FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are not
historical facts but rather are based on current expectations, estimates and
projections. We may use words such as "anticipate," "expect," "intend," "plan,"
"believe," "foresee," "estimate" and variations of these words and similar
expressions to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted. You should read this report completely and with the understanding
that actual future results may be materially different from what we expect. The
forward-looking statements included in this report are made as of the date of
this report and should be evaluated with consideration of any changes occurring
after the date of this Report. We will not update forward-looking statements
even though our situation may change in the future and we assume no obligation
to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
BUSINESS OPERATIONS
Prior to January 1, 2020, the Company was in the business of providing
infrastructure assets to licensed producers, processors and retailers engaged in
the cannabis industry. Due to the restrictive regulatory and operational
challenges the Company faced in that business it was decided to pivot away from
cannabis and instead focus on opportunities in the hemp industry. The Company
plans to acquire assets such as equipment, real estate and operating entities
engaged in hemp related activities and to repurpose its existing assets for use
in hemp operations.
In May 2017, the Company formed MYHI-AZ to acquire equipment to service the
growing cannabis industry. In September 2017, the Company entered into a
consulting agreement with D9 Manufacturing, "D9," to provide D9 customers with
infrastructure equipment. Also in September 2017, MYHI-AZ purchased 2 intermodal
grow containers from D9 to be used in a grow operation in Arizona. MYHI-AZ
leased the grow containers to D9 for 3 years with the right to extend the lease
for an additional 2 years. The lease began August 15, 2017. The lease provided
for a monthly lease rate of $20,000 a month and required advance payment for
operating supplies and expenses. The monthly lease rate was recorded as Revenue
and an Account Receivable while the advances were recorded as an Other
Receivable. The monthly lease payments were to commence on harvesting of the
first crop. The containers were planted in October 2017 with an expected harvest
in January 2018. The initial grow operation encountered a power failure which
ultimately resulted in the loss of the crop. The loss of this crop resulted in a
deferral of collection of the lease rental payments and the operating cost
payments. The power failure highlighted electrical issues with the facility
where the containers are being used and improvements to the containers that
could be made. The container improvements and facility power requirement issue
took a few months to resolve.
Effective June 5, 2018, MYHI-AZ and D9 agreed to convert the current amount due
under the operating lease, representing $150,000 in lease payments and $22,294
in operating expenses, into a $135,000 note payable, (the "Note"), with a term
of 3 years and an interest rate of 7% per annum, and to capitalize $35,000 for
improvements to the containers. The first payment on the Note was due October 3,
2018. The Parties also agreed to terminate the current lease effective March 31,
2018 and replace it with a new lease beginning July 1, 2018 with lease payments
of $5,000.00 per month beginning November 1, 2018. This replacement lease was
terminated on March 31, 2019 as D9 was unable to successfully complete a harvest
due to the ongoing power problems and a shift in the focus of their company to
extraction only. During the three-month period ended June 30, 2019, the Company
decided to sell the containers to generate capital to finance its own change in
focus to extraction. On August 20, 2019, the Company completed the sale of the
containers for proceeds of $100,000.
Effective August 18, 2018, the Company entered into an Exchange Agreement (the
"Exchange Agreement") with Alchemy Capital LLC ("Alchemy") pursuant to which
Alchemy, the sole shareholder of One Lab Co ("Labco"), agreed to exchange 100%
of the capital stock of Labco for 88,000,000 restricted shares of the Company
(the "MYHI Shares"). The Exchange Agreement called for the issuance of
20,000,000 MYHI Shares at Closing and 68,000,000 MYHI Shares after certain
equipment under order by Labco at the time (the "Equipment") was delivered
pursuant to a Lease Agreement (the "Lease") between Labco and Workforce Labor
Solutions, LLC ("the Lessee") . The Equipment consists of a state-of-the-art
intermodal extraction laboratory, engineered and designed specifically for
processing cannabis. The Lease calls for monthly payments of $25,000 and has a
five year term commencing November 1, 2018 with an option to renew for a second
five year term. As of December 31,2019, the Lessee was eleven months in arrears.
The Company has been in constant discussion with the Lessee regarding this
delinquency and hopes to resolve the matter before the end of the current
quarter.
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RESULTS OF OPERATIONS
Working Capital
As of December 31, 2019
Total Current Assets $ 106,513
Total Current Liabilities (284,075 )
Working Capital (Deficit) $ (177,562 )
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