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    BOMH   US09859M1045

BOOMER HOLDINGS INC.

(BOMH)
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BOOMER : 10-KT - Management's Discussion and Analysis of Financial Condition and Results of Operations.

05/17/2021 | 05:28pm EST

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This annual report contains certain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 with respect to our business, financial condition, liquidity and results of operations. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "could," "would," "will," "may," "can," "continue," "potential," "should," and the negative of these terms or other comparable terminology often identify forward-looking statements. Statements in this annual report that are not historical facts are hereby identified as "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. See "Risk Factors" beginning on page 13.

Many of the important factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statements, which speak only as of the date of this annual report. Except as otherwise required by law, we do not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after such applicable date or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the "Risk Factors" section hereof beginning on page 13 and in reports we will file from time to time with the Commission after the date of this annual report.

Impact of COVID-19

The Company's operations and business have experienced disruption due to the unprecedented conditions surrounding the COVID-19 pandemic spreading throughout the United States and the world. As a result, several state and local mandates were implemented that encouraged the practice of social distancing, placed restrictions from individuals gathering in groups and, in many areas, placed complete restrictions on non-essential movement outside of the home. Shortly after the national emergency declaration, state and local officials began placing restrictions on businesses. Many of the stores which sell our wellness products were closed as a result of the pandemic since they were not seen as essential. The COVID-19 pandemic has, and continues to have, a material impact on the Company's business operations, financial position, liquidity, capital resources and results of operations.

Corporate History

Boomer Holdings Inc. was incorporated as Remaro Group Corp. under the laws of the State of Nevada on March 31, 2016. On January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the "Exchange Agreement"), with BNW, Boomer Naturals Holdings, Inc., a Nevada corporation ("Boomer"), Boomer Naturals, Inc., and the shareholders of Boomer (the "Exchange"). Upon consummation of the transactions set forth in the Exchange Agreement (the "Closing"), the Company adopted the business plan of Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 40,326,913 pre-split shares (the "Exchange Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"). Pursuant to the terms of the Exchange Agreement, the Company's Majority Shareholder agreed to retire 8,000,000 shares of the Company's Common Stock. Also on January 7, 2020, the Company approved an amendment to its Articles of Incorporation (the "Amendment") to change the name of the Company to Boomer Holdings Inc., effect a forward stock split on the basis of three-to-one (3:1) and to increase the number of authorized shares of capital stock to 210,000,000 of which 200,000,000 shares shall be Common Stock and 10,000,000 shares will be blank check preferred stock, par value $0.001 per share.

Description of Our Business

Our mission is to develop and sell products of superior quality which improve the overall wellness of our customers. We are currently engaged in two principal product lines: (i) Boomer Botanics, our line of wellness products that contains our proprietary formula combining five natural and powerful ingredients that target the body's central nervous system which is the first FDA-compliant product of its kind; and (ii) our line of face masks and other personal protection equipment.


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Boomer Botanics

We are engaged in the research, development, acquisition, licensing and sales of specialized natural products which have FDA compliant ingredients and are impactful on the central nervous system. These products powered by natural terpenes, include, edible and topical offerings. We are engaged in marketing and branding within the central nervous wellness space, including our proprietary formula which is currently patent pending. Boomer Naturals currently operates a retail store in Las Vegas Nevada and Boomer Natural products are also available in Golf Pro Shops, Specialty Stores, Chiropractic Offices and Nail Salons across the country. Boomer Naturals has a robust online presence and enjoys material sales through its website at BoomerNaturals.com.

We believe our Boomer Botanics formula is an FDA-compliant formulation that fully supports the body's central nervous system ("CNS"). Boomer Botanics combines five natural and powerful ingredients that target the CNS. The term FDA-compliant means that a company is selling a regulated food additive that is, or that its chemicals are, in compliance with the food additive provisions of the Federal Food, Drug, and Cosmetic Act. All of the ingredients in our Boomer Botanics formula are on the FDA Generally Recognized as Safe ("GRAS") List which means they are deemed safe to use as an additive to food, beverages, and supplements without prior FDA review and approval and the Company is able to advertise on Google, Facebook, Yahoo, Bing, YouTube, Instagram, and all national television networks where other, competing companies are not allowed to advertise. This allows Boomer Naturals to advertise creating brand recognition that our competitors cannot.

