EDGAR 10-K Filing

Company CIK: 1409446
Filing Year: 2021
Filename: 1409446_10-K_2021_0001640334-21-001709.json

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ITEM 1. BUSINESS
Item 1. Business
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms “Company”, “we”, “us” , “our” and “our company” mean Nate’s Food Co., unless otherwise indicated.
General Overview
We were incorporated under the laws of the State of Colorado on January 12, 2000 under the name Capital Resources Alliance, Inc. At inception, we were an early stage company in the business of mining and exploration. On May 19, 2014 our company completed a reverse merger with Nate’s Pancakes, Inc., an Indiana company, with Nate’s Pancakes being the surviving entity. In May 2014, we changed our name from Capital Resource Alliance, Inc. to Nate’s Food Co.
In connection with the reverse merger, we became a food manufacturing and product company, and in May 2014, we executed a licensing agreement with Nate’s Pancakes to market and sell “Nate’s Homemade”, exclusively throughout the world.
On April 6, 2017, our board of directors and a majority of our shareholders approved the filing of Restated Articles of Incorporation to increase the authorized shares of common stock of our company from Five Hundred Million (500,000,000) to One Billion Five Hundred Million 1,500,000,000. The Restated Articles of Incorporation to effect the increase of common stock was filed with the Secretary of State for the State of Colorado on July 26, 2017.
Our Current Business
We are a food manufacturing and product company that manufactures, distributes and sells ready-to-use, pre-mixed pancake and waffle batter. We hold a 20 year worldwide exclusive license agreement for Nate’s Homemade.
At present, we do not have any ongoing production of Nate’s Homemade Pancake and Waffle Batter due to the lack of a production facility. Our production has been temporarily suspended and our equipment placed in storage until we have sufficient financial resources to resume production, either in manufacturing facility of our own or by working with a copacker as we have done in the past.
License Agreement
Term
The license agreement in which our company entered into was for a term of twenty (20) years. Our company had the right to renew the license agreement for successive ten (10) year period by paying $1,000,000 for each new term. Production was halted in January 2018 and the holders of the license agreed to accept a buy-out of $0.00 and halt the accrual of any additional minimum fees. As of April 1, 2019, our company has been the sole owners of the intellectual property associated with the license agreement.
Payments/Royalty
Under the terms of the license agreement, our company was required to pay a royalty equal to Three Percent (3%) of the Gross Revenue from the licensed products. Gross revenue is defined as total revenue minus discounts and allowances. The license required that we pay a minimum monthly fee of $7,500 beginning twelve (12) months from the execution of the license agreement (June 1, 2015) which is against the 3% royalty. The fee began accruing on June 1, 2015.
Due to the production halt and subsequent buy-out in January 2018, there were no amounts accrued with respect to any accrued royalty payments as at May 31, 2021 and May 31, 2020.
Product Ordering
Our company is able to purchase raw materials directly from 3rd party suppliers and manufacture the product for sales. Our company may also develop and create additional flavors such as chocolate, blueberry, or strawberry.
Our Product
Through Nate’s Homemade we sell a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. Our current product is an original flavor of pancake and waffle batter and we have developed three flavors for our pancake and waffle mix. Once we have resumed production, we plan to continue to expand into other baked goods and other non-breakfast areas.
Our Customers
Prior to suspending production, our products were being sold across the United States to a variety of customers through our online store at www.nateshomemade.com. At present, we have no ongoing sales activities since production is suspended, and we have stopped using the website, www.nateshomemade.com.
When we were in production, we delivered samples of our products to retail chains such as Wal-Mart, Target, Sam’s Club, Costco, Kroger, BJ’s and Albertson’s and in retail stores and evaluate their interest of our product.
Sales and Marketing
Since suspending all production activity, we have also suspended our sales and marketing activity. We anticipate resuming production as well as sales and marketing activity in the future when we have the necessary financial resources.
Manufacturing and Distribution
Raw materials used in our products include cans, valves, caps, flour and other commodities. We continuously monitor worldwide supply and cost trends of these raw materials to enable us to take appropriate action to obtain the ingredients and packaging we need for production. Although the prices of our principal raw materials may fluctuate based on adverse weather, the economy, and other conditions, we believe such raw materials to be generally available from numerous sources.
We currently have suspended all production, sales, marketing and distribution activities until such time as we have the financial resources necessary to resume production.
Seasonality
Sales of our products were not seasonal, and were generally evenly distributed throughout the year.
Competition
We operate in a highly competitive environment. We have numerous competitors of varying sizes, including manufacturers of private label products, as well as manufacturers of other branded food products, which compete for trade merchandising support and consumer dollars. We compete with large conventional consumer packaged foods companies. We also compete with natural and organic consumer packaged foods companies. At present, there are no other companies manufacturing or distributing aerosol delivered pancake and waffle batters.
Competitive factors in our industry include product innovation, product quality, price, brand recognition and loyalty, product variety and ingredients, product packaging and package design, effectiveness of marketing and promotional activity, and our ability to identify and satisfy consumer tastes and preferences.
Compliance with Government Regulation
Food-Related Regulations
As a manufacturer and distributor of food products, we are subject to a number of food-related regulations, including the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory framework governs the manufacture (including composition and ingredients), labeling, packaging, and safety of food in the United States. The FDA:
·
regulates holding, distribution and manufacturing practices for food ingredients and foods through its current good manufacturing practices regulations and periodically inspects manufacturing facilities to audit compliance;
·
specifies the standards of identity for certain foods, including many of the products we sell; and
·
prescribes the format and content of certain information required to appear on food product labels.
