U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2019

 or

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

 

BIOFORCE NANOSCIENCES HOLDINGS, INC.

(Name of Small Business Issuer in its charter)

Nevada		000-51074		74-3078125
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)
		2020 General Booth Blvd. Suite 230 Virginia Beach, VA 23454 (Address of principal executive offices)

 

Registrant's telephone number: (757) 306-6090

Registrant’s fax number: (757) 306-6092

______________________________________

Richard W. Jones, Esq.

Jones & Haley, P.C.

115 Perimeter Center Place, Suite 170

Atlanta, Georgia 30346-1238

(770) 804-0500

www.corplaw.net

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:  Common Stock par value $0.001

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 requirement 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 (§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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information incorporated by reference in Part III of  the Form 10-K or any amendment to this Form 10-K.  [  ]

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:

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange [ ]

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

The aggregate market value of the 5,225,259 shares of common equity held by non-affiliates computed by reference to the average bid and ask price of $5.10 per share of the registrant’s common stock (as reported on the OTCPINK operated by "The OTC Markets Group, Inc.") at which the common equity was last sold as of the last business day of its most recently completed second fiscal quarter (June 30, 2019) was approximately $26,648,821. The stock price and the number shares at June 30 2019 takes into account a one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  At March 03, 2020 the registrant had outstanding 15,271,753 shares of common stock, par value $0.001 per share post split one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020.

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Table of Contents

PART I
		Page
Item 1.	Business	4
Item 1A.	Risk Factors	11
Item 2.	Property	11
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	11
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters  and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	13
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	19
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	19
Item 9B.	Other Information	22
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management  and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions, and Director Independence	28
Item 14.	Principal Accountant Fees and Services	29
Item 15.	Exhibits, and Financial Statement Schedules	29
	Signatures	31

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

In light of the risks and uncertainties inherent in all projected operational matters, the inclusion of forward-looking statements in this Form 10-K, should not be regarded as a representation by us or any other person that any of our objectives or plans will be achieved or that any of our operating expectations will be realized.  Our revenues and results of operations are difficult to forecast and could differ materially from those projected in the forward-looking statements contained in this Form 10-K, as a result of certain risks and uncertainties including, but not limited to, our business reliance on third parties to provide us with technology, our ability to integrate and manage acquired technology, assets, companies and personnel, changes in market condition, the volatile and intensely competitive environment in the business sectors in which we operate, rapid technological change, and our dependence on key and scarce employees in a competitive market for skilled personnel.  These factors should not be considered exhaustive; we undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

PART I

For historical information, this report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses.  Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language.  Our actual results may differ significantly from those projected in the forward-looking statements.  Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report.  We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances taking place after the date of this document.

ITEM 1.  Business.

 

The Company

 

BioForce Nanosciences Holdings, Inc. (“BioForce or the “Company”) was previously in the business of manufacturing nano-particular measurement devices and molecular printers, but due to a lack of profitability, the subsidiary of the company that owned that technology filed for bankruptcy.  That subsidiary and related technology was later bought out of bankruptcy by an unrelated third party.  Subsequently, new management came into the Company to pursue a better business model and now the Company’s mission is to become a leading provider of natural vitamins, minerals and other nutritional supplements, powders and beverages, formulated to promote a healthier lifestyle for active individuals in all age ranges. The Company private labels products with key distributors and manufacturing providers.

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BioForce entered into the supplement business in or about 2015.  These supplements, powders and beverages offer vitamins and minerals to complement a healthy intake of protein and carbohydrates for active individuals and participants in sports.

 

BioForce recently changed its business plan and it is in the process of establishing a dynamic marketing campaign to achieve brand awareness of its product offerings to drive business growth through sales of nutrition supplements to retailers, sporting goods retailers, supermarkets, mass merchandisers, and online. BioForce currently markets its products through social media and telemarketing. The Company plans to expand marketing efforts with a direct marketing and B2B (Business to Business) sales campaign, with the eventual expectation to expand throughout the entire United States.

 

The Company proactively seeks to expand its “BioForce Eclipse” nutritional powder for use into households throughout the U.S., and the Company will approach retail stores, including health food and sporting goods stores to create a vendor relationship. During this phase, the Company will continue to try to advance its social media platform with direct online and targeted advertisements to health conscience individuals.

 

Nutrition retailers, grocery stores, retail pharmacies, and online stores, like Amazon, will be important channels for the Company’s Eclipse product-lines. In The USA, there are thousands of direct outlets like grocery stores, pharmacies, hospitals, department stores, medical clinics, surgery clinics, universities, nursing homes, prisons, and other facilities which are all targets of potential sales of the vitamin and mineral supplemental products.

 

The Company plans to offer its products for direct sales on its website at www.bioforceeclipse.com which is currently under development.  

 

The approximate $33.0 billion vitamin and supplement manufacturing industry grew on average 2.5% annually between 2012 and 2019.  In 2020, industry revenue is expected to grow an additional 3.3%.

 

The Company will seek out retail sales opportunities with gyms, health clubs, and fitness centers with incentive base sales agreements based on volume of sales obtained.

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Currently, the Company receives 100% of its revenues from the sale of the BioForce Eclipse private label brand powder supplements.  The product is a mixture of amino acids, key vitamins, and other plant based proteins, essential to the physical well-being of the individual. Protein supplements are known to promote muscular growth, so athletes or others often take them as a dietary supplement to gain muscle mass.

