10-Q 1 egrn_10q.htm FORM 10-Q egrn_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: June 30, 2017

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-53902

 

Evergreen-Agra Global Investments, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada

 

98-0460379

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

 

19800 MacArthur suite 300, Irvine CA, USA 92612

(Address of Principal Executive Offices & Zip Code)

 

604-764-7646

(Telephone Number)

 

N/A

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

 

Securities registered pursuant to section 12(g) of the Act: Common Stock, $0.001 par value

 

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

 

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

 

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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

 

Accelerated filer

¨

Non-accelerated filer  

¨

(Do not check if a smaller reporting company)

Smaller reporting company

x

 

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

 

The registrant had 26,004,936 shares of common stock outstanding as of June 30, 2017.

 

 
 
 
 

 

Evergreen-Agra Global Investments, Inc.

 

Quarterly Report On Form 10-Q

For The Quarterly Period Ended

June 30, 2017

 

INDEX

 

PART I – FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

4

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17

Item 4.

Controls and Procedures

17

 

 

PART II – OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

18

Item 1A.

Risk Factors

18

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

18

Item 3.

Defaults Upon Senior Securities

18

Item 4.

(Removed and Reserved)

18

Item 5.

Other Information

18

Item 6.

Exhibits

19

 

 
2
 
 

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements include, but are not limited to, statements with respect to the following:

 

 

our need for additional financing;

 

 

 

 

the competitive environment in which we operate;

 

 

 

 

our dependence on key personnel;

 

 

 

 

conflicts of interest of our directors and officers;

 

 

 

 

our ability to fully implement our business plan;

 

 

 

 

our ability to effectively manage our growth; and

 

 

 

 

other regulatory, legislative and judicial developments.

 

Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended December 31, 2016, this quarterly report on Form 10-Q, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

We caution readers not to place undue reliance on any such forward-looking statements, which speak only to a state of affairs as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward-looking statements contained in this annual report by the foregoing cautionary statements. 

 

 
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PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The following unaudited interim financial statements of Evergreen-Agra Global Investments, Inc. (sometimes referred to as “we”, “us” or “our Company”) are included in this quarterly report on Form 10-Q:

 

 

 

Page

 

Balance Sheets

 

5

 

Statements of Operations

 

6

 

Statements of Cash Flows

 

7

 

Statement of Stockholders’ Equity (Deficit)

 

8

 

Notes to the Financial Statements

 

9

 

 

 
4
 
 

 

Evergreen-Agra Global Investments, Inc.

Consolidated Balance Sheets

 

 

 

 

 

 

 

June 30,

2017

 

 

December 31,

2016

 

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ -

 

 

$ -

 

Prepaid expense

 

 

2,422

 

 

 

82

 

Total current assets

 

 

2,422

 

 

 

82

 

 

 

 

 

 

 

 

 

 

Equipment, less accumulated depreciation of $4,500 and $4,500, respectively

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$ 2,422

 

 

$ 82

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 570,765

 

 

$ 574,742

 

Accounts payable - related parties

 

 

475,663

 

 

 

472,643

 

Total current liabilities and total liabilities

 

 

1,046,428

 

 

 

1,047,385

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock, $0.001 par value: 100,000,000 Common Shares Authorized; 26,004,936 and 42,881,491 Shares Issued and Outstanding, respectively

 

 

26,005

 

 

 

42,882

 

Additional paid-in capital

 

 

2,632,341

 

 

 

2,337,464

 

Accumulated deficit

 

 

(3,702,352 )

 

 

(3,427,649 )

Total stockholders’ deficit

 

 

(1,044,006 )

 

 

(1,047,303 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$ 2,422

 

 

$ 82

 

 

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

 

 
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Evergreen-Agra Global Investments, Inc.

