Seguin Natural Hair Products, Inc.
Balance Sheets
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December 31, 2018 | | |
March 31, 2018 | |
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ASSETS | |
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CURRENT ASSETS: | |
| | | |
| | |
Cash | |
$ | - | | |
$ | 610 | |
Prepaid expense | |
| 3,366 | | |
| 615 | |
Total Current Assets | |
| 3,366 | | |
| 1,225 | |
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| | | |
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Total Assets | |
$ | 3,366 | | |
$ | 1,225 | |
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LIABILITIES AND STOCKHOLDERS' DEFICIT | |
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CURRENT LIABILITIES: | |
| | | |
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Accrued expenses and other current liabilities | |
$ | 1,069 | | |
$ | 9,289 | |
Accrued Interest Payable | |
| 6,606 | | |
| 10,220 | |
Compensation payable | |
| 17,500 | | |
| - | |
Convertible note payable related party, net of unamortized discount | |
| - | | |
| 17,500 | |
Convertible note payable | |
| - | | |
| 75,306 | |
Derivative liability | |
| - | | |
| 12,857 | |
Bank overdraft | |
| 68 | | |
| - | |
Advances from stockholders | |
| 236 | | |
| 236 | |
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| | | |
| | |
Total Current Liabilities | |
| 25,479 | | |
| 125,408 | |
LONG TERM LIABILITIES: | |
| | | |
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Loan payable -related party | |
$ | 19,490 | | |
$ | 5,490 | |
Total Long Term Liabilities | |
| 19,490 | | |
| 5,490 | |
Total Liabilities | |
| 44,969 | | |
| 130,898 | |
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COMMITMENTS AND CONTINGENCIES | |
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STOCKHOLDERS' DEFICIT: | |
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Common stock par value $0.0001: 500,000,000 shares authorized;
5,825,000 and 14,828,904 shares issued and outstanding as of
December 31, 2018 and March 31, 2018; respectively | |
$ | 1,457 | | |
$ | 582 | |
Additional paid-in capital | |
| 190,914 | | |
| 92,766 | |
Shares to be issued | |
| 21,000 | | |
| - | |
Accumulated deficit | |
| (254,975 | ) | |
| (223,021 | ) |
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| | | |
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Total Stockholders' Deficit | |
| (41,604 | ) | |
| (129,673 | ) |
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Total Liabilities and Stockholders' Deficit | |
$ | 3,366 | | |
$ | 1,225 | |
See accompanying notes to the unaudited financial statements.
Seguin Natural Hair Products, Inc.
Statements of Operations
(unaudited)
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For the Nine Month's Ending December 31st, | | |
For the Three Month's Ending December 31st, | |
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2018 | | |
2017 | | |
2018 | | |
2017 | |
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Operating Expenses | |
| | | |
| | | |
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Professional fees | |
$ | 12,118 | | |
$ | 72,638 | | |
| 9,229 | | |
$ | 35,863 | |
General and administrative expenses | |
| 20,589 | | |
| 2,536 | | |
| 7,532 | | |
| 439 | |
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Total operating expenses | |
| 32,707 | | |
| 75,174 | | |
| 16,761 | | |
| 36,302 | |
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Loss from Operations | |
| (32,707 | ) | |
| (75,174 | ) | |
| (16,761 | ) | |
| (36,302 | ) |
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Other Income and Expenses | |
| | | |
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Gain on extinguishment of debt | |
| 10,000 | | |
| - | | |
| 10,000 | | |
| - | |
Gain on derivative extinguishment | |
| 12,857 | | |
| - | | |
| 12,857 | | |
| - | |
Derivative discount amortization | |
| (5,000 | ) | |
| | | |
| | | |
| | |
Interest expense | |
| (17,104 | ) | |
| (42,753 | ) | |
| (4,439 | ) | |
| (38,965 | ) |
Total other income and expense | |
| 753 | | |
| (42,753 | ) | |
| 18,418 | | |
| (38,965 | ) |
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Income Tax Provision | |
| - | | |
| - | | |
| - | | |
| - | |
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| | | |
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Net Income (Loss) | |
$ | (31,954 | ) | |
$ | (117,927 | ) | |
| 1,657 | | |
$ | (75,267 | ) |
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Net Loss per Common Share - Basic and Diluted | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
| 0.00 | | |
$ | (0.00 | ) |
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Weighted average common shares outstanding: - basic and diluted | |
| 6,684,435 | | |
| 16,527,555 | | |
| 8,393,964 | | |
| 16,550,000 | |
See accompanying notes to the unaudited financial statements.