In March 2014, the FDA issued a proposed rule that would make significant changes to the information appearing in, and the format of, the nutrition facts appearing on food labels. In July 2015, the FDA issued a supplemental proposed rule to establish a reference value for added sugars and to require a declaration of the percent daily value of added sugars on the food label. The proposed rule would also revise the footnote in the nutrition label regarding the percent daily value. It is not clear whether FDA will issue final regulation or, if it does, how much time FDA will give food manufactures to bring their labels into compliance. During the time our products were in production we worked with our copacker to ensure that all of our products were fully compliant with all relevant FDA regulations.
In addition, the FDA enforces the Public Health Service Act and regulations issued thereunder, which authorizes regulatory activity necessary to prevent the introduction, transmission, or spread of communicable diseases. These regulations require, for example, pasteurization of milk and milk products. The FDA also is implementing the Food Safety Modernization Act of 2011 (“FSMA”) which, among other things, mandates that the FDA adopt preventive controls to be implemented by farms, warehouses, food facilities and transporters in order to minimize or prevent hazards to food safety.
In September 2015, FDA released final rules implementing the Produce Safety and Current Good Manufacturing Practices, Hazard Analysis and Risk Based Preventive Controls (HARPC) requirements for human food and animal food, which was a major milestone in the implementation of FSMA. The final rules revise the FDA’s food safety regulations by: (1) codifying good agricultural practices and water fertilizer action limits, (2) updating and revising certain requirements in the existing current good manufacturing practices regulations (current 21 CFR Part 110), (3) requiring the establishment and implementation of a food safety system that includes an analysis of hazards and risk-based preventive controls and sets requirements for a written food safety plan, and (4) adding new requirements for a risk-based end-to-end supply chain program. Compliance is required by September 19, 2016, with respect to the new good manufacturing practices and HARPC regulations, and by January 2017, with respect to the new produce safety rules. We remained in full compliance with all relevant manufacturing and production safety rules and regulations until we suspended all production activities in 2018.
We are subject to numerous other federal, state, and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of our facilities, and regulation of our trade practices in connection with the sale of our products. In response to food-borne illness events, FDA scrutiny of the food and beverage industry has increased over the past few years, which has required food and beverage companies to dedicate additional resources to the areas regulated by the FDA.
Labeling Regulations
We are subject to various labeling requirements with respect to our products at the federal, state, and local levels. At the federal level, the FDA has authority to review product labeling, and the Federal Trade Commission may review labeling and advertising materials, including online and television advertisements to determine if advertising materials are misleading. Similarly, many states review dairy product labels to determine whether they comply with applicable state laws. In addition, the European Union has issued and enforces rules governing foodstuff labeling, nutrition, and health claims. We believe we are in material compliance with all labeling laws and regulations applicable to our business.
We believe that we are and will continue to be in compliance in all material respects with applicable statutes and the regulations passed in the United States. There are no current orders or directions relating to our company with respect to the foregoing laws and regulations.
Intellectual Property
We currently have the exclusive license to all intellectual property held by IPC, Inc., which includes the patent filed by Nate Steck for delivery of pancake and waffle batter contained in an aerosol can, as well as our domain names and websites, www.natesfoodco.com and www.nateshomemade.com.
Employees
Other than our directors and officers, who provide their services to our company and independent consultants, we have no full-time employees.
WHERE YOU CAN FIND MORE INFORMATION
You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 2. PROPERTIES
Item 2. Properties
Our corporate head office is located at 15151 Springdale Street, Huntington Beach, California 92649. This location is currently provided to us at no cost. We believe that this space is sufficient to meet our present needs. Our product development, food science division and production facilities are located at ABCO Laboratories, Inc., located at 2450 South Watney Way, Fairfield, California, 94533.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party and which would reasonably be likely to have a material adverse effect on our company. To date, our company has never been involved in litigation, as either a party or a witness, nor has our company been involved in any legal proceedings commenced by any regulatory agency against our company.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common shares are quoted on the OTC Markets under the symbol “NHMD.” The following quotations, obtained from Stockwatch, reflect the high and low bids for our common shares based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The following table reflects the high and low bid information for our common stock obtained from Nasdaq and reflects inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
The high and low bid prices of our common stock for the periods indicated below are as follows:
Quarter Ended:
High
Low
May 31, 2021
$ 0.0020
$ 0.0002
February 28, 2021
0.0025
0.0005
November 30, 2020
0.0011
0.0004
August 31, 2020
0.0008
0.0002
May 31, 2020
0.0007
0.0002
February 29, 2020
0.0009
0.0003
November 30, 2019
0.0015
0.0004
August 31, 2019
$ 0.0014
$ 0.0007
Our shares are issued in registered form. ClearTrust, LLC, 16540 Pointe Village Drive, Suite 210, Lutz, FL 33558 (Telephone: (813) 235-4490; Facsimile: (813) 388-4549 is the registrar and transfer agent for our common shares.
As of July 20, 2021, the shareholders’ list showed 21 registered shareholders with 537,774,616 common shares outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
Equity Compensation Plan Information
We do not have any equity compensation plans.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
We did not sell any equity securities which were not registered under the Securities Act during the year ended May 31, 2021, that were not otherwise disclosed on our quarterly reports on Form 10-Q or our current reports on Form 8-K filed during the year ended May 31, 2021.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fiscal years ended May 31, 2021 and 2020.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report.
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Plan of Operations and Liquidity Requirements
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Results of Operations - Years Ended May 31, 2021 and 2020
The following summary of our results of operations should be read in conjunction with our financial statements for the years ended May 31, 2021 and 2020, which are included herein.
Our operating results for the years ended May 31, 2021 and 2020 and the changes between those periods for the respective items are summarized as follows:
Year Ended
May 31,
Change
Revenue
$ 1,758
$ -
$ 1,758
Cost of goods sold
-
Gross profit
1,302
-
1,302
Operating expenses
22,434
23,245
(811 )
Other (income) expenses
(1,164,026 )
1,286,606
(2,450,632 )
Net income (loss)
$ 1,142,894
$ (1,309,851 )
$ (2,447,927 )
Revenue
Our Company generated $1,758 in revenue with a gross profit of $1,302 or 74%, for the year ended May 31, 2021, as compared to $0 revenue with a gross profit of $0, for the year ended May 31, 2020.
