Management's statements contained in this portion of the prospectus are not
historical facts and are forward-looking statements. Factors which could have a
material adverse effect on the operations and future prospects of the Company on
a consolidated basis include, but are not limited to, those matters discussed
under the section entitled "Risk Factors," above. Such risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements.
Our Plan for the Next 12 Months
On December 31, 2018, the Company completed the transactions contemplated by a
certain Share Exchange Agreement entered into by and between the Company and Mr.
Andrew Eddy, an individual residing in Great Britain and owner of 100% of the
issued and outstanding capital shares of V Beverages, a company organized under
the laws of the United Kingdom (the "Share Exchange Agreement"). Pursuant to the
Share Exchange Agreement, the Company acquired 100% of the issued and
outstanding capital shares of V Beverages (the "V Beverage Shares"). At the
closing of the transactions under the Share Exchange Agreement, Mr. Eddy
transferred and sold all of the V Beverage Shares to the Company in exchange for
15,750,000 shares of the Company's common stock, par value $0.001, which the
Company issued on April 17, 2019. Subsequent to the completion of the
transactions under the Share Exchange Agreement, V Beverages is operated as the
Company's wholly-owned subsidiary.
The Company is focused entirely on the business of its wholly owned
subsidiaries. Our subsidiary, V Beverages, owns 100% of the issued and
outstanding capital shares of MaxChater Ltd., a company organized under the laws
of the United Kingdom, which it acquired on August 1, 2018. MaxChater serves as
our wholly-owned operating subsidiary that is solely engaged in the business of
designing, producing, marketing and selling low carbon, eco-friendly alcoholic
Momentous Holdings Corp. Group Structure
We are a modern craft beverage company, founded in 2015, that is based in
London, United Kingdom. We design, produce, market and sell handcrafted,
award-winning alcohol beverage products with a portfolio consisting of gin,
vodka, bitter aperitif and ready-to-drink cocktails ("RTD").
Our strategy is to produce premium products with minimal impact to the
environment through the use of modern technology during production. Our methods
help us to conserve energy and reduce water waste whilst delivering what we
believe is a superior product. We also focus on environmentally friendly and
recyclable packaging to reduce our carbon footprint. We are also looking to
employ carbon offsetting in order to meet our carbon neutral status target by
the end of 2020.
The following is a list of milestones we wish to accomplish within the next
Secure necessary funding to meet additional expenses of being a public company
and to expand operations
Product Development, Facility improvements and Equipment upgrades
Parent Company name change to better reflect new business
Engage in advertising and marketing programs, through both traditional sources
and social media
Develop/Complete development of Cannabinoid infused alcoholic beverages
Hire additional skilled employees to complete our team, such as brand
Develop an advisory committee to complement the board and employees of the
Develop additional corporate governance standards, including formation of
independent majority compliance, audit and compensation committees
Continuation of MaxChater annual growth, in terms of both units sold and annual
Our first major milestones are expected to be securing funds and increasing the
scale of our production. This is our primary focus. In three years, we hope to
have established our brand, products and corporate presence in the United
States, and internationally.
Revenue (including related party revenue) for the nine (9) month period ended
February 29, 2020 (successor) was $144,458, for the seven (7) month period ended
February 28, 2019 (successor) was approximately $84,989 and for the two (2)
month period ended July 31, 2018 (predecessor) was approximately $26,067. The
increase is due mainly to an increase in sales volume following the company's
move to larger premises in November 2019.
Gross Profit for the nine (9) month period ended February 28, 2019 (successor)
was $31,217, for the seven (7) month period ended February 28, 2019 (successor)
was approximately $16,447 and for the two (2) month period ended July 31, 2018
(predecessor) was approximately $3,508.
Operating expenses for the nine (9) month period ended February 29, 2020
(successor) were $286,552, for the seven (7) month period ended February 28,
2019 (successor) were approximately $128,531 and for the two (2) month period
ended July 31, 2018 (predecessor) were approximately $27,358.
Operating expenses for the successor periods consisted of general and
administrative expenses and increased due to the acquisition and increase of V
Beverages operating activities following the acquisition of MaxChater by V
Operating expenses for the predecessor two (2) month period ended July 31, 2018
consisted of general and administrative expenses of MaxChater.
We anticipate our operating expenses will increase as we undertake our plan of
operations. The increase will be attributable to the measures described above to
implement our business plan and the professional fees associated with our being
a reporting company under the U.S. Securities Exchange Act of 1934.
Net loss for the nine (9) month period ended February 29, 2020 (successor) was
$244,840 for the seven (7) month period ended February 28, 2019 (successor) was
approximately $101,735 and for the two (2) month period ended July 31, 2018
(predecessor) was approximately $21,169.
Liquidity and Capital Resources
As of February 29, 2020, we had total current assets of $31,778, consisting of
cash of $7,555, accounts receivable of $14,179 and prepaid expenses and other of
$10,044. We had total current liabilities of $423,365 as of February 29, 2020
consisting of advances from related parties of $174,149, accounts payable of
$49,438, taxes payable of $64,827, bank overdraft of $18,601, amounts due under
a convertible promissory note of $12,459, a derivative liability of $79,800 and
other liabilities of $24,091. Accordingly, we had a working capital deficit of
$391,587 as of February 29, 2020.
As of May 31, 2019 (successor), we had total current assets of $27,871,
consisting of cash of $4,840, accounts receivable of $19,547 and prepayments and
other receivables of $3,484. We had current liabilities of $184,423 as of May
31, 2019. We therefore had a working capital deficit of $156,552 as of May 31,
Operating activities resulted in a net cash outflow of $173,913 for the nine (9)
month period ended February 29, 2020.
Our ability to operate beyond the next twelve (12) months is contingent upon us
obtaining additional financing and/or upon realizing sales revenue sufficient to
fund our ongoing expenses. The business has also been significantly affected by
the ongoing COVID-19 pandemic and is currently closed until it is considered
safe to restart operations which is dependent upon UK Government policy. Under
normal circumstances, our currently available funds will allow us to operate for
another six (6) months. Until we are able to sustain our ongoing operations
through sales revenue, we intend to fund operations through debt and/or equity
financing arrangements, which may be insufficient to fund our capital
expenditures, working capital, or other cash requirements. We do not have any
formal commitments or arrangements for the sales of stock or the advancement or
loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company had a working capital
deficit of $391,587, a total stockholders' deficit of $336,161 at February 29,
2020 and an accumulated deficit at that date of $397,445.
The continuing operations of the Company are dependent upon its ability to
continue to raise adequate financing and to commence profitable operations to
repay its liabilities arising from normal business operations as they become
due. Details of the Company's debt are set out in note 4.
Following the completion of the Company's annual report on Form 10-K for the
year ended May 31, 2019, management raised funds in order to provide working
capital for the immediate future and on January 13, 2020 issued a Convertible
Promissory Note, details of which are set out in note 4.
The ongoing coronavirus pandemic has had a significant impact on the ability of
the Company to continue as a going concern and further details are set out in
note 8 'Subsequent Events'.
These factors, among others, raise substantial doubt about the ability of the
Company to continue as a going concern for a reasonable period of time. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this
Off Balance Sheet Arrangements
As of February 29, 2020, there were no off balance sheet arrangements.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most
"critical accounting policies" in the Management Discussion and Analysis. The
SEC indicated that a "critical accounting policy" is one which is both important
to the portrayal of a company's financial condition and results, and requires
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. We do not believe that any accounting policies currently fit this
Recently Issued Accounting Pronouncements
We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on our results of operations, financial position or
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