Seguin Natural Hair Products, Inc.
Statements of Changes in Stockholders' Deficit
For the Three and Nine Months Ended December 31st, 2018 and 2017
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Common Stock, $0.0001 Par Value | | |
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Additional | | |
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Total | |
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Number of Shares | | |
Amount | | |
Shares to be Issued | | |
Paid-in Capital | | |
Accumulated Deficit | | |
Stockholders'
Equity (Deficit) | |
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Balance, September 30, 2017 | |
| 16,500,000 | | |
$ | 1,650 | | |
$ | - | | |
$ | 98,693 | | |
$ | (136,866 | ) | |
$ | (36,523 | ) |
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Capital Contribution | |
| - | | |
| 5 | | |
| - | | |
| 33,595 | | |
| - | | |
| 33,600 | |
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Net loss for the three months ending December 31, 2017 | |
| - | | |
| - | | |
| - | | |
| - | | |
| (75,267 | ) | |
| (75,267 | ) |
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Balance, December 31, 2017 | |
| 16,500,000 | | |
| 1,655 | | |
| - | | |
| 132,288 | | |
| (212,133 | ) | |
| (78,190 | ) |
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Balance, March 31, 2017 | |
| 16,500,000 | | |
$ | 1,650 | | |
$ | - | | |
$ | 90,693 | | |
$ | (94,206 | ) | |
$ | (1,863 | ) |
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Capital Contribution | |
| - | | |
| 5 | | |
| | | |
| 41,595 | | |
| - | | |
| 41,600 | |
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Net loss for the nine months ended December 31, 2017 | |
| - | | |
| - | | |
| - | | |
| - | | |
| (117,927 | ) | |
| (117,927 | ) |
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Balance, December 31, 2017 | |
| 16,500,000 | | |
| 1,655 | | |
| - | | |
| 132,288 | | |
| (212,133 | ) | |
| (78,190 | ) |
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Balance, September 30, 2018 | |
| 5,825,000 | | |
$ | 582 | | |
$ | - | | |
$ | 92,766 | | |
$ | (256,633 | ) | |
$ | (163,285 | ) |
Common stock issued upon Conversion of Debt | |
| 8,753,506 | | |
| 875 | | |
| 21,000 | | |
| 98,148 | | |
| - | | |
| 120,023 | |
Net income for the three months ending December 31, 2018 | |
| | | |
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| 1,658 | | |
| 1,658 | |
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Balance, December 31, 2018 | |
| 14,578,506 | | |
$ | 1,457 | | |
| 21,000 | | |
| 190,914 | | |
$ | (254,975 | ) | |
$ | (41,604 | ) |
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Balance, March 31, 2018 | |
| 5,825,000 | | |
$ | 582 | | |
$ | - | | |
$ | 92,766 | | |
$ | (223,021 | ) | |
$ | (129,673 | ) |
Common stock issued upon Conversion of Debt | |
| 8,753,506 | | |
| 875 | | |
| 21,000 | | |
| 98,148 | | |
| - | | |
| 120,023 | |
Net loss for the six months ending December 31, 2018 | |
| | | |
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| (31,954 | ) | |
| (31,954 | ) |
Balance, December 31, 2018 | |
| 14,578,506 | | |
$ | 1,457 | | |
| 21,000 | | |
| 190,914 | | |
$ | (254,975 | ) | |
$ | (41,604 | ) |
See accompanying notes to
the unaudited financial statements.
