UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
| [X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended October 31, 2023
or
| [_] |
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to _________
Commission File Number: 0-55077
NEUTRA CORP.
(Exact name of registrant as specified in its charter)
| Wyoming |
|
27-4505461 |
| (State or other jurisdiction of Incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
| |
|
|
54 Sugar Creek Center Blvd., Suite 200
Sugar Land, Texas |
|
77478 |
| (Address of principal executive offices) |
|
(Zip code) |
Registrant’s telephone number, including area
code: 702-793-4121
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
[X] Yes [_] No
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
[X] Yes [_] No
Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
| |
Large accelerated filer |
[_] |
Accelerated filer |
[_] |
| |
Non-accelerated filer |
[X] |
Smaller reporting company |
[X] |
| |
|
Emerging growth company |
[_] |
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. [_]
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).
[_] Yes [X] No
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date. As of December 15, 2023, 2,917,899,124 shares of common stock are issued and outstanding.
TABLE
OF CONTENTS
- 2 -
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain
forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”,
“estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding
our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties
and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors
and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those
in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue
with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic,
political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition,
and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider
the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this
report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual
Report on Form 10-K for the fiscal year ended January 31, 2023. We advise you to carefully review the reports and documents we file from
time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and
our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws,
we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence
of unanticipated events.
OTHER PERTINENT INFORMATION
When used in this report, the terms, “we,”
the “Company,” “our,” and “us” refers to Neutra Corp., a Wyoming corporation.
- 3 -
Table of Contents
PART
I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEUTRA CORP.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| |
|
|
|
|
|
|
|
| |
|
October 31, |
|
January 31, |
|
| |
|
2023 |
|
2023 |
|
| |
|
(UNAUDITED) |
|
(AUDITED) |
|
| |
|
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
692 |
|
$ |
1,969 |
|
| Accounts Receivable |
|
|
98 |
|
|
— |
|
| Inventory |
|
|
18,610 |
|
|
23,846 |
|
| Total current assets |
|
|
19,400 |
|
|
25,815 |
|
| |
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
7,544 |
|
|
49,360 |
|
| |
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
26,944 |
|
$ |
75,175 |
|
| |
|
|
|
|
|
|
|
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
| Accounts payable and accrued expenses |
|
$ |
480,974 |
|
$ |
516,890 |
|
| Accounts payable to related party |
|
|
407,768 |
|
|
233,087 |
|
| Advances payable |
|
|
3,450 |
|
|
3,450 |
|
| Advances payable to related party |
|
|
12,314 |
|
|
2,314 |
|
| Dividends payable on Series G preferred stock |
|
|
— |
|
|
2,062 |
|
| Accrued interest payable |
|
|
4,322 |
|
|
1,836 |
|
| Total current liabilities |
|
|
908,828 |
|
|
759,639 |
|
| |
|
|
|
|
|
|
|
| Notes payable, related party |
|
|
54,156 |
|
|
54,156 |
|
| |
|
|
|
|
|
|
|
| TOTAL LIABILITIES |
|
|
962,984 |
|
|
813,795 |
|
| |
|
|
|
|
|
|
|
| COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| MEZZANINE EQUITY |
|
|
|
|
|
|
|
| Series G preferred stock; $1.00 stated value, 0 shares and 35,200 shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively |
|
|
— |
|
|
35,200 |
|
| |
|
|
|
|
|
|
|
| STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
| Common stock, $0.001 par value; unlimited shares authorized; 2,917,899,124 and 2,743,575,314 shares issued and outstanding at October 31, 2023 and January 31, 2023, respectively |
|
|
2,917,899 |
|
|
2,743,575 |
|
| Preferred stock, $0.001 par value; 20,000,000 shares authorized: |
|
|
|
|
|
|
|
| Series A convertible preferred stock; 50,000 shares issued and outstanding at October 31, 2023 and January 31, 2023 |
|
|
50 |
|
|
50 |
|
| Series B convertible preferred stock; 10,000 and 0 shares issued and outstanding at October 31, 2023 and January 31, 2023 |
|
|
10 |
|
|
10 |
|
| Series C convertible preferred stock; 40,000 shares issued and outstanding at October 31, 2023 and January 31, 2023 |
|
|
40 |
|
|
40 |
|
| Series E preferred stock, 1,000,000 shares issued and outstanding at October 31, 2023 and January 31, 2023 |
|
|
1,000 |
|
|
1,000 |
|
| Series F preferred stock, $0.001 par value; 1,000,000 shares issued and outstanding at October 31, 2023 and January 31, 2023 |
|
|
1,000 |
|
|
1,000 |
|
| Additional paid-in capital |
|
|
7,751,840 |
|
|
7,889,555 |
|
| Preferred stock subscribed but not issued |
|
|
50,000 |
|
|
50,000 |
|
| Accumulated deficit |
|
|
(11,657,879 |
) |
|
(11,459,050 |
) |
| |
|
|
|
|
|
|
|
| TOTAL STOCKHOLDERS' DEFICIT |
|
|
(936,040 |
) |
|
(773,820 |
) |
| |
|
|
|
|
|
|
|
| TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT |
|
$ |
26,944 |
|
$ |
75,175 |
|
The accompanying footnotes are an integral part of
these unaudited consolidated financial statements.
