UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2017

 

OR

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission File Number: 333-59114

 

AMAIZE BEVERAGE CORPORATION

(Exact name of small business issuer as specified in charter)

 

Nevada   33-0730042
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

5042 Wilshire Blvd. #34708, Los Angeles, CA   90036
(Address of principal executive offices)   (Zip Code)

 

(949) 287-3164

(Issuer’s Telephone number, including area code)

 

 

(Former name, former address, and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports,), and (2) has been subject to such filing requirements for the past 90 days. Yes [  ] No [X]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [  ] No [X]

 

Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “larger accelerated filer” and “smaller or a smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated Filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] Smaller reporting company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

 

Indicate the number of shares of the registrant’s common stock outstanding of each of the insurer’s common stock, as of the latest practicable date.

 

The number of shares outstanding of the registrant’s only class of common stock, $0.001 par value per share, was 15,708,030 as of July 28, 2017. The registrant has no outstanding non-voting common equity.

 

 

 

     
 

 

AMAIZE BEVERAGE CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED MARCH 31, 2017

 

TABLE OF CONTENTS

 

    PAGE
     
PART I. FINANCIAL INFORMATION    
       
Item 1. Financial Statements   3
       
  (a) Balance Sheets (unaudited and unreviewed)   3
  (b) Statements of Operations (unaudited and unreviewed)   4
  (c) Statements of Cash Flows (unaudited and unreviewed)   5
  (d) Statement of Stockholders’ Deficit (unaudited and unreviewed)   6
  (e) Notes to Financial Statements (unaudited and unreviewed)   7
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   10
       
Item 3. Quantitative and Qualitative Disclosures about Market Risk   14
       
Item 4. Controls and Procedures   15
       
PART II. OTHER INFORMATION    
       
Item 1. Legal Proceedings   17
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   17
       
Item 3. Defaults On Senior Securities   17
       
Item 4. Mine Safety Disclosures   17
       
Item 5. Other Information   17
       
Item 6. Exhibits   17
       
Signatures   18

 

  2  
 

 

PART I - FINANCIAL INFORMATION

 

Amaize Beverage Corporation

Balance Sheets

(Unaudited an Unreviewed)

 

    March 31, 2017     June 30, 2016  
ASSETS                
Current Assets                
Cash   $ -     $ -  
Total Current assets     -       -  
                 
Property and Equipment                
Office Equipment (Net of Accumulated Depreciation)     2,977       5,113  
Total Fixed Assets     2,977       5,113  
                 
Total Assets   $ 2,977     $ 5,113  
                 
LIABILITIES and STOCKHOLDERS’ DEFICIT                
Current Liabilities                
Accounts Payable   $ 161,874     $ 160,824  
Accounts Payable Related Party     -       16,500  
Accrued Liabilities     6,545       6,545  
Liability for Lawsuit Judgement     200,761       200,761  
Liability for Lease Judgement     181,968       181,968  
Payroll Taxes     3,592       3,592  
Shareholder Loans     61,143       50,028  
Total Current Liabilities     615,883       620,218  
                 
Total Liabilities     615,883       620,218  
                 
Commitments and Contingencies                
                 
Stockholders’ Deficit                
Preferred Stock $0.001 Par Value 25,000,000 Authorized                
No Shares Issued     -       -  
Common Stock $0.001 Par Value 200,000,000 Shares Authorized 15,708,030 and 15,558,030 Issued and Outstanding at September 30, 2016 and June 30, 2016 Respectively             15,708                   15,558      
Additional Paid-In Capital     52,515,882       52,478,532  
Deficit Accumulated     (53,144,496 )     (53,109,195 )
                 
Total Stockholders’ Deficit     (612,906 )     (615,105 )
                 
Total Liabilities and Stockholders’ Deficit   $ 2,977     $ 5,113  

 

The accompanying notes are an integral part of these unaudited financial statements.

