Bespoke Extracts, Inc 10-Q for FY2019 Q3
Bespoke Extracts, Inc. (BSPK)
About this 10-Q
Bespoke Extracts, Inc filed this 10-Q on January 21, 2020, covering the quarter ended November 30, 2019 (FY2019 Q3).
Headline figures
Quarter ended November 30, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $416.41K
- compared with net income of $3.85M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: November 30, 2019
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 000-52759
BESPOKE EXTRACTS, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 20-4743354 | |
| (State
or other jurisdiction of incorporation) |
(IRS
Employer Identification No.) |
323 Sunny Isles Boulevard, Suite 700
Sunny Isles Beach, FL 33160
(Address of principal executive offices)
855-633-3738
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. 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). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☒ | 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 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 ☐ No ☒
As of January 15, 2020, there were 110,389,621 shares outstanding of the registrant’s common stock, par value $0.001.
TABLE OF CONTENTS
| Page No. | ||
| PART I - FINANCIAL INFORMATION | 1 | |
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 15 |
| Item 4 | Controls and Procedures | 15 |
| PART II - OTHER INFORMATION | 16 | |
| 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 | 16 |
| Item 4. | Mine Safety Disclosures | 16 |
| Item 5. | Other Information | 16 |
| Item 6. | Exhibits | 16 |
i
Bespoke Extracts, Inc.
Condensed Balance Sheets
| November 30, | ||||||||
| 2019 | August 31, | |||||||
| (Unaudited) | 2019 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 81,865 | $ | 10,343 | ||||
| Accounts receivable, net | 3,636 | 6,452 | ||||||
| Prepaid expense | 11,500 | 17,637 | ||||||
| Inventory, net | 1,264 | 3,171 | ||||||
| Total current assets | 98,265 | 37,603 | ||||||
| Domain names, net of amortization of $9,200 and $8,364, respectively | 40,985 | 41,821 | ||||||
| Total assets | $ | 139,250 | $ | 79,424 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 151,077 | $ | 111,056 | ||||
| Convertible notes - net of unamortized discounts $182,156 and $0, respectively | 17,844 | - | ||||||
| Total current liabilities | 168,921 | 111,056 | ||||||
| Commitments and contingencies (Note 6) | ||||||||
| Stockholders' Deficit | ||||||||
Preferred Stock, $0.001 par value, 50,000,000 authorized shares; 1 share issue and outstanding as of November 30, 2019 and 0 shares issued and outstanding at August 31, 2019, respectively | ||||||||
Series A Convertible Preferred Stock, $0.001 par value, 1,000 shares designated, no shares issued and outstanding as of November 30, 2019 and August 31, 2019, respectively | - | - | ||||||
Series B Preferred Stock, $0.001 par value, 1 share designated, 1 share issued and outstanding as of November 30, 2019 and 0 shares issued and outstanding at August 31, 2019, respectively | 1 | - | ||||||
Common stock, $0.001 par value: 800,000,000 authorized; 105,388,426 and 78,155,093 shares issued and outstanding as of November 30, 2019 and August 31, 2019, respectively | 105,389 | 78,156 | ||||||
| Additional paid-in capital | 14,341,227 | 13,950,095 | ||||||
| Common stock payable | 76,000 | 76,000 | ||||||
| Accumulated deficit | (14,552,288 | ) | (14,135,883 | ) | ||||
| Total stockholders' deficit | (29,671 | ) | (31,632 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 139,250 | $ | 79,424 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
Bespoke Extracts, Inc.
Condensed Statements of Operations
Unaudited
| For the three months ended | ||||||||
| November 30, | November 30, | |||||||
| 2019 | 2018 | |||||||
| Sales | $ | 1,739 | $ | 41,431 | ||||
| Cost of products sold | 1,087 | 11,608 | ||||||
| Gross Profit | 652 | 29,823 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | 241,502 | (4,078,341 | ) | |||||
| Professional fees | 55,375 | 37,995 | ||||||
| Consulting | 101,500 | 55,500 | ||||||
| Amortization expense | 836 | 836 | ||||||
| Total operating expenses | 399,213 | (3,984,010 | ) | |||||
| (Loss) / Income from operations | (398,561 | ) | 4,013,833 | |||||
| Other expense | ||||||||
| Financing common share expense | - | (76,000 | ) | |||||
| Interest expense | (17,844 | ) | (84,033 | ) | ||||
| Total other expense | (17,844 | ) | (160,033 | ) | ||||
| (Loss) / Income before income tax | (416,405 | ) | 3,853,800 | |||||
| Provision for income tax | - | - | ||||||
| Net (Loss) / Income | $ | (416,405 | ) | $ | 3,853,800 | |||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||
| Basic and Diluted | 90,161,615 | 46,257,657 | ||||||
| NET (LOSS) / INCOME PER COMMON SHARE OUTSTANDING | ||||||||
| Basic and Diluted | $ | (0.00 | ) | $ | 0.08 | |||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
Bespoke Extracts, Inc.
