UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One) | ||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For
the period ended | ||
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
None | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Act:
☐ Large Accelerated Filer | ☐ Accelerated Filer |
☒
|
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of May 3, 2022, there were outstanding shares of the registrant’s common stock.
PART I – FINANCIAL INFORMATION
Item 1. Interim Condensed and Consolidated Financial Statements
VETANOVA INC
Interim Condensed and Consolidated Financial Statements
For the Period Ended March 31, 2022
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VETANOVA INC
Condensed and Consolidated Balance Sheets
As of | ||||||||
March
31, 2022 (Unaudited) | Dec
31, 2021 (Audited) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Prepaid expenses | - | - | ||||||
Total Current Assets | ||||||||
Long Term Assets | ||||||||
Greenhouse | ||||||||
Land | ||||||||
Total Long Term Assets | ||||||||
TOTAL ASSETS | $ | $ | ||||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | $ | ||||||
Interest payable | ||||||||
Payment due to related parties for land and greenhouse acquisition | ||||||||
Bridge notes payable | ||||||||
Bridge notes payable to related party (net of discount) | ||||||||
Total Current Liabilities | ||||||||
TOTAL LIABILITIES | ||||||||
Commitments & Contingencies | ||||||||
Stockholders’ Equity | ||||||||
Common stock, $ par value, shares authorized, shares issued and outstanding at March 31, 2022 and December 31, 2021 | ||||||||
VitaNova
Solar Partners, LLC | ||||||||
Additional paid-in capital | ||||||||
Accumulated (deficit) | ( | ) | ( | ) | ||||
Total VETANOVA INC Equity | ||||||||
Non-controlling interest in a subsidiary | ||||||||
TOTAL STOCKHOLDERS’ EQUITY | ||||||||
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY | $ | $ |
The accompanying notes to condensed financial statements are an integral part of these statements.
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VETANOVA INC
Condensed and Consolidated Statements of Operations
(Unaudited)
Three Months ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenue | $ | - | ||||||
Direct cost of revenue | - | - | ||||||
Gross Margin | - | - | ||||||
Operating Expenses | ||||||||
General and administrative | ||||||||
Total Operating Expenses | ||||||||
Profit (Loss) from Operations | ( | ) | ( | ) | ||||
Other Income (Expense) | ||||||||
Interest expense | ( | ) | - | |||||
Total Other Income (Expense) | ( | ) | - | |||||
Minority Share of Loss | ||||||||
Net Profit (Loss) Before Taxes | ( | ) | ( | ) | ||||
Income Tax (Provision) Benefit | - | - | ||||||
Net Profit (Loss) | $ | ( | ) | $ | ( | ) | ||
(Loss) per Common Share - Basic | $ | ( | ) | $ | ( | ) | ||
(Loss) per Common Share - Dilutive | $ | ( | ) | $ | ( | ) | ||
Weighted Average Shares Outstanding: | ||||||||
Basic | ||||||||
Dilutive |
The accompanying notes to condensed financial statements are an integral part of these statements.
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VETANOVA INC
Condensed and Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Loss | $ | ( | ) | $ | ( | ) | ||
Adjustments to reconcile net (loss) to net cash used in operating activities: | ||||||||
Amortization of debt discount | - | |||||||
Net change in operating assets and liabilities: | ||||||||
Decrease (Increase) in related party receivable | - | |||||||
Decrease in prepaid expenses | - | |||||||
Increase (Decrease) in accounts payable and accrued expenses | ( | ) | ||||||
Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
Cash Flows from Investing Activities | - | - | ||||||
Cash Flows from Financing Activities | ||||||||
Sale of VETANOVA units | - | |||||||
Payments on Notes | ( | ) | - | |||||
Sale of convertible debt | - | |||||||
Cash Flows from Financing Activities | ||||||||
Net Change in Cash & Cash Equivalents | ( | ) | ||||||
Beginning Cash & Cash Equivalents | - | |||||||
Ending Cash & Cash Equivalents | $ | $ |
Non-cash transactions | ||||||||
For the three months ended March 31, | ||||||||
2022 | 2021 | |||||||
Non-controlling interest share of loss | $ | $ | - |
The accompanying notes to condensed financial statements are an integral part of these statements.
