The following discussion and analysis of the results of operations and financial
condition of the Company for the quarters ended March 31, 2022 and 2021, should
be read in conjunction with the other sections of this Quarterly Report,
including the Financial Statements and notes thereto of the Company included in
this Quarterly Report. The various sections of this discussion contain
forward-looking statements, all of which are based on our current expectations
and could be affected by the uncertainties and risk factors described throughout
this Quarterly Report as well as other matters over which we have no control.
See "Cautionary Note Regarding Forward-Looking Statements." Our actual results
may differ materially. The Company does not undertake any obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of this Quarterly Report. Operating results for the nine months ended
March 31, 2021, are not necessarily indicative of results that may occur in
future interim periods or for the full fiscal year.
Organizational History of the Company and Overview
ZHRH Corporation ("we," "our," "us" or the "Company") was originally
incorporated in the State of Nevada on July 13, 2011, as Ketdarina Corp. On May
7, 2021, the Company amended its Articles of Incorporation in Nevada to change
its corporate name to ZHRH Corporation, our current name, which became effective
on July 16, 2021.
Until November 19, 2014, the Company was in the business of wholesale of bedding
products to industrial, commercial and institutional retailers, and other
professional business users, or to other wholesalers and related subordinated
services. On November 19, 2014, the Company's then principal shareholders sold
their shares of the Company to Western Highlands Minerals, Ltd., a Vietnamese
corporation ("WHM"), resigned from all positions with the Company and appointed
WHM's designees as new management; WHM then took over the inactive bedding
business from the Company, and cancelled all previous debt which was owed to
them at that time.
In or about 2015, the Company phased out of its prior business and became a
"shell company," as such term is defined in Rule 12b-2 under the Exchange Act of
1934, as amended (the "Exchange Act"). The Company is currently a shell company.
On December 11, 2020, as a result of a receivership in the Eighth Judicial
District Court in Clark County, Nevada, Case Number: A-20-816621-B, the
plaintiff creditor in the case, Custodian Ventures LLC (the "Custodian")
received an order from the Clark County Court appointing David Lazar as the
receiver of the Company. On the same date, David Lazar was appointed as the
Company's Chief Executive Officer, President, Secretary, Chief Financial
Officer, Chief Executive Officer and Chairman of the Board of Directors. On
December 29, 2020, the Company's Charter was reinstated in the State of Nevada.
The receivership was terminated by the Eighth Judicial District Court in Clark
County, Nevada, under Case Number: A-20-816621-B on May 10, 2021 and on the same
date, the court also discharged Mr. Lazar as the receiver.
On March 9, 2021, pursuant to the approval of the board of directors of the
Company dated March 9, 2021, the Company issued 71,260,000 shares of common
stock, as repayment of debt owed to the Custodian, in the amount of $18,355.
On April 6, 2021, the Custodian entered into a Common Stock Purchase Agreement
(the "SPA") with Calgary Thunder Bay Limited ("Calgary"), pursuant to which
Calgary purchased 71,260,000 shares of common stock of the Company from the
Custodian, representing 95.01% of the total issued and outstanding shares of the
Company's common stock. The sale was consummated on April 13, 2021. As a result
of the sale, there was a change of control of the Company.
-4-
Table of Contents
On that same date, Mr. David Lazar, who was the Company's then sole officer and
director, submitted his resignation from all positions with the Company and
appointed Brett Lovegrove as the sole director and officer of the Company.
On May 7, 2021, by consent of the Company's sole director and Calgary, as
majority shareholder, the Company amended its corporate name to ZHRH Corporation
and the name change became effective on July 16, 2021.
On July 16, 2021, the Company changed its trading symbol from KTDR to ZHEC.
On October 4, 2021, the Board of Directors of the Company increased the size of
the Board by two persons and appointed each James Purnell Bond and Aymar de
Lencquesaing as directors of the Company effective as of October 4, 2021. On
October 4, 2021, the Board of the Company adopted Amended and Restated Bylaws.