Operating expenses
Our operating expenses for the year ended May 31, 2021, were $22,434 compared to $23,245 for the year ended May 31, 2020. The decrease in operating expenses was primarily as a result of a decrease in general and administrative expenses.
Other (income) expenses
During the year ended May 31, 2021, the Company recognized $1,184,178 gain on change in fair value of derivative liabilities, compared to $1,255,026 loss on fair value of derivative liabilities during the year ended May 31,2020. During the years ended May 31, 2021 and 2020, the Company recognized interest expenses of $20,152 and $31,580, respectively.
Liquidity and Financial Condition
Working Capital
May 31,
May 31,
Changes
Current Assets
$ 615
$ 727
$ (112 )
Current Liabilities
1,344,749
2,487,755
(1,143,006 )
Working Capital Deficiency
$ 1,344,134
$ 2,487,028
$ (1,142,894 )
Cash Flows
Year Ended
May 31,
Net cash used in operating activities
$ (4,112 )
$ (2,059 )
Net cash used in investing activities
-
-
Net cash provided by financing activities
4,000
2,500
Net change in cash
$ (112 )
$ 441
The current assets as of May 31, 2021 and 2020, were all from cash at bank account of $615 and $727, respectively.
Our total current liabilities as of May 31, 2021, were $1,344,749 as compared to total current liabilities of $2,487,755 as of May 31, 2020. The decrease in current liabilities was primarily due to a decrease in value of derivative liabilities of $1,184,178 offset by an increase in accrued interest of $7,259, accrued interest-related parties of $12,894 and notes payable -related party of $21,019.
Operating Activities
Net cash used in operating activities was $4,112 for the year ended May 31, 2021, compared with net cash used in operating activities of $2,059 for the year ended May 31, 2020.
Investing Activities
During the years ended May 31, 2021, and 2020, our company did not have any investing activities.
Financing Activities
Net cash from financing activities was $4,000 for the year ended May 31, 2021, compared to $2,500 from financing activities for the year ended May 31, 2020, primarily due to a decrease in proceeds from notes payable - related parties.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Going Concern
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, our company has negative working capital, recurring losses, and does not have an established source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about our company’s ability to continue as a going concern.
The ability of our company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if our company is unable to continue as a going concern.
In the coming year, our company’s foreseeable cash requirements will relate to continual development of the operations of our business, maintaining our good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. Our company may experience a cash shortfall and be required to raise additional capital.
Historically, we have mostly relied upon internally generated funds such as shareholder loans and advances to finance our operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of our company’s stock or through loans from private investors, although there can be no assurance that we will be able to obtain such financing. Our company’s failure to do so could have a material and adverse effect upon us and our shareholders.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements
Our company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
NATE’S FOOD CO.
AUDITED FINANCIAL STATEMENTS
May 31, 2021 and 2020
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FINANCIAL STATEMENTS:
Balance Sheets
Statements of Operations
Statements of Changes in Stockholders’ Deficit
Statements of Cash Flows
Notes to the Financial Statements
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Nate’s Food Co.
Huntington Beach, CA
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Nate’s Food Co. (the Company) as of May 31, 2021 and 2020, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception, has a working capital deficit, and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Going Concern - Disclosure
The financial statements of the Company are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. As noted in “Going Concern Consideration” above, the Company has a history of recurring net losses, a significant accumulated deficit and currently has net working capital deficit. At May 31, 2021, the Company had an accumulated deficit of $5,018,302. The Company has contractual obligations such as commitments for repayments of accounts and notes payable and accrued interest (collectively “obligations”). Currently management’s forecasts and related assumptions illustrate their ability to meet the obligations through planned resumption of operations, management of expenditures, obtaining additional loans from related and unrelated parties, and private placements of capital stock for additional funding to meet its operating needs. Should there be constraints on the ability to resume operations and access financing through stock issuances, the Company will continue to manage cash outflows and meet the obligations through related and unrelated party loans.
We identified management’s assessment of the Company’s ability to continue as a going concern as a critical audit matter. Management made judgments to conclude that it is probable that the Company’s plans will be effectively implemented and will provide the necessary cash flows to fund the Company’s obligations as they become due. Specifically, the judgments with the highest degree of impact and subjectivity in determining it is probable that the Company’s plans will be effectively implemented include its ability to resume operations, manage expenditures, its ability to access funding from the capital market, and its ability to obtain loans from related and unrelated parties. Auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included the following, among others, evaluating the probability that the Company will be able to: (i) resume operations, (ii) access funding from the capital markets, (iii) manage expenditures, and (iv) obtain loans from related and unrelated parties.
/s/ Pinnacle Accountancy Group of Utah
Pinnacle Accountancy Group of Utah a dba of Heaton & Company, PLLC
We have served as the Company’s auditor since 2018.
Pinnacle Accountancy Group of Utah
Farmington, Utah
July 27, 2021
Nate’s Food Co.
