes payable to common stock |
|
| 559,334 |
| - |
Settlement of derivative liability |
|
| 26,843 |
| - |
Shares of common stock issued for subscriptions |
|
| - |
| 514,571 |
Stock issued for prepaid expenses |
|
| - |
| 73,600 |
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
Cash Paid for Interest |
|
| $- |
| $- |
Cash Paid for Taxes |
|
| - |
| - |
|
|
|
|
|
|
See accompanying notes to the condensed consolidated financial statements |
5
NABUFITNEWBRIDGE GLOBAL VENTURES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 — THE COMPANY AND BASIS OF PRESENTATION
Financial Statement Presentation and principles of consolidation—–The accompanying condensed consolidated financial statements for NABUFIT Global, Inc. (“NABUFIT Global”) and its wholly-owned subsidiaries NABUFIT Global ApS (“NABUFIT Denmark”), NABUFIT China Limited (“NABUFIT China”) and NABUFIT IP ApS (“NABUFIT IP”) (collectively “NABUFIT,” “we”, or “the Company”) are presented in conformity with accounting principles generally accepted in the United States of America.America and include the operations and balances of NewBridge Global Ventures, Inc. (“NewBridge”) and its wholly-owned subsidiaries, Elevated Education, Inc. (“Elevated”), 5Leaf, LLC (“5Leaf”), Genus Management Group, LLC (“Genus”), Mad Creek Farm, LLC (“Mad Creek”), 725 E 11th, LLC (“11th Street”), Timothy Lane LLC (“Timothy”), East 10th Street LLC (“10th Street”), The Bay Clonery, LLC (“Bay Clonery”), Roots of Caly, LLC (“Roots”), and 50% owned subsidiary Green Thumb Distributors, Inc. (“Green Thumb”). The consolidated financial statements include the operations of NewBridge and Elevated since July 14, 2018 which operations are continuing (see Reverse Acquisition below). Genus, Timothy, 10th Street, Green Thumb, Bay Clonery, and Roots were formed in 2018 (collectively, “New Entities”, “we”, or “the Company”). Intercompany balances and transactions have been eliminated in consolidation.
Nature of OperationsOrganization–— Effective August 30, 2017, On July 14, 2018, NewBridge closed on Share Exchange and Purchase Agreements (the “Purchase Agreements”, the Company entered into an Agreement on Transfer of Shares (“Transfer Agreement”) whereby it sold all of“July Acquisitions”, the interest held in its operating subsidiaries NABUFIT Denmark, NABUFIT China, and NABUFIT IP (“Operating Subsidiaries”) and consequently ceased its prior operations (“Operations Sale”). See Note 4 – discontinued operations. Prior to the Operations Sale, the Company, through its Operating Subsidiaries designed, manufactured and marketed the NABUFIT virtual training and fitness products and services (“NABUFIT Products”). After completion of the Operations Sale, all of the Company’s equity in the Operating Subsidiaries were transferred and all of its interests in the NABUFIT Product and the associated technology and intellectual property ceased.
Following the Operations Sale, the Company commenced providing business consulting services to several companies in the medical marijuana and cannabis related industries. These companies include an online company which provides education to healthcare professionals regarding medical cannabis and the endocannabinoid system, a distribution company focused on delivering best in class hemp oil and medical marijuana products and a wellness center delivering medical recommendations to patient and sales of CBD and hemp oil products.
In connection with such consulting agreements, the Company will provide the following services:
·Strategic advisory and services;
·Business services;
·Marketing services;
·Acquisition and development services; and
·Strategic partnership and consolidation services.
Reverse Stock Split
Effective June 27, 2017, the Company filed an Amended and Restated Certificate of Incorporation (“Restated Certificate”“Closing”) with the Delaware Secretaryvarious members and shareholders of State11th Street, Mad Creek, Timothy, Genus (formerly GLML) and 5Leaf (together the “Consortium”), whereby NewBridge purchased the Company effected a reverse stock split to reduce the number of shares of outstanding common stock at a rate of 1 share for every 30 shares of common stock then outstanding (“Reverse Split”). The approvalor membership interests of the Restated Certificate was approved by written consent of holders ofseveral entities making up the Consortium for a majoritycombined 31,000,000 shares of the Company’s common stock. Each stockholder owning fewer than 30stock, par value $0.0001 per share. The Consortium consists of a farm, nursery, extraction facility, and management and real estate companies in the cannabis industry.
Reverse Acquisition – The 31,000,000 shares issued to the Consortium represented 76% of the 40,904,589 shares of the Company��s common stock issued and outstanding immediately beforefollowing the effective timeJuly Acquisitions. In addition, three of the Reverse Stock Split received fromfour board members were replaced by the Company $0.10 in cash, without interest, for each of such shares of common stock; and (b) each stockholder owning of record 30 or more shares of common stock immediately beforesellers at the effective timeClose. Due to the relative size of the Reverse Split held, afterConsortium compared to the Reverse Split, the number of shares of common stock equal to 1/30th of the number heldCompany prior to the Reverse Split. On June 28, 2017Closing and the change in control of the Company, filed with the Securities and Exchange Commission (“SEC”),July Acquisitions were considered a reverse acquisition and the Company’s stockholders were furnished with a Definitive Information Statement filed on Schedule 14(c) to adviseConsortium is the stockholdersacquirer for accounting purposes. The historical financial statements are of the corporate actions. All shareConsortium.
Nature of Business – The Company is vertically integrated and per-share amounts includedthrough its subsidiaries intends to cultivate, manufacture, and distribute industrial hemp throughout the United States and medical and recreational cannabis in this report have been restatedCalifornia as follows:
Mad Creek Farm—plans to reflectbe a grower of cannabis,
5Leaf—plans to manufacture and extract oils from hemp and cannabis,
Green Thumb—has applied for a California Type 11 license in the 1 for 30 reverse stock split.Bay area,
Genus—plans to provide consulting services to cultivators, processors and retailers.
Elevated Education—is creating and plans to market curriculum focused on the endocannabinoid system, pharmacology and clinical applications of medical cannabis.
Bay Clonery—plans to operate as an indoor nursery and tissue culture lab and to cultivate and market cannabis clones.
10th Street, 11th Street, and Timothy Lane—will operate as real estate holding companies.
Roots of Caly—plans to operate as an indoor nursery and to cultivate and market cannabis clones.