- 4 -
Table of Contents
NEUTRA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Nine Months Ended |
|
| |
|
October 31, |
|
October 31, |
|
| |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| REVENUE |
|
$ |
1,311 |
|
$ |
23,383 |
|
$ |
11,478 |
|
$ |
62,077 |
|
| Cost of goods sold |
|
|
722 |
|
|
12,708 |
|
|
6,403 |
|
|
29,725 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross margin |
|
|
589 |
|
|
10,675 |
|
|
5,075 |
|
|
32,352 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
9,051 |
|
|
19,726 |
|
|
41,816 |
|
|
59,179 |
|
| Sales commissions |
|
|
779 |
|
|
10,584 |
|
|
6,879 |
|
|
26,101 |
|
| General and administrative expenses |
|
|
43,487 |
|
|
46,439 |
|
|
152,085 |
|
|
186,958 |
|
| Total operating expenses |
|
|
53,317 |
|
|
76,749 |
|
|
200,780 |
|
|
272,238 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOSS FROM OPERATIONS |
|
|
(52,728 |
) |
|
(66,074 |
) |
|
(195,705 |
) |
|
(239,886 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
(2,258 |
) |
|
(15,718 |
) |
|
(2,486 |
) |
|
(46,528 |
) |
| Total other income (expense) |
|
|
(2,258 |
) |
|
(15,718 |
) |
|
(2,486 |
) |
|
(46,528 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss before income taxes |
|
|
(54,986 |
) |
|
(81,792 |
) |
|
(198,191 |
) |
|
(286,414 |
) |
| Provision for income taxes |
|
|
— |
|
|
— |
|
|
(638 |
) |
|
— |
|
| Net loss |
|
|
(54,986 |
) |
|
(81,792 |
) |
|
(198,829 |
) |
|
(286,414 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends on Series G convertible preferred stock |
|
|
— |
|
|
(573 |
) |
|
— |
|
|
(4,105 |
) |
| Deemed dividend on Series G convertible preferred stock |
|
|
— |
|
|
— |
|
|
— |
|
|
(10,200 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss available to common shareholders |
|
$ |
(54,986 |
) |
$ |
(82,365 |
) |
$ |
(198,829 |
) |
$ |
(300,719 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss per common share |
|
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
$ |
(0.00 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding - basic and diluted |
|
|
2,917,899,124 |
|
|
2,300,718,171 |
|
|
2,914,202,623 |
|
|
2,187,836,449 |
|
The accompanying footnotes are an integral part of
these unaudited consolidated financial statements.
- 5 -
Table of Contents
NEUTRA CORP.
CONSOLIDATED STATEMENT OF CHANGES IN MEZZANINE EQUITY
(UNAUDITED)
| |
|
|
|
|
|
|
| |
Series G Preferred Stock |
|
| |
Shares |
|
Amount |
|
| |
|
|
|
|
| Balance, January 31, 2023 |
|
35,200 |
|
$ |
35,200 |
|
| |
|
|
|
|
|
|
| Series G preferred stock converted to common stock |
|
(35,200 |
) |
|
(35,200 |
) |
| |
|
|
|
|
|
|
| Balance, October 31, 2023 |
|
— |
|
$ |
— |
|
The accompanying footnotes are an integral part of
these unaudited consolidated financial statements.
