SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS
We believe that it is important to communicate our future expectations to our
security holders and to the public. This report, therefore, contains statements
about future events and expectations which are “forward-looking statements”
within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the
Securities Exchange Act of 1934, including the statements about our plans,
objectives, expectations and prospects under the heading “Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” You
can expect to identify these statements by forward-looking words such as “may,”
“might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,”
“project,” “expect,” “intend,” “seek” and other similar expressions. Any
statement contained in this report that is not a statement of historical fact
may be deemed to be a forward-looking statement. Although we believe that the
plans, objectives, expectations and prospects reflected in or suggested by our
forward-looking statements are reasonable, those statements involve risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements, and we
can give no assurance that our plans, objectives, expectations and prospects
will be achieved.
Important factors that might cause our actual results to differ materially from
the results contemplated by the forward-looking statements are contained in the
“Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for
the fiscal year ended
subsequent filings with the
discussion of our results of operations should be read together with our
financial statements and related notes included elsewhere in this report.
Company Overview and Product Brands
The Company was formed as a
was involved in exploration and development of mining properties until
acquired trademarks and intellectual property, which includes all rights and
trade secrets to the hemp-derived CBD-infused line of consumer beverages sold
under the “Good Hemp” brand. Since then, the Company has been conducting
operations under the “Good Hemp” trade name and through the
website. Information on this website is not a part
of this report on Form 10-Q.
liability company formed under the laws of the
CBD products to customers through chiropractic offices. In
company was dissolved in
operations in the consolidated financial statements. The Company plans to sell
Good Hemp Wellness CBD inventory directly.
Creek Group, LLC
Diamond Creek brand of high alkaline water products, for a total purchase price
“PXS Merger Agreement”) with
corporation, pursuant to which a wholly-owned subsidiary of the Company will
merge (the “PXS Merger”) with and into PXS, with PXS becoming our wholly-owned
subsidiary as a result of the PXS Merger. Pursuant to the PXS Merger Agreement,
an aggregate of 100,000,000 shares of Company common stock will be issued to the
shareholders of PXS (the “PXS Shareholders”) in the PXS Merger. The PXS Merger
closing is to occur upon the satisfaction of several conditions, including (i)
customary closing conditions, including the receipt of necessary approval from
each of the Company and PXS, the accuracy of the representations and warranties
of the other party, performance by the other party of its obligations under the
PXS Merger Agreement, and the absence of any material adverse changes in the
condition of the other party, and (ii) the reformation of promissory notes
payable to our current management.
wholly-owned subsidiary of the Company, and 100,000,000 shares of common stock
were authorized for issuance to the PXS Shareholders pursuant to the PXS Merger
Agreement. 20,000,000 of such shares were issued to the PXS Shareholders, the
balance of the 100,000,000 issuable shares will be issued in the future, the
Company’s CEO and directors resigned, and new officers and directors were
appointed, constituting a change of control of the Company.
18 Table of Contents
The Company now has two divisions: (i) a beverage division focused on selling
high alkaline water products under the “Diamond Creek” brand name; and (ii) a
recently acquired division resulting from the PXS Merger, which markets
EnviroXstreamTMcleaner/degreaser and other competitively-priced,
environmentally-friendly products that are designed to work as well as or better
than their toxic competitors.
natural spring water, sourced from the highest quality, award winning springs.
Diamond Creek is available in one gallon, one liter and half liter bottles and
aids in balancing the body’s pH while providing superior hydration resulting
from a proprietary ionization process. As of
was available in over 1,500 stores in
EnviroXstream. EnviroXstream is, for purposes of assigning an industrial use,
categorized as a cleaner/degreaser product. However, EnviroXstream is not an
ordinary cleaner/degreaser product, as it has several other applications,
including as an office and household cleaner.
EnviroXstream is a plant-based, non-toxic, safe, yet extremely powerful,
cleaner/degreaser technology that expedites the natural bio-degradation process
of hydrocarbons and other compounds. As discussed below, EnviroXstream is
currently a California South Coast AQMD-Certified
past has been, an
distinguishes itself by its efficacy, which is buttressed by its “green”
Our Growth Strategy
In General. The Company’s new management has determined to accelerate growth
through strategic acquisitions and partnerships, continuing the strategy of the
Company’s former management, then investing capital, both financial and human,
into the acquired enterprises.
chain stores; increase awareness of our brand in
additional chain, convenience and key account store listings for all our brands
nationwide and internationally; increasing our warehouse direct to retail
channel; focusing on full-service Class “A” distributors; and focusing on
placing our products in produce, natural and cold sets as opposed to the grocery
We will be looking for strategic acquisitions and partnerships in the beverage
and hemp sectors, such as
supply chain, distribution and relationships with retail customers.
EnvioXstream. The Company’s recently acquired Petro X Solutions subsidiary is
focused on expanding its US distribution reach into industry, as well as into
consumer sales channels, including on Amazon®.
Results of Operations For the three months ended
March 31, 2022compared to the three months ended March 31, 2021Three Months Ended March 31, Increase/ March 31, 2022 March 31, 2021 (Decrease) Net Sales $ 204,257$ 73,804 $ 130,453Cost of Sales 203,232 55,454 147,778 Gross Profit 1,025 18,350 (17,325 ) Operating Expenses 89,178 1,398,060 (1,308,882 ) Operating Loss (88,153 ) (1,379,710 ) 1,291,557 Other Income 30 - 30 Gain on Write-off of Debt - 38,910 (38,910 ) Interest Expense (37,626 ) (17,186 ) (20,440 ) Gain (Loss) on Derivative Liabilities 1,023,571 (84,829 ) 1,108,400 Loss on Extinguishment of Debt (60,906 ) - (60,906 ) Loan Fees (28,385 ) - (28,385 ) Net Loss $ 808,531 $ (1,442,815 ) $ 2,251,34619 Table of Contents Revenue
During the three months ended
net sales compared to
to the acquisition of Diamond Creek, which had existing sales.
Cost of Sales
The Company had cost of sales of
primarily due to increased sales of the Company’s products.
The Company incurred general and administrative expenses totaling
the three months ended
period in 2021. The decrease was primarily due to the amortization of
of the branding agreement in 2021.
The Company had a net income of
increase was primarily due to the decrease in the amortization of the branding
agreement and the change in derivative liabilities of
Liquidity and Capital Resources
We had cash used in operations of
cash used in operating activities for the three months ended
attributable to the amortization of the branding agreement of
We had cash used in investing activities of
We had cash provided by financing activities of
not have sufficient resources to effectuate our business. We expect to incur a
estimate that these expenses will be comprised primarily of general expenses
including overhead, inventory purchases, legal and accounting fees.
unrelated third parties. As of
party notes totaled
third-party notes totaled
20 Table of Contents
The Company does not know of any trends, demands, commitments, events or
uncertainties that will result in, or that are reasonable likely to result in,
our liquidity increasing or decreasing in any material way.
The Company does not know of any significant changes in expected sources and
uses of cash.
The Company does not have any commitments or arrangements from any person to
provide it with any equity capital.
The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As reflected in the financial
statements, the Company had a working capital deficit of
which raises substantial doubt as to the Company’s ability to continue as a
going concern for a period of one year from the issuance of these financial
Off Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in
of 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. Such estimates and assumptions affect the reported
amounts of revenues and expenses during the reporting period. We base our
estimates on historical experiences and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions and conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
Reclassification of Certain Expenses
The results of operations as of
basis with prior periods.
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