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NOTE 2 – GOING CONCERN
The accompanying condensed consolidated financial statements have been prepared with the recognition that there is considerable doubt about whether the Company can continue as a going concern. As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $3,368,614$2,086,776 for the ninethree months ended September 30, 2017March 31, 2019 and has an accumulated deficit of $7,779,616$5,556,113 at September 30, 2017.March 31, 2019. The Company also used cash in operating activities of $2,531,792$907,979 during the ninethree months ended September 30, 2017. After the discontinued operations, the financial situationMarch 31, 2019. The Company is somewhat improved but the Company stillalso in default on its notes payable related party and has a net loss from continuing operationsconstruction liens on some of $1,440,346 and net cash used in operating activities – continuing operations of $872,770 for the nine months ended September 30, 2017.its property. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
In order for us to continue as a going concern, we will need to obtain additional debt or equity financing. Weare regularly and continually seeking additional funding from investors and from time to time we are in various stages of negotiations. Nonetheless, to date we have not accomplished a financing of the size needed to put the Company on a stable operating basis.There can be no assurance that we will be able to secure additional debt or equity financing, that we will be able to attain positive cash flow operations, or that, if we are successful in any of those actions, those actions will produce adequate cash flow to enable us to meet our future obligations. All of our existing financing arrangements are short-term. If we are unable to obtain additional debt or equity financing, we may be required to cease operations.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information– The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the United States Securities and Exchange Commission.SEC. Accordingly, they are condensed and do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. The results of operations for the ninethree months ended September 30, 2017,March 31, 2019, may not be indicative of the results that may be expected for the year ending December 31, 2017.2019.
These financial statements should be read in conjunction with the financial statements and notes thereto which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2018. The accounting policies set forth in those annual financial statements are the same as the accounting policies utilized in the preparation of these financial statements, except as modified for appropriate interim financial statement presentation.
Principles of Consolidation– The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America and include operations and balances of NABUFIT Global, Inc. and its wholly-owned subsidiaries NABUFIT Denmark, NABUFIT China and NABUFIT IP. Intercompany balances and transactions have been eliminated in consolidation. NABUFIT China and NABUFIT IP have been formed but have no activity to date. All three subsidiaries were sold to an employee of NABUFIT Denmark effective August 30, 2017. As a result of this action, the current year and prior year disclosures reflect these operations as discontinued operations and prior year financial information has been restated to reflect this accounting treatment.
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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
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Fair Value – The fair values of the Company’s financial assets and liabilities approximate their carrying amounts at the reporting date.
Foreign Currency Transactions and Translations– For the purposes of this report, the functional currency of NABUFIT Denmark is the Danish Krone (DKK), the functional currency of NABUFIT China is the China Yuan Renminbi (CNY), and the functional currency of NABUFIT Global and the reporting currency is U.S. dollars (USD). The Company translates the assets and liabilities of NABUFIT Denmark and NABUFIT China from the functional currency to U.S. dollars at the appropriate spot rates as of the balance sheet date. Equity balances are translated using historical exchange rates. Changes in the carrying value of these assets and liabilities attributable to fluctuations in spot rates are recognized in foreign currency translation adjustment, a component of accumulated other comprehensive income. Income statement accounts are translated using the average exchange rate during the period.
Monetary assets and liabilities denominated in a currency that is different from the functional currency must first be remeasured from the applicable currency to the functional currency. The effect of this remeasurement process is recognized translation adjustments in our statement of comprehensive loss.
The Company incurred foreign currency transaction losses of $24,353 and $0 during the nine months ended September 30, 2017 and 2016, respectively. The foreign currency transaction loss was on a convertible note payable denominated in DKK that was settled during September 2017.
Cash and Cash Equivalents– The balance in cash and cash equivalents consists of cash reserves held in bank accounts. The Company maintains cash balances in bank accounts that, at times, exceed federally insured limits. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant risk with respect to cash.
Property and Equipment – Property and equipment are stated at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets. Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized. Leasehold improvements are assigned useful lives based on the shorter of their useful lives or the term of the related leases, including renewal options likely to be exercised. Routine maintenance, repairs and renewal costs are expensed as incurred. When property is retired or otherwise disposed of, the carrying values are removed from the property and equipment and related accumulated depreciation and amortization accounts.
Goodwill – The Company tests its recorded goodwill for impairment annually on November 30, or more often if indicators of potential impairment exist, by determining if the carrying value of each reporting unit
exceeds its estimated fair value. Factors that could trigger impairment include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the Company’s overall business and significant negative industry or economic trends. Future impairment reviews may require write-downs in the Company’s goodwill and could have a material adverse impact on the Company’s operating results for the periods in which such write-downs occur. As of March 31, 2019 and 2018, goodwill was $9,245,953 and $0, respectively.
Long-Lived Assets – Long-lived assets are reviewed for impairment when events or changes in circumstances indicate the carrying values of the assets may not be fully recoverable. When this occurs, the Company reviews the values assigned to long-lived assets by analyzing the anticipated, undiscounted cash flows they generate. When the expected future undiscounted cash flows from these assets do not exceed their carrying values, the Company estimates the fair values of such assets. Impairment is recognized to the extent the carrying values of the assets exceed their estimated fair values. Assets held for sale are reported at the lower of their carrying values or fair values less costs to sell.
Research andDevelopment – Research and development costs are expensed as incurredand are included in selling, general and administrative expense.
Stock-Based Compensation – The Company records compensation expense in the financial statements for stock-based awards based on the grant date fair value of those awards that are ultimately expected to vest. As such, the value of the award is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized over the requisite service periods of the awards on a ratable basis, which recognizes expense for each vesting tranche of each grant starting on the grant date and finishing on the vest date for that tranche.
Revenue Recognition– The Company recognizesgenerates revenue through consulting arrangements, and in the future from manufacturing services, producing and selling products. The revenue will be recognized at the point in time that the services are performed and products are sold and delivered to the customer. This policy will be modified if necessary as the Company grows and develops multiple revenue sources. The company had rental income prior to the recent quarter. The rental income was recognized monthly when persuasive evidence of an arrangement exists, performance of the service has occurred, the sales price charged is fixed or determinable,earned and collectability iscollection reasonably assured. Revenue is net of taxes and discounts and is recorded on an accrual basis.
Software Development Costs – The Company expenses software development costs until the Company has a working business model for the software.
Income Taxes – The Company accounts for income taxes pursuant to Accounting Standards Codification (ASC) 740, Income Taxes, which requires the use of the asset and liability method of accounting for deferred income taxes. We recognize deferred tax liabilities and assets based on the differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years.
All allowances against deferred income tax assets are recorded in whole or in part, when it is more likely than not those deferred income tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates 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.
A valuation allowance is required to the extent it is more-likely-than-not that a deferred tax asset will not be realized. ASC 740 also requires reporting of taxes based on tax positions that meet a more-likely-than-not standard and are measured at the amount that is more-likely-than-not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits.
8
Derivatives – The Company has entered into convertible debt agreements whereby the related conversion features are derivatives. Therefore, the Company has calculated the fair value of these derivatives on the execution dates and has also recorded a gain on derivative for the change in fair value from the execution date to the reporting date.
The Company estimates fair values of derivative financial instruments using the Black-Scholes model, adjusted for the effect of dilution, because it embodies all of the requisite assumptions (including trading volatility, estimated terms, dilution and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques (such as Black-Scholes model) are highly volatile and sensitive to changes in the trading market price of our common stock.
Basic and Diluted Loss Per Share – Basic loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per common share is
calculated by dividing net loss by the weighted-average number of common shares outstanding during the period giving effect to potentially dilutive common stock equivalents. As of September 30, 2017,March 31, 2019 and 2018, the Company had 4,834,000 and 0, respectively, common stock equivalents of 150,148 shares outstanding related to the convertible notes payable. outstanding.