Condensed Statements of Cash Flows
Unaudited
| For the three months ended | ||||||||
| November 30, | November 30, | |||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net (Loss) / Income | $ | (416,405 | ) | $ | 3,853,800 | |||
| Adjustments to reconcile net (loss) / income to net cash used in operating activities | ||||||||
| Amortization expense | 836 | 836 | ||||||
| Amortization of debt discounts | 17,844 | 66,033 | ||||||
| Bad debt expense | 2,981 | - | ||||||
| Gain on forfeited unvested employee stock award (net of cash paid of $1,600) | - | (2,440,768 | ) | |||||
| Option and warrant expense | 156,366 | (1,801,526 | ) | |||||
| Common stock issued for services | 40,500 | 120,000 | ||||||
| Financing common share expense | - | 76,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (165 | ) | (1,950 | ) | ||||
| Inventory | 1,906 | 13,421 | ||||||
| Prepaid expense | 6,137 | (1,358 | ) | |||||
| Accounts payable and accrued liabilities | 64,022 | 27,962 | ||||||
| Net Cash used in operating activities | (125,978 | ) | (87,550 | ) | ||||
| Cash flow from financing activities | ||||||||
| Proceeds from the issuance of convertible debt | 100,000 | - | ||||||
| Proceeds from exercise of warrants for cash | - | 2,000 | ||||||
| Repurchase of common stock | (27,500 | ) | - | |||||
| Sale of common stock | 125,000 | 120,000 | ||||||
| Net cash provided by financing activities | 197,500 | 122,000 | ||||||
| Net increase in cash and cash equivalents | 71,522 | 34,450 | ||||||
| Cash and cash equivalents at beginning of period | 10,343 | 79,784 | ||||||
| Cash and cash equivalents at end of period | $ | 81,865 | $ | 114,234 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Noncash investing and financing activities: | ||||||||
| Discount due beneficial conversion feature | $ | 36,300 | $ | - | ||||
| Stock issued with convertible debt | $ | 63,700 | $ | - | ||||
| Preferred stock issued for the conversion of accrued salary | $ | 24,000 | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
Bespoke Extracts, Inc.
Condensed Statement of Stockholders Deficit
For The Three Months Ended November 30, 2018 and 2019
Unaudited
| Series A | Series B | |||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Preferred | Preferred | Common | Common | Common | ||||||||||||||||||||||||||||||||||
| Shares | Par | Shares | Par | Shares | Par | Stock | Accumulated | |||||||||||||||||||||||||||||||||
| Outstanding | Amount | Outstanding | Amount | Outstanding | Amount | APIC | Payable | Deficit | Total | |||||||||||||||||||||||||||||||
| Balance August 31, 2018 | - | $ | - | - | $ | - | 42,902,712 | $ | 42,903 | $ | 16,246,201 | $ | - | $ | (16,716,644 | ) | $ | (427,540 | ) | |||||||||||||||||||||
| Sale of common stock | - | - | - | - | 2,000,000 | 2,000 | 118,000 | - | - | 120,000 | ||||||||||||||||||||||||||||||
| Forfeiture of stock issued through warrant exercise, net of cash paid | - | - | - | - | (16,000,000 | ) | (16,000 | ) | (2,424,768 | ) | - | - | (2,440,768 | ) | ||||||||||||||||||||||||||
| Common stock issued for the exercise of warrants | - | - | - | - | 20,000,000 | 20,000 | (18,000 | ) | - | - | 2,000 | |||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | 1,000,000 | 1,000 | 119,000 | - | - | 120,000 | ||||||||||||||||||||||||||||||
| Option and warrant expense | - | - | - | - | - | - | (1,801,526 | ) | - | - | (1,801,526 | ) | ||||||||||||||||||||||||||||
| Financing common share expense | - | - | - | - | - | - | - | 76,000 | - | 76,000 | ||||||||||||||||||||||||||||||
| Net income for the three months ended November 30, 2018 | - | - | - | - | - | - | - | - | 3,853,800 | 3,853,800 | ||||||||||||||||||||||||||||||
| Balance November 30, 2018 (Unaudited) | - | $ | - | - | $ | - | 49,902,712 | $ | 49,903 | $ | 12,238,907 | $ | 76,000 | $ | (12,862,844 | ) | $ | (498,034 | ) | |||||||||||||||||||||
| Series A | Series B | |||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Preferred | Preferred | Common | Common | Common | ||||||||||||||||||||||||||||||||||
| Shares | Par | Shares | Par | Shares | Par | Stock | Accumulated | |||||||||||||||||||||||||||||||||
| Outstanding | Amount | Outstanding | Amount | Outstanding | Amount | APIC | Payable | Deficit | Total | |||||||||||||||||||||||||||||||
| Balance August 31, 2019 | - | $ | - | - | $ | - | $ | 78,155,093 | 78,156 | $ | 13,950,095 | $ | 76,000 | $ | (14,135,883 | ) | $ | (31,632 | ) | |||||||||||||||||||||
| Preferred stock issued for the conversion of accrued salary | - | - | 1 | 1 | - | - | 23,999 | - | - | 24,000 | ||||||||||||||||||||||||||||||
| Sale of common stock | - | - | - | - | 20,833,333 | 20,833 | 104,167 | - | - | 125,000 | ||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | 4,500,000 | 4,500 | 36,000 | - | - | 40,500 | ||||||||||||||||||||||||||||||