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VETANOVA INC
Condensed and Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
Common Stock | VetaNova Solar | Additional | Noncontrolling | |||||||||||||||||||||||||
Shares (000s) | Amount | Partners (VSP) | Paid In Capital | Accumulated (Deficit) | interest in VSP | Stockholders’ Equity | ||||||||||||||||||||||
Balances, December 31, 2020 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
2021 Activity: | ||||||||||||||||||||||||||||
Net (Loss) | - | $ | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
Private placement - VTNA | - | - | - | |||||||||||||||||||||||||
VetaNova Solar Partners | - | - | ( | ) | ||||||||||||||||||||||||
Return of stock issued for services | ( | ) | ( | ) | - | - | - | - | ( | ) | ||||||||||||||||||
Stock issued for services | - | - | - | |||||||||||||||||||||||||
Stock issued for asset purchases | - | - | - | |||||||||||||||||||||||||
Stock re-issued to VitaNova Partners | - | - | - | - | - | - | ||||||||||||||||||||||
Balances, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
March 31, 2022, Three Month Activity | ||||||||||||||||||||||||||||
Net (Loss) | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Balances, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ |
The accompanying notes to condensed financial statements are an integral part of these statements.
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VETANOVA INC
Notes to Condensed Financial Statements
For the Three Months Ended March 31, 2022 and March 31, 2021
Note 1 – Organization and Business
The Company is in its development stage and, depending on available financing, intends to build and operate solar-powered, carbon-negative greenhouses utilizing Artificial Intelligence assisted technologies to control the growing environment. The Company’s revenue is expected to come from growing farm-fresh fruits and vegetables to be sold to local markets.
The Company intends to produce farm-fresh fruits and vegetables for local delivery in historically productive agricultural regions with
high solar indexes and close to large urban areas of the United States, such as the Front Range of Colorado and Central Valley of California.
In 2021 the Company acquired four contiguous parcels of land from a related party totalling
● | Parcel
1 - The Company issued |
● | Parcel
2 - The Company issued |
● | Parcel
3 – The Company issued |
● | Parcel
4 - The Company issued |
On the land in southern Colorado the Company plans to:
● | retrofit
the existing greenhouse and warehouse so that the equipment in the greenhouse and warehouse will run on solar power as opposed to
utility provided electricity and propane. (Estimated cost: $ |
● | construct
an additional |
The Company has a direct or indirect interest in the three entities listed above.
The Company plans to finance all or a part of the cost of retrofitting/ constructing greenhouses and warehouses and building solar systems through future offering of the Company’s securities, proceeds from the exercise of the Company’s warrants or borrowings from private lenders.
As of March 31, 2022, the Company did not have any agreements with any person to purchase any of the Company’s securities or lend any funds to the Company.
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On August 4, 2021 the Company entered in an agreement with Mastronardi Produce Limited pursuant to which Mastronardi was granted the exclusive right to sell and market all US Grade No. 1 Products produced from all of the Company’s greenhouses in North America. For each sale, Mastronardi will be paid a low double digit percentage of the gross price received for the sale of the products grown at the Company’s greenhouses, plus all costs incurred in the sale and distribution of such products.
Mastronardi is a fourth-generation family owned company and the leading marketer and distributor in North America of tomatoes, peppers, cucumbers, berries and leafy greens. Mastronardi has an extensive and long-tenured retail network and is nationally recognized under the primary SUNSET® brand and other brands, including Campari®, Angel Sweet®, Flavor Bombs®, Sugar Bombs®, and WOW™ berries.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The unaudited interim consolidated financial statements, prepared using the accrual basis of accounting, included herein, have been presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
In the opinion of management, these statements reflect all adjustments, all of which are of a normal recurring nature, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2021, and notes thereto included in the Company’s annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ materially from those estimates.
Consolidation
In
January 2021, the Company formed VetaNova Solar Partners, LLC (“VSP”). VSP is authorized to issue common and preferred membership units. As of March 31, 2022,
VSP had
Cash and cash equivalents
For purposes of reporting cash flows, the Company considers cash and cash equivalents to include highly liquid investments with original maturities of 90 days or less. Those are readily convertible into cash and not subject to significant risk from fluctuations in interest rates. The recorded amounts for cash equivalents approximate fair value due to the short-term nature of these financial instruments.
Greenhouse and associated land
See Note 1 for information concerning land acquired by the Company.