Seguin Natural Hair Products, Inc.
Statements of Cash Flows
Unaudited
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For the Nine Month's Ending
December 31st, | |
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2018 | | |
2017 | |
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CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
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Net loss | |
$ | (31,954 | ) | |
| (117,927 | ) |
Adjustments to reconcile net loss to net cash used in operating activities | |
| | | |
| | |
Stock based compensation | |
| - | | |
| 5 | |
Amortization on debt discount | |
| 5,000 | | |
| 37,306 | |
Gain on extinguishment of debt | |
| (10,000 | ) | |
| - | |
Changes in fair value of derivative liability | |
| (12,857 | ) | |
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Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid Expenses | |
| (2,751 | ) | |
| - | |
Accrued expenses and other current liabilities | |
| 37,884 | | |
| 26,577 | |
| |
| | | |
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Net cash used in operating activities | |
| (14,678 | ) | |
| (54,039 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds from capital contribution | |
| - | | |
| 1,000 | |
Proceeds from realted party convertible note | |
| - | | |
| 30,700 | |
Proceeds from convertible note | |
| - | | |
| 10,000 | |
Proceeds from promissory notes payable – related parties | |
| - | | |
| 12,500 | |
Proceeds from loan - related parties | |
| 14,000 | | |
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Bank overdraft | |
| 68 | | |
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| |
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Net cash provided by financing activities | |
| 14,068 | | |
| 54,200 | |
| |
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Net change in cash | |
| (610 | ) | |
| 161 | |
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Cash at beginning of the reporting period | |
| 610 | | |
| 622 | |
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Cash at end of the reporting period | |
$ | 0 | | |
| 783 | |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |
| | | |
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| |
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Interest paid | |
$ | - | | |
$ | - | |
| |
| | | |
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Income tax paid | |
$ | - | | |
$ | - | |
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SUPPLIMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS | |
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Issuance of shares upon conversion of notes payable | |
$ | 120,023 | | |
$ | - | |
Expenses paid by related party on behalf of the company | |
$ | 11,249 | | |
$ | 11,095 | |
See accompanying notes to
the unaudited financial statements.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
Note 1 - Organization
Seguin Natural Hair Products Inc.
Seguin Natural Hair Products Inc.
(the “Company”) was incorporated on April 29, 2014 under the laws of the State of Nevada. Initial operations have included
organization and incorporation, target market identification, marketing plans, capital formation and property acquisitions. A substantial
portion of the Company’s activities has involved developing a business plan and establishing contacts and visibility in the marketplace.
The Company has generated no revenues since inception.
We are no longer in the business of developing
and selling shampoo, conditioner or any other hair care products.
On December 28, 2017, the Company entered into an Agreement
and Plan of Merger as amended January 9, 2018 (“Merger Agreement”), with Yuengling’s Ice Cream Corporation, a private
Pennsylvania corporation (“Yuengling’s”).
On June 13, 2018, the Company informed
Yuengling’s by written notice that the Company has terminated the Agreement and Plan of Merger dated December 28, 2017. The reason
for the termination was the failure of Yuengling’s to complete the audit of its financial statements as required by the terms of
the Merger Agreement.
Note 2 - Significant and Critical Accounting Policies and Practices
The Management of the Company is responsible
for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical
accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and
results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates
about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices
are disclosed below as required by generally accepted accounting principles.
Basis of Presentation
The Company’s financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Fiscal Year End
The Company elected March 31st as its fiscal year end date
upon its formation.
Use of Estimates and Assumptions and Critical Accounting Estimates
and Assumptions
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(s)
of the financial statements and the reported amounts of expenses during the reporting period(s).
