Avai Bio, Inc 10-Q for FY2022 Q2
Avai Bio, Inc. (AVAI)
About this 10-Q
Avai Bio, Inc filed this 10-Q on November 15, 2021, covering the quarter ended September 30, 2021 (FY2022 Q2).
Headline figures
Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $166.32K
- compared with net income of $50.46K a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the quarterly period ended
For the transition period from __________ to __________
Commission file number
| (Exact name of small business issuer as specified in its charter) | ||||
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| 7370 | ||||
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(State or other jurisdiction of incorporation or organization)
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(Primary Standard Industrial Classification Number)
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(IRS Employer Identification Number) |
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(Address of principal executive offices and Zip Code)
(Registrant’s telephone number, including area code)
(Registrant’s email)
| Securities registered under Section 12(b) of the Exchange Act: | ||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| Common Stock, $0.001 par value | TREN | OTC Markets | ||
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.
Indicate by check mark whether the registrant has
submitted electronically on its corporate Web site, if any, 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). Yes ( )
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 | ( ) |
| (X) | Smaller reporting company | ( | |
| (Do not check if a smaller reporting company) | 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 7(a)(2)(B) of the Securities Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ( )
State the number of shares outstanding of each
of the issuer's classes of common equity, as of the latest practicable date: common shares issued and outstanding as of
November 12, 2021.
TREND INNOVATIONS HOLDING INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
| Page | ||
| PART I | FINANCIAL INFORMATION: | |
| Item 1. | Consolidated Financial Statements (Unaudited) | 3 |
| Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and March 31, 2021 | 4 | |
| Consolidated Statements of Operations for the three and six months ended September 30, 2021 (Unaudited) and September 30, 2020 | 5 | |
| Consolidated Statement of Stockholders’ Equity for the six months ended September 30, 2021 (Unaudited) | 6 | |
| Consolidated Statement of Cash Flows for the six months ended September 30, 2021 (Unaudited) and September 30, 2020 | 7 | |
| Notes to the Interim Consolidated Financial Statements (Unaudited) | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 16 |
| Item 4. | Controls and Procedures | 16 |
| PART II | OTHER INFORMATION: | |
| Item 1. | Legal Proceedings | 16 |
| Item 1A | Risk Factors | 16 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16 |
| Item 3. | Defaults Upon Senior Securities | 17 |
| Item 4. | Mine Safety Disclosures | 17 |
| Item 5. | Other Information | 17 |
| Item 6. | Exhibits | 17 |
| Signatures | 17 |
2 | Page
| PART I. | FINANCIAL INFORMATION |
| ITEM 1. | FINANCIAL STATEMENTS |
The accompanying interim financial statements of Trend Innovations Holding Inc. (formerly FreeCook) (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.
The interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
3 | Page
TREND INNOVATIONS HOLDING INC.
Consolidated Balance Sheets
|
September 30, 2021 (Unaudited) |
March 31, 2021 | ||
| ASSETS | |||
| Current Assets | |||
| Cash and cash equivalents | 8,525 | 60,364 | |
| Prepaid Expenses | |||
| Loan Receivable | |||
| Accounts Receivable | |||
| Prepaid Rent | |||
| Prepaid Taxes | |||
| Total Current Assets | |||
| Fixed Assets | |||
| Accumulated depreciation | ( |
( | |
| Furniture and Equipment | |||
| Vehicles | |||
| Total Fixed Assets | |||
| Intangible Assets | |||
| Accumulated depreciation | ( |
( | |
| App Development Cost | |||
| RSS Database | |||
| Website Development | |||
| Total Intangible Assets | |||
| Other Assets | |||
| Deferred expenses | |||
| Total Other Assets | |||
| TOTAL ASSETS | |||
| LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) | |||
| Liabilities | |||
| Current Liabilities | |||
| Accrued Liabilities | |||
| Accrued Payroll | |||
| Accounts Payable | |||
| Loan from Related Parties (note 6) | |||
| Convertible Notes Payable (note 7) | |||
| Loan Payable | |||
| Notes payable - Related Party | |||
| Retainers from Customers | |||
| Total Current Liabilities | |||
| Total Liabilities | |||
| Stockholder’s Equity (Deficit) | |||
|
Preferred stock, $ par value, shares authorized; and common shares issued and outstanding respectively |
|||
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Common stock, $ par value, shares authorized; and common shares issued and outstanding respectively |
|||
| Additional paid in capital | |||
| Accumulated other comprehensive income | ( |
||
| Accumulated deficit | ( |
( | |
| Total Stockholder’s Equity (Deficit) | ( |
( | |
| TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) |
See accompanying notes, which are an integral part of these financial statements
4 | Page
TREND INNOVATIONS HOLDING INC.
