Securities Registration Statement (s-1/a)
24 April 2020 - 7:10PM
Edgar (US Regulatory)
As
filed with the Securities and Exchange Commission on April __, 2020
No. 333-237087
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
Amendment
No. 1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES
ACT OF 1933
Boomer Holdings
Inc.
(Exact name
of registrant as specified in its charter)
Nevada
|
4700
|
36-4833921
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
8670
W. Cheyenne Avenue, Las Vegas, NV 89129
(888)-266-6370
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which
registered
|
Common stock
|
BOMH
|
OTC Markets
|
Michael
Quaid
Chief Executive
Officer
Boomer Holdings
Inc.
8670
W. Cheyenne Avenue
Las
Vegas, NV 89129
(888)-266-6370
(Name, address,
including zip code, and telephone number, including area code, of agent for service)
Copies
of all communications to:
Peter
Campitiello, Esq.
McCarter
& English, LLP
Two Tower
Center Boulevard, 24th Floor
East Brunswick,
New Jersey 08816
(732) 867-9741
Approximate
date of commencement of proposed sale to the public:
From time
to time after this Registration Statement becomes effective.
If any
of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. ☒
If this
Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act. (Check One):
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☒
|
|
|
|
|
|
|
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 7(a)(2)(B) of the Securities Act. ☐
CALCULATION
OF REGISTRATION FEE
|
Title
of each class of
|
Proposed
maximum
|
Proposed
maximum
|
|
|
|
securities
to be registered Amount to be registered (1)
|
aggregate
offering price per share(2)
|
Aggregate
offering price(2)Amount of registration fee
|
|
Common
Stock, par value
|
|
|
|
|
|
|
$0.001
per share,
|
13,751,256
|
$2.75
|
$12,605,318
|
$1,636.18
|
|
|
Total:
|
|
|
$12,605,318
|
$1,636.18
|
(3)
|
|
|
|
|
|
|
|
|
(1)
|
The
common stock will be offered for resale by selling stockholders pursuant to the prospectus
contained herein. Pursuant to Rule 416 under the Securities Act of 1933, as amended,
there is also being registered hereby such indeterminate number of additional common
shares as may be issued or issuable because of stock splits, stock dividends, stock distributions,
and similar transactions.
|
|
(2)
|
Estimated
in accordance with Rule 457(c) solely for purposes of calculating the registration fee.
The maximum price per security and the maximum aggregate offering price are based on
the average of the bid and the ask price of the Registrant’s Common Stock as reported
on the OTC Markets on March 10, 2020, which date is within five business days prior to
filing this Registration Statement.
|
The registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date
as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The
information contained in this prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Preliminary
Prospectus Subject to Completion, Dated April 24, 2020
13,751,256
Shares of Common Stock
This
prospectus relates to the re-sale by the selling stockholders identified in this prospectus, or their assigns (each a “Selling
Stockholder” and, collectively, the “Selling Stockholders”) of up to an aggregate of 13,751,256 shares
of common stock, par value $0.001 per share (the “Common Stock”), of Boomer Holdings Inc., a Nevada corporation (“Boomer”
or the “Company”).
The shares offered by this
prospectus may be sold by the Selling Stockholders or their transferees, pledgees, donees or assigns or other successors-in-interest that
receive any of the shares as a gift, distribution, or other non-sale related transfer from time to time in the over-the-counter
market or any other national securities exchange or automated interdealer quotation system on which our Common Stock is then listed
or quoted, through negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices,
as described under “Plan of Distribution” herein.
All net proceeds from the
sale of the shares of Common Stock covered by this prospectus will go to the Selling Stockholders. We will receive none of the
proceeds from the sale of the shares of Common Stock covered by this prospectus by the Selling Stockholders. We may receive proceeds
upon the exercise of outstanding warrants for shares of Common Stock covered by this prospectus if the warrants are exercised
for cash. We will bear all expenses of registration incurred in connection with this offering, but all selling and other expenses
incurred by the Selling Stockholders will be borne by them.
Our Common Stock trades
on the OTC Markets under the symbol “BOMH” . On January 10, 2020, we effected a three-for-one forward split
of our Common Stock (the “Forward Split”) by filing our Amended and Restated Articles of Incorporation with the Secretary
of State of Nevada.
The Selling Stockholders
may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended, in connection with
the resale of the Registered Shares.
Investing in the Common
Stock offered by this prospectus is speculative and involves a high degree of risk. See “Risk Factors” beginning on
page 4.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is April 24, 2020
TABLE OF
CONTENTS
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|
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PAGE
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Prospectus
Summary
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1
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SUMMARY
OF THE OFFERING
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3
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Risk
Factors
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4
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Cautionary
Statement Concerning Forward-Looking Statements
|
12
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Use
of Proceeds
|
12
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MARKET
FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
|
12
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Business
|
13
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MANAGEMENT,
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
|
15
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Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
17
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Certain
Relationships and Related Transactions
|
18
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Description
of COMPANY SECURITIES
|
19
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THE
TRANSACTIONS
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21
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SELLING
STOCKHOLDERS
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21
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Plan
of Distribution
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25
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Management’s
Discussion and Analysis OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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26
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Changes
in and disagreements with accountants
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28
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Experts
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28
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Interest
of named Experts and counsel
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28
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WHERE
TO FIND MORE INFORMATION
|
28
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FINANCIAL
STATEMENTS
|
F-1
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ABOUT THIS
PROSPECTUS
This prospectus is part
of a registration statement that we filed on behalf of the Selling Stockholders with the Securities and Exchange Commission (the
“SEC” or the “Commission”) to permit the Selling Stockholders to sell the Registered Shares described
in this prospectus in one or more transactions. The Selling Stockholders and the plan of distribution of the Registered Shares
being offered by them are described in this prospectus under the headings “Selling Stockholders” and “Plan of
Distribution.”
You should rely only
on the information contained in this prospectus. We have not authorized any person to provide you with different information.
If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is
accurate only as of the date of this document, regardless of the time of delivery of this prospectus or the time of issuance or
sale of any securities. Our business, financial condition, results of operations and prospects may have changed since that date.
You should read this prospectus in its entirety before making an investment decision. You should also read and consider the information
in the documents to which we have referred you in the section of this prospectus entitled “Where You Can Find More Information.”
PROSPECTUS
SUMMARY
The following summary highlights
information contained elsewhere in this prospectus. It does not contain all of the information you need to consider in making
your investment decision. Before making an investment decision, you should read this entire prospectus carefully and you should
consider, among other things, the matters set forth under “Risk Factors” and our financial statements and related
notes thereto appearing elsewhere in this prospectus. In this prospectus, except as otherwise indicated, “Boomer,”
“Boomer Holdings,” the “Company,” “we,” “our,” and “us” refer to Boomer
Holdings Inc., a Nevada corporation and its subsidiaries.
Company Overview
Boomer
Holdings Inc., through its wholly-owned subsidiary Boomer Naturals, Inc., a Nevada corporation, provides wellness solutions to
multiple target markets through multiple sales channels, including retail locations, e-commerce, and wholesale distribution networks.
Boomer sells health and wellness products and services geared toward alleviating pain, anxiety and improving general wellness
through our proprietary lines of CB5 products. We believe our CB5 formula is the first FDA-compliant alternative that fully
supports the body’s endocannabinoid system (ECS). CB5 combines five natural and powerful ingredients that target the
ECS. The term FDA-compliant means that a company is selling a regulated food additive that is, or that its chemicals are, in compliance
with the food additive provisions of the Federal Food, Drug, and Cosmetic Act. All of the ingredients in our CB5 formula are on
the FDA Generally Recognized as Safe (“GRAS”) List which means they are deemed safe to use as an additive to food,
beverages, and supplements without prior FDA review and approval.
Since
our products do not contain any CBD or THC and all of our ingredients are on the FDA’s GRAS (Generally Recognized as Safe
List), Boomer Naturals is able to advertise on Google, Facebook, Yahoo, Bing, YouTube, Instagram, and all national television
networks. CBD and cannabis companies are not allowed to advertise on any of these channels. This allows Boomer Naturals to advertise
creating brand recognition that our CBD competitors cannot. With many millions of people searching on the Internet monthly for
CBD or CBD alternative products for pain, anxiety, inflammation, and sleep, being able to advertise is a huge advantage.
Boomer
Naturals has obtained certificates of free sale to export our CB5 products to over 20 countries outside of the United States.
The United States does not offer export certificates for CBD or THC products allowing Boomer Naturals to service the needs of
the alternative wellness market globally.
The CB5 products
were developed by neurosurgeon, Dr. Markus Chwajol https://boomernaturals.com/wellness-advisory-board/markus-chwajol/. The Boomer
CB5 products contain a powerful combination of terpenes that interact with three known cannabinoid receptors and possibly a fourth,
while the standard products in the industry interact only with one. Terpenes are aromatic compounds found in many plants that
create their characteristic aroma. Terpenes may also offer some health benefits to the human body. Terpenes are found in basil,
thyme, black pepper, hops, rosemary, lemongrass, jasmine, pine trees, cacao, and other plants and flowers. The product contains
all-natural ingredients which are all listed on the Generally Recognized as Safe list of the Food and Drug Administration and
was developed by a practicing brain surgeon who is an expert in natural ingredients and CB receptors.
Boomer
focuses on wellness solutions for the 50 and older age demographic through the development of products using the Boomer proprietary
CB5 formula. The CB5 formula includes a variety of terpenes that are compliant with FDA guidelines as all ingredients are listed
on the Generally Recognized as Safe list. The solutions include products to alleviate pain, reduce anxiety, increase sleep quality,
as well as offer cosmetic benefits. In addition, Boomer offers a full line of products to benefit the health of pets, including
those suffering from seizures.
Recently,
due to the COVID-19 pandemic, in-stores sales of the Company’s products have been completely reduced to zero and the Company’s
planned openings of retail stores in New York and Chicago have been delayed indefinitely as well as potential tests in retail
stores. The Company has shifted its focus to its Boomer Medical Supplies segment. Boomer Medical Supplies is focusing on the perceived
opportunity created from the recent shift away from the reliance on Chinese-produced medical supplies. The Company has established
exclusive arrangements with non-Chinese medical supplies manufacturers mainly focusing on face masks, linens, bedding, gloves,
and gowns. The Company is currently successfully selling a variety of face masks and hand sanitizers to consumers online, at our
retail stores, and through distribution to doctors, therapists, and wholesale brokers. The company has been receiving approximately
1,000 online orders per day for facemasks and hand sanitizers a number of larger, wholesale orders.
Recent Developments
On
December 12, 2019, Marina Funt, the Company’s former principal shareholder, Chief Executive Officer, Chief Financial Officer,
President, Treasurer, Secretary and Director, consummated the sale of 8,000,000 pre-split shares of Common Stock (the “Shares”)
to Boomer Natural Wellness, Inc. (“BNW”). The acquisition of the Shares, which represented approximately 76% of the
Company’s shares of outstanding Common Stock, resulted in a change in control of the Company. In connection with the sale
of the Shares, Ms. Funt waived, forgave and discharged any indebtedness of any kind owed to her by the Company.
Also
on December 12, 2019, in connection with the sale of the Shares, Daniel Capri was appointed a Director of the Registrant and,
upon Ms. Funt’s resignation, was appointed to serve as the Registrant’s President, Treasurer and Secretary.
On
January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the “Exchange Agreement”),
with BNW, Boomer Naturals Holdings, Inc., a Nevada corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders
of Boomer (the “Exchange”). Upon consummation of the transactions set forth in the Exchange Agreement (the “Closing”),
the Company adopted the business plan of Boomer. Pursuant to the terms of the Agreement, the Company agreed to acquire all of
the outstanding shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares (the “Exchange Shares”)
of the Company’s Common Stock. Pursuant to the terms of the Exchange Agreement, BNW agreed to retire 24,000,000 shares
of the Company’s Common Stock. As a result of the Exchange, Boomer became a wholly-owned subsidiary of the Company and following
the consummation of the Exchange, the shareholders of Boomer beneficially owned approximately Ninety-Four Percent (94%)
of the issued and outstanding Common Stock of the Company.
At
the effective time of the Exchange, Michael Quaid was appointed Chief Executive Officer and Director and Thomas Ziemann as Chief
Operating Officer and Director.
Also on January
7, 2020, the Company approved an amendment to its Articles of Incorporation (the “Amendment”) to: change the name
of the Company to Boomer Holdings Inc.; effect a forward stock split on the basis of three-to-one (3:1); and to increase the number
of authorized shares of capital stock to 210,000,000 of which 200,000,000 shares shall be Common Stock and 10,000,000 shares will
be blank-check preferred stock, par value $0.001 per share. The Amendment was effected on January 10, 2019.
On
January 10, 2020, Boomer Naturals executed a Trademark License Agreement (the “License Agreement”) with Tommy Bahama
Group, Inc. (“Tommy Bahama”) a wholly owned subsidiary of Oxford Industries, Inc. Pursuant to the terms of the License
Agreement, Tommy Bahama agreed to license the Tommy Bahama trademark and other intellectual property from Tommy Bahama in connection
with the manufacture, sale, distribution, advertisement and promotion of the Company’s products as more fully set forth
in the License Agreement. The License Agreement requires the Company to pay minimum royalties for each license year and meet minimum
net sales requirements of products under the licensed marks each year. The License Agreement may be terminated by Tommy Bahama
before the end of the term for several reasons.