The land and structures were acquired from a related
party entity and therefore, the land and structure value was transferred at historical cost. Based on consideration paid, the Company
recognized a loss of $
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After
completing the above acquisitions, the Company commissioned an appraisal to be performed. This appraisal gave an “as-is”
estimate of value at $
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company has determined the deferred tax assets and liabilities on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of its position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Basic loss per share is computed by dividing the loss attributed to the Company’s common shareholders for the period by the weighted average number of common shares outstanding for the period. Diluted loss per share is computed by dividing the net income for the period by the weighted average number of common and potential common shares outstanding during the period.
As of March 31, 2022 and December 31, 2021, the Company’s outstanding warrants were excluded from the fully diluted weighted average number of shares outstanding since the warrants would be anti-dilutive.
Accounting for Equity Raise
The Company recently sold common stock and warrants. Accounting Standards Codification (“ASC”) requires the Company to first analyze the warrants to determine if the warrants are a liability or an equity instrument.
The warrants in the offering qualify as equity. The warrants do not obligate the Company to repurchase its shares by transferring an asset. The warrants do not obligate the Company to settle the warrants by issuing a variable number of shares if the monetary value of the obligation is based on a predetermined fixed amount, variation in something other than the issuers stock price, or variations inversely related to the issuers stock price. Therefore, since there is no obligation on behalf of the Company, the warrants have been classified as equity.
The next step is to determine the fair value of the equity unit. The Company’s offering does not meet any of the four areas of ASC 820-10-30-3A requiring a fair value calculation; therefore, fair value equals the actual transaction value. The next step is to compute the fair value order to determine the allocation of value between the common shares and the warrants issued (ASC 815). The Company performed this calculation which gave a value of 50% to the warrant and 50% to the common shares.
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The following variables were used to calculate the warrant value:
● | Annualized
volatility of | |
● | Expected
life in years of | |
● | Discount
rate – bond equivalent (US Treasury |
The common share value was computed by evaluating each equity raise closing date to the Company’s market stock price to the price issue, which was $ /share.
Accounting for debt to equity conversions
During
the quarters ending December 31, 2021 and March 31, 2022, the Company sold bridge notes which mature on
ASU 2020-06 simplifies the accounting for convertible instruments. Therefore, the embedded conversion features no longer are separated from the debt with conversion features that are not required to be accounted for as derivatives under ASU 2020-06 or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and therefore will be accounted for as a single equity instrument measured at its historical cost.
The Company has elected to adopt this standard during the year ended December 31, 2021.
Note 3 – Payment due to related parties for land and structure purchases
On
August 17, 2021, the Company acquired from a related party approximately
The
issuance of the
On
November 8, 2021, the Company acquired from a related party approximately
The
issuance of the
During
the quarter ended December 31, 2021, the Company has paid $
Note 4 – Notes Payable
The following is a detail of the bridge notes payable:
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||
Note | Principle Balance | Accrued Interest | Discount | Principle Balance | Interest rate | Security | ||||||||||||||||||
Bridge Notes | $ | $ | $ | $ | % | Deeds of trust on | ||||||||||||||||||
Bridge Note - related party | $ | $ | $ | $ | % | real estate and improvements | ||||||||||||||||||
Totals | $ | $ | $ | $ | ||||||||||||||||||||
Less: note discounts | $ | $ | ||||||||||||||||||||||
Total current notes due | $ | $ |
During
the quarters ending March 31, 2022 and December 31, 2021, the Company sold bridge notes that mature on
10 |
Note 5 – Equity Transactions
During the three months ended March 31, 2022, there were no equity transactions.
During the twelve months ended December 31, 2021 there were the following equity transactions:
● | shares to outside investors; | |
● | stock issued for services; | |
● | stock issued for land and structure purchases, and | |
● | shares returned from a prior issuance to a consultant for services rendered. |
Note 6 – Related Party Transactions
As
of September 30, 2021 VitaNova Partners owed the Company $
On
July 15, 2020, the Company and VitaNova Partners entered into a consulting agreement whereby VitaNova would provide management services
to the Company. VitaNova is paid $
On
August 17, 2021, the Company acquired from a related party approximately
On
November 8, 2021, the Company acquired from a related party approximately
During the twelve months ended December 31, 2021 there were the following equity transactions involving related parties:
● | VSP common units were issued to John McKowen, and | |
● | shares of the Company’s common stock issued for land and greenhouse/warehouse purchase |
During the three months ended March 31, 2022 there were the following equity transactions involving related parties:
● | VitaNova
Partners invested $ |
Note 7 - Subsequent Events
In April of 2022, holders of the Company’s promissory notes sold in December 2021 and March 2022 (the “Old Notes”) exchanged their Old Notes for New Notes.