 

Nutritional Products are made up of a wide range of products, which include supplements, meal replacement products, multivitamins, and convenience products. As these products have increased in popularity, more individuals have been attempting to get in optimal physical condition, wanting to use products that complement their lifestyles, exercise, or athletic regimen. BioForce’s Management is aware of other potential products and will continue to evaluate these potential markets and possible new products lines.

 

BioForce entered into a market that has some reputable players, but has limited leadership. BioForce will work to get the product available through most retail channels, so that customers will see both convenience in purchasing the product, and convenience over having to take numerous different supplements. After BioForce launches its products into the sports nutrition supplement industry, it is anticipated that there will be other firms that will work to offer similar products. This fact magnifies the importance of BioForce’s quality and its support of its products.

 

The initial marketing efforts will focus on the online stores, B2B sales, direct mail, industry trade shows, conventions, and affiliate marketing designed to educate prospective users and distributors, including retail channels, doctors and gyms. Less direct methods will include TV and radio advertising until such time as the Company’s budget allows it to upgrade its marketing plan and to do so effectively.

 

BioForce Supplements will maintain an executive office in Virginia Beach, Virginia. All marketing, sales, and customer support will be managed from its Virginia Beach Office. Private labeling is done on a contractual basis unless an opportunity to vertically integrate production makes fiscal sense.

 

BioForce Nanosciences Holdings sells the BioForce Eclipse powder multivitamin and mineral supplement without non-compete and non-disclosure agreements. The Company currently private labels the powder through a manufacturer located in Virginia. The Company has a Supplier Agreement with this manufacturer that gives the Company non-exclusion rights to market the product.  The distributor owns the rights to the formula for this product.  If the Company can source product in a more cost-effective way without diminished quality, the Company would evaluate such opportunities when presented.  Currently, the distributor who provides the private label powder provides “Consignment Terms,” which allows us to only pay for the product when it is sold. 

 

In addition to manufacturing the product, this private label vitamin distributor also offers custom labeling and packaging of the product. BioForce utilizes these services, and will seek out examples from other potential manufacturer and distributor of future products to ensure that the quality of work reflects the Company’s standards for presentation and quality.

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The FDA has rules regarding the fitness for consumption of foods as well as vitamins and supplements sold to the public, and those laws apply to our product.  However, our product does not require pre-clearance like a drug in order to be sold into the marketplace.  

 

BioForce’s management understands that similar competing products are available to the consumer, and customers may consider switching from BioForce Eclipse to a competitor’s product. Manufacturers and distributors who provide private label services generally incentives larger orders, which the Company might not be financially able to provide.  Management remains conscience of changes in the market place, its relationship with the Private Label manufacture distributor, and other risk associated with supply chain issues.

 

BioForce’s dietary supplements and vitamins cannot take the place of a well-balanced diet. Some people believe that the ingestion of supplements, pills and beverages can make up for poor eating habits; but vitamin and mineral supplements don’t offer a wellness solution. None of BioForces’ products are approved by the FDA and are sold without doctors prescriptions through the Company’s marketing channels.

  

The Company caters to the needs of customers with a focus on the elderly and athletes across numerous sports, ages, and economic backgrounds. 

 

The Company plans to offer numerous products beyond nutritional supplement powder, but will only offer products that advance the BioForce product-line name, “BioForce Eclipse” (See Fig. 1-product labels).

 

The aging baby boomers, report regular use of multivitamin and multi-mineral supplements at a higher rate than other demographic group. Recent surveys have indicated that women, Caucasians, individuals with higher education levels, people with lower body mass indexes and people with higher physical activity levels were more likely to use supplements. These groups were also most likely to talk to a doctor about the need for supplements, because they knew about their benefits, they are subject to a higher risk of deficiencies, or had a family history of medical type issues.

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Health conscience “Baby Boomers,” sports participants, and other active individuals continue to extend their health education awareness. The industry's traditional focus on these groups is shifting to an ever-expanding group that includes recreational and lifestyle users, such as fitness enthusiasts, weekend athletes and gym-goers, of all ages.

 

BioForce will provide its consumer base with products that serve their health needs and which add value even beyond their needs. The Company first introduced its multivitamin and mineral supplemental powder product, “BioForce Eclipse in December, 2014.” With the introduction of this first product, BioForce advances the Company’s name offering additional products that meet the standards for a healthy lifestyle.  BioForce Eclipse is a private label branding produced by Body Align, LLC from a distributor located in Virginia, USA.

 

The Company has had one customer in each of the last two fiscal years.  The customer is not required to purchase the product in the future and the Company’s marketing plan is to broaden the Company’s customer base. (See “Risk Factors.”)

 

The Company will increase and maintain its U.S. market share by offering new incentives and promotions to customers that may have otherwise been holding off on trying its products. The Company will market new biodegradable, recyclable containers of its products to its customer base and new markets. BioForce will evaluate the success of its marketing objectives and determine which marketing strategy provides the best results. As sale volumes increase, we expect that it will become necessary to hire sales associates.

 

Reverse Stock Split

 

On December 2, 2019, The Board of Directors of the Company unanimously approved an amendment to the Company’s Articles of Incorporation in order to effect a plan of recapitalization that provides for a one-for-five (1-for-5) reverse stock split of our common stock.  Pursuant to written resolutions, the shareholders of the Company voted to approve the proposal to authorize the reverse split. The reverse stock split took effect, after filing a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada. The amended Articles of Incorporation did not change the authorized shares to 1,000,0000, consisting of 9,000,000 shares of common stock and 100,000,000 shares of "Blank Check "preferred stock. The common and preferred shares have a par value of $0.001 per share. Based on the amended Articles of Incorporation the Company has 10,000,000 Series 'A' Preferred which have voting and conversion rights of 1 to 100 common shares, par value $0.001 (see Exhibit 3.2); leaving a balance of 90,000,000 "Blank Check" Preferred. There are no Series 'A' Preferred issued and outstanding as of February 28, 2020.