NewCustomerConcentration – Concentration of credit risk with respect to accounts receivable is limited due to only having a few sales. For consulting revenue, the Company had one customer account for 100% of total rental income for the three months ended March 31, 2019. There was no consulting revenue during the three months ended March 31, 2018. For rent revenue, the Company had one tenant account for 100% of total rent revenue for the three months ended March 31, 2018. There was no rent revenue for the three months ended March 31, 2019.
Recent Accounting Pronouncements – In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 changes the accounting for leases. In particular, lessees will recognize lease assets and lease liabilities for operating leases. The Company does not expect the adoption of any recent accounting pronouncements to have a material impactadopted ASU 2016-02 on its financial statements.January 1, 2019 as described in Note 11.
NOTE 4 – DISCONTINUED OPERATIONSCHANGES IN ACCOUNTING PRINCIPLE
EffectiveAs described in Note 6, the Company adopted Topic 842 Leases, effective January 1, 2019 resulting in the retrospective adjustment of the comparative 2018 periods presented. Prior to the application of Topic 842, the rent expense was recorded in the amount of the lease payments, adjusted on straight-line basis over the lease term. The presented condensed consolidated statement of operations and condensed consolidated statement of cash flows for the three-month period ended March 31, 2018 were not adjusted since the lease did not commence until August 1, 2018. The balance sheet presented as of December 31, 2017,2018 is adjusted to reflect the ROU asset and operating lease liability described in Note 6. Stockholders’ equity was not affected since the total 2018 expense remained the same.
NOTE 5 – ASSET PURCHASE AGREEMENT AND JOINT VENTURE
On February 14, 2019, the Company and EcoXtraction LLC, a Louisiana limited liability company (the “Seller”) entered into an Asset Purchase Agreement on Transfer(the “Purchase Agreement”), pursuant to which the Company issued to the Seller an aggregate of 2,350,000 shares of the Company’s common stock par value $0.0001 per share (the “Shares”) and the Seller sold to the Company certain equipment and other tangible property. In connection with the Purchase Agreement, the Company and the Seller entered into a Lock-Up Agreement, which provides that, among other things, the Seller may not liquidate any of the Shares (“Transferreceived in connection with the Purchase Agreement until September 30, 2020 (the “Lock-Up Agreement”). Further, in connection with NABUfit Finance ApS,the Purchase Agreement and the Lock-Up Agreement, the Company and the Seller entered into a Danish company (“Buyer”)Registration Rights Agreement, wherein the Company agreed to sellprovide certain registration rights under the Securities Act of 1933 (the “Securities Act”) including an obligation to, Buyerwithin ninety (90) days following the Seller’s written request, prepare and Buyer agreed to purchase fromfile with the Company all ofSecurities and Exchange Commission (the “SEC” or the issued and outstanding shares owned by the Company in its three wholly owned subsidiaries, NABUFIT Denmark, NABUFIT IP and NABUFIT China (the “Subsidiaries”“Commission”). The purchase price paid by Buyer for the Subsidiaries was DKK 250,000 (USD $40,000), plus possible additional consideration of up to DKK 350,000 ($56,000) in payments related to tax refunds due to the Subsidiaries in the fourth quarter of 2017. a Registration Statement or Registration Statements on Form S-1, or such other applicable form if Form S-1 is not available.
The operating results of NABUFIT Denmark have been classified as discontinued operations for all periods presented. NABUFIT China and NABUFIT IP were newly formed entities with no operations to report.
The following are the key componentspurchase accounting consisted of the sale and discontinued operations:following:
| $ | ||
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| 2,820,530 | |
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The above table is a provisional valuation. A formal valuation will be obtained for the year end financial statements.
The 2,350,000 shares issued on February 14, 2019 were valued at $1.29 per share, $3,031,500 in total.
The Purchase Agreement conveyed only assets; the Company did not receive any ownership interest in or to the Seller or the securities of the Seller and the Company does not consider it to be an acquisition of a business. The Company and the Seller also took steps described herein to create a joint venture (the “Joint Venture”).
In connection with the Purchase Agreement, on February 14, 2019, the Company and the Seller entered into a License Agreement, pursuant to which Seller sub-licensed to the Company certain intellectual property relating to cannabis extraction technology which the Seller licenses from Hydro Dynamics, Inc. (“Hydro”) (the “License Agreement”). Subject to the terms of the License Agreement, the Seller grants to the Company certain licenses, including an exclusive license for an initial term of two (2) years from the effective date of the agreement (the “Exclusive License”). The Company has the option to renew the Exclusive License for two (2) successive additional terms of one (1) year each. The Company shall exercise its renewal option by giving the Seller written notice of the Company’s intent to renew the license; in consideration for each one-year renewal term, the Company shall issue to the Seller 250,000 shares of the Company’s common stock. The Company is under no obligation to renew.
On February 14, 2019, the Company, EcoX and CleanWave entered into an Assignment and License Agreement (the “A&L Agreement”), pursuant to which the Seller agreed to assign and/or license certain intellectual property to CleanWave, and the Company agreed to contribute an aggregate of $2,000,000 of cash contributions to CleanWave (the “Cash Contribution”) such Cash Contribution being made no later than by the second anniversary of the effective date of the A&L Agreement. If the Cash Contribution is not met, then ownership of certain intellectual property described in the A&L Agreement shall revert back to EcoX, and CleanWave would execute all documents necessary to re-assign such intellectual property back to EcoX.
In connection with the Purchase Agreement, on February 15, 2019, the Company and EcoX created CleanWave Labs, LLC, a Nevada limited liability company (“CleanWave”) with each of the Company and EcoX as the members of CleanWave (the “Operating Agreement”). The Company shall own 50% of the member equity interests and 50% of the member profit interests of CleanWave. CleanWave was formed primarily for the purpose of (i) developing and exploiting certain proprietary technologies being assigned and licensed to the Company by EcoX designed to extract CBD, THC, as well as additional compounds from cannabis and hemp plants and (ii) manufacture and market equipment derived from that technology for use in extracting CBD, THC and additional compounds. Pursuant to the terms of the Operating Agreement and in consideration of its membership interests, the Company shall provide certain equipment, as well as $2,000,000 in working capital over a two-year period, with the first $150,000 of the $2,000,000 paid to Hydro upon election to be used to pay Hydro the amount owed by EcoX to Hydro. The Company has not yet made the $150,000 payment to Hydro.
As of March 31, 2019, the Investment in CleanWave was $39,912, which consisted of $52,450 of equipment contributed from NewBridge to CleanWave, less $12,537 for NewBridge’s share of the net loss of CleanWave during the three months ended March 31, 2019.
The Company analyzed CleanWave and determined that it is a variable interest entity since the total equity investment is not sufficient to permit the entity to finance its activities without additional funding from NewBridge. Also, neither NewBridge nor EcoX have a controlling financial interest in CleanWave since neither entity has the power to direct the activities of CleanWave that most significantly impact the economic performance of CleanWave. This is because neither party can approve the annual budget without the other party’s agreement since neither party has a majority interest. As a result, neither party is the primary beneficiary. NewBridge accounted for its interest in CleanWave using the equity method.