| Warrant expense | - | - | - | - | - | - | 156,366 | - | - | 156,366 | ||||||||||||||||||||||||||||||
| Common stock issued with debt | - | - | - | - | 4,900,000 | 4,900 | 58,800 | - | - | 63,700 | ||||||||||||||||||||||||||||||
| Repurchase of common stock | - | - | - | - | (3,000,000 | ) | (3,000 | ) | (24,500 | ) | - | - | (27,500 | ) | ||||||||||||||||||||||||||
| Beneficial conversion feature | - | - | - | - | - | - | 36,300 | - | - | 36,300 | ||||||||||||||||||||||||||||||
| Net loss for the three months ended November 30, 2019 | - | - | - | - | - | - | - | - | (416,405 | ) | (416,405 | ) | ||||||||||||||||||||||||||||
| Balance November 30, 2019 (Unaudited) | - | $ | - | 1 | $ | 1 | 105,388,426 | $ | 105,389 | $ | 14,341,227 | $ | 76,000 | $ | (14,552,288 | ) | $ | (29,671 | ) | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
Bespoke Extracts, Inc.
Notes to Condensed Financial Statements
Unaudited
1. NATURE OF OPERATIONS, SIGNIFICANT ACCOUNTING POLICIES AND GOING CONCERN
Nature of Business Operations
Bespoke Extracts, Inc. (the “Company”) is a Nevada corporation focused on marketing and selling a proprietary line of premium, quality, all natural CBD products in the forms of tinctures, capsules, drops and edibles for the nutraceutical and veterinary markets, which it introduced in mid-2018. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived isolate, the Company markets its products as dietary supplements through its retail ecommerce store found at www.bespokeextracts.com. In the future, the Company also intends to sell its products through wholesale channels.
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month period ended November 30, 2019 may not necessarily be indicative of the results that may be expected for the year ending August 31, 2020.
For further information, refer to the Company's financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended August 31, 2019.
Certain prior period amounts have been reclassified to conform to current period presentation.
Going Concern
The accompanying financial statements have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations, a working capital deficit and an accumulated deficit for the three months ended and as of November 30, 2019. This raises substantial doubt about our ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed. The accompanying financial statements do not contain any adjustments that may result from the outcome of this uncertainty.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. At November 30, 2019 and August 31, 2019, the Company did not have any cash equivalents.
5
Fair Value of Financial Instruments
The carrying amounts of cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued liabilities and convertible note payable approximate their fair values as of November 30, 2019 and August 31, 2019, respectively, because of their short-term natures.
Accounts Receivable
Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense.
The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. At November 30, 2019 and August 31, 2019 the Company has recorded an allowance for doubtful accounts of $2,981 and $0, respectively.
Inventory
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin. As of November 30, 2019 and August 31, 2019, inventory amounted to $1,264 and $3,171, respectively, which consisted of finished goods. During the year ended August 31, 2019 the Company reserved $52,332 for slow moving inventory. No additional reserve was recorded during the three months ended November 30, 2019.
Revenue Recognition
Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers.
Our products are sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment. The Company offers a 14 day return policy on sales.
Stock Option Plans
Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable in accordance with, and FASB ASC 718, Compensation-Stock Compensation, including related amendments and interpretations. The related expense is recognized over the period the services are provided. Stock option compensation expense has been recognized as a component general and administrative expenses in the accompanying financial statements for the three months ended November 30, 2019 and 2018.
6
Net Income / Loss per Share
Basic income / loss per share amounts are computed based on net income / loss divided by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. Outstanding options, warrants and convertible debt were excluded from the calculation of diluted income / loss per share during the three months ended September 30, 2019 and September 30, 2018 because their inclusion would have been anti-dilutive. The effect of 3,450,000 warrants and 1,200,000 options is anti-dilutive for the three months end November 30, 2019. The effect of 3,490,000 warrants and 1,200,000 options is anti-dilutive for the three months ended November 30, 2018.