- 7 -
Table of Contents
NEUTRA CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
|
|
|
|
|
|
|
| |
|
Nine Months Ended |
|
| |
|
October 31, |
|
| |
|
2023 |
|
2022 |
|
| |
|
|
|
|
|
|
|
| CASH FLOW FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
| Net loss |
|
$ |
(198,829 |
) |
$ |
(286,414 |
) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
| Depreciation |
|
|
41,816 |
|
|
59,179 |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
| Accounts Receivable |
|
|
(98 |
) |
|
— |
|
| Inventory |
|
|
5,236 |
|
|
(26,810 |
) |
| Accounts payable and accrued liabilities |
|
|
21,637 |
|
|
(23,271 |
) |
| Accounts payable to related party |
|
|
116,475 |
|
|
76,332 |
|
| Accrued interest payable |
|
|
2,486 |
|
|
46,228 |
|
| NET CASH USED IN OPERATING ACTIVITIES |
|
|
(11,277 |
) |
|
(154,756 |
) |
| |
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
| Stock subscriptions received |
|
|
— |
|
|
50,000 |
|
| Proceeds from sale of Series G convertible preferred stock |
|
|
— |
|
|
50,000 |
|
| Proceeds from advance from related party |
|
|
10,000 |
|
|
— |
|
| Proceeds from issuance of note payable |
|
|
— |
|
|
60,000 |
|
| Repayments on notes payable |
|
|
— |
|
|
(5,844 |
) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
10,000 |
|
|
154,156 |
|
| |
|
|
|
|
|
|
|
| NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(1,277 |
) |
|
(600 |
) |
| |
|
|
|
|
|
|
|
| Cash and cash equivalents at beginning of period |
|
|
1,969 |
|
|
1,056 |
|
| |
|
|
|
|
|
|
|
| Cash and cash equivalents at end of period |
|
$ |
692 |
|
$ |
456 |
|
| |
|
|
|
|
|
|
|
| Cash paid during the period for: |
|
|
|
|
|
|
|
| Interest |
|
$ |
— |
|
$ |
— |
|
| Taxes |
|
$ |
— |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
| Noncash investing and financing transactions: |
|
|
|
|
|
|
|
| Conversion of Series G preferred stock |
|
$ |
36,609 |
|
$ |
250,000 |
|
| Dividends on mezzanine equity |
|
$ |
— |
|
$ |
4,105 |
|
| Deemed dividend on mezzanine equity |
|
$ |
— |
|
$ |
10,200 |
|
| Expenses paid on the Company’s behalf |
|
$ |
58,206 |
|
$ |
— |
|
The accompanying footnotes are an integral part of
these unaudited consolidated financial statements.
- 8 -
Table of Contents
NEUTRA CORP.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
October 31, 2023
Note 1. Background Information
Neutra Corp. was incorporated in Nevada on January
11, 2011, to market and participate in the nutraceutical space by bringing products derived from all natural and organic origins. Along
with participating in the actual nutraceutical products, we plan to research and bring new technology to the nutraceutical space. Nutraceutical
natural medicine is an alternative system that focuses on natural remedies and the body’s vital ability to heal and maintain itself.
One of the nutraceutical sub-markets is the new thriving medical cannabis market, in which we intend to participate. We intend to entrust
the manufacturing to a nutraceutical contractor to private label all of our products and to sell them under our unique brand. We have
established a fiscal year end of January 31.
As the global cannabis market grows exponentially,
it is constantly in need of better technologies and products to be more efficient in how it grows, what it grows and how it consumes cannabis
and its related products. From lighting to dosage devices, from pesticide replacements to plant enhancers, Neutra Corp. is constantly
combing the industry for the latest and greatest to test, prove and bring to market.