The Boomer Botanic products were developed by neurosurgeon, Dr. Markus Chwajol https://boomernaturals.com/wellness-advisory-board/markus-chwajol/. The Boomer Botanics products contain a powerful combination of terpenes that interact with three known receptors in the CNS and possibly a fourth, while the standard products in the industry interact only with one. Terpenes are aromatic compounds found in many plants that create their characteristic aroma. Terpenes may also offer some health benefits to the human body. Terpenes are found in basil, thyme, black pepper, hops, rosemary, lemongrass, jasmine, pine trees, cacao, and other plants and flowers. The solutions include products that may alleviate pain, reduce anxiety, increase sleep quality, as well as offer cosmetic benefits. In addition, Boomer offers a full line of products to benefit the health of pets, including those suffering from seizures. Our product formulas are developed by our team of medical and scientific advisory board and are currently manufactured by FDA registered and GMP certified third-party contract manufacturers located in Florida.

These statements have not been evaluated by the Food and Drug Administration. The FDA has not reviewed or cleared any of our products nor has the FDA endorsed or verified any of our claims regarding our products. Our products are not intended to diagnose, treat, cure, or prevent any disease and none of our products have been approved by the FDA for any purpose.

Our Sales and Distribution Strategy

With our Boomer Botanics formula we believe are in a unique position to brand our line. Our FDA compliant product will give us access to advertising on national television and social media platforms like Facebook and Google. Through its websites and internet advertising, Boomer will be able to brand its products while informing consumers of the attributes of Boomer Botanics. This direct-to-consumer interaction could pave the way for significant online sales through the Boomer Naturals website. The Company also sells its products in retail stores, golf shops and through chiropractor offices.

Market Size

According to the Global Wellness Institute, health and wellness is a multi-billion-dollar industry and the trend is for consumers moving away from pharmaceuticals toward more natural solutions for everyday challenges. According to a Global Use of Medicines report from the IQVIA Institute for Human Data Science, the global pharmaceutical industry was valued at $1.2 trillion in 2018 https://pharmaceuticalcommerce.com/business- and-finance/global-pharma-spending-will-hit-1-5-trillion-in-2023-says-iqvia/.

Boomer Medical Products

Upon most U.S. States issuing some level of Stay-At-Home orders arising from the COVID-19 pandemic, the short-term business strategy of Boomer Naturals shifted. Once the Stay-At-Home orders took effect, most retailers who sold our Boomer Botanics offerings were required to close their retail stores for several months. However, management saw an opportunity to remain consistent with its health and wellness brand strategy by expanding its offerings to face coverings and other products within the Personal Protective Equipment category.

Commencing in April 2020, Boomer Naturals began to offer for online retail sale at its website a variety of face coverings and sanitizers. During this period, Boomer Naturals began running advertisements on television, radio and various digital platforms featuring face coverings. Due to increased demand for these items, e-commerce sales grew to over 3,000 orders per day during the quarter ended July 31, 2020. This increased revenue stream was able to replace the anticipated revenue arising from the Tommy Bahama relationship. In addition, while the e-commerce PPE vertical continued to grow, Boomer Naturals began to receive some interest in wholesale purchases of face coverings and other protective equipment. Boomer Naturals is in the early stages of growing a wholesale PPE division. While no assurance can be given regarding the performance of the Boomer Medical products division, the Company anticipates that this division will continue to generate revenues for the next three to six months to accompany the expected reemergence of the Boomer Botanics division upon Tommy Bahama retail stores reopening and increase overall brand awareness from the retail focused advertising campaign.


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Recently, due to the COVID-19 pandemic, in-stores sales of the Company's Boomer Botanics products have been completely reduced to zero and the Company's planned openings of retail stores in New York and Chicago have been delayed indefinitely as well as potential tests in retail stores. The Company has shifted its focus to its Boomer Medical Supplies segment. Boomer Medical Supplies is focusing on the perceived opportunity created from the recent shift away from the reliance on Chinese-produced medical supplies. The Company has entered into an Exclusive Distributor Agreement with an unaffiliated third-party company located in Viet Nam (the "Supplier"). Pursuant to the agreement, the Company is the exclusive distributor of the supplier's products in the United States the Company has established exclusive arrangements with non-Chinese medical supplies manufacturers mainly focusing on face coverings gloves, and gowns. provided the Company orders at least $3 million of inventory per year. The Supplier in turn has exclusive manufacturing agreements with certain manufacturers provide that the manufacturers will not sell these items to any other U.S. based customer provided that the Supplier orders an annual minimum of 1,500,000 masks from one manufacture and 750,000 masks from a second manufacturer, respectively. If the minimum amounts are not met, the agreements become non-exclusive for the U.S. market.