Critical accounting estimates are
estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for
highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or
operating performance is material. The Company’s critical accounting estimates and assumptions affecting the financial statements
were:
| (i) | Assumption as a going concern: Management assumes that the Company will continue
as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course
of business; |
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
| (ii) | Valuation allowance for deferred tax assets: Management assumes that the
realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards
for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly,
the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based
on (a) the Company has incurred recurring losses, (b) general economic conditions, (d) its ability to raise additional funds to support
its daily operations by way of a public or private offering, among other factors. |
Reclassification of certain amounts
Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations.
These significant accounting estimates
or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain
estimates or assumptions are difficult to measure or value.
Management bases its estimates on
historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a
whole 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.
Management regularly evaluates the key
factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical
experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.
Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10
of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10- 35-37 establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures,
Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value
into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical
assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph
820-10-35- 37 are described below:
| 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 observable inputs and not corroborated
by market data. |
Financial assets are considered Level
3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one
significant model assumption or input is unobservable.
The fair value hierarchy gives the
highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization
is based on the lowest level input that is significant to the fair value measurement of the instrument.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses approximate their fair value because of the short maturity of this
instrument.
Transactions involving related parties
cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not
exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated
on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Cash Equivalents
The Company considers all highly liquid investments with
maturities of three months or less at the time of purchase to be cash equivalents.
Related Parties
The Company follows subtopic 850-10
of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the related
parties include a. affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as
such terms are used in and construed under Rule 405 under the Securities Act); b. entities for which investments in their equity securities
would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.
other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include
disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items
in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved;
b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods
for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions
on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and
the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to
related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitment and Contingencies
The Company follows subtopic 450-20
of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the
financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events
occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.
In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result
in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived
merits of the amount of relief sought or expected to be sought therein.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
If the assessment of a contingency
indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency
is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote
are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Revenue Recognition
In May 2014, the FASB issued ASU No.
2014-09, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition requirements in Accounting
Standards Codification 605, "Revenue Recognition." This ASU is based on the principle that revenue is recognized to depict the
transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of
revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized
from costs incurred to obtain or fulfill a contract. ASC 606-10-50-5 requires that entities disclose disaggregated revenue information
in categories (such as type of good or service, geography, market, type of contract, etc.) that depict how the nature, amount, timing,
and uncertainty of revenue and cash flow are affected by economic factors. ASC 606-10-55-89 explains that the extent to which an entity's
revenue is disaggregated depends on the facts and circumstances that pertain to the entity's contracts with customers and that some entities
may need to use more than one type of category to meet the objective for disaggregating revenue. In August 2015, the FASB issued ASU No.
2015-14, which deferred the effective date of the new revenue standard by one year, and allowed entities the option to early adopt the
new revenue standard as of the original effective date. There have been multiple standards updates amending this guidance or providing
corrections or improvements on issues in the guidance. The requirements for these standards relating to Topic 606 are effective for interim
and annual periods beginning after December 15, 2017. This standard permitted adoption using one of two transition methods, either the
retrospective or modified retrospective transition method.
The Company adopted these standards
for the year ended March 31, 2018 using the modified retrospective method. The adoption of these standards did not have an impact on the
Company's Condensed Statements of Operations in the first quarter of 2018.
Deferred Tax Assets and Income Tax Provision
The Company accounts for income taxes
under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based
upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance
to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements
of operations in the period that includes the enactment date.
The Company adopted section 740-10-25
of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%)
likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest
and penalties on income taxes, accounting in interim periods and requires increased disclosures.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
The estimated future tax effects of
temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax
credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance
sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the
interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition,
the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion,
adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates,
additional allowances or reversals of reserves may be necessary.
Tax years that remain subject to examination
by major tax jurisdictions
The Company discloses tax years that remain subject to examination
by major tax jurisdictions pursuant to the ASC Paragraph 740-10-50-15.