Consolidated Statements of Operations

 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30, 2017

 

 

June 30, 2016

 

 

June 30, 2017

 

 

June 30, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Officer stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

866,994

 

Consulting Fees (all stock-based)

 

 

63,000

 

 

 

-

 

 

 

63,000

 

 

 

-

 

Professional fees (including stock-based of $15,000 in 2017)

 

 

-

 

 

 

48,112

 

 

 

15,000

 

 

 

53,112

 

Other general and administrative

 

 

15,415

 

 

 

5,467

 

 

 

26,306

 

 

 

6,536

 

Depreciation of equipment

 

 

-

 

 

 

200

 

 

 

-

 

 

 

400

 

Foreign exchange loss (gain)

 

 

15,696

 

 

 

(956 )

 

 

20,397

 

 

 

40,597

 

Total Operating Expenses

 

 

94,111

 

 

 

52,823

 

 

 

124,703

 

 

 

967,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from Operations

 

 

(94,111 )

 

 

(52,823 )

 

 

(124,703 )

 

 

(967,639 )

Stock-based costs relating to terminated acquisitions of Green-Era Consulting and Med-Care Advisors

 

 

-

 

 

 

-

 

 

 

(150,000 )

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (94,111 )

 

$ (52,823 )

 

$ (274,703 )

 

$ (967,639 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) per Common Share -   Basic and Diluted 

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.01 )

 

$ (0.02 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding - basic and diluted

 

 

25,863,855

 

 

 

42,826,491

 

 

 

26,892,037

 

 

 

42,539,090

 

 

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

 

 
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Evergreen-Agra Global Investments, Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended June 30,

 (Unaudited)

 

 

 

 

 

 

 

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net Income (loss)

 

$ (274,703 )

 

$ (967,639 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Officer stock-based compensation

 

 

-

 

 

 

866,994

 

Other stock-based service compensation

 

 

78,000

 

 

 

-

 

Stock-based costs relating to terminated acquisitions

 

 

150,000

 

 

 

-

 

Depreciation of equipment

 

 

-

 

 

 

400

 

(Increase) decrease in prepaid expense

 

 

(2,340 )

 

 

-

 

Increase (decrease) in accounts payable

 

 

(3,977 )

 

 

25,375

 

Increase (decrease) in accounts payable - related parties

 

 

3,020

 

 

 

74,870

 

Net cash used in operating activities

 

 

(50,000 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

 

 

 

 

 

 

Proceeds from private placement

 

 

50,000

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

 

-

 

 

 

-

 

Cash and cash equivalents at beginning of period

 

 

-

 

 

 

-

 

Cash and cash equivalents at end of period

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

Income taxes paid

 

$ -

 

 

$ -

 

Interest paid

 

$ -

 

 

$ -

 

 

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

 

 
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Evergreen-Agra Global Investments, Inc.

Consolidated Statements of Stockholders' Equity

For the Year Ended December 31, 2016 and Six Months Ended June 30, 2017 (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional 

 

 

 

 

Total

 

 

 

Number of

Shares

 

 

Amount

 

 

Paid in

Capital

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity 

 

Balance - December 31, 2015

 

 

25,486,602

 

 

$ 25,487

 

 

$ 1,454,865

 

 

$ (2,473,567 )

 

$ (993,215 )

Shares issued to Matthew Rhoden pursuant to Executive Agreement dated January 4, 2016

 

 

17,339,889

 

 

 

17,340

 

 

 

849,654

 

 

 

-

 

 

 

866,994

 

Private placement on September 1, 2016

 

 

55,000

 

 

 

55

 

 

 

32,945

 

 

 

-

 

 

 

33,000

 

Net loss for the year ended December 31, 2016

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(954,082 )

 

 

(954,082 )
Balance - December 31, 2016

 

 

42,881,491

 

 

 

42,882

 

 

 

2,337,464

 

 

 

(3,427,649 )

 

 

(1,047,303 )

Cancellation on January 13, 2017 of shares issued to Matthew Rhoden on February 25, 2016

 

 

(17,339,889 )

 

 

(17,340 )

 

 

17,340

 

 

 

-

 

 

 

-

 

Shares issued for legal services on March 1, 2017

 

 

25,000

 

 

 

25

 

 

 

14,975

 

 

 

-

 

 

 

15,000

 

Shares issued on March 7, 2017 relating to terminated acquisitions

 

 

250,000

 

 

 

250

 

 

 

149,750

 

 

 

-

 

 

 

150,000

 

Private placement on May 23, 2017

 