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard was effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.
The adoption of ASU 2016-02 did not have an impact on our balance sheet, results of operations or balance sheets as we currently do not have any long term corporate office and equipment leases.
2. ASSET PURCHASE AGREEMENT
On February 21, 2017, the Company purchased all right, title, interest and goodwill in or associated with certain domain names set forth in an asset purchase agreement for a total of $20,185 in cash and 200,000 shares of the Company’s common stock valued at $30,000. For the three months ended November 30, 2019 and November 30, 2018 amortization expense amounted to $836 and $836 respectively. The domain names are being amortized over a 15 year period.
3. CONVERTIBLE NOTE PAYABLE
On November 6, 2019, the Company entered into and closed a securities purchase agreement with an accredited investor, pursuant to which, the Company issued and sold to the investor an original issue discount convertible debenture (which was amended and restated on November 11, 2019) in the principal amount of $200,000, for a purchase price of $100,000, resulting in an original issue discount of $100,000. The Company also issued to the investor 4,900,000 shares of common stock valued at $63,700 ($0.013 per share). As amended, the debenture had a maturity date of August 1, 2020 and was convertible into shares of common stock of the Company at a conversion price of $0.006, provided that, if the Company failed to repay the debenture upon maturity, the conversion price would be reduced to $0.001 (subject to adjustment for stock splits, stock dividends and similar transactions) and the debenture would bear interest at the rate of 9% per year. The Company recorded beneficial conversion of $36,300 due to the conversion feature. The debenture could not be converted to common stock to the extent such conversion would result in the holder beneficially owning more than 4.99% of the Company’s outstanding common stock. The Company’s obligation to repay the debenture upon maturity was secured by a security interest in the Company’s URLs pursuant to a security agreement between the Company and the investor.
As of November 30, 2019 the Company recorded a total of $17,844 of expense for the amortization of the original issue discount, beneficial conversion feature and the common stock issued to the note holder. The note was subsequently repaid (see note 8).
4. EQUITY
Common Stock and Preferred Stock
The Company has authorized capital of 800,000,000 shares of common stock with a par value of $0.001, and 50,000,000 shares of preferred stock with a par value of $0.001. 1,000 shares of preferred stock are designated as Series A Convertible Preferred Stock. No shares of Series A Preferred Stock are issued and outstanding as of November 30, 2019 and August 31, 2019, respectively . 1 share of preferred stock is designated Series B Preferred Stock. 1 share and 0 shares of Series B Preferred Stock are issued and outstanding as of November 30, 2019 and August 31, 2019, respectively. The Series B Preferred Stock has a stated value of $24,000 and entitles the holder to 51% of the total voting power of the Company’s stockholders. The Company may, in its sole discretion, redeem the Series B Preferred Stock at any time for a redemption price equal to the stated value. The Series B Preferred does not provide the holder with any dividend rights or any liquidation rights, and is not convertible to common stock.
7
On October 30, 2018, the Company entered into an employment agreement with Niquana Noel pursuant to which Ms. Noel will serve as the Company’s Chief Executive Officer and president for a term of four years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Ms. Noel’s annual salary is $96,000 and she received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. Ms. Noel exercised the warrant for $2,000 and was issued the 20,000,000 shares on October 31, 2018. The shares received upon the exercise of the warrants are subject to forfeiture over a service period of four years. See “Warrants” below.
Pursuant to a securities purchase agreement entered into on June 6, 2018 the Company was obligated to issue additional shares of common stock if the Company sold common stock at a price lower than $0.10 per share (or common stock equivalents with an exercise price less than $0.10 per share) during the six month period following the closing of the purchase agreement, in which event the Company was required to issue additional shares to the purchaser for no additional consideration, such that the total number of common stock received by the purchaser will be equal to $50,000 divided by lower financing price. As of November 30, 2019 and August 31, 2019, the Company was obligated to issue 500,000 shares of common stock valued at $76,000.
On October 3, 2019, the Company entered into a letter agreement with Niquana Noel, the Company’s chief executive officer. Pursuant to the agreement, Ms. Noel exchanged $24,000 in accrued but unpaid compensation owed to her by the Company for one share of newly created Series B Preferred Stock of the Company.
In connection with the letter agreement, on October 3, 2019, the Company filed a Certificate of Designation of Series B Preferred Stock with the Secretary of State of Nevada. Pursuant to the Certificate of Designation, the Company designated one share of its preferred stock as Series B Preferred Stock. See “Common Stock and Preferred Stock” above.
On October 14, 2019, the Company entered into and closed a securities purchase agreement with an accredited investor pursuant to which the Company issued and sold to the investor 20,833,333 shares of common stock for a purchase price of $125,000.
In November 2019, 3,000,000 shares of common stock were returned to the Company for cancellation and the Company paid $27,500 in connection with a settlement agreement.