NOTE 6 – OPERATING LEASES
The Company leases a 4,200 square foot facility in Oakland, California for $3,500 per month. After year one, the Landlord can increase the rent to fair market value, not to exceed $3.50 per square foot. The lease commenced August 1, 2018 and expires August 1, 2028. The lessor is Hong So Mac, a related party. Although possible, the Company does not anticipate an increase in the rent.
As a result of the adoption of ASC 842, the Company recognized an operating liability with a corresponding right-of-use (“ROU”) asset of the same amount based on thepresent value of the minimum rental payments of the lease as of August 1, 2018. The discount rate used to compute the present value of the minimum rental payments of the lease is the Company’s estimated borrowing rate of 10%. The ROU asset is amortized on a straight-line basis over the remaining term of the lease, which is recorded as rent expense.
Balance sheet information related to the lease is as follows:
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| March 31, |
| December 31, | ||
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| 2019 |
| 2018 | ||
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Operating lease right-of-use asset |
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| $ | 254,199 |
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| 258,276 |
Operating lease liability, current portion |
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| (17,362) |
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| (16,935) |
Operating lease liability, net of current portion |
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| (236,837) |
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| (241,341) |
The components of lease expense are as follows:
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| March 31, |
| March 31, | ||
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| 2019 |
| 2018 | ||
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Amortization of right-of-use asset recorded as rent expense |
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| $ | 4,077 |
| $ | - |
Interest on lease liability included in other expense |
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| 6,423 |
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| - |
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Total lease cost |
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| $ | 10,500 |
| $ | - |
Maturities of the lease liability are as follows:
Future Minimum Lease Payments | |||
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2019 |
| $ | 42,000 |
2020 |
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| 42,000 |
2021 |
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| 42,000 |
2022 |
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| 42,000 |
2023 |
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| 42,000 |
Thereafter |
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| 210,000 |
Total future minimum lease payments |
| $ | 420,000 |
Less: amount representing interest |
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| (165,801) |
Present value of future payments |
| $ | 254,199 |
Current portion |
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| 17,362 |
Long-term portion |
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| 236,837 |
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Other information related to the lease:
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| March 31, |
| March 31, | ||
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| 2019 |
| 2018 | ||
Operating cash flows |
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Cash paid related to operating lease obligations |
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| $ | 10,500 |
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| - |
Weighted average remaining lease term (in years) |
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Operating leases |
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| 9.33 |
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| - |
Weighted average discount rate |
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Operating leases |
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| 10.0% |
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| 0.0% |
On March 31, 2019, there was a fire on the property next to the location the lease making the building uninhabitable since then. The city removed the red tag on the property on June 17 so now the landlord can get the insurance company to assess the water damage and begin repairing the building. It will likely continue to be uninhabitable through September 2019. According to the lease, the Company does not have to make lease payments while the building is uninhabitable and also has the option to terminate the lease if it chooses. The Company has not made a decision yet on whether to terminate the lease and stopped paying rent until the property is fixed. The ROU asset and lease liability will continue to decrease as originally scheduled.
NOTE 7 – PROPERTY AND EQUIPMENT
As of March 31, 2019, the Company’s property and equipment consists of the following:
Property and equipment consisted of the following: |
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| Estimated |
| March 31, |
| December 31, |
| Useful Lives |
| 2019 |
| 2018 |
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Land | n/a |
| $908,271 |
| $908,271 |
Buildings and improvements | 5-30 years |
| 2,391,922 |
| 2,391,922 |
Machinery and equipment | 3-8 years |
| 893,562 |
| 424,461 |
Office furniture and equipment | 3-8 years |
| 26,120 |
| 23,146 |
Construction in progress | n/a |
| 3,734,847 |
| 1,712,043 |
Total |
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| 7,954,722 |
| 5,459,843 |
Less accumulated depreciation |
|
| (230,543) |
| (212,534) |
Net property and equipment |
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| $7,724,179 |
| $5,247,309 |
For the three months ended March 31, 2019 and 2018, the Company had depreciation expense of $18,009 and $15,595, respectively.
NOTE 8 – INTANGIBLE ASSETS
As of March 31, 2019, the intangible assets consist of the following:
Estimated | March 31, | ||
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The account classifications that make up the discontinued operations as of December 31, 2016, on the balance sheet, are shown below:
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| 2 years |
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| 2,820,530 | |
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| (176,284) | |
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| $ 2,644,246 |
NOTE 5 – ACCRUED LIABILITIES
As of September 30, 2017 and December 31, 2016, the Company had accrued liabilities of $27,752 and $2,304,938, respectively. The accrued liabilities as of September 30, 2017 and December 31, 2016 consist mainly of $0 and $2,115,890 due over the next 18 months on an ambassador contract with Neymar that was entered into during the prior year. This contract was soldtechnology licensing rights were acquired as part of the Transferasset purchase agreement (see Note 5). The Company has an exclusive license to water extraction technology for two years and a non-exclusive license in perpetuity. For the three months ended March 31, 2019, the Company had amortization expense of shares. See Note 4.$176,284.
NOTE 69 – CONVERTIBLE NOTES PAYABLE
On January 7, 2019, the Company completed the first close on a $7.5 million private offering of securities (the “Offering”), whereby the Company entered into a Note Purchase Agreement (the “Purchase Agreement”) with certain accredited investors, pursuant to which the Company issued to those investors $1,074,000 worth of 10% convertible promissory notes, convertible into shares of the Company’s common stock, par value $0.0001 per share at a conversion price of $1.00 per share upon the terms and subject to the conditions set forth in the Note Purchase Agreement and the Notes (the “Notes”), for a maximum of $7.5 million. The Notes have a maturity date of December 31, 2019 if not converted. The Company recorded a beneficial conversion feature of $1,031,040 upon issuance and recognized amortization of the debt discount of $239,040 for the three months ended March 31, 2019. On March 14, 2019, the Company completed the second close and issued $230,000 worth of 10% convertible promissory notes. The terms and maturity date are the same as those for the January 7 closing.