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Government Regulations

 

The FDA has rules regarding the fitness for consumption of foods as well as vitamins and supplements sold to the public, and those laws apply to our product.  However, our product does not require pre-clearance like a drug in order to be sold into the marketplace.  

 

Employees

 

The Company has two full time employees, Mr. Merle Ferguson, its President and CEO, and Mr. Richard Kaiser, its Acting CFO and Secretary.

 

Transfer Agent

Our transfer agent is Transfer Online, Inc. whose address is 512 SE Salmon Street, Portland, Oregon 97214, and telephone number is (503) 227-2950, email info@transferonline.com.

Company Contact Information

Our principal executive offices are located at 2020 General Booth Blvd. Unit 230, Virginia Beach, Virginia 23454, telephone (757) 306-6090, website:www.bioforceeclipse.com, and email: info@bioforceeclipse.com.  

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Figure 1- product labels

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ITEM 1A.  Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 2.  Properties.

The Company makes use of the office space of Yes International, which is owned and operated by Richard Kaiser, a Director and the Secretary of the Company.  As a result, the Company neither rents nor owns any properties. The Company currently has no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

ITEM 3. Legal Proceedings.  

At this time, there are no material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

ITEM 4. Mine Safety Disclosure- (Removed and Reserved).

 

Not applicable to this Company.

PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Our common stock has been traded on the OTCPINK since April 15, 2009, under the symbol “BFNH.”  

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The following table sets forth the high and low bid prices for our common stock on the OTCPINK as reported by various market makers for 2018 and 2019.  The quotations do not reflect adjustments for retail mark-ups, mark-downs, or commissions and may not necessarily reflect actual transactions.

	High	Low
2018 Quarter Ended:
March 31, 2018	$0.92	$0.91
June 30, 2018	$0.89	$0.53
September 30, 2018	$0.98	$1.06
December 31, 2018	$0.91	$1.00
2019 Quarter Ended(1):
March 31, 2019	$9.45	$8.20
June 30, 2019	$5.00	$5.00
September 30, 2019	$2.50	$2.50
December 31, 2019	$0.90	$0.80

(1) This price takes into account the one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020.

As of December 31, 2019, we were authorized to issue 900,000,000 shares of our common stock, of which 15,270,588 shares were outstanding taking into account the one-for-five (1-for-5) reverse stock split effective February 28, 2020. Our shares of common stock are held by approximately 231 stockholders of record.  The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.  In addition to our authorized common stock, BioForce Nanosciences Holdings, Inc. is authorized to issue 100,000,000 shares of preferred stock, par value at $0.001 per share. Based on the amended Articles of Incorporation the Company has 10,000,000 Series 'A' Preferred which have voting and conversion rights of 100 common shares, par value $0.001( see Exhibit 3.2); leaving a balance of 90,000,000 "Blank Check" Preferred, with no shares issued. Also, there are no Series 'A' Preferred issued and outstanding as of February 28, 2020. There is no trading market for our preferred stock.

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Dividends

We have not paid or declared any dividends on our common stock, nor do we anticipate paying any cash dividends or other distributions on our common stock in the foreseeable future.  Any future dividends will be declared at the discretion of our board of directors and will depend, among other things, on our earnings, if any, our financial requirements for future operations and growth, and other facts as our board of directors may then deem appropriate.

ITEM 6. Selected Financial Data.

Not applicable.

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

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

The following discussion reflects our plan of operation.  This discussion should be read in conjunction with the financial statements which are attached to this report.  This discussion contains forward-looking statements, including statements regarding our expected financial position, business and financing plans.  These statements involve risks and uncertainties.  Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly under the headings “Special Note Regarding Forward-Looking Statements.”

Unless the context otherwise suggests, “we,” “our,” “us,” and similar terms, as well as references to “BFNH” or “BioForce” all refer to BioForce Nanosciences Holdings, Inc. as of the date of this report.

Going Concern

On December 31, 2019, we had total assets of $58,895 and total liabilities of $11,587.  Our independent certified public accountants have stated in their report on our audited financial statements for the calendar year-end that there is a substantial doubt about our ability to continue as a going concern.  In the absence of significant revenue and profits, we will be completely dependent on additional debt and equity financing.  If we are unable to raise needed funds on acceptable terms, we will not be able to execute our business plan, develop or enhance existing services, take advantage of future opportunities, if any, or respond to competitive pressures or unanticipated requirements.  If we do not obtain sufficient capital, we will not be able to continue operations.

As of December 31, 2019, BioForce had an accumulated deficit of $761,752, which included a net loss of $46,538 reported for the year ended December 31, 2019.  Also, during the year ended December 31 2019, we used net cash of $24,383 for operating activities. These factors raise substantial doubt about our ability to continue as a going concern.

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While we are attempting to generate revenues, our cash position may not be significant enough to support our daily operations.  Management intends to raise additional funds by way of an offering of our debt or equity securities.  Management believes that the actions presently being taken to further implement our business plan and generate revenues provide the opportunity for BioForce to continue as a going concern.  While we believe in the viability of our strategy to generate revenues and in our ability to raise additional funds, we may not be successful.

