ESGH 10-Q
ESG Inc. (ESGH)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For
the quarterly period ended
OR
For the transition period from ________ to _________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
| n/a | n/a |
(Former Name, former address and former fiscal year, if changed since last report)
Securities registered under Section 12(b) of the Exchange Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ”non-accelerated filer,” ” smaller reporting company,” and ” emerging growth company ” in Rule 12b-2 of the Exchange Act. (Check all that apply):
| Large accelerated filer | ☐ | 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).
As of July 13, 2022, there were shares of common stock, $0.001 par value per share, outstanding.
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TABLE OF CONTENTS
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Part I. Financial Information
Item 1. Financial Statements (Unaudited)
PLASMA INNOVATIVE INC.
CONDENSED BALANCE SHEET
| May 31, 2022 (unaudited) | August 31, 2021 (audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Property, Plant and Equipment, net | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | - | - | ||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, par value $; shares authorized; shares issued and outstanding | ||||||||
| Common stock, par value $; shares authorized, shares issued and outstanding | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholder’s Equity | ||||||||
| Total Liabilities and Stockholder’s Equity | $ | $ | ||||||
See accompanying notes are to the condensed financial statements.
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PLASMA INNOVATIVE INC.
CONDENSED STATEMENT OF OPERATIONS
For the three months and nine months ended May 31, 2022 (unaudited)
| Three Months Ended | Nine Months Ended | |||||||
| Operating expenses | ||||||||
| General and administrative expenses | $ | $ | ||||||
| Total operating expenses | ||||||||
| Net Loss from operations | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Net Loss Per Share: Basic and Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Number of Shares Outstanding: Basic and Diluted | ||||||||
See accompanying notes to the condensed financial statements.
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PLASMA INNOVATIVE INC.
CONDENSED STATEMENT OF CASH FLOWS
For the nine months ended May 31, 2022 (unaudited)
| 2022 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Net loss for the period | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
| Depreciation expense | ||||
| Prepaid expense | ||||
| Net Cash Used in Operating Activities | ( | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
| Purchase of property, plant, and equipment | ( | ) | ||
| Net Cash used in Investing Activities | ( | ) | ||
| NET INCREASE IN CASH | ||||
| Cash, beginning of period | ||||
| Cash, end of period | $ | |||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
| Cash paid for interest | $ | |||
| Cash paid for income tax | $ | |||
| NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||||
| Common stock issued for services | ||||
See accompanying notes to the condensed financial statements.
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PLASMA INNOVATIVE INC.
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
For the nine months ended May 31, 2022
(UNAUDITED)
| Common Stock | Additional Paid-in | Subscription | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Payable | Deficit | Equity | |||||||||||||||||||
| Balance, August 31, 2021 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Shares payable for services | - | |||||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, November 30, 2021 | ( | ) | ||||||||||||||||||||||
| Shares payable for services | - | ( | ) | ( | ) | |||||||||||||||||||
| Shares issued for intangible assets at 0.001 per share on January 12, 2022 | ||||||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, February 28, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, May 31, 2022 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
See accompanying notes to the condensed financial statements.
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PLASMA INNOVATIVE INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Plasma Innovative Inc. (the “Company”, “we”, “us” or “our”) was incorporated on July 22, 2021, under the law of the State of Nevada for the purpose of researching, developing, designing, manufacturing and distributing cold plasma equipment for application in the agriculture industry.
NOTE 2 – GOING CONCERN
The accompanying financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. For the nine and three months ended May 31, 2022, the Company has no revenues. Management’s plans are to initially market our technologies to farmers, nurseries, and greenhouses close to our facilities in Pennsylvania and collaborate with agriculture departments at various universities to expand the business. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to implement its business plan and generate sufficient revenue. 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 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q. They do not include all information and notes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Financial Statements included in our Registration Statement on Form S-1 as amended, filed with the Securities and Exchange Commission (“Commission”) on September 24, 2021.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company
had $
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Major repairs and improvements that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations.
