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    BOMH   US09859M1045

BOOMER HOLDINGS INC.

(BOMH)
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BOOMER : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

07/27/2020 | 05:26pm EST

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS




This Report contains forward-looking statements within the meaning of the
federal securities laws. All statements other than statements of historical fact
made in this report are forward looking. In particular, the statements herein
regarding industry prospects and future results of operations or financial
position are forward-looking statements. These include statements about our
expectations, beliefs, intentions or strategies for the future, which we
indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "we believe," "Company believes," "management believes" and similar
language. These forward-looking statements can be identified by the use of words
such as "believes," "estimates," "could," "possibly," "probably," "anticipates,"
"projects," "expects," "may," "will," or "should," or other variations or
similar words. No assurances can be given that the future results anticipated by
the forward-looking statements will be achieved. Forward-looking statements
reflect management's current expectations and are inherently uncertain. The
forward-looking statements are based on the current expectations of Boomer
Holdings. Inc. and are inherently subject to certain risks, uncertainties and
assumptions, including those set forth in the discussion under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
this report. Actual results may differ materially from results anticipated in
these forward-looking statements.



Investors are also advised to refer to the information in our previous filings
with the Securities and Exchange Commission (SEC), especially on Forms 10-K,
10-Q and 8-K, in which we discuss in more detail various important factors that
could cause actual results to differ from expected or historic results. It is
not possible to foresee or identify all such factors. As such, investors should
not consider any list of such factors to be an exhaustive statement of all risks
and uncertainties or potentially inaccurate assumptions.



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. Due to the timing of initial and evolving
governmental orders and guidelines impacting the Company's financial operations
in New York, and West Virginia, as well as other contributors to the process of
financial statement preparation in other U.S. states, relating to social
distancing, stay in place orders, travel and other restrictions on business,
necessary and immediate access of personnel, records and information have been
adversely effected as set forth throughout this report.



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, then
named Remaro Group Corp., executed and consummated an Agreement of Merger and
Plan of Share Exchange (the "Exchange Agreement"), with Boomer Natural Wellness,
Inc. ("BNW"), Boomer Naturals Holdings, Inc., a Nevada corporation ("Boomer"),
Boomer Naturals, 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 Naturals. Pursuant
to the terms of the Exchange 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 (the "Exchange Shares") of the Company's Common Stock and BNW
agreed to retire 24,000,000 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 endocannabinoid system (ECS) which is the first FDA-compliant
CBD alternative; and (ii) our line of face masks and other personal protection
equipment.



                                       19






Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



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 endocannabinoid system. These products powered by natural
terpenes, include, edible and topical offerings. We are engaged in marketing and
branding within the alternative CBD/THC space, including our trademark "CB5"
brand which is a proprietary formula and currently patent pending. Boomer
Naturals currently operates a retail store in Las Vegas Nevada and is currently
negotiating a lease on the company's flagship store in Manhattan New York.
Boomer Natural products are also available in Golf Pro Shops, Specialty Stores,
Chiropractic Offices and Nail Salons across the countries. Boomer Naturals has a
robust online presence and enjoys material sales through its website at
BoomerNaturals.com.



Our Strategy


With our CB5 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. In addition we expect to
air promotional/educational content throughout 2020 on PBS affiliates across the
country as well as a corporate sponsorship at Madison Square Garden and the
MSG
network.



However, as a result of COVID-19 Pandemic, there can be no assurance that we
will be able to increase any retail sales of our CB5 products. Most of the
stores that sell our CB5 products are non-essential retail stores so the ability
to generate sales will be subject to these stores re-opening sufficiently in the
near future and consequently remaining open, of which we can offer no
predictions or assurances.



Online Sales


Through its websites and internet advertising, Boomer will be able to brand its
products while informing consumers of the attributes of CB5. This direct to
consumer interaction could pave the way for significant online sales through the
Boomer Naturals website.



National Retail Chains.


As a result of the Pandemic, most non-essential retail stores were required to
be closed since March 2020. Further, many National Retail Chains are hesitant to
introduce CBD related products on a national scale and thus far have only
offered topical products in regional test markets. We believe as stores reopen,
the FDA compliant ingredients in CB5 will allow these chains to offer Boomer
Natural products in both topical and ingestible forms nation-wide.



Golf



As a result of the Pandemic, most golf courses and non-essential retail stores
that sold golf-related products were required to be closed since March 2020. As
stores reopen and items are phased in, we plan to continue to grow our
distribution network in the golf space in part through our relationship with PGA
Magazine and the PGA Merchandising Show. With access to vendors through these
mediums and the ability to advertise we will be able to best utilize of our
wide-ranging wholesale sales network. We are in a unique position to capture a
significant share of the expansive golf market.



Overseas opportunities


Boomer has begun discussions with distributors in over 7 countries to carry the
Boomer Naturals CB5 product line. These distributors see a unique opportunity to
fulfill consumer demand via CB5 where CBD is not available to sell.



In addition, we intend to seek new branding and licensing opportunities for our intellectual property and we will seek strategic corporate and product acquisitions.