Our ability to continue as a going concern is dependent upon our capability to further implement our business plan and generate revenues.

Results of Operations

Year Ended December 31, 2019, Compared to Year Ended December 31, 2018. 

Revenues for the Company’s year ended December 31, 2019 totaled $17,775 from the sales of its vitamin supplements. The increase of $1,465 as compared to the same period ending December 31, 2018 was attributed to the higher sales for the Company’s vitamin supplements.

 

Gross margins changed between 2019 and 2018 due to increases of net sales of units sold of the “BioForce Eclipse” supplement product, 790 units in 2019 compared to 725 units in 2018.

 

Gross profit for the year ended December 31, 2019 was $4,360 as compared to gross profit for $4,665 for the year ended December 31, 2018. A decrease in gross profit for the period ended December 31, 2019 compared to year ended December 31, 2018 was due to an increase cost contributed from the purchase of product labels and the art work fee for those labels during 2019.

 

Cost of Goods Sold for the year ended December 31, 2019 totaled $13,415 compared to $11,645 for year ended December 31, 2018.  The increase was due to higher unit sales of the “BioForce Eclipse” supplement product and the purchase of product labels in 2019.

General and Administrative expenses for the year ended December 31, 2019 totaled $50,898 compared to $71,405 for December 31, 2018, primarily due to decreases in professional service fees.

 

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Net Loss

 

Net loss for the years ended December 31, 2019 and 2018 were $45,538 and $67,738, respectively.

 

Liquidity and Capital Resources:

 

As of December 31, 2019, our assets totaled $58,895, which consisted of cash and prepaid expenses. The Company’s total liabilities were $11,587, which consisted of accounts payable and accrued expenses and stock payable.  As of this date the Company had an accumulated deficit of $761,752 and working capital of $47,308.

 

As of December 31, 2018, our assets totaled $35,127, which consisted of mainly cash. The Company’s total liabilities were $5,323, which consisted of accounts payable and accrued expenses.  As of this date the Company had an accumulated deficit of $715,214 and working capital of $29,804.

 

Our independent auditors, in their report on the financial statements, have indicated that the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty. As indicated herein, we need capital for the implementation of our business plan, and we will need additional capital for continuing our operations.  We do not have sufficient revenues to pay our operating expenses at this time.  Unless the company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan. For the next 12 months the Company has an oral commitment from its CEO to advance funds as necessary to meeting our operating requirement.

 

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Investing Activities

Net cash used in investing activities was $0 for both calendar years ended December 31, 2019, and 2018.

Cash from Financing Activities

Net cash provided by financing activities was $47,886 for year ended December 31, 2019, and was $77,533 for year ended December 31, 2018.

Critical Accounting Policies

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.  Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses.  These estimates and assumptions are affected by management’s application of accounting policies.  Critical accounting policies include revenue recognition and impairment of long-lived assets.

Revenue Recognition

 

Inventory

 

Inventory is carried at the lower of cost or (net realizable value), using last- in, first-out method of determining cost. The Company only orders inventory once a sales invoice is obtained. Inventory consists of finished goods of the “BioForce Eclipse” supplement, shipped from our private-label distributor.

 

All existing inventory is considered current and usable and no reserve for obsolescence was carried for the years ended December 31, 2019 and 2018.

 

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Derivative Instruments The Company evaluates its convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with paragraph 810-10-05-4 of the FASB Accounting Standards Codification and paragraph 815-40-25 of the FASB Accounting Standards Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. As of December 31, 2019 and 2018 there were no derivative liabilities. 

 

In accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: 1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation.

 

We adopted this ASC on January 1, 2018. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them.

 

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Stock-Based Compensation

We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Recent Accounting Pronouncements 

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including revenue recognition.  The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Subsequent Events

On December 2, 2019, the Board of Directors of the Company unanimously approved an amendment to the Company’s Articles of Incorporation in order to effect a plan of recapitalization that provides for a one-for-five (1-for-5) reverse stock split of our common stock.  Pursuant to written resolutions, the shareholders of the Company voted to approve the proposal to authorize the reverse split. The reverse stock split took effect, after filing a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada. The amended Articles of Incorporation did not change the authorized shares to 1,000,0000, consisting of 9,000,000 shares of common stock and 100,000,000 shares of "Blank Check "preferred stock. The common and preferred shares have a par value of $0.001 per share. Based on the amended Articles of Incorporation the Company has 10,000,000 Series 'A' Preferred which have voting and conversion rights of 1 to 100 common shares, par value $0.001( see Exhibit 3.2); leaving a balance of 90,000,000 "Blank Check" Preferred. There are no Series A Preferred issued and outstanding as of February 28, 2020.

On February 20, 2020 the Company issued 1,072 restricted shares of common stock at $1.2495 per share based on the closing price of the Company's shares on February 20, 2020. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as stock payable in the amount of $1,339 (See Note 11) *

*Adjustments to stock issuance accounts the one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020, all fractional share amounts after split round upwardly to next whole share; price per share adjusted based on the one-for-five (1-for-5) reverse split of common shares.

-18-

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

ITEM 8. Financial Statements and Supplementary Data.

 

The financial statements and related notes are included as part of this report as indexed in the appendix on page F-1, et seq.

ITEM 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosures.

  There are no disagreements with the accountants on accounting and financial disclosures.

ITEM 9A. Controls and Procedures.

 

See Item 9A(T) below.

ITEM 9A(T). Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 

-19-

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over financial reporting disclosure controls and procedures were not effective as of December 31, 2019.