On October 25, 2021, we entered into an amendment with Blue Oak Advisory Limited
("Blue Oak") and Zhonguan Ruiheng Environmental Technology Company Limited
("ZHRH China") (the "Amendment"), which was an amendment to an original
agreement between ZHRH China and Blue Oak dated January 6, 2021, (the "Original
Agreement"). The Company was not a party to the Original Agreement between ZHRH
China and Blue Oak. The Amendment is effective as of October 25, 2021, and sets
forth that Mr. Jean-Michel Doublet is to be appointed as the Company's Chief
Executive Officer and Mr. Lionel Therond is to be appointed as the Company's
Chief Financial Officer. The Amendment was entered into with the intent to set
forth renumeration to be received by Mr. Jean-Michel Doublet and Mr. Lionel
Therond in connection with any proposed business combination in which the
Company acquires ZHRH China. The Company has not entered into any agreements,
letters of intent or any other oral or written agreements in connection with any
proposed business combination in which the Company acquires ZHRH China, other
than the Amendment. There can be no assurance that the Company will enter into
any letters of intent or any other oral or written agreements in connection with
any proposed business combination in which the Company acquires ZHRH China, or
that any such business combination can occur at all (the "Proposed Business
Combination").
Pursuant to the Amendment, each Mr. Jean-Michel Doublet and Mr. Lionel Therond
are to provide 25% of their working hours each week to their duties to the
Company in exchange for the following: (i) Blue Oak is to receive an increased
success fee under the Original Agreement upon consummation of the Proposed
Business Combination, (ii) Mr. Jean-Michel Doublet and Mr. Lionel Therond are
each to receive 0.5% of the Company's common stock on a fully diluted basis upon
the occurrence of the Proposed Business Combination to vest 50% upon completion
of the Proposed Business Combination and 50% 6 months thereafter and (iii) Mr.
Jean-Michel Doublet and Mr. Lionel Therond are each to receive additional shares
constituting 1.5% of the Company's then fully diluted common stock to vest upon
the Company's uplisting to the OTCQB or Nasdaq.
On October 25, 2021, Mr. Brett Lovegrove, who has served as the sole director
and officer of the Company since April 13, 2021, resigned from all officer
positions with the Company effective on the same date.
On October 25, 2021, the Board of Directors of the Company took the following
actions: (i) appointed Mr. Jean-Michel Doublet as the Company's Chief Executive
Officer, (ii) appointed Mr. Lionel Therond as the Company's Chief Financial
Officer and (iii) appointed Mr. Brett Lovegrove as the Chairman of the Board,
all effective on the same date.
Mr. Doublet is a beneficial owner of 60% of Blue Oak and is the Chief Executive
Officer of Blue Oak. Mr. Lionel Therond is a beneficial owner of 40% of Blue Oak
and is a director at Blue Oak.
Blue Oak is set to receive remuneration from the Company in connection with the
Proposed Business Combination pursuant to the Original Agreement.
-5-
Table of Contents
No Current Operations and Shell Status
In or about 2015, the Company phased out of its prior business and became a is a
"shell company," as such term is defined in Rule 12b-2 under the Exchange Act of
1934, as amended (the "Exchange Act"). The Company is currently a shell company.
The Company has no operations at this time, and currently does not have any
principal products or services, customers or intellectual property. As the
Company has no current operations, it also currently is not subject to any
competitive business conditions. Further, the Company is not subject to any
government approvals at this time, other than those applicable to it as a "shell
company," as such term is defined in Rule 12b-2 under the Exchange Act.
Prior Receivership
On December 11, 2020, as a result of a receivership in the Eighth Judicial
District Court in Clark County, Nevada, Case Number: A-20-816621-B, the
plaintiff creditor in the case, Custodian Ventures LLC (the "Custodian")
received an order from the Clark County Court appointing David Lazar as the
receiver of the Company. On the same date, David Lazar was appointed as the
Company's Chief Executive Officer, President, Secretary, Chief Financial
Officer, Chief Executive Officer and Chairman of the Board of Directors. On
December 29, 2020, the Company's Charter was reinstated in the State of Nevada.
The receivership was terminated by the Eighth Judicial District Court in Clark
County, Nevada, under Case Number: A-20-816621-B on May 10, 2021 and on the same
date, the court also discharged Mr. Lazar as the receiver.