Consolidated Statements of Operations
Three and Six months ended September 30, 2021 (Unaudited) and 2020
|
Three months ended September 30, 2021 |
Three months ended September 30, 2020 |
Six months ended September 30, 2021 |
Six months ended September 30, 2020 | ||||||||||
| ORDINARY INCOME/EXPENSE | |||||||||||||
| Income | |||||||||||||
| Sales | $ | $ | $ | $ | |||||||||
| TOTAL INCOME | |||||||||||||
| COGS | |||||||||||||
| GROSS PROFIT | ( |
||||||||||||
| OPERATING EXPENSES | |||||||||||||
| Depreciation Expense | |||||||||||||
| General and Administrative Expenses | |||||||||||||
| Professional Fees | |||||||||||||
| Rent Expenses | |||||||||||||
| TOTAL OPERATING EXPENSES | |||||||||||||
| OTHER (EXPENSES) INCOME | |||||||||||||
| NET INCOME (LOSS) FROM OPERATIONS | $ | ( |
$ | $ | $ | ||||||||
| PROVISION FOR INCOME TAXES | |||||||||||||
| NET INCOME (LOSS) | $ | ( |
$ | $ | $ | ||||||||
| Other comprehensive income (loss): | |||||||||||||
| Foreign currency translation adjustment | $ | ( |
$ | $ | ( |
$ | |||||||
| COMPREHENSIVE INCOME (LOSS) | $ | ( |
$ | $ | $ | ||||||||
| NET LOSS PER SHARE: BASIC AND DILUTED | $ | ( |
$ | ( |
$ | ( |
$ | ( | |||||
|
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED |
|||||||||||||
See accompanying notes, which are an integral part of these financial statements
5 | Page
TREND INNOVATIONS HOLDING INC.
Consolidated Statement of Stockholders’ Equity
Six months ended September 30, 2021 (Unaudited)
|
|
Common Stock | Preferred Stock |
Additional Paid-in Capital |
Accumulated other comprehensive income | Accumulated Deficit |
Total Stockholders’ Equity | ||
| Shares | Amount | Shares | Amount | |||||
|
Balance, March 31, 2020 |
$ |
— | $ | $ |
$ | $ ( |
$ ( | |
| Common Shares issued | — | ( |
||||||
| Foreign currency translation adjustment | — | — | ||||||
| Net income (loss) for the three-months period | — | — | ||||||
|
Balance, June 30, 2020 |
$ |
— | $ | $ |
$ |
$ ( |
$ | |
| Capital contribution | — | — | ||||||
| Foreign currency translation adjustment | — | — | ||||||
| Net income (loss) for the three-months period | — | — | ||||||
|
Balance, September 30, 2020 |
$ |
— | $ | $ |
$ |
$ |
$ | |
|
Balance, March 31, 2021 |
$ |
5,000,000 | $ |
$ |
$ |
$ ( |
$ ( | |
| Foreign currency translation adjustment | — | — | ( |
( | ||||
| Net income (loss) for the three-months period | — | — | ||||||
|
Balance, June 30, 2021 |
$ |
5,000,000 | $ |
$ |
$ |
$ |
$ | |
| Conversion of Notes Payable into Common Shares | — | |||||||
| Foreign currency translation adjustment | — | — | ( |
( |
( | |||
| Net income (loss) for the three-months period | — | — | ( |
( | ||||
|
Balance, September 30, 2021 |
$ |
5,000,000 | $ |
$ |
$ ( |
$ ( |
$ ( | |
See accompanying notes, which are an integral part of these financial statements
6 | Page
TREND INNOVATIONS HOLDING INC.