Balance Sheets
May 31,
May 31,
ASSETS
Current assets:
Cash
$ 615
$ 727
Total current assets
TOTAL ASSETS
$ 615
$ 727
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities
$ 298,489
$ 298,489
Accrued interest
34,546
27,287
Accrued interest - related party
76,281
63,387
Notes payable - related party
361,075
340,056
Convertible notes
36,818
36,818
Derivative liability
537,540
1,721,718
Total current liabilities
1,344,749
2,487,755
Total liabilities
1,344,749
2,487,755
Stockholders’ Deficit:
Series A Preferred Stock, Par Value $0.0001, 2,000,000 shares authorized, 1,940,153 issued and outstanding
Series B Preferred Stock, Par Value $0.0001, 150,000 shares authorized, 150,000 issued and outstanding
Series C Preferred Stock, Par Value $1.00, 250,000 shares authorized, 250,000 issued and outstanding
250,000
250,000
Series D Preferred Stock, Par Value $0.0001, 10,000,000 shares authorized, 6,350,000 issued and outstanding
Series E Preferred Stock, Par Value $0.0001, 15,000,000 shares authorized, 14,989,500 issued and outstanding, respectively
1,499
1,499
Common Stock, Par Value $0.001, 1,500,000,000 shares authorized, 537,774,616 issued and outstanding, respectively
537,774
537,774
Additional paid in capital
2,884,051
2,884,051
Accumulated deficit
(5,018,302 )
(6,161,196 )
Total stockholders’ deficit
(1,344,134 )
(2,487,028 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
$ 615
$ 727
The accompanying notes are an integral part of these financial statements.
Nate’s Food Co.
Statements of Operations
May 31,
May 31,
Sales
$ 1,758
$ -
Cost of Goods Sold
-
Gross Profit
1,302
-
Operating Expenses
Selling, general and administrative
$ 22,434
$ 23,245
Total operating expenses
22,434
23,245
Operating Loss
(21,132 )
(23,245 )
Other (Income) Expense
(Gain) loss on change in fair value of derivative liability
(1,184,178 )
1,255,026
Interest expense
20,152
31,580
Total other (income) expenses
(1,164,026 )
1,286,606
Net Income (Loss)
$ 1,142,894
$ (1,309,851 )
Net income (loss) per common share:
Basic
$ 0.00
$ 0.00
Diluted
$ 0.00
$ 0.00
Weighted average number of common shares outstanding:
Basic
537,774,616
537,774,616
Diluted
545,415,172
537,774,616
The accompanying notes are an integral part of these financial statements.
Nate’s Food Co.
Statements of Changes in Stockholders’ Deficit
Preferred Stock
Common
Additional
Total
Series A
Series B
Series C
Series D
Series E
Stock
Paid-in
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Amount
Capital
Deficit
Deficit
Balances May 31, 2019
1,940,153
$ 194
150,000
$ 15
250,000
$ 250,000
6,350,000
$ 635
14,989,500
$ 1,499
537,774,616
$ 537,774
$ 2,884,051
$ (4,851,345 )
$ (1,177,177 )
Net loss
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,309,851 )
(1,309,851 )
Balances May 31, 2020
1,940,153
$ 194
150,000
$ 15
250,000
$ 250,000
6,350,000
$ 635
14,989,500
$ 1,499
537,774,616
$ 537,774
$ 2,884,051
$ (6,161,196 )
$ (2,487,028 )
Net income
-
-
-
-
-
-
-
-
-
-
-
-
-
1,142,894
1,142,894
Balances May 31, 2021
1,940,153
$ 194
150,000
$ 15
250,000
$ 250,000
6,350,000
$ 635
14,989,500
$ 1,499
537,774,616
$ 537,774
$ 2,884,051
$ (5,018,302 )
$ (1,344,134 )
The accompanying notes are an integral part of these financial statements.
Nate’s Food Co.
Statements of Cash Flow
Year Ended
May 31,
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)
$ 1,142,894
$ (1,309,851 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
(Gain) loss on change in fair value of derivative liability
(1,184,178 )
1,255,026
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities
17,019
32,594
Accrued interest - related party
12,894
12,892
Accrued interest
7,259
7,280
Net cash used in operating activities
(4,112 )
(2,059 )
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities
-
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party
4,000
2,500
Net cash provided by financing activities
4,000
2,500
Net cash increase (decrease) for the period
(112 )
Cash at beginning of period
Cash at end of period
$ 615
$ 727
Supplemental Cash Flow Disclosures
Cash paid for interest
$ -
$ -
Cash paid for income taxes
$ -
$ -
Non-Cash Investing and Financing Activity:
Reclassification of accounts payable to notes payable - related party
$
17,019
$ -
The accompanying notes are an integral part of these financial statements.
NATE’S FOOD CO.
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 2021 AND 2020
Note 1 - Organization and Summary of Significant Accounting Policies
Organization and Nature of Business
Nate’s Food Co. (“we”, “us”, “our”, the “Company” or the “Registrant”) was incorporated in the state of Colorado on January 12, 2000. Nate’s Food Co. is domiciled in the state of Colorado, and its corporate headquarters are located in Huntington Beach, California. The Company selected May 31 as its fiscal year end. On May 12, 2014, Nate’s Pancakes Inc. was incorporated in the state of Indiana. On May 19, 2014, the Company completed a reverse merger between Nate’s Pancakes, Inc and Capital Resource Alliance. Nate’s Pancakes was the surviving Company. In May 2014, the Company changed its name from Capital Resource Alliance to Nate’s Food Co.
We sell a ready-to-use, pre-mixed pancake and waffle batter delivered in a pressurized can. Our current product is an original flavor of pancake and waffle batter. Currently, we have developed three flavors for our pancake and waffle mix. We suspended our operations in 2018, but plan to resume our pancake and waffle batter operations, and to expand into other baked goods and other non-breakfast areas.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on Nate’s Food Co. financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Nate’s Food Co.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all short-term marketable securities purchased with maturity of three months or less to be cash equivalents.
Stock-Based Compensation
The Company applies ASC 718 “Compensation - Stock Compensation” to stock-based compensation to employees and non-employees, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized over the estimated service period (generally the vesting period) on the straight-line method. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, "Revenue Recognition” following the five steps procedure:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company’s sales are derived from the sale of ready-to-use, pre-mixed pancake and waffle batter. The Company recognizes revenue at a point in time when it satisfies its obligation by transferring control of the goods to the customer. The cost of sales includes packaging-related expenses.
