UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURUTIES EXCHANGE ACT OF 1934

 

For the fiscal year ended July 31, 2014

 

Commission file number 333-153510

 

GREEN HYGIENICS HOLDINGS INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada		26-2801338
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

Suite 4, 690 McCurdy Road, Kelowna, B.C., Canada V1X 2P5

(Address of Principal Executive Offices & Zip Code)

 

250-878-7333

(Telephone Number)

 

Securities registered pursuant to Section 12(b) of the Act:

None

 

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ¨ No x

 

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 x No ¨

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

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

 

Large accelerated filer	¨	Accelerated filer o	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

 

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

 

Aggregate market value of voting common equity held by non-affiliates as of April 30, 2015: $150,000 approximately.

 

As of April 30, 2015 the registrant had 11,369,078 shares of common stock issued and outstanding.

 

 

Table of Contents

 

Part I			3
Item 1.	Business			3
Item 1A.	Risk Factors			5
Item 2.	Properties			7
Item 3.	Legal Proceedings			7
Item 4.	Mine Safety Procedures			7
Part II				8
Item 5.	Market for Common Equity and Related Stockholder Matters			8
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			9
Item 8.	Financial Statements and Supplementary Data			10
Item 9.	Changes in and Disagreements with Accountants on Financial Disclosure			22
Item 9A.	Controls and Procedures			22
PART III				23
Item 10.	Directors, Executive Officers and Control Persons			23
Item 11.	Executive Compensation			24
Item 12.	Security Ownership of Certain Beneficial Owners and Management			25
Item 13.	Certain Relationships and Related Transactions			25
Item 14.	Principal Accounting Fees and Services			26
Item 15.	Exhibits			26
Signatures				27

 

2

 

Part I

 

Item 1. Business

 

COMPANY OVERVIEW

 

Green Hygienics Holdings Inc. (the Company) was incorporated in the State of Nevada on June 12, 2008 as Silver Bay Resources Inc. and issued 55,000 shares of common stock on June 12, 2008 (after accounting for the forward and reverse splits detailed below) for cash of $20,000. On June 30, 2010 the Company changed its name to Takedown Entertainment Inc and forward split its issued shares on the basis of five new shares for one old share (5:1) on the same date. On July 24, 2012 the Company changed its name to Green Hygienics Holdings Inc. and, on the same date, reverse split both its issued and outstanding shares of common stock on a two thousand old for one new basis (1:2000).

 

During 2008 the Company staked one mineral claim located 100 km northwest of Vancouver, British Columbia and acquired a molybdenum property comprised of one mineral claim located approximately 35 kilometers north of Vancouver, British Columbia. We did not proceed with further exploration of the mineral claims due to a determination that the results of our initial geological program did not generate investor interest in the claims and we were unable to finance further exploration. Mineral property costs of $20,000 were expensed during 2009. Both properties have since been abandoned by the Company.

 

During the years 2009 to date the Company was involved in the acquisition, production, licensing, marketing and distribution of mixed martial arts (MMA) content, programming and merchandising for North American and International markets. The Company is currently negotiating to transfer to the former President of the Company all of its rights to and interests in its mixed martial arts program (Takedown), including any and all Takedown assets, in return for the forgiveness of a liability of $29,812 owing to the former President of the Company.

 

We had $3,361 in cash reserves as of the year ended July 31, 2014. We anticipate that we will incur $50,000 for administrative expenses, including professional legal and accounting expenses associated with compliance with our periodic reporting requirements over the next twelve months, and approximately $10,000 per month ($120,000) to continue with our business development.

 

We are contemplating raising additional capital to finance our business operations. No final decisions regarding financing have been made at this time. It is anticipated that funding for the Company will come from one or more of the following means: engaging in an offering of our stock; engaging in borrowing; locating a joint venture partner or partners.

 

BANKRUPTCY OR SIMILAR PROCEEDINGS

 

We have not been the subject of a bankruptcy, receivership or similar proceedings.

 

PRODUCTS AND SERVICES

 

During the years 2009 to date the Company was involved in the acquisition, production, licensing, marketing and distribution of mixed martial arts (MMA) content, programming and merchandising for North American and International markets. The Company was never able to close asset acquisition agreements due to a lack of funding. As a result, we have no customers or consumers of our products, we have no principal suppliers or sources for materials. There is no need for government approval of our products and services.

 

During the current year, reviewed two business opportunities. On November 13, 2013, the Company entered into an option to purchase a 50% interest in BION for a total of $2,500,000, a company wholly owned by Aartha USA Inc. Aartha is an approved licensee of a patented hybrid iron/vanadium chemical solution technology developed and owned by PNNL Labs. PNNL has agreed to license Aartha its solution technology for a period of thirty years for the areas of North and South America and Aartha has agreed to supply BION with the solution technology for thirty years. The Company paid $98,800 for the this option and has decided not to proceed with this business opportunity at this time.

 

On January 16, 2014 the Company entered an option agreement whereby the Company holds the option to acquire twelve 2 megawatt wind turbines for a total of $2,280,000 or $190,000 per each turbine. An option fee of $150,000 was paid and has been expensed. The Company has decided not to proceed with this business opportunity at this time.

 

The Company is currently reviewing other business opportunities at this time.

 

3

 

MARKETS AND CUSTOMERS

 

According to the directors of the Company: Mixed Martial Arts (MMA) is an international sport with mainstream acceptance: MMA events, featuring athletes using a variety of fighting styles including boxing, jiu jitsu and wrestling have seen growth over the last five years; In 2009, total MMA pay-per-view revenues reached $450 million USD as compared to HBO Boxing at $175 million USD and WWE at $80 million USD; Add to that the revenue earned from live event ticket sales, television licensing, home video, merchandise and sponsorship, and the MMA industry is becoming the competition, with estimates of the global MMA market being a $1 billion USD industry. The Company continues to search for funding to continue its business.

 

COMPETITION

 

The entertainment industry is highly competitive. Competitors will include the Ultimate Fighting Championship (UFC), ProElite, and other independent media companies and individual producers and operators, most of which will have financial resources, personnel and facilities substantially greater than we have. We will face competition for the acquisition of broadcast rights and media network time.

 

REGULATIONS

 

We expect that our operations will comply in all respects with applicable laws and regulations. We believe that the existence and enforcement of such laws and regulations will have no more restrictive an effect on our operations than on other similar companies in the media and entertainment industry.

 

EMPLOYEES

 

The Company has no employees.

 

RESEARCH AND DEVELOPMENT EXPENDITURES

 

We have not incurred any research or development expenditures since our incorporation.

 

PATENTS AND TRADEMARKS

 

We do not own, either legally or beneficially, any patents or trademarks.

 

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 a Form 10K annually and Forms 10Q quarterly. In addition, we will file a Form 8K 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 (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

4

 

Item 1A. Risk Factors

 

THERE ARE SIGNIFICANT RISKS ASSOCIATED WITH AN INVESTMENT IN OUR COMMON STOCK. BEFORE MAKING A DECISION CONCERNING THE PURCHASE OF OUR SECURITIES, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS AND OTHER INFORMATION IN THIS ANNUAL REPORT WHEN YOU EVALUATE OUR BUSINESS.

 

Business Risks:

 

Risks Associated with Our Company. We have limited operating history which makes it difficult to evaluate the investment merits of our Company.

 

If we do not obtain additional financing, our business will fail because we will be unable to fund even the administration of our minimal operations. In order for the Company to continue we need to obtain additional financing. As of July 31, 2014 we had $3,361 cash on hand. We currently have limited operations.

 

The future issuance of debt may contain contractual restrictions that may curtail implementation of our business plan. We do not have any contractual restrictions limiting our ability to incur debt. Any significant indebtedness, however, could restrict our ability to fully implement our business plan. If we are unable to repay the debt, we could be forced to cease operating.

 

The loss of any of our key personnel may affect our ability to implement our business plan and cause our stock to decline in value. We are dependent on David Ashby, President and Director of the Company, to implement our business plan. The loss of his services may have a negative effect on our ability to timely and successfully implement our business plan. We do not have an employment agreement with Mr. Ashby and we have not obtained key man insurance over him.

 

Investment Risks:

 

Our issuance of additional shares may have the effect of diluting the interest of shareholders; our common stock shareholders do not have preemptive rights. Any additional issuances of common stock by us from our authorized but unissued shares may have the effect of diluting the percentage interest of existing shareholders. The securities issued to raise funds may have rights, preferences or privileges that are senior to those of the holders of our other securities, including our common stock. The board of directors has the power to issue such shares without shareholder approval. We fully intend to issue additional common shares in order to raise capital to fund our business operations and growth objectives.

 

We do not anticipate paying dividends to our common stockholders in the foreseeable future, which makes investment in our stock speculative and risky. We have not paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. The board of directors has sole authority to declare dividends payable to our stockholders. The fact that we have not paid and do not plan to pay dividends indicates that we must use all of our funds we generate for reinvestment in our business activities. Investors also must evaluate an investment in the Company solely on the basis of anticipated capital gains.

 

Limited liability of our executive officers and directors may discourage shareholders from bringing a lawsuit against them. Our Memorandum and Articles of Incorporation contain provisions that limit the liability of our directors for monetary damages and provide for indemnification of officers and directors. These provisions may discourage shareholders from bringing a lawsuit against officers and directors for breaches of fiduciary duty and may reduce the likelihood of derivative litigation against officers and directors even though such action, if successful, might otherwise have benefited the shareholders. In addition, a shareholder's investment in the Company may be adversely affected to the extent that we pay costs of settlement and damage awards against officers or directors pursuant to the indemnification provisions of the bylaw. The impact on a shareholder's investment in terms of the cost of defending a lawsuit may deter the shareholder from bringing suit against any of our officers or directors. We have been advised that the SEC takes the position that these article and bylaw provisions do not affect the liability of any director under applicable federal and state securities laws.

 

We are a development stage company and we expect to incur operating losses for the foreseeable future. We were incorporated on June 12, 2008 and our business to date has been principally organizational activities. We have no way to evaluate the likelihood that our business will be successful. Potential investors should be aware of the difficulties normally encountered by startup companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the business that we plan to undertake. These potential problems include, but are not limited to, additional costs and expenses that may exceed current estimates. We anticipate that we will incur increased operating expenses without realizing any revenues. We recognize that if business revenues are not forthcoming, we will not be able to continue business operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and if we are unsuccessful in addressing these risks, our business will most likely fail.

 

5

 

We have yet to earn continuous or sufficient revenue and our ability to sustain our operations is dependent on our ability to raise additional financing. As a result there is substantial doubt about our ability to continue as a going concern. We have accumulated net losses of $15,637,619 for the period from inception June 12, 2008 to July 31, 2014 and have insufficient revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of our business. These factors raise substantial doubt that we will be able to continue as a going concern. Our independent auditor has expressed substantial doubt about our ability to continue as a going concern. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. As a result we may have to liquidate our business and you may lose your investment. You should consider our auditor's comments when determining if an investment in our company is suitable.

 

Because our current officers and directors have other business interests, they may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail. Mr. David Ashby, our President and director, currently devotes his full attention providing services to the Company. While he presently possesses adequate time to attend to our interest, it is possible that the demands on him from other obligations could increase, with the result that he would no longer be able to devote sufficient time to the management of our business. This could negatively impact our business development.

 

We may be unable to obtain additional capital that we may require to implement our business plan. This would restrict our ability to grow. The proceeds from our financing efforts to date have provided us with a limited amount of working capital not sufficient to fund our proposed operations. We will require additional capital to continue to operate our business and our proposed operations. We may be unable to obtain additional capital as and when required.

 

Future acquisitions and future development, production and marketing activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as legal compliance costs and accounting expenses) will require a substantial amount of additional capital and cash flow.

 

We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means. If we do not succeed in raising additional capital, the capital we have received to date is not sufficient to fund our operations going forward without obtaining additional capital financing.

 

Any additional capital raised through the sale of equity may dilute your ownership percentage. This could result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity. The terms of securities we issue in future may be more favorable to our new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, and issuances of incentive awards under equity employee incentive plans, which may have a further dilutive effect.

 

Our ability to obtain needed financing may be impaired by such factors as the capital markets generally, our status as a new enterprise without a demonstrated operating history or the retention or loss of key management. If the amount of capital we are able to raise from financing activities is not sufficient to satisfy our capital needs, we may be required to cease our operations.

 

We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which may adversely impact our financial condition.

 

The limited trading of our common stock may impair your ability to sell your shares. There has been no trading market for our common stock since our inception. The lack of trading of our common stock and the low volume of any future trading may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. Such factors may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using common stock as consideration.

 

6

 

The market price of our common stock is likely to be highly volatile and subject to wide fluctuations. Assuming we are able to establish an active trading market for our common stock, the market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:

 

*	dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies;
*	announcements of acquisitions or other business initiatives by our competitors;
*	market changes in the demand for products and services;
*	quarterly variations in our revenues and operating expenses;
*	changes in the valuation of similarly situated companies, both in our industry and in other industries;
*	changes in analysts' estimates affecting us, our competitors or our industry;
*	additions and departures of key personnel;
*	fluctuations in interest rates and the availability of capital in the capital markets;

 

These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common stock and our results of operations and financial condition.

 

Our operating results may fluctuate significantly, and these fluctuations may cause our stock price to decline. Our operating results will likely vary in the future primarily as the result of fluctuations in our revenues and operating expenses, costs that we incur, and other factors. If our results of operations do not meet the expectations of current or potential investors, the price of our common stock may decline.

 

Applicable SEC rules governing the trading of "penny stocks" will limit the trading and liquidity of our common stock, which may affect the trading price of our common stock. Our common stock is presently considered to be a "penny stock" and is subject to SEC rules and regulations which impose limitations upon the manner in which such shares may be publicly traded and which regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the FINRA system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase the difficulty investors may experience in attempting to liquidate such securities.

 

Forward-looking statements

 

This Form 10-K contains forward-looking statements that involve risk and uncertainties. We use words such as anticipate, believe, will, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons.

 

Item 2. Properties

 

We currently do not own any physical property or own any real property. Our principal executive office is located at: Suite 4, 690 McCurdy Road, Kelowna, B.C., Canada V1X 2P5

 

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. Mine Safety Procedures

 

Not applicable

 

7

 

Part II

 

Item 5. Market for Common Equity and Related Stockholder Matters

 

Green Hygienics trades on the OTC market under the trading symbol GRYN. Trading for GRYN for the last two years by quarter is as follows:

 

Quarter ended		High				Low				Close				Volume
31-Jul-14		$	0.59			$	0.12			$	0.12				425,300
30-Apr-14		$	1.06			$	0.36			$	0.36				65,900
31-Jan-14		$	1.02			$	0.60			$	1.02				30,800
31-Oct-13		$	1.05			$	1.00			$	1.00				500
31-Jul-13		$	1.02			$	1.02			$	1.02				-
30-Apr-13		$	1.02			$	1.02			$	1.02				-
31-Jan-13		$	1.02			$	1.01			$	1.02				1,400
31-Oct-13		$	3.60			$	1.01			$	1.01				1,300

 

Holders

 

As of April 30, 2015 there were 48 shareholders of record of our common stock.

 

Dividends

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, that our Board of Directors may deem relevant.

 

Recent Sales of Unregistered Securities

 

NONE

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a suitably written statement.

 

8

 

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, if our common stock becomes subject to the penny stock rules, stockholders may have difficulty selling those securities.

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward Looking 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 are a development stage company and have not yet generated or realized any revenues.

 

Results of Operations

 

We are still in the development stage and have not generated any revenues to date.

 

Comparison of Operations for July 31, 2014 with July 31, 2013

 

We incurred operating losses of $15,637,619 from date of incorporation June 12, 2008 to the year ended July 31, 2014. These losses consisted of general operating expenses and professional fees incurred in connection with the day to day operation of our business, the preparation and filing of our periodic reports and the development of our media content, systems and business. An analysis of the loss is as follows:

 

		Year ended				Year ended
Expense		7/31/2014				7/31/2013				Change				Explanation
Travel		$	-			$	20,228			$	(20,228	)		No travel in 2014
Administration fees			88,527				52,000				36,527			Increased consulting fees
Management fees			84,000				56,962				27,038			Increase monthly to $7k/mo
Director fees			1,632,331				16,800				1,615,531			Benefit to director from issuance of 1,000,000 shares to director
Development subcontractors			21,600				-				21,600			Consultant for wind turbines
Interest			38,357				9,266				29,091			Increase in interest due to increase in related party indebtedness
Option payments			248,800				-				248,800			Cost of payments for battery and wind turbine options
Beneficial conversion feature			2,830,954				-				2,830,954			Calculated benefit received on convertible note
Loss on conversion of debt			-				7,939,914				(7,939,914	)		Settled $467,109 in debt for the issuance of 8,242,180 shares with a market value of $8,407,023. The fair valuation resulted in a loss on conversion of $7,939,914.
Other			151,023				362,989				(211,966	)
Net loss for year		$	5,095,592			$	8,458,159			$	(3,362,567	)

 

9

 

Comparison of Operations for July 31, 2013 with July 31, 2012

 

We incurred operating losses of $10,300,170 from date of incorporation June 12, 2008 to the year ended July 31, 2013. These losses consisted of general operating expenses and professional fees incurred in connection with the day to day operation of our business, the preparation and filing of our periodic reports and the development of our media content, systems and business. Our net loss for the year ending July 31, 2013 was $8,302,903. The loss consists principally of a loss on conversion of debt in the amount of $7,939,914, year end audited financial statements) and operating expenses of $353,723 incurred in analyzing, reorganizing, planning and evaluating the Company’s business focus and direction.

 

In 2013, our auditors issued a going concern opinion. Little has changed in 2014. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues. There is no assurance we will ever generate revenues. We are still in our development stage and have generated no revenues to date. The following table provides selected financial data about our company for the years ended July 31, 2014 and 2013.

 

Balance Sheet Data:		2014				2013
Cash		$	3,361			$	4,324
Total assets		$	3,361			$	4,324
Total liabilities		$	332,618			$	236,882
Shareholders' (deficit)		$	(329,257	)		$	(232,558	)

 

Liquidity and Capital Resources

 

Our cash balance at July 31, 2014 was $3,361 (2013 - $4,324) with outstanding liabilities of $332,618 (2013 - $236,882).

 

Our current cash balance will be unable to sustain operations for the next twelve months. We will be forced to raise additional funds by issuing new debt or equity securities or otherwise. During the year ended July 31, 2014 we raised $228,750 in equity and increased our debt to a related party by $110,916. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. We are a development stage company and have generated no revenue to date.

 

Plan of Operation

 

We are not currently able to fund our levels of operations for the next twelve months. As a result we will be forced to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital when needed, we will not be able to complete our business plan. We are a development stage company and have generated no revenue to date.

 

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.

 

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement and public offering of its common stock.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

  

Item 8. Financial Statements and Supplementary Data

 

The company had no independent accountant review the financials for this period, in accordance with Rule 3-11 of Regulation S-X.

 

10

 

REPORT OF MANAGEMENT

 

To the Board of Directors

Green Hygienics Holdings Inc.

 

The Company has prepared the accompanying balance sheets of Green Hygienics Holdings Inc. as of July 31, 2014 and 2013 the related statements of operations, changes in stockholders' deficit, and cash flows for the years ended July 31, 2014 and 2013. These financial statements are the responsibility of the Company's management and have not been audited.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has a working capital deficit and incurred an accumulated net loss from operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ David Ashby

 

President

 

April 30, 2015

 

11

 

GREEN HYGIENICS HOLDINGS INC

Balance Sheets

 

		As of				As of
		July 31,				July 31,
		2014 (Unaudited)				2013 (Audited)
Assets
Current assets
Cash		$	3,361			$	4,324
Total current assets			3,361				4,324
Total Assets		$	3,361			$	4,324
Liabilities
Current liabilities
Accounts payable		$	38,475			$	23,844
Management fees payable			-				29,812
Convertible notes payable to related party, net of discount of $78,699 and $0 respectively			37,537				-
Loan payable to related party			256,605				183,226
Total current liabilities			332,617				236,882
Total Liabilities			332,617				236,882
Stockholders' Deficit
Common Stock, $0.001 par value 375,000,000 common shares authorized 11,269,078 shares issued July 31, 2014 (9,292,313 issued July 31, 2013)			11,269				9,298
Additional paid-in capital			15,257,343				10,300,170
Stock payable			39,750				-
Deficit			(15,637,618	)			(10,542,026	)
Total stockholders' deficit			(329,256	)			(232,558	)
Total liabilities and stockholders' deficit		$	3,361			$	4,324

 

The accompanying notes are an integral part of these financial statements

 

12

 

GREEN HYGIENICS HOLDINGS INC

Statements of Operations

 

		For the year ending				For the year ending
		July 31 2014 (Unaudited)				July 31 2013 (Audited)
Revenue		$	-			$	-
Expenses
Communications expenses			20,298				36,364
Human resource expenses			1,804,858				125,762
Office and administration expenses			2,756				11,066
Professional costs			147,036				180,531
Total Expenses			1,974,948				353,723
Loss from operations before other expense			(1,974,948	)			(353,723	)
Beneficial conversion feature of convertible debt			(2,830,954	)			-
Loss on conversion of debt			-				(7,939,914	)
Option payments			(248,800	)			-
Interest			(40,890	)			(9,266	)
Net loss before income tax			(5,095,592	)			(8,302,903	)
Provision for income tax			-				-
Net Loss		$	(5,095,592	)		$	(8,302,903	)
Basic and Diluted Loss per Common Share		$	(0.48	)		$	(2.37	)
Weighted Average Number of Common Shares			10,568,180				3,376,713

 

The accompanying notes are an integral part of these financial statements

 

13

 

GREEN HYGIENICS HOLDINGS INC

Statements of Cash Flows

 

		For the year ending				For the year ending
		July 31, 2014				July 31, 2013
Cash Flow From Operating Activities
Net loss		$	(5,095,592	)		$	(8,302,903	)
Adjustments to reconcile net loss to net cash used:
Imputed interest			24,881				9,266
Stock payable			39,750				-
Loss on conversion of debt			-				793,750
Loss on settlement of accounts payable			556,922				4,756,209
Loss on settlement of management fees payable			1,325,865				2,389,955
Beneficial feature of convertible debt			2,830,954				-
Option payments			248,800				-
Non cash directors fees			-				16,800
Changes in:
Accounts payable			14,631				22,271
Management fees payable			40,962				-
Net cash used in operating activities			(12,827	)			(314,652	)
Cash Flow From Investing Activities
Option to purchase expenses			(248,800	)			-
Net cash used in investing activities			(248,800	)			-
Cash Flow From Financing Activities
Loans payable to related party			113,976				68,976
Proceeds from shares issued for cash			228,750				250,000
Finder’s fees paid			(79,002	)			-
Repayment of related party debt			(3,060	)			-
Net cash provided by financing activities			260,664				318,976
Change in cash for the period			(963	)			4,324
Cash at beginning of period			4,324				-
Cash at end of period		$	3,361			$	4,324
Cash paid for:
Interest		$	-			$	-
Income Tax		$	-			$	-

 

The accompanying notes are an integral part of these financial statements

 

14

 

GREEN HYGIENICS HOLDINGS INC

Statement of Stockholders' Equity (Deficit)

July 31, 2014

 

																						Deficit
																						Accumulated
																		Stock				During				Total
		Common Stock								Paid in				Stock				Subscription				Exploration				Equity
		Shares				Amount				Capital				Payable				Receivable				Stage				(Deficit)
Balance, July 31, 2012			42,133			$	42			$	1,626,337			$	-				-			$	(2,239,123	)		$	(612,744	)
Issuance of shares for:
Services			14,000				14				16,786				-				-								16,800
Cash			1,000,000				1,000				249,000				-				-								250,000
Conversion of loans payable			875,000				875				891,625				-				-								892,500
Conversion of accounts payable			4,873,390				4,873				4,996,503				-				-								5,001,376
Conversion of management fee payable			2,493,790				2,494				2,510,653				-				-								2,513,147
Imputed interest			-				-				9,266				-				-								9,266
Net loss for year			-				-				-				-				-				(8,302,903	)			(8,302,903	)
Balance, July 31, 2013			9,298,313			$	9,298			$	10,300,170			$	-				-			$	(10,542,026	)		$	(232,558	)
Issuance of shares for:
Services			1,154,765				1,155				1,324,710				-				-								1,325,865
Cash			435,000				435				228,315				-				-								228,750
Finders fees paid			-				-				(79,002	)			-				-								(79,002	)
Conversion of accounts payable			381,000				381				556,541				-				-								556,922
Conversion benefit features on convertible debt			-				-				2,830,954				-				-								2,830,954
Discount on convertible debt			-				-				70,774																70,774
Imputed interest			-				-				24,881				-				-								24,881
Shares to be issued							-				-				39,750												39,750
Net loss for year			-				-				-				-				-				(5,095,592	)			(5,095,592	)
Balance, July 31, 2014			11,269,078			$	11,269			$	15,257,343			$	39,750				-			$	(15,637,618	)		$	(329,257	)

 

The accompanying notes are an integral part of these financial statements

 

15

 

GREEN HYGIENICS HOLDINGS INC

Footnotes to the Financial Statements

For the year ended July 31, 2014

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

The Company was incorporated under the laws of the State of Nevada on June 12, 2008. On June 30, 2010 the Company changed its name to Takedown Entertainment Inc. and changed its business focus to mixed martial arts media entertainment. On July 24, 2012 the Company changed its name to Green Hygienics Holdings Inc. and is pursuing alternative energy and other environmentally friendly ventures.

 

The Company has been unable to raise additional capital to further its business and has been looking at all opportunities to maintain and enhance shareholder value, which may include a possible disposition of its current operations and/or entering into a potential business combination. The Company has been in negotiations with one potential business combination candidate. However, no definitive agreements have yet been entered into. There can be no assurances that a definitive agreement will be entered into or that a subsequent transaction will be closed.

 

CONCENTRATIONS AND ECONOMIC DEPENDENCE

 

None.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

BASIS OF PRESENTATION

 

The Company follows accounting principles generally accepted in the United States of America. In the opinion of management all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.

 

REVENUE RECOGNITION

 

The Company will recognize revenue in accordance with Accounting Standards Codification No. 605, REVENUE RECOGNITION ("ASC-605"), ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Revenue was earned for the placement of product endorsements in the filming of a promotion that was carried on to the pre-production stage by the Company.

 

USE OF ESTIMATES

 

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.

 

To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

16

 

CASH AND CASH EQUIVALENTS

 

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of July 31, 2014 the Company had $4,324 in cash or cash equivalents (July 31, 2013 cash of $0).

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1

Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2

Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3

Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The Company’s financial instruments consist principally of cash, accounts payable and amounts due to related parties. Pursuant to ASC 820 and 825, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of July 31, 2014 and 2013:

 

		Fair Value Measurement at July 31, 2014												Fair Value Measurement at July 31, 2013
Financial Instrument		Level 1				Level 2				Level 3				Level 1				Level 2				Level 3
Assets:
Cash		$	3,361			$	-			$	-			$	4,324			$	-			$	-
Liabilities:
Accounts payable		$	-			$	38,475			$	-			$	-			$	23,844			$	-
Loan payable to related party		$	-			$	294,142			$	-			$	-			$	183,226			$	-

 

INCOME TAXES

 

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. 

 

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 

 

17

 

The Company has approximately $2,942,282 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2030. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes for the year ended July 31, 2014 and had no uncertain tax positions as at July 31, 2014.

 

Net deferred tax assets consist of the following components as of:

 

		July 31,				July 31,
		2014				2013
NOL Carryover		$	1,000,376			$	879,006
Valuation allowance			(1,000,376	)			(879,006	)
Net deferred tax asset		$	0			$	0

 

BASIC AND DILUTED NET LOSS PER COMMON SHARE

 

The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at July 31, 2014 and 2013, the Company had no potentially dilutive shares.

 

STOCK BASED COMPENSATION

 

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as “Development Stage Entities” (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.

 

In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.

 

18

 

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure.

 

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

 

NOTE 3 - GOING CONCERN

 

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. However, the Company has accumulated a loss and has a limited operating history. This raises 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.

 

As shown in the accompanying financial statements, the Company has incurred a net loss of $15,637,618 for the period from June 12, 2008 (inception) to July 31, 2014 and has generated minimal revenues. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of acquisitions. Management has plans to seek additional capital through a private placement and public offering 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 4 - OTHER ASSETS

 

In November 13, 2013, the Company entered into an option to purchase a 50% interest in BION for a total of $2,500,000, a company wholly owned by Aartha USA Inc. Aartha is an approved licensee of a patented hybrid iron/vanadium chemical solution technology developed and owned by PNNL Labs. PNNL has agreed to license Aartha its solution technology for a period of thirty years for the areas of North and South America and Aartha has agreed to supply BION with the solution technology for thirty years.

 

As of April 30, 2014, the Company paid $98,800 in cash and has expensed this payment as an Option Expense.

 

On January 16, 2014 the Company entered an option agreement whereby the Company holds the option to acquire twelve 2 megawatt wind turbines for a total of $2,280,000 or $190,000 per each turbine. An option fee of $150,000 was paid and has been expensed. Upon completion of the terms by the Option holder, the option may be terminated by the option holder if the Company does not buy at least one turbine before July 19, 2014. The Option holder has not completed the terms of the Option to Purchase Agreement and the Company has abandoned this project.

 

NOTE 5 - RELATED PARTY TRANSACTIONS

 

LOAN PAYABLE – During the year ended July 31, 2014, shareholders have advanced an additional $113,978 to the Company as a loan with no fixed terms of repayment and non interest bearing. During the year the Company repaid $3,060 to the shareholders. The balance of the advances as at July 31, 2014 is $256,605 (2013 - $183,226). Imputed interest on this debt of $20,762 has been recorded as interest expense, and as a credit to Additional Paid in Capital. During the year ended July 31, 2013, the Company settled $98,750 of the debt with the issuance of 875,000 common shares and recorded $6,914 in imputed interest expense as a credit to Additional Paid in Capital. The conversion of the debt for the issuance of common shares fairly valued at the market price on the date of authorization according to GAAP resulted in a loss on conversion of $687,825.

 

19

 

MANAGEMENT FEES PAYABLE - During the year ended July 31, 2014 the current President of the Company earned $84,000 (2013 - $14,000) in management fees related to the operations of the Company. In addition the President has advanced $10,774 for payment of corporate expenses. As of July 31, 2014 $70,774 is payable to the President. Imputed interest on this debt of $4,119 has been recorded as interest expense, and as a credit to Additional Paid in Capital. On July 31, 2014, the Company entered into a settlement agreement with the President, whereby it has entered into a six month, 5% convertible promissory note with the President. Under the terms of the Promissory Note, the Note can be converted into shares at $0.003 per share.

 

During the year ended July 31, 2013 the Company accrued management fees payable of $22,500 to a former director of the Company for services as an officer of the Company. The management fees payable are unsecured, non interest bearing and with no fixed terms of repayment. During the year, $123,192 in fees payable were settled for the issuance of 2,493,790 shares of common stock.

 

NOTE 6 – CONVERTIBLE DEBT

 

On December 10, 2013, The Company entered into a note payable agreement with a related party for a principal balance of $44,353; the debenture payable is unsecured, bears simple interest at 10% per annum, is due in full December 9, 2014 and is convertible to common shares at $0.50 per share. The Company recorded a discount of $20,571 due to this beneficial conversion feature. The discount was accrued over the term of the note, and the net note balance as of July 31, 2014 was $37,537. As of July 31, 2014 the Company recorded interest expense to amortization the discount of $12,546 and accrued interest of $2,254 on the Note.

 

On July 31, 2014, the Company entered into a note payable agreement with a related party for the principal balance of $70,774; the promissory note is unsecured, bears simple interest at 5% per annum, is due in full on January 31, 2015 and is convertible to common shares at $0.003 per share. The Company recorded a discount of $70,774 due to this beneficial conversion feature. The discount will be accrued over the term of the note, and the net note balance as of July 31, 2014 was $0. An additional beneficial conversion expense of $2,830,954 was determined because of the conversion share price was less than the market price at which time the note was issued.

 

NOTE 7 - COMMON STOCK

 

During the year ended July 31, 2013:

 

	·	On August 31, 2012 the Company issued 14,000 shares of common stock to the directors of the Company for services rendered to the Company by the directors. The shares issued are valued based on fair market value as determined between the parties at the date of authorization at $16,800.
	·	875,000 shares of common stock were issued in the settlement of $98,750 of loans payable and recognized a loss on settlement of $793,750 because the shares were valued based on their fair market value using the market price on the date of settlement which amount was greater than the debt, resulting in a loss;
	·	7,367,180 shares of common stock fairly valued between the parties at market were issued in the settlement of $123,192 in management fees and $245,167 of debt. A loss on settlement of $7,146,164 was recorded because the shares were valued based on their fair market value using the market price on the date of settlement which amount was greater than the debt, resulting in a loss; and
	·	The Company issued 1,000,000 common shares valued at $0.25 per share and received $250,000 cash.

 

During the year ended July 31, 2014:

 

	·	The Company sold 457,500 shares of common stock for the receipt of $228,750, the Company issued 435,000 shares; the remaining unissued shares of 22,500 value at $11,250 is recorded as a stock payable. The Company paid finders fees totally $79,002 as follows stock payable $28,750, shares $50,502.
	·	Issued 1,000,000 shares of common stock, authorized on August 20, 2013 to the president of the Company in lieu of options fairly valued at $1,200,000, which is the fair market value on date of grant.
	·	On November 7, 2013, the Company issued 64,000 shares of common stock for service. The shares were value at $64,800 which is the fair market value on date of grant.
	·	On January 2, 2014 authorized 381,000 shares of common stock in settlement of debt of $114,250. The shares issued were value at $547,200 which is based on fair market value on date of grant. As a result of the conversion, the Company recorded a loss on conversion of $432,950.
	·	On November 17, 2013, the Company issued 90,765 shares to outside consultant. The shares were value at $61,085 which is based on the fair market value on date of grant.

 

20

 

STOCK OPTIONS

 

The Company has in place a stock option plan for the benefit of consultants and employees. The Company had not granted any options to acquire common shares under the plan at April 30, 2014 (2013 – nil).

 

COMMITMENT TO ISSUE COMMON SHARES

 

The Company is committed to issue 77,000 shares of the company valued at $38,500 at the time of the commitment.

 

NOTE 8 - CONVERSION OF DEBT

 

During the year ended July 31, 2013 the Company settled $467,109 in debt for the issuance of 8,242,180 shares of common stock fairly valued according to GAAP at a fair market value of $8,407,023. The fair valuation resulted in a loss on conversion of $7,939,914.

 

NOTE 9 - SUBSEQUENT EVENTS AND CONTINGENCIES

 

On April 16, 2015, the Company entered into promissory note agreements to settle with two of its related party creditors. The terms of the Promissory Notes are as follows:

 

		Promissory Note #1				Promissory Note #2
Principal amount of note		$	145,150			$	189,150
Interest rate			5	%			5	%
Term			1 year				1 year
Security		Unsecured				Unsecured
Convertibility debt per share		$	0.01			$	0.01

 

There were no events of a material nature known to the Company and not disclosed in these financial statements at July 31, 2014 through the date of issuance of these financial statements.

 

21

 

Item 9. Changes in and Disagreements with Accountants on Financial Disclosure

 

None.

 

Item 9A. Controls and Procedures

 

Management’s Report on Disclosure Controls and Procedures

 

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of July 31, 2014 using the criteria established in “ Internal Control - Integrated Framework ” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

 

A material weakness is a deficiency, or 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. In its assessment of the effectiveness of internal control over financial reporting as of July 31, 2014, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.

 

1.

We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

 

2.

We did not maintain appropriate cash controls – As of July 31, 2014, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.

 

3.

We did not implement appropriate information technology controls – As at July 31, 2014, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

 

Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

 

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of July 31, 2014 based on criteria established in Internal Control—Integrated Framework issued by COSO.

 

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of July 31, 2014, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

This annual 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 temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

 

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PART III

 

Item 10. Directors, Executive Officers and Control Persons

 

The names, ages and titles of our executive officers and director are as follows:

 

Name and Address of Executive Officer and/or Director		Age		Position
David Ashby		64		President, CEO and Director appointed January 24, 2013

 

David Ashby is a professional engineer and combines experience in marketing, venture capital and global market expansion along with his contemporary education. Mr. Ashby held an Atomic Energy License for over 20 year as a Senior Radiographer and has extensive knowledge and experience in the field of infrared technology. Born and raised in Saskatchewan, Canada, he moved to Alberta, Canada, after completing a Bachelor of Arts with a major in Mathematics and a minor in Economics in the early 1970’s to pursue his interest in the oil and gas service sector. By age 28, Mr. Ashby was a co-founder/owner of a multi- million dollar international pipeline x-ray company. He has been under contract as a pipeline inspector with Enbridge.

 

Term of Office 

 

Our directors are appointed to hold office until the next annual meeting of our stockholders or until a successor is qualified and elected, or until he resigns or is 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/or directors. Our officers and directors have not been the subject of any order, judgment, or decree of any court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring, suspending or otherwise limiting them from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities.

 

Our officers and directors have not been convicted in any criminal proceeding (excluding traffic violations) nor are they subject of any currently pending criminal proceeding.

 

We conduct our business through agreements with consultants and arms-length third parties. We pay our consultants usual and customary rates received by other third parties for performing similar consulting services.

 

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.

 

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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.

 

Item 11. Executive Compensation

 

Management Compensation 

 

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the past three years ending July 31, 2014:

 

				Annual Compensation														Long Term Compensation
Name		Title		Year		Salary ($)				Bonus				Other Annual Compensation				Restricted Stock Awarded				Options/* SARs (#)				LTIP payouts ($)				All Other Compensation
David Ashby		President and director (from January 24, 2013)		2013 2014		$ $	0 0			$ $	0 0			$ $	14,000 84,000			$ $	0 0			$ $	0 0			$ $	0 0			$ $	0 0
Peter E. Wudy		President and director		2012		$	0			$	0			$	90,000*			$	0			$	0			$	0			$	0
		(from May 11, 2010 to January 24, 2013)		2013		$	0			$	0			$	22,500			$	0			$	0			$	0			$	0
Dr. Alan Fields		Director (resigned)		2012		$	12,000			$	0			$	0			$	0			$	0			$	0			$	0

 

* $60,000 accrued as payable

 

There are no current employment agreements between the company and its officer/director.

 

There are no annuity, pension or retirement benefits proposed to be paid to the officer or director or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the company or any of its subsidiaries, if any.

 

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Item 12. Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of August 15, 2013 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 director, and or (iii) our officer. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.

 

Title of Class		Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership				Percentage of Common Stock (1)
Common Stock		Violet Rose Holdings Ltd. 10951 – 96th Ave, Grande Prairie Alberta			700,000				6.2	%
		Alita Capital Partners Inc 201 – 127 Commercial Drive, Calgary Alberta			2,463,840				21.9	%
		Bear Creek Gravel Inc 1559 Pritchard Street, Westbank British Columbia			1,430,160				12.7	%
		Fairway Mobile Homes Ltd 1680 Ross Road, Kelowna British Columbia			1,073,180				9.5	%
		Turon Capital Partners Inc 403 – 2877 Paradise Road, Las Vegas Nevada			2,400,000				21.3	%
		D. Ashby Marketing Corp.(2) 3079 Ourtoland Drive, , Kelowna British Columbia			1,000,000				9.5	%
		Total			9,067,180				80.5	%

 

(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.

 

(2) David Ashby, President of the Company is the controlling shareholder of D. Ashby Marketing Corp.

 

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 August 15, 2013.

 

Item 13. Certain Relationships and Related Transactions

 

None of our directors, or officers, any proposed nominee for election as a director, any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all of our outstanding shares, any promoter, or any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us other than the transactions described below.

 

Our management is involved in other business activities and may in the future be involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction.

 

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Item 14. Principal Accounting Fees and Services

 

For the year ended July 31, 2014, the total fees charged to the company for reviews was $17,500.

 

 For the year ended July 31, 2013, the total fees charged to the company for audit services, including quarterly reviews, were $17,200.

 

For the year ended July 31, 2012, the total fees charged to the company for audit services, including quarterly reviews, were $11,000.

 

Item 15. Exhibits

 

Exhibit Number		Description
31.1		Sec. 302 Certification of Chief Executive Officer
31.2		Sec. 302 Certification of Chief Financial Officer
32.1		Sec. 906 Certification of Chief Executive Officer
32.2		Sec. 906 Certification of Chief Financial Officer
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

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Signatures

 

Pursuant to the requirements of Section 13(a) 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.

 

 

	Green Hygienics Holdings Inc.
April 30, 2015	By:	/s/ David Ashby
		David Ashby
		President, Director, (Principal) Chief Executive Officer and Acting Chief Financial Officer

 

 

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