Consolidated Statement of Cash Flows
Six months ended September 30, 2021 (Unaudited) and 2020
|
Six months ended September 30, 2021 |
Six months ended September 30, 2020 | ||||
| OPERATING ACTIVITIES | |||||
| Net Income | $ | $ | |||
| Foreign currency translation adjustment | ( |
||||
| Adjustments to reconcile Net Income to net cash used in operations: | |||||
| Accumulated depreciation | |||||
| Accounts Payable | ( |
||||
| Accounts Receivables | ( | ||||
| Accrued Liabilities | |||||
| Accrued Payroll | |||||
| Deferred expenses | |||||
| Loan Receivable | ( |
( | |||
| Retainers from Customers | ( |
||||
| Prepaid expenses | ( | ||||
| Prepaid taxes | ( |
( | |||
| Prepaid rent | ( |
||||
| Purchase of goods for resale | ( | ||||
| Net cash used in Operating Activities | ( |
( | |||
| INVESTING ACTIVITIES | |||||
| Vehicles acquisition cost | $ | $ | |||
| Net cash provided by Investing Activities | |||||
| FINANCING ACTIVITIES | |||||
| Additional paid in capital | $ | $ | |||
| Loan from Related Parties | |||||
| Loan Payable | ( |
||||
| Net cash provided by Financing Activities | |||||
| Net cash increase for period | $ | ( |
$ | ( | |
| Cash at beginning of period | $ | $ | |||
| Cash at end of period | $ | $ |
See accompanying notes, which are an integral part of these financial statements
7 | Page
TREND INNOVATIONS HOLDING INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2021
(Unaudited)
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
Trend Innovations Holding Inc. is a holding company for innovative websites and mobile apps which are aimed to provide customization and convenience for its users. The Company is constantly working on completing relevant tasks in IT consulting and introducing artificial intelligence to regular users. We make our customers' businesses more visual, manageable and predictable, which ultimately leads to increased profitability.
Our principal office address is located at 44A Gedimino avenue, Vilnius, 01110, Lithuania.
Sale and Purchase of Ownership Interest Agreement
On June 28, 2019 Trend Innovations Holding Inc. (formerly FreeCook) a Nevada corporation (“Buyer”, “Company”), entered into a Sale and Purchase of Ownership Interest Agreement with ThyNews Tech LLC, a Wyoming corporation, (“Thynews Tech” or the “Seller”), wherein Trend Innovations Holding Inc. (formerly FreeCook) purchased 100% of the ownership of Thynews Tech. Upon completion of the Agreement, Trend Innovations Holding Inc. (formerly FreeCook) agreed to deliver to Thynews Tech’s owners a cumulative total of one hundred thousand (100,000) restricted shares of Trend Innovations Holding Inc. treasury valued at One Dollar ($1.00) per share. The shares were to be delivered to Thynews Tech within 60 days following the execution of the agreement. Additionally, Trend Innovations Holding Inc. provided to Thynews Tech’s owners, as consideration, a Promissory Note in the amount of One Hundred Thousand United States Dollars ($100,000 US). Trend Innovations Holding Inc. acquired 100% of the ownership of duly and validly issued, fully paid and non-assessable ownership interest of ThyNews Tech LLC, including ThyNews Application. Prior to the transaction, Trend Innovations Holding Inc. had 5,014,080 shares of common stock issued and outstanding. Upon the transaction, the additional 100,000 of Trend Innovations Holding Inc. common stock were issued and outstanding. Upon the issuance of shares to Thynews, there were 5,014,080 shares of common stock issued and outstanding.