Earnings per Share
Earnings per share ("EPS")
is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or
loss per share. EPS is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs
260-10-45-10 through 260-10-45-16 Basic EPS shall be computed by dividing income available to common stockholders (the numerator) by the
weighted- average number of common shares outstanding (the denominator) during the period. Income available to common stockholders shall
be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and the dividends accumulated
for the period on cumulative preferred stock (whether or not earned) from income from continuing operations (if that amount appears in
the income statement) and also from net income. The computation of diluted EPS is similar to the computation of basic EPS except that
the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential
common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through
contingent shares issuance arrangement, stock options or warrants.
Pursuant to ASC Paragraphs 260-10-45-45-21
through 260-10-45-45-23 Diluted EPS shall be based on the most advantageous conversion rate or exercise price from the standpoint of the
security holder. The dilutive effect of outstanding call options and warrants (and their equivalents) issued by the reporting entity shall
be reflected in diluted EPS by application of the treasury stock method unless the provisions of paragraphs 260-10-45-35 through 45-36
and 260-10-55-8 through 55-11 require that another method be applied. Equivalents of options and warrants include non-vested stock granted
to employees, stock purchase contracts, and partially paid stock subscriptions (see paragraph 260–10–55–23). Anti-dilutive
contracts, such as purchased put options and purchased call options, shall be excluded from diluted EPS. Under the treasury stock method:
a. Exercise of options and warrants shall be assumed at the beginning of the period (or at time of issuance, if later) and common shares
shall be assumed to be issued. b. The proceeds from exercise shall be assumed to be used to purchase common stock at the average market
price during the period. (See paragraphs 260-10-45-29 and 260-10-55-4 through 55-5.) c. The incremental shares (the difference between
the number of shares assumed issued and the number of shares assumed purchased) shall be included in the denominator of the diluted EPS
computation.
There were no potentially dilutive common shares
outstanding for the years ended March 31, 2018 and 2017.
Cash Flows Reporting
The Company adopted paragraph 230-10-45-24
of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they
stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation
method
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
(“Indirect method”) as
defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting
net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash
receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in
net income that do not affect operating cash receipts and payments.
Subsequent Events
The Company follows the guidance in
Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent
events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing
them on EDGAR.
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued
ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is
a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which
is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not
significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary,
lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there
will be any impact on our results of operations, cash flows or financial condition.
In March 2016, the FASB issued ASU
2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the
accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award
transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification
on the statement of cash flows. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods
within those fiscal years. The Company adopted this standard as of December 31, 2016. The adoption of this standard had no effect on our
results of operation, cash flows, other than presentation, or financial condition.
In April 2016, the FASB issued ASU
2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in
this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following
two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles
for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange
for consideration and (b) determining whether an entity's promise to grant a license provides a customer with either a right to use the
entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which
is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation
to reduce the degree of judgement necessary to comply with Topic 606. The Company is has reviewed the provisions of this ASU to and determined
there will be no material impact on our results of operations, cash flows or financial condition.
In April 2016, the FASB issued ASU
No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments" ASU 2016 - provides guidance regarding the classification
of certain items within the statement of cash flows. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, with
early adoption permitted. The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than
presentation, or financial condition.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
On November 17, 2016, the FASB issued
ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash", a consensus of the FASB's Emerging Issues Task
Force (the "Task Force"). The new standard requires that the statement of cash flows explain the change during the period in
the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will
also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU No. 2016-18
is effective for public business entities for fiscal years beginning after December 15, 2017. The Company does not believe this ASU will
have an impact on our results of operation, cash flows, other than presentation, or financial condition
The Company evaluated all recent accounting
pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position,
results of operations or cash flows of the Company.
Note 3 – Going Concern
The Company has elected to adopt early
application of Accounting Standards Update No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40):
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
The Company’s financial statements
have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets,
and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company had an accumulated
deficit at March 31, 2018, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
The Company is attempting to commence
operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations.
