ITEM 1. BUSINESS
Description of Business and History
Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010, the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013.
In May 2017, the Company announced plans to register the company as a closed ended fund to invest in public companies within the pharmaceutical cannabis sector as a whole.
On November 19, 2013, pursuant to a letter of intent dated September 10, 2013, the Company issued 20,000,000 post-split shares of its common stock to Rene Hamouth in exchange for 100% ownership of Evergreen Systems (“ES”). Except for conducting research on the medical marijuana industry, ES had no assets, liabilities, or business operations prior to the acquisition. At closing, the Company also issued 19,600,000 post-split shares of its common stock to Harpreet Sangha (then director and former chief executive officer of the Company from September 19, 2009 to September 1, 2013) for future services to be rendered and 1,000,000 post-split shares of its common stock to Richard Specht (secretary and director of the Company from September 1, 2013 to November 21, 2014) for services rendered. ES became a wholly owned subsidiary of the Company.
The acquisition resulted in a change of control of the Company on November 19, 2013. The accompanying consolidated financial statements reflect the assets, liabilities and operations of Evergreen Systems from its inception on August 15, 2013 to November 19, 2013 and are consolidated with Evergreen-Agra, Inc. thereafter.
Search for Business Opportunities
The Company’s search will be directed toward medical marijuana assets and small and medium-sized enterprises in that industry which have a desire to become reporting corporations and which are able to provide audited financial statements. While the Company is focused on the medical marijuana industry, the Company does not propose to restrict its search for investment opportunities to any particular geographical area or solely to that industry, and may, therefore, engage in essentially any business, to the extent of its limited resources. The Company’s discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors. No assurance can be given that the Company will be successful in finding or acquiring a desirable business opportunity, and no assurance can be given that any acquisition, which does occur, will be on terms that are favorable to the Company or its current stockholders.
The Company may merge with a company that has retained one or more consultants or outside advisors. In that situation, the Company expects that the business opportunity will compensate the consultant or outside advisor. As of the date of this filing, there have been no discussions, agreements or understandings with any party regarding the possibility of a merger or acquisition between the Company and such other company. Consequently, the Company is unable to predict how the amount of such compensation would be calculated at this time.
The Company will not restrict its search to any specific kind of firm or type of assets, but may acquire a venture, which is in its preliminary or development stage, one which is already in operation, or in a more mature stage of its corporate existence, or simply acquire assets from which it will build its (desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
Evaluation of Business Opportunities
The analysis of business opportunities will be under the supervision of the Company’s management and directors, who are not professional business analysts. In analyzing prospective business opportunities, management will consider such matters as available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable, but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of a variety of factors, including, but not limited to, the possible need to expand substantially, shift marketing approaches, change product emphasis, change or substantially augment management, raise capital and the like. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. Prior to making a decision to participate in a business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, such items as a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during the relevant periods; a description of present and required facilities;, an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available at that time, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced within a required period of time; and the like.
The Company is currently subject to the reporting requirements of the Exchange Act. Under the Exchange Act, any merger or acquisition candidate will become subject to the same reporting requirements of the Exchange Act as the Company following consummation of any merger or acquisition. Thus, in the event the Company successfully completes the acquisition of or merger with an operating business entity, that business entity must provide audited financial statements for at least two most recent fiscal years or, in the event the business entity has been in business for less than two years, audited financial statements will be required from the period of inception. Acquisition candidates that do not have or are unable to obtain the required audited statements will not be considered appropriate for acquisition.
Management believes that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current stockholders, acquisition candidates which have long-term plans for raising capital through public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates, who have a need for an immediate cash infusion, are not likely to find a potential business combination with the Company to be an attractive alternative. Nevertheless, the Company has not conducted market research and is not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more. There can also be no assurances that we are able to successfully pursue a business opportunity. In that event, there is a substantial risk to the Company that failure to complete a business combination will significantly restrict its business operation and force management to cease operations and liquidate the Company.
Bankruptcy or similar proceedings
We have not been the subject of a bankruptcy, receivership or similar proceedings.
Competition
We operate in a highly competitive industry, many of our competitors have financial resources, staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to cost effectively acquire prospects and then exploit such prospects. Competition for the acquisition of exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of this competition. No assurance can be given that a sufficient number of suitable exploration properties will be available for acquisition, exploration and development.
Employees
We have no significant employees other than our officers and directors. We plan to retain independent consultants on a contract basis to conduct the work to carry out our plan of operations.
Research and Development Expenditures
We have not incurred any research or development expenditures since our incorporation.
Subsidiaries
Our Company has one subsidiary business: Evergreen Systems.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or trademark.
Reports to Securities Holders
We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, (“SEC”), at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
ITEM 1A.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2.
ITEM 2. PROPERTIES
We currently do not own any physical property or own any real property. Our principal executive office is located at 19800 MACARTHUR SUITE 300 IRVINE CA 92612.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Shares of our common stock have been quoted on the OTC Markets since December 26, 2008. From December 26, 2008 to June 17, 2009 shares of our common stock were quoted under the symbol “AFCP”, from June 18, 2009 to January 13, 2010 under the symbol “BCKR”, from January 14, 2010 to July 19, 2011 under the symbol “ARGC”, from July 20, 2011 to October 23, 2013 under the symbol “SHRK” and currently, the Company’s shares are quoted under the symbol “EGRN”. The range of high and low closing trading price information for each quarter in the past two years is set forth below. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
___________
(A)
The last reported transaction was 100 shares on June 28, 2017 at $3.00 per share
Shareholders
As of May 30, 2017, we had 169 shareholders.
Dividends
We have not, since the date of our incorporation, declared or paid any dividends on our common shares. We anticipate that we will retain future earnings and other cash resources for the operation and development of our business for the foreseeable future. The payment of dividends in the future will depend on our earnings, if any, and our financial condition and such other factors as our board of directors considers appropriate.
Equity Compensation Plans
We do not currently have any equity compensation plans in place at this time. We have no outstanding options.
Recent Sales of Unregistered Securities
On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during the year ended December 31, 2016.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our most recent audited financial statements which are included in this annual report, and the related notes to such financial statements. This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. We have yet to generate revenues to achieve profitability.
Plan of Operations
Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010 the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013.
In May 2017, the Company announced plans to register the company as a closed ended fund to invest in public companies within the pharmaceutical cannabis sector as a whole.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At December 31, 2016, the Company had negative working capital of $1,047,303. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.
The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
For the years ended December 31, 2016 and 2015, we had no revenues. Total operating expenses increased $1,011,038 from negative expenses of $56,956 in 2015 to $954,082 in 2016. Stock-based compensation increased $822,994 from $44,000 in 2015 to $866,994 in 2016 as a result of the issuance of 17,339,889 shares of Company common stock to Matthew Rhoden on February 25, 2016 pursuant to an Executive Agreement dated January 4, 2016. Professional fees and other general and administrative expenses increased $55,772 from $11,991 in 2015 to $67,763 in 2016 due to higher professional fees in 2016 as a result of our filing delinquent 2013, 2014 and 2015 periodic reports with the SEC in 2016. Foreign exchange loss increased $132,422 from a gain of $113,747 in 2015 (resulting from a decrease in the Canadian Dollar exchange rate used to translate our liabilities denominated in Canadian Dollars to United States Dollars) to a loss of $18,675 in 2016 (resulting from an increase in the Canadian Dollar exchange rate).
Net loss increased $1,011,038 from net income of $56,956 in 2015 to a net loss of $954,082 in 2016. The increase was due to the $822,994 increase in stock-based compensation, the $55,772 increase in professional fees and other general and administrative expenses, and the $132,422 increase in foreign exchange loss explained above.
Liquidity and Capital Resources
We had a working capital deficit of $1,047,303 at December 31, 2016. At both December 31, 2016 and 2015, we had no cash or cash equivalents. General and administrative expenses paid in 2016 and 2015 were paid directly by or on behalf of our Chairman of the Board of Directors.
On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Evergreen-Agra, Inc.
I have audited the accompanying consolidated balance sheets of Evergreen-Agra, Inc. (the “Company”) as of December 31, 2016 and 2015 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2016 and 2015. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company’s Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Evergreen-Agra, Inc. as of December 31, 2016 and 2015 and the results of its operations and cash flows for the years ended December 31, 2016 and 2015 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael T. Studer CPA P.C.
Michael T. Studer CPA P.C.
Freeport, New York
June 13, 2017
Evergreen-Agra, Inc.
(Formerly Sharprock Resources Inc.)
Consolidated Balance Sheets
The accompanying notes are an integral part of these consolidated financial statements.
Evergreen-Agra, Inc.
(Formerly Sharprock Resources Inc.)
Consolidated Statements of Operations
For the Years Ended December 31,
The accompanying notes are an integral part of these consolidated financial statements.
Evergreen-Agra, Inc.
(Formerly Sharprock Resources Inc.)
Consolidated Statements of Stockholders' Equity
For the Years Ended December 31, 2015 and 2016
The accompanying notes are an integral part of these consolidated financial statements.
Evergreen-Agra, Inc.
(Formerly Sharprock Resources Inc.)
Consolidated Statements of Cash Flows
For the Years Ended December 31,
The accompanying notes are an integral part of these consolidated financial statements.
EVERGREEN-AGRA, INC.
(Formerly Sharprock Resources Inc.)
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2016 and 2015
NOTE 1. NATURE OF OPERATIONS
Description of Business and History
Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010, the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013. In May 2017, the Company announced plans to register the Company as a closed ended fund to invest in public companies within the cannabis sector.
On November 19, 2013, pursuant to a letter of intent dated September 10, 2013, the Company issued 20,000,000 post-split shares of its common stock to Rene Hamouth in exchange for 100% ownership of Evergreen Systems (“ES”). Except for conducting research on the medical marijuana industry, ES had no assets, liabilities, or business operations prior to the acquisition. At closing, the Company also issued 19,600,000 post-split shares of its common stock to Harpreet Sangha (then director and former chief executive officer of the Company from September 19, 2009 to September 1, 2013) for future services to be rendered and 1,000,000 post-split shares of its common stock to Richard Specht (secretary and director of the Company from September 1, 2013 to November 21, 2014) for services rendered. ES became a wholly owned subsidiary of the Company. The acquisition resulted in a change of control of the Company on November 19, 2013 and was accounted for as a reverse acquisition.
NOTE 2. GOING CONCERN UNCERTAINTY
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At December 31, 2016, the Company had negative working capital of $1,047,303. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.
The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Evergreen-Agra, Inc. (from November 19, 2013 to December 31, 2016) and its wholly owned subsidiary ES (from inception on August 15, 2013 to December 31, 2016). All significant intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in U.S. dollars.
Use of Estimates
In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with original maturities of three months or less when acquired to be cash equivalents. We had no cash equivalents at December 31, 2015 and 2016.
Equipment
Equipment is stated at historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, generally ranging from three to five years.
Stock-Based Compensation
Stock-based compensation is accounted for at estimated fair value in accordance with Accounting Standards Codification 718, “Compensation - Stock Compensation.”
Income Taxes
The Company accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company computes tax assets benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
Income (Loss) Per Common Share
The Company reports net income (loss) per share in accordance with provisions of the FASB. The provisions require dual presentation of basic and diluted income (loss) per share. Basic net income (loss) per share excludes the impact of common stock equivalents. Diluted net income (loss) per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. For the periods presented, there were no common stock equivalents outstanding.
Fair Value of Financial Instruments
Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of December 31, 2015 and 2016. The Company’s financial instruments consist of cash and accounts payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.
Reclassification
Certain 2015 expense amounts have been reclassified to conform to the current year’s presentation.
Recent Accounting Pronouncements
Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.
NOTE 4. ACCOUNTS PAYABLE
Accounts payable at December 31, 2016 and 2015 consists of:
At December 31, 2016, $145,273 of the total $574,742 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.
At December 31, 2015, $139,315 of the total $547,838 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2015 exchange rate of $0.7215.
The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.
NOTE 5. ACCOUNTS PAYABLE - RELATED PARTIES
Accounts payable - related parties at December 31, 2016 and 2015 consists of:
At December 31, 2016, $451,118 of the total $472,643 accounts payable - related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.
At December 31, 2015, $436,992 of the total $446,109 accounts payable - related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2015 exchange rate of $0.7215.
The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.
NOTE 6. COMMON STOCK ISSUANCES
Issuances in 2015
On June 30, 2015, the Company issued 100,000 shares of its common stock to Bram Solloway for consulting services. The $44,000 estimated fair value of the 100,000 shares of Company common stock has been charged to “Stock-based compensation” in the statement of operations for the three months ended June 30, 2015.
On July 2, 2015, the 19,600,000 shares of Company common stock issued to Harpreet Sangha on November 19, 2013 were returned to the Company transfer agent and cancelled due to the resignation of Harpreet Sangha as Chairman of the Board and as a director on May 4, 2014.
Issuances in 2016
On February 25, 2016, the Company issued 17,339,889 shares of its common stock to Matthew Rhoden pursuant to an Executive Agreement between the Company, Matt Rhoden (the “Executive”) and Rene Hamouth (the “Principal Shareholder”) dated January 4, 2016. The agreement provided for the employment of the Executive as Chief Executive Officer of the Company for a period of 5 years, unless sooner terminated by the Board of Directors. The agreement also provided for the Executive and Principal Stockholder to vote together on all matters presented to the shareholders for vote and for each to grant the other a right of first refusal on shares owned by each during the term of the agreement. The $866,994 estimated fair value of the 17,339,889 shares of Company common stock was charged to “Officer compensation” in the statement of operations for the three months ended March 31, 2016. The 17,339,889 shares of Company common stock were returned to the Company and cancelled on January 13, 2017 due to Mr. Rhoden’s resignation as chief executive officer and director at the Company on January 12, 2017.
On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth (see Note 5).
NOTE 7. INCOME TAXES
The Company has generated taxable losses for the periods presented. Accordingly, no provisions for income taxes have been recorded.
The Company’s effective tax rate differs from the United States Federal income tax rate as follows:
At December 31, 2016, the Company has net operating loss carryforwards which expire from 2028 to 2036. The deferred tax asset relating to these net operating loss carryforwards has been fully reserved for at December 31, 2016 and December 31, 2015 since management’s assessment has not yet determined it to be more likely than not that the net operating loss carryforwards will be realized.
Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
NOTE 8. SUBSEQUENT EVENTS
On January 13, 2017, the 17,339,889 shares of Company common stock issued to Matthew Rhoden on February 15, 2016 (see NOTE 6) were returned to the Company and cancelled due to the resignation of Matthew Rhoden as chief executive officer and director of the Company on January 12, 2017.
Pursuant to a Debt Settlement Agreement dated January 18, 2017 between Rene Hamouth individually and Mark Henley, the Company erroneously issued a total of 102,000 shares of its common stock to Mr. Henley on January 19, 2017 and February 1, 2017. As the agreement was with Rene Hamouth individually (not the Company), Mr. Hamouth delivered 102,000 shares of his common stock to the Company transfer agent for cancellation on July 7, 2017 to correct the erroneous Company issuance of the 102,000 shares of Common stock.
On March 1, 2017, the Company issued 25,000 shares of its common stock to its law firm for services rendered. The $15,000 estimated fair value of the 25,000 shares of Company common stock will be charged to “Professional fees” in the statement of operations for the three months ended March 31, 2017.
On March 7, 2017, the Company issued 250,000 shares of its common stock to Jonas LaForge in connection with contemplated transactions with Green - Era consulting and Med - Care Advisors. The conditions for closing were not completed and the Company has requested Mr. LaForge return the 250,000 shares for cancellation.
On June 23, 2017, the Company changed its name to Evergreen - Agra Global Investments, Inc.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Management
Mr. Rene Hamouth is our Company’s President and Chairman of the Board of Directors. All references herein to management of the Company is to Mr. Hamouth. He has agreed to allocate his time to the activities of the Company for which he will be compensated.
Management’s Report On Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016 based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, our management concluded that, during the period covered by this report, such internal controls over financial reporting were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer and our Chief Financial Officer in connection with the review of our financial statements as of December 31, 2016.
Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the company to provide only management’s report.
Management’s Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate, the following series of measures once we have the financial resources to do so:
We intend to create a position to segregate duties consistent with control objectives and to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. In addition, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the last quarter of our fiscal year ended December 31, 2016, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
Not applicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The name, age and titles of our executive officers and directors are as follows:
Mr. Rene Hamouth is our Company’s President and Chairman of the Board of Directors. All references herein to management of the Company is to Mr. Hamouth. He has agreed to allocate his time to the activities of the Company for which he will be compensated.
Term of Office
Our directors are appointed to hold office until the next annual meeting of our stockholders or until their successor is elected and qualified, or until they resign or are removed in accordance with the provisions of the State of Nevada Statutes. Our officers are appointed by our Board of Directors and hold office until removed by the Board.
Significant Employees
We have no significant employees other than our officers and directors.
Family Relationships
There are currently no family relationships between any of our board of directors or our executive officers.
Committees of the Board of Directors
Our Board of Directors acts as our nominating committee and our audit committee; we do not have separate committees that perform these functions.
Involvement in Certain Legal Proceedings
Except as disclosed in this annual report, during the past ten years none of the following events have occurred with respect to any of our directors or executive officers:
1.
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.
Engaging in any type of business practice; or
iii.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.
Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;
5.
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.
Such person was 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, relating to an alleged violation of:
i.
Any Federal or State securities or commodities law or regulation; or
ii.
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
iii.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.
Such person was 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), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
There are currently no legal proceedings to which our officers and directors are a party adverse to us or in which our officers and director has a material interest adverse to us.
Compliance with Section 16 of the Securities Exchange Act
Section 16(a) of the Exchange Act requires the executive officers and directors, and persons who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. We have not received copies of any such forms from our executive officers and directors during the fiscal year ended December 31, 2016.
Code of Ethics
Our board of directors adopted our code of ethical conduct that applies to all of our employees and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.
We believe the adoption of our Code of Ethical Conduct is consistent with the requirements of the Sarbanes-Oxley Act of 2002.
Our Code of Ethical Conduct is designed to deter wrongdoing and to promote:
·
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·
Full, fair, accurate, timely and understandable disclosure in reports and documents that we file or submit to the Securities & Exchange Commission and in other public communications made by us;
·
Compliance with applicable governmental laws, rules and regulations;
·
The prompt internal reporting to an appropriate person or persons identified in the code of violations of our Code of Ethical Conduct; and
·
Accountability for adherence to the Code.
·
We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: 19800 MACARTHUR SUITE 300 IRVINE CA 92612.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Management Compensation
The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers during our fiscal years ended December 31, 2016 and 2015.
Summary Compensation Table
_____________
(1)
Mr. Rene Hamouth, Chief Executive Officer of the Company from September 1, 2013 to July 17, 2014, director of the Company from September 1, 2013, and Chairman of the Board of Directors of the Company from July 17, 2014
(2)
Mr. Matthew Rhoden, Chief Executive Officer of the Company from January 4, 2016 to January 12, 2017.
(3)
Mr. Todd Hazlewood, Chief Financial Officer of the Company from July 17, 2014
Outstanding Equity Awards as of December 31, 2016
There were no outstanding equity awards as of December 31, 2016 for each of our named executive officers.
Equity Compensation Plans
We do not currently have any equity compensation plans at this time.
Compensation of Directors
The following table provides information regarding compensation during our fiscal years ended December 31, 2016 and 2015 earned by directors who are not executive officers. Our directors who are executive officers do not receive additional compensation for their service as directors and their compensation is disclosed in the “Summary Compensation” Table above.
Director Compensation
_____________
(1)
Mr. Bacardi was appointed as a director of the Company on December 13, 2013.
Employment Contracts
There are currently no employment contracts or related arrangements with our executive officers or directors.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 30, 2017 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our directors, and or (iii) our officers. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.
_____________
(1)
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 June 30, 2017.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
On February 25, 2016, the Company issued 17,339,889 shares of its common stock to Matthew Rhoden pursuant to an Executive Agreement between the Company, Matt Rhoden (the “Executive”) and Rene Hamouth (the “Principal Shareholder”) dated January 4, 2016. The agreement provided for the employment of the Executive as Chief Executive Officer of the Company for a period of 5 years, unless sooner terminated by the Board of Directors. The agreement also provided for the Executive and Principal Stockholder to vote together on all matters presented to the shareholders for vote and for each to grant the other a right of first refusal on shares owned by each during the term of the agreement. The $866,994 estimated fair value of the 17,339,889 shares of Company common stock was charged to “Officer compensation” in the statement of operations for the three months ended March 31, 2016. The 17,339,889 shares of Company common stock were returned to the Company and cancelled on January 13, 2017 due to Mr. Rhoden’s resignation as chief executive officer and director at the Company on January 12, 2017.
On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.
We do not consider any of our directors as being independent under item 407 (a) of Regulation S-K.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Aggregate fees for professional services rendered to us by our auditors during our last two fiscal years are set forth below.
Audit Fees
Audit fees are the aggregate fees billed for professional services rendered by our independent auditors for the audit of our annual financial statements, the review of the financial statements included in each of our quarterly reports and services provided in connection with statutory and regulatory filings or engagements.
Audit Related Fees
Audit related fees are the aggregate fees billed by our independent auditors for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not described in the preceding category.
Tax Fees
Tax fees are fees billed by our independent auditors for tax compliance, tax advice and tax planning.
All Other Fees
All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Our entire board of directors acts as our audit committee, and has assumed responsibility for the pre-approval of audit and permitted non-audit services to be performed by our company’s independent auditor. Our Board will, on an annual basis, consider and, if appropriate, approve the provision of audit and non-audit services by our auditors. Thereafter, our Board will, as necessary, consider and, if appropriate, approve the provision of additional audit and non-audit services by our auditors which are not encompassed by our Board’s annual pre-approval and are not prohibited by law.
PART IV
ITEM 15.
ITEM 15. EXHIBITS
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Rene Hamouth
Chairman of the Board,
July 13, 2017
Rene Hamouth
President, Secretary and a director