Note 2. Going Concern
For the nine months ended October 31, 2023, the Company
had a net loss of $198,829 and did not have positive cash flow from operations. As of October 31, 2023, the Company has negative working
capital of $889,428. We have generated limited revenues to date and our activities have been primarily limited to developing our business
plan and research and development of products. We will not have the necessary capital to fully develop or execute our business plan until
we are able to secure additional financing. There can be no assurance that such financing will be available on suitable terms. We need
to raise additional funds in order to implement our business plan. Our current cash on hand is insufficient to commercialize our products
or fully develop our business strategy. If we are unable to raise adequate additional funds or if those funds are not available on terms
that are acceptable to us, we will not be able to execute our business plan and we may cease operations.
These factors raise a substantial doubt about the
Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that
may result from the possible inability of the Company to continue as a going concern.
The Company does not have the resources at this time
to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business
plan. Without additional capital, the Company will not be able to remain in business.
Management has plans to address the Company’s
financial situation as follows:
In the near term, management plans to continue to
focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing
to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue
to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional
funding and the potential inability to achieve profitability raises doubts about the Company’s ability to continue as a going concern.
In the long term, management believes that the Company’s
projects and initiatives will be successful and will provide cash flow to the Company that will be used to finance the Company’s
future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company
will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt
or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to
achieve adequate profitability and cash flows from operations to sustain its operations.
Note 3. Significant Accounting Policies
The significant accounting policies that the Company
follows are:
Interim Financial Statements
The accompanying unaudited financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim
financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated financial statements do
not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These
consolidated financial statements should be read in conjunction with the consolidated financial statements for the fiscal year ended January
31, 2023, and notes thereto and other pertinent information contained in our Form 10-K that we filed with the Securities and Exchange Commission
(the “SEC”).
The results of operations for the nine month period
ended October 31, 2023, are not necessarily indicative of the results to be expected for the full fiscal year ending January 31, 2024.
Basis of Presentation
The consolidated financial statements and related
disclosures have been prepared pursuant to the rules and regulations of the SEC. The consolidated financial statements have been prepared
using the accrual basis of accounting in accordance with GAAP.
Consolidated Financial Statements
The consolidated financial statements of the Company
include the accounts of the Company and its wholly owned subsidiaries, Diamond Anvil Designs, LLC Deity Corporation and Vivis Corporation
(Vivis), from the date of their formations or acquisition. Significant intercompany transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Inventory
Inventory is comprised of packaging and supplies and
at times raw materials. Inventory is valued at cost, based on the average cost method, unless and until the net realizable value for the
inventory is lower than cost, in which case an allowance is established to reduce the valuation to the net realizable value. As of October 31, 2023, and January 31, 2023, market values of all of our inventory were greater than cost, and accordingly, no such valuation allowance
was recognized.
Property and Equipment, net
Property and equipment consist of equipment used to
manufacture the Company’s products and is presented at cost. Depreciation is recognized over the useful life of the equipment on
a straight-line basis over three years beginning when the asset is put in service. For the nine months ended October 31, 2023, and 2022,
the Company recognized depreciation expense of $41,816 and $59,179, respectively.
Revenue Recognition
The Company recognizes revenue
in accordance with ASC Topic 606, Revenue From Contracts With Customers. Revenues are recognized when control of the promised goods or
services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange
for transferring those goods or services. Revenue is recognized based on the following five step model:
| • |
Identification of the contract with a customer |
| |
|
| • |
Identification of the performance obligations in the contract |
| |
|
| • |
Determination of the transaction price |
| |
|
| • |
Allocation of the transaction price to the performance obligations in the contract |
| |
|
| • |
Recognition of revenue when, or as, the Company satisfies a performance obligation |
Product sales are recognized
all of the following criteria are satisfied: (i) a contract with an end user exists which has commercial substance; (ii) it is probable
the Company will collect the amount charged to the end user; and (iii) the Company has completed its performance obligation whereby the
end user has obtained control of the product. A contract with commercial substance exists once the Company receives and accepts a purchase
order or once it enters into a contract with an end user. If collectability is not probable, the sale is deferred and not recognized until
collection is probable or payment is received. Control of products typically transfers when title and risk of ownership of the product
has transferred to the customer. Payment is received before shipment of the product. Net revenues comprise gross revenues less customer
discounts and allowances, actual and expected returns. Shipping charges billed to customers are included in net sales. Various taxes on
the sale of products to customers are collected by the Company as an agent and remitted to the respective taxing authority. These taxes
are presented on a net basis and recorded as a liability until remitted to the respective taxing authority. The Company allows for customers
to return unopened products within 10 days in certain limited circumstances. There have been no refunds processed for returned product.