The convertible notes payable consists of the following:
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| March 31, |
| December 31, |
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| 2019 |
| 2018 |
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|
|
|
|
|
Convertible notes payable |
|
| $1,329,494 |
| $- |
Less debt discount |
|
| (792,000) |
| - |
Convertible notes payable, net of discount |
| 537,494 |
| - | |
Less current portion |
|
| (537,494) |
| - |
Convertible notes payable, net of current portion and discount | $- |
| $- |
NOTE 10 – NOTES PAYABLE
As of March 31, 2019, the Company’s notes payable consisted of bank loans of $346,041 on the Mad Creek property and $383,848 on the 10th Street property, which was assumed when the property was deeded to the Company on September 12, 2018. The Mad Creek loan had a variable interest rate of 4.75% as of March 31, 2019 that adjusts on May 1 and November 1 each year. The loan matures on November 1, 2036. The 10th Street loan has a fixed interest rate of 9.66% and a maturity date of July 1, 2036.
|
|
| March 31, |
| December 31, |
|
|
| 2019 |
| 2018 |
|
|
|
|
|
|
Note payable |
|
| $729,890 |
| $734,327 |
Less current portion |
|
| (20,109) |
| (23,355) |
Note payable, net of current portion |
| $709,781 |
| $710,972 |
NOTE 11 – STOCK OPTIONS
As of March 31, 2019, options to purchase 3,380,000 shares of common stock under the Company’s stock option plan were authorized and reserved for future grant. A summary of activity in the stock option plan for the three months ended March 31, 2019 is as follows:
|
| ||
2019 | |||
|
| Weighted- | |
| Average | ||
Number | Exercise | ||
of | Price | ||
Outstanding as of | 1,580,000 | $0.25 | |
Granted | 1,950,000 | 0.89 | |
Exercised | - | - | |
Forfeited or expired | - | - | |
Outstanding as of end of the period | 3,530,000 | 0.60 | |
|
| ||
|
| ||
|
| ||
| 3,530,000 |
|
|
As of March 31, 2019, options exercisable and options outstanding had a weighted average remaining contractual term of 3.04 years and had an aggregate intrinsic value of $584,216.
The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for the grants made in the three months ended March 31, 2019:
| 2019 |
|
|
|
|
Volatility | 459.7% |
|
|
|
|
|
|
|
|
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NOTE 7 – DERIVATIVE LIABILITIES
The Company evaluated the termsExpected option life and volatility are based on historical data of the convertible debt conversion features under the applicable accounting literature, including Derivatives and Hedging, ASC 815, and determined that certain features required separate accounting as derivatives.Company. The derivatives were recorded as "derivative liabilities" on the condensed consolidated balance sheets and will be adjusted to reflect fair value at each reporting date. The total fair value of the derivative liabilities at issuance was $107,334. The fair value of the derivative liabilities at September 30, 2017 was $39,519. The Company recognized a gain of $40,972 for the nine months ended September 30, 2017, whichrisk-free interest rate is presented as "gain on derivative" on the condensed consolidated statements of operations, and recognized a $26,843 reduction in the derivative liability related to the settlement of a convertible note payable. The $26,843 was recorded as a credit to additional paid-in capital.
On May 9, 2017, the Company recorded a derivative liability of $75,957 on convertible debt due to the variable nature of the conversion price. The valuation wascalculated based on the Black-Scholes model. Theaverage US Treasury bill rate that corresponds with the option life. Historically, the Company recordedhas not declared dividends and there are no foreseeable plans to do so.
As of March 31, 2019, there was $2,815,924 of unrecognized share-based compensation cost related to grants under the stock option plans that will be recognized over a loss on derivativeweighted-average period of $17,957 since3 years.
Share-based compensation expense included in selling, general and administrative expense in the valuestatements of income for each of the derivativethree-month periods ended March 31, 2019 and 2018 was greater than the proceeds from the convertible note. As of September 30, 2017, the derivative liability was remeasured at $39,519.
The details are as follows:
| May 9, |
| June 30, |
| September 30, |
| 2017 |
| 2017 |
| 2017 |
Stock price at valuation date | $5.10 |
| $2.40 |
| $0.61 |
Conversion price | $2.61 |
| $1.56 |
| $0.40 |
Risk free rate | 1.07% |
| 1.14% |
| 1.11% |
Volatility | 160.28% |
| 148.43% |
| 112.12% |
Number of shares if converted | 22,222 |
| 37,656 |
| 150,148 |
Value of derivative | $75,957 |
| $50,670 |
| $39,519 |
Gain (loss) on derivative | $(17,957) |
| $25,287 |
| $11,151 |
On May 10, 2017, the Company recorded a derivative liability of $49,334 on convertible debt due to a round- down provision of the conversion price. The valuation was based on the Black-Scholes model. As of September 29, 2017, the derivative liability was valued at $26,843. The valuation was done as of September 29, 2017 since that is the date the note was converted to shares of common stock. The details are as follows:
| May 9, |
| June 30, |
| September 29, |
| 2017 |
| 2017 |
| 2017 |
Stock price at valuation date | $5.10 |
| $2.40 |
| $0.61 |
Conversion price | $3.00 |
| $1.56 |
| $0.40 |
Risk free rate | 1.02% |
| 1.05% |
| 0.99% |
Volatility | 160.26% |
| 124.88% |
| 85.30% |
Number of shares if converted | 16,667 |
| 32,051 |
| 125,000 |
Value of derivative | $49,334 |
| $37,599 |
| $26,843 |
Gain on derivative | $- |
| $11,735 |
| $10,756 |
11$113,247 and $0, respectively.
NOTE 8 – FAIR VALUE MEASUREMENTS
Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:
·Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
·Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
·Level 3: Pricing inputs that are generally unobservable and are supported by little or no market data.
Financial Assets Measured on a Recurring Basis
Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table summarizes the valuation of our financial assets measured at fair value on a recurring basis as of September 30, 2017:
| Level 1 |
| Level 2 |
| Level 3 |
| Total |
Liabilities: |
|
|
|
|
|
|
|
Derivative Liabilities | $ - |
| $ - |
| $ 39,519 |
| $ 39,519 |
In accordance with U.S. GAAP, we use market prices and pricing models for fair value measurements of our derivative financial instruments.
NOTE 912 – SHAREHOLDERS’ EQUITY
We have authorized capital stock consisting of 100,000,000 shares of $0.0001 par value common stock and 400,000 shares of $0.0001 par value preferred stock. As of September 30, 2017At March 31, 2019 and December 31, 2016,2018, we had 3,359,200 (post-reverse stock split)59,698,055 and 854,338 (post-reverse stock split)57,116,055 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued and outstanding.
During March 2017,January 2019, the Company recordedissued 32,000 shares to Patrick Tang for compensation through March 31, 2019 and issued 200,000 shares to John MacKay as a creditsigning bonus. The Company recognized share-based compensation of $46,080 and $248,000, respectively, related to additional paid-in capitalthese issuances. The value was based on the fair value of $87,020the Company’s common stock.
On February 14, 2019, the Company issued 2,350,000 shares to EcoXtraction LLC for the beneficial conversion featureasset acquisition as described in Note 5.
On April 3, 2017, the Company entered into a Common Stock Subscription Agreement with LF Investments ApS for the purchase of 71,667 The shares were valued at the price of $3.00$1.29 per share for $215,000.a total valuation of $3,031,500. The value was based on the fair value of the Company’s common stock.
On May 1, 2017,
NOTE 13 – COMMITMENTS AND CONTINGENCIES
As discussed in Note 5, the Company entered into a Common Stock Subscription Agreement with Hans Kjaer Holding A/S foris committed to contributing $2,000,000 to CleanWave by February 14, 2021 to fund the purchase of 47,824 shares at the price of $3.00 per share for $143,472.joint venture’s operations.
On May 9, 2017, the Company issued 48,345 shares of common stock at $3.00 per share to settle the convertible notes payable of $145,034.