 

  3  
 

 

Amaize Beverage Corporation

Statements of Operations

(Unaudited and Unreviewed)

 

    For the Three
Months Ended
March 31, 2017 		    For the Three
Months Ended
March 31, 2016 		    For the Nine
Months Ended
March 31, 2017 		    For the Nine
Months Ended
March 31, 2016 		 
                         
Revenues   $ -     $ -     $ -     $ -  
                                 
Operating Expenses                                
                                 
General and Administrative Expenses     4,000       5,323       35,301       1,595,329  
Loss on Settlement of Liabilities with Equity Related Party             -               16,125  
Total Operating Expenses     4,000       5,323       35,301       1,611,454  
                                 
Operating Loss     4,000       5,323       (35,301 )     (1,611,454 )
                                 
Provision for Income Taxes     -       -       -       -  
                                 
Net Loss   $ 4,000     $ 5,323     $ (35,301 )   $ (1,611,454 )
                                 
Net Loss Per Share Basic and Diluted   $ 0.00     $ 0.00     $ (0.00 )   $ (0.12 )
                                 
Weighted Average Number of Common Shares                                
Outstanding Basic and Diluted     15,366,551       15,558,030       15,696,534       13,374,266  

 

The accompanying notes are an integral part of these unaudited financial statements.

 

  4  
 

 

Amaize Beverage Corporation

Statements of Cash Flows

(Unaudited and Unreviewed)

 

    For the Nine Months Ended
March 31, 2017 		    For the Nine Months Ended
March 31, 2016 		 
Cash Flows from Operating Activities                
Net Loss   $ (35,301 )   $ (1,611,454 )
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities                
Depreciation     2,136       2,136  
Shares Issued for Accounts Payable Related Parties     16,500       8,875  
Loss on Settlement of Liabilities for Equity     -       16,125  
Shares Issued for Services     -       112,500  
Shares Issued for Directors’ Fees     -       162,000  
Shares Issued for Services Related Parties     21,000       1,438,483  
Changes in Operating Assets and Liabilities                
Increase in Accounts Payable     1,050       5,453  
Decrease in Directors’ Fees             (157,500 )
Decrease in Accounts Payable Related Parties     (16,500 )     875  
Net Cash Used in Operations     (11,115 )     (22,507 )
                 
Cash Flows from Investing Activities     -       -  
Net Cash Provided by (Used In) Financing Activities     -       -  
                 
Cash Flows from Financing Activities                
Shareholder Loans Advanced     11,115       20,506  
Net Cash Provided by Financing Activities     11,115       20,506  
                 
Net Increase / Decrease in Cash     -       (2,001 )
                 
Cash Beginning of Period             2,001  
                 
Cash Ending of Period   $ -     $ -  
                 
Supplemental Disclosure                
Income Taxes Paid   $ -     $ -  
Interest Paid   $ -     $ -  
Supplemental Disclosure of Non-Cash Investing and Financing Activities                
Shares issued fror Services   $ -     $ 112,500  
Shares Issued for Services Related Party   $ 21,000     $ 1,438,483  
Settlement of Directors’ Fees for Shares   $ -     $ 162,000  
Settlement of Accounts Payable with Equity Related Parties   $ 16,500     $ 8,875  
Loss on Settlement of Liabilities with Equity Related Parties   $ -     $ 16,125  

 

The accompanying notes are an integral part of these unaudited financial statements.

 

  5  
 

 

Amaize Beverage Corporation

Statements of Stockholders’ Deficit

(Unaudited and Unreviewed)

 

                            Stockholders’  
    Common Shares     Additional           Accumulated  
          Par Value     Paid-In     Deficit     Equity  
    Shares     $0.001     Capital     accumulated     (Deficit)  
Balance June 30, 2015     11,261,030     $ 11,261     $ 50,744,846     $ (51,451,909 )   $ (695,802 )
Common Shares Issued for Services     112,500       112       112,388               112,500  
Common Shares Issued for Services Related Parties     3,708,039       3,708       1,459,775               1,463,483  
Common Shares Issued for Directors’ Fees     476,461       477       161,523               162,000  
Net Loss for the Year                             (1,657,286 )     (1,657,286 )
Balance June 30, 2016     15,558,030     $ 15,558     $ 52,478,532     $ (53,109,195 )   $ (615,105 )
Common Shares Issued for Services Related Parties     150,000       150       37,350               37,500  
Net Loss for the Period                             (35,301 )     (35,301 )
Balance March 31, 2017     15,708,030     $ 15,708     $ 52,515,882     $ (53,144,496 )   $ (612,906 )

 

The accompanying notes are an integral part of these unaudited financial statements.