Contract Costs
Costs incurred to obtain a customer contract are not
material to the Company. The Company elected to apply the practical expedient to not capitalize contract costs to obtain contracts with
a duration of one year or less, which are expensed and included within cost of goods and services.
Cost of Sales
Cost of sales includes all of the costs to purchase
and assemble the Company’s products. Products are manufactured for the Company by third-party contractors, such costs represent
the amounts invoiced by the contractors. Additionally, shipping costs are included in Cost of Sales in the Statements of Operations.
Earnings (Loss) per Common Share
We compute basic and diluted earnings per common share
amounts in accordance with ASC Topic 260, Earnings per Share. The basic earnings (loss) per common share are calculated by dividing
our net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted
earnings (loss) per common share are calculated by dividing our net income (loss) available to common shareholders by the diluted weighted
average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no dilutive shares outstanding
for any periods reported.
Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies,
to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties
and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably
estimated.
As discussed in more detail in Note 5, the Company
agreed to pay 60% of all revenue from Deity Corporation to Sydney Jim, the Company’s CEO, up until a total of $250,000 is paid to
Mr. Jim, at which point he will be entitled to 20% of revenue from Deity Corporation.
There were no other known commitments or contingencies
as of October 31, 2023, and January 31, 2023.
Mezzanine equity
Where ordinary or preferred shares are determined
to be conditionally redeemable upon the occurrence of certain events that are not solely within the control of the issuer, and upon such
event, the shares would become redeemable at the option of the holders, they are classified as ‘mezzanine equity’ (temporary
equity). The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in
a demand for cash, securities or other assets of the entity in the future.
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 Adopted Accounting Pronouncements
The Company does not believe that any recently issued
effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying
financial statements.
Note 4. Property and equipment, net
Property and equipment consist of the following:
| |
|
October 31, 2023 |
|
January 31, 2023 |
|
| Equipment |
|
$ |
236,717 |
|
$ |
236,717 |
|
| Total property and equipment |
|
|
236,717 |
|
|
236,717 |
|
| Less: accumulated depreciation |
|
|
(229,173 |
) |
|
(187,357 |
) |
| Property and equipment, net |
|
$ |
7,544 |
|
$ |
49,360 |
|
Note 5. Related Party Transactions
During the nine months ended October 31, 2023, and 2022,
we incurred salary expense of $75,000 to our CEO, Sydney Jim. In addition, we incurred commission expense of $6,879 and $26,101 during
the nine months ended October 31, 2023, and 2022 to Mr. Jim and owed a total of $41,475 and $34,596 in accrued commissions as of October 31,
2023, and January 31, 2023, respectively. During the nine months ended October 31, 2023, Mr. Jim paid expenses of $41,253 on behalf of the Company.
As of October 31, 2023, and January 31, 2023, we owed
Mr. Jim, or entities controlled by him, $407,768 and $233,087 which is recorded on the balance sheet in “Accounts Payable –
Related Party”, respectively, and $12,314 and $2,314 in “Advances payable to related party”, respectively. This balance includes the commissions payable to Mr. Jim described above.
During the nine months ended October 31, 2023, an investor
advanced $10,000 to the Company. This advance is unsecured, non-interest bearing and due on demand.
On March 11, 2022, the Company entered into a loan
agreement for $60,000 of proceeds with the holder of the Company’s Series A and B preferred stock. The loan is unsecured and bears
interest at 6%. The Company will make monthly payments of $4,240 per month beginning in April 2022 through the maturity at June 18, 2023.
As of October 31, 2023, the note principal balance was $54,156 and accrued interest was $4,322. The Company has not made all the required monthly
payments under the note agreement to date.