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On September 29, 2017, the Company issued 666,632 shares of common stock for $201,280 of cash; 129,032 of these shares were to Brian Mertz, the CEO. The Company also issued 1,666,678 shares of common stock for services and settlement of convertible notes payable and accounts payable for $0.61 per share, which was the quoted market price. Shares issued for services totaled 220,228 and were valued at $134,339; $88,506 of this balance was for Brian Mertz’s salary from October through December 2017, which is classified as a prepaid expenses as of September 30, 2017. Convertible notes payable of $414,300 were settled for 1,375,623 shares. Accounts payable of $24,382 were settled for 70,827 shares, which included $5,532 of related party payables to Brian Mertz. The Company recognized a loss on debt settlement of $416,809 on the settlement of the convertible notes payable and accounts payable.
Total share-based compensation of $81,339 was recognized during the nine months ended September 30, 2017. As of September 30, 2017, the Company had no unrecognized share-based compensation.
NOTE 1014 – RELATED PARTY TRANSACTIONS
The Company is leasing 4200 square feet of property from Hong So Mac, the father of Sam Mac, one of the principal shareholders (see Note 6). Total rent payments of $10,500 were made for the three months ended March 31, 2019.
On December 31, 2018, the Company issued notes payable of $958,467 to several of its principal shareholders, members of management and affiliated companies. The notes have been classified as notes payable related party. The notes bear interest at 8% and carry either a $5,000 or $1,000 late fee if not paid in full by March 31, 2019, the maturity date. A few of the notes had due dates on March 28, 2019. The interest increases to 12% for unpaid balances after the maturity date. The notes are unsecured except for one note for $261,650 which is secured by equipment that was purchased with the funds from the note. Most of the remaining balance is payable to Tran Millenium, a company owned by Eric Tran, for consulting related to the formation, strategy, permitting, licensing, compliance and construction design for the new entities formed during 2018. As of March 31, 2019, the Company had paid back $135,000 of the notes payable related party but was in default on the rest. As of March 31, 2019, the Company had notes payable related parties of $872,169, which includes interest and penalties of $48,703.
As of September 30, 2017March 31, 2019 and December 31, 2016,2018, the Company had related party payables of $5,450$941,584 and $30,183$106,093, respectively, for reimbursable expenses.
NOTE 15 – MANAGEMENT CHANGES
On January 17, 2019, the Company announced the expansion of its corporate management team with the appointments of Dr. John MacKay as Chief Technology Officer (“CTO”), Patrick P. Tang as Chief Compliance Officer (“CCO”) and Sandra Ribble as Corporate Controller of Newbridge Global Ventures.
Dr. John MacKay’s employment agreement commenced January 2, 2019 and terminates on December 31, 2021, with extensions upon mutual agreement. His base salary is $10,000 per month and he will be issued 200,000 shares of the Company’s Common Stock par value $0.0001 as a signing bonus and he will be eligible for an annual bonus.
Patrick Tang’s employment agreement commences March 1, 2019 and terminating on December 31, 2020, with extensions upon mutual agreement. His base salary is $10,000 per month for March thru December 2019 and then $15,000 per month for the twelve months ended December 2020. Patrick will also be granted options to its CEOacquire 300,000 shares of the Company’s Common Stock par value $0.0001 and will be eligible for an annual bonus. Also, on December 18, 2018, the Company signed an interim services agreement with Patrick Tang in which he received 32,000 shares of common stock for interim services from December 18, 2018 through March 2019.
On January 18, 2019, the Company granted non-statutory stock options of 1,000,000 to Synergistic Technologies Associates, LLC (a company owned by Dr. John MacKay) and 300,000 to Patrick Tang. The options have an exercise price of $1.00 per share.
On January 17, 2019, the Board Chairmanapproved the 2019 Equity Incentive Plan (“2019 Incentive Plan”) in order to attract and retain qualified personnel, directors and consultants and align their interests with those of the Company’s stockholders. The 2019 Incentive Plan reserves 5,000,000 shares of the Company’s common stock, par value $0.000l for expenses relatedfuture issuance. The option exercise price will be set by a committee but will not be less than the fair market value of the common stock at the time of the grant.
On January 17, 2019, the Board approved the appointment of Ellen Gee as President of 5Leaf, LLC, replacing Dr. John MacKay.
On April 16, 2019, the Board appointed Arthur Kwan to the operationCompany’s Board effective immediately.
On May 10, 2019, the Board appointed Eric Baum to the Company’s Board effective immediately.
On June 6, 2019, the Company terminated Eric Tran from his position as Chief Strategy Officer of NewBridge Global Ventures, Inc. and from his employment and directorship positions with each of the business. These payables were due on demand with no interest. Additional related party transactions were disclosed in Note 9.Company’s subsidiaries. Mr. Tran will remain a Director of the Company.
NOTE 1116 – SUBSEQUENT EVENTS
On October 13, 2017,April 9, 2016, effective as of April 16, 2019, the Company paid $75,038 to the holder of the convertible promissory note dated May 9, 2017 to settle the outstanding principal and interest. The payment includedentered into a prepayment penalty of $11,876.
On October 11, 2017, Brian Mertz resigned as the Company’s Chief Executive Officer. The resignation was not related to any disagreementsconsulting agreement with the Company on any matter relating to its operations, policies, practices or any issues regarding financial disclosures, accounting or legal matters.
On October 18, 2017, the Board appointed Mark Mersman as the Company’s Chief Executive Officer and Chief Information Officer and Scott Cox as the Company’s President and Chief Operating Officer. Pursuant to that appointment, the CompanyAston Capital where it agreed to issue eachto Mr. Kwan an aggregate of Mr. Mersman and Mr. Cox 100,000 shares of the Company’s Common Stock as a signing bonus with the ability to earn additional shares upon meeting certain performance milestones pursuant to their Employment Agreements.
The Incentive Plan was approved by the Nabufit Board on October 18, 2017 and by a majority of the Nabufit stockholders on October 19, 2017. The Incentive Plan permits Nabufit to grant “Awards,” that may consist of stock options, the grant or sale of restricted stock (“Restricted Stock”), stock appreciation rights (“SARs”), or hypothetical units issued with reference to Nabufit common stock (“Restricted Stock Units”), for up to 4,000,000 shares of Nabufit common stock. Awards may be granted under the Incentive Plan to employees, directors, and consultants of Nabufit and its subsidiaries, including also subsidiaries that Nabufit may form or acquire in the future. The Incentive Plan will be administered by the Nabufit Board or by a committee authorized by the Nabufit Board (the “Committee”), which will make all determinations with regard to the grant and terms of Awards, subject to the terms of the Incentive Plan.
Effective October 18, 2017, Directors Mads H. Fredericksen, Jorgen Buhl Rasmussen, Kristoffer Ewald and Allan J. Vestergaard resigned from the Board of Directors. The resignations were not related to any disagreements with the Company on any matter relating to its operations, policies, practices or any issues regarding financial disclosures, accounting or legal matters.
13
Benjamin Esque as Directors granted to Mr. Kwan options to purchase an aggregate of the Company, to serve until his respective successor is duly elected and qualified or his earlier resignation, death or removal by the stockholders of the Company. Ole Sigetty and Brian Mertz have previously served as officers and directors of the Company.