 

Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.  Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

 

Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

 

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.

 

Management, including our Principal Executive Officer and Principal Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013).

-20-

We identified the following deficiencies which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of December 31, 2019: 

 

· The Company has inadequate segregation of duties within its cash disbursement control design.

   

· During the year ended December 31, 2019, the Company internally performed all aspects of its financial reporting process, including, but not limited to the underlying accounting records and the recording of journal entries and for the preparation of financial statements.  This process was deficient, because these duties were performed often times by the same people, and therefore a lack of review was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.

It should be noted  that any  system of  controls,  however  well  designed  and operated,  can provide only  reasonable,  and not absolute,  assurance  that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.  Because of these and other inherent limitations of control system, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

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 rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

 

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. If deficiencies appear in our internal controls, management would immediately make changes that would improve the segregation of duties, accounting processes and oversight.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting that occurred during the year ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

-21-

ITEM 9B. Other Information.

None.

ITEM 10. Directors, Executive Officers and Corporate Governance.

The following table provides information concerning our officers and directors. All directors hold office until the next annual meeting of stockholders or until their successors have been elected and qualified.

NAME		AGE		POSITION
Merle Ferguson		73		President/Treasurer/Director
Richard Kaiser		55		Secretary/Director

BIOGRAPHY

 

Mr. Ferguson became Chairman of the Board of the Company on July 8, 2013, and subsequently on December 1, 2016 he also became CEO and President of the Company.  Prior to that, he had no relationship with the Company. Mr. Ferguson attended Yakima Valley College from 1964-1966 with a major in forestry and a minor in Business Management. In April of 1966, he enlisted in the United States Marine Corps, serving two tours in Vietnam, and was honorably discharged in 1970. From 2001 to the present, Mr. Ferguson has served as Chairman, Secretary, Treasurer and majority shareholder of Predictive Technology Group, Inc., a company located in Salt Lake City, Utah, which is a biotech company involved in the manufacturing and marketing of products involving stem cells and genetic therapeutics.  The stock of Predictive Technology Group is traded on the OTC Markets Pink, current information market. From January, 2009 to the present, Mr. Ferguson has served as Chairman, President, CEO, CFO and majority owner of Element Global, Inc., located in Virginia Beach, Virginia.  Element Global provides mining, media and energy services.  The stock of Element Global is trades on the OTC Markets Pink, no information market. Beginning in May, 2014, Mr. Ferguson also became Chairman and President of Element Global.  From January, 2002 to 2014, Mr. Ferguson served as an Officer and Director of Gold Rock. Since 2014, he has also served as President, Chairman and CEO of Gold Rock, located in Virginia Beach, Virginia, which manufactures homes using rare earth substances and recycled tires.  Gold Rock Holdings, Inc. is a stock is traded on the over the counter market. The Board reviewed Mr. Ferguson’s background and it considers him as qualified to fill this position, due to his extensive business experience and work with public companies.

-22-

On or about July 1, 2013, Mr. Kaiser became the Registrant’s Secretary and Director On December 1, 2016, Mr. Kaiser also served the role of Interim CFO, corporate secretary and corporate governance officer.  Prior to that, Mr. Kaiser provided services to the Registrant through his Company, Yes International, Inc.  He has served as an officer and Co-Owner of Yes International since July, 1991.  Yes International is a full-service EDGAR conversion, investor relations and venture capital firm located in Virginia Beach, Virginia.  In 1990, Mr. Kaiser received a Bachelor of Arts degree in International Economics from Oakland University (formerly known as Michigan State University-Honors College.)  The Board reviewed Mr. Kaiser’s background and considered him qualified for his position due to his educational background and his experience with SEC filings and public companies.  From April 1, 2015 to the present, Mr. Kaiser has also served as a director, secretary and interim CEO of Bravo Multinational, Inc., a public company formed under the laws of Delaware with its headquarters located in Ontario, Canada.  Bravo is in the business of buying and selling casino gaming equipment.

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors acts as the Audit Committee and the Board has no separate committees. The Company has no qualified financial expert, because it has inadequate financial resources at this time to hire such an expert. The Company anticipates that a qualified financial expert will be obtained when the Company’s financial position improves.

ITEM 11. Executive Compensation.

Name and Principal  Position	Year		Salary		Bonus  ($)		Stock Awards  ($)		Option Awards  ($)		Non-Equity Incentive Plan Compensation  ($)		Nonqualified Deferred Compensation  ($)		All Other Compensation  ($)		Total  ($) (1)(2)(3)
Merle Ferguson President, CEO and Director	2017 2018 2019	$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		(2) $-0- $-0-
Richard Kaiser Secretary and Director	2017 2018 2019	$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		$-0- $-0- $-0-		(3) $-0- $-0-

(1) Does not include perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is more than $10,000.

(2) In 2014, 20,000,000 (4,000,000 shares post-split one-for-five reverse stock-split) shares of common stock were issued to Mr. Ferguson in connection with his employment contract for services to be rendered over a five-year period; after reverse stock-split of 1for 5common shares, effective as of February 28, 2020, amount now is 4,000,000.

(3) In 2014, 10,000,000 (2,000,000 shares post-split one-for-five reverse stock-split) shares of common stock were issued to Mr. Kaiser in connection with past services rendered to the company; after reverse stock-split of 1 for 5 common shares, effective as of February 28, 2020, amount now is 2,000,000.