Recent Developments
Note Purchase Agreement dated March 7, 2022 and Related Agreements
On March 7, 2022, the Company entered into a Note Purchase Agreement (the "Note
Purchase Agreement") with James Purnell Bond, a member of the Company's Board of
Directors. Pursuant to the Note Purchase Agreement, the Company agreed to sell
and issue to Mr. Bond, a convertible promissory note in the principal amount of
$30,000 (the "Note"). The Note was issued to Mr. Bond on March 7, 2022. The Note
carries an interest rate of 10% per annum and matures on December 31, 2022 (the
"Maturity Date"). The Note converts automatically on the first business day
following the completion of a transaction between the Company and Zhonghuan
Ruiheng Environmental Technology Co., Ltd. ("ZHRH China") pursuant to which the
Company shall obtain a controlling interest in ZHRH China, shall have been
completed and the Company shall have obtained such controlling interest, as
determined by the Company (the "ZHRH Transaction"), into a number of
unregistered and restricted fully paid and nonassessable shares of shares of the
Company's common stock equal to (i) the indebtedness under the Note as of such
conversion date divided by (ii) the value per share of common stock as
determined based on a valuation of the Company of $30,000,000 and the number of
issued and outstanding shares of common stock as of such conversion date (the
"Conversion Shares"). In the event that the ZHRH Transaction is not completed
prior to the Maturity Date, none of the indebtedness under the Note will convert
or be convertible into shares of the Company's common stock and instead the
indebtedness under the Note will come due and payable in full. There can be no
assurance that the Company will enter into any letters of intent or any other
oral or written agreements in connection with the ZHRH Transaction, or that the
ZHRH Transaction can occur at all. In connection with the Note Purchase
Agreement and the Note, on March 7, 2022, the Company entered into an Escrow
Agreement (the "Escrow Agreement") with Mr. Bond, and Anthony L.G., PLLC as the
escrow agent (the "Escrow Agent"). Pursuant to the Escrow Agreement, Mr. Bond
agreed to deliver the purchase price for the Note to the escrow account to be
held by the Escrow Agent, until such time as the Escrow Agent receives an Escrow
Release Notice signed by the Company and Mr. Bond instructing the release of the
escrowed funds to the Company. The Escrow Agent's fee under the Escrow Agreement
is $2,500 to be paid by the Company.
-6-
Table of Contents
Securities Purchase Agreement dated January 24, 2022 and Related Agreements
On January 24, 2022, the Company entered into a Securities Purchase Agreement
(the "Securities Purchase Agreement") with Badon Partners SAS and Calgary
Thunder Bay Limited. Calgary Thunder Bay Limited is the Company's majority
shareholder, holding 71,260,000 shares of the Company's common stock at this
time which constitutes 95.01% of the Company's issued and outstanding common
stock. Xuejiao Fang is the 100% owner of Calgary Thunder Bay Limited and has the
power to vote and dispose of the shares held by Calgary Thunder Bay Limited.
Badon Partners SAS is 100% owned and controlled by Aymar de Lencquesaing a
member of the Company's Board of Directors. Pursuant to the Securities Purchase
Agreement, the Company agreed to sell and issue Badon Partners SAS a convertible
promissory note in the principal amount of $200,000 (the "Note") and to sell and
issue to Badon Partners SAS and a number of shares of the Company's common stock
equal to (i) $200,000 (the "Shares Purchase Price") divided by (ii) the value
per share of common stock as determined based on a valuation of the Company of
$30,000,000 and the number of issued and outstanding shares of common stock as
of the "Shares Closing," as such term is defined in the Securities Purchase
Agreement (the "Shares"). The term "Share Closing" is defined in the Securities
Purchase Agreement as the first business day after the completion of the ZHRH
Transaction. There can be no assurance that the Company will enter into any
letters of intent or any other oral or written agreements in connection with the
ZHRH Transaction, or that the ZHRH Transaction can occur at all. Pursuant to the
Securities Purchase Agreement, Calgary Thunder Bay Limited agreed that in the
event that the ZHRH Transaction does not occur, and the Note becomes due and
payable, Calgary Thunder Bay Limited will transfer 50% of the shares it holds in
the Company to Badon Partners SAS in full satisfaction of the indebtedness under
the Note. Calgary Thunder Bay Limited also agreed in the Securities Purchase
Agreement to not directly or indirectly sell or offer to sell the shares of the
Company's common stock held by Calgary Thunder Bay Limited until the earlier of,
full repayment of the Note by the Company or full conversion of the Note. The
Note was issued to Badon Partners SAS on January 24, 2022. The Note carries an
interest rate of 10% per annum and matures on December 31, 2022 (the "Maturity
Date"). The Note converts automatically on the first business day following the
completion of the ZHRH Transaction, into a number of unregistered and restricted
fully paid and nonassessable shares of shares of the Company's common stock
equal to (i) the indebtedness under the Note as of such conversion date divided
by (ii) the value per share of common stock as determined based on a valuation
of the Company of $30,000,000 and the number of issued and outstanding shares of
common stock as of such date conversion date (the "Conversion Shares"). In the
event that the ZHRH Transaction is not completed prior to the Maturity Date,
none of the indebtedness under the Note will convert or be convertible into
shares of the Company's common stock and Calgary Thunder Bay Limited will
transfer to Badon Partners SAS 50% of the shares of the Company's common stock
held by Calgary Thunder Bay limited in accordance with the terms of the Note and
the terms of the Securities Purchase Agreement. In connection with the
Securities Purchase Agreement and the Note, on January 24, 2022, the Company
entered into an Escrow Agreement (the "Escrow Agreement") with Badon Partners
SAS and Anthony L.G., PLLC as the escrow agent (the "Escrow Agent"). Pursuant to
the Escrow Agreement, Badon Partners SAS agreed to deliver the purchase price
for the Note to the escrow account to be held by the Escrow Agent, until such
time as the Escrow Agent receives an Escrow Release Notice signed by the Company
and Badon Partners SAS instructing the release of the escrowed funds to the
Company. The Escrow Agent's fee under the Escrow Agreement is $2,500 to be paid
by the Company.