                                       20




Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



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.
Boomer Naturals received its first round of Tommy Bahama orders during March
2020 and expected that Tommy Bahama would be reordering on a monthly basis to
replenish stock at all of its brick and mortar retail locations. In addition, we
believe Tommy Bahama intended to launch an aggressive e-commerce campaign
commencing with email advertisements to its significant database of customers.



Once the Stay-At-Home orders took effect, Tommy Bahama was required to close its
retail stores for several months and further elected to delay any major
e-commerce marketing initiatives due to their belief that consumers were
primarily spending money on food and other necessities as opposed to engaging in
significant discretionary spending during the Pandemic. It would have been
reasonably expected that said actions by Tommy Bahama would have caused a
significant delay in revenues to the Company. 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 the overwhelming demand for such
items, e-commerce sales have grown to over 1,000 orders per day as of April 30,
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 CB5 division upon Tommy Bahama retail stores reopening and increase
overall brand awareness from the retail focused advertising campaign.



Although the margins on protective equipment are lower than CB5 products, it is
anticipated that this division will still yield material top line revenue and
profits to assist Boomer Naturals in meeting or exceeding its 2020 Guidance. In
the event both divisions prosper simultaneously, 2020 Guidance could foreseeably
be exceeded; however, due to the uncertainty of the PPE division arising from
uncertainty of medical trends in prevention and treatment from COVID-19,
management believes the most accurate and transparent position with respect to
its financial affairs is to maintain its current 2020 Guidance.



                                       21



Results of Operations



Three Months Ended April 30, 2020 (Unaudited) Compared to Three Months Ended
April 30, 2019 (Unaudited):



                                               Three Months Ended April 30,

                                               2020                        2019                      Changes
                                                       % of                      % of
                                       Amount         Revenue      Amount      Revenue         Amount           %

Net revenue                        $  1,249,373         100.0 %   $    -           0.0 %   $  1,249,373        100.0 %
Cost of Goods Sold                      782,982          62.7 %        -           0.0 %        782,982         62.7 %
Gross profit                            466,391          37.3 %        -           0.0 %        466,391         37.3 %

Operating expenses:
 Advertising and marketing              427,743          34.2 %        -           0.0 %        427,743         34.2 %
 General and administrative             552,904          44.3 %        -           0.0 %        552,904         44.3 %
 Payroll and payroll taxes              662,656          53.0 %        -           0.0 %        662,656         53.0 %
 Professional fees                      582,875          46.7 %        -           0.0 %        582,875         46.7 %
 Research and development                   539           0.0 %        -           0.0 %            539          0.0 %
 Depreciation and amortization           11,536           0.9 %        -   

0.0 % 11,536 0.9 %

 Rent                                   144,910          11.6 %        -           0.0 %        144,910         11.6 %
Total operating expenses              2,383,163         190.7 %        -   

0.0 % 2,382,163 190.7 %

Loss from operations                 (1,916,772 )      -153.4 %        -   

0.0 % (1,916,772 ) -153.4 %


Other Income (Expense):
Interest expense                        (91,274 )        -7.3 %        -           0.0 %        (91,274 )       -7.3 %
Other income                              1,790           0.1 %        -           0.0 %          1,790          0.1 %
Total other income (expense)            (89,484 )        -7.2 %        -   

0.0 % (89,484 ) -7.2 %


Loss before provision for income
taxes                                (2,006,256 )     -160.6. %        -           0.0 %     (2,006,256 )     -160.6 %

Provision for income taxes                   -            0.0 %        -           0.0 %             -           0.0 %

Net loss                           $ (2,006,256 )      -160.6 %   $    -           0.0 %   $ (2,006,256 )     -160.6 %



Revenue


Our revenue during the three months ended April 30, 2020 we had $1,249,373 in
revenues, coming from PPE products, sales, retail, and wholesale income from
customers that purchased our CB5 wellness products, compared to $0 from these
revenue sources for the same period one year ago. We expect the revenue we
receive from PPE and CB5 wellness products to continue to grow as sales
increase.



Cost of Goods Sold


Our Cost of Goods Sold ("COGS") for sales of PPE and CB5 wellness products
consists of the cost of acquiring and manufacturing the product to the customer.
For the three months ended April 30, 2020, our COGS associated with PPE products
and CB5 wellness was $782,982. Most orders are delivered directly to the
customer, without any handling, storage or processing by us. We did not have any
COGS for the three months ended April 30, 2019 as we did not have any revenue
during that same period.



Operating Expenses


Overall, operating expenses increased for the three months ended April 30, 2020, in the amount of $2,383,163 as the Company ramped up operations.



Non-Operating Expenses


We incurred interest expense related to notes payable and lines of credit in the amount of $91,274 for the three months ended April 30, 2020.



