The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
The accompanying notes are an integral part of
these condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – GENERAL
Sipup Corporation (the “Company”)
is a Nevada Corporation incorporated on October 31, 2012. For additional information see below and note 5 - subsequent events.
Share Exchange Transaction
On June 2, 2019, the Company
completed the acquisition of Enlightened Capital Ltd., an Israeli company with offices at Bnei-Brak, Israel (“Enlightened”)
whereby Enlightened became a direct and wholly owned subsidiary of the Company. As consideration, the Company issued to Enlightened’s
shareholders 18,000,000 common Stock, par value $0.001 per share.
Enlightened
is engaged, in the field of green energy and is licensed to internationally trade in Certified Emission Reductions, also known as carbon
credits (“CERs”), as issued by the UN until 2040.
The transaction was accounted
for as a reverse asset acquisition in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Under this method of accounting, Enlightened was deemed to be the accounting acquirer for financial reporting purposes. This determination
was primarily based on the facts that, immediately following the Merger: (i) Enlightened’s stockholders owned a substantial majority
of the voting rights in the combined company. As a result of the Recapitalization Transaction, the shareholders of Enlightened received
the largest ownership interest in the Company, and Enlightened was determined to be the “accounting acquirer” in the Recapitalization
Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of
Enlightened. The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number
of shares received by the accounting acquirer in the Recapitalization Transaction.
Going concern
The accompanying financial
statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets
and the liquidation of liabilities in the normal course of business. As of February 29, 2020, the Company has an accumulated deficit of
$240,003 from operations. The Company has earned no revenues to cover its operating costs. The Company intends to fund future operations
through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements
for the year ending November 30, 2020.
The ability of the Company
to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and
development of its business plan. In response to these problems, management intends to raise additional funds through public or private
placement offerings.
These factors, among others,
raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Unaudited Interim Financial Statements
The accompanying
unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with
accounting principles generally accepted in the GAAP and with the instructions to Form 10-Q. In the opinion of management, the financial
statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments
(consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial
condition, results of operations and cash flows for the for three-months ended February 29, 2020. However, these results are not necessarily
indicative of results for any other interim period or for the year ended November 30, 2020. The preparation of financial statements in
conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial
statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts
could differ from these estimates.
Certain information
and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been
omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be
read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report published on the SEC’s
website, for the year ended November 30, 2019.
Use of Estimates
The preparation
of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and
expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ
from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to the going
concern assumptions.
NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
Derivative Liabilities and Fair Value
of Financial Instruments
Fair value accounting
requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement
of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt
host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the
instrument is not considered conventional convertible debt under Accounting Standards Codification (“ASC”) 470, the Company
will continue its evaluation process of these instruments as derivative financial instruments under ASC 815, “Derivatives and Hedging”.
Once determined,
derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value
being recorded in results of operations as an adjustment to fair value of derivatives.
Fair value of certain
of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and
other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance
with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value
in accordance with generally accepted accounting principles and expands disclosures about fair value investments.
Fair value, as defined
in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal
(or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk
of non performance, which includes, among other things, the Company’s credit risk.
Valuation techniques
are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application
of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or
liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the
use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting
measurement as follows:
Level 1: Quoted prices (unadjusted)
in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2: Quoted prices for similar assets
or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs
other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated
by observable market data for substantially the full term of the assets or liabilities; and
Level 3: Unobservable inputs for the
asset or liability that are supported by little or no market activity, and that are significant to the fair values.
NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
Recent Accounting Pronouncements
In June 2016, the
Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial
Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU
No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition
requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to
be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about
past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability
of the reported amount. Topic 326 will originally become effective for the Company beginning January 1, 2020, with early adoption permitted,
on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal
years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is
not expected to have a material impact to the Company’s consolidated financial statements after evaluation.
In December 2019,
the FASB issued ASU 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes.” The amendments in this
ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain
aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years
beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is
permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected
to have a material impact to the Company’s consolidated financial statements after evaluation.
The Company has
implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does
not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a
material impact on the consolidated financial statements of the Company.
NOTE 3 – LOAN FROM STOCKHOLDER
|
|
|
As of,
|
|
|
|
|
February 29,
2020
|
|
|
November 30,
2019
|
|
|
Loan from shareholder (*)
|
|
$
|
148,803
|
|
|
$
|
147,495
|
|
|
Loan from related party (**)
|
|
|
14,020
|
|
|
|
14,020
|
|
|
|
|
$
|
162,823
|
|
|
$
|
161,515
|
|
|
(*)
|
The loan is unsecured, bears annual 2.56% interest and has
no repayment term. This loan is repayable on demand
|
|
(**)
|
The loan is unsecured, bears no interest and has no repayment
term. This loan is repayable on demand
|
NOTE 4 – RELATED PARTY TRANSACTION
The following transactions
were carried out with related parties:
|
|
|
Three Months Ended
February 29,
|
|
|
|
|
2020
|
|
|
2019
|
|
|
General and administrative expenses
|
|
|
21,600
|
|
|
|
-
|
|
|
Interest on shareholder’s loan
|
|
|
1,308
|
|
|
|
907
|
|
For additional information please refer to Note
3.
NOTE 5 – SUBSEQUENT EVENTS
In accordance with ASC 855-10,
Company management reviewed all material events through the date of this report and determined that there are no additional material subsequent
events to report.
(i) During November 2020 the
Company, in consideration of the advance of $50,000 for purposes of paying outstanding Company obligation to third parties, the Company
issued to Adi Zim and Rosario Capital Ltd. its unsecured convertible promissory note in the principal amount of $50,000 (the “Note”),
which note shall be convertible into shares of the Company’s common stock at a rate equal to $0.1 per share.
(ii) On April 25, 2021, 2020,
the Company entered into a Stock Exchange Agreement with VeganNation Services Ltd., a company formed under the laws of the State of Israel
(“VeganNation”) and the shareholders of VeganNation pursuant to which VeganNation would become a wholly owned subsidiary of
the Company, and the shareholders of VeganNation would receive an aggregate of 23,562,240 shares of common stock of the Company. The transaction
is subject to customary closing conditions.
VeganNation is, a leading
global plant-based company building an all-encompassing conscious consumer ecosystem, connecting and empowering plant-based and sustainable
businesses and individuals. Management of the Company believes that the growth of sustainable and plant-based consumer goods presents
a unique opportunity to participate in the fastest growing lifestyle globally.
In connection with the proposed
transaction, the VeganNation stockholders are expected to receive comon stock of Sipup that will be equal to approximately 50% of the
issued and outstanding common stock of the Company at the closing of the proposed merger, on a fully diluted basis.
In additiona, on December
28, 2020, the Company disclosed on a current report on Form 8-K that VeganNation previously entered into a non-binding Letter of Intent
(the “LOI”) to acquire a vegan industry company located in the United States (the “Target”) and that VeganNation
had assigned the LOI to the Company. As disclosed by the Company in its Current Report on Form 8-K filed on April 26, 2021, the Company
and Target have terminated all discussions relating to the acquisition of the Target.