On October 18, 2017, the shareholders holding a majority of the Company’s issued and outstanding250,000 shares of common stock approvedof the Company at a strike price of $0.65 per share.
On April 12, 2019, the Company and Hydro Dynamics, Inc., a Georgia corporation (“Hydro”) entered into a technology license agreement (the “Agreement”), whereby the Company would license from Hydro certain Hydro-owned technology and associated intellectual property including the ShockWave Power Reactor/Extractor, such intellectual property being useful in a variety of industries including but not limited to those industries which extract, mix, heat, hydrate, homogenize and crystallize materials (the “Hydro Technology”). Pursuant to the terms and subject to the conditions set forth in the Agreement, the Company shall, in consideration for licensing the Hydro Technology from Hydro, furnish to Hydro: (i) a one-time lump-sum cash payment of $60,000 (the “Cash Payment”) no later than July 3, 2019; (ii) four semiannual payments of $125,000 each for an amendmentaggregate of $500,000 in payments beginning on January 15, 2020 and culminating with a final payment on July 15, 2021, such $500,000 is convertible into shares of the Company’s common stock, par value $0.0001 per share at a conversion price of $1.00 per share or the market price at the time of conversion but not less than $0.75 per share; (iii) 2,125,000 shares of the Company’s
Common Stock (the “Stock Payment”) and (iv) an annual license fee of $100,000 no later than January 15 of each year of the Term beginning in 2022. In addition to these fees, Hydro and the Company agreed to enter into a revenue-sharing plan whereby the Company will furnish to Hydro 3% of net revenues from the Company derived by the Company’s sale or lease of certain technologies (the “Revenue-Sharing Arrangement”) and Hydro is further permitted to sell certain stand-alone products to third-parties in exchange for paying to the Company a participation fee for any such third-party sales. The agreement is perpetual, subject to the Company’s Amendedright to terminate the agreement at the end of the Company’s 2025 fiscal year.
On April 17, 2019, the Company and Restated CertificateKing Hemp Farm NM, LLC, a New Mexico limited liability company (“King”), entered into an operating agreement (the “Operating Agreement”), pursuant to which the Companies formed King Hemp Farm LLC, a Nevada limited liability company (the “Joint Venture”). The Companies formed the Joint Venture primarily for the purpose of Incorporationexploiting certain farming operations to changeraise hemp on properties controlled by King and to extract CBD and additional compounds from hemp plants. In connection with the nameOperating Agreement, King granted the Company two 10-year leases on at least 10 acres of land controlled by King. The managers of the Joint Venture are initially Robert Bench, the Company’s interim Chief Executive Officer, and Tyler King. The members of the Joint Venture are the Company and King, each with a 50% membership interest, with payment from the proceeds generated by the Joint Venture to be distributed in accord with the respective capital contributions of each of the Company and King. King agreed to “NewBridge Global Ventures, Inc.” (“Amendment”). The Amendment will be effective on the date which is 20 days after notice is provided to the shareholderscultivate 50 acres of land in 2019 and the Company or about November 21, 2017.issued 1,000,000 shares, valued at $0.50 per share to King during April 2019.
On November 10, 2017,May 1, 2019, the Company and Innovative Separations, LLC, an Oregon limited liability company (“Innovative”) together with Joseph Mazza, the managing member of Innovative (“Mr. Mazza”) entered into a letter of intent, pursuant to which the Company and Innovative will be joint partners for the purpose of exploiting certain farming operations that raise cannabis and hemp and to extract CBD, THC and other compounds from cannabis and hemp plants through the use of certain technologies and equipment (the “Innovative Transaction”). Pursuant to the terms of the letter of intent and subject to the conditions to be set forth in an Operating Agreement, the Company may: (i) issue 25,000 shares of the Company’s common stock to Mr. Mazza, and 25,000 shares of the Company’s common stock to the Gary and Gail Harstein Family Trust; (ii) enter into a lease purchase option to purchase certain property listed in the Operating Agreement; (iii) place at least one Company ShockWave Power™ Reactor in Innovative and (iv) provide cash for working capital of up to $200,000 over a one-year period. In addition to the Innovative joint venture, the Company will receive the right to use certain trade names and access to certain lands currently owned by Innovative (together with the Innovative joint venture, the “Innovative Interests”). The term proposed Operating Agreement shall be perpetual absent certain dissolution provisions as further described in the Operating Agreement. The Operating Agreement may also provides for certain drag-along provisions, whereby the Managers may require any members of Innovative to sell their respective Innovative MIs to a proposed purchaser.
On May 2, 2019, the Company and Apothio, LLC, a Colorado limited liability company (“Apothio”) entered into an assignmentoperating agreement (the “Operating Agreement”), pursuant to which the Company and Apothio agreed to form Apothio Bakersfield, LLC, a Nevada limited liability company (the “Joint Venture”), whereby pursuant to the terms and subject to the conditions set forth in the Operating Agreement, the Company and Apothio shall each receive fifty percent (50%) of the membership interests in the Joint Venture. Under the terms of the Operating Agreement, the Company will be required to: (i) underwrite costs to contribute extraction equipment; (ii) fund the cost of a fully-functional extraction facility and (iii) install a fully-functional testing laboratory with Mustang Capital, LLC (“Mustang”)certain equipment as determined by the managers of the Joint Venture. Apothio will contribute existing biomass of approximately 150,000 pounds for the Company to begin processing and extraction, and will contribute some of its 512 acres of plants. The term of the Operating Agreement shall be perpetual absent certain dissolution provisions as further described in the Operating Agreement. The Operating Agreement also provides for certain drag-along provisions, whereby Mustang has assigned all beneficial interest into an existing Management Consulting Agreement with Elevated Portfolio Holdings, LLC. Mustang is controlled by Mark Mersman, CEO.the managers may require any members of the Joint Venture to sell their respective membership interests to a proposed purchaser.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion is intended to assist you in understanding our results of operations and our present financial condition. Our condensed financial statements and the accompanying notes included in this quarterly report on Form 10-Q contain additional information that should be referred to when reviewing this material.
Forward-Looking Information and Cautionary Statements
This quarterly report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Such statements are based on currently available financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Such factors include, but are not limited to, market factors, market prices and marketing activity, future revenues and costs, unsettled political conditions, civil unrest and governmental actions, foreign currency fluctuations, and environmental and labor laws and other factors detailed herein and in our other filings with the U.S. Securities and Exchange Commission (the “Commission”) filings. Additional factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:
·our ability to raise capital when needed and on acceptable terms and conditions;
·our ability to identify and acquire a viable operating business;
·our ability to attract and retain management, and to integrate and maintain technical information and management information systems;
·the intensity of competition; and
·general economic conditions.
14
Forward-looking statements are predictions and not guarantees of future performance or events. Forward-looking statements are based on current industry, financial and economic information, which we have assessed but which by its nature, is dynamic and subject to rapid and possibly abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. We hereby qualify all our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934) to reflect subsequent events or circumstances. All written and oral forward-looking statements made in connection with this Quarterly Reportquarterly report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.