As part of the Note exchange:
1. | The
unpaid principal and interest of $ | |
2. | With
the New Notes, the holders of the Old Notes received Series III and Series IV Warrants. For each $ | |
3. | The
New Notes are convertible into shares of the Company’s common stock at a conversion price of $ | |
4. | The
New Notes bear interest at | |
5. | The Company will file a Registration Statement with the Securities and Exchange Commission to register for public sale: |
a. | the Series III and Series IV Warrants, | |
b. | the shares of common stock issuable upon the exercise of the Series III and Series IV Warrants. |
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Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
Unless the context requires otherwise, references in this Form 10-Q to “we,” “our,” “us” and similar terms refer to VETANOVA INC.
Note about Forward-Looking Statements
This Form 10-Q contains forward-looking statements, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. These statements relate to expectations concerning matters that are not historical facts. These forward-looking statements reflect our current views and expectations based largely upon the information currently available to us and are subject to inherent risks and uncertainties. Although we believe our expectations are based on reasonable assumptions, they are not guarantees of future performance and there are a number of important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including the risks described in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020. By making these forward-looking statements, we do not undertake to update them in any manner except as may be required by our disclosure obligations in filings we make with the Securities and Exchange Commission under the Federal securities laws. Our actual results may differ materially from our forward-looking statements.
Overview
The Company is in its development stage and intends to build and operate solar-powered, carbon-negative greenhouses utilizing Artificial Intelligence assisted technologies to control the growing environment if the Company can obtain financing. The Company’s revenue is expected to come from growing farm-fresh fruits and vegetables to be sold to local markets.
The Company intends to produce farm-fresh fruits and vegetables for local delivery in historically productive agricultural regions with
high solar indexes and close to large urban areas of the United States, such as the Front Range of Colorado and Central Valley of California.
In 2021 the Company acquired four contiguous parcels of land from a related party totalling 157 acres in Pueblo County Colorado.
● | Parcel 1 - The Company issued 95,000,000 shares of its common stock and agreed to pay $2,368,421 by December 31, 2022, to GrowCo Partners 1, LLC for approximately 39 acres containing one fully completed 90,000 sq. ft. greenhouse, and one adjoining fully completed 15,000 sq. ft. warehouse. on the land. The shares were issued in book entry form on November 19, 2021. The cash amount will bear interest at 6% per year from August 17, 2021, until paid. The completed greenhouse and warehouse have not been in operation since 2020. |
● | Parcel 2 - The Company issued 5,000,000 shares of its common stock and agreed to pay $131, 579 by December 31, 2022, to GrowCo Partners 2, LLC for 39 acres of vacant land. The shares were issued in book entry form on November 29, 2021. The cash amount will bear interest at 6% per year from August 17, 2021, until paid. |
● | Parcel 3 – The Company issued 5,000,000 shares of its common stock and agreed to pay $131, 579 to GrowCo, Inc. by December 31, 2022, for 39 acres of vacant land. The shares were issued in book entry form on November 29, 2021. The cash amount will bear interest at 6% per year from August 17, 2021, until paid. |
● | Parcel 4 - The Company issued 15,000,000 shares of its common stock and agreed to pay $394,737 by December 31, 2022, to GrowCo Partners 2, LLC for 39 acres of land with a partially completed greenhouse structure. The shares were issued in book entry form on November 29, 2021. The cash amount will bear interest at 6% per year from August 17, 2021, until paid. |
On the land in southern Colorado the Company plans to:
● | retrofit the existing greenhouse and warehouse so that the equipment in the greenhouse and warehouse will run on solar power as opposed to utility provided electricity and propane. (Estimated cost: $9,500,000. Estimated time to complete: eight months) and build a solar system to power the greenhouse/ warehouse (Estimated cost: $3,000,000) |
● | construct an additional 23 acres of greenhouse and associated warehouse space (Estimated cost: $45,500,000. Estimated time to complete: 36 months), and build solar systems to power the greenhouse and warehouse facilities (Estimated cost: $6,500,000) |
The Company has a direct or indirect interest in the three entities listed above.
12 |
The Company plans to finance all or a part of the cost of retrofitting/ constructing greenhouses and warehouses and acquiring solar systems through future offering of the Company’s securities, proceeds from the exercise of the Company’s warrants or borrowings from private lenders.
As of December 31, 2021 the Company did not have any agreements with any person to purchase any of the Company’s securities, or lend any funds to the Company.