The Company is currently successfully selling a variety of face coverings and hand sanitizers to consumers online and through distribution to doctors, therapists, and wholesale brokers. As of the date of this annual report, the Company has been receiving more than 1,000 online orders per day for facemasks and hand sanitizers as well as a number of larger, wholesale orders.

Boomer Naturals recently became an approved vendor for face coverings for a national retail chain with over 8,000 retail stores and has begun receiving and filling orders for this retailer in stores and online. The retailer and Boomer have executed a non-exclusive purchase order agreement for face coverings and the retailer has no obligation to purchase either a minimum unit or dollar amount of face coverings from the Issuer. To date, Boomer Naturals has received $6 million in orders from this retailer. Additionally, Boomer Naturals recently executed a purchaser order agreement with this retailer and its affiliate for approximately 5.4 million branded face coverings.

PPE Product Offerings

Our PPE product offerings include Respiratory Masks such as the | N95, KN95, FFP2 & FFP3, P95 & R95 masks which are tight-fitting face masks that can filter out small particles, viruses, and bacteria, Surgical Masks including | 3-ply, 4-ply disposable, loose-fitting face masks that cover the nose, mouth, and chin; and cloth face masks that may offer protection from dust and prevent the spread of COVID-19. the CDC recommends using masks in public settings for social distancing and proper hygiene.

BOOMER VIETNAM

In recent years, Vietnam has become one of the largest and fastest growing economies in Asia. Vietnam has become an emerging manufacturing hub, increasing exports to the United States up to 20%-30% per year. To capitalize on this rapid growth, Boomer recently established a Boomer Vietnam division. The division seeks to leverage its strong relationships with Vietnamese manufacturers and logistics companies to help other U.S. based companies manufacture products in Vietnam. Boomer Vietnam receives consulting fees and referral commissions for making introductions and facilitating transactions.

OTHER EXPANSION LINES

Given its commercial success and access to quality products from Vietnam, Boomer is focused on building an e-commerce platform to support an expanded product line and drive repeat orders. The company expects to add up to 100 new products and expand its direct-to-consumer customer base. We intend to make many of these new products available to consumers through Boomer's wholesale network as well. The Company expects to offer additional products produced in Vietnam including Bedding, Apparel and Vietnamese Coffee. The apparel and bedding products will be offered with silver infusion which will provide naturally antiviral and antibacterial protection. Sales of Vietnamese coffee is booming in Europe and throughout Asia and the Company believes it can open up a virtually untapped market in the U.S.

In addition, the Company will be launching sales of powdered workout and vitamin formulas produced in the U.S. to complement its current suite of healthy living products.


Financing Transactions

Stock Transactions

During the six months ended January 31, 2021, the Company issued 248,000 shares of the Company's common stock previously unissued as of July 31, 2020.

Effective October 5, 2020, the Company issued approximately 15,831,000 shares of common stock to various shareholders for subscriptions, conversions of outstanding securities, services and other consideration.


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On July 29, 2020, the Company issued approximately 2,983,416 shares of common stock to various shareholders for subscriptions, conversions of outstanding securities, services and other consideration.

Effective July 20, 2020, the Company issued an aggregate of 7,743,156 shares of common stock to various shareholders for subscriptions, services other consideration. 916,600 of the shares were issued for subscriptions received in the aggregate amount of $840,270 and 6,826,556 of the shares were issued for services.

On January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the "Exchange Agreement"), with Boomer Naturals Holdings, Inc., a Nevada corporation ("Boomer"), Boomer Naturals, Inc., and the shareholders of Boomer (the "Exchange"). Upon consummation of the transactions set forth in the Exchange Agreement (the "Closing"), the Company adopted the business plan of Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares of the Company's Common Stock.

Convertible Note Payable

On October 14, 2020, the Company entered into convertible promissory note principal amount of $262,500 with a maturity date of April 15, 2021. The convertible promissory note provides for 10% interest per annum with unpaid principal balance and accrued interest payable on the maturity date and included an original issuance discount of $12,500 and a derivative liability of $110,039. The note was repaid on April 14, 2021.

Paycheck Protection Program Loan

On April 21, 2020, the Company received loan proceeds in the amount of $347,700 under the Paycheck Protection Program ("PPP") from Cross River Bank, Inc. ("Lender"). The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, and maintains its payroll levels. The PPP note of $347,700 was forgiven in April 2021.