During the year ended January 31, 2022, the Company
acquired the assets of Deity Corporation, a Texas corporation which the Sydney Jim, the Company’s CEO, had a controlling interest
in that will produce hemp and cannabis products. The transaction was considered an asset acquisition, as there were no operations of Deity
Corporation prior to the transaction. The Company received the formulas for certain hemp and cannabis-based products and a website to
market the products that will be produced. In exchange, the Company will pay Mr. Jim 60% of the revenue from Deity Corporation sales
until a total of $250,000 is reached, at which point the Company will pay 20% of Deity Corporation revenue to Mr. Jim.
Note 6. Advances and Notes Payable
As of October 31, 2023, and January 31, 2023, we had
amounts due under advances of $3,450 at each period. These advances are not collateralized, non-interest bearing and are due on demand.
On March 11, 2022, the Company entered into a loan
agreement for $60,000 of proceeds with the holder of the Company’s Series A and B preferred stock. The loan is unsecured and bears
interest at 6%. The Company will make monthly payments of $4,240 per month beginning in April 2022 through the maturity at June 18, 2023.
As of October 31, 2023, the note principal balance was $54,156 and accrued interest was $4,322.
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Table of Contents
Note 7. Shareholders’ Equity
Series A Preferred Stock. In January
2020, our board of directors designated 50,000 shares of our preferred stock as Series A Preferred Stock which rank subordinate to all
shares of common stock and do not have voting rights. The Series A Preferred Stock has a stated value of $5 per share. The Series A Preferred
Stock is entitled to receive dividends of 10% of the net profit of VIVIS Corporation. The holders of the Series A Preferred Stock have
the option to convert each share into 800 shares of common stock of the Company. As of October 31, 2023, and January 31, 2023, there are
50,000 shares of Series A Preferred Stock outstanding.
Series B Preferred Stock. In July
2020, our board of directors designated 10,000 shares of our preferred stock as Series B Preferred Stock which rank subordinate to all
shares of common stock and do not have voting rights. The Series B Preferred Stock has a stated value of $5 per share. The Series B Preferred
Stock is entitled to receive dividends of 0.4% of the net profit of VIVIS Corporation. Holders of the Series B Preferred Stock have the
option to convert each share into 800 shares of common stock. During the year ended January 31, 2021, the Company subscribed 10,000 shares
of Series B Preferred Stock for cash proceeds of $50,000. The shares were issued during the year ended January 31, 2022. As of October 31,
2023, and January 31, 2023, there are 10,000 shares of Series B Preferred Stock outstanding.
Series C Preferred Stock. In November
2020, our board of directors designated 40,000 shares of our preferred stock as Series C Preferred Stock which rank subordinate to all
shares of common stock and do not have voting rights. The Series C Preferred Stock has a stated value of $5 per share. The Series C Preferred
Stock is entitled to receive dividends of 10% of the net profit of VIVIS Corporation. After the Series C Preferred Stock has received
cumulative dividends of $500,000, the dividend rate will reduce to 1%. Holders of the Series C Preferred Stock have the option to convert
each share into 38 shares of common stock. During the year ended January 31, 2021, the Company subscribed 40,000 shares of Series B Preferred
Stock for cash proceeds of $200,000. The shares were issued during the year ended January 31, 2022. As of October 31, 2023, and January 31,
2023, there are 40,000 shares of Series C Preferred Stock outstanding.
Series E preferred stock issued for services
On November 13, 2015, our board of directors designated
1,000,000 shares of our preferred stock as Series E Preferred Stock. The Series E Preferred Stock is subordinated to our common stock.
It does not receive dividends and does not participate in equity distributions. The Series E Preferred stock has 2 votes for each outstanding
share of common stock in the company. As of October 31, 2023, and January 31, 2023, there are 1,000,000 shares Series E Preferred Stock outstanding.
Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purposes.
Series F preferred stock issued for services
The Series F Preferred Stock is subordinated to our
common stock and superior to all shares of Preferred Stock. It does not receive dividends and does not participate in equity distributions.