                                       22



 Results of Operations



Nine Months Ended April 30, 2020 (Unaudited) Compared to Nine Months Ended April
30, 2019 (Unaudited):



                                               Nine Months Ended April 30,

                                              2020                        2019                      Changes
                                                       % of                     % of
                                       Amount        Revenue      Amount      Revenue         Amount           %

Net revenue                        $  1,676,936        100.0 %   $    -           0.0 %   $  1,676,936        100.0 %
Cost of Goods Sold                      936,369         55.8 %        -           0.0 %        936,369         55.8 %
Gross profit                            740,567         44.2 %        -           0.0 %        740,567         44.2 %

Operating expenses:
 Advertising and marketing            1,067,396         63.7 %        -           0.0 %      1,067,396         63.7 %
 General and administrative           1,083,610         64.6 %        -           0.0 %      1,083,610         64.6 %
 Payroll and payroll taxes            1,566,840         93.4 %        -           0.0 %      1,566,840         93.4 %
 Professional fees                    1,550,257         92.4 %        -           0.0 %      1,550,257         92.4 %
 Research and development                17,024          1.0 %        -           0.0 %         17,024          1.0 %
 Depreciation and amortization           19,834          1.2 %        -    
      0.0 %         19,834          1.2 %
 Rent                                   343,005         20.5 %        -           0.0 %        343,005         20.5 %
Total operating expenses              5,647,966        336.8 %        -           0.0 %      5,647,966        336.8 %

Loss from operations                 (4,907,399 )     -292.6 %        -           0.0 %     (4,907,399 )     -292.6 %

Other Income (Expense):
Interest expense                       (175,864 )      -10.5 %        -           0.0 %       (175,864 )      -10.5 %
Other income                              3,280          0.2 %        -           0.0 %          3,280          0.2 %
Total other income (expense)           (172,584 )      -10.3 %        -           0.0 %       (172,584 )      -10.5 %

Loss before provision for income
taxes                                (5,079,983 )     -302.9 %        -           0.0 %     (5,079,983 )     -302.9 %

Provision for income taxes                   -           0.0 %        -           0.0 %             -           0.0 %

Net loss                           $ (5,079,983 )     -302.9 %   $    -           0.0 %   $ (5,079,983 )     -302.9 %




Revenue



Our revenue during the nine months ended April 30, 2020 we had $1,676,936 in
revenues, coming from PPE products, sales, retail, and wholesale income from
customers that purchased our CB5 wellness products, compared to $0 from these
revenue sources for the same period one year ago. We expect the revenue we
receive from PPE and CB5 wellness products to continue to grow as sales
increase.



Cost of Goods Sold


Our Cost of Goods Sold ("COGS") for sales of PPE and CB5 wellness products
consists of the cost of acquiring and manufacturing the product to the customer.
For the nine months ended April 30, 2020, our COGS associated with PPE products
and CB5 wellness was $936,369. Most orders are delivered directly to the
customer, without any handling, storage or processing by us. We did not have any
COGS for the nine months ended April 30, 2019 as we did not have any revenue
during that same period.



Operating Expenses


Overall, operating expenses increased for the nine months ended April 30, 2020, in the amount of $5,647,966 as the Company ramped up operations.



Non-Operating Expenses


We incurred interest expense related to notes payable and lines of credit in the amount of $175,864 for the nine months ended April 30, 2020.



                                       23


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. We ended April 30,
2020 with $128,115 of cash compared with $152,667 as of July 31, 2019.



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



                                                         Nine Months Ended April 30,
                                                               2020              2019

Net cash provided by (used in) operating activities $ (5,410,046 )

     $  -
Net cash provided by (used in) investing activities              (114,538 )

-

Net cash provided by (used in) financing activities             5,500,032  

-

Net increase (decrease) in cash                       $           (24,552 )

-

Operating Activities - For the nine months ended April 30, 2020 and 2019, net cash used in operating activities was $(5,410,046) and $0, respectively, primarily due to loss of $5,079,983 for the nine months ended April 30, 2020.

Investing Activities - Cash used in investing activities primarily consisted of purchases of property and equipment.

Financing Activities - Net cash provided by or used in financing activities primarily consisted of net borrowings from notes payable and lines of credit of $4,260,837 and $1,630,238 for the nine months ended April 30, 2020 and borrowings of debt and issuances of common stock of $2,377,000 for the nine months ended April 30, 2020.




CRITICAL ACCOUNTING POLICIES



Our critical accounting estimates are included in our significant accounting
policies as described in Note 2 of the consolidated financial statements of this
Form 10-Q. Those consolidated financial statements were prepared in accordance
with GAAP. Critical accounting estimates are those that we believe are most
important to the portrayal of our financial condition and results of operations.
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 the CB5 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 at April 30, 2020.



Advertising Expense


Advertising costs are expensed as incurred. Advertising expense amounted to $1,067,396 and $427,743 for the nine and three months ended April 30, 2020, respectively.



                                       24



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.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2021 90,2 M - -
Net income 2021 14,6 M - -
Net Debt 2021 10,9 M - -
P/E ratio 2021 7,06x
Yield 2021 -
Capitalization 0,08 M 0,08 M -
EV / Sales 2020 11,5x
EV / Sales 2021 1,32x
Nbr of Employees 120
Free-Float 56,1%
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Mean consensus -
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Managers and Directors
Daniel Capri Chairman, President, CEO, Secretary & Treasurer
Giang Thi Hoang Director
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