On March 30, 2020 Trend Innovations Holding Inc (formerly FreeCook)., being represented by its President and Director, Natalija Tunevic, entered into Sale and Purchase of Ownership Interest Of 100% of Itnia Co. LLC, a Wyoming limited liability company which owns 100% of MB Lemalike Innovations, a Lithuanian IT consulting company with Mikhail Bukshpan. Upon completion of the Agreement, Trend Innovations Holding Inc. agreed to deliver to Itnia Co. LLC’s owners a cumulative total of one hundred fifty thousand (150,000) restricted shares of Trend Innovations Holding Inc. treasury valued at One Dollar ($1.00) per share. The shares were to be delivered to Mr. Bukshpan within the mutually agreed upon time frame following the execution of the agreement. Additionally, Trend Innovations Holding Inc. were to provide to Mr. Bukshpan, as consideration, a Promissory Note in the amount of One Hundred and Fifty Thousand United States Dollars ($150,000 US).
MB Lemalike Innovations
MB ‘Lemalike Innovations’, formerly known as MB ‘Repia’, was incorporated in Lithuania on October 9, 2017. The company was originally engaged in providing business and other consulting services for the companies intending to seek for new markets outside Lithuania. Recently the company has also been developing in the IT direction. In providing consultations, Lemalike Innovations helps enterprises in the Baltic countries looking for export opportunities. Lemalike Innovations is currently working to enter the area of implementing and consulting on the matter of Artificial Intelligence technologies.
On January 31, 2020, Mr. Mikhail Bukshpan became the director of the entity. On March 10, 2020, he merged Lemalike Innovations into his limited liability company, Itnia Co. LLC. Upon that, on March 30, 2020, Itnia Co. LLC merged into Trend Innovations Holding Inc. and became a part of the holding.
The company’s registered office is located at Sv. Stepono g. 27D-2, LT-01315 Vilnius, Lithuania.
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Note 2 – GOING CONCERN
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), which contemplate continuation of the Company as a going concern. However, the Company had limited revenues and recurring losses as of September 30, 2021. The Company has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying condensed financial statements have been prepared by Trend Innovations Holding Inc. in accordance with GAAP without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows as of September 30, 2021 and for the related periods presented.
The results for the six months ended September 30, 2021, are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2021, filed with the Securities and Exchange Commission.
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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Application Development Costs
The Company follows the provisions of ASC 985, Software, which requires that all costs relating to the purchase or internal development and production of software products to be sold, leased or otherwise marketed, be expensed in the period incurred unless the requirements for technological feasibility have been established. The Company capitalizes all eligible software costs incurred once technological feasibility is established. The Company amortizes these costs using the straight-line method over a period of three years, which is the remaining estimated economic life of the costs. At the end of each reporting period, the Company writes down any excess of the unamortized balance over the net realizable value.
Depreciation, Amortization, and Capitalization
The Company records depreciation and amortization when appropriate using straight-line method over the estimated useful life of the assets. We estimate that the useful life of equipment is 5 years and website development is 1 year. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriate accounts and the resultant gain or loss is included in net income.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company had $8,525 of cash as of September 30, 2021.
Prepaid Expenses
Prepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense. Prepaid Expenses are recorded at fair market value.
The Company’s subsidiary Itnia Co. LLC had $148,774 in prepaid expenses as of September 30, 2021 (March 31, 2021 – $203,628). Prepaid expenses consist of prepaid services.
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Lease
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the consolidated balance sheets.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, The Company generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Website Development Costs
The Company amortizes these costs using the straight-line method over a period of one years, which is the remaining estimated economic life of the costs. At the end of each reporting period, the Company writes down any excess of the unamortized balance over the net realizable value.
Foreign Currency Translation
The Company considers the U.S. dollar to be its functional currency as it is the currency of the primary economic environment in which the Company operates. All assets, liabilities, revenues and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. All exchange gains and losses are included in operations.
For the six months ended September 30, 2021, foreign currency transaction gain was ($24,712).
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Revenue Recognition
The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
The Company has assessed the impact of the guidance by performing the following five steps analysis:
Step 1: Identify the contract
Step 2: Identify the performance obligations
Step 3: Determine the transaction price
Step 4: Allocate the transaction price
Step 5: Recognize revenue
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
Revenue from supplies of consulting services is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the services are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the period reported.