While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability
to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent
upon its ability to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds.
The financial statements do not include
any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a going concern.
Note 4 – Convertible Notes - Related
party
On October 31, 2017, the Company entered
into a Promissory Note with an investor (the “Lender”) who has significant influence over the Company’s affairs for
up to $1,400. Interest is 25% per annum and is payable on demand. There is no penalty for prepayment.
On November 8, 2017, the Company entered
into a Promissory Note with an investor who has significant influence over the Company’s affairs for $5,600. Interest is 12% per
annum and is payable on demand. There is no penalty for prepayment.
On December 11, 2017, the Company
(the “Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the
“Lender”) who has significant influence for up to $5,500 principal. The consideration of $5,500 with a 25% interest per
annum is payable on demand. There is no penalty for prepayment.
On June 19, 2017, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $7,000 principal. The consideration is $7,000 payable with a 12% interest per annum and will mature
after one year from the date of the note. There is an interest penalty for prepayment before 180 days which ranges from 118%-148%.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
Conversion terms:
The Lender has the right at any time
from the effective date, to convert the outstanding and unpaid notes principal and interest due into the Company’s common shares.
The conversion price is $0.35 per share. The total number of shares due under any conversion notice will be equal to the conversion amount
divided by the conversion price. As of December 4th 2018 this note was fully converted. (See Note 7 below)
From August 1 to Sep 30, 2017 the Company
issued various promissory notes with an aggregate principal amount of $20,595, of which $11,095 was paid directly by the holder to
pay for expenses on behalf of the Company. These borrowing were from an investor who has significant influence over the
Company’s affairs. Interest is 25% per annum and is payable on demand. There is no penalty for prepayment. These promissory
notes have since been modified to include conversion privileges, as per note 7 below.
On September 28, 2017, the Company
entered into a Promissory Note Agreement with an investor for up to $10,000. Interest is 25% per annum and is payable on demand.
There is no penalty for prepayment. The lenders have the right at any time from the effective date, to convert the outstanding and
unpaid notes principal and interest due into the Company’s common shares. The conversion terms are 70% of the lowest trading
price during prior 5 trading days. The total number of shares due under any conversion notice will be equal to the conversion amount
divided by the conversion price. The Company evaluated the convertible note for embedded derivatives. See Note 7 below for
derivative liability and discount discussion on this convertible note.
On October 9, 2017, the Company entered
into a Promissory Note with an investor who has significant influence over the Company’s affairs for $3,000. Interest is 25% per
annum and is payable on demand. There is no penalty for prepayment.
Conversion terms:
The Lender has the right at any time
from the effective date, to convert the outstanding and unpaid notes principal and interest due into the Company’s common shares.
The conversion price is $0.35 per share. The total number of shares due under any conversion notice will be equal to the conversion amount
divided by the conversion price. As of December 4th 2018 this note was fully converted. (See Note 6 below)
On November 14, 2017, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $2,200. The consideration is $2,200 payable with a 12% interest per annum and payable on demand.
In the event of any prepayment, the Borrower will pay to Lender 150% of the unpaid principal amount of this Note.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On November 20, 2017, the Company
(the “Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $2,500. The consideration is $2,500 payable with a 12% interest per annum and payable on demand.
In the event of any prepayment, the Borrower will pay to Lender 150% of the unpaid principal amount of this Note.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On December 4, 2017, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $6,500. The consideration is $6,500 payable with a 12% interest per annum and payable on demand.
In the event of any prepayment, the Borrower will pay to Lender 150% of the unpaid principal amount of this Note.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On January 26, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $21,000. The consideration is $21,000 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On January 19, 2018 and January 29, 2018,
the Company (the “Borrower”) entered into Promissory Note Agreements (the “Note”) with an investor (the
“Lender”) who has significant influence for up to $3,000, $2,000 and $5,000. The consideration is $10,000 payable with a
12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share.