New Director Appointments
On March 9, 2022, the Board of Directors (the "Board") of the Company increased
the size of the Board by three (3) persons and appointed each Jean-Michel
Doublet, Lionel Therond, and Cindy Zhongye Li, as directors of the Company
effective as of March 9, 2022. Mr. Therond is currently the Company's Chief
Financial Officer, and Mr. Doublet is currently the Company's Chief Executive
Officer.
-7-
Table of Contents
Entry into Director Agreements
On March 9, 2022, the Board approved the entry of the following directors into
director agreements with the Company:
? Aymar de Lencquesaing
? Brett Lovegrove
? Cindy Li
? James P. Bond
? Jean-Michel Doublet
? Lionel Therond
as further described in detail below. Brett Lovegrove is currently the Chairman
of the Board. Mr. Therond is currently the Company's Chief Financial Officer,
and Mr. Doublet is currently the Company's Chief Executive Officer.
Director Agreement with Aymar de Lencquesaing
On March 9, 2022, the Company entered into a Director Agreement with Aymar de
Lencquesaing (the "ADL Director Agreement"). Pursuant to the ADL Director
Agreement, Mr. de Lencquesaing agreed to perform the duties of a director in
accordance with the terms of the ADL Director Agreement with a time commitment
of 1-2 days per month, with 4 Board meetings per year. The ADL Director
Agreement's term starts on March 9, 2022 and terminates upon the earlier of the
following to occur: (i) removal of Mr. de Lencquesaing as a director of the
Company upon proper shareholder action in accordance with the Company's
articles, bylaws and applicable law (ii) Mr. de Lencquesaing's resignation as a
director of the Company (iii) Mr. de Lencquesaing death or (iv) failure of the
shareholders of the Company to re-elect Mr. de Lencquesaing at the Company's
annual shareholder meeting or any special meeting of the shareholders called for
the purpose of electing directors.
Pursuant to the ADL Director Agreement, the Company agreed to indemnify Mr. de
Lencquesaing, if he becomes a party, or is threatened to become a party, to a
proceeding (other than an action by or in the right of the Company) by reason of
Mr. de Lencquesaing's status as a director in accordance with the terms and
conditions set forth in the ADL Director Agreement. Pursuant to the ADL Director
Agreement, the Company agreed to obtain and maintain director and officer
insurance for the Company, with Mr. de Lencquesaing being named as an insured
party under such insurance, following the completion of a transaction between
the Company and Zhonghuan Ruiheng Environmental Technology Co., Ltd. ("ZHRH
China") pursuant to which the Company shall obtain a controlling interest in
ZHRH China, shall have been completed and the Company shall have obtained such
controlling interest, as determined by the Company (the "ZHRH Transaction").
There can be no assurance that the Company will enter into any letters of intent
or any other oral or written agreements in connection with the ZHRH Transaction,
or that the ZHRH Transaction can occur at all.
Pursuant to the ADL Director Agreement, the Company agreed to compensate Mr. de
Lencquesaing for such services $80,000 per each full year that he serves as a
Director of the Company, to be paid as follows:
? The deferred cash grant will be made on the closing of the ZHRH Transaction and
will be based on the length of Mr. de Lencquesaing service as a director of the
Company as of that date at the time of closing (the "First Grant"), however the
cash payment of the First Grant will not occur until the one year anniversary
of the date of the First Grant.