The
Company had property and equipment of $
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Depreciation, Amortization, and Capitalization
The Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the assets. The Company establishes a capitalization policy for its assets based on the dollar amount that is more than $1,000 in value or if its estimated useful life exceeds one year.
The
Company had depreciation expense of $
Fair Value of Financial Instruments
ASC Topic 820 “Fair Value Measurements and Disclosures” establishes a three-tier value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets.
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Impairment of Long-lived Assets
In accordance with FASB ASC 360-10, Accounting for the Impairment or Disposal of Long-lived Assets, long-lived assets such as property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flow to be generated by the asset.
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 law. 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 will recognize revenue in accordance with ASC Topic 606 “Revenue Recognition”. The Company recognizes revenue when products are fully delivered, or services have been provided and collection is reasonably assured.
Comprehensive Income
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Compressive 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. As of May 31, 2022, there were no differences between our comprehensive loss and net loss.
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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 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 effects is anti-dilutive. As of May 31, 2022, there were no potentially dilutive debt or equity instruments issued or outstanding.
Stock-Based Compensation
Stock-based compensation is accounted for at the grant date fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Recent Accounting Pronouncements
As of May 31, 2022, and for the period then ended, there were no recently adopted accounting standards that had a material impact on the Company’s financial statements. There were no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements.
NOTE 4 – COMMITMENTS AND CONTINGENCIES
On August 8, 2021, the Company entered into an Office Space Using Agreement with Pietro Industries Inc. (“Pietro”) for its office building located in 523 School House Road, Kennett Square, PA 19348. The agreement was to terminate on July 31, 2022.
On September 18, 2021, but effective August 28, 2021, the Company and Pietro signed a termination agreement which effectively terminated the Office Space Using Agreement and a separate Joint Testing and Evaluation Agreement between the parties. On that same date, Pietro agreed to allow the Company to use 1,000 square feet at its premises month to month on a rent-free basis.
NOTE 5 - COMMON STOCK
The Company has 75,000,000 shares of stock authorized, including common stock, $ par value per share and preferred stocks, $ par value per share. There were shares of common stock issued and outstanding as of May 31, 2022.
On August 6, 2021, the Company entered into the Technology Assignment Agreement with Hanliang Shao, a director of the Company. Pursuant to the agreement, Mr. Shao conveyed to the Company all his rights, titles and interests in and to three separate technologies. In exchange, Mr. Shao will earn 4,000,000 shares of Company’s common stock upon the filing of a patent with the US Patent and Trademark Office (“USPTO”). In addition, Mr. Shao shall be entitled to receive a total of 2,000,000 additional shares of Company common stock issuable monthly over a three (3) year period beginning with the month of August 2021 (“Term”) at the rate of 55,556 shares per month, except in final month, the amount is 55,540, provided that during the Term, the assignee does not breach the confidentiality and non-compete covenants contained in the agreement. Mr. Shao was entitled 111,112 shares of common stock at $0.001 par value under the agreement for the months of September 2021 and October 2021, which were issued in January 2022 at a value of $111. Mr. Shao passed away on November 20, 2021. On December 20, 2021, the Company entered into a Continuation of Technology Assignment Agreement with Ping Wu, Tian Yang, Jun Shao, Yu Shao, Chunni Shao, and Dongni Shao (collectively, the “Shao Heirs”). Pursuant to this agreement, Mr. Tian Yang was appointed by the Shao Heirs to be the recipient and record holder of the shares of common stock issuable under the Technology Assignment Agreement.
NOTE 6 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASSC 855-10) the Company has analyzed its operations subsequent to May 31, 2022 to 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.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements made in this quarterly report on Form 10-Q are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the registrant to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this quarterly report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the registrant or any other person that the objectives and plans of the registrant will be achieved.