Pursuant
to the License Agreement, Boomer Naturals is Tommy Bahama’s exclusive wellness licensed partner. Tommy Bahama recently placed
its first order for $500,000 of products from our CB5 line for people and pets. Boomer CB5 is the premier product for Tommy Bahama’s
Friend and Family event scheduled for March 2020 with CB5 product placement at cash register countertops in both men’s and
women’s departments. Tommy Bahama is expected to give our roll-on as a free gift with purchases during March and has ordered
19,000 roll-ons to give away at their largest retail event of the year. Also beginning in March, Tommy Bahama is expected to send
emails to their database with offers from Boomer Naturals and posting offers on their social media platforms reaching approximately
500,000 followers.
Risks
of Investing
Investing in our securities
involves substantial risks. Potential investors are urged to read and consider the risk factors relating to an investment in the
Common Stock set forth under “Risk Factors” in this prospectus as well as other information we include in this prospectus.
Trading
Market
Our Common Stock is quoted
on the OTC Markets under the symbol “BOMH”.
Corporate
Information
We were
incorporated in the State of Nevada on March 31, 2016 as Remaro Group Corp. On January 10, 2020, the Company filed an amendment
to its Articles of Incorporation (the “Amendment”) to: change the name of the Company to Boomer Holdings Inc.; effect
a forward stock split on the basis of three-to-one (3:1); and to increase the number of authorized shares of capital stock to
210,000,000 comprised of 200,000,000 shares of Common Stock and 10,000,000 shares of blank-check preferred stock, par value $0.001
per share. Our principal executive offices are located at 8670 W. Cheyenne Avenue, Las Vegas, NV 89129. Our telephone number is
(888) 266-6370. Our website address is http://www.bnwhealth.com. Information contained in our website does not constitute
any part of, and is not incorporated into, this prospectus.
SUMMARY
OF THE OFFERING
Common
Stock offered by the Selling Stockholders:
|
Up to 13,751,256
shares of our Common Stock.
|
Selling
Stockholders:
|
See “Selling Stockholders”
beginning on page 21.
|
Common
Stock outstanding prior to the offering:
|
128,513,739
shares*
|
Common
Stock outstanding after giving effect to the offering:
|
12,513,739
shares.
|
Use
of proceeds:
|
We are not selling any of
the shares of Common Stock covered by this prospectus and will receive no proceeds from the sale or other disposition of the
shares covered hereby by the Selling Stockholders. All of the proceeds from the sale or other disposition of Common Stock
covered by this prospectus will go to the Selling Stockholders. We will bear all costs associated with registering
the shares of Common Stock offered by this prospectus. See “Use of Proceeds” beginning on page 12.
|
Risk
factors
|
See “Risk Factors”
and other information included in this prospectus for a discussion of the factors you should carefully consider before deciding
to invest in our securities.
|
Trading
Symbol on OTC Markets:
|
BOMH
|
Transfer
agent and registrar
|
Action Stock Transfer, Inc.
|
|
*
|
Based
on 128,513,739 shares of Common Stock outstanding on April 24, 2020.
|
RISK FACTORS
Risks Related to the COVID-19
Pandemic
The
recent COVID-19 pandemic may adversely affect our business, results of operations, financial condition, liquidity, and cash flow.
While
the complete impact on our business from the recent outbreak of the COVID-19 coronavirus is unknown at this time and difficult
to predict, various aspects of our business are being adversely affected by it and may continue to be adversely affected.
As
of the date hereof, COVID-19 has been declared a pandemic by the World Health Organization, has been declared a National Emergency
by the United States Government and has resulted in several states being designated disaster zones. COVID-19 coronavirus caused
significant volatility in global markets, including the market price of our securities. The spread of COVID-19 coronavirus has
caused public health officials to recommend precautions to mitigate the spread of the virus, especially as to travel and congregating
in large numbers. In addition, certain states and municipalities have enacted, and additional cities have enacted and others are
considering, quarantining and “shelter-in-place” regulations which severely limit the ability of people to move and
travel, and require non-essential businesses and organizations to close.
Our
stores and the stores that sell our products are considered non-essential. There is significant uncertainty around the breadth
and duration of these store closures and other business disruptions related to COVID-19, as well as its impact on the U.S. economy,
consumer willingness to visit malls and shopping centers, and employee willingness to staff our stores once they re-open. The
extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted,
including new information which may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its
impact.
Thus
far, these restrictions have adversely affected our business, results of operations and financial condition. It is unclear how
such restrictions, should they continue for an extended period, which will contribute to a general slowdown in the global economy,
will affect our business, results of operations, financial condition and our future strategic plans.
Risks Related to the
Company
The
Company has a limited operating history.
Boomer
Naturals, Inc., the Company’s wholly-owned operating subsidiary, was formed in June 2019 and has a limited operating history,
assets and operating revenues, and its prospects of future profitable operations may be delayed or never realized. We have a limited
operating history upon which you may evaluate our business and prospects. We are in the early stages of our business and have
not yet commenced full-scale operations. Accordingly, we are in the initial revenue phase, and our activities to date have involved
research and development of products and services, business planning, market testing, and efforts to raise startup capital. Our
business and prospects must be considered in light of the risk, expense, and difficulties frequently encountered by preliminary
or limited revenue companies in early stages of development, particularly companies in highly competitive and evolving markets.
If we are unable to effectively allocate our resources, manufacture our products, generate sales, or obtain and grow our customer
base, our business operating results and financial condition would be adversely affected and we may be unable to execute our business
plan, and our business could fail. Investors could therefore be at risk of losing their investment.
The
Company has a short operating history, which makes it difficult to evaluate its prospects, and future financial results and may
increase the risk that it will not be successful. The Company has provided certain historical financial information; however,
such financial information may not be a reliable indicator of future results. In addition, the historical information is not necessarily
indicative of what our results of operations, financial position and cash flows will be in the future.
We
have inadequate capital and need for additional financing to accomplish our business and strategic plans.
We
have very limited funds, and such funds are not adequate to develop our current business plan. Our ultimate success may depend
on our ability to raise additional capital. In the absence of additional financing or significant revenues and profits, the Company
will have to approach its business plan from a much different and much more restricted direction, attempting to secure additional
funding sources to fund its growth, borrowing money from lenders or elsewhere or to take other actions to attempt to provide funding.
We cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available,
will be obtainable on terms satisfactory to us.
The Company
has a history of operating losses and may continue to incur losses as it seeks to grow.
The
Company had $2,866,073 in net loss for the period June 7, 2019 (date of formation) to December 31, 2019. Additionally,
the Company may incur future losses from the launch of new retail stores, inventory buildup that remains unsold, expenses associated
with new marketing initiatives, and the growing expenses associated with additional staff necessary to manage Company growth.
The extent of losses and the time required to reach profitability are uncertain. There can be no assurance that the Company will
be able to obtain or sustain profitability on an ongoing basis.
The
Company's success depends on the efforts and abilities of the Management team.
The
Company is dependent upon the effort, experience, and abilities of its senior management team. The loss of the services of any
of them for any reason could adversely affect the Company's business and operations, and there is no guarantee that the Company
could find adequate replacements on a timely basis.
The
Company may experience insufficient capital.
Management
expects that the Company will need additional capital to fund the Company’s next growth phase. Additional sources of equity
capital may not be available when needed or, if available, may only be available on unfavorable terms and in any event would result
in the interests of the existing Shareholders being diluted. In such event, the Company may not be able to obtain the financing
it needs, in which case the Company's potential growth could be delayed.
Risks
Related to the Business of the Company
The
health and wellness industry is highly competitive.
The
health and wellness industry has extremely low barriers to entry and more companies are expected to enter the sector due to the
popularity of the sector, especially during the first few months of a new year. Some of the Company’s current and potential
competitors have greater resources for developing additional products, much longer operating histories, and have been marketing
to wider audiences. As the Company continues to devote significant resources to developing its customer base, the Company will
face significant competition from established companies that may have far greater experience than the Company. Although management
believes that the Company is currently able to compete effectively in each of the various markets in which the Company participates,
the Company cannot assure that the Company will be able to continue to do so or that the Company will be capable of maintaining
or further increasing its current market share. The Company’s failure to compete successfully in its various markets could
have a material adverse effect on the Company’s business, financial condition and results of operations.
Our
business is subject to changes in consumer preferences and discretionary spending.
Changes
in consumer preferences or negative publicity around the CB5 product or industry as a whole could adversely impact Company revenue.
The Company's success will also largely depend on various factors affecting discretionary consumer spending, including economic
conditions, political conditions, disposable consumer income and consumer confidence, which may vary widely in different markets.
Adverse changes in these factors could reduce our sales or impose practical limits on our product pricing, either of which could
adversely affect the Company's results of operations.
The
success of the Company’s business will depend in part on how favorably consumers perceive of and recognize its brand.
The
Company has a pending trademark for Boomer Naturals. The various names, logos, trademarks, service marks and trade secrets
associated with the Company's current and future brands could be imitated in ways that the Company cannot predict or prevent.
There is no assurance that the Company’s rights to use such Intellectual Property will be fully enforceable, that other
parties will not infringe upon those rights, or that the Company’s competitors will not seek to utilize similar intellectual
property. Accordingly, if a third party successfully challenges the Company’s ownership of, or right to use, such marks
or if the Company is unable to stop unauthorized use of such marks or if the Company’s licensees of the marks and patents
use them in a way that negatively impacts their value, the Company’s business or results of operations could be harmed.
The unenforceability of such rights or the failure of other countries to recognize the Company's intellectual property rights
could negatively impact the Company’s ability to capitalize on efforts to establish brand equity.
We
are or will be subject to regulations that could adversely affect our business and results of operations.
We
are or will be subject to extensive regulations where we manufacture, distribute and/or will sell our products. Our products are
subject to numerous food safety and other laws and regulations relating to the sourcing, manufacturing, storing, labeling, marketing,
advertising and distribution of these products. If regulators determine that the labeling and/or composition of any of our products
is not in compliance with law or regulations, or if we or our co-manufacturers otherwise fail to comply with applicable laws and
regulations, we could be subject to civil remedies or penalties, such as fines, injunctions, recalls or seizures, warning letters,
restrictions on the marketing or manufacturing of the products, or refusals to permit the import or export of products, as well
as potential criminal sanctions. In addition, enforcement of existing laws and regulations, changes in legal requirements and/or
evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations,
financial or otherwise, that could adversely affect our business, financial condition or operating results.
The
inability to hire and retain qualified staff could adversely affect operating results. The Company's success will depend in
part upon management's ability to attract, motivate and retain a sufficient number of qualified employees, and support staff necessary
to conduct its operations. Qualified individuals of the requisite caliber and quantity needed to fill positions may be in
short supply. Also, any material increases in employee turnover rates could have a material adverse effect on the Company’s
business, financial condition, operating results or cash flows.
The
Company is subject to numerous laws and regulations. The Company’s products are affected by a variety of regulations
at the State and Federal levels. The Company will need to constantly monitor developments and adjust to changes in the laws and
regulations. Such laws and regulations may change from time to time, and the Company may or may not be able to comply with new
requirements. In addition, the cost of compliance may be very high and affect operating income.
The
Company sells cosmetics and consumable products that could be subject to potential litigation risk. Although the Company engages
high quality manufacturers and suppliers to produce products, it is unknown whether a defective product can cause harm to a person
or pet. In the event of such a happening, the Company will likely be threatened with potential litigation from an injured party.
In order to mitigate said risk, the Company shall maintain product liability insurance of at least $2,000,000.
Risks Related to the Securities
Markets and Investments in Our Securities
General securities market
uncertainties resulting from the COVID-19 pandemic.
Since
the outset of the COVID-19 pandemic the US and worldwide national securities markets have undergone unprecedented stress due to
the uncertainties of the pandemic and the resulting reactions and outcomes of government, business and the general population.
These uncertainties have resulted in declines in all market sectors, increases in volumes due to flight to safety and governmental
actions to support the markets. As a result, until the pandemic has stabilized, the markets may not be available to the Registrant
for purposes of raising required capital. Should we not be able to obtain financing when required, in the amounts necessary to
execute on our plans in full, or on terms which are economically feasible we may be unable to sustain the necessary capital to
pursue our strategic plan and may have to reduce the planned future growth and scope of our operations.
Our
common stock may be considered a “penny stock” and may be difficult to sell.
The
Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market
price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions. Historically,
the price of our common stock has fluctuated greatly. If, the market price of the common stock is less than $5.00 per share and
the common stock does not fall within any exemption, it therefore may be designated as a “penny stock” according to
SEC rules. The “penny stock” rules impose additional sales practice requirements on broker-dealers who sell securities
to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of securities and have received the purchaser’s written consent
to the transaction before the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the broker-dealer
must deliver, before the transaction, a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny
stocks. These additional burdens imposed on broker-dealers may restrict the ability or decrease the willingness of broker-dealers
to sell our common shares, and may result in decreased liquidity for our common shares and increased transaction costs for sales
and purchases of our common shares as compared to other securities.
Our
stock price may be volatile and your investment in our common stock could suffer a decline in value.
The
price of our common stock may fluctuate significantly in response to a number of factors, many of which are beyond our control.
These factors include but are not limited to:
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progress
of our products through the regulatory process;
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government regulatory
action affecting our products or our competitors’ products in both the United States and foreign countries;
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developments or
disputes concerning patent or proprietary rights;
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economic conditions
in the United States or abroad;
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broad market fluctuations;
and
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changes in financial
estimates by securities analysts.
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There
is a risk of market fraud.
Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns
of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and
misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5)
the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with consequent investor losses. We are aware of the abuses that
have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of
the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations
to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices
could increase the volatility of our share price.
A
decline in the price of our common stock could affect our ability to raise working capital and adversely impact our ability to
continue operations.
A
prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction
in our ability to raise capital. A decline in the price of our common stock could be especially detrimental to our
liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have
a significant negative effect on our business plan and operations, including our ability to develop new services and continue
our current operations. If our common stock price declines, we can offer no assurance that we will be able to raise
additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise
sufficient capital in the future, we may not be able to have the resources to continue our normal operations.
Our common
stock may never be listed on a major stock exchange.
We
anticipate seeking the listing of our common stock on a national or other securities exchange at some time in the future, assuming
that we can satisfy the initial listing standards for such exchange. We currently do not satisfy the initial listing
standards and cannot ensure that we will be able to satisfy such listing standards or that our common stock will be accepted for
listing on any such exchange. Should we fail to satisfy the initial listing standards of such exchanges, or our common
stock is otherwise rejected for listing, the trading price of our common stock could suffer, the trading market for our common
stock may be less liquid, and our common stock price may be subject to increased volatility.
There
is no assurance of cash distributions to the Shareholders.
There
is no assurance that the Shareholders will receive a return of any or all of their investment in the Company. In the
event cash is available for distribution, management may elect to reserve cash to further expand the business for a larger potential
exit. Any cash distributions to the Shareholders whether from operations or any future sale, disposition or other capital
event of the Company are highly speculative, and the amounts of any such distributions cannot be accurately predicted.
We
do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our capital
stock must come from increases in the fair market value and trading price of the capital stock.
We
have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable
future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit
agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash
dividends in the future will be at the discretion of our board of directors and will be dependent upon our financial condition,
results of operations, capital requirements and any other factors that the board of directors decides is relevant. Therefore,
any return on your investment in our capital stock must come from increases in the fair market value and trading price of the
capital stock.
We
may issue additional equity shares to fund our operational requirements, which would dilute share ownership. Such sales of additional
equity securities may adversely affect the market price of our common stock and your rights in the company may be reduced.
The
Company’s continued viability depends on its ability to raise capital. We expect to continue to incur drug development and
selling, general and administrative costs. Changes in economic, regulatory or competitive conditions may lead to cost increases.
Management may determine that it is in the best interest of the company to develop new services or products. In any such case
additional financing is required for the company to meet its operational requirements. We may choose to raise additional capital
due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating
plans. The sale or the proposed sale of substantial amounts of our common stock in the public markets may adversely affect the
market price of our common stock. Also, any new securities issued may have greater rights, preferences or privileges than our
existing common stock. Our stockholders may experience substantial dilution upon such issuances and a reduction in the price that
they are able to obtain upon sale of their shares. There can be no assurances that the company will be able to obtain such financing
on terms acceptable to the company and at times required by the company, if at all. In
The
requirements of complying with the Sarbanes-Oxley act may strain our resources and distract management.
We
are subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act of 2002. The costs associated with these
requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current
reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure
controls and procedures and internal controls over financial reporting. Historically, we have maintained a small accounting staff,
but in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial
reporting, significant additional resources and management oversight will be required. This includes, among other things, activities
necessary for supporting our independent public auditors. This effort may divert management’s attention from other business
concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, we may need to hire additional accounting and financial persons with appropriate public company experience and technical
accounting knowledge, and we cannot assure you that we will be able to do so in a timely fashion.
Certain
stockholders possess the majority of our voting power, and through this ownership, control our Company and our corporate actions.
Currently,
one shareholder, Boomer Natural Holdings, Inc., the sole shareholder of our operating company, holds approximately 94%
of the voting power of our Common Stock and Daniel Capri, our Chairman and President, holds voting and dispositive power over
Boomer Natural Holdings , Inc. This company, and therefore Mr. Capri, has a controlling influence in determining the outcome
of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and
the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. As such, Mr.
Capri has the power to prevent or cause a change in control; therefore, without his consent we could be prevented from entering
into transactions that could be beneficial to us. The interests of our executive officers may give rise to a conflict of interest
with the Company and the Company’s shareholders.
General
Risk Factors
General
investment risks. No assurance can be made that the Company will generate any profits. The Company's business will be subject
to the risks generally incident to our industry, to the risks generally incident to the development of new products, particularly
in the wellness community where consumers can be fickle.
Future
changes in international, federal, state, and local laws and regulations may adversely affect the Company. These changes may
have a negative impact on the Company's ability to achieve its goals and thus the value of the shares could be diminished or entirely
lost.
The
Shareholders will have limited authority. Purchasers of shares will have the status of shareholders in the Company and, with
limited exceptions, will have no voice in the management or conduct of the affairs of the Company, including very limited voting
rights. Except where the approval of the shareholders is expressly required by the law, management will have the sole and absolute
right and authority to act for and on behalf of the Company in connection with all aspects of the business of the Company. Accordingly,
no person should purchase shares unless such person is willing to entrust all aspects of the management of the Company to the
management team and has evaluated the management team’s capabilities to perform such functions.
The
Shareholders could lose their limited liability protection if they participate in the management of the Company. Shareholders
are not generally liable for the debts and obligations of the Company beyond the amount invested in the Company. However, to the
extent a Shareholder participates in the control of the Company's business, such Shareholder may become personally liable for
the debts and obligations of the Company.
The
Management Team is entitled to certain protections from the Company. The management team will not be liable to the Company
or its Shareholders for monetary damages for an act or omission in the management team's capacity as such, except under certain
limited circumstances. Furthermore, the Company (but not the Shareholders) will indemnify the management team for losses which
arise out of acts or omissions of the management team under certain circumstances. The Company may purchase insurance for the
payment of such indemnity obligations, but there is no guarantee that any such coverage will be insufficient to cover a particular
claim or that the Company will be able to obtain insurance coverage at a reasonable cost.
The
ownership interests of the Shareholders may be diluted in the future. The Company intends to continue to make significant
investments to support its business growth and may require additional funds to respond to business challenges, including the need
to expand into new markets, develop new products and features or enhance the Company’s existing products, improve its operating
infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, the Company may need to engage in
equity or debt financings to secure additional funds. If the Company raises additional funds through future issuances of equity
or convertible debt securities, the existing Shareholders could suffer significant dilution, and any new equity securities that
are issued (if approved by the Shareholders) could have rights, preferences and privileges superior to those of the current Shareholders.
Any debt financing the Company secures in the future could involve restrictive covenants relating to capital raising activities
and other financial and operational matters, which may make it more difficult to obtain additional capital and to pursue business
opportunities. The Company may not be able to obtain additional financing on favorable terms, if at all. If the Company is unable
to obtain adequate financing or financing on satisfactory terms when required, the Company’s ability to respond to business
challenges could be significantly impaired and have a material adverse effect on its financial condition and operating results.
We
may face product liability claims. The Company, like any other retailer, distributor or manufacturer of products that are
designed to be ingested or applied to the body faces an inherent risk of exposure to product liability claims in the event that
the use of its products results in injury. In the event that the Company does not have adequate insurance or contractual indemnification,
product liability claims could have a material adverse effect on the Company. The successful assertion or settlement of any uninsured
claim, a significant number of insured claims, or a claim exceeding the Company's insurance coverage could have a material adverse
effect on the Company.
We
rely on the proper function, availability and security of information technology systems to operate our business and a cyber-attack
or other breach of these systems could have a material adverse effect on our business, financial condition or results of operations.
We rely on information technology
systems to process, transmit, and store electronic information in our day-to-day operations. Similar to other companies, the size
and complexity of our information technology systems makes them vulnerable to a cyber-attack, malicious intrusion, breakdown,
destruction, loss of data privacy, or other significant disruption. Our information systems require an ongoing commitment of significant
resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information
processing technology, evolving systems and regulatory standards. Any failure by us to maintain or protect our information technology
systems and data integrity, including from cyber-attacks, intrusions or other breaches, could result in the unauthorized access
to personally identifiable information, theft of intellectual property or other misappropriation of assets, or otherwise compromise
our confidential or proprietary information and disrupt our operations. Any of these event may cause us to have difficulty preventing,
detecting, and controlling fraud, be subject to legal claims and liability, have regulatory sanctions or penalties imposed, have
increases in operating expenses, incur expenses or lose revenues as a result of a data privacy breach or theft of intellectual
property, or suffer other adverse consequences, any of which could have a material adverse effect on our business, financial condition
or results of operations.
We are
subject to certain data privacy and security requirements, which are complex and varied among jurisdictions. Any failure to ensure
adherence to these requirements could subject us to fines and penalties, and damage our reputation.
We are required to comply
with numerous federal and state laws, including state security breach notification laws, state health information privacy laws
and federal and state consumer protection laws, which govern the collection, use and disclosure of personal information. Other
countries also have, or are developing, laws governing the collection, use and transmission of personal information. In addition,
most healthcare providers who may prescribe the products we currently sell or may sell in the future and from whom we may obtain
patient health information are subject to privacy and security requirements under the Health Insurance Portability and Accountability
Act of 1996 and comparable state laws. The legislative landscape for privacy and data protection continues to evolve, and there
has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including
recently enacted laws in a majority of states requiring security breach notifications. Any of these laws could create liability
for us or increase our cost of doing business, and any failure to comply could result in harm to our reputation, and potentially
fines and penalties.
Risks Related to Intellectual
Property
Intellectual
property rights may not provide adequate protection, which may permit third parties to compete against us more effectively.
Our success depends significantly
on our ability to maintain and protect our proprietary rights in the technologies and inventions used in or embodied by our product.
To protect our proprietary technology, we rely on patent protection, as well as a combination of copyright, trade secret and trademark
laws, as well as nondisclosure, confidentiality, license and other contractual restrictions in our manufacturing, consulting,
employment and other third party agreements. These legal means may afford only limited protection, however, and may not adequately
protect our rights or permit us to gain or keep any competitive advantage.
We
have not and may not be able to adequately protect our intellectual property rights throughout the world.
Filing, prosecuting and defending
patents on our product and technologies in any or all countries throughout the world could be prohibitively expensive. The requirements
for patentability may differ in certain countries, particularly developing countries, and the breadth of patent claims allowed
can be inconsistent. In addition, the laws of some foreign countries may not protect our intellectual property rights to the same
extent as laws in the United States. Consequently, we may not be able to prevent third parties from copying our inventions in
all countries outside the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent
protection that covers the commercial products to develop their own competing products that are the same or substantially the
same as our commercial product and, further, may export otherwise infringing products to territories where we have patent protection,
but judicial systems do not adequately enforce patents to cause infringing activities to be ceased.
We do not have patent rights
in certain foreign countries in which a market for our product and technologies exists or may exist in the future. Moreover, in
foreign jurisdictions where we do have patent rights, proceedings to enforce such rights could result in substantial costs and
divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted
narrowly, and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We
may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.
Thus, we may not be able to stop a competitor from marketing and selling in foreign countries products that are the same as or
similar to our product and technologies.
Obtaining
and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other
requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance
with these requirements.
Moreover, the United States
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number
of procedural, documentary, fee payment and other similar provisions during the patent application process. In addition, periodic
maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent.
While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable
rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting
in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment
or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed
time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents
and patent applications covering our product or procedures, we may not be able to stop a competitor from marketing products that
are the same as or similar to our product and technologies.
We
may in the future become involved in lawsuits to protect or enforce our intellectual property, or to defend our products against
assertion of intellectual property rights by a third party, which could be expensive, time consuming and unsuccessful.
Competitors
may infringe our patents. To counter infringement or unauthorized use, we may be required to file infringement claims, which can
be expensive and time-consuming. If we initiate legal proceedings against a third party to enforce a patent covering one of our
product candidates, the defendant could counterclaim that the patent covering our product or product candidate is invalid and
/ or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity and / or unenforceability are
common, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. In an infringement
proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from
using the technology at issue on the grounds that our patents do not cover the technology in question. Third parties may also
raise similar claims before administrative bodies in the U.S. or abroad, even outside the context of litigation. Such mechanisms
include re-examination, post grant review, inter partes review, and equivalent proceedings in foreign jurisdictions (e.g., opposition
proceedings). Such proceedings could be more expeditious or cost-effective for plaintiffs than a standard court proceeding, and
could result in revocation of or amendment to our patents in such a way that they no longer cover our product candidates or similar
products of our competitors. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With
respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our
patent counsel, and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of
invalidity and / or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or
interpreted narrowly, could put our patent applications at risk of not issuing and could have a material adverse effect on our
business.
Interference
or derivation proceedings provoked by third parties or brought by us may be necessary to determine the priority of inventions
with respect to our patent applications. Our business could be harmed if the prevailing party does not offer us a license on commercially
reasonable terms. Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result
in substantial costs and distract our management and other employees. We may not be able to prevent misappropriation of our intellectual
property rights, particularly in countries where the laws may not protect those rights as fully as in the U.S.
Changes
in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product and our technologies.
Legislation introduced earlier
this decade increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or
defense of our issued patents. The Leahy-Smith Act includes a number of significant changes to United States patent law. These
include provisions that affect the way patent applications are prosecuted, redefine prior art, may affect patent litigation, and
switch the United States patent system from a “first-to-invent” system to a “first-inventor-to-file” system.
Under a “first-inventor-to-file” system, assuming the other requirements for patentability are met, the first inventor
to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had
made the invention earlier. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith
Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, in particular, the first-inventor-to-file
provisions, only became effective on March 16, 2013. As case law continues to develop in response to this legislation, it
is not yet clear what the full impact of the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith
Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and
the enforcement or defense of our issued patents.