 

  6  
 

 

AMAIZE BEVERAGE CORPORATION

FOOTNOTES TO UNAUDITED AND UNREVIEWED FINANCIAL STATEMENTS

For the Nine Month Periods Ended March 31, 2017 and 2016

 

Note 1. The Company

 

On October 4, 2013, Healthient, Inc. (“the Company”) changed its name to SnackHealthy, Inc. and dissolved its sole wholly-owned subsidiary SnackHealthy, Inc., a Nevada corporation. As of June 26, 2015, a majority of the shareholders of the Company representing not less than 9,327,859 shares of common stock (82.83%) consented in writing to change the Company’s name to Amaize Beverage Corporation. Such approval and consent constitute the approval and consent of a majority of the total number of shares of outstanding common stock and are sufficient under the Nevada General Corporation Law and the Company’s Bylaws to approve the above action. On August 13, 2015, Amaize Beverage Corporation, previously known as SnackHealthy, Inc., a Nevada corporation filed an amendment to its articles of incorporation (the “Amendment”) with the Secretary of State of the state of Nevada. The Amendment provided for the change of the Company’s name from SnackHealthy, Inc., to Amaize Beverage Corporation. The name change and the change of the Company’s trading symbol were subsequently declared effective by the Financial Industry Regulatory Authority as of August 19, 2015.

 

The Company has developed a healthy beverage product line containing a unique strain of purple corn which is high in antioxidant value. The beverages are all natural, low calorie, gluten free, and non-GMO. The Company plans to distribute and sell the beverages through large retailers and club stores in the United States.

 

Note. 2 Significant Accounting Policies

 

Basis of Presentation

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year-end is June 30.

 

Estimates

 

The preparation of financial statements in conformity with 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, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

 

Financial Instruments

 

The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and amounts due to related parties, as reported in the accompanying balance sheets, approximates fair value due to the short-term nature of these financial instruments.

 

Property and Equipment

 

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three to seven years.

 

Website Development Costs

 

The Company has adopted the provisions of FASB Accounting Standards Codification No. 350 Intangible-Goodwill and Other. Costs incurred in the planning state of websites are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated three-year life of the asset. All website development costs have been fully amortized at March 31. 2017

 

Other Assets

 

Our drink license was amortized over three years and is fully amortized at March 31. 2017.

 

Long-Lived Assets

In accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

 

  7  
 

 

Income Taxes

 

The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

Revenue Recognition

 

Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, products are shipped, which is when title and risk of loss pass to the customer and collectability of the amount is reasonably assured. Specifically, revenue is recognized when products are shipped, which is when title and risk of loss pass to the customer. The Company classifies selling discounts and rebates, if any, as a reduction of revenue.

 

Advertising Costs

 

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred no advertising expenses during the periods ended March 31. 2017 and 2016.

 

Stock-Based Compensation

 

In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation . Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.

 

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.

 

Basic and Diluted Net Loss per Common Share

 

Net loss per common share is computed pursuant to FASB Accounting Standards Codification No. 260, Earnings per Share . Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed in the same way as for basic net loss.

 

Reclassifications

 

Certain amounts previously presented for prior year have been reclassified. The reclassifications had no effect on net loss, total assets, or stockholders’ deficit.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

  Note 3. Going Concern

 

The financial statements have been prepared assuming the Company will continue as a going concern which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company incurred a net loss of $35,301 for the period ended March 31. 2017and accumulated losses of $53,144,496 since inception to March 31. 2017. Cash used in operations for the period ended March 31. 2017 was $11,115 and as of March 31. 2017, we had a working capital deficit of $615,883. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.

 

  8  
 

 

Management believes that the actions presently being taken and the success of future operations will be sufficient to enable the Company to continue as a going concern, however, there can be no assurance that the raising of equity will be successful or that the Company will be able to achieve profitability. Failure to achieve the needed equity funding or establish profitable operations would have a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Note 4. Property and Equipment

 

The Company started the construction of several websites all of which have been completed and were amortized over three years. Computers and furniture are being depreciated over three to seven years.

 

Property and equipment were as follows:

 

    March 31. 2017     June 30, 2016  
             
Office equipment   $ 22,165     $ 22,165  
Depreciation     19,188       17,052  
Net book value   $ 2,977     $ 5,113  

 

Note 5. Commitments and Contingencies

 

Lease Commitments

 

The Company gave up its leased office space in Jupiter, Florida in January 2014, and acquired a new office in Newport Beach, California. The Florida leaseholder obtained a judgment in the amount of $181,968 for the remainder of the monthly lease payments through June 2016 pursuant to the terms of the lease agreement plus legal fees of $1,487. The Company has recorded the full amount of the judgment, however believes that when the facility is re-leased it may not have to pay the full amount. Upon the leaseholder’s execution of a new lease with a new tenant, the Company plans to file for the release of the amount of the judgment over and above the actual loss incurred by the leaseholder. There is no guarantee the property will be re-leased or that such a filing will be successful and that the Company will be able to mitigate its loss in this way.