The Company derives its revenue from direct sales to individuals and business companies. Generally, the Company recognizes revenue when services are sold and accepted by the customers and there are no continuing obligations to the customer.
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The Company computes income (loss) per share in accordance with FASB ASC 260 “Earnings per Share”. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. For the period from November 6, 2017 (inception) through September 30, 2021, there were no potentially dilutive debt or equity instruments issued or outstanding.
Comprehensive Income (Loss)
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. For the six months period ended September 30, 2021, our net income (loss) was $230,012 and comprehensive loss was $201,389.
COVID-19 Risks, Impacts and Uncertainties
Our company may be subject to the risks arising from COVID-19's impacts on the IT industry. Our management believes that these impacts, which include but are not limited to the following, may have a negative effect on our financial position, results of operations, and cash flows: (i) prohibitions or limitations on in-person activities associated with meetings; (ii) lack of consumer desire for incurring additional expenses during these times; and (iii) deteriorating economic conditions, such as increased unemployment rates. In addition, we have considered the impacts and uncertainties of COVID-19 in our use of estimates in preparation of our consolidated financial statements. These estimates include, but are not limited to, likelihood of achieving performance conditions under performance-based equity awards, net realizable value of inventory, and the fair value of reporting units and goodwill for impairment.
In Spring of 2020, a lot of governments around the world issued lockdown orders prohibiting their respective citizens from working in the offices and arranging face-to-face meetings. There also were instances of reducing number of hours available to each employee. These actions were taken in response to the economic impact of COVID-19 on business areas resulted in a reduction of productivity for the year 2020. Due to the online nature of the company’s operations, our regular course of business did not incur significant changes. However, the company’s clients and third parties had to adjust their operations which resulted in a decreased number of agreements.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.
Note 4 – FIXED ASSETS
As of September 30, 2021, our fixed assets comprised of $1,500 in equipment and $33,285 in vehicles. Depreciation expense of equipment was $16,180 as of September 30, 2021.
Note 5 – INTANGIBLE ASSETS
As of September 30, 2021, the total amount of website development was $8,361. Depreciation expense of website development was $8,361 as of September 30, 2021.
As of September 30, 2021, the unamortized balance of the costs related to the purchase or internal development and production of software to be sold, leased, or otherwise marketed was $97,400, which is deemed to be equal to the net realizable value, and is included within Application Development Costs in the balance sheet. Depreciation expense of application development was $73,050 as of September 30, 2021.
As of September 30, 2021, the total amount of Capitalized Application Development Costs was $24,350.
In December 2019 and March 2020 the Company purchased an RSS Database. As of September 30, 2021, the total amount of RSS Database was $149,000. Depreciation expense of RSS Database was $26,250 as of September 30, 2021.
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Note 6 – RELATED PARTY TRANSACTIONS
During the period from November 6, 2017 (inception) through September 30, 2021, our president has loaned to the Company $41. This loan is unsecured, non-interest bearing and due on demand.
The Company’s subsidiary Thynews Tech LLC received $124,590 as advances from related parties as of September 30, 2021. The advances are interest-free and due on demand.
The Company’s subsidiary Itnia Co. LLC received $146,219 as advances from related parties as of September 30, 2021. The advances are interest-free and due on demand.
As of September 30, 2021, the Company has an outstanding
debt to Mr. Mikhail Bukshpan, our Treasurer, COO and Director, who is also the owner of Itina Co. LLC. The amount of such debt is $
Note 7 – THIRD PARTY TRANSACTIONS
On January 11, 2021, Natalija Tunevic, assigned her $60,000 loan to Mr. Oleg Sapojnicov. A conversion clause was added to the Note. Conversion may take place after a lockup period of 60 days following the issue of the note. The conversion price shall be at market share price on the day of conversion subject to a 40% discount.
On April 1, 2021, Natalija Tunevic, assigned her $50,000 loan to Mr. Serhii Cherniienko. A conversion clause was added to the Note, pursuant to which, the $50,000 loan is convertible, at any time after six months, at the discretion of Mr. Serhii Cherniienko, into shares of the Company’s Common Stock at a fixed conversion price of $0.01 per share.