In addition, patent reform
legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution,
enforcement, and defense of our patents and applications. Furthermore, the United States Supreme Court and the United States Court
of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States
are interpreted. Similarly, foreign courts have made, and will likely continue to make, changes in how the patent laws in their
respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws or changes to
patent laws that might be enacted into law by United States and foreign legislative bodies. Those changes may materially affect
our patents or patent applications and our ability to obtain and enforce or defend additional patent protection in the future.
Our
trademarks may be infringed or successfully challenged, resulting in harm to our business.
We rely on our trademarks
as one means to distinguish our product from the products of our competitors, and we have registered or applied to register many
of these trademarks. The USPTO or foreign trademark offices may deny our trademark applications, however, and even if published
or registered, these trademarks may be ineffective in protecting our brand and goodwill and may be successfully opposed or challenged.
Third parties may oppose our trademark applications, or otherwise challenge our use of our trademarks. In addition, third parties
may use marks that are confusingly similar to our own, which could result in confusion among our customers, thereby weakening
the strength of our brand or allowing such third parties to capitalize on our goodwill. In such an event, or if our trademarks
are successfully challenged, we could be forced to rebrand our product, which could result in loss of brand recognition and could
require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks and we may
not have adequate resources to enforce our trademark rights in the face of any such infringement.
We
may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets
of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors.
We could in the future be
subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets or other proprietary
information of former employers, competitors, or other third parties. Although we endeavor to ensure that our employees and consultants
do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may
in the future be subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation
agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other
proprietary information of a former employer or competitor. Litigation may be necessary to defend against these claims. Even if
we are successful in defending against these claims, litigation could result in substantial costs and could be a distraction to
management. If our defense to those claims fails, in addition to paying monetary damages, a court could prohibit us from using
technologies or features that are essential to our product, if such technologies or features are found to incorporate or be derived
from the trade secrets or other proprietary information of the former employers or other third parties. An inability to incorporate
technologies or features that are important or essential to our product may prevent us from selling our product. In addition,
we may lose valuable intellectual property rights or personnel. Moreover, any such litigation or the threat thereof may adversely
affect our ability to hire employees or contract with independent sales representatives. A loss of key personnel or their work
product could hamper or prevent our ability to commercialize our product.
Risks Related to Our
Common Stock
The
market price of our Common Stock has been, and may continue to be volatile and fluctuate significantly, which could result in
substantial losses for investors.
The trading price for our
Common Stock has been, and we expect it to continue to be, volatile. The price at which our Common Stock trades depends upon a
number of factors, including historical and anticipated operating results, our financial situation, announcements of technological
innovations or new products by us or our competitors, our ability or inability to raise the additional capital needed and the
terms on which it may be raised, and general market and economic conditions. Some of these factors are beyond our control. Broad
market fluctuations may lower the market price of our Common Stock and affect the volume of trading, regardless of our financial
condition, results of operations, business or prospects. Among the factors that may cause the market price of our Common
Stock to fluctuate are the risks described in this “Risk Factors” section and other factors, including:
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fluctuations
in quarterly operating results or the operating results of competitors;
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variance
in financial performance from the expectations of investors;
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changes
in the estimation of the future size and growth rate of its markets;
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changes
in accounting principles or changes in interpretations of existing principles, which
could affect financial results;
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failure
of its products to achieve or maintain market acceptance or commercial success;
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conditions
and trends in the markets served;
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changes
in general economic, industry and market conditions;
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success
of competitive products and services;
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changes
in market valuations or earnings of competitors;
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changes
in pricing policies or the pricing policies of competitors;
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announcements
of significant new products, contracts, acquisitions or strategic alliances by the Company
or its competitors;
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potentially
negative announcements, such as a review of any of our filings by the SEC, changes in
accounting treatment or restatements of previously reported financial results or delays
in our filings with the SEC:
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changes
in legislation or regulatory policies, practices or actions;
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the
commencement or outcome of litigation involving us, our general industry or both;
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our
filing for protection under federal bankruptcy laws;
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recruitment
or departure of key personnel;
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changes
in capital structure, such as future issuances of securities or the incurrence of additional
debt;
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actual
or expected sales of Common Stock by stockholders; and
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the
trading volume of our Common Stock.
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In addition, the stock markets,
in general, the OTC Markets and the market for synthetic cannabinoid companies in particular, may experience a loss of investor
confidence. Such loss of investor confidence may result in extreme price and volume fluctuations in our Common Stock that are
unrelated or disproportionate to the operating performance of its business, financial condition or results of operations. These
broad market and industry factors may materially harm the market price of our Common Stock and expose it to securities class action
litigation. Such litigation, even if unsuccessful, could be costly to defend and divert management’s attention and resources,
which could further materially harm our financial condition and results of operations.
Anti-takeover
provisions in our Amended and Restated Articles of Incorporation and By-laws may reduce the likelihood of a potential change of
control, or make it more difficult for our stockholders to replace management.
Certain provisions of our
Amended and Restated Articles of Incorporation and By-laws could have the effect of making it more difficult for our stockholders
to replace management at a time when a substantial number of stockholders might favor a change in management. These provisions
include:
|
•
|
providing
for a staggered board; and
|
|
•
|
authorizing
the board of directors to fill vacant directorships or increase the size of its board
of directors.
|
Furthermore, our board of
directors has the authority to issue up to 10,000,000 shares of preferred stock in one or more series and to determine the rights
and preferences of the shares of any such series without stockholder approval. Any series of preferred stock is likely to be senior
to the Common Stock with respect to dividends, liquidation rights and, possibly, voting rights. The board’s ability to issue
preferred stock may have the effect of discouraging unsolicited acquisition proposals, thus adversely affecting the market price
of our Common Stock.
Our common stock is
governed under The Securities Enforcement and Penny Stock Reform Act of 1990.
The Securities Enforcement
and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades
in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to certain exceptions. Such exceptions include any equity
security listed on NASDAQ and any equity security issued by an issuer that has (i) net tangible assets of at least $2,000,000,
if such issuer has been in continuous operation for three years; (ii) net tangible assets of at least $5,000,000, if such
issuer has been in continuous operation for less than three years; or (iii) average annual revenue of at least $6,000,000,
if such issuer has been in continuous operation for less than three years. Unless an exception is available, the regulations require
the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and
the risks associated therewith. These additional requirements may discourage broker-dealers from effecting transactions in securities
that are classified as penny stocks, which could severely limit the market price and liquidity of such securities and the ability
of purchasers to sell such securities in the secondary market.
The
Company has never declared or paid any dividends to the holders of its Common Stock and does not expect to pay cash dividends
in the foreseeable future.
The Company currently intends to
retain all earnings for use in connection with the expansion of its business and for general corporate purposes. The board of
directors will have the sole discretion in determining whether to declare and pay dividends in the future. The declaration of
dividends will depend on profitability, financial condition, cash requirements, future prospects and other factors deemed relevant
by the Company’s board of directors. Our ability to pay cash dividends in the future could be limited or prohibited by the
terms of financing agreements that it may enter into or by the terms of any preferred stock that may be authorized and issued.
The Company does not expect to pay dividends in the foreseeable future. As a result, holders of our Common Stock must rely on
stock appreciation for any return on their investment.
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains
certain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995 with respect to our business, financial condition, liquidity and results of operations.
Words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,”
“believes,” “seeks,” “estimates,” “could,” “would,” “will,”
“may,” “can,” “continue,” “potential,” “should,” and the negative
of these terms or other comparable terminology often identify forward-looking statements. Statements in this prospectus that are
not historical facts are hereby identified as “forward-looking statements” for the purpose of the safe harbor provided
by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended.
These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could
cause actual results to differ materially from the results contemplated by the forward-looking statements. See “Risk Factors”
beginning on page __.
Many of the important factors
that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on
any forward-looking statements, which speak only as of the date of this prospectus. Except as otherwise required by law, we do
not assume any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or
circumstances after such applicable date or to reflect the occurrence of unanticipated events. You should, however, review the
factors and risks we describe in the “Risk Factor” section hereof beginning on page 7 and in reports we will file
from time to time with the Commission after the date of this prospectus.
USE OF PROCEEDS
We are
not selling any of the shares of Common Stock covered by this prospectus and will receive no proceeds from the sale or other disposition
of the shares covered hereby by the Selling Stockholders. All of the proceeds from the sale or other disposition of Common Stock
covered by this prospectus will go to the Selling Stockholders. We will bear all costs associated with registering the shares
of Common Stock offered by this prospectus.
MARKET
FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Market Information
Our
Common Stock is quoted on the OTC Markets under the symbol “BOMH.” Quotations on the OTC Markets reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
As of
March 9, 2020, there were approximately 37 holders of record of our Common Stock.
Dividend Policy
We have
never declared or paid any dividends to the holders of our Common Stock and we do not expect to pay cash dividends in the foreseeable
future. We currently intend to retain any earnings for use in connection with the expansion of our business and for general corporate
purposes.
BUSINESS
Overview
The following section should
be read in conjunction with the Financial Statements attached to this prospectus.
PRODUCTS
Boomer
Naturals Holdings Inc., through its wholly-owned subsidiary Boomer Naturals, Inc., a Nevada corporation, provides wellness solutions
to multiple target markets through multiple sales channels, including retail locations, e-commerce, and wholesale distribution
networks. Boomer sells health and wellness products and services geared toward alleviating pain, anxiety and improving general
wellness through our proprietary lines of CB5 products. CB5 formula is the first FDA-compliant alternative that fully supports
the body’s endocannabinoid system (ECS). This revolutionary breakthrough combines five natural and powerful ingredients
that target the ECS. Our product formulas are developed by our team of medical and scientific advisory board and are currently
manufactured by FDA registered and GMP certified third-party contract manufacturers located in Florida.
Since
our products do not contain any CBD or THC and all of our ingredients are on the FDA’s GRAS (Generally Recognized as Safe
List), Boomer Naturals is able to advertise on Google, Facebook, Yahoo, Bing, YouTube, Instagram, and all national television
networks. CBD and cannabis companies are not allowed to advertise on any of these channels. This allows Boomer Naturals to advertise
creating brand recognition that our CBD competitors cannot. With many millions of people searching on the Internet monthly for
CBD or CBD alternative products for pain, anxiety, inflammation, and sleep, being able to advertise is a huge advantage.
Boomer
Naturals has obtained certificates of free sale to export our CB5 products to over 20 countries outside of the United States.
The United States does not offer export certificates for CBD or THC products allowing Boomer Naturals to service the needs of
the alternative wellness market globally.
The
CB5 products were developed by neurosurgeon, Dr. Markus Chwajol https://boomernaturals.com/wellness-advisory-board/markus-chwajol/.
The Boomer CB5 products contain a powerful combination of terpenes that interact with three known cannabinoid receptors and possibly
a fourth, while the standard products in the industry interact only with one. The product contains all-natural ingredients which
are all listed on the Generally Recognized as Safe list of the Food and Drug Administration and was developed by a practicing
brain surgeon who is an expert in natural ingredients and CB receptors.
Boomer
focuses on wellness solutions for the 50 and older age demographic through the development of products using the Boomer proprietary
CB5 formula. The CB5 formula includes a variety of terpenes that are compliant with FDA guidelines as all ingredients are listed
on the Generally Recognized as Safe list. The solutions include products to alleviate pain, reduce anxiety, increase sleep quality,
as well as offer cosmetic benefits. In addition, Boomer offers a full line of products to benefit the health of pets, including
those suffering from seizures.
Boomer
Natural’s product lines include CB5, Golf CB5, Pet CB5, SKIN Sunscreen, and medical-grade skincare. Our most popular
CB5 products are the AM, PM, and all-day tinctures and gummies as well as our pain relief roll on. Boomer Naturals products are
available online at BoomerNaturals.com and, and at Boomer Naturals retail stores, doctors’ offices, and golf shops and resorts
across the country. The Company believes its proprietary formulations are an alternative to CBD,
These statements
have not been evaluated by the Food and Drug Administration. The FDA has not reviewed or cleared any of our products nor has the
FDA endorsed or verified any of our claims regarding our products. Our products are not intended to diagnose, treat, cure, or
prevent any disease and none of our products have been approved by the FDA for any purpose.
The
Company’s initial wellness partners include Tommy Bahama, PGA of America (PGA Magazine), and Madison Square Garden. Boomer
Naturals will leverage the brand recognition and customer loyalty of these top brands to elevate our brand to a leader in wellness.
On
January 10, 2020, Boomer Naturals executed a Trademark License Agreement (the “License Agreement”) with Tommy Bahama
Group, Inc. (“Tommy Bahama”) a wholly owned subsidiary of Oxford Industries, Inc. Pursuant to the terms of the License
Agreement, Tommy Bahama agreed to license the Tommy Bahama trademark and other intellectual property from Tommy Bahama in connection
with the manufacture, sale, distribution, advertisement and promotion of the Company’s products as more fully set forth
in the License Agreement. The License Agreement requires the Company to pay minimum royalties for each license year and meet minimum
net sales requirements of products under the licensed marks each year. The License Agreement may be terminated by Tommy Bahama
before the end of the term for several reasons.