-23-

Employment Agreements

The Company had an employment contract with Mr. Ferguson for the period from July 1, 2013 until June 30, 2018. Since June 30, 2018, Mr. Ferguson continues to work on a month-to-month basis.  There are no other compensation plans or arrangements, including payments to be made by us with respect to our officers, directors, employees or consultants that would result from the resignation, retirement or any other termination of such directors, officers, employees or consultants. There are no arrangements for compensation to be paid to our directors, officers, employees or consultants that would result from a change-in-control.

Stock Options

 

The Company had no stock options outstanding at December 31, 2019.

 

Board of Directors Compensation

 

Our executive directors did not receive any compensation for their service as Directors of the Company for the years ended December 31, 2018 and 2019.

 

-24-

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2018, by (i) each person who is known by us to own beneficially more than 5% of our outstanding common stock; (ii) each of our officers and directors; and (iii) all of our directors and officers as a group.

Name and Address of Beneficial Owner		Amount of Common Stock Beneficially Owned		Percentage Ownership of Common stock (1)
Merle Ferguson 1750 Barbara Lane Encinitas, CA 92024		4,000,000(2)		26.19%
Richard Kaiser 3419 Virginia Beach Blvd., Suite 252 Virginia Beach, VA 23452		2,038,000(3)		13.34%
Susan Donohue		4,000,000 (4)		26.19%
1239 Artic Street Antigo, WI 54409
All Officers and Directors as a Group (2 persons)		6,038,000		39.53%

(1) Applicable percentage ownership is based on 15,270,588 shares outstanding as of December 31, 2019, reflects the post-split amounts based on the reverse stock split of 1for 5 effective on February 28, 2020. There are no options, warrants, rights, conversion privilege or similar right to acquire the common stock of the Company outstanding as of December 31, 2018.

(2) Mr. Ferguson owns directly 4,000,000 share of common stock, ownership recorded after stock split of 1 for 5 reverse effective as of February 28, 2020.

(3) Mr. Kaiser owns directly 2,000,000 shares of common stock and he owns 38,000 shares beneficially through his Company, Yes International, Inc. Ownership was recorded after stock split of 1 for 5 reverse effective as of February 28, 2020.

(4) Ms. Donohue owns her 4,000,000 shares beneficially through her wholly owned companies, TJJR Enterprises, Inc. and Trade Exchange International, Inc. Ownership was recorded after stock split of 1 for 5 reverse effective as of February 28, 2020.

-25-

RECENT SALES OF UNREGISTERED SECURITIES.

 

2018 Unregistered Securities

 

In June 2018, the Company issued 999 restricted shares of common stock at $3.25 per shares based on the closing price of the Company's shares on June 11, 2018. The issuance was in exchange for product payment that was recorded in accounts payable in the amount of $3,245.*

 

In August 2018, the Company issued 972 restricted shares of common stock at $3.75 per share based on the closing price of the Company's shares on August 21, 2018. The issuance was in exchange for product payment that was recorded in accounts payable in the amount of $3,645. *

 

In November 2018, the Company issued 713 restricted shares of common stock at $5.50 per share based on the closing price of the Company's shares on November 11, 2018. The issuance was in exchange for product payment of $3.920 for the Company's "BioEclipse" supplement.*

 

2019 Unregistered Securities

 

In January 2019, the Company issued 925 restricted shares of common stock at $4.40 per share based on the closing price of the Company's shares on January 18, 2019. The issuance was in exchange for product payment of the Company's "BioEclipse" Supplement and was record as an accounts payable in the amount of $4,080 ( See Note 7 to Financial Statements and exhibit 10.1).*

 

In May 2019, the Company issued 616 restricted shares of common stock at $1.35 per share based on the closing price of the Company's shares on May 17, 2019. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as an account payable in the amount of $4,160.*

-26-

In July 2019, the Company issued 2,865 restricted shares of common stock at $0.875 per share based on the closing price of the Company's shares on July 22, 2019. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as an account payable in the amount of $4,540 (See Note 7 to Financial Statements).*

 

In November 2019, the Company issued 4,464 restricted shares of common stock at $0.65 per share based on the closing price of the Company's shares on November 13, 2019. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as an account payable in the amount of $4,240 (See Note 7 to Financial Statements).*

 

On February 20, 2020 the Company issued 1,072 restricted shares of common stock at $1.2495 per share based on the closing price of the Company's shares on February 20, 2020. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as a stock payable in the amount of $1,339 (See Note 7 to Financial Statements).*

 

*Adjustments to stock issuance accounts for the reverse split of 1 for 5 common shares effective February 28, 2020, all fractional share amounts after split round upwardly to next whole share; price per share adjusted based on the 1 for 5 reverse split of common shares.

All securities issued by the Company are deemed "restricted securities" within the meaning of that term as defined in Rule 144 of the Securities Act and have been issued pursuant to the "private placement" exemption under Section 4(2) of the Securities Act. Such transactions did not involve a public offering of securities. All purchasers in the private placement had access to information on the Company necessary to make an informed investment decision. The Company has been informed that all purchasers were able to bear the economic risk of this investment and are aware that the securities were not registered under the Securities Act, and cannot be re-offered or re-sold unless they are registered or are qualified for sale pursuant to an exemption from registration. The transfer agent and registrar of the Company will be instructed to mark "stop transfer" on its ledger regarding these shares.

-27-

REPORTS TO SECURITY HOLDERS

(1) The Company is not required to deliver an annual report to security holders and at this time; does not anticipate the distribution of such a report.