 

83,334

 

 

 

83

 

 

 

49,917

 

 

 

-

 

 

 

50,000

 

Shares issued for consulting services on June 27, 2017

 

 

105,000

 

 

 

105

 

 

 

62,895

 

 

 

-

 

 

 

63,000

 

Net loss for the quarter ended June 30, 2017

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(274,703 )

 

 

(274,703 )
Balance - June 30, 2017 (Unaudited)

 

 

26,004,936

 

 

$ 26,005

 

 

$ 2,632,341

 

 

$ (3,702,352 )

 

$ (1,044,006 )

 

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

  

 
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EVERGREEN-AGRA GLOBAL INVESTMENTS, INC.

Notes to Consolidated Financial Statements

For The Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

NOTE 1. NATURE OF OPERATIONS

 

Description of Business and History

 

Evergreen-Agra Global Investments, Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010, the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. Effective June 23, 2017, the Company changed its name to Evergreen-Agra Global Investments, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013. In May 2017, the Company announced plans to register the Company as a closed ended fund to invest in public companies within the cannabis sector.

 

On November 19, 2013, pursuant to a letter of intent dated September 10, 2013, the Company issued 20,000,000 post-split shares of its common stock to Rene Hamouth in exchange for 100% ownership of Evergreen Systems (“ES”). Except for conducting research on the medical marijuana industry, ES had no assets, liabilities, or business operations prior to the acquisition. At closing, the Company also issued 19,600,000 post-split shares of its common stock to Harpreet Sangha (then director and former chief executive officer of the Company from September 19, 2009 to September 1, 2013) for future services to be rendered and 1,000,000 post-split shares of its common stock to Richard Specht (secretary and director of the Company from September 1, 2013 to November 21, 2014) for services rendered. ES became a wholly owned part of the Company. The acquisition resulted in a change of control of the Company on November 19, 2013 and was accounted for as a reverse acquisition.

 

NOTE 2. GOING CONCERN UNCERTAINTY

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At June 30, 2017, the Company had negative working capital of $1,044,006. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 
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The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Interim Financial Information

 

The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they may not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the unaudited financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation. Operating results for the three and six months periods ended June 30, 2017 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2017. The notes to the consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2016.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Evergreen-Agra Global Investments, Inc. (from November 19, 2013 to June 30, 2017) and its wholly owned subsidiary ES (from inception on August 15, 2013 to June 30, 2017). All significant intercompany balances and transactions have been eliminated in consolidation.

 

Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in U.S. dollars.

 

 
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Use of Estimates

 

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with original maturities of three months or less when acquired to be cash equivalents. We had no cash equivalents at December 31, 2016 and June 30, 2017.

 

Equipment

 

Equipment is stated at historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, generally ranging from three to five years.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at estimated fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation.”

 

Income Taxes

 

The Company accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company computes tax assets benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

 

Income (Loss) Per Common Share

 

The Company reports net income (loss) per share in accordance with provisions of the FASB. The provisions require dual presentation of basic and diluted income (loss) per share. Basic net income (loss) per share excludes the impact of common stock equivalents. Diluted net income (loss) per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. For the periods presented, there were no common stock equivalents outstanding.

 

 
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Fair Value of Financial Instruments

 

Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of June 30, 2017 and December 31, 2016. The Company’s financial instruments consist of cash and accounts payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

 

Reclassification

 

Certain 2016 expense amounts have been reclassified to conform to the current year’s presentation.

 

Recent Accounting Pronouncements

 

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

 

NOTE 4. ACCOUNTS PAYABLE

 

Accounts payable at June 30, 2017 and December 31, 2016 consists of:

 

 

 

June 30,
2017

 

 

December 31,

2016

 

Former law firms

 

$ 482,365

 

 

$ 478,545

 

Former audit firms

 

 

7,625

 

 

 

7,625

 

Other service providers

 

 

80,775

 

 

 

88,572

 

Total

 

$ 570,765

 

 

$ 574,742

 

  

At June 30, 2017, $150,241 of the total $570,765 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the June 30, 2017 exchange rate of $0.7703.

 

At December 31, 2016, $145,273 of the total $574,742 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.