Pursuant
to the License Agreement, Boomer Naturals is Tommy Bahama’s exclusive wellness licensed partner. Tommy Bahama recently placed
its first order for $500,000 of products from our CB5 line for people and pets. Boomer CB5 is the premier product for Tommy Bahama’s
Friend and Family event scheduled for March 2020 with CB5 product placement at cash register countertops in both men’s and
women’s departments. Tommy Bahama is expected to give our roll-on as a free gift with purchases during March and has ordered
19,000 roll-ons to give away at their largest retail event of the year. Also beginning in March, Tommy Bahama is expected to send
emails to their database with offers from Boomer Naturals and posting offers on their social media platforms reaching approximately
500,000 followers.
MARKET SIZE
According
to the Global Wellness Institute, health and wellness is a multi-billion dollar industry and the trend is for consumers moving
away from pharmaceuticals toward more natural solutions for everyday challenges. To meet this demand, Boomer Naturals created
an all-natural doctor-formulated alternative to CBD, known as CB5. CB5 is a proprietary blend of botanical terpenes designed to
restore balance to the ECS. Discovered in the early 1990s, the body's ECS features cannabinoids and receptors (CB1, CB2, and two
others yet to be named) that are some of the most abundant neurotransmitters found in the brain. The ECS supports and regulates
several key systems and can help with issues relating to reducing pain and inflammation, balancing sleep/wake cycles, supporting
the immune system, balancing mood, supporting a healthy metabolism, supporting reproductive health, and more. We believe
CB5 is a more effective solution than CBD because it hits more receptors in the ECS with an entourage effect of many different
plant terpenes.
According
to Forbes, the projected market value of the CBD industry was expected to hit $20 billion by 2024. https://www.forbes.com/sites/irisdorbian/2019/05/20/cbd-market-could-reach-20-billion-by-2024-says-new-study/#7c8a622a49d0
The
over the counter drugs and medication market was valued at $125 billion USD in 2018 and is estimated to be $185 billion USD by
2025. https://www.gminsights.com/industry-analysis/over-the-counter-otc-drugs-market
According
to a Global Use of Medicines report from the IQVIA Institute for Human Data Science, the
global pharmaceutical industry was valued at $1.2 trillion in 2018. https://pharmaceuticalcommerce.com/business-and-finance/global-pharma-spending-will-hit-1-5-trillion-in-2023-says-iqvia/
One
study from Statista, a subscription based aggregator of statistics, provided that the US market value of vitamins, minerals and
supplements was over $48.5 billion dollars in 2017. https://www.statista.com/statistics/521735/market-size-vitamins-minerals-and-supplements-worldwide/
Another
report from Grand View Research, a market research and consulting company that was not hired by the Company, predicts that the
global pet care market size has an estimated current market value of $131.7 billion dollars and is expected to grow to $202.6
billion US by 2025. https://www.grandviewresearch.com/press-release/global-pet-care-market
MANAGEMENT AND EMPLOYEES
As of
the date of this Report, Boomer has forty (40) full time employees. We believe we enjoy good employee relations. None of
our employees are members of any labor union, and we are not a party to any collective bargaining agreement.
PROPERTIES
The Company
does not own any physical location. Boomer currently leases its corporate headquarters and other offices in Las Vegas, Nevada
which lease expires on September 20, 2027. We believe our current offices are sufficient in size for current and near term
future operations.
GOVERNMENT REGULATION
We
believe we are in compliance with applicable federal, state and other regulations and that we have compliance programs in place
to ensure compliance going forward. There are no regulatory notifications or actions pending.
Certain
of our products are considered supplements and are regulated in the U.S. either as food or dietary supplements. The formulation
manufacturing, packaging, labeling, advertising, distribution and sale (hereafter, "sale" or "sold" may be
used to signify all of these activities) of dietary supplements such as those sold by the Company are subject to regulation by
one or more federal agencies, principally the Food and Drug Administration (the "FDA") and the Federal Trade Commission
(the "FTC"), and to a lesser extent the Consumer Product Safety Commission and United States Department of Agriculture.
The Company's activities are also regulated by various governmental agencies for the states and localities in which the Company's
products are sold, as well as by governmental agencies in certain countries outside the United States in which the Company's products
are sold. Among other matters, regulation by the FDA and FTC is concerned with product safety and claims made with respect to
a product's ability to provide health-related benefits.
Federal
agencies, primarily the FDA and FTC, have a variety of procedures and enforcement remedies available to them, including initiating
investigations, issuing warning letters and cease and desist orders, requiring corrective labeling or advertising, requiring consumer
redress (for example, requiring that a company offer to repurchase products previously sold to consumers), seeking injunctive
relief or product seizures, imposing civil penalties or commencing criminal prosecution. In addition, certain state agencies have
similar authority. These federal and state agencies have in the past used these remedies in regulating participants in the dietary
supplements industry, including the imposition by federal agencies of civil penalties in the millions of dollars against a few
industry participants. There can be no assurance that the regulatory environment in which the Company operates will not change
or that such regulatory environment, or any specific action taken against the Company, will not result in a material adverse effect
on the Company. In addition, increased sales of, and publicity about, dietary supplements may result in increased regulatory scrutiny
of the dietary supplements industry.
The
Dietary Supplement Health and Education Act ("DSHEA") was enacted in 1994, amending the Federal Food, Drug and Cosmetic
Act. The Company believes DSHEA is generally favorable to consumers and to the dietary supplement industry. DSHEA establishes
a statutory class of "dietary supplements," which includes vitamins, minerals, herbs, amino acids and other dietary
ingredients for human use to supplement the diet. Dietary ingredients on the market as of October 15, 1994 do not require
the submission by the manufacturer or distributor to the FDA of evidence of a history of use or other evidence of safety establishing
that the ingredient will reasonably be expected to be safe, but a dietary ingredient which was not on the market as of October 15,
1994 may need to be the subject of such a submission to FDA at least 75 days before marketing. Among other things, DSHEA
prevents the FDA from regulating dietary ingredients in dietary supplements as "food additives" and allows the use of
statements of nutritional support on product labels. The FDA has issued proposed and final regulations in this area and indicates
that further guidance and regulations are forthcoming.
The
FDA has issued a proposal to regulate the sale of products containing the herb "ma huang" (also known as ephedra), a
natural ingredient that contains a small percentage of ephedrine alkaloids. Various states and localities also have proposed or
adopted restrictions on the sale of ephedra.
In
November 1998, the FTC announced new advertising guidelines specifically for the dietary supplement industry, entitled "Dietary
Supplements: An Advertising Guide for Industry." These guidelines reiterate many of the policies the FTC has previously announced
over the years, including requirements for substantiation of claims made in advertising about dietary supplements.
The
FDA has announced its intent to issue proposed Good Manufacturing Practices regulations for the dietary supplement industry. The
FDA has published the industry's proposed GMP guidelines, but has not yet published its own proposed regulations for public comment.
The Company
cannot predict the nature of any future laws, regulations, interpretations or applications, nor can it determine what effect such
additional regulation, when and if it occurs, would have on its business in the future. Such additional regulation could, however,
require the reformulation of certain products to meet new standards, the recall or discontinuance of certain products, additional
record keeping, expanded documentation of the properties of certain products, revised, expanded or different labeling and/or additional
scientific substantiation. Any or all of such requirements could have a material adverse effect on the Company.
MANAGEMENT,
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
Below are the names and
certain information regarding the Company’s executive officers and directors:
Name
|
Age
|
Position
|
Michael Quaid
|
57
|
Chief Executive
Officer, Director
|
Thomas Ziemann
|
59
|
Chief Operating Officer, Director
|
Daniel Capri
|
69
|
President, Chairman
|
Michael
Quaid, Chief Executive Officer. Michael Quaid has served as the Chief Executive Officer of Boomer Naturals
since its formation in August 2019. Prior to joining Boomer Naturals and from January 2013 to December 2018, Mr. Quaid was the
majority owner and Managing Director of Typhoon FX trading platforms. Previously from January 1995 until January 2008, Mr. Quaid
was Managing Partner at KCCO II Trading. From 1991-1995 Mr. Quaid was head of European Derivatives for S.G. Warburg & Co.
in London. Prior to these roles Mr. Quaid held financial engineering positions at Itel Corporation and started his career as an
auditor with Arthur Young & Co. Mr. Quaid holds an MBA from the Kellogg School of Business, Northwestern University and a
Bachelor of Science degree from Millikin University.
Thomas
Ziemann, Chief Operating Officer. Mr. Ziemann has been the Chief Operating Officer of Boomer Naturals sinceJuly 2019.
Prior thereto and from January 1992 to December 2014 Mr. Ziemann served in several capacities with RJF Agencies, Inc, a small
independent insurance agency, as partner/shareholder/owner and Executive Vice President. Mr. Ziemann began his career in 1982
with Federated Mutual Insurance Company in Owatonna, MN. He began his sales career as a Marketing Representative in Willmar, MN
then moving to Eau Claire, WI in 1990. Completed his CIC designation in 1986, while earning top sales membership into the prestigious
Presidents Council and Distinguished Service Award as a Senior Marketing Representative. Mr. Ziemann is also currently and since
June 2015 has served as a co -owner and board member of Arizona Organics. Thomas Ziemann is a 1982 graduate of Bemidji State
University with a BS in Business Administration.
Daniel
Capri, Director, President, Treasurer and Secretary. Mr. Capri has served as the President of Boomer Naturals, Inc. since
June 2019. Simultaneously therewith and from June 2019, Mr. Capri has also served as the Managing Member of Internet Business
Consultants of Nevada (IBC), an ecommerce advisory, a company located in Las Vegas, Nevada. Mr. Capri was part of the founding
team at Xyience, a leading supplement and energy drink company. Mr. Capri has been the owner and Founder of Whale Sports, a sports
advisory service since its inception in March 2017, helping to grow sales from zero to over a million dollars in revenue in its
first year. Prior thereto and from April 2015 to March 2017, Mr. Capri was retired.
Our directors
are elected for a term of one year and serve until such director’s successor is duly elected and qualified. Each executive
officer serves at the pleasure of the Board.
The Company
has no nominating, audit or compensation committees at this time.
Audit
Committee and Financial Expert; Committees
The Company
does not have an audit committee. We are not a "listed company" under SEC rules and are therefore not required to have
an audit committee comprised of independent directors.
The Company
has no nominating or compensation committees at this time. The entire Board participates in the nomination and audit oversight
processes and considers executive and director compensation. Given the size of the Company and its stage of development, the entire
Board is involved in such decision making processes. Thus, there is a potential conflict of interest in that our directors and
officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect
management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.
Involvement
in Certain Legal Proceedings
There are
no legal proceedings that have occurred within the past ten years concerning our directors, or control persons which involved
a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities
or banking industries, or a finding of securities or commodities law violations.
None
of our directors and officers have been affiliated with any company that has filed for bankruptcy within the last ten years.
We are not aware of any proceedings to which any of our officer or director, or any associate of such officer or director, is
a party adverse to us or any of our or has a material interest adverse to us or any of our subsidiaries.
Changes
in Nominating Process
There are
no material changes to the procedures by which security holders may recommend nominees to our Board.
EXECUTIVE
COMPENSATION
Summary Compensation
Table.
The following table sets
forth the total compensation awarded to, earned by or paid to: (i) each person who served as a principal executive officer
for the years ended December 31, 2019 and 2018, and (ii) our two other most highly-compensated executive officers who were
serving as executive officers on December 31, 2019. We refer to these individuals as our “named executive officers.”
Name
and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
($)
|
|
Stock
Award(s)
($)
|
|
Option
Awards
(#)
|
|
All
Other
Compensation
($)
|
|
Total
($)
|
Daniel
Capri, Chairman, President (1)
|
|
|
2019
|
|
|
$
|
48,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
48,000
|
|
|
|
|
2018
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
Thomas Zieman, Director,
COO(2)
|
|
|
2019
|
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
60,000
|
|
|
|
|
2018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Michael Quaid, Director,
CEO(2)
|
|
|
2019
|
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
60,000
|
|
|
|
|
2018
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employment Agreements
Each of Daniel Capri, Michael
Quaid and Thomas Ziemann executed employment agreements with the Company on January 16, 2020 (the “Agreements”). The
term for each of the Agreements is three years. Each of the officers shall receive 500,000 shares of the Company’s common
stock and salary in the following amounts (i) $4,000 per month during the first ninety (90) days of the Agreements; (ii) an increase
to $10,000 per month during any month in which the Company’s sales reach One Million Dollars ($1,000,000 or (iii) an increase
to a total of $15,000 per month during any month in which the Company’s sales reach $3,000,000 per month. In addition, the
executives are eligible for annual bonuses shall be paid as determined by the Board of Directors of Employer. Any of the executives
may terminate the Agreement on ninety (90) days written notice and the Company may terminate the Agreement: (i) without advance
notice if the executive is found guilty in a court of law of a felony or agreeing to a felony plea; (ii) if the executive breaches
any of the provisions of the Agreement and the breach is not cured within 30 days written notice; and (iii) executive becomes
disabled and cannot perform his duties hereunder and said disability continues for a period of twelve (12) consecutive months.
The executives are eligible for benefits upon the establishment by the Company of a benefit plan. The Agreements also provide
customary provisions or reimbursement, non-disclosure, confidentiality and other terms.
Mr. Capri has agreed to temporarily
defer his salary.
Outstanding
Equity Awards
There
are no outstanding equity awards made to any named executive officer that were outstanding at March 11, 2020.
Compensation
of Directors
Our
directors do not receive a fee for serving as directors of the Company.