On August 4, 2021 the Company entered in an agreement with Mastronardi Produce Limited pursuant to which Mastronardi was granted the exclusive right to sell and market all US Grade No. 1 Products produced from all of the Company’s greenhouses in North America. For each sale, Mastronardi will be paid a low double digit percentage of the gross price received for the sale of the products grown at the Company’s greenhouses, plus all costs incurred in the sale and distribution of such products.
Mastronardi is a fourth-generation family owned company and the leading marketer and distributor in North America of tomatoes, peppers, cucumbers, berries and leafy greens. Mastronardi has an extensive and long-tenured retail network and is nationally recognized under the primary SUNSET® brand and other brands, including Campari®, Angel Sweet®, Flavor Bombs®, Sugar Bombs® and WOW™ berries.
Results of Operations
For Three Months Ended March 31, 2022 and March 31, 2021
During the three months ended March 31, 2022, and March 31, 2021, there was no revenue nor direct cost of revenue.
During the three months ended March 31, 2022, the Company recognized $107,305 of general and administrative expenses, compared to $192,804 during the three months ended March 31, 2021. The decrease of $85,499 is due to the Company reducing operating expenses during its development stage to conserve capital.
Interest expense was $49,003 for the three months ended March 31, 2022 compared to no interest expense during the three months ended March 31, 2021. Interest expense was due to the Company’s sale of bridge notes and amounts due from asset acquisition during the last six months of its year ended December 31, 2021.
The minority share of the Company’s consolidate loss was $3,991 for the three months ended March 31, 2022. There was no minority share recognized for the three months ended March 31, 2021, since the consolidated subsidiary, VitaNova Solar Partners, LLC did not exist during this time period.
The above produced a net loss of $152,317 for the three months ended March 31, 2022 compared to a loss of $192,804 for the three months ended March 31, 2021.
Liquidity and Capital Resources
We have begun our operations relying on external investors. Since inception and through March 31, 2022, we have raised $2,598,625in capital.
Our estimated capital requirements for the period ending December 31, 2022 are:
● | General and administrative expenses | $ | 625,000 | ||
● | Payments related to the purchase of land in southeastern Colorado (1) | $ | 2,500,000 | ||
● | Retrofit/expand existing greenhouses and warehouse (2) | $ | 9,500,000 | ||
● | Construction of solar system to power expanded greenhouse and warehouse | $ | 3,000,000 |
(1) See Footnote 3 of this report regarding payments we are required to make in connection with the purchase of these properties.
(2) Represents the costs to retrofit and expand an existing greenhouse and warehouse we acquired in southern Colorado.
13 |
The Company received preliminary approval from C-PACE, a Colorado specialized solar financing program developed by federal, state and county governments. The Company is in the process of developing the engineering necessary to complete the C-Pace financing application.
We believe with additional capital from third party investors we will have sufficient capital to meet our anticipated cash needs for at least the next twelve months.
To date we have only had limited revenue, which occurred the last six months of 2020 via a sublease of farming land. Therefore, presently operations are not sufficient to sustain our operations without the additional sources of capital. As of March 31, 2022, we had cash and cash equivalents of $46,168. We used $101,826 in cash in our operating activities during the three months ended March 31, 2022.
See Note 2 of the notes to condensed consolidated financial statements included elsewhere in this Form 10-Q for a discussion of our significant account policies.
Critical Accounting Policies
We have identified the policy below as critical to our business operations and the understanding of our results from operations.
Impairment Policy. At least once every year, management examines all of our assets for proper valuation and to determine if an impairment is necessary. In terms of real estate owned, this impairment examination also includes accumulated depreciation. Management examines market valuations and if an additional impairment is necessary, an impairment charge is recorded.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of interest rate changes and change in the market values of our real estate properties and water assets. Because we had no market risk sensitive instruments outstanding as of March 31, 2022, it was determined that there was no material market risk exposure to our consolidated financial position, results of operations, or cash flows as of such date. We do not enter into derivatives or other financial instruments for trading or speculative purposes.
Item 4. Controls and Procedures
Our management, comprised of our chief executive officer (CEO), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on that evaluation, and taking the matters described below into account, the Company’s CEO has concluded that our disclosure controls and procedures over financial reporting were not effective during reporting period ended March 31, 2022.
There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
Item 6. Exhibits
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VETANOVA INC | ||
Dated: May 9, 2022 | By: | /s/ John McKowen |
John McKowen, Chief Executive and Financial Officer |
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