On May 3, 2021, Natalija Tunevic, assigned her $25,000 loan to Mr. Oleg Sapojnicov. A conversion clause was added to the Note, pursuant to which, the $25,000 loan is convertible, at any time after six months, at the discretion of Mr. Oleg Sapojnicov, into shares of the Company’s Common Stock at a fixed conversion price of $0.01 per share.
On June 1, 2021, Mikhail Bukshpan, assigned his $50,000 debt to Ms. Jurgita Bizonaite. A conversion clause was added to the Note, pursuant to which, the $50,000 debt is convertible, at any time after six months, at the discretion of Ms. Jurgita Bizonaite, into shares of the Company’s Common Stock at a fixed conversion price of $0.01 per share.
On September 30, 2021, Natalija Tunevic, assigned her $44,500 loan to Mr. Serhii Cherniienko. A conversion clause was added to the Note, pursuant to which, the $44,500 loan is convertible, at any time after six months, at the discretion of Mr. Serhii Cherniienko, into shares of the Company’s Common Stock at a fixed conversion price of $0.01 per share.
Note 8 – STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has 5,000,000, $0.001 par value shares of preferred stock authorized as of September 30, 2021.
There were
Common Stock
The Company has 250,000,000, $0.001 par value shares of common stock as of September 30, 2021.
The Board of Directors and Majority Stockholder resolved on July 12, 2021 that 34,483 Common Shares shall be issued to Mr. Oleg Sapojnicov in exchange for Convertible Note in the amount of $60,000.
There were
Warrants
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Stock Options
The Company has never adopted a stock option plan and has never issued any stock options.
Note 9 – COMMITMENTS AND CONTINGENCIES
The Company rents an office at 44A Gedimino avenue, Vilnius, 01110, Lithuania.
Note 10 - CONCENTRATION RISK
The Company is potentially subject to concentration risk in its sales revenue.
Major Customer
The Company has two major customer that accounted for approximately 61% and $484,044 of sales for the six months ended September 30, 2021. The Company expects to maintain this relationship with the customer.
Note 12 – SUBSEQUENT EVENTS
In accordance with ASC 855, “Subsequent Events”, the Company has analyzed its operations subsequent to September 30, 2021, through the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than those described below.
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ITEM 2. |
MANAGEMENT’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Business Description
Trend Innovations Holding Inc. (formerly FreeCook) is a holding company for innovative websites and mobile apps which are aimed to provide customization and convenience for its users. The company’s office is located at 44A Gedimino avenue, Vilnius, 01110, Lithuania. The phone number is +37052512561 available Monday to Friday from 10:00am to 5:00pm EET (Lithuanian time). The direct phone line of Natalija Tunevic is +15404950016.
In summer 2018, Trend Innovations Holding Inc. (formerly FreeCook) started operations with development of a trading platform for users who cook at home and want to sell their food on the Internet and home-cooked food lovers.
On June 28, 2019, Trend Innovations Holding Inc. acquired Thy News LLC, an owner of a news application with feed from various sources that users can choose and customize. It is available for free download in Apple AppStore and Google Play Market. Users also will be able to subscribe for additional paid features that extend the functionality of the original app. At the moment of the first release, the app’s news database consisted of 24,000 processed news sources, and as of December 31, 2019 this amount increased for more 75,000 processed sources to a total of 99,000 processed sources. From January 1, 2020 to March 31, 2021 the Company acquired additional 50,000 processed sources. As of September 30, 2021, the users of the app have an opportunity to choose interesting and relevant news feeds from 149,000 processed sources.
On July 22, 2019, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State which changed the Company’s name from FreeCook to Trend Innovations Holding Inc.
On March 30, 2020, the Company acquired Itnia Co. LLC, a Wyoming limited liability company, an owner of MB Lemalike Innovations. The company provides services in the field of IT consulting using artificial intelligence technologies. Itnia Co. LLC, on behalf of Lemalike Innovations, provides IT consulting services including: i) Project Management and Software Administration; ii) Financial and Asset Management for IT; iii) Service Management for IT; iv) Event Management for IT.