 

 
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The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.

 

NOTE 5. ACCOUNTS PAYABLE – RELATED PARTIES

 

Accounts payable – related parties at June 30, 2017 and December 31, 2016 consists of:

 

 

 

June 30,
2017

 

 

 December 31,
2016

 

 

 

 

 

 

 

 

Harpreet Sangha, chief executive office of the Company from September 19, 2009 to September 1, 2013 and director of the Company from September 19, 2009 to May 4, 2014

 

$ 53,154

 

 

$ 51,645

 

 

 

 

 

 

 

 

 

 

Herminder Rai, chief financial officer of the Company from April 12, 2012 to September 21, 2013 and director of the Company from May 8, 2012 to March 11, 2014

 

 

59,393

 

 

 

57,482

 

 

 

 

 

 

 

 

 

 

Sam Sangha, brother of Harpreet Sangha

 

 

119,917

 

 

 

115,951

 

 

 

 

 

 

 

 

 

 

Rene Hamouth, chief executive officer of the Company from September 1, 2013 to July 17, 2014, director of the Company from September 1, 2013, and Chairman of   the board of directors of the Company from July 17, 2014

 

 

566

 

 

 

12,956

 

 

 

 

 

 

 

 

 

 

Craig Alford, director of the Company from October 14, 2011 to September 1, 2013

 

 

242,633

 

 

 

234,609

 

Total

 

$ 475,663

 

 

$ 472,643

 

 

At June 30, 2017, $466,547 of the total $475,663 accounts payable – related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the June 30, 2017 exchange rate of $0.7703.

 

At December 31, 2016, $451,118 of the total $472,643 accounts payable – related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.

 

The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.

 

 
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NOTE 6. COMMON STOCK ISSUANCES

 

Issuances in 2016

 

On February 25, 2016, the Company issued 17,339,889 shares of its common stock to Matthew Rhoden pursuant to an Executive Agreement between the Company, Matt Rhoden (the “Executive”) and Rene Hamouth (the “Principal Shareholder”) dated January 4, 2016. The agreement provided for the employment of the Executive as Chief Executive Officer of the Company for a period of 5 years, unless sooner terminated by the Board of Directors. The agreement also provided for the Executive and Principal Stockholder to vote together on all matters presented to the shareholders for vote and for each to grant the other a right of first refusal on shares owned by each during the term of the agreement. The $866,994 estimated fair value of the 17,339,889 shares of Company common stock was charged to “Officer compensation” in the statement of operations for the three months ended March 31, 2016. The 17,339,889 shares of Company common stock were returned to the Company and cancelled on January 13, 2017 due to Mr. Rhoden’s resignation as chief executive officer and director at the Company on January 12, 2017.

 

On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth (see Note 5).

 

Issuances in 2017

 

On January 13, 2017, the 17,339,889 shares of Company common stock issued to Matthew Rhoden on February 25, 2016 (see above) were returned to the Company and cancelled due to the resignation of Matthew Rhoden as chief executive officer and director of the Company on January 12, 2017.

 

On March 1, 2017, the Company issued 25,000 shares of its common stock to its law firm for services rendered. The $15,000 estimated fair value of the 25,000 shares of Company common stock was charged to “Professional fees” in the statement of operations for the three months ended March 31, 2017.

 

On March 7, 2017, the Company issued 250,000 shares of its common stock to Jonas LaForge in connection with contemplated transactions with Green – Era Consulting and Med – Care Advisors. The conditions for closing were not completed and the Company has requested Mr. LaForge return the 250,000 shares for cancellation. The $150,000 estimated fair value of the 250,000 shares of Company common stock was charged to “Stock-based costs related to terminated acquisitions” in the statement of operations for the three months ended March 31, 2017.

 

On May 23, 2017, the Company sold 83,334 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $50,000 proceeds were used to pay Company liabilities and expenses.

 

On June 27, 2017, the Company issued 105,000 shares of its common stock to Arthur Porcari for consulting services. The $63,000 estimated fair value of the 105,000 shares of Company common stock was charged to “Consulting fees” in the statement of operations for the three months ended June 30, 2017.