During the years ended May 31, 2021 and 2020, the Company recognized revenue of $1,758 and nil, respectively, for the goods that have been delivered to the customers. During the years ended May 31, 2021 and 2020, the Company incurred cost of sales of $456 and nil, respectively, resulting in gross profit of $1,302 and nil, respectively.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740-10, “Accounting for Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Under ASC 740-10, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is “more likely than not” that the position is sustainable upon examination, based on its technical merits. The tax benefit of a qualifying position under ASC 740-10 would equal the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including interest and penalties, if applicable) is established to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and penalties, if any, are included as components of income tax expense and income taxes payable.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash, accounts payable and accrued liabilities, convertible notes and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.
The three-level hierarchy for fair value measurements is defined as follows:
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement
The following table summarizes fair value measurements by level at May 31, 2018 and 2017, measured at fair value on a recurring basis:
May 31, 2021
Level 1
Level 2
Level 3
Total
Liabilities
Derivative liabilities
$
-
$
-
$
537,540
$
537,540
May 31, 2020
Level 1
Level 2
Level 3
Total
Liabilities
Derivative liabilities
$
-
$
-
$
1,721,718
$
1,721,718
Earnings (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method for outstanding warrants and options and using the if-converted method for convertible debt and convertible preferred stock. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
For the years ended May 31, 2021 and 2020, respectively, the following warrants, convertible notes and convertible preferred stock were potentially dilutive.
Year ended
May 31,
(Shares)
(Shares)
Warrants
-
92,322,564
Convertible notes payable
185,358,384
582,762,000
Series B convertible preferred stock
150,000,000
150,000,000
Series C convertible preferred stock
16,500,000
16,500,000
Series D convertible preferred stock
95,250,000
95,250,000
Series E convertible preferred stock
149,895,000
95,250,000
597,003,384
1,032,084,564
For the year ended May 31, 2020, the warrants, convertible notes and convertible preferred stock that were potentially dilutive, were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive.
The following represents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computation for the year ended May 31, 2021:
Net Income (Loss)
Shares
Per Share
(Numerator)
(Denominator)
Amount
Basic EPS
$ 1,142,894
537,774,616
$ 0.00
Effect of dilutive securities:
Warrants
-
-
-
Convertible notes payable
(1,190,805 )
185,358,384
-
Preferred stock
-
-
-
Diluted EPS
$ (47,911 )
723,133,000
$ (0.00 )
Recently Issued Accounting Pronouncements
The Company has determined that there are no applicable recently issued accounting pronouncements that are expected to have a material impact on these financial statements.
Note 2 - Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has negative working capital, recurring losses, and does not have an established source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the succeeding paragraphs and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
In the coming year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business developments. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, it has mostly relied upon internally generated funds such as shareholder loans and advances to finance its operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.
Note 3 - Related Party Transactions
Notes Payable - Related Party
During the years ended May 31, 2021 and 2020, the Company borrowed $4,000 and $2,500, respectively from our officer for working capital purposes. As at May 31, 2021 and 2020, the total amount owed to this officer was $361,075 and $334,056, respectively. Of the May 31, 2021 amount, $57,000 of the loan is at 10% interest and was to be repaid by June 28, 2017 and currently is in default, and as at May 31, 2021 and 2020, accrued interest of $28,079 and $22,379 in interest has been recorded with respect to this loan.There is no additional interest charged to the note as a result of the default. Additionally, $71,902 of the loan is at 10% interest and due on December 31, 2016 and currently in default and as at May 31, 2021 and 2020, accrued interest of $48,202 and $41,008 in interest has been recorded with respect to this loan.There is no additional interest charged to the note as a result of the default. Additionally, $232,173 of the loan includes $17,019 reclassified from accounts payable is at 0% interest, and is due on demand.
Note 4 - Convertible Notes
The Company had the following convertible notes payable outstanding as of May 31, 2021 and 2020:
May 31,
May 31,
Convertible notes payable
$ 36,818
$ 36,818
36,818
36,818
Less: debt discount and deferred financing cost
-
-
36,818
36,818
Less: current portion of convertible notes payable
36,818
36,818
Long-term convertible notes payable
$ -
$ -
On October 13, 2016, the Company received financing from an unrelated party in the amount of $85,500 with $5,000 original issue discount and incurred $8,000 in financing costs. On December 29, 2017, the principal balance along with the related default penalties, accrued and unpaid interest, and the conversion rights were sold to another unrelated party. The original issue discount and financing costs were amortized over the original life of the note using the effective interest method. The $85,500 bears 10% interest and matured on July 13, 2017. The note is currently in default, and bears 18% interest rate while in default. The holder shall be entitled to convert any portion of the outstanding and unpaid conversion amount into fully paid and non-assessable shares of common stock. The conversion price is the 45% discount to the lowest traded price during the previous 20 trading days to the date of a conversion notice. The Company may redeem the note at rates ranging from 125% to 150% depending on the redemption date. The note was discounted for a derivative (see note 5 for details) and the discount was amortized over the original life of the note using the effective interest method. During the years ended May 31, 2021 and 2020, the Company recognized interest expense of $7,259 and $7,279, respectively. As of May 31, 2021 and 2020, the Company had accrued interest of $34,546 and $27,287, respectively.
Note 5 - Derivative Liability
The Company analyzed the conversion options on its convertible note (note 4) for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the embedded conversion option should be classified as a liability when the conversion option becomes effective and there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for warrants (note 6) as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.