On February 9, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $4,000. The consideration is $4,000 payable with a 12% interest per annum and payable on demand.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On March 7, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $5,500. The consideration is $5,500 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On March 16, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $2,250. The consideration is $2,250 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On March 29, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $2,300. The consideration is $2,300 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
The Company evaluated the convertible
note for possible embedded derivatives and concluded that none exist. However, the Company concluded a portion of the note should be allocated
to additional paid-in capital as a beneficial conversion feature at the issuance date, since the conversion price on that date was lower
than the fair market value of the underlying stock. Resultantly, a discount of $33,595 was recognized during the year ended March 31,
2018 representing the intrinsic value of the beneficial conversion feature of the note, which amount is being amortized through the maturity
date of the note.
On April 16, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $1,000. The consideration is $1,000 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On April 19, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $3,000. The consideration is $3,000 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
On June 19, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $4,000. The consideration is $4,000 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below).
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
On June 28, 2018, the Company (the
“Borrower”) entered into a Promissory Note Agreement (the “Note”) with an investor (the “Lender”)
who has significant influence for up to $3,500. The consideration is $3,500 payable with a 12% interest per annum and payable on demand.
Conversion terms:
The Lender has the right at any time
from time to time, following the 9th anniversary month of the date of this note, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The number of shares of Common Stock to be issued
upon a conversion hereunder will be determined by dividing the Conversion Amount by Volume Weighted Average Price of the Common Stock
as quoted by OTC Markets Group Inc. for the preceding five (5) trading days immediately preceding the date of conversion (“Conversion
Price”). In no event, however, will the Conversion Price be less than $0.35 per share. As of December 4th 2018
this note was fully converted. (See Note 6 below)
Note 5 - Modification of Promissory
Notes
In October 2018, the Company amended
previously issued promissory notes with an aggregate principal amount of $23,595 owed to an investor who has significant influence over
the Company’s affairs and a promissory note with a principal amount of $10,000 owed to an investor whereby a conversion option was
added to the notes. As of October 6, 2017, the lenders have the right at any time from the effective date, to convert the outstanding
and unpaid notes principal and interest due into the Company’s common shares. The conversion price is 70% of the lowest trading
price during prior 5 trading days. The total number of shares due under any conversion notice will be equal to the conversion amount divided
by the conversion price, which is treated as debt extinguishment.
Note 6- Conversion of Debt: In
December 2018, in a private transaction the holder of the $102,145 in debt sold these notes to an unrelated investor who subsequently
converted the outstanding principal debt to common stock, thereby acquiring control of the company.
Effective December 4, 2018, the Company
issued 8,753,506 shares of its common stock (“Shares”) upon the exercise of conversion rights under outstanding convertible
promissory notes (“Notes”). The conversion price for the shares was $0.00927 per share and the aggregate principal
amount converted under the Notes was $102,145. As a result of the conversion, the Notes were paid in full and are no longer outstanding
obligations of the Company. On December 8th 2021 the Company issued the additional 2,265,372 shares of common stock for the
above conversion. The Shares were issued in compliance with the exemptions from the registration requirements of the Securities Act of
1933, as amended, provided by Section 4(a)(2) and Regulation S for transactions not involving a public offering and for offers and sales
outside the United States.
Note 7 – Derivatives and Fair Value Instruments
The Company applied paragraph 815-10-05-4
of the FASB Accounting Standards Codification to the Convertible Notes Payable issued September 28, 2017. Based on the guidance in paragraph
815-10-05-4 of the FASB Accounting Standards Codification the Company concluded these instruments were required to be accounted for as
derivatives on issuance date. The Company records the fair value of the Convertible Notes Payable and certain warrants that are classified
as derivatives on issuance date and the fair value changes on each reporting date reflected in the consolidated statements of operations
as “Change in Fair Value - derivatives.” These derivative instruments are not designated as hedging instruments under paragraph
815-10-05-4 of the FASB Accounting Standards Codification and are disclosed on the balance sheet under Derivative Liabilities.