On October 19, 2020, Natalija Tunevic, being the sole member of the Board of Directors, appointed Mr. Mikhail Bukshpan to positions of a Director and Chief Operations Officer of Trend Innovations Holding Inc. Ms. Natalija Tunevic also resigned from the position of the Treasurer of the Company and appoint Mr. Bukshpan the Treasurer of Trend Innovations Holding Inc.
Results of operations
Results of Operations for the three and six months ended September 30, 2021 and 2020:
Revenue
For the three months ended September 30, 2021 and 2020 the Company generated total revenue of $58,770 and $354,603, respectively.
For the six months ended September 30, 2021 and 2020 the Company generated total revenue of $816,785 and $653,816, respectively.
Operating expenses
Total operating expenses for the three months ended September 30, 2021 and 2020 were $129,620 and $37,018. The operating expenses for the three months ended September 30, 2021 included $14,022 in depreciation expenses; $99,812 in general and administrative expenses; $15,471 in professional fees; $315 in rent expense. The operating expenses for the three months ended September 30, 2020 included $14,048 in depreciation expenses; $10,514 in general and administrative expenses; $12,206 in professional fees; $250 in rent expense.
Total operating expenses for the six months ended September 30, 2021 and 2020 were $276,194 and $73,961. The operating expenses for the six months ended September 30, 2021 included $28,097 in depreciation expenses; $203,840 in general and administrative expenses; $43,673 in professional fees; $584 in rent expense. The operating expenses for the six months ended September 30, 2020 included $28,507 in depreciation expenses; $31,046 in general and administrative expenses; $13,922 in professional fees; $487 in rent expense.
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Net Loss/Income
The net income (loss) for the three months ended September 30, 2021 and 2020 was $(166,316) and $50,462 accordingly.
The net income (loss) for the six months ended September 30, 2021 and 2020 was $230,012 and $99,143 accordingly.
Six Months Period Ended September 30, 2021
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2021, the Company had $8,525 of cash and our liabilities were $763,808, comprised of an amount owed to the directors of the Company and its subsidiary; accounts payable; loans payable; notes payable and retainers from customers.
As of September 30, 2021, our total assets were $697,786. Total assets were comprised of $532,081 in current assets, $18,605 in fixed assets and $147,100 in intangible assets.
As of September 30, 2021, our current liabilities were $763,808 and Stockholders’ deficit was $231,727.
CASH FLOWS FROM OPERATING ACTIVITIES
As of September 30, 2021, the Company used $(234,616) of cash flows in operating activities.
CASH FLOWS FROM INVESTING ACTIVITIES
As of September 30, 2021, the Company generated $434 of cash flows in investing activities.
CASH FLOWS FROM FINANCING ACTIVITIES
As of September 30, 2021, the Company generated $182,343 of cash flows in financing activities.
There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.
There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon public offering and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited consolidated financial statements, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
| ITEM 4. | CONTROLS AND PROCEDURES |
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2021. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Controls over Financial Reporting
There was no change in the Company’s internal control over financial reporting during the quarterly period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
| PART II. | OTHER INFORMATION |
| ITEM 1. | LEGAL PROCEEDINGS |
During the past ten years, none of the following occurred with respect to the President of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the commodities futures trading commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.
| ITEM 1A. | RISK FACTORS |
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
No unregistered shares were sold during the six-month period ended September 30, 2021.
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| ITEM 3. | DEFAULTS UPON SENIOR SECURITES |
No senior securities were issued and outstanding during the six-month period ended September 30, 2021.
| ITEM 4. | MINE SAFETY DISCLOSURES |
None
| ITEM 5. | OTHER INFORMATION |
None
| ITEM 6. | EXHIBITS |
The following exhibits are included as part of this report by reference:
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Dated: November 15, 2021 | TREND INNOVATIONS HOLDING INC. | ||
| By: | /s/ | Natalija Tunevic | |
| Name: | Natalija Tunevic | ||
| Title: | President, Secretary and Director | ||
| (Principal Executive, Financial and Accounting Officer) | |||
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