 

 
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NOTE 7. INCOME TAXES

 

The Company has generated taxable losses for the periods presented. Accordingly, no provisions for income taxes have been recorded.

 

The Company’s effective tax rate differs from the United States Federal income tax rate as follows:

 

 

 

Three Months Ended
 June 30,

 

 

Six Months Ended
 June 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Federal income tax at 35%

 

$ (32,939 )

 

$ (18,488 )

 

$ (96,146 )

 

$ (338,674 )
Non-deductible stock-based compensation

 

 

22,050

 

 

 

-

 

 

 

27,300

 

 

 

303,448

 

Non-deductible stock-based costs related to terminated acquisitions

 

 

-

 

 

 

-

 

 

 

52,500

 

 

 

-

 

Non-deductible (non-taxable) foreign exchange (gain) loss

 

 

5,494

 

 

 

(335 )

 

 

7,139

 

 

 

14,209

 

Change in valuation allowance

 

 

5,395

 

 

 

18,823

 

 

 

9,207

 

 

 

21,017

 

Provision for Income Taxes

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

  

At June 30, 2017, the Company has net operating loss carryforwards which expire from 2028 to 2037. The deferred tax asset relating to these net operating loss carryforwards has been fully reserved for at June 30, 2017 since management’s assessment has not yet determined it to be more likely than not that the net operating loss carryforwards will be realized.

 

Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

 

NOTE 8. LEASE COMMITMENT

 

The Company uses premises provided by its Chairman of the Board of Directors under a Lease Agreement effective January 1, 2017. The agreement has a term of one year and provides for rent of $3,000 per month. For the three and six months ended June 30, 2017 and 2016, rent expense was $9,000, $18,000, $0 and $0, respectively.

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion should be read in conjunction with our most recent audited financial statements which are included in the Form 10-K for the year ended December 31, 2016, and the related notes to such financial statements. This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. We have yet to generate revenues to achieve profitability.

 

Plan of Operations

 

Evergreen-Agra Global Investments, Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010 the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. Effective June 23, 2017, the Company changed its name to Evergreen-Agra Global Investments, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013.

 

At June 30, 2017, the Company had negative working capital of $1,044,006. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

On May 23, 2017, the Company sold 83,334 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $50,000 proceeds were used to pay Company liabilities and expenses.

 

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations going forward. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining equity financing, there is no assurance that we will obtain the funding necessary to pursue our business plan. If we do not continue to obtain additional financing going forward, we will be forced to re-evaluate or abandon our plan of operations.

 

Results of Operations

 

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

 

For the three months ended June 30, 2017 and 2016, we had no revenues. Total operating expenses increased $41,288 from $52,823 in 2016 to $94,111 in 2017. Stock-based compensation increased $63,000 from $0 in 2016 to $63,000 in 2017. General and administrative expenses decreased $38,164 from $53,579 in 2016 to $15,415 in 2017 due to higher professional fees in 2016 as a result of our filing of our 2014 and 2015 periodic reports with the SEC in 2016. Foreign exchange loss increased $16,652 from a gain of $956 in 2016 (resulting from a decrease in the Canadian Dollar exchange rate used to translate our liabilities denominated in Canadian Dollars to United States Dollars) to a loss of $15,696 in 2017 (resulting from an increase in the Canadian Dollar exchange rate).

 

 
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Net loss increased $41,288 from a net loss of $52,823 in 2016 to a net loss of $94,111 in 2017. The increase was due to the $63,000 increase in stock-based compensation and the $16,652 increase in foreign exchange loss, offset partially by the $38,164 decrease in general and administrative expenses.

 

Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

 

For the six months ended June 30, 2017 and 2016, we had no revenues. Total operating expenses decreased $842,936 from $967,639 in 2016 to $124,703 in 2017. Total stock-based compensation decreased $788,994 from $866,994 in 2016 as a result of the issuance of 17,339,889 shares of Company common stock to Matthew Rhoden on February 25, 2016 pursuant to an Executive Agreement dated January 4, 2016 to $78,000 in 2017. General and administrative expenses (non-stock based) decreased $33,342 from $59,648 in 2016 to $26,306 in 2017 due to higher professional fees in 2016 as a result of our filing of our 2014 and 2015 periodic reports with the SEC in 2016. Foreign exchange loss (gain) decreased $20,200 from a loss of $40,597 in 2016 (resulting from an increase in the Canadian Dollar exchange rate used to translate our liabilities denominated in Canadian Dollars to United States Dollars) to a loss of $20,397 in 2017 also resulting from an increase in the Canadian Dollar exchange rate.