Change-in-Control
Agreements
The
Company does not have any change-in-control agreements with its executive officers.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Based
solely upon information made available to us, the following table sets forth information regarding the beneficial ownership of
our Common Stock as of March 11, 2020, held by: (i) each director and director nominees; (ii) each of the named executive
officers; (iii) all of our directors and executive officers as a group; and (iv) each additional person or group who
is known by us to own beneficially more than 5% of our Common Stock . Except as indicated in the footnotes below, the address
of the persons or groups named below is c/o Boomer Holdings Inc., 8670 W Cheyenne Avenue, #120, Las Vegas Nevada 89129.
|
|
Beneficial
|
Percent
of Class
|
Shareholder (1)
|
Ownership
|
(2)
|
Michael
Quaid, Director, Chief Executive Officer,
|
|
—
|
|
—
%
|
Thomas Ziemann, Director, Chief
Operating Officer
|
—
|
— %
|
Daniel Capri, Chairman, President
(3)
|
120,980,739
|
94 %
|
|
|
|
|
|
All Officers and Directors as
a Group (3 persons)
|
—
|
— %
|
|
|
|
|
|
Other 5% Holders
|
|
|
|
Boomer Naturals Holdings, Inc.
(4)
|
120,980,739
|
|
94%
|
|
(1)
|
The
address for all officers, directors and beneficial owners is 8670 W Cheyenne Avenue,
#120, Las Vegas Nevada 89129.
|
|
(2)
|
Based
upon 128,513,739 shares of Common Stock outstanding.
|
|
(3)
|
Includes
the 120,980,739 shares beneficially owned by Boomer Naturals, Inc. over which Mr. Capri
disavows beneficial ownership.
|
|
(4)
|
Daniel
Capri holds voting and dispositive control over the shares held by Boomer Naturals Holdings,
Inc. but disavows beneficial ownership of such shares.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
None.
Anti-takeover
Effects of Nevada Law and of Our Charter and Bylaws
In
addition to the features of our charter related to the issuance of preferred stock, which are described above, the Nevada Revised
Statutes (“NRS”) contain several provisions which may make a hostile take-over or change of control of our Company
more difficult to accomplish. They include the following:
Nevada
law, provides that any one or all of the directors of a corporation may be removed by the holders of not less than two-thirds
of the voting power of a corporation’s issued and outstanding stock. All vacancies on the board of directors of a Nevada
corporation may be filled by a majority of the remaining directors, though less than a quorum, unless the articles of incorporation
provide otherwise. In addition, unless otherwise provided in the articles of incorporation, the board may fill the vacancies for
the entire remainder of the term of office of the resigning director or directors. Our Articles of Incorporation do not provide
otherwise.
In
addition, Nevada law provides that unless otherwise provided in a corporation’s articles of incorporation or bylaws, shareholders
do not have the right to call special meetings. Our Articles of Incorporation and our Bylaws do not give shareholders this right.
In accordance with Nevada law, we also require advance notice of any shareholder proposals.
Nevada
law provides that, unless otherwise prohibited by any bylaws adopted by the shareholders, the board of directors may amend any
bylaw, including any bylaw adopted by the shareholders. Pursuant to Nevada law, our Articles of Incorporation grant the authority
to adopt, amend or repeal bylaws exclusively to our directors.
Nevada’s
“combinations with interested stockholders” statutes prohibit certain business “combinations” between
certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after the such person
first becomes an “interested stockholder” unless (i) the corporation’s board of directors approves the combination
(or the transaction by which such person becomes an “interested stockholder”) in advance, or (ii) the combination
is approved by the board of directors and sixty percent of the corporation’s voting power not beneficially owned by the
interested stockholder, its affiliates and associates. Furthermore, in the absence of prior approval, certain restrictions may
apply even after such two-year period. For purposes of these statutes, an “interested stockholder” is any person who
is (x) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares
of the corporation, or (y) an affiliate or associate of the corporation and at any time within the two previous years was the
beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation.
Subject to certain timing requirements set forth in the statutes, a corporation may elect not to be governed by these statutes.
However, we have not included any such provision in our Articles of Incorporation or Bylaws, which means these provisions apply
to us.
Nevada’s
“acquisition of controlling interest” statutes contain provisions governing the acquisition of a controlling interest
in certain Nevada corporations. These “control share” laws provide generally that any person who acquires a “controlling
interest” in certain Nevada corporations may be denied certain voting rights, unless a majority of the disinterested stockholders
of the corporation elects to restore such voting rights. These statutes provide that a person acquires a “controlling interest”
whenever a person acquires shares of a subject corporation that, but for the application of these provisions of the NRS, would
enable that person to exercise (1) one-fifth or more, but less than one-third, (2) one-third or more, but less than a majority
or (3) a majority or more, of all of the voting power of the corporation in the election of directors. Once an acquirer crosses
one of these thresholds, shares which it acquired in the transaction taking it over the threshold and within the 90 days immediately
preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares”
to which the voting restrictions described above apply. Our Articles of Incorporation and Bylaws currently contain no provisions
relating to these statutes, and unless our Articles of Incorporation or Bylaws in effect on the tenth day after the acquisition
of a controlling interest were to provide otherwise, these laws would apply to us if we were to (i) have 200 or more stockholders
of record (at least 100 of which have addresses in the State of Nevada appearing on our stock ledger) and (ii) do business in
the State of Nevada directly or through an affiliated corporation. As of the date of this prospectus, we have less than 100 record
stockholders with Nevada addresses. However, if these laws were to apply to us, they might discourage companies or persons interested
in acquiring a significant interest in or control of the company, regardless of whether such acquisition may be in the interest
of our shareholders.
Our
articles of incorporation and/or bylaws provide that:
|
•
|
the authorized number
of directors can be changed only by resolution of our board of directors;
|
|
•
|
our bylaws may be
amended or repealed by our board of directors or our stockholders;
|
|
•
|
our board of directors
will be authorized to issue, without stockholder approval, preferred stock, the rights of which will be determined at the
discretion of the board of directors and that, if issued, could operate as a “poison pill” to dilute the stock
ownership of a potential hostile acquirer to prevent an acquisition that our board of directors does not approve;
|
|
•
|
our stockholders
must comply with advance notice provisions to bring business before or nominate directors for election at a stockholder meeting.
|
Potential
Effects of Authorized but Unissued Stock
We
have shares of Common Stock and preferred stock available for future issuance without stockholder approval. We may utilize these
additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate
corporate acquisitions or payment as a dividend on the capital stock.
The
existence of unissued and unreserved Common Stock and preferred stock may enable our board of directors to issue shares to persons
friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party
attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity
of our management. In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges
and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences
of each series of preferred stock, all to the fullest extent permissible under the Nevada Revised Statutes and subject to any
limitations set forth in our certificate of incorporation. The purpose of authorizing the board of directors to issue preferred
stock and to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated with a
stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with
possible financings, acquisitions and other corporate purposes, could have the effect of making it more difficult for a third-party
to acquire, or could discourage a third-party from acquiring, a majority of our outstanding voting stock.
DESCRIPTION
OF COMPANY SECURITIES
The following description
of our Common Stock and preferred stock summarizes the material terms and provisions of our Common Stock and preferred stock.
The following description of our capital stock does not purport to be complete and is subject to, and qualified in its entirety
by, our Amended and Restated Articles of Incorporation, as amended, and our Amended and Restated By-Laws, which are
exhibits to the registration statement of which this prospectus forms a part, and by applicable law. We refer in this section
to our Amended and Restated Articles of Incorporation, as amended, as our certificate of incorporation, and we refer to our Amended
and Restated By-Laws as our by-laws. The terms of our Common Stock and preferred stock may also be affected
by Nevada law.
Authorized Capital Stock
Our
authorized capital stock consists of 210,000,000 shares of our Common Stock, par value $0.001 per share, and 10,000,000 shares
of undesignated preferred stock, par value $0.001 per share. As of April 24, 2020, we had 128,513,739 shares of Common Stock outstanding
and no shares of preferred stock outstanding.
Common Stock
Voting
Holders of our Common Stock
are entitled to one vote per share on matters to be voted on by stockholders and also are entitled to receive such dividends,
if any, as may be declared from time to time by our board of directors in its discretion out of funds legally available therefor.
Holders of our Common Stock have exclusive voting rights for the election of our directors and all other matters requiring stockholder
action, except with respect to amendments to our certificate of incorporation that alter or change the powers, preferences, rights
or other terms of any outstanding preferred stock if the holders of such affected series of preferred stock are entitled to vote
on such an amendment or filling vacancies on the board of directors.
Dividends
Holders of Common Stock are
entitled to share ratably in any dividends declared by our board of directors, subject to any preferential dividend rights of
any outstanding preferred stock. Dividends consisting of shares of Common Stock may be paid to holders of shares of Common Stock.
We do not intend to pay cash dividends in the foreseeable future.
Liquidation
and Dissolution
Upon our liquidation or dissolution,
the holders of our Common Stock will be entitled to receive pro rata all assets remaining available for distribution to stockholders
after payment of all liabilities and provision for the liquidation of any shares of preferred stock at the time outstanding.
Other Rights
and Restrictions
Our Common Stock has no preemptive
or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such
stock. Our Common Stock is not subject to redemption by us. Our certificate of incorporation and bylaws do not restrict the ability
of a holder of Common Stock to transfer the stockholder’s shares of Common Stock. If we issue shares of Common Stock under
this prospectus, the shares will be fully paid and non-assessable and will not have, or be subject to, any preemptive
or similar rights.
Preferred
Stock
Our board of directors has
the authority to issue up to 10,000,000 shares of preferred stock in one or more series and to determine the rights and preferences
of the shares of any such series without stockholder approval. Our board of directors may issue preferred stock in one or more
series and has the authority to fix the designation and powers, rights and preferences and the qualifications, limitations, or
restrictions with respect to each class or series of such class without further vote or action by the stockholders. The ability
of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or
preventing a change of control of us or the removal of existing management.
Warrants
We have not issued and do
not have any outstanding warrants to purchase shares of our common stock.
Options
We have not
issued and do not have any outstanding options to purchase shares of our common stock.
Convertible
Securities
We have not issued and do not have
any outstanding securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of
our common stock.
Market Information
Our Common Stock is quoted the
OTC Markets under the symbol “BOMH” .
Transfer
Agent and Registrar
The transfer agent and registrar
for our Common Stock is Action Stock Transfer, Inc.
SELLING
STOCKHOLDERS
We are registering for
resale or other disposition by the Selling Stockholders named herein an aggregate of 13,751,256 shares of Common Stock. From inception
though the six months year ended January 31, 2018, the Company issued an aggregate 7,533,000 shares of its common stock at $0.03
per share for total proceeds of $25,110. Following the share exchange with Boomer and the retirement of 33,000 of such shares,
the Company agreed to register the remaining 7,500,000 shares (the “Offering Shares”) for resale for the benefit of
the Selling Stockholders on this registration statement.
In connection with the Exchange,
we agreed to register an additional 6,231,243 shares of Common Stock (the “Distribution Shares”) currently held by
Boomer Naturals Holdings, Inc., our principal stockholder (“BNH”) so that BNH could distribute the Distribution Shares
to certain of its stockholders and to register the Distribution Shares for resale.
The table below lists (a)
the names of the Selling Stockholders whose shares are being offered by this prospectus, (b) information regarding the beneficial
ownership of shares of Common Stock by each of the Selling Stockholders, including the number of shares of Common Stock beneficially
owned by each Selling Stockholder as of April 24, 2020 ; and (c) the amount and (if one percent or more) the percentage
of the class to be owned by such security holder after completion of the offering. The fourth column assumes the sale of all of
the shares offered by the Selling Stockholders pursuant to this prospectus. The information in the table below with respect to
the Selling Stockholders has been obtained from the Selling Stockholders and the Company’s transfer agent.
Beneficial ownership is
determined in accordance with the rules of the SEC and includes voting or investment power with respect to shares. Unless otherwise
indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their
shares of common stock, except to the extent authority is shared by spouses under applicable law. The inclusion of any shares
in this table does not constitute an admission of beneficial ownership for the person named below.
None of the
selling stockholders has held any position or office, or has otherwise had a material relationship, with us or any of our subsidiaries
within the past three years.