Executive Summary
Effective August 30, 2017,With a series of acquisitions and joint venture partnerships completed since January of 2019, the Company soldis
positioning itself to begin operations and growth. The Company’s recent licensing of the ShockWave Power™ Reactor (SPR), has brought us an innovative and efficient way of extracting oil from cannabis and industrial hemp at scale. The promise of this oil extraction process has led to the signing of three joint venture partnerships with hemp farms in Oregon, California, and New Mexico. This will allow the Company to expand its operating subsidiariesoperations and its operating business. The Company is currently engaged in providing business consulting services to several companiesbecome a player in the medical marijuanalarge and cannabis related industries. These companies include an online education company providing education to healthcare professionals on medical cannabisgrowing oil extraction niche along with our existing facilities in Oakland that are nearing completion for cloning, extraction, and distribution. We should be in operations during the endocannabinoid system, a distribution company focused on delivering bestquarter ending September 30, 2019 in class hemp oil and medical marijuana products and a Wellness center delivering medical recommendations to patient and salesmany of CBD and hemp oil products.
In connection with such consulting agreements, the Company will provide the following services:
·Strategic advisory and services;
·Business services;
·Marketing services;
·Acquisition and development services; and
·Strategic partnership and consolidation services.our locations.
Critical Accounting Policies and Estimates
Certain accounting policies are considered by management to be critical to an understanding of our condensed consolidated financial statements. Their application requires significant management judgment, with financial reporting results relying on estimates about the effect of matters that are inherently uncertain. A summary of critical accounting policies can be found in our Form 10-K for the year ended December 31, 2016.2018. For all of these policies, management cautions that future results rarely develop exactly as forecasted, and the best estimates routinely require modification.
Results of Operations
During the three months ended September 30, 2017,March 31, 2019, the Company had a net loss of $1,104,495$2,086,776 compared to a net loss of $1,003,383$56,644 for the three months ended September 30, 2016. For the three months ended September 30, 2016 and 2017, theMarch 31, 2018. The increase in net loss from discontinued operations decreased from $598,429 to $365,443, which led to the Company selling the subsidiaries. For the same time period, the net loss from continuing operations decreased from $404,954 to $739,052. The decrease was due to cost cutting measures implemented by management.
15
During the nine months ended September 30, 2017, the Company had a net loss of $3,368,614 compared to a net loss of $2,342,013 for the nine months ended September 30, 2016. For the nine months ended September 30, 2016 and 2017, the net loss from discontinued operations increased from $1,594,978 to $1,928,268. For the same time period, the net loss from continuing operations increased from $747,035 to $1,440,346. The increase wasmainly due to the growth of the Companyadditional entities acquired or formed over the past nine months as management tried to make it a viable business.
year. Operating expenses from continuing operations consist mainly of employee salaries, share-based compensation, consulting, legal and benefits, investor relations, stock based compensation, professional fees, and interest expense.accounting. We expect operating expenses to be at similar levelsincrease in the rest offuture based on the year.recent acquisitions and joint ventures and beginning operations.
Liquidity and Capital Resources
Since NABUFIT’s inception in June 2015, it has incurred significant net losses and negative cash flows from operations, which led to the decision by management to sell the Subsidiaries during the third quarter. ForDuring the three and nine months ended September 30, 2017,March 31, 2019, we had a net loss of $1,104,495 and $3,368,614, respectively. For the same time periods,$2,086,776. At March 31, 2019, we had a net loss from continuing operations of $739,052 and $1,440,346, respectively. For the nine months ended September 30, 2017 we used net cash in operating activities – continuing operations of $872,770. At September 30, 2017, we had working capital of $166,710 and an accumulated deficit of $7,779,616.$5,556,113.
We could potentially use our available financial resources sooner than we currently expect, and we may incur additional indebtedness to meet future financing needs. Adequate additional funding may not be available to us on acceptable terms or at all. In addition, although we anticipate being ableAdditional equity financing may result in dilution to obtain additional financing through non-dilutive means, we may be unable to do so.our shareholders. Our failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of operations. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled “Risk Factors” noted in the previously filed Form 10-K.10-K for the year ended December 31, 2018.
The following table summarizes our cash flows for the ninethree months ended September 30, 2017:March 31, 2019 and 2018:
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Number of Employees
As of September 30, 2017,March 31, 2019, the Company had no12 full-time and 2 part-time employees.
Disclosure of Contractual Obligations
NoneNone.
16
Off-Balance Sheet Financing Arrangements
The Company had no off-balance sheet financing arrangements at September 30, 2017March 31, 2019 and December 31, 2016.2018.
GeneralCritical Accounting Policies
The Company’s Financial Statements are prepared in accordance with U.S. generally accepted accounting principles, which require management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, net revenue, if any, and expenses, and the disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under 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. Senior management has discussed the development, selection and disclosure of these estimates with the Board of Directors. Management believes that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates under different assumptions or conditions. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. Management believes the following critical accounting policies reflect the significant estimates and assumptions used in the preparation of the Financial Statements.
New Accounting Pronouncements
The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our President, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act.”)) and based upon this evaluation concluded that as of September 30, 2017,March 31, 2019, our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and (ii) accumulated and communicated to our management,
including our principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
None.
None.
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There are no legal proceedings which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.
Item 1. Legal Proceedings1A. Risk Factors
TheAs a Smaller Reporting Company had no legal proceedings as defined by Rule 12b-2 of September 30, 2017.the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On May 18, 2017, the Company entered into an Equity Purchase Agreement dated May 9, 2017 (“Purchase Agreement”) with Kodiak Capital Group, LLC (“Kodiak”), whereby Kodiak agreed to purchase up to 10,000,000 shares of its common stock, par value $0.0001 per share at a price of $0.10 per shares (the resulting in an aggregate gross proceeds to the Company of up to $1,000,000. In addition, the Company extended a convertible promissory note in the amount of $50,000. On September 29, 2017,February 14, 2019, the Company issued Kodiak 161,290 shares of its common stock in full settlement of that agreement.
On or about September 26, 2017 NABUfit Global, Inc. (the “Company”) entered into Subscription Agreements (“Subscription Agreements”) with Zat Invest, Hans Kjaer Holding and Brian Mertz for the purchase of 666,6322,350,000 shares of restricted common stock to EcoXtraction at $1.29 per share for a total consideration of $201,280.$3,031,500.
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In connection with the foregoing issuances, the Company relied upon the exemption from securities registration provided by Section 4(a)(2) under the Securities Act for transactions not involving a public offering.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
None.
Exhibits. The following exhibits are included as part of this report:
EXHIBIT NODESCRIPTION AND METHOD OF FILING
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Form Employment Agreement (Previously filed as Exhibit 99.1 to Form 8k filed on October 20, 2017)
99.2
2017 Equity Plan (Previously filed as Exhibit 99.2 to Form 8k filed on October 20, 2017)
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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.
NABUFITNEW BRIDGE GLOBAL VENTURES, INC.
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| By: | /s/ Robert K Bench |
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| Robert K Bench, Principal Financial Officer |
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2026