The Series F Preferred stock retains 2/3 of the voting rights in the company. During the year ended January 31, 2021, the Company issued
1,000,000 shares of Series F Preferred Stock to Sydney Jim, our CEO, in exchange for services. As of the date of this report, there are
1,000,000 shares Series F Preferred Stock outstanding. As of October 31, 2023, and January 31, 2023, there are 1,000,000 shares of Series
F Preferred Stock outstanding.
Series G convertible preferred stock
During the nine months ended October 31, 2023, the
Company the holder of the Series G convertible preferred stock converted 35,200 shares and accrued dividends of $1,408 into 174,323,810
shares of common stock. During the nine months ended October 31, 2022, the Company accrued dividends of $3,532, and the holder of the Series
G convertible preferred stock converted 250,000 shares and accrued dividends of $10,000 into 518,644,372 shares
of common stock. The conversions were in accordance with the terms of the agreement and no gain or loss was recognized. As of October 31, 2023, there were no shares of Series G convertible preferred stock outstanding.
Preferred Stock Subscription
On February 23, 2022, the Company sold 10,000 shares
of preferred stock not yet designated for cash proceeds of $50,000.
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Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial
condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein.
This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial
conditions, operations, plans, objectives, and performance that involve risk, uncertainties, and assumptions. The actual results may differ
materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product
sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate,
estimate or similar expressions are also used to indicate forward-looking statements.
Background of our Company
Neutra Corp. was incorporated in Florida on January
11, 2011. On October 5, 2015, we reincorporated from Florida to Nevada. On August 16, 2019, we reincorporated from Nevada to Wyoming.
The reincorporation was approved by our board of directors and by the holders of a majority of the voting rights for our common stock.
There was no change in share ownership as a result of the reincorporation. Our authorized shares in the Wyoming corporation are unlimited
shares of common stock and 20,000,000 shares of preferred stock.
We have established a fiscal year end of January 31.
As the global cannabis market grows exponentially,
it is constantly in need of better technologies and products to be more efficient in how it grows, what it grows and how it consumes cannabis
and its related products. From lighting to dosage devices, from pesticide replacements to plant enhancers, Neutra Corp. is constantly
combing the industry for the latest and greatest to test, prove and bring to market.
We have generated limited revenues to date and our
activities have been primarily limited to developing our business plan and research and development of products. We will not have the
necessary capital to fully develop or execute our business plan until we are able to secure additional financing. There can be no assurance
that such financing will be available on suitable terms. We need to raise additional funds in order to implement our business plan. Our
current cash on hand is insufficient to commercialize our products or fully develop our business strategy. If we are unable to raise adequate
additional funds or if those funds are not available on terms that are acceptable to us, we will not be able to execute our business plan
and we may cease operations.
Plan of Operations
We believe we do not have adequate funds to fully
execute our business plan for the next twelve months unless we obtain additional funding. However, should we not raise this capital, we
will allocate our funding to first assure that all State, Federal and SEC requirements are met.
As of October 31, 2023, we had cash on hand of $692.
We intend to pursue capital through public or private
financing, as well as borrowing and other sources in order to finance our business activities. We cannot guarantee that additional funding
will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may
be significantly hindered.
Critical Accounting Policies
We prepare our consolidated financial statements in
conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on
historical experience, current trends, and other factors that management believes to be important at the time the consolidated financial
statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our consolidated
financial statements.
While we believe that the historical experience, current
trends and other factors considered support the preparation of our consolidated financial statements in conformity with GAAP, actual results
could differ from our estimates and such differences could be material.
For a full description of our critical accounting
policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in our Annual Report for the year ended January 31, 2023, on Form 10-K.
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Table of Contents
Results of Operations
Three months ended October 31, 2023 compared to
the three months ended October 31, 2022.
Revenue and Cost of Goods Sold
During the three months ended October 31, 2023, we
recognized revenue of $1,311 and cost of goods sold of $722 related to the sales of CBD products. During the three months ended October
31, 2022, we recognized revenue of $23,383 and cost of goods sold of $12,708 related to the sales of CBD products. The decrease in revenue
compared to the prior year is due to a slowdown in current economic conditions.
Depreciation
We recognized depreciation expense of $9,051 and $19,726
for the three months ended October 31, 2023, and 2022, respectively, related to the Company’s property and equipment.