Cash Advance Agreements

From February through April 2021, the Company entered into Merchant Cash Advance Agreements ("Agreements") with APEX Funding Source for receivables purchased totaling $4,432,000 with a purchase price totaling $3,200,000. The Company will remit weekly payments totaling $233,433 until repaid. The Agreements are secured by the collateral, as defined, of the Company and is personally guaranteed by the Company's President.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee 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 increases in the cost of services. To become profitable and competitive, we must receive additional capital. We have no assurance that future financing will materialize. If that financing is not available, we may be unable to continue operations.

RESULTS OF OPERATIONS

Change of year end - The financial year end of the Company was changed from July 31 to January 31. Accordingly, the current financial statements are prepared for 6 months from August 1, 2020 to January 31, 2021 and as a result, the comparative amounts stated in the consolidated statement of operations, consolidated statement of cash flows, the consolidated statement of stockholders' deficit, and the related notes to consolidated financial statements are not comparable.

The following discussion represents a comparison of our results of operations for the six months ended January 31, 2021 and the year ended July 31, 2020. The results of operations for the periods shown in our unaudited consolidated financial statements are not necessarily indicative of operating results for the entire period. In the opinion of management, the unaudited consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented.


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Results of Operations for the Six Months Ended January 31, 2021 and the Year
Ended July 31, 2020.

                                         Six Months Ended        Year Ended
                                         January 31, 2021      July 31, 2020

Net revenues                            $       45,106,131     $   11,472,571
Cost of sales                                   16,420,869          3,888,175
Gross Profit                                    28,685,262          7,584,396
Operating expenses                              21,059,135         22,760,859
Other expense                                      321,740            388,315

Net profit (loss) before income taxes $ 7,304,387 $ (15,564,778 )

Net Revenues

Net revenues increased by $33,633,560, or 293.2%, to $45,106,131 for the six months ended January 31, 2021 from $11,472,571 for the year ended July 31, 2020. The increase in revenue is primarily the result of an increase in customer purchases of our personal protection equipment ("PPE") products due to the COVID 19 pandemic in 2020.

Cost of Sales

Cost of sales increased by $12,532,694, or 322.3%, to $16,420,869 for the six months ended January 31, 2021 from $3,888,175 for the year ended July 31, 2020. The increase in cost of sales was primarily due to the increase in PPE revenue. As a percentage of revenue, cost of sales was 36.4% and 33.9% resulting in a gross margin of 63.6% and 66.1% for the six months ended January 31, 2021 and the year ended July 31, 2020, respectively, primarily due to increased cost of product.

Operating expenses

Operating expenses decreased by $1,701,724, or 7.5%, to $21,059,135 for the six months ended January 31, 2021 from $22,760,859 for the year ended July 31, 2020, primarily due to increases in professional fees of $762,444, payroll and payroll taxes of $149,953, depreciation and amortization costs of $28,876, and general and administration costs of $3,203,895, offset primarily by advertising and marketing of $5,548,130, rent of $281,738, and research and development costs of $17,024, as a result of adding administrative infrastructure for our anticipated business development.

For the six months ended January 31, 2021, we had advertising and marketing expenses of $8,284,457, general and administrative costs of $7,058,291, payroll and payroll taxes of $2,579,339, professional fees of $2,736,804, depreciation and amortization costs of $57,100, and rent of $343,144, as a result of adding administrative infrastructure for our anticipated business development.

For the year ended July 31, 2020, we had advertising and marketing expenses of $13,832,587, general and administrative costs of $3,854,396, payroll and payroll taxes of $2,429,386, professional fees of $1,974,360, research and development costs of $17,024, depreciation and amortization costs of $28,224, and rent of $624,882, as a result of adding administrative infrastructure for our anticipated business development.

Other Expense

Other expense for the six months ended January 31, 2021 totaled $321,740 primarily due to interest expense of $58,356, interest expense - related party of $238,384, other expense of $35,000, and other income of $10,000, compared to other expense of $388,315 for the year ended July 31, 2020, primarily due to interest expense of $253,618, interest expense - related party of $89,440, other expense of $56,580, and other income of $11,323.

Net income (loss) before income taxes

Net income before income taxes for the six months ended January 31, 2021 totaled $7,304,387 primarily due to (increases/decreases) in advertising and marketing expenses, general and administrative costs, payroll and payroll taxes, professional fees, depreciation and amortization costs, and rent compared to a loss of $15,564,778 for the year ended July 31, 2020, primarily due to (increases/decreases) in advertising and marketing expenses, general and administrative costs, payroll and payroll taxes, professional fees, research and development costs, depreciation and amortization costs, and rent .