The following table summarizes the derivative liabilities included in the balance sheets at May 31, 2021 and 2020:
Balance - May 31, 2019
$ 466,692
(Gain) on change in fair value of the derivative
1,255,026
Balance - May 31, 2020
$ 1,721,718
Loss on change in fair value of the derivative
(1,184,178 )
Balance - May 31, 2021
$ 537,540
The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability, as well as the determined value of the option liability at each measurement date:
May 31,
May 31,
Expected term
(3.14) - 0.08 years
(2.13) - 1.08 years
Expected average volatility
336%
274% - 361%
Expected dividend yield
-
-
Risk-free interest rate
0.08%
0.18% - 1.76%
Note 6 - Equity Transaction
Preferred Stock
Series A Preferred Stock
The Company is authorized to issue 2,000,000 shares of series A Preferred Stock at a par value of $0.0001. The Series A Preferred Stock has voting rights equal to 1,000 votes for each 1 share of common stock owned. The Series A Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series A Preferred Stock.
There were no issuances of the Series A Preferred Stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 1,940,153 shares of series A Preferred Stock were issued and outstanding.
Series B Preferred Stock
The Company is authorized to issue 150,000 shares of Series B Preferred Stock at a par value of $0.0001. The Series B Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series B Preferred Stock. The Series B Preferred Stock converts into common stock at a ratio of 1:1,000. However, the Series B Preferred Stock may not be converted for a period of 12 months from the date of issue.
There were no issuances of the Series B Preferred Stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 150,000 shares of Series B Preferred Stock were issued and outstanding.
Series C Preferred Stock
The Company is authorized to issue 250,000 shares of Series C Preferred Stock at a par value of $1. The Series C Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series C Preferred Stock. The Preferred Stock can be converted to common stock, at a conversion rate of 66 common shares for each preferred stock.
There were no issuances of the Series C Preferred Stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 250,000 shares of Series C Preferred Stock were issued and outstanding.
Series D Convertible Preferred Stock
The Company is authorized to issue 10,000,000 shares of Series D Preferred Stock at a par value of $0.0001. The Series D Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series D Preferred Stock. Beginning January 1, 2017, each holder of shares of Series D Preferred Stock may, at any time and from time to time, convert each of its shares of Series D Preferred Stock into a 15 of fully paid and nonassessable shares of common stock.
There were no issuances of the Series D Preferred Stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 6,350,000 shares of Series D Preferred Stock were issued and outstanding, respectively.
Series E Preferred Stock
The Company is authorized to issue 15,000,000 shares of series E Preferred Stock at a par value of $0.0001. The Series E Preferred Stock shall have no liquidation preference over any other class of stock and there will be no dividends due or payable on the Series E Convertible Preferred Stock. Beginning October 1, 2016, each share of Series E Preferred Stock is convertible into ten (10) shares of common stock. From October 1, 2016 to October 1, 2018, holders of Series E Preferred Stock may at any time convert to shares of common stock, thereafter, the Company may elect to convert any outstanding stock at any time without notice to the shareholders. The Company evaluated the conversion feature and concluded that it did not qualify as a derivative transaction. The Company evaluated the convertible preferred stock under FASB ACS 470-20-30 and determined it does not contain a beneficial conversion feature.
There were no issuances of the Series E Preferred Stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 14,989,500 shares of Series E Preferred Stock were issued and outstanding, respectively.
Common stock
The Company is authorized to issue 1,500,000,000 shares of common stock at a par value of $0.001.
There were no issuances of common stock during the years ended May 31, 2021 and 2020.
As of May 31, 2021 and 2020, 537,774,616 shares of common stock were issued and outstanding, respectively.
Warrants
On September 29, 2015, the Company granted 1,000,000 warrants valued at $29,000 to Vista Capital Investments, LLC, in exchange for interest owed of $12,222, and recognized a loss on debt settlement of $16,778. Warrants were originally exercisable into 1,000,000 shares of common stock, for a period of five years from issuance, at a price of $0.05 per share, with multiple reset provisions when the share price is below $0.05. As a result of these reset features, additional warrants were issued and became exercisable into 92,332,564 shares of common stock at $0.00011 per share. Each warrant was exercisable into one share of common stock.
The following table summarizes warrant activity for the years ended May 31, 2021 and 2020:
Number of
shares
Weighted Average Exercise Price
Weighted Average Life (years)
Outstanding, May 31, 2019
36,933,026
$ 0.00028
1.33 years
Reset features
55,399,539
0.00011
0.33 years
Forfeited
-
-
-
Exercised
-
-
-
Outstanding, May 31, 2020
92,322,564
$ 0.00011
0.33 years
Reset features
-
-
-
Forfeited
(92,332,564 )
(0.00011 )
-
Exercised
-
-
-
Outstanding, May 31, 2021
-
$ -
-
Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at May 31, 2017, for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants).
The Company determined that the warrants qualify for derivative accounting (see note 5).
Note 7 - Taxes
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended May 31, 2021 and 2020 as applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the Company remain open.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law including lowering the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our balance sheet. The Company has completed the accounting for the effects of the Act during the period ended May 31, 2021. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no impact on the balance sheet.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:
Income tax provision at the federal statutory rate
21 %
Effect on operating losses
(21 )%
Changes in the net deferred tax assets consist of the following:
Income tax
May 31,
May 31,
Net operating loss carry forward
$ 1,080,649
$ 1,121,933
A reconciliation of income taxes computed at the statutory rate is as follows:
May 31,
May 31,
Total deferred tax assets at statutory tax rate
$ 226,936
$ 235,606
Increase in valuation allowance
(226,936 )
(235,606 )
Net deferred tax asset
$ -
$ -
Note 8 - Risks and Uncertainties
In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no retroactive material adverse impacts on the Company’s results of operations and financial position at May 31, 2021 and 2020. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change, as new events occur and additional information is obtained.
Note 9 - Subsequent Events
Management has evaluated subsequent events through the date these financial statements were issued. Based on our evaluation no material events have occurred that require disclosure.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
As of May 31, 2021, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this annual report.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2021. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework - 2013. Our management has concluded that, as of May 31, 2021, our internal controls over financial reporting are not effective. Our management reviewed the results of their assessment with our board of directors.