General and Administrative Expenses
We recognized general and administrative expenses
of $43,487 and $46,439 for the three months ended October 31, 2023, and 2022, respectively. The decrease is primarily related to the decrease
in wages and professional fees.
Interest Expense
Interest expense was $2,258 and $15,718 for the three
months ended October 31, 2023, and 2022, respectively. The decrease in interest expense was related to the settlement of outstanding convertible
notes payable in the prior year.
Net Loss
We incurred a net loss of $54,986 for the three months
ended October 31, 2023, as compared to $81,792 for the comparable period of 2022.
Nine months ended October 31, 2023, compared to
the nine months ended October 31, 2022.
Revenue and Cost of Goods Sold
During the nine months ended October 31, 2023, we
recognized revenue of $11,478 and cost of goods sold of $6,403 related to the sales of CBD products. During the nine months ended October
31, 2022, we recognized revenue of $62,077 and cost of goods sold of $29,725 related to the sales of CBD products. The decrease in revenue
compared to the prior year is due to a slowdown in current economic conditions.
Depreciation
We recognized depreciation expense of $41,816 and
$59,179 for the nine months ended October 31, 2023, and 2022 related to the Company’s property and equipment.
General and Administrative Expenses
We recognized general and administrative expenses
of $152,085 and $186,958 for the nine months ended October 31, 2023, and 2022, respectively. The decrease is primarily related to the
decrease in wages and professional fees.
Interest Expense
Interest expense was $2,486 and $46,528 for the nine
months ended October 31, 2023, and 2022, respectively. The decrease in interest expense was related to the settlement of outstanding convertible
notes payable in the prior year.
Net Loss
We incurred a net loss of $198,829 for the nine months
ended October 31, 2023, as compared to $286,414 for the comparable period of 2022.
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Table of Contents
Liquidity and Capital Resources
At October 31, 2023, we had cash on hand of $692.
We have working capital deficit of $889,428. Net cash used in operating activities for the nine months ended October 31, 2023, was $11,277.
The Company had net cash provided by financing activities of $10,000 for the nine months ended October 31, 2023, with $10,000 of proceeds
from advances from related party. Cash on hand is not adequate to fund our operations for the next twelve months. We do not expect to
achieve positive cash flow from operating activities in the near future. We will require additional cash in order to implement our business
plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable
to us. We have no material commitments for capital expenditures as of October 31, 2023.
Additional Financing
Additional financing is required to continue operations.
Although actively searching for available capital, we do not have any current arrangements for additional outside sources of financing
and cannot provide any assurance that such financing will be available.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
This item is not applicable to smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Internal Control over
Financial Reporting
We carried out an evaluation, under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness
of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2023. Based upon
that evaluation, our principal executive officer and principal financial officer concluded that, as of October 31, 2023, our disclosure
controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated
to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.
| 1. |
As of October 31, 2023, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
| |
|
| 2. |
As of October 31, 2023, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
| |
|
| 3. |
As of October 31, 2023, we did not maintain effective controls over transactions with related parties. Specifically, controls were not designed and in place to ensure that all transactions with related parties were captured and tracked in our financial statements. The Company has no formal process related to the identification and approval of related party transactions. Management has determined that this control deficiency constitutes a material weakness. |
Our management, including our principal executive
officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal
controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that
there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
have been detected.
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Table of Contents
Change in Internal Controls Over Financial Reporting
There was no change in our internal controls over
financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to
materially affect, our internal controls over financial reporting.
PART
II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any
of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse
to us.
ITEM 1A. RISK FACTORS
This item is not applicable to smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
We have not defaulted upon senior securities.
ITEM 4. MINE SAFETY DISCLOSURES
This item is not applicable to the Company.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
__________
| (1) |
Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on February 24, 2011. |
| (2) |
Filed or furnished herewith. |
| (3) |
In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.” |
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
Neutra Corp. |
| |
|
| |
|
| Date: December 15, 2023 |
BY: /s/ Sydney Jim |
| |
Sydney Jim |
| |
President, Secretary, Treasurer, Principal Executive Officer,
Principal Financial and Accounting Officer, and Sole Director |
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