 

In January 2014, the Company entered into a lease at the rate of $1,439 per month which ended December 2014. In January 2015, the Company was equipped to operate in a virtual environment. We believe that our existing arrangement which provides for virtual pbx telephone, à la carte conference space, address services, mail forwarding and hosting facilities to be highly cost effective and adequate to meet our current needs. The Company plans to seek suitable additional space when needed.

 

The Company has not invested in any real property at this time, nor does the Company intend to do so. The Company has no formal policy with respect to investments in real estate or investments with persons primarily engaged in real estate activities.

 

Legal

 

In June of 2013, a former officer of the Company filed a lawsuit against the Company and its President and directors alleging several counts, including a breach of contract and fiduciary duty, and seeking damages in the amount of $122,300 and other unspecified damages. On March 20, 2015 the court entered a final judgment in the amount of $200,761 comprised of the principal amount of $122,344 plus prejudgment interest from September 15, 2012 through the date of judgment in the amount of $54,421, costs in the amount of $773, and attorney’s fees of $23,222. The court dismissed the case against any party not listed in the final order and the case is now closed as to all parties. As of March 31. 2017 the Company had accrued in full for this liability of $200,761 in its financial statements.

 

Note 6. Stockholders’ Deficit

 

The Company has authorized 200,000,000 shares of common stock with a par value of $0.001 and 25,000,000 shares of preferred stock with a par value of $0.001.

 

During the year ended June 30, 2016 the Company issued 3,708,039 shares of common stock valued at $1,463,483 for services rendered by related parties, 112,500 shares of common for services valued at $112,500, and 476,461 shares of common stock in payment of Directors’ fees valued at $162,000.

 

During the nine months ended March 31. 2017 the Company issued 150,000 shares of common stock in payment of services to a related party.

 

  9  
 

 

Note 8. Loans from Directors and Shareholders

 

During the nine months ended March 31. 2017 a related party advanced the Company loans in the amount of $11,115. As of March 31. 2017 the balance of loans outstanding was $61,143. The loans are non-interest bearing and due on demand.

 

Share valuations are determined by the closing quoted share price of the stock on the date the issuance is authorized by the Board of Directors.

 

Note 9. Income Taxes

 

The components of the deferred tax asset are as follows:

 

Deferred tax assets   March 31. 2017     June 30, 2016  
Net operating loss carry-forwards and other nominal temporary differences   $ 577,320     $ 574,200  
Valuation allowance     (577,320 )     (574,200 )
                 
Net deferred tax assets   $ -     $ -  

 

The Company had available approximately $1,698,000 at March 31. 2017 and $1,688,800 at June 30, 2016 of unused federal and Florida net operating loss carry-forwards that may be applied against future taxable income. These net operating loss carry-forwards expire through 2033.

There is no assurance that the Company will realize the benefit of the net operating loss carry-forwards. ASC No. 740 requires a valuation allowance to be recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

 

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows at March 31. 2017 and June 30, 2016 respectively:

 

Statutory rate     34 %
State taxes, net of federal tax benefit   0 %
Effective tax rate     34 %

 

Note 10. Subsequent Events

 

The Company has evaluated subsequent events from March 31. 2017 through the date the financial statements were available to be issued and has determined that, other than as disclosed above, there have been no subsequent events after March 31. 2017 for which disclosure is required.

 

 

 

 

ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and any other similar words. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward- looking statements include, among others, the following:

 

● product liability claims;
   
● our relationship with, and our ability to influence the actions of, our distributors;
   
● adverse publicity associated with our industry, products or ingredients;
   
● improper action by our employees in violation of applicable law;
   
● changing consumer preferences and demands;
   
● loss or departure of any member of our senior management team which could negatively impact our distributor and/or buyer relations and operating results;
   
● the competitive nature of our business;
   
● regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products or ingredients;
   
● risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, pricing and currency devaluation risks;
   
● our dependence on increased penetration of existing markets;
   
● contractual limitations on our ability to expand our business;
   
● our reliance on our information technology infrastructure and outside manufacturers;
   
● the sufficiency of trademarks and other intellectual property rights;

 

● product concentration;
   
● our reliance on our management team;
   
● uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;
   
● changes in tax laws, treaties or regulations, or their interpretation;
   
● any collateral impact resulting from the ongoing worldwide financial “crisis,” including the availability of liquidity to us, our customers and our suppliers or the willingness of our customers to purchase products in a recessionary economic environment; and;
   
● whether we will purchase any of our shares in the open markets or otherwise.