This annual report does not include an attestation report of our company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our company’s registered public accounting firm pursuant to temporary rules of the SEC that permit our company to provide only management’s report in this annual report.
Identified Material Weakness
A material weakness in our internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.
Management identified the following material weaknesses during its assessment of internal controls over financial reporting as of May 31, 2021:
·
No independent directors: Our company does not have any independent directors.
·
No segregation of duties: Ineffective controls over financial reporting.
·
No audit committee
·
No written policies & procedures: We need to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity transactions, and prepare, review and submit SEC filings in a timely manner.
Management’s Remediation Initiatives
As our resources allow, we will add financial personnel to our management team. We plan to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity transactions. We will also create an audit committee made up of our independent directors.
As of May 31, 2021, our company has not taken any remediation actions to address these weaknesses in our controls even though they were identified during the year. Our company’s management expects, once it is in the financial position to do so, to hire additional staff in our accounting department to be able to segregate the duties.
Inherent Limitations on Effectiveness of Controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the year ended May 31, 2021 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
Name
Position Held
with the Company
Age
Date First Elected
or Appointed
Nate Steck
President, Chief Executive Officer and Director
May 12, 2014
Marc Kassoff
Vice-President, Chief Financial Officer and Director
May 12, 2014
Timothy Denton
Secretary and Director
May 12, 2014
Business Experience
The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.
Nate Steck - President, Chief Executive Officer and Director
Mr. Steck is an entrepreneur and trained French Chef and with over 20 years’ experience in Product Development and Food Production. He has developed over 30 successful products from concept to shelf with National distribution for consumer brands and private labels, cumulative sales of 175M. He is the Co-Founder of Batter Blaster, Co-Founder of Elena’s Food Specialties and Founder of Elite foods.
Our company believes that Mr. Steck’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.
Marc Kassoff - Vice-President, Chief Financial Officer and Director
Mr. Kassoff currently the President and CEO of Meyer, Christian and Associates, Inc. a healthcare subrogation firm. This has been his position for the last 20 years. Mr. Kassoff is also on the Board of the Effect and Encompass which serves the South Orange County community as a Drug and Alcohol Recovery Program.
Our company believes that Mr. Kassoff’s professional background experience gives him the qualifications and skills necessary to serve as a director and officer of our company.
Timothy Denton - Secretary and Director
Mr. Denton has practiced law in California since 1981, and during that time he has represented and assisted dozens of start-up companies and other businesses, handling both matters involving transactional business as well as civil litigation. For over 13 years he has been the Supervising Attorney at the firm of Meyer Christian & Associates, primarily representing hospitals and medical provider groups, working with his clients to ensure regulatory compliance with state and federal laws and agencies. He has continued to work with business development issues for a number of start-up businesses throughout this period, including assisting in the development of Nate’s Food, Co.
Our company believes that Mr. Denton’s professional background experience gives him the qualifications and skills necessary to serve as an officer of our company.
Employment Agreements
We have no formal employment agreements with any of our directors or officers.
Family Relationships
There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executive officers has, during the past ten years:
1.
been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
2.
had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
3.
been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
4.
been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
5.
been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
6.
been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended May 31, 2021, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than 10% beneficial owners of our subsidiaries were complied with, with the exception of the following:
Name
Number of Late
Reports
Number of
Transactions Not
Reported on a Timely
Basis
Failure to File
Requested Forms
Nate Steck
--
--
1 (1)
Marc Kassoff
--
--
1 (1)
Timothy Denton
--
--
1 (1)
____________
(1)
The insider is late filing beneficial ownership forms. The required beneficial ownership forms are expected to be filed subsequent to the filing of this Form 10-K.
Code of Ethics
Our company’s board of directors adopted a Code of Business Conduct and Ethics that applies to, among other persons, our company’s principal executive officer and our principal financial and accounting officer, as well as persons performing similar functions.
We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: Nate’s Food Co., 15151 Springdale Street Huntington Beach, California 92649.
Board and Committee Meetings
Our board of directors held no formal meetings during the year ended May 31, 2021. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Colorado Revised Statutes and our Bylaws, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
Nomination Process
As of May 31, 2021, we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders. Our board of directors has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual report.
Audit Committee
Currently our audit committee consists of our entire board of directors. We do not have a standing audit committee as we currently have limited working capital and minimal revenues. Should we be able to raise sufficient funding to execute our business plan, we will form an audit, compensation committee and other applicable committees utilizing our directors’ expertise.
Audit Committee Financial Expert
Currently our audit committee consists of our entire board of directors. We do not currently have a director who is qualified to act as the head of the audit committee or as a financial expert.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
(a)
our principal executive officer;
(b)
each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended May 31, 2021 and 2020; and
(c)
up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended May 31, 2021 and 2020, who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION TABLE
Name
and Principal Position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($)
Change in Pension
Value and Nonqualified Deferred Compensation Earnings
($)
All
Other Compensation
($)
Total
($)
Nate Steck
-
-
-
-
-
-
-
-
President, CEO and Director
-
-
-
-
-
-
-
-
Marc Kassoff
-
-
-
-
-
-
-
-
Vice-President, CFO and Director
-
-
-
-
-
-
-
-
Timothy Denton
-
-
-
-
-
-
-
-
Secretary and Director
-
-
-
-
-
-
-
-
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
Grants of Plan-Based Awards
During the fiscal year ended May 31, 2021, we did not grant any stock options.
Option Exercises and Stock Vested
During our fiscal year ended May 31, 2021, there were no options exercised by our named officers.
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our board of directors.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Indebtedness of Directors, Senior Officers, Executive Officers and Other Management
None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of July 20, 2021, certain information with respect to the beneficial ownership of our common and preferred shares by each shareholder known by us to be the beneficial owner of more than 5% of our common and preferred shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common and preferred stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common and preferred stock, except as otherwise indicated.
Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
Percentage
of Class (1)(2)(3)(4)(5)(6)
Nate Steck
15151 Springdale St,
Huntington Beach, CA 92649
6,974,000 Common Stock / Direct
970,052 Series A Preferred / Direct
21,292 Series B Preferred / Direct
47,807 Series C Preferred / Direct
1,000,000 Series D Preferred / Direct
1,196,000 Series E Preferred / Direct
1.3%
50.0%
14.2%
19.1%
15.8%
8.0%
Marc Kassoff
15151 Springdale St,
Huntington Beach, CA 92649
5,296,000 Common Stock / Direct
970,051 Series A Preferred / Direct
52,970 Series B Preferred / Direct
47,807 Series C Preferred / Direct
1,000,000 Series D Preferred / Direct
1,196,000 Series E Preferred / Direct
1.0%
50.0%
35.3%
19.1%
15.8%
8.0%
Timothy Denton
15151 Springdale St,
Huntington Beach, CA 92649
5,000,000 Common Stock / Direct
25 Series A Preferred / Direct
20,419 Series B Preferred / Direct
47,806 Series C Preferred / Direct
1,000,000 Series D Preferred / Direct
1,196,000 Series E Preferred / Direct
0.9%
-
13.6%
19.1%
15.8%
8.0%
Directors and Executive Officers as a Group
17,270,000 Common Stock
1,940,128 Series A Preferred
94,681 Series B Preferred
143,420 Series C Preferred
3,000,000 Series D Preferred
3,588,000 Series E Preferred
3.2%
99.99%
63.1%
57.4%
47.2%
23.9%
Jeremy Kaplan
15151 Springdale St,
Huntington Beach, CA 92649
20,469 Series B Preferred / Direct
47,806 Series C Preferred / Direct
1,000,000 Series D Preferred / Direct
1,196,000 Series E Preferred / Direct
13.6%
19.1%
15.8%
8.0%
_________________
*represents an amount less than 1%
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on July 20, 2021. As of July 20, 2021 there were 537,774,616 shares of our company’s common stock issued and outstanding.
(2)
Our company is authorized to issue 2,000,000 shares of Series A Preferred Stock, par value $0.0001. As of July 20, 2021 there were 1,940,153 shares of our company’s Series A Preferred Stock issued and outstanding.
(3)
Our company is authorized to issue 150,000 shares of Series B Preferred Stock, par value $0.0001. As of July 20, 2021 there were 150,000 shares of our company’s Series B Preferred Stock issued and outstanding.
(4)
Our company is authorized to issue 250,000 shares of Series C Preferred Stock, par value $1.00. As of July 20, 2021 there were 250,000 shares of our company’s Series C Preferred Stock issued and outstanding.
(5)
Our company is authorized to issue 10,000,000 shares of Series D Preferred Stock, par value $0.0001. The Series D Preferred Stock is convertible into shares of our common stock. As of July 20, 2021 and there were 6,350,000 shares of our company’s Series D Preferred Stock issued and outstanding. Of the Series D Preferred Stock outstanding, 3,000,000 are held by our directors or officers and upon conversion, no current holder of the Series D Preferred Stock would be a beneficial owner of 5% or more of our common stock.
(6)
Our company is authorized to issue 15,000,000 shares of Series E Preferred Stock, par value $0.0001. As of July 20, 2021 there were 14,989,500 shares of our company’s Series E Preferred Stock issued and outstanding. Of the Series E Preferred Stock outstanding, 3,588,000 are held by our directors and officers. Upon conversion no current holder of the Series E Preferred stock would be a beneficial owner of 5% or more of our common stock.
Changes in Control
We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended May 31, 2021, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last two completed fiscal years.
Director Independence
We currently act with three directors, consisting of Nate Steck, Marc Kassoff and Timothy Denton. We have determined that none of our directors is an independent director, as that term is used in Rule 4200(a)(15) of the Rules of National Association of Securities Dealers.
Currently our audit committee consists of our entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
From inception to present date, we believe that the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed fiscal year ended May 31, 2021 and for fiscal year ended May 31, 2020 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
Year Ended
May 31,
May 31,
Audit Fees
$ 5,250
$ 0
Audit Related Fees
Tax Fees
All Other Fees
Total
$ 5,250
$ 0
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a)
Financial Statements
(1)
Financial statements for our company are listed in the index under Item 8 of this document.
(2)
All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto.
(b)
Exhibits
Exhibit
Number
Description
(3)
Articles of Incorporation and Bylaws
3.1
Articles of Incorporation (Incorporated by reference to our Registration Statement on Form SB-2 filed on September 14, 2007)
3.2
Bylaws (Incorporated by reference to our Registration Statement on Form SB-2 filed on September 14, 2007)
3.3
Restated Articles of Incorporation (Incorporated by reference to our Registration Statement on Form 10 filed on July 29, 2014)
3.4
Restated Articles of Incorporation field with the Colorado Secretary of State on September 18, 2015 (Incorporated by reference to our Annual Report on Form 10-K filed on October 6, 2016)
3.5
Certificate of Designation, Preferences and Rights of Series D Preferred Stock filed with the Colorado Secretary of State on June 28, 2016 (Incorporated by reference to our Annual Report on Form 10-K filed on October 6, 2016)
3.6
Restated Articles of Incorporation (Incorporated by reference to our Current Report on Form 8-K filed on August 4, 2017)
(31)
Rule 13a-14 (d)/15d-14d) Certifications
31.1*
Section 302 Certification by the Principal Executive Officer
31.2*
Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
(32)
Section 1350 Certifications
32.1**
Section 906 Certification by the Principal Executive Officer
32.2**
Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
101**
Interactive Data File
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
** Furnished herewith