On November 6, 2019, the Company entered into and closed a securities purchase agreement with an accredited investor, pursuant to which, the Company issued and sold to the investor an original issue discount convertible debenture (which was amended and restated on November 11, 2019) in the principal amount of $200,000, for a purchase price of $100,000, resulting in an original issue discount of $100,000. The Company also issued to the investor 4,900,000 shares of common stock valued at $63,700, ($0.013 per share). See Note 3.
Effective November 11, 2019, the Company issued 4,500,000 shares of common stock pursuant to a consulting agreement valued at $40,500 ($0.009 per share).
8
Warrants
On May 22, 2017, the Company entered into an employment agreement with Marc Yahr to serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Mr. Yahr received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. The warrants were exercised in full on May 31, 2017; however, the 20,000,000 shares of the Company’s common stock were not issued to Mr. Yahr until June 10, 2017. The shares received upon the exercise of the warrants were subject to forfeiture over a service period of three years. The fair value of the award was determined to be $10,998,105 which will be recognized as compensation expense over the three year service period. Effective October 30, 2018, Marc Yahr resigned from all positions with the Company including as President and Chief Executive Officer of the Company (except as director, which he resigned as on November 25, 2018). Pursuant to the agreement, Mr. Yahr agreed to return 80% of the warrant shares to the Company if he served as CEO of the Company pursuant to the terms and conditions of the employment agreement for a period of more than 12 months but less than 18 months. Therefore, 16,000,000 shares of common stock were forfeited to the Company, and the Company recognized a gain on the forfeited common shares of ($2,440,768) net of $1,600 paid by the Company during the three months ended November 30, 2018. As of November 30, 2018, $0 remains to be expensed over the remaining vesting period.
On March 2, 2018 the Company entered into a management agreement with Global Corporate Management, LLC. Pursuant to this agreement, the Company agreed to pay $4,000 and to issue 150,000 common stock purchase warrants per month (an aggregate of 3,600,000 warrants) with an exercise price of $0.50, exercisable commencing six months after issuance for a period of 5 years. During the three months ended November 30, 2019 and 2018 the Company recognized a gain of ($3,378) and $(1,281,412), respectively due to a remeasurement of this nonemployee award.
On April 16, 2018, the Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants each month to purchase common stock with an exercise price of $0.60. However, if the consultant generates more than $10,000 in monthly sales, the warrants will have an exercise price of $.30, and if the consultant generates more than $20,000 in monthly sales, the warrants may be exchanged in “cashless exercise”. Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales. On July 11, 2018 the Company terminated the agreement. On August 1, 2018 the Company entered into a new consulting agreement with Dr. Hellman. The term is 1 year with payment of 60,000 warrants each month to purchase common stock with an exercise price of $0.60. The warrants may be exercised on a cashless basis. A total of $256,038 warrant expense in relation to this award was recognized during the year ended August 31, 2018. During the three months ended November 30, 2019 and 2018 the Company recognized a gain of ($2,084) and $(115,843), respectively due to a remeasurement of this nonemployee award.
On October 30, 2018, the Company entered into an employment agreement with Niquana Noel pursuant to which Ms. Noel will serve as the Company’s Chief Executive Officer and president for a term of four years, unless earlier terminated pursuant to the terms of the employment agreement. Pursuant to the terms of the employment agreement, Ms. Noel’s annual salary is $96,000 and she received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. Ms. Noel exercised the warrant and was issued the 20,000,000 shares on October 31, 2018. The fair value of this award was determined to be $2,598,138 of which $161,828 was recognized during the three months ended November 30, 2019 and $54,128 was recognized during the three months ended November 30, 2018. Unamortized expense at November 30, 2019 is $1,893,920 and as of August 31, 2019 is $2,055,748. The shares received upon the exercise of the warrants are subject to forfeiture over a service period of four years. The shares will be required to be returned to the Company as follows and the Company accounts for forfeitures when they occur:
Ms. Noel would have been required to return 80% of the common stock to the Company if she was not serving as Chief Executive Officer of the Company pursuant to the terms and conditions of her employment agreement as of October 30, 2019 (the first anniversary of the employment agreement);
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Ms. Noel shall return 60% of the common stock to the Company if she is not serving as the Chief Executive Officer of the Company pursuant to the terms and conditions of the employment agreement as of the second anniversary of the employment agreement (October 30, 2020);