 

Net loss decreased $692,936 from a net loss of $967,639 in 2016 to a net loss of $274,703 in 2017. The decrease was due to the $842,936 decrease in operating expenses, offset by a $150,000 increase in stock based costs relating to terminated aquisitions of Green-Era Consulting and Med-Care Advisors in 2017.

 

Liquidity and Capital Resources

 

We had a working capital deficit of $1,044,006 at June 30, 2017. At both June 30, 2017 and December 31, 2016, we had no cash or cash equivalents. Most of our general and administrative expenses paid in 2017 and 2016 were paid directly by or on behalf of our Chairman of the Board of Directors.

 

On May 23, 2017, the Company sold 83,334 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $50,000 proceeds were used to pay Company liabilities and expenses.

 

Off-Balance Sheet Arrangements

 

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

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable because we are a smaller reporting company.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Mr. Rene Hamouth, our Chairman and Chief Executive Officer, and Todd Hazlewood, our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a15(e) of the exchange Act) as of June 30, 2017. Based on this evaluation, our chairman and chief executive officer and our chief financial officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2016, due to the deficiencies in our internal control over financial reporting, as reported in our Annual Report on Form 10-K for our year ended December 31, 2016, which deficiencies have not been remedied.

 

No Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We currently are not a party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

 

Item 1A. Risk Factors

 

Not applicable because we are a smaller reporting company.

 

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

 

On May 23, 2017 the Company sold 83,334 shares of its common stock to an investor for proceeds of $50,000. The $50,000 proceeds were used to pay Company liabilities and expenses.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. (Removed and Reserved)

 

Not applicable.

 

Item 5. Other Information

 

None

 

 
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Item 6. Exhibits

 

Exhibit No.

 

Description

 

 

 

3.1

 

Articles of Incorporation (1)

3.2

 

Bylaws (1)

3.3

 

Certificate of Amendment as filed with the Nevada Secretary of State, effective as of November 13, 2009 (2)

3.4

 

Certificate of Change as filed with the Nevada Secretary of State, filed December 1, 2010 (3)

3.5

 

Certificate of Correction as filed with the Nevada Secretary of State, filed December 2, 2010 (3)

3.6

 

Certificate of Amendment as filed with the Nevada Secretary of State, effective as of February 24, 2011 (4)

3.7

 

Articles of Merger as filed with the Nevada Secretary of State, effective as of July 20, 2011 (5)

10.1

 

Share Purchase Agreement, dated February 3, 2012, among Sharprock Resources Inc., Credence Holdings Limited, Union Mining Holding Limited, and two individuals who are the beneficial owners of the entire share capital of Union.(6)

10.2

 

Consulting Contract between the Company and Craig Alford, dated July 1, 2011 (7)

10.3

 

Letter Agreement between the Company and Resource Energy Development, Inc., dated October 11, 2011 (7)

31.1

 

Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under theSecurities and Exchange Act of 1934, as amended (8)

31.2

 

Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended (8)

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (8)

__________ 

Notes

 

(1)

Incorporated by reference from our Registration Statement on Form S-1, filed with the SEC on September 5, 2008.

(2)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on March 3, 2010.

(3)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on December 17, 2010.

(4)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on March 2, 2011.

(5)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on July 20, 2011.

(6)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on February 9, 2012.

(7)

Incorporated by reference from our Annual Report on Form 10-K, filed with the SEC on April 16, 2012.

(8)

Filed herewith.

  

 
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SIGNATURES

 

Pursuant to the requirements 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.

 

 

  Evergreen-Agra Global Investments, Inc.
       
Date: August 1, 2017 By: /s/ Rene Hamouth

 

 

Rene Hamouth

 
    Chairman of the Board and a Director  

 

 

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