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
The Company follows paragraph
820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820- 10-35-37”) to measure the fair value of its financial
instruments and paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial
instruments. Paragraph 820-10- 35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the
United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability
in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs
to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by
Paragraph 820-10-35-37 are described below:
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 inputs
and not corroborated by market data.
Financial assets are considered Level 3 when their fair values
are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption
or input is unobservable.
The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets
and liabilities, such as cash, prepayments and other current assets, accounts payable and accrued expenses, approximate their fair values
because of the short maturity of these instruments.
The Company’s Level 3 financial
liabilities consist of the Convertible Notes Payable issued September 28, 2017, for which there is no current market for these securities
such that the determination of fair value requires significant judgment or estimation. We have valued the automatic conditional conversion,
re-pricing/down-round, change of control; default and follow-on offering provisions using a lattice model, for which management understands
the methodologies. These models incorporate transaction details such as Company stock price, contractual terms, maturity, risk free rates,
as well as assumptions about future financings, volatility, and holder behavior as of issuance and December 31, 2018.
As of December 31, 2018 the Company’s
Derivative Liability on the above Convertible Notes Payable was $12,857 and the Derivative Note Discount of $10,000 was fully amortized.
During the quarter ended December 31, 2018 Management made the decision, due to the noteholder’s company dissolution, to write off
the note. The resulting gain on extinguishment of debt in the amount of $10,000 is reported in the statement of operations along with
the associated derivative liability which was written off to gain on derivative liability extinguishment in the amount of $12,857.
As of December 31, 2018 The Company’s derivative
liability on the above Convertible Notes Payable was $-0-. The following table shows the derivative liability valuation and change in
fair-market value of the derivatives on all outstanding notes as of December 31, 2018:
Schedule of derivative liabilities at fair value |
|
|
|
|
Valuation March
31, |
Issuances
during
the |
Conversions
during
the |
Write-off
during the
period |
Valuation
December
31, |
2018 |
period |
period |
|
2018 |
$12,857 |
$-0- |
$-0- |
$(12,857) |
$-0- |
Seguin Natural Hair Products Inc.
December 31, 2018 and 2017
Notes to the Financial Statements
Note 8– Related Party Transactions
Free Office Space
The Company has been provided office
space by its Chief Executive Officer at no cost. The management determined that such cost is nominal and did not recognize the rent expense
in its financial statement.
Shareholder Advances
The balance owed to shareholders as
of December 31, 2018 and March 31, 2018 was $236 and $236, respectively. The advances from shareholders are unsecured, non-interest bearing,
and payable on demand.
Contribution of Capital
During the year ended March 31, 2018, Oivi Launonen, former CEO of
the Company, made a total contribution of $1,000.
On February 1, 2018 Robert C. Laskowski
returned to the Company 10,725,000 shares of common stock. The return of these common shares of stock is recorded as an offset to additional
paid in capital during the year ended March 31, 2018.
Note 9- Change in control
As described in Note 6 above, in a
private transaction the holder of the $81,145 in debt sold these notes to an unrelated investor, Mr. Danny Iandoli, who subsequently converted
the outstanding principal debt to common stock, thereby acquiring control of the company.
Effective December 4, 2018, the Company
issued 8,753,506 shares of its common stock to Mr. Danny Iandoli upon the exercise of conversion rights under outstanding convertible
promissory notes. The conversion price for the shares was $0.00927 per share and the aggregate principal amount converted under the Notes
was $81,145. As a result of the conversion, the Notes were paid in full and are no longer outstanding obligations of the Company. The
company recorded Shares to be issued in the amount of 2,265,372 shares on the above conversion.
Note 10- Subsequent Events
Issuance of Shares for Conversion
On December 8th 2021 the
Company issued the additional 2,265,372 shares of common stock it had recorded as shares to be issued related to the December 2018 debt
conversion.