The Selling Stockholders
may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
Information about the Selling
Stockholders may change over time. Any changed information will be set forth in an amendment to the registration statement or
supplement to this prospectus, to the extent required by law.
|
|
|
|
|
|
Maximum
|
Number
of
|
|
|
|
|
|
|
|
|
Number of Shares
|
Shares
|
% of
|
|
|
|
|
Total Shares
|
to be Sold
|
Beneficially
|
Class
|
|
|
|
|
Beneficially Owned
|
Pursuant to the
|
Owned After
|
After
|
Investor Name
|
Prior to Offering
|
Prospectus
|
Offering
|
Offering*
|
Distribution
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bart K. Gershenbaum
|
0
|
8,001
|
0
|
*
|
Justin Brown
|
0
|
12,000
|
0
|
*
|
Fred & Eileen Cimino
|
0
|
|
36,000
|
|
0
|
*
|
Howard Attenborough
|
0
|
|
75,000
|
|
0
|
*
|
Michael Larson
|
0
|
|
43,002
|
|
0
|
*
|
Michael James Lahti
|
0
|
|
36,000
|
|
0
|
*
|
Larry Salisbury
|
0
|
8,001
|
0
|
*
|
Victor Bunce
|
0
|
16,002
|
0
|
*
|
Chris Cziesla
|
0
|
20,001
|
0
|
*
|
Tri Huu Nguyen
|
0
|
24,000
|
0
|
*
|
Anh Tuan Pham
|
0
|
24,000
|
0
|
*
|
George Pozgar
|
0
|
10,002
|
0
|
*
|
Joshua Schneider
|
0
|
18,501
|
0
|
*
|
Nhi Huynh
|
0
|
|
40,002
|
|
0
|
*
|
John Wiederholt
|
0
|
16,002
|
0
|
*
|
John B Gazerro and Arleen Gazeroo
|
0
|
12,000
|
0
|
*
|
Susan M. Gazerro
|
0
|
7,002
|
0
|
*
|
David Engram
|
0
|
20,001
|
0
|
*
|
Gary Marcotte
|
0
|
|
40,002
|
|
0
|
*
|
Ricky Badesa
|
0
|
|
100,002
|
|
0
|
*
|
John Gregorio
|
0
|
|
130,002
|
|
0
|
*
|
Garret Omuro
|
0
|
20,001
|
0
|
*
|
Hallie Wiederholt
|
0
|
4,002
|
0
|
*
|
William Flynn Jr.
|
0
|
9,000
|
0
|
*
|
Bill Honeycutt
|
0
|
8,001
|
0
|
*
|
Mohit Sahgal
|
0
|
20,001
|
0
|
*
|
Doug & Julie Ostrenga
|
0
|
33,504
|
0
|
*
|
Robert Ekstedt
|
0
|
|
44.001
|
|
0
|
*
|
Jason And Melissa Goeltz
|
0
|
16,002
|
0
|
*
|
David Haywood
|
0
|
10,002
|
0
|
*
|
Stephen Garvin Jr.
|
0
|
10,002
|
0
|
*
|
Stephen George Garvin III
|
0
|
20,001
|
0
|
*
|
Randy Miller
|
0
|
27,000
|
0
|
*
|
Kristy Jensen
|
0
|
9,501
|
0
|
*
|
Burke Bennett
|
0
|
8,001
|
0
|
*
|
Charles Saulson
|
0
|
16,002
|
0
|
*
|
Casey Hall Anderson
|
0
|
6,402
|
0
|
*
|
Lisa Dawood-Hogan
|
0
|
3,201
|
0
|
*
|
Melvin Yoshio Morikawa
|
0
|
20,001
|
0
|
*
|
Mary Sinobio
|
0
|
24,000
|
0
|
*
|
Anthony C. Moretti
|
0
|
|
77,001
|
|
0
|
*
|
Rob E. Holt
|
0
|
|
40,002
|
|
0
|
*
|
Jon And Beverly Bolt
|
0
|
|
40,002
|
|
0
|
*
|
Mark Joern
|
0
|
|
40,002
|
|
0
|
*
|
John Preschlack
|
0
|
10,002
|
0
|
*
|
Doug & Julie Ostrenga
|
0
|
1,002
|
0
|
*
|
Leonard Kobylenski
|
0
|
10,002
|
0
|
*
|
Nathan Chappell
|
0
|
10,002
|
0
|
*
|
Anthony Dibrito
|
0
|
20,001
|
0
|
*
|
Wayne Mcpherson
|
0
|
10,002
|
0
|
*
|
Jake Kirby
|
0
|
10,002
|
0
|
*
|
Matthew Busick
|
0
|
10,002
|
0
|
*
|
Larry D Doty
|
0
|
25,002
|
0
|
*
|
Steve Holyoak
|
0
|
10,002
|
0
|
*
|
Michael L Anita L Martin
|
0
|
15,000
|
0
|
*
|
Gold Mine Trust
|
0
|
125,001
|
0
|
*
|
Thomas F. Wells
|
0
|
80,001
|
0
|
*
|
Rob Holt
|
0
|
80,001
|
0
|
*
|
Melvin Morikawa
|
0
|
20,001
|
0
|
*
|
Matthew Borkowski
|
0
|
20,001
|
0
|
*
|
Elliot Rittenberg
|
0
|
36,000
|
0
|
*
|
Theodore W. Manos Sr
|
0
|
20,001
|
0
|
*
|
Les Gocha
|
0
|
4,002
|
0
|
*
|
Hoa Thi An Truong
|
0
|
16,002
|
0
|
*
|
Mimi T Ho
|
0
|
20,001
|
0
|
*
|
Lennie Graves
|
0
|
20,001
|
0
|
*
|
Miguel Moises Garcia
|
0
|
20,001
|
0
|
*
|
Neil H Wright
|
0
|
8,001
|
0
|
*
|
Phil/Janet Shuman
|
0
|
50,001
|
0
|
*
|
William & Cathy Holl
|
0
|
80,001
|
0
|
*
|
Shana Wheeler
|
0
|
30,000
|
0
|
*
|
Richard Wheeler
|
0
|
60,000
|
0
|
*
|
Duc Sy Nguyen
|
0
|
30,000
|
0
|
*
|
Thang Pham
|
0
|
100,002
|
0
|
*
|
Michael Mcgrath
|
0
|
8,001
|
0
|
*
|
Gregg Knudten
|
0
|
200,001
|
0
|
*
|
Matthew Shuman
|
0
|
25,002
|
0
|
*
|
Gth Holding LLC
|
0
|
200,001
|
0
|
*
|
Brent Dodge
|
0
|
10,002
|
0
|
*
|
Anthony Moretti
|
0
|
32,001
|
0
|
*
|
Anthony Tryon
|
0
|
75,000
|
0
|
*
|
Amanda Sandavol
|
0
|
25,002
|
0
|
*
|
Sammi Hamilton
|
0
|
25,002
|
0
|
*
|
Richard And Faith Schantz
|
0
|
25,002
|
0
|
*
|
David Larson
|
0
|
25,002
|
0
|
*
|
Steve Garvin
|
0
|
10,002
|
0
|
*
|
Successful 1000
|
0
|
10,002
|
0
|
*
|
Melvin Morikawa
|
0
|
10,002
|
0
|
*
|
Sharon Ruhle
|
0
|
12,000
|
0
|
*
|
Connor Stastny
|
0
|
20,001
|
0
|
*
|
Chase Eller
|
0
|
32,001
|
0
|
*
|
William B. Bunce
|
0
|
80,001
|
0
|
*
|
W J Byrnes & Company of Los
Angeles
|
|
|
|
|
Inc.
|
0
|
40,002
|
0
|
*
|
Anne & Larry Kleine
|
0
|
10,002
|
0
|
*
|
Brandt Jobe
|
0
|
250,002
|
0
|
*
|
William Jobe
|
0
|
250,002
|
0
|
*
|
David Mingo`
|
0
|
40,002
|
0
|
*
|
Jessica Folino
|
0
|
80,001
|
0
|
*
|
Shane Lebaron
|
0
|
10,002
|
0
|
*
|
Brett Fleming
|
0
|
40,002
|
0
|
*
|
Raymond Ruzzo
|
0
|
20,001
|
0
|
*
|
George Capri
|
0
|
16,002
|
0
|
*
|
Thomes L Young
|
0
|
80,001
|
0
|
*
|
Jon Bal
|
0
|
20,001
|
0
|
*
|
Kevin C Minter
|
0
|
250,002
|
0
|
*
|
Smedsrud Consulting LLC
|
0
|
48,000
|
0
|
*
|
Guerra Holdings Inc.
|
0
|
2,000,001
|
0
|
*
|
Michael Mcgrath
|
0
|
32,001
|
0
|
*
|
K-9 Kountry Llc
|
0
|
50,001
|
0
|
*
|
Micheal A. Dominick
|
0
|
20,001
|
0
|
*
|
|
0
|
6,231,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GTH Holdings LLC
|
1,440,000
|
1,440,000
|
0
|
*
|
Tiet Boomer Holdings LLC
|
1,440,000
|
1,440,000
|
0
|
*
|
Boomer NYC Holdings Inc
|
1,005,000
|
1,005,000
|
0
|
*
|
Boomer Syndicate Inc
|
870,000
|
870,000
|
0
|
*
|
Micro Cap Ventures Inc
|
954,999
|
954,999
|
0
|
*
|
Phoenix Diversified Holdings LLC
|
300,000
|
300,000
|
0
|
*
|
Yue Long
|
|
|
|
|
180,000
|
|
180,000
|
|
0
|
*
|
Lisa Tursellino
|
150,000
|
|
150,000
|
|
0
|
*
|
Incubation Inc
|
120,000
|
|
120,000
|
|
0
|
*
|
Jason Phan
|
|
|
|
|
150,000
|
|
150,000
|
|
0
|
*
|
JKB Investment Inc (Nevada Corporation)
|
75,000
|
|
75,000
|
|
0
|
*
|
Jonathan Lindenblatt
|
75,000
|
|
75,000
|
|
0
|
*
|
Gerard Casazza
|
75,000
|
|
75,000
|
|
0
|
*
|
Michael And Rhonda Stauner Revocable
|
|
|
|
|
|
|
|
|
Trust U/A/D June 24, 1993
|
100,002
|
|
100,002
|
|
0
|
*
|
Craig Casca
|
|
|
|
|
20,001
|
20,001
|
0
|
*
|
Rachelle Dietz
|
100,002
|
|
100,002
|
|
|
|
*
|
Steve Denk
|
|
|
|
|
100,002
|
|
100,002
|
|
0
|
*
|
Gregg Knudten
|
125,001
|
|
125,001
|
|
0
|
*
|
William Holl
|
25,002
|
25,002
|
0
|
*
|
Rob Holt
|
|
|
|
|
40,002
|
|
40,002
|
|
0
|
*
|
Winston Deloney
|
125,001
|
|
125,001
|
|
0
|
*
|
Mary Uelmen
|
50,001
|
|
50,001
|
|
0
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
7,520,013
|
|
7,520,013
|
|
0
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total:
|
|
13,751,256
|
|
13,751,256
|
|
0
|
|
*
|
|
*
|
Percentage not listed if less than
1%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
PLAN OF
DISTRIBUTION
Each Selling Stockholder
of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their
securities covered hereby on the principal trading market (any of the markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange, OTCQB or OTC QX (or any successors to any of the foregoing)) or in private
transactions. These sales may be at fixed or negotiated prices. The Company will not receive any of the proceeds from the sale
by the Selling Stockholders of the securities. A Selling Stockholder may use any one or more of the following methods when selling
securities:
|
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
|
•
|
block
trades in which the broker-dealer will attempt to sell the securities as agent but may
position and resell a portion of the block as principal to facilitate the transaction;
|
|
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
|
|
•
|
an
exchange distribution in accordance with the rules of the applicable exchange;
|
|
•
|
privately
negotiated transactions;
|
|
•
|
settlement
of short sales;
|
|
•
|
in
transactions through broker-dealers that agree with the Selling Stockholders to sell
a specified number of such securities at a stipulated price per security;
|
|
•
|
through
the writing or settlement of options or other hedging transactions, whether through an
options exchange or otherwise;
|
|
•
|
a
combination of any such methods of sale; or
|
|
•
|
any
other method permitted pursuant to applicable law
|
The Selling Stockholders
may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended,
if available, rather than under this prospectus.
Broker-dealers engaged by
the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction
a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale
of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions,
or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which
securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended
to reflect such transaction).
The Selling Stockholders
and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within
the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement
or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required
to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed
to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be freely resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule
of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities
Act or any other rule of similar effect, under circumstances in which any legend borne by such securities relating to restrictions
on transferability thereof, under the Securities Act or otherwise, is removed. The resale securities will be sold only through
registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states,
the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations
under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market
making activities with respect to the securities for the applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
securities by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser of the securities at or prior to the
time of the sale (including by compliance with Rule 172 under the Securities Act).
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements in this prospectus
constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference
include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand
for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from
customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development,
market acceptance or installation of our products and services; changes in government regulations; availability of management
and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and
worldwide political stability and economic growth. The words "believe," "expect," "anticipate,"
"intend" and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.
Corporate History
Boomer Holdings Inc. was incorporated
as Remaro Group Corp. under the laws of the State of Nevada on March 31, 2016. On January 7, 2020, the Company executed an Agreement
of Merger and Plan of Share Exchange (the “Exchange Agreement”), with BNW, Boomer Naturals Holdings, Inc., a Nevada
corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders of Boomer (the “Exchange”). Upon consummation
of the transactions set forth in the Exchange Agreement (the “Closing”), the Company adopted the business plan of
Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance
of an aggregate 40,326,913 pre-split shares (the “Exchange Shares”) of the Company’s common stock, par value
$0.001 per share (the “Common Stock”). Pursuant to the terms of the Exchange Agreement, the Company’s Majority
Shareholder agreed to retire 8,000,000 shares of the Company’s Common Stock. Also on January 7, 2020, the Company approved
an amendment to its Articles of Incorporation (the “Amendment”) to: change the name of the Company to Boomer Holdings
Inc.; effect a forward stock split on the basis of three-to-one (3:1); and to increase the number of authorized shares of capital
stock to 210,000,000 of which 200,000,000 shares shall be Common Stock and 10,000,000 shares will be blank-check preferred stock,
par value $0.001 per share.
Description of Our Business
We are engaged in the research,
development, acquisition, licensing and sales of specialized natural products which have FDA compliant ingredients and are impactful
on the endocannabinoid system. These products powered by natural terpenes, include, edible and topical offerings. We are engaged
in marketing and branding within the alternative CBD/THC space, including our trademark “CB5” brand which is a proprietary
formula and currently patent pending. Boomer Naturals currently operates a retail store in Las Vegas Nevada and is negotiating
a lease on the company’s flagship store in Manhattan New York. Boomer Natural products are also available in Golf Pro Shops,
Specialty Stores, Chiropractic Offices and Nail Salons across the countries. Boomer Naturals has a robust online presence and
enjoys material sales through its website at BoomerNaturals.com
Our Strategy
With our CB5 formula we believe
are in a unique position to brand our line. Our FDA compliant product will give us access to advertising on national television
and social media platforms like Facebook and Google. In addition we expect to air promotional/educational content throughout 2020
on PBS affiliates across the country as well as a corporate sponsorship at Madison Square Garden and the MSG network.