(2) The Company has filed a Form 10 Registration Statement with the SEC and following the effectiveness of the Registration Statement the Company will be a reporting company and will comply with the requirements of the Securities Exchange Act of 1934 (the “Act”), as amended, and will file all required reports with the SEC.

(3) The public may read and copy any materials the Company files with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

(4) The Company filed a Definitive Information Statement with US SEC on December 2, 2019 which was mailed informing shareholders of record about the board decision and majority shareholder approvals of to amended articles of incorporation with the State of Nevada reflecting a 5:1 reverse stock split which became effective on February 28, 2020.

 

ITEM 13.  Certain Relationships and Related Transactions and Director Independence.

 

Mr. Merle Ferguson, the Company's CEO, President and Chairman paid $43,136 in 2019 and in 2018 he paid $70,933 in expenses on behalf of the Company. Mr. Richard Kaiser, the Company's CFO and Director paid $4,750 in 2019 and $6,600 in 2018. Both Mr. Ferguson and Mr. Kaiser have no expectations that these payments would be repaid in cash. Except as otherwise indicated herein, there have been no other related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.

 

-28-

ITEM 14. Principal Accounting Fees and Services.

Audit Related Fees

The aggregate fees billed by BF Borges CPA PC for audit and review services for financial statements for the year ended December 31, 2019 was $24,000 and for the year ended December 31, 2018 was $22,000.

Tax Fees

There were no aggregate fees billed by BF Borges CPA PC for professional services rendered for tax services for the fiscal years ended December 31, 2019 and 2018.

All Other Fees

There were no other fees billed by BF Borges CPA PC for professional service rendered for the fiscal years ended December 31, 2019 and 2018, other than as stated under the captions Audit Fees, Audit-Related Fees, and Tax Fees.

ITEM 15. Financial Statements and Exhibits.

 

Index to Financial Statements   F-1- F-9

 

-29-

(b) Index to Exhibits.

Exhibit No.     Description of Exhibit

3.1 Certificate of Incorporation (1)

3.2 Amended Articles of Certificate of Incorporation (2)

 

3.3 Bylaws (1)

 

4.1 Specimen Certificate of Common Stock (1)

 

10.1 Supplier Agreement (1)

 

10.2 Employer Agreement – Merle Ferguson (1)

 

31.1 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

 

31.2 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.

 

32.1 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

 

32.2 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

 

101 Interactive XBRL Tags

 

(1) Previously filed on Form 10 and Form 10/As

(2) Previously filed on DEF 14C-Definative Information Statement

-30-

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIOFORCE NANOSCIENCES HOLDINGS, INC.

Date: March 4, 2020                                                   

 

By: /s/ Merle Ferguson

Merle Ferguson, Chief Executive Officer and Chairman

 

By: /s/ Richard Kaiser

Richard Kaiser, Acting Chief Financial Officer, Principal Accounting Officer and Secretary

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

March 4, 2020

/s/ Merle Ferguson     Merle Ferguson, Chief Executive Officer

/s/ Richard Kaiser   Richard Kaiser, Acting Chief Financial Officer, Principal Accounting Officer and Secretary

-31-

BIOFORCE NANOSCIENCES HOLDINGS, INC.

F-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the board of directors of BioForce Nanosciences Holdings, Inc

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of BioForce Nanosciences Holdings, Inc. (the "Company") as of December 31, 2019 and 2018, the related statements of operations, changes in stockholder’s equity, and cash flows for the each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Going concern uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company incurred recurring losses from operations, and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ B F Borgers CPA PC

 

We have served as the Company’s auditor since 2017.

 

Lakewood, Colorado

March 4, 2020  

F-2

 The accompanying notes are an integral part of these financial statements

F-3

BIOFORCE NANOSCIENCES HOLDINGS, INC.

STATEMENTS OF OPERATIONS

 The accompanying notes are an integral part of these financial statements

F-4

BIOFORCE NANOSCIENCES HOLDINGS, INC.

STATEMENTS OF CASH FLOWS

 The accompanying notes are an integral part of these financial statements

F-5

BIOFORCE NANOSCIENCES HOLDINGS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 and 2018

 The accompanying notes are an integral part of these financial statements

F-6

BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 1 – Organization & Description of Business

 

The Company was incorporated in the State of Nevada on December 10, 1999 as Silver River Ventures, Inc.  On February 24, 2006, the Company completed the acquisition of BioForce Nanosciences Holdings Inc. (“BioForce”), a Delaware corporation, and changed the corporate name at that time. The acquisition was made pursuant to an agreement entered into on November 30, 2005 ("Merger Agreement"), whereby we agreed to merge our newly created, wholly owned subsidiary, Silver River Acquisitions, Inc., with and into BioForce, with BioForce being the surviving entity. The Company’s mission is to become a leading provider of vitamin, mineral and other nutritional supplements, powders and beverages, formulated to promote a healthier lifestyle for active individuals in all age ranges.  

 

NOTE 2 – Summary of Significant Accounting Policies

 

Basis of Presentation

 

The Company’s financial statements have been prepared and presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Use of Estimates

 

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

 

Cash

 

At December 31, 2019 and 2018, the Company’s cash consisted of the following:

F-7

BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 2 – Summary of Significant Accounting Policies - continued

 

Accounts Receivable

 

The Company considers accounts receivable to be fully collectible.  Accordingly, no allowance for doubtful accounts is required.  If amounts become uncollectible they will be charged to operations when that determination is made.