Assets and Liabilities

Assets were $15,853,009 as of January 31, 2021. Assets consisted primarily of cash of $1,161,295, accounts receivables of $8,559,268, accounts receivable - related parties of $110,000, inventories, net of $3,710,488, equipment of $191,628, right-of-use assets of $1,727,732, and other assets of $392,598. Liabilities were $20,526,812 as of January 31, 2021. Liabilities consisted primarily accounts payable of $3,561,730, accounts payable - related party of $3,113,250, factor payable of $7,001,629, accrued interest of $141,671, unearned revenue of $116,759, warrant liability of $110,039, lines of credit from related parties of $447,500, convertible notes of $2,395,807, notes payable of $497,700, operating lease liabilities of $1,574,063, finance lease liabilities of $182,423, and other current liabilities of $1,384,241.


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Liquidity and Capital Resources

Our principal liquidity requirements are for working capital and capital expenditures. We fund our liquidity requirements primarily through cash on hand, cash flows from operations and borrowings from through debt. On January 31, 2021 we had cash of $1,161,295 compared with $4,171,371 as of July 31, 2020.


The following table summarizes our cash flows from operating, investing, and
financing activities:

                                                                Six Months Ended       Year Ended
                                                                  January 31,           July 31,
                                                                      2021                2020
Net cash used in operating activities                          $       (7,372,269 )   $ (5,281,278 )
Net cash provided by (used in) investing activities                        37,869         (224,865 )
Net cash provided by financing activities                               4,324,324        9,524,847
Net increase (decrease) in cash                                $       (3,010,076 )   $  4,018,704



Operating Activities - For the six months ended January 31, 2021, net cash used in operating activities was $(7,372,269). Net cash used in operations was primarily due to net income of $7,304,387, and the changes in operating assets and liabilities of $14,765,917, primarily due to the net changes in accounts receivable of $5,552,316, accounts receivable - related parties of $106,599, other current assets of $97,772, inventories of $150,552, accounts payable of $5,337,470, and unearned revenue of $6,932,505, offset primarily by the change in accounts payable - related party of $2,399,414, other current liabilities of $976,737, and accrued interest of $35,146. In addition, net cash used in operating activities was offset primarily by adjustments to reconcile net profit from the accretion of the debt discount of $80,847, depreciation expense of $57,100, and noncash lease expense of $46,686.

For the six months ended July 31, 2021, net cash used in operating activities was $5,281,278. Net cash used in operations was primarily due to a net loss of $15,564,778, and the changes in operating assets and liabilities of $10,190,265, primarily due to the net changes in accounts receivable of $3,006,952, accounts receivable - related parties of $3,401, other current assets of $292,892, and inventories of $3,506,212, offset primarily by the change in accounts payable of $8,739,331, accounts payable - related party of $713,836, other current liabilities of $106,525, accrued interest of $390,766, and unearned revenue of $7,049,264. In addition, net cash used in operating activities was offset primarily by adjustments to reconcile net loss from depreciation expense of $28,224, and noncash lease expense of $65,011.

Investing Activities - Changes in cash in investing activities for the six months ended January 31, 2021 and the year ended July 31, 2020 primarily consisted of purchases of property and equipment and payments received from loans receivables, offset primarily by loans provided on loans receivables to related parties.

Financing Activities - For the six months ended January 31, 2021, net cash provided by financing activities was $4,324,324 due to borrowing on lines of credit of $34,167,575, repayments on lines of credit of $29,390,809, borrowing on lines of credit - related parties of $95,000, repayments on lines of credit - related parties of $661,125, repayments on notes payable of $10,802, borrowing on convertible notes payable - related parties of $262,500, and repayments on convertible notes payable - related parties of $138,015. For the year ended July 31, 2021, net cash provided by financing activities was $9,524,847 due to borrowing on lines of credit of $2,967,528, repayments on lines of credit of $742,665, borrowing on lines of credit - related parties of $2,221,363, repayments on lines of credit - related parties of $1,317,738, borrowing on convertible notes payable - related parties of $2,351,765, repayments on convertible notes payable of $51,250, borrowing on notes payable of $2,166,929, repayments on notes payable of $1,658,428, borrowing on notes payable - related parties of $64,400, repayments on notes payable - related parties of $138,400, and proceeds from the issuance of common stock of $3,661,343.