Online Sales
Through its websites and internet
advertising, Boomer will be able to brand its products while informing consumers of the attributes of CB5. This direct to consumer
interaction could pave the way for significant online sales through the Boomer Naturals website.
National Retail Chains.
Currently many National Retail
Chains are hesitant to introduce CBD related products on a national scale and thus far have only offered topical products in regional
test markets. The FDA compliant ingredients in CB5 will allow these chains to offer Boomer Natural products in both topical and
ingestible forms nation-wide.
Golf
We plan to continue to grow our
distribution network in the golf space in part through our relationship with PGA Magazine and the PGA Merchandising Show. With
access to vendors through these mediums and the ability to advertise we will be able to best utilize of our wide-ranging wholesale
sales network. We are in a unique position to capture a significant share of the expansive golf market.
Chiropractors
Without the endorsement of the
American Chiropractors Association many Chiropractors are not employing CBD into treatments. CB5 with its FDA compliant ingredients
clears the path for doctors wishing to employ a natural alternative to pharmaceuticals. CB5 will be introduced nationally to the
Chiropractor community at the widely attended Parker Chiropractor Show in Las Vegas Nevada in February where Boomer Naturals will
be exhibiting. A key component to the attendance at this show is no CBD Companies are allowed to exhibit.
Veterinarians
Like the Chiropractor community
Veterinarians continue to look for non-pharmaceutical solutions for animals. To date the American Veterinary Association has not
endorsed CBD. This leaves a tremendous opportunity for CB5 making an impact into the Veterinary space. Boomer Naturals can exhibit
and introduce its product line to the community at the AVMA annual conventions.
Overseas opportunities
Boomer has begun discussions with
distributors in over 7 countries to carry the Boomer Naturals CB5 product line. These distributors see a unique opportunity to
fulfill consumer demand via CB5 where CBD is not available to sell.
In addition, we intend to seek
new branding and licensing opportunities for our intellectual property and we will seek strategic corporate and product acquisitions.
RESULTS OF OPERATIONS
Year ended December 31, 2019
(inception).
Revenue
During the year ended December
31, 2019 from June 7, 2019 (inception) our revenues were $371,650. During the year ended December 31, 2019 from June 7, 2019 (inception)
the cost of revenue was $165,461.
Operating Expenses
During the year ended December
31, 2019, we incurred $2,377,090 general and administrative expenses and $647,831 of marketing expenses. General and administrative
expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and
accounting and developmental costs.
Net Loss
Our net loss for the year ended
December 31, 2019 was $2,818,732.
Liquidity and Capital Resources
As of December 31, 2019
As of December 31, 2019 from June
7, 2019 (inception) our total assets were $2,055,112. As of December 31, 2019 our total current liabilities were $1,178,023.
Stockholders’ deficit was
9$83,605) as of December 31, 2019 from June 7, 2019 (inception).
Cash Flows from Operating
Activities
For the year ended December 31,
2019 from June 7, 2019 (inception), cash flows used in operating activities was $2,386,684 consisting of a net loss of $2,866,073,
depreciation of $2,982, increase in accounts payable of $355,067 and accrued expenses of $166,270.
Cash flows from Investing
Activities
For the year ended December 31,
2019 from June 7, 2019 (inception), cash flow used in investing activities was $117,454.
Cash Flows from Financing
Activities
We have financed our operations
primarily from either borrowing from our line of credit or from related parties and the issuance of our securities. For the year
ended December 31, 2019 net cash provided by financing activities was $3,1888,489.
PLAN OF OPERATION AND FUNDING
Based on our current rate of
expenditures and anticipated changes, we have estimated a total cash expenditure budget of approximately $7 million for the next
12 months, of which approximately $4 million is expected to be expended towards sales, $250,000 is expected to be expended toward
product development and approximately $2.75 million is budgeted for working capital and general and administrative expenses.
We expect that working capital
requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working
capital requirements are expected to increase in line with the growth of our business. Historically, we have financed our operations
through private sales of equity securities and, in part, through sales of our products. We believe that our cash flow from operating
activities and the sale of equity securities will be sufficient to meet our capital requirements for at least the next 12 months.
LEGAL
MATTERS
The validity of the Common
Stock covered hereby will be passed upon for us by McCarter & English LLP, East Brunswick, New Jersey.
EXPERTS
The consolidated financial statements
as of December 31, 2019 and for the year then ended included in this prospectus and in the registration statement have been so
included in reliance on the report of Benjamin & Ko, an independent registered public accounting firm, (the report on the
financial statements contains an explanatory paragraph regarding the Company’s ability to continue as a going concern) appearing
elsewhere herein and in the registration statement, given on the authority of said firm as experts in auditing and accounting.
WHERE TO
FIND MORE INFORMATION
We have filed a registration
statement on Form S-1 with the SEC to register resale of shares of our Common Stock being offered by this prospectus. For further
information with respect to us and our Common Stock, please see the registration statement on Form S-1 and the exhibits thereto.
In addition, we file annual, quarterly and current reports, proxy statements and other information with SEC. The SEC maintains
a website, http://www.sec.gov that contains reports, proxy statements and information statements and other information regarding
registrants that file electronically with the SEC, including us. Our SEC filings are also available to the public from commercial
document retrieval services. Information contained on our website should not be considered part of this prospectus.
You may also request a copy
of our filings at no cost by writing or telephoning us at:
Boomer Holdings,
Inc.
8670 W. Cheyenne
Avenue
Las Vegas,
NV 89129
Attn: Corporate
Secretory
E-Mail: info@boomernaturals.com
Telephone:
(888)-266-6370
Our website address is http://www.boomernaturals.com.
Information contained in our website does not constitute any part of, and is not incorporated into, this prospectus.
Financial
Statements
As
of December 31, 2019 and
for
the period June 7, 2019 (date of formation) to December 31, 2019
|
Table of
Contents
|
Page
|
|
|
|
|
Report of Independent
Registered Public Accounting Firm
|
F-1
|
|
|
|
|
Financial
Statements
|
|
|
|
Balance
Sheet
|
F-2
|
|
|
Statement
of Operations
|
F-3
|
|
|
Statement
of Stockholders’ Equity
|
F-4
|
|
|
Statement
of Cash Flows
|
F-5
|
|
|
|
|
Notes to Financial
Statements
|
F-6
|
Report
of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
of Boomer Naturals, Inc.
Opinion on the Financial Statements
We have
audited the accompanying balance sheet of Boomer Naturals, Inc. (the “Company”) as of December 31, 2019, and the related
statement of operations, stockholders’ equity, and cash flows for the period June 7, 2019 (date of formation) to December
31, 2019. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position
of the Company as of December 31, 2019, and the results of its operations and its cash flows for the period June 7, 2019 (date
of formation) to December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
The
Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these
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 audit 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 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 audit, we are required to obtain an understanding of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, 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 audit
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 audit 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 audit provides a reasonable basis for our opinion.
Santa Ana, CA
February 21, 2020
We have served
as the Company’s auditor since 2019
Consolidated Financial Statements
December
31,
|
|
2019
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash
|
|
$
|
684,351
|
|
Accounts
receivable, net of allowance for bad debt of $0
|
|
|
10,060
|
|
Inventories,
net
|
|
|
49,203
|
|
Prepaid
expenses and other current assets
|
|
|
23,511
|
|
Total
current assets
|
|
|
767,125
|
|
|
|
|
|
|
Non-current
Assets:
|
|
|
|
|
Property
and equipment, net
|
|
|
114,472
|
|
Operating
lease right-of-use assets, net
|
|
|
1,173,515
|
|
Total
non-current assets
|
|
|
1,287,987
|
|
|
|
|
|
|
Total
assets
|
|
$
|
2,055,112
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
355,067
|
|
Accrued
expenses
|
|
|
166,270
|
|
Lines
of credit - related parties
|
|
|
406,021
|
|
Current
portion of operating lease liabilities
|
|
|
250,665
|
|
Total current liabilities
|
|
|
1,178,023
|
|
Operating
lease liabilities, less current portion
|
|
|
960,694
|
|
|
|
|
|
|
Total
liabilities
|
|
|
2,138,717
|
|
|
|
|
|
|
Commitments
and Contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’
Deficit:
|
|
|
|
|
Common
stock, no par value; 200,0000,000 shares authorized,
121,446,757 shares issued and outstanding
|
|
|
—
|
|
Additional
paid-in capital
|
|
|
2,782,468
|
|
Accumulated
deficit
|
|
|
(2,866,073
|
)
|
|
|
|
|
|
Total
stockholders' deficit
|
|
|
(83,605
|
)
|
|
|
|
|
|
Total
liabilities and stockholders’ deficit
|
|
$
|
2,055,112
|
|
See
accompanying financial statements notes
June
7, 2019 (date of formation) to December 31, 2019
|
|
Amount
|
|
|
|
Net sales
|
|
$
|
371,650
|
|
|
|
|
|
|
Cost of sales
|
|
|
165,461
|
|
|
|
|
|
|
Gross
profit
|
|
|
206,189
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales
and marketing
|
|
|
647,831
|
|
General
and administrative
|
|
|
2,377,090
|
|
Total
operating expenses
|
|
|
3,024,921
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(2,818,732
|
)
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
Interest
income
|
|
|
300
|
|
Interest
expense
|
|
|
(47,641
|
)
|
Total
other expense, net
|
|
|
(47,341
|
)
|
|
|
|
|
|
Loss before income
tax provision
|
|
|
(2,866,073
|
)
|
|
|
|
|
|
Income
tax provision
|
|
|
—
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,866,073
|
)
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
Basic
and diluted
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
Basic
and diluted
|
|
|
118,766,430
|
|
See
accompanying financial statements notes
June
7, 2019 (date of formation) to December 31, 2019
|
|
Amount
|
|
|
|
Cash
flows from operating activities:
|
|
|
|
|
Net
loss
|
|
$
|
(2,866,073
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Depreciation
expense - property and equipment
|
|
|
2,982
|
|
Changes
in assets and liabilities:
|
|
|
|
|
Accounts
payable
|
|
|
355,067
|
|
Accounts
receivable
|
|
|
(10,060
|
)
|
Inventories
|
|
|
(49,203
|
)
|
Prepaid
expenses and other current assets
|
|
|
(23,511
|
)
|
Operating
lease right-of-use assets, net of liabilities
|
|
|
37,844
|
|
Accrued
expenses
|
|
|
166,270
|
|
Net
cash used in operating activities
|
|
|
(2,386,684
|
)
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
Purchases
of property and equipment
|
|
|
(117,454
|
)
|
Net
cash used in investing activities
|
|
|
(117,454
|
)
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
Borrowing
from line of credit - related parties
|
|
|
406,021
|
|
Issuance
of common stock
|
|
|
2,782,468
|
|
Net
cash provided by financing activities
|
|
|
3,188,489
|
|
|
|
|
|
|
Net increase in cash
|
|
|
684,351
|
|
|
|
|
|
|
Cash
– beginning of year
|
|
|
—
|
|
|
|
|
|
|
Cash
– end of year
|
|
$
|
684,351
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
Cash
paid during the year for:
|
|
|
|
|
Interest
|
|
$
|
35,427
|
|
Income
taxes
|
|
$
|
—
|
|
See
accompanying financial statements notes
|
|
|
|
|
|
Additional
|
|
|
|
Total
|
|
|
Common
Stock
|
|
Paid-in
|
|
Accumulated
|
|
Stockholders'
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
Balances
- June 7, 2019 (date of formation)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of stock
|
|
|
121,446,757
|
|
|
|
—
|
|
|
|
2,782,468
|
|
|
|
—
|
|
|
|
2,782,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,866,073
|
)
|
|
|
(2,866,073
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
- December 31, 2019
|
|
|
121,446,757
|
|
|
$
|
—
|
|
|
$
|
2,782,468
|
|
|
$
|
(2,866,073
|
)
|
|
$
|
(83,605
|
)
|
See
accompanying financial statements notes
Boomer
Naturals Inc., a wholly owned subsidiary of Boomer Holdings Inc. (the “Company”) was incorporated in July 2019 and
is headquartered in Las Vegas, Nevada. The Company engages in the development and sale of the proprietary CB5 wellness formula
in the United States of America and internationally. All of the Company’s sales relate to CB5 and its related products.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
This
summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial
statements. The financial statements and notes are representation of the company’s management who are responsible for the
integrity and objectivity of the financial statements. These accounting policies confirm to accounting principles generally accepted
in the United State of America and have been consistently applied in the preparation of the financial statements.
Basis
of Presentation and Consolidation
These
accounting policies conform to generally accepted accounting principles in the United States of America (“GAAP”) and
have been consistently applied in the preparing the Firm’s financial statements. The accounting and reporting policies of
the Company are in accordance with accounting principles generally accepted in the United States of America, which is based on
the accrual method of accounting.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP 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 revenue and expenses during the reporting period. Significant estimates include, but are
not limited to, the estimated useful lives of property and equipment, patent and trademark, the ultimate collection of accounts
receivable and accrued expenses. Actