UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

 

FORM 10-Q

 

[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2016

 

[_] Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________to ________________

 

Commission file number 333-198993

 

GREEN MEADOW PRODUCTS, INC.

(Name of small business issuer in its charter)

 

 

 

1010 Industrial Road, Ste. 70

Boulder City, Nevada 89005

www.GreenMeadowProducts.com

702-769-4529

(Address and telephone number of registrant's principal executive offices and principal place of business)

 

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_]

 

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

 

Indicate 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.

 

 

  

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

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

 

 

 

 

GREEN MEADOW PRODUCTS, INC.

TABLE OF CONTENTS

  INDEX

  

 

 

 

 

 

 

ITEM 1. CONDENSED FINANCIAL STATEMENTS

 

UNAUDITED FINANCIAL STATEMENTS

GREEN MEADOW PRODUCTS, INC.

TABLE OF CONTENTS

  

September 30, 2016

  

  

 

GREEN MEADOW PRODUCTS, INC.

CONDENSED BALANCE SHEETS

(UNAUDITED)

 

  

See accompanying notes to unaudited financial statements.

 

 

 

 

 

GREEN MEADOW PRODUCTS, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

  

 * denotes income or (loss) of less than $0.01 per share

See accompanying notes to unaudited financial statements.

 

 

 

 

 

  

GREEN MEADOW PRODUCTS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

  

  

See accompanying notes to unaudited financial statements.

 

 

 

 

GREEN MEADOW PRODUCTS, INC.

NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2016 AND JUNE 30, 2016 AND

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

 

Note 1 – NATURE OF OPERATIONS

 

Green Meadow Products, Inc. ("the Company", "GMP", "we", "us" or "our") was incorporated under the laws of the State of Wyoming on June 22, 2012.

 

The Company initially acquired a product for trucking fleets on December 20, 2012. Subsequently on April 18, 2013, we made the decision to take the business in a different direction and sold the product for the trucking fleets at a loss. The Company's current focus is on the sales of licensing rights to our Green Meadow PR formula and the manufacturing and sales of our Green Meadow PR formula as well as the manufacturing and sales of our PawPal product and our recently acquired stress relief formula.

 

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

 

BASIS OF PRESENTATION

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in audited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the period presented have been included in the interim period. The operating results for the three-month period ended September 30, 2016 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2016 or for any future period.

 

These unaudited condensed financial statements and notes should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended June30, 2016.

 

ESTIMATES

 

The preparation of the financial statement 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 period. Actual results could differ from those estimates.

 

 

 

 

CUSTOMER AND PURCHASE CONCENTRATION

 

During the quarter ended September 30, 2016 we had $7,100 in sales to Sandstone Enterprises for a sub license agreement for a dog treat formula which equates to 100% of sales for the quarter. During the quarter ended September 30, 2015 we had $5,000 in sales to one customer for licensing rights which equates to 60% of sales for the quarter, and swap meet sales for $3,360 which equates to 40% of sales for the quarter.

 

NET INCOME (LOSS) PER SHARE OF COMMON STOCK

 

The Company computes net income (loss) per share in accordance with ASC 105, "Earnings per Share" which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

The Company has no potentially dilutive debt or equity instruments issued and outstanding during the quarters ended September 30, 2016 or 2015.   

REVENUE RECOGNITION

 

The Company recognizes 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.

 

The Company's revenues have been generated primarily through sublicense and distribution agreements related to our Paw Pal product and our pain relief products. The terms of these agreements generally consist solely of upfront, nonrefundable payments for licensing and distribution rights. Revenues from non-refundable licensing and distribution fees are recognized upon the completion of delivery of the license agreement and invoice to the customer and/or receipt of the payment if the license has stand-alone value and we do not have ongoing involvement or obligations. 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations other than in respect of the early adoption of the new regulations relating to Development Stage Entities as discussed above.

 

Note 3– GOING CONCERN

 

 

 

 

 

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

Note 4 - INCOME TAXES

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

For the three month period ended September 30, 2016, we did not recognize a tax expense.

 

For the three month period ended September 30, 2015, we recognized a tax credit of $871 in respect of tax losses generated in the period that were available to carry back and generate a tax refund in respect of taxable profits generated in the prior year. .

 

Note 5 – SUBSEQUENT EVENTS

 

Management has reviewed events between September 30, 2016 to the date that the financials were issued, and there were no significant events identified for disclosure.

 

 

 

 

 

 

GENERAL

 

Green Meadow Products, Inc. ("the Company", "GMP", "we", "us" or "our") was incorporated under the laws of the State of Wyoming on June 22, 2012. 

 

The Company initially acquired a product for trucking fleets which it sold at a loss in order to focus on the pet product business. The Company now operates in the pet natural health supplement and related fields; with a focus on natural pet pain relief formulas and pet pain preventative products. We believe it will be able to successfully compete in today's natural supplement and related fields industry by controlling production costs and by limiting its distribution expenses using, primarily, online marketing tools to promote its products and to further develop its digital strategies.

 

 

Significant Accounting Policies and Estimates

 

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the Company's consolidated financial statements which have been prepared in accordance with accounting principals generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Revenue Recognition

 

The Company recognizes 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) collectibility 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 collectibility 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.

 

The Company's revenues have been generated primarily through sublicense and distribution agreements related to our Paw Pal product and our pain relief products. The terms of these agreements generally consist solely of upfront, nonrefundable payments for licensing and distribution rights. Revenues from non-refundable licensing and distribution fees are recognized upon the completion of delivery of the license agreement and invoice to the customer and/or receipt of the payment if the license has stand-alone value and we do not have ongoing involvement or obligations. 

 

For the year ended June 30, 2016 and the three month period ended September 30, 2016, all license payments met the above criteria or in the case of one contract, the only continuing involvement was to sell our products to the distributor at pricing that is consistent with market transactions, thereby allowing for the recognition of revenue for the licensing and distribution arrangements upon receipt. 

 

When non-refundable license fees do not meet this criteria, the license revenues are recognized over the expected period of performance. We periodically review for any expected period of substantial involvement under the agreements that provide for non-refundable up-front payments and license fees. If ever applicable, we will adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of our expected involvement.

 

 

 

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

 

Results of Operations

 

For The Three Months Ended September 30, 2016 Compared To The Three Months Ended September 30, 2015.

 

Revenue

 

During the quarter ended September 30, 2016 we had $7,100 in sales to Sandstone Enterprises for a sub license agreement for a dog treat formula which equates to 100% of sales for the quarter.

During the quarter ended September 30, 2015 we had $5,000 in sales to one customer for licensing rights which equates to 60% of sales for the quarter, and swap meet sales for $3,360 which equates to 40% of sales for the quarter.

Cost of Sales

 

For the three month period ended September 30, 2016, we had no cost of goods.

 

For the three month period ended September 30, 2015, we recognized cost of goods of $2,000 relating to the dog treats which we sold as a market test at a street fair in the period.

 

Gross Profit

 

For the three month period ended September 30, 2016, we recognized a gross profit of $7,100 from sale of a sub license agreement for a dog treat formula.

 

For the three month period ended September 30, 2015, we had a gross profit of $6,360 from the sale of certain licensing rights and sale of dog treat products.

 

 

 

 

Operating Expenses

 

For the three month period ended September 30, 2016, we incurred total operating expenses of $9,022 consisting of professional fees of $8,000 which were attributable to expenses relating to our SEC filings and accounting costs, amortization of $1,019, consulting fees of $0 and general and administrative fees of $3.

 

For the three month period ended September 30, 2015, we incurred total operating expenses of $12,168 consisting of professional fees of $5,898 which were attributable to expenses relating to our SEC filings and accounting costs, amortization of $1,019, consulting fees of $5,000 and general and administrative fees of $251.

 

Income Tax

For the three month period ended September 30, 2016, we did not recognize a tax expense.

 

For the three month period ended September 30, 2015, we recognized a tax credit of $871 in respect of tax losses generated in the period that were available to carry back and generate a tax refund in respect of taxable profits generated in the prior year. .

  

Net Income (Loss)

For the three month period ended September 30, 2016, we recognized a net loss of $(1,922) due to the factors discussed above. 

For the three month period ended September 30, 2015, we incurred a net loss of $(4,937) due to the factors discussed above.

 

Liquidity and Capital Resources

 

For The Three Months Ended September 30, 2016 Compared To The Year Ended June 30, 2016 And The Three Months Ended September 30, 2015.

 

As at September 30, 2016, the Company had cash on hand of $3,474, total assets of $26,277, total liabilities of $7,500 and stockholders' equity of $18,777 as compared to September 30, 2015, where the Company had cash on hand of $28,372, total assets of $49,023, total liabilities of $330 and stockholders' equity of $48,693.

As at June 30, 2016, the Company had cash on hand of $8,977, total assets of $25,699, total liabilities of $5,000 and stockholders' equity of $20,699. The change in shareholders' equity in the three months ended September 30, 2016 was largely attributable to operating loss incurred in the period.

 

Operating Activities

 

For the three month period ended September 30, 2016, we used $(5,503) cash in operating activities compared to $(4,789) in cash from operating activities for the three months ended September 30, 2015.

 

During the three months ended September 30, 2016, we incurred a loss of $(1,922) which was reduced for cash flow purposes by $1,019 in non-cash expenses reduced further by a net increase in working capital liabilities of $(4,600). By comparison, during the three months ended September 30, 2015, we incurred a loss of $(4,937) which was reduced for cash flow purposes by $1,019 in non-cash expenses and increased by income tax benefit of $(871).

 

 

 

 

Investing Activities

 

For the three month period ended September 30, 2016 we had no investing activities.

 

Financing Activities

  

During the three months ended September 30, 2016 and 2015 we neither generated nor used any funds in financing activities.

 

Our auditor's report states the following with regard to our ability to continue as a going concern, "has yet to establish a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern".

 

The Company believes it may have sufficient cash resources available to fund its primary operation for the next twelve (12) months. The Company has no agreements in place with its shareholders, officer and director or with any third parties to fund operations beyond the end of the Company's September 30, 2016 quarter. The Company has not negotiated nor has available to it any other third party sources of liquidity.

 

The Company has no, current, off balance sheet arrangements and does not anticipate entering into any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 4. Controls and Procedures

   

Evaluation of Disclosure Controls and Procedures

 

Our chief executive officer and chief financial officer are responsible for establishing and maintaining our disclosure controls and procedures. Disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1933 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and to ensure that information required to be disclosed by us in those reports is accumulated and communicated to the our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1933) as of September 30, 2016. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the evaluation date, such controls and procedures were effective.

 

Changes in internal controls

 

There were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

The Company was not subject to any legal proceedings during the three and three month periods ended September 30, 2016 or 2015 and to the best of our knowledge and belief no proceedings are currently threatened or pending.

 

Item 1A. Risk Factors

 

 As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

No unregistered equity securities were issued sold during the three months ended September 30, 2016. 

 

Item 3. Defaults upon Senior Securities

 

No senior securities were issued and outstanding during the three and three months ended September 30, 2016.

 

Item 4. Mining Safety Disclosures

 

Not applicable to our Company.

 

Item 5. Other Information

 

None.

 

ITEM 6. EXHIBITS

 

** Filed Herewith

 

 

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