 

Earnings (Loss) per Share

 

Earnings (loss) per share of common stock are computed in accordance with FASB ASC 260 “Earnings per Share”.  Basic earnings (loss) per share are computed by dividing income or loss available to common shareholders by the weighted-average number of common shares outstanding for each period.  Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding assuming conversion of all potentially dilutive stock options, warrants and convertible securities, if dilutive. Common stock equivalents that are anti-dilutive are excluded from both diluted weighted average number of common shares outstanding and diluted earnings (loss) per share.

 

Stock-Based Compensation 

 

We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

 

Fair Value of Financial Instruments

 

The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued liabilities and stock payable approximate fair value given their short term nature or effective interest rates.

F-8

BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 2 – Summary of Significant Accounting Policies - continued

 

 

Revenue Recognition

 

Beginning January 1, 2018, the Company implemented ASC 606, Revenue from Contracts with Customers.  Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them.  These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.

 

The Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.  To achieve this core principle, we apply the following five steps:  identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.

 

Inventory   

 

Inventory is carried at the lower of cost or net realizable value, using last-in, first-out method of determining cost.  The Company only orders inventory once a sales invoice is obtained.  Inventory consists of finished goods of the “BioForce Eclipse” supplement, shipped from our private label.

 

Reclassifications

 

Certain prior period amounts in the accompanying unaudited financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported financial statements.

F-9

BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 3 – Recently Issued Accounting Standards

 

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including the new lease standard.  The Company does not have any leases and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

NOTE 4 – Going Concern 

 

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations.  As a result, there is an accumulated deficit at December 31, 2019 and 2018.

While the Company is attempting to continue operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.    Management believes that the actions presently being taken to further implement the Company’s business plan; to expand sales with a dynamic marketing campaign and generate revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

 

NOTE 5 – Prepaid Expenses

 

Prepaid expenses consist of the following at December 31, 2019 and 2018:

F-10

BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 6 – Related Party Transactions

 

The Company’s Director, Secretary and Acting CFO, Richard Kaiser, is the operator of Yes International, a full-service investor relations firm.  He handles duties of the Company regarding his officer capacities as the Secretary and Acting CFO, but also provides investor relations services through Yes International for the Company at no charge.

 

During the year s ended December 31, 2019 and 2018, two majority shareholders who are the CEO and CFO paid all expenses of the Company in the amount of $47,886 and $77,533, respectively.  These amounts paid will not be reimbursed to the shareholder or the CFO; therefore, additional paid in capital was increased by $47,886 and $77,533, respectively for the years ended December 31, 2019 and 2018.

 

NOTE 7 – Stock

 

Preferred Stock

 

Preferred stock consists of 100,000,000 shares authorized at $0.001 par value.  10,000,000 of these preferred shares have been separately allocated to Series 'A' Preferred which have voting and conversion right of 1 to 100 common shares. At December 31, 2019 and, 2018 there were -0- shares issued and outstanding.  

 

Common Stock

 

Common stock consists of 900,000,000 shares authorized at $0.001 par value.  On November 25, 2019 the board of directors approved a one-for-five (1-for-5) reverse stock split.  The reverse has been retrospectively accounted for at January 1, 2018 in the statements of changes in stockholders’ equity.  At December 31, 2019 and December 31, 2018, there were 15,270,588 and 15,261,718 shares issued and outstanding, respectively.  

 

During the year ended December 31, 2019, the Company issued 8,870 shares of common stock in exchange for product payment that was recorded in accounts payable in the amount of $16,156.  The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date.

 

During the year ended December 31, 2018, the Company issued 2,683 shares of common stock in exchange for product payment that was recorded in accounts payable in the amount of $11,807.  The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date which was an overpayment of the account payable to the vendor.  The overpayment of $998 is included in loss on liability settlement in the statement of operations at December 31, 2018.

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BIOFORCE NANOSCIENCES HOLDINGS, INC.

NOTES TO FINANCIAL STATEMENTS

 

NOTE 8 – Commitments and Contingencies

 

The Company has no commitments and contingencies.

 

NOTE 9 – Concentrations

 

For the year ended December 31, 2019 the Company’s sales were with one (1) customer and amounted to $17,775.  For the year ended December 31, 2019, the Company’s purchases were with one (1) vendor and amounted to $13,415.

 

NOTE 10 – Income Taxes

 

Income taxes are computed based on Net income (loss) provided in the financial statements at federal and state applicable rates.  Income tax expense at December 31, 2019 and 2018 was $-0- due to the Company’s net loss.

 

The effective income tax rate of 0% for the years ended December 31, 2019 and 2018 differed from the statutory rate, due primarily to net operating losses incurred by the Company in the respective periods.  For the year ended December 31, 2019, a tax benefit of approximately $12,555 would have been generated.  For the year ended December 31, 2018 a tax benefit of approximately $18,300 would have been generated.  However, all benefits have been fully offset through an allowance account due to the uncertainty of the utilization of the net operating losses.  As of December 31, 2019 the Company had net operating losses of approximately $114,200 that would result in a deferred tax asset of approximately $30,855.  However, the Company has established a valuation allowance in full amount of the deferred tax asset due to the uncertainty of the utilization of operating losses in the future.

 

NOTE 11 – Subsequent Events

On February 20, 2020 the Company issued 1,072 restricted shares of common stock at $1.2495 per share based on the closing price of the Company's shares on February 20, 2020. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as stock payable in the amount of $1,339*

*Adjustments to stock issuance accounts the one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020, all fractional share amounts after split round upwardly to next whole share; price per share adjusted based on the one-for-five (1-for-5) reverse split of common shares.

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