 

OVERVIEW

 

To more effectively facilitate the process of shifting to retail distribution, in November 2013, Richard Damion joined our Company as the acting Chief Executive Officer. He was then approved by the Board of Directors as the Company’s Chief Executive Officer in January, 2014. On February 15, 2015, the Board of Directors of the Company appointed A.R. (Bud) Grandsaert as the Company’s new President. Richard Damion resigned as the Company’s President as of that date, however, he remains the Company’s Chief Executive Officer and Director.

 

We determined during the first quarter of 2015 that we would transition out of our lower margin, perishable snack food product lines and have focused our resources solely on developing our new healthy beverages. Amaize Beverage Corporation will continue to focus on developing its healthy beverage product line with a plan to sell to large retailers and club stores in the United States. The Company recently completed development of a unique “better for you” beverage with purple corn as its primary ingredient. Purple corn has historical roots of over thousands of years yet is newly rediscovered for its incredible health benefits. Leading Research & Development companies in the United States have been gathering data on its health benefits and working on integrating its benefits into a number of consumer products. The beverage, with super antioxidant status, is a unique blend of fruits and spices, offering extraordinary health benefits and great taste. Our initial portfolio design includes three beverage lines; Amaize™ 100% Natural Purple Corn Beverage, Amaizing Tea™ and Amaizing Lemonade™. We plan to launch our Amaize™ 100% Natural Purple Corn Drink ahead of our blended teas and blended lemonades to establish our distribution network with a one of a kind product and to later, ‘red-carpet’ our tea and lemonade beverages through an established distribution system. The fact that the average American drinks over seven drinks per day allows plenty of opportunity to market a healthy drink, helping us to achieve our mission of providing a positive healthy delicious beverage . While there can be no assurance, management believes that this strategy will ultimately prove successful. The Company is currently seeking the necessary financing to pursue its business and growth plans, however, no assurances can be given that the Company will obtain the necessary financing.

 

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We are a virtual company with a focus on staying lean through the use of cloud based technologies, maintaining low overhead, subcontracting services, creating sales through commissioned brokers, developing products through reputable co-packers and keeping little to no inventory except for use in sales and business development activities.

 

Industry wide factors that affect us include the increasing prevalence of obesity in adults and children and demand for healthier foods and beverages worldwide.

 

  ● According to the World Health Organization (WHO), approximately 1.7 billion adults are overweight and 400 million are obese. By 2015, it is predicted that 2.3 billion adults will be overweight and more than 700 million will be obese. Obesity rates among children have also climbed, with more than 30 percent now overweight or obese.
     
  ● According to the Centers for Disease Control and Prevention, over the last 30 years, obesity among American children ages 6 to 11years has more than doubles.
     
  ● Studies show that the most effective way to prevent obesity is to address it during childhood by instilling healthy habits which starts with the very basis of cutting back on sugary drinks, eating the right foods and exercising daily.

 

Significant Accounting Policies

 

For the Company’s significant accounting policies see “Footnote 2” to the accompanying March 31. 2017 unaudited financial statements.

 

Presentation

 

“Net sales,” reflect distribution allowances, handling and shipping income, represent what we collect and recognize as net revenues in our financial statements.

 

Our “gross profit” consists of net sales less “cost of sales,” which represents the prices we pay to our raw material suppliers and manufacturers of our products as well as costs related to product shipments to our warehouse and distribution center, duties and tariffs, expenses relating to shipment of products to customers and importers and similar expenses.

 

“Selling fees” consist of commissions, overrides and production bonuses.

 

Our “operating margins” consist of net sales, less cost of sales and selling fees.

 

“General and administrative expenses” represent our operating expenses, components of which include labor and benefits, sales and marketing events, professional fees, travel and entertainment, marketing, occupancy costs, communication costs, bank fees, depreciation and amortization and other miscellaneous operating expenses.

 

RESULTS OF OPERATIONS

 

Our results of operations for the periods below are not necessarily indicative of results of operations for future periods, which depend on numerous factors, including our ability to distribute our products through major retailers, open new markets, penetrate existing markets, and our ability to secure, develop and introduce new products.

 

Three and Nine Months Ended March 31, 2017 Compared to Three and Nine Months Ended March 31, 2016.

 

Revenue

 

The Company revised its sales method from network marketing sales through individual brand partners to direct to consumer and retail store sales at the end of its fiscal year June 30, 2013. The Company had no revenues in the three and nine months ended March 31, 2017 and 2016.

 

Cost of Revenues

 

The Company recognized no cost of sales in the three and nine month periods ended March 31, 2017 or 2016 as it recognized no sales during these periods.

 

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Gross Profit

 

The Company recognized no gross profit in the three and nine months ended March 31, 2017 and 2016 due to the factors described above.

 

Selling Expenses

 

The Company incurred no selling expenses in the three and nine months ended March 31, 2017 and 2016 as it had no sales activity in these periods.

 

General and Administrative Expenses

 

General and administrative expenses comprised the following for the three months ended March 31, 2017 and 2016:

 

    GENERAL AND ADMINISTRATIVE
    Three Months ended
March 31, 2017 		    Three Months ended
March 31, 2016 		 
             
Independent contractors   $ -     $ 3,125  
Directors’ fees     -       -  
Professional fees     4,766       (4,368 )
Technology     505       3,087  
Product development     -       -  
Travel and entertainment     -       159  
Office expenses     357       2,077  
Telephone     452       531  
Depreciation     712       712  
                 
    $ 6,792     $ 5,323  

 

General and administrative expenses consist primarily of professional advisor fees, audit fees and travel associated with exploring new opportunities. Our general and administrative expenses for the three months ended March 31, 2017 were approximately $1,400 more as compared to the three months ended March 31, 2016.

 

General and administrative expenses comprised the following for the nine months ended March 31, 2017 and 2016:

 

    GENERAL AND ADMINISTRATIVE
    Nine Months ended
March 31, 2017 		    Nine Months ended
March 31, 2016 		 
             
Independent contractors   $ 21,000     $ 1,445,108  
Directors’ fees             4,500  
Professional fees     5,423       17,945  
Technology     1,717       66,760  
Product development     -       50,000  
Travel and entertainment     -       3,635  
Office expenses     446       289  
Telephone     1,291       345  
Depreciation     1,424       1,424  
                 
    $ 31,301     $ 1,590,006  

 

General and administrative expenses consist primarily of professional advisor fees, audit fees and travel associated with exploring new opportunities. Our general and administrative expenses for the nine months ended March 31, 2017 were approximately $1,560,000 less as compared to the nine months ended March 31, 2016. The decrease was due to fewer shares being issued for the non-cash payment of services to related parties included in independent contractors, no additional product development costs and a substantial reduction in technology costs.

 

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Provision for Income Taxes

 

We incurred taxable losses; consequently, no liability for taxation was incurred during the nine months ended March 31, 2017 or 2016.

 

Net Loss

 

The net loss for the nine months ended March 31, 2017 was $35,301 as compared to $1,611,454 for the nine months ended March 31, 2017.

 

Liquidity and Capital Resources

 

The Company had no cash balance as of March 31, 2017 and a working capital deficit as follows:

 

Total current assets   $ -  
Total current liabilities     615,883  
Working capital deficit   $ (615,883 )

 

The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and to successfully implement its business plan. Management believes that the actions presently being taken and the success of future operations may be sufficient to enable the Company to continue as a going concern. However, there can be no assurance that the raising of equity will be successful. Failure to achieve the needed equity funding could have a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Cash Flows

 

The following table summarizes selected items from our accompanying Statement of Cash Flows for the nine months ended March 31, 2017 and 2016.

 

Net cash provided by (used in):   March 31, 2017     March 31, 2016  
Operating activities   $ (11,115 )   $ (20,506 )
Investment activities     -       -  
Financing activities     11,115       20,506  
                 
Total change in cash   $ -     $ -  

 

During the nine months ended March 31, 2017 and 2016, the Company’s operating expenses of $11,115 and $20,506 respectively, were paid by loans from a shareholder of the Company.

 

Off Balance Sheet Arrangements

 

At March 31, 2017, we had no material off balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

 

ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk

 

As a Smaller Reporting Company, as defined by Rule 12b-2 of the Exchange Act and in Item 10 (f) (1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

 

This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and any other similar words. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward- looking statements include, among others, the following:

 

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● product liability claims;
   
● our relationship with, and our ability to influence the actions of, our distributors;
   
● adverse publicity associated with our industry, products or ingredients;
   
● improper action by our employees in violation of applicable law;
   
● changing consumer preferences and demands;
   
● loss or departure of any member of our senior management team which could negatively impact our distributor and/or buyer relations and operating results;
   
● the competitive nature of our business;
   
● regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products or ingredients;

 

● risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, pricing and currency devaluation risks;
   
● our dependence on increased penetration of existing markets;
   
● contractual limitations on our ability to expand our business;
   
● our reliance on our information technology infrastructure and outside manufacturers;
   
● the sufficiency of trademarks and other intellectual property rights;
   
● product concentration;
   
● our reliance on our management team;
   
● uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;
   
● changes in tax laws, treaties or regulations, or their interpretation;
   
● any collateral impact resulting from the ongoing worldwide financial “crisis,” including the availability of liquidity to us, our customers and our suppliers or the willingness of our customers to purchase products in a recessionary economic environment; and;
   
● whether we will purchase any of our shares in the open markets or otherwise.

 

ITEM 4 - Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

A system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-l5(e)) under the Securities Exchange Act of 1934,as amended the “Exchange Act” are controls and other procedures that are designed to provide reasonable assurance that the information that the Company is required to disclose in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Moreover, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

 

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The Company’s Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company, and have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report, based on their evaluation of these controls and procedures required by paragraph (b) of Rules 13a-15(f) and 15d-15(f), due to certain material weaknesses in our internal control over financial reporting as discussed below.

 

Internal Control over Financial Reporting

 

The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting for the Company. Due to limited resources, Management conducted an evaluation of internal controls based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The results of this evaluation determined that our internal control over financial reporting was ineffective as of March 31, 2017, due to material weaknesses. A material weakness in internal control over financial reporting is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

 

Management’s assessment identified the following material weaknesses in internal control over financial reporting:

 

  ● The small size of our Company limits our ability to achieve the desired level of separation of internal controls and financial reporting. We currently do not have independent directors on our Board of Directors to review and oversee the financial policies and procedures of the Company.
     
  ● We do not have a functional audit committee since our Board of Directors acts as the audit committee.
     
  ● We have not achieved the desired level of documentation of our internal controls and procedures. When the Company obtains sufficient funding, this documentation will be strengthened through utilizing a third party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.

 

As a result of the material weaknesses in internal control over financial reporting described above, the Company’s management has concluded that, as of March 31, 2017, the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by the COSO.

 

To date, the Company has not been able to establish an Audit Committee with an independent director due its limited financial resources. When the Company obtains sufficient funding, Management intends to add establish its Audit Committee and charge them with assisting the Company in addressing the material weaknesses noted above. The Company’s lack of current financial resources makes it impossible for the Company to hire the appropriate personnel needed to overcome these weaknesses and ensure that appropriate controls and separation of responsibilities of a larger organization exist. We also will continue to follow the standards for the Public Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:

 

  ● Pertain to the maintenance of records in reasonable detail accurately that fairly reflect the transactions and dispositions of the Company’s assets;
     
  ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and
     
  ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

 

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Changes in Internal Control over Financial Reporting

 

Our management determined that there were no changes made in our internal controls over financial reporting during the nine months ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

This quarterly report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this period report.

 

PART II - OTHER INFORMATION

 

ITEM 1 - LEGAL PROCEEDINGS

 

None.

 

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 - MINE SAFETY DISCLOSURES

 

Not applicable to our Company.

 

ITEM 5 - OTHER INFORMATION

 

None.

 

ITEM 6 – EXHIBITS

 

(a) Exhibits

 

Exhibit No.   Description
     
Exhibit 31.1   CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
     
Exhibit 31.2   CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
     
Exhibit 32.1   CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
     
 101.INS   XBRL Instance Document
     
101.SCH   XBRL Schema Document
     
101.CAL   XBRL Calculation Linkbase Document
     
101.DEF   XBRL Definition Linkbase Document
     
101.LAB   XBRL Label Linkbase Document
     
101.PRE   XBRL Presentation Linkbase Document

 

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SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  AMAIZE BEVERAGE CORPORATION
     
Date: August 9, 2017 By: /s/ Richard Damion
    Richard Damion
    Chief Executive Officer
     
  By: /s/ William Lindberg
    William Lindberg
    Chief Financial Officer

 

  18  
 

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