Financing - Based on our current rate of expenditures and anticipated changes, we have estimated a total cash expenditure budget of approximately $120 million for the next 12 months, of which approximately $45 million is expected to be expended towards sales and marketing, approximately $31 million is expected to be expended toward cost of goods sold and approximately $19 million is budgeted for working capital and general and administrative expenses.

We expect that working capital requirements will continue to be funded through a combination of increased sales, both online and wholesale, our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business. Historically, we have financed our operations through private sales of equity securities and, in part, through sales of our products. We believe that our cash flow from operating activities and the sale of equity securities will be sufficient to meet our capital requirements for at least the next 12 months.

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.


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Stock Transactions

During the six months ended January 31, 2021, the Company issued 248,000 shares of the Company's common stock previously unissued as of July 31, 2020.

Effective October 5, 2020, the Company issued approximately 15,831,000 shares of common stock to various shareholders for subscriptions, conversions of outstanding securities, services and other consideration.

On July 29, 2020, the Company issued approximately 2,983,416 shares of common stock to various shareholders for subscriptions, conversions of outstanding securities, services and other consideration.

Effective July 20, 2020, the Company issued an aggregate of 7,743,156 shares of common stock to various shareholders for subscriptions, services other consideration. 916,600 of the shares were issued for subscriptions received in the aggregate amount of $840,270 and 6,826,556 of the shares were issued for services.

On January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the "Exchange Agreement"), with Boomer Naturals Holdings, Inc., a Nevada corporation ("Boomer"), Boomer Naturals, Inc., and the shareholders of Boomer (the "Exchange"). Upon consummation of the transactions set forth in the Exchange Agreement (the "Closing"), the Company adopted the business plan of Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares of the Company's Common Stock.

Convertible Note Payable

On October 14, 2020, the Company entered into convertible promissory note principal amount of $262,500 with a maturity date of April 15, 2021. The convertible promissory note provides for 10% interest per annum with unpaid principal balance and accrued interest payable on the maturity date and included an original issuance discount of $12,500 and derivative liability of $110,039.

Paycheck Protection Program Loan

On April 21, 2020, the Company received loan proceeds in the amount of $347,700 under the Paycheck Protection Program ("PPP") from Cross River Bank, Inc. ("Lender"). The PPP was established as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), provides for loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, and maintains its payroll levels. The PPP note of $347,700 was forgiven in April 2021.

Cash Advance Agreements

From February through April 2021, the Company entered into Merchant Cash Advance Agreements ("Agreements") with APEX Funding Source for receivables purchased totaling $4,432,000 with a purchase price totaling $3,200,000. The Company will remit weekly payments totaling $233,433 until repaid. The Agreements are secured by the collateral, as defined, of the Company and is personally guaranteed by the Company's President.

Capital Resources.

We had no material commitments for capital expenditures as of January 31, 2021.

Fiscal year end

Our fiscal year end is January 31.


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Critical Accounting Policies

We believe the accounting policies below are the most critical to aid you in fully understanding and evaluating this management discussion and analysis. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense. Our estimates are evaluated on an ongoing basis and drawn from historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. Actual results may differ from our estimates. Management believes that the following accounting estimates reflect the more significant judgments and estimates we use in preparing our consolidated financial statements.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability is reasonably assured, and delivery has occurred, or services have been rendered. The Company offers its Boomer Botanics proprietary formula various channels, e-commerce, and brick and mortar retail.

The Company includes shipping and handling costs in cost of sales. Amounts billed for shipping and handling are included with revenues in the statement of operation.

The Company recognizes an allowance for estimated future sales returns in the period revenue is recorded, based on pending returns and historical return data, among other factors. Management did not believe any allowance for sales returns was required as of January 31, 2021.

Accounts Receivable

Accounts receivable are carried at original invoice amount less the allowance for doubtful accounts based on a review of all outstanding amounts at year end. Management determines the allowance for doubtful accounts based on a combination of write-off history, aging analysis, and any specific known troubled accounts. Trade receivables are written off when deemed uncollectible.

Inventories

Inventories primarily consist of finished goods and are stated at the lower of cost (first-in-first-out) or market. The Company maintains an allowance for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values.

Recent Accounting Pronouncements

Refer to Note 3 in the accompanying notes to the condensed consolidated financial statements for recent accounting pronouncements.

Off-Balance Sheet Arrangements

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Inflation

We do not believe that inflation has had a material effect on our results of operations.

© Edgar Online, source Glimpses

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