Substantial risks exist with respect to an investment in the Company. These risks include but are not limited to, those risk factors discussed in our Registration Statement, as amended, on Form S-1 for the fiscal year ended August 31, 2021, filed with the Securities and Exchange Commission (“Commission”) on September 24, 2021. More broadly, these factors include, but are not limited to:
| ● | We have incurred significant losses and expect to incur future losses; |
| ● | We have limited operating history and limited business growth; |
| ● | Potential significant dilution resulting from the issuance of new securities for any funding, debt conversion or any business combination. |
Description of Business
Plasma Innovative Inc., a Nevada corporation, was incorporated on July 22, 2021. We are an emerging cold plasma application company. We intend to use our proprietary, cold plasma technology to treat crops and plant seeds for agriculture. We believe that treated seeds yield healthier and more productive plants and crops. One of our directors has spent the last 16 years testing and developing this technology, which has been assigned to the Company.
We have begun the assembly and construction of our initial cold plasma processing unit which we will use for test purposes. We expect the unit to be completed in late 2022.
Plasma is called the fourth state of matter after gas, solid, and liquid. Sir William Crooks identified it in 1879. Plasma is roughly defined as a collection of equally positive and negative charge carriers and has zero total charge. Mr. Shao, our director, has spent a number of years developing the application of cold plasma for the agriculture industry. In 2015, through his own internal testing, he discovered that cold plasma could interact with living organisms (biomolecules), thereby enabling living organisms (biomolecules) to obtain energy. Our process applies radio-frequency lighting supplied by the plasma source in a low-pressure vacuum environment to affect the seeds at the molecular level. As the plant life cycle develops from seed to yield-bearing plants, our internal tests have indicated that the plants are healthier, demonstrating superior qualities over conventional, untreated seeds.
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Although the favorable characteristics of our plasma process have been supported by our own internal testing, the results have not been corroborated by third-party, independent tests.
RESULTS OF OPERATIONS
For the nine and three months ended May 31, 2022, we did not recognize any revenues from operations.
For the nine and three months ended May 31, 2022, we had a net loss from operations of $50,991 and $556, respectively related to administrative expenses which consist primarily of professional fees.
We will continue to explore and advance the potential collaborations with agriculture departments of large universities within the State of Pennsylvania. We are hopeful that these universities will participate in the testing of our technology, which we believe will lead to a prospective client base of larger farmers’ greenhouses and nurseries in the area and state.
Net Loss
For the nine and three months ended May 31, 2022, the Company had a net loss of $50,991 and $556 respectively, for the reasons discussed above.
Liquidity and Capital Resource
The Company had $86,630 in working capital as of May 31, 2022.
Our primary uses of cash have been for operations. The main sources of cash have been from the private placement of our common stock. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
| ● | The need for additional equipment, |
| ● | Development of a Company website, |
| ● | Increases in advertising and marketing in order to attempt to generate more revenues, and |
| ● | The cost of being a public company. |
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 that is material to investors.
Contractual Obligations
None.
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 information required by this Item.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this quarterly report, an evaluation was carried out by the Company’s management, with the participation of the principal executive officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act (“Exchange Act”) as of May 31, 2022. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was not accumulated and communicated to management, including the principal executive officer and the principal financial officer, to allow timely decisions regarding required disclosures.
Change in Internal Control over Financial Reporting
During the quarter ended May 31, 2022, there have been no changes in internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II. Other Information
Item 1. Legal Proceedings
There is presently no material pending legal proceedings to which the Company, any executive officer, any owner of the record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
Item 1A. Risk Factors
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable to our Company.
Item 5. Other Information
None
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6. Exhibits.
| Exhibit | Description | |
| 31.1 | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | |
| 32.1 | Certification of the Company’s Principal Executive Officer and Principal Financial pursuant to 18 U.S.C. Section 1350, as adopted 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 DEFINITION LINKBASE DOCUMENT* | |
| 101.LAB | XBRL TAXONOMY LABEL LINKBASE DOCUMENT* | |
| 101.PRE | XBRL TAXONOMY PRESENTATION LINKBASE DOCUMENT* |
| + | In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed. |
| * | Filed herewith. |
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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.
| Date: July 22, 2022 | PLASMA INNOVATIVE INC. |
| /s/ Zhi Yang | |
Zhi Yang President and CEO (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer) |
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