Ms. Noel shall return 40% of the common stock to the Company if she is not serving as Chief Executive Officer of the Company pursuant to the terms and conditions of the employment agreement as of the third anniversary of the employment agreement (October 30, 2021);
Ms. Noel shall return 20% of the common stock to the Company if she is not serving as the Chief Executive Officer of the Company pursuant to the terms and conditions of the employment agreement as of the fourth anniversary of the employment agreement (October 30, 2022);
The following table summarizes the warrant activities during the three months ended November 30, 2019:
| Number of Warrants | Weighted- Average Price Per Share | |||||||
| Outstanding at August 31, 2019 | 3,330,000 | $ | 0.56 | |||||
| Granted | 120,000 | - | ||||||
| Cancelled or expired | - | - | ||||||
| Exercised | - | - | ||||||
| Outstanding at November 30, 2019 | 3,450,000 | $ | 0.56 | |||||
| Exercisable at November 30, 2019 | 3,330,000 | $ | 0.52 | |||||
| Intrinsic value at November 30, 2019 | $ | - | ||||||
The fair value of the warrants was estimated using the Black-Scholes option pricing model and the following range of assumptions:
| Grant
Date and Re-measurement Date | ||
| For the three month ended November 30, 2019 | ||
| Risk-free interest rate at grant date | 1.52% - 1.61% | |
| Expected stock price volatility | 326% - 394% | |
| Expected dividend payout | - | |
| Expected life (in years) | 2.5 – 4.5 |
OPTIONS
On July 26, 2017 the Company granted a nonemployee options to purchase 2,200,000 shares of common stock. The options have a three year term. 1,000,000 options were immediately exercisable on the date of issuance with an exercise price of $0.001 and the remaining 1,200,000 options vest over a period of four (4) semiannual installments or every six (6) months until July 26, 2019 at an exercise price of $1.00. As of November ,30, 2019 all the options were fully vested. During the three months ended November 30, 2018 the Company recognized a gain of $(368,831).
| Number of Options | Weighted- Average Price Per Share | |||||||
| Outstanding at August 31, 2019 | 1,200,000 | $ | 1.00 | |||||
| Granted | - | - | ||||||
| Canceled or expired | - | - | ||||||
| Exercised | - | - | ||||||
| Outstanding at November 30, 2019 | 1,200,000 | $ | 1.00 | |||||
| Exercisable at November 30, 2019 | 1,200,000 | $ | 1.00 | |||||
| Intrinsic value at November 30, 2019 | $ | - | ||||||
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5. RELATED PARTY TRANSACTIONS
On May 22, 2017, the Company entered into an employment agreement with Marc Yahr to serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the employment agreement. See Note 4.
On October 30, 2018, the Company entered into an employment agreement with Niquana Noel pursuant to which Ms. Noel will serve as the Company’s Chief Executive Officer and president for a term of four years, unless earlier terminated pursuant to the terms of the employment agreement. See Note 4.
6. COMMITMENTS AND CONTINGENCIES
On April 16, 2018 the Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants to purchase common stock with an exercise price of $0.60. However, if the consultant generates more than $10,000 in monthly sales, the warrants will have an exercise price of $0.30, and if the consultant generates more than $20,000 in monthly sales, the warrants may be exchanged in “cashless exercise”. Additionally, the Company agreed to pay to the consultant 10% of retail sales and 5% of wholesale sales. On July 11, 2018 the Company terminated the agreement. On August 1, 2018 the Company entered into a new consulting agreement with Dr. Hellman. The term is 1 year with payment of 60,000 warrants to purchase common stock with an exercise price of $0.60. The warrants may be exercised on a cashless basis. (See note 4). As of November 30, 2019 no commission have been earned under this agreement.
Pursuant to a securities purchase agreement entered into on June 6, 2018 the Company was obligated to issue additional shares of common stock if the Company sold common stock at a price lower than $0.10 per share (or common stock equivalents with an exercise price less than $0.10 per share) during the six month period following the closing of the purchase agreement, in which event the Company was required to issue additional shares to the purchaser for no additional consideration, such that the total number of common stock received by the purchaser will be equal to $50,000 divided by lower financing price. As of November 30, 2019 and August 31, 2019 the Company was obligated to issue 500,000 shares of common stock valued at $76,000 which is included in the common stock payable in the accompanying balance sheet.
On July 19, 2019 the Company entered into a non-binding preliminary term sheet with Cannasaver Corp. (“Cannasaver”). The term sheet contemplates that the Company will acquire Cannasaver for aggregate consideration of $25,000,000, 80% of which will be in the form of common stock of the Company, and the remaining 20% of which will be in cash, it being recognized that the Company will need to raise such funds from investors. The completion of this acquisition will be subject to entering into definitive agreements and the satisfaction of customary closing conditions, and there is no assurance such transaction will be completed. Cannasaver is partially owned by Lyle Hauser, who is a former significant stockholder of the Company and is an adviser to the Company. As of the date of this report the transaction has not been consummated.
7. MAJOR CUSTOMERS
There are concentrations of credit risk with respect to accounts receivables due to the amounts owed by one customer at August 31, 2019 whose balance represented approximately 28%, of total accounts receivables. As of November 30, 2019, no customer amounted to over 10% of accounts receivable. During the three months ended November 30, 2018, no individual customer amounted to over 10% of total sales. During the three months ended November 30, 2019, sales to one customer amounted to 67% of sales. The loss of business from one or a combination of the Company’s significant customers, or an unexpected deterioration in their financial condition, could adversely affect the Company’s operations.
8. SUBSEQUENT EVENTS
On December 24, 2019, the Company entered into and closed a securities purchase agreement with an accredited investor, pursuant to which, the Company issued and sold to the investor an original issue discount convertible debenture in the principal amount of $500,000, for a purchase price of $300,000. The Company also issued to the investor 5,000,000 shares of common stock. The debenture matures April 30, 2020 and is convertible into shares of common stock of the Company at a conversion price of $0.001, except that, if the Company fails to repay the Debenture upon maturity, the conversion price will be reduced to $0.0004 (subject to adjustment for stock splits, stock dividends, and similar transactions) and the debenture will bear interest at the rate of 9% per year. The debenture may not be converted to common stock to the extent such conversion would result in the holder beneficially owning more than 4.99% of the Company’s outstanding common stock. The Company’s obligation to repay the debenture upon maturity is secured by a security interest in the Company’s inventory pursuant to a security agreement between the Company and the investor.
On December 24, 2019, the Company entered into an agreement (the “Repayment Agreement”) with the holder of the amended and restated original issue discount convertible debenture issued by the Company on November 11, 2019 (the “November 2019 Debenture”), in the original principal amount of $200,000 (see note 3). Pursuant to the Repayment Agreement, the Company paid the holder $120,000, and transferred certain URLs to the holder, and the November 2019 Debenture was deemed paid in full.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Quarterly Report and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this Quarterly Report to conform forward-looking statements to actual results, except as may be required under applicable law. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:
| ● | Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans; |
| ● | Our failure to earn revenues or profits; |
| ● | Inadequate capital to continue business; |
| ● | Volatility, lack of liquidity or decline of our stock price; |
| ● | Potential fluctuation in quarterly results; |
| ● | Rapid and significant changes in markets; and |
| ● | Insufficient revenues to cover operating costs. |
The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this Quarterly Report.
Overview
We were incorporated in the State of Colorado on July 29, 1988 under the name Cine-Source Entertainment, Inc. On April 27, 2004, the Company changed its name to First Quantum Ventures, Inc. On April 13, 2006, the Company changed its name to First Quantum Ventures, Inc., and on May 5, 2006, the Company reincorporated in Nevada. On March 15, 2012, the Company changed its name to DiMi Telematics International, Inc.
In early 2017, our management team elected to suspend further investment and working capital on developing its then-existing technology and business prospects, turning its attention to the hemp-derived cannabidiol, or CBD, market. On March 10, 2017, the Company changed its name to Bespoke Extracts, Inc. to align the Company’s corporate identity with its new business plan.
The Company is now focused on selling its proprietary line of premium quality, all natural cannabidiol (CBD) products in the form of tinctures and capsules for the nutraceutical and veterinary markets, which it introduced in mid-2018. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived CBD, our products are marketed as dietary supplements and distributed through our direct-to-consumers ecommerce store, found at www.BespokeExtracts.com. In the future, we plan to also sell through select specialty retailers, pharmacies/dispensaries and care providers.
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Results of Operations for the three months ended November 30, 2019 and 2018
Sales
Sales during the three months ended November 30, 2019 were $1,739 compared to $41,431 for the three months ended November 30, 2018. The reduction in sales was primarily a result of decreased marketing of the Company’s products.
Operating Expenses
Selling, general and administrative expenses for three months ended November 30, 2019 and 2018 totaled $241,502 and $(4,078,341), respectively. Option and warrant expense for the three months ended November 30, 2019 and 2018 was $156,366 and $(1,801,526), respectively which was primarily due to the fair value re-measurement of warrants and options. Stock-based compensation for the three months ended November 30, 2019 and 2018 was $40,500 and $120,000, respectively which was a result of common stock issued for services. The Company recorded a gain of $(2,440,768) which was a result of a reduction in expense from forfeited common shares during the three months ended November 30, 2018. Professional fees amounted to $55,375 and $37,995, respectively for the three months ended November 30, 2019 and 2018. The increase in expenses was due to increased legal and professional fees. Consulting expense amounted to $101,500 and $55,500 respectively for the three months ended November 30, 2019 and 2018, respectively. The increase was primarily due to final payment of branding and marketing performed by consultants during the three months ended November 30, 2019. Amortization expense for the three month ended November 30, 2019 and 2018 was $836 and $836, respectively which was a result of amortization of domain names.
Financing Common Share Expense
Pursuant to a securities purchase agreement entered into on June 6, 2018, the Company was obligated to issue additional shares of common stock if the Company sold common stock at a price lower than $0.10 per share (or common stock equivalents with an exercise price less than $0.10 per share) during the six-month period following the closing of the purchase agreement, in which event the Company was required to issue additional shares to the purchaser for no additional consideration, such that the total number of common stock received by the purchaser would be equal to $50,000 divided by the lower financing price. During the three months ended November 30, 2018, the Company was obligated to issue 500,000 shares of common stock valued at $76,000, and recorded the amount as financing common share expense as compared to none in the comparable period in 2019.
Interest Expense
Interest expense on promissory notes for the three months ended November 30, 2019 and 2018 was $17,844 and $84,033, respectively. The decrease in interest expense was due to the amortization expense for the warrants and beneficial conversion associated with those notes that had been converted to common stock or fully amortized during the three months ended November 30, 2018.
Net Income / (Loss)
For the reasons stated above, our net loss for the three months ended November 30, 2019 totaled ($416,105) , or ($0.00) per share, compared to a net income for the three months ended November 30, 2018 of $3,853,800, or $0.08 per share.
LIQUIDITY AND CAPITAL RESOURCES
As of November 30, 2019, we had cash and cash equivalents of $81,865. Net cash used in operating activities for the three months ended November 30, 2019 was $125,978. Our current liabilities as of November 30, 2019 totaled $168,921 and consisted of accounts payable and accrued liabilities of $151,077 and a convertible note payable of $17,844, net of an unamortized discount of $182,156. As of November 30, 2018, we had cash and cash equivalents of $114,234. Net cash used in operating activities for the three months ended November 30, 2018 was $87,550. Our current liabilities as of November 30, 2018 totaled $741,322 consisting of accounts payable and accrued liabilities of $133,386, and convertible note payables-net, unamortized discounts of $607,886.
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During the three months ended November 30, 2019, the Company raised $125,000 from the sale of common stock compared to $120,000 for the three months ended November 30, 2018. During the three months ended November 30, 2019, the Company received a total of $100,000, net of original issue discounts of convertible note as compared to none during the comparable three months of 2018. During the three month ended November 30, 2019 the Company repurchased $27,500 of common stock.
The accompanying financial statements have been prepared assuming a continuation of the Company as a going concern. The Company had negative cash flows from operations for the three months ended November 30, 2019 and had a working capital deficit at November 30, 2019. This raises substantial doubt about our ability to continue as a going concern.
We have not generated positive cash flows from operating activities. Our primary source of capital has been from the sale of equity securities. Our primary use of capital has been for professional fees and general and administrative costs. We have no committed sources of capital and will need to raise additional capital to continue and expand our operations. Additional capital may not be available on terms acceptable to us, or at all.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant 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.
Critical accounting policies and estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 1 to our financial statements appearing elsewhere in this report.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not required for smaller reporting companies.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation, our management has concluded that the design and operation of our disclosure controls and procedures are not effective since the following material weaknesses exist:
| ● | Our chief executive officer also functions as our chief financial officer. As a result, our officer may not be able to identify errors and irregularities in the financial statements and reports; | |
| ● | We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties; and | |
| ● | Documentation of all proper accounting procedures is not yet complete. |
To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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We are not currently a party to, nor is any of our property currently the subject of, any material legal proceedings.
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Effective November 11, 2019, the Company issued 4,500,000 shares of common stock for services pursuant to a consulting agreement.
In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
No disclosure required.
None.
| Exhibit No. | Description | |
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 101.INS | XBRL Instance Document* | |
| 101.SCH | XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | XBRL Taxonomy Calculation Linkbase Document* | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |
| 101.LAB | XBRL Taxonomy Label Linkbase Document* | |
| 101.PRE | XBRL Taxonomy Presentation Linkbase Document* |
| * | Filed herewith. |
| ** | Furnished herewith. |
16
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.
| BESPOKE EXTRACTS, INC. | ||
| Dated: January 21, 2020 | By: | /s/ Niquana Noel |
Niquana Noel Chief Executive Officer and Chief Financial Officer | ||
| (Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||
17
Exhibit 31.1
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Niquana Noel, certify that:
| 1) | I have reviewed this Quarterly Report on Form 10-Q of Bespoke Extracts, Inc. (the “registrant”); | |
| 2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; | |
| 3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report; | |
| 4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and | |
| 5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b) | Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting. | |
| /s/ Niquana Noel | |
| Niquana Noel | |
| Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) | |
| January 21, 2020 |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Bespoke Extracts, Inc., as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Niquana Noel, the Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Niquana Noel | |
| Niquana Noel | |
| Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive Officer and Principal Financial Officer) | |
| Dated: January 21, 2020 |