? Following the closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Mr. de Lencquesaing continues to serve as a director of
the Company, the Company will grant Mr. de Lencquesaing $20,000 (each a
"Quarterly Grant") with the payment in cash of same to be made on the one year
anniversary of each Quarterly Grant.
-8-
Table of Contents
Director Agreement with Brett Lovegrove
On March 9, 2022, the Company entered into a Director Agreement with Brett
Lovegrove (the "BL Director Agreement"). Pursuant to the BL Director Agreement,
Mr. Lovegrove agreed to perform the duties of a director in accordance with the
terms of the BL Director Agreement with a time commitment of 8-10 days per
month, with 4 Board meetings per year. The BL Director Agreement's term starts
on March 9, 2022 and terminates upon the earlier of the following to occur: (i)
removal of Mr. Lovegrove as a director of the Company upon proper shareholder
action in accordance with the Company's articles, bylaws and applicable law (ii)
Mr. Lovegrove's resignation as a director of the Company (iii) Mr. Lovegrove's
death or (iv) failure of the shareholders of the Company to re-elect Mr.
Lovegrove at the Company's annual shareholder meeting or any special meeting of
the shareholders called for the purpose of electing directors.
Pursuant to the BL Director Agreement, the Company agreed to indemnify Mr.
Lovegrove, if he becomes a party, or is threatened to become a party, to a
proceeding (other than an action by or in the right of the Company) by reason of
Mr. Lovegrove's status as a director in accordance with the terms and conditions
set forth in the BL Director Agreement. Pursuant to the BL Director Agreement,
the Company agreed to obtain and maintain director and officer insurance for the
Company following the completion of the ZHRH Transaction and Mr. Lovegrove will
be named as an insured party under such insurance. There can be no assurance
that the Company will enter into any letters of intent or any other oral or
written agreements in connection with the ZHRH Transaction, or that the ZHRH
Transaction can occur at all.
Pursuant to the BL Director Agreement, the Company agreed to compensate Mr.
Lovegrove for such services by issuing him shares of the Company's common stock
as follows:
? The intent is that for each full year that he serves as a director of the
Company, he'll receive a number of shares of the Company's common stock having
a total value of $80,000.
? The first grant of shares of common stock will be made on the closing of the
ZHRH Transaction and will be based on the length of Mr. Lovegrove's service as
a director of the Company as of that date at the time of closing (the "First
Grant").The number of shares of common stock to be issued in the First Grant
shall be based on a value of each share of common stock as determined based on
the number of shares of common stock issued to the shareholders of ZHRH China
in the ZHRH Transaction assuming a pre-money valuation of ZHRH China of USD$30
million. In the event that Mr. Lovegrove ceases to serve as a director of the
Company for any reason prior to the vesting of the First Grant shares, such
First Grant shares will be automatically forfeited.
? Following the closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Mr. Lovegrove continues to serve as a director of the
Company, the Company will grant Mr. Lovegrove a restricted stock award of
shares of the Company's common stock having a fair market value (as determined
by the Board or a committee thereof, but in any case without the involvement of
Mr. Lovegrove) as of the last day of each such calendar quarter of $20,000
(each, a "Quarterly Grant"). Each Quarterly Grant shall vest, if at all, on the
one-year anniversary of the applicable grant date, and, once vested, shall be
subject to no additional contractual lock-in period. In the event that Mr.
Lovegrove ceases to serve as a director of the Company for any reason, any
Quarterly Grant which has not vested at such time will be automatically
forfeited.
-9-
Table of Contents
Director Agreement with Cindy Li
On March 9, 2022, the Company entered into a Director Agreement with Cindy Li
(the "CL Director Agreement"). Pursuant to the CL Director Agreement, Ms. Li
agreed to perform the duties of a director in accordance with the terms of the
CL Director Agreement with a time commitment of 1-2 days per month, with 4 Board
meetings per year. The CL Director Agreement's term starts on March 9, 2022 and
terminates upon the earlier of the following to occur: (i) removal of Ms. Li as
a director of the Company upon proper shareholder action in accordance with the
Company's articles, bylaws and applicable law (ii) Ms. Li's resignation as a
director of the Company (iii) Ms. Li's death or (iv) failure of the shareholders
of the Company to re-elect Ms. Li at the Company's annual shareholder meeting or
any special meeting of the shareholders called for the purpose of electing
directors.
Pursuant to the CL Director Agreement, the Company agreed to indemnify Ms. Li,
if she becomes a party, or is threatened to become a party, to a proceeding
(other than an action by or in the right of the Company) by reason of Ms. Li's
status as a director in accordance with the terms and conditions set forth in
the CL Director Agreement. Pursuant to the CL Director Agreement, the Company
agreed to obtain and maintain director and officer insurance for the Company
following the completion of the ZHRH Transaction, and Ms. Li will be named as an
insured party under such insurance. There can be no assurance that the Company
will enter into any letters of intent or any other oral or written agreements in
connection with the ZHRH Transaction, or that the ZHRH Transaction can occur at
all.
Pursuant to the CL Director Agreement, the Company agreed to compensate Ms. Li
for such services by issuing her shares of the Company's common stock as
follows:
? The intent is that for each full year that she serves as a director of the
Company, she'll receive a number of shares of the Company's common stock having
a total value of $80,000.
? The first grant of shares of common stock will be made on the closing of the
ZHRH Transaction and will be based on the length of Ms. Li's service as a
director of the Company as of that date at the time of closing (the "First
Grant").The number of shares of common stock to be issued in the First Grant
shall be based on a value of each share of common stock as determined based on
the number of shares of common stock issued to the shareholders of ZHRH China
in the ZHRH Transaction assuming a pre-money valuation of ZHRH China of USD$30
million. In the event that Ms. Li ceases to serve as a director of the Company
for any reason prior to the vesting of the First Grant shares, such First Grant
shares will be automatically forfeited.
? Following the closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Ms. Li continues to serve as a director of the Company,
the Company will grant Ms. Li a restricted stock award of shares of the
Company's common stock having a fair market value (as determined by the Board
or a committee thereof, but in any case without the involvement of Ms. Li) as
of the last day of each such calendar quarter of $20,000 (each, a "Quarterly
Grant"). Each Quarterly Grant shall vest, if at all, on the one-year
anniversary of the applicable grant date, and, once vested, shall be subject to
no additional contractual lock-in period. In the event that Ms. Li ceases to
serve as a director of the Company for any reason, any Quarterly Grant which
has not vested at such time will be automatically forfeited.
-10-
Table of Contents
Director Agreement with James P. Bond
On March 9, 2022, the Company entered into a Director Agreement with James P.
Bond (the "JB Director Agreement"). Pursuant to the JB Director Agreement, Mr.
Bond agreed to perform the duties of a director in accordance with the terms of
the JB Director Agreement with a time commitment of 1-2 days per month, with 4
Board meetings per year. The JB Director Agreement's term starts on March 9,
2022 and terminates upon the earlier of the following to occur: (i) removal of
Mr. Bond as a director of the Company upon proper shareholder action in
accordance with the Company's articles, bylaws and applicable law (ii) Mr.
Bond's resignation as a director of the Company (iii) Mr. Bond's death or (iv)
failure of the shareholders of the Company to re-elect Mr. Bond at the Company's
annual shareholder meeting or any special meeting of the shareholders called for
the purpose of electing directors.
Pursuant to the JB Director Agreement, the Company agreed to indemnify Mr. Bond,
if he becomes a party, or is threatened to become a party, to a proceeding
(other than an action by or in the right of the Company) by reason of Mr. Bond's
status as a director in accordance with the terms and conditions set forth in
the JB Director Agreement. Pursuant to the JB Director Agreement, the Company
agreed to obtain and maintain director and officer insurance for the Company
following the completion of the ZHRH Transaction, and Mr. Bond will be named as
an insured party under such insurance. There can be no assurance that the
Company will enter into any letters of intent or any other oral or written
agreements in connection with the ZHRH Transaction, or that the ZHRH Transaction
can occur at all.
Pursuant to the JB Director Agreement, the Company agreed to compensate Mr. Bond
for such services by issuing him shares of the Company's common stock as
follows:
? The intent is that for each full year that he serves as a director of the
Company, he'll receive a number of shares of the Company's common stock having
a total value of $80,000.
? The first grant of shares of common stock will be made on the Closing of the
ZHRH Transaction and will be based on the length of Mr. Bond's service as a
director of the Company as of that date at the time of Closing (the "First
Grant").The number of shares of common stock to be issued in the First Grant
shall be based on a value of each share of common stock as determined based on
the number of shares of common stock issued to the shareholders of ZHRH China
in the ZHRH Transaction assuming a pre-money valuation of ZHRH China of USD$30
million. In the event that Mr. Bond ceases to serve as a director of the
Company for any reason prior to the vesting of the First Grant shares, such
First Grant shares will be automatically forfeited.
? Following the Closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Mr. Bond continues to serve as a director of the
Company, the Company will grant Mr. Bond a restricted stock award of shares of
the Company's common stock having a fair market value (as determined by the
Board or a committee thereof, but in any case without the involvement of Mr.
Bond) as of the last day of each such calendar quarter of $20,000 (each, a
"Quarterly Grant"). Each Quarterly Grant shall vest, if at all, on the one-year
anniversary of the applicable grant date, and, once vested, shall be subject to
no additional contractual lock-in period. In the event that Mr. Bond ceases to
serve as a director of the Company for any reason, any Quarterly Grant which
has not vested at such time will be automatically forfeited.
-11-
Table of Contents
Director Agreement with Jean-Michel Doublet
On March 9, 2022, the Company entered into a Director Agreement with Jean-Michel
Doublet (the "JD Director Agreement"). Pursuant to the JD Director Agreement,
Mr. Doublet agreed to perform the duties of a director in accordance with the
terms of the JD Director Agreement with a time commitment of 1-2 days per month,
with 4 Board meetings per year. The JD Director Agreement's term starts on March
9, 2022 and terminates upon the earlier of the following to occur: (i) removal
of Mr. Doublet as a director of the Company upon proper shareholder action in
accordance with the Company's articles, bylaws and applicable law (ii) Mr.
Doublet's resignation as a director of the Company (iii) Mr. Doublet's death or
(iv) failure of the shareholders of the Company to re-elect Mr. Doublet at the
Company's annual shareholder meeting or any special meeting of the shareholders
called for the purpose of electing directors.
Pursuant to the JD Director Agreement, the Company agreed to indemnify Mr.
Doublet, if he becomes a party, or is threatened to become a party, to a
proceeding (other than an action by or in the right of the Company) by reason of
Mr. Doublet's status as a director in accordance with the terms and conditions
set forth in the JD Director Agreement. Pursuant to the JD Director Agreement,
the Company agreed to obtain and maintain director and officer insurance for the
Company following the completion of the ZHRH Transaction, and Mr. Doublet will
be named as an insured party under such insurance. There can be no assurance
that the Company will enter into any letters of intent or any other oral or
written agreements in connection with the ZHRH Transaction, or that the ZHRH
Transaction can occur at all.
Pursuant to the JD Director Agreement, the Company agreed to compensate Mr.
Doublet for such services by issuing him shares of the Company's common stock as
follows:
? The intent is that for each full year that he serves as a Director of the
Company, he'll receive a number of shares of the Company's common stock having
a total value of $80,000.
? The first grant of shares of common stock will be made on the closing of the
ZHRH Transaction and will be based on the length of Mr. Doublet's service as a
director of the Company as of that date at the time of closing (the "First
Grant").The number of shares of common stock to be issued in the First Grant
shall be based on a value of each share of common stock as determined based on
the number of shares of common stock issued to the shareholders of ZHRH China
in the ZHRH Transaction assuming a pre-money valuation of ZHRH China of USD$30
million. In the event that Mr. Doublet ceases to serve as a director of the
Company for any reason prior to the vesting of the First Grant shares, such
First Grant shares will be automatically forfeited.
? Following the closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Mr. Doublet continues to serve as a director of the
Company, the Company will grant Mr. Doublet a restricted stock award of shares
of the Company's common stock having a fair market value (as determined by the
Board or a committee thereof, but in any case without the involvement of Mr.
Doublet) as of the last day of each such calendar quarter of $20,000 (each, a
"Quarterly Grant"). Each Quarterly Grant shall vest, if at all, on the one-year
anniversary of the applicable grant date, and, once vested, shall be subject to
no additional contractual lock-in period. In the event that Mr. Doublet ceases
to serve as a director of the Company for any reason, any Quarterly Grant which
has not vested at such time will be automatically forfeited.
-12-
Table of Contents
Director Agreement with Lionel Therond
On March 9, 2022, the Company entered into a Director Agreement with Lionel
Therond (the "LT Director Agreement"). Pursuant to the LT Director Agreement,
Mr. Therond agreed to perform the duties of a director in accordance with the
terms of the LT Director Agreement with a time commitment of 1-2 days per month,
with 4 Board meetings per year. The LT Director Agreement's term starts on March
9, 2022 and terminates upon the earlier of the following to occur: (i) removal
of Mr. Therond as a director of the Company upon proper shareholder action in
accordance with the Company's articles, bylaws and applicable law (ii) Mr.
Therond's resignation as a director of the Company (iii) Mr. Therond's death or
(iv) failure of the shareholders of the Company to re-elect Mr. Therond at the
Company's annual shareholder meeting or any special meeting of the shareholders
called for the purpose of electing directors.
Pursuant to the LT Director Agreement, the Company agreed to indemnify Mr.
Therond, if he becomes a party, or is threatened to become a party, to a
proceeding (other than an action by or in the right of the Company) by reason of
Mr. Therond's status as a director in accordance with the terms and conditions
set forth in the LT Director Agreement. Pursuant to the LT Director Agreement,
the Company agreed to obtain and maintain director and officer insurance for the
Company following the completion of the ZHRH Transaction, and Mr. Therond will
be named as an insured party under such insurance. There can be no assurance
that the Company will enter into any letters of intent or any other oral or
written agreements in connection with the ZHRH Transaction, or that the ZHRH
Transaction can occur at all.
Pursuant to the LT Director Agreement, the Company agreed to compensate Mr.
Therond for such services by issuing him shares of the Company's common stock as
follows:
? The intent is that for each full year that he serves as a Director of the
Company, he'll receive a number of shares of the Company's common stock having
a total value of $80,000.
? The first grant of shares of common stock will be made on the closing of the
ZHRH Transaction and will be based on the length of Mr. Therond's service as a
director of the Company as of that date at the time of closing (the "First
Grant").The number of shares of common stock to be issued in the First Grant
shall be based on a value of each share of common stock as determined based on
the number of shares of common stock issued to the shareholders of ZHRH China
in the ZHRH Transaction assuming a pre-money valuation of ZHRH China of USD$30
million. In the event that Mr. Therond ceases to serve as a director of the
Company for any reason prior to the vesting of the First Grant shares, such
First Grant shares will be automatically forfeited.
? Following the closing of the ZHRH Transaction, for each calendar quarter
thereafter during which Mr. Therond continues to serve as a director of the
Company, the Company will grant Mr. Therond a restricted stock award of shares
of the Company's common stock having a fair market value (as determined by the
Board or a committee thereof, but in any case without the involvement of Mr.
Therond) as of the last day of each such calendar quarter of $20,000 (each, a
"Quarterly Grant"). Each Quarterly Grant shall vest, if at all, on the one-year
anniversary of the applicable grant date, and, once vested, shall be subject to
no additional contractual lock-in period. In the event that Mr. Therond ceases
to serve as a director of the Company for any reason, any Quarterly Grant which
has not vested at such time will be automatically forfeited.
New Secretary Appointment
On April 11, 2022, the Company appointed Lionel Therond to serve as secretary of
the Company effective immediately.
Results of Operations for the three months period ended March 31, 2022 and for
the three months period ended March 31, 2021
For the three months period ended March 31, 2022 we generated $0 in revenues.
For the three months period ended March 31, 2022 we had $164,150 of operating
expenses consisting of $9,681 of legal fees and $52,000 of accounting and audit
fees, $1,401 of general and administrative expense compared to $58,003 of
consulting, legal and registration fees during the period the three months ended
March 31, 2021. The increase is attributable to legal and accounting fees
incurred in order to take the Company out of its prior receivership and for the
preparation of financials and SEC reports.
-13-
Table of Contents
Results of Operations for the nine months period ended March 31, 2022 and for
the nine months period ended March 31, 2021
For the nine months period ended March 31, 2022 we generated $0 in revenues.
For the nine months period ended March 31, 2022 we had $404,903 of operating
expenses consisting of $127,412 of legal fees, $111,000 of accounting and audit
fees and $145,209 of consulting fees, and $11,601 of general administrative
expense compared to $79,890 of legal, consulting and registration fees during
the period the nine months ended March 31, 2021. The increase is attributable to
legal and accounting fees incurred in order to take the Company out of its prior
receivership and for the preparation of financials and SEC reports.
At the present time, we have not made any arrangements to raise additional cash.
If we are unable to raise additional cash, we will either have to suspend
operations until we do raise the cash or cease operations entirely.
Going Concern
The Company was only recently released from receivership in Nevada. The
Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. At March 31, 2022, the Company
had a retained deficit of $651,139 and no working capital. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
Liquidity and Capital Resources
As of March 31, 2022, and June 30, 2021 we had $10,349 and $0 cash on hand,
respectively.
Off Balance Sheet Arrangements
None.
© Edgar Online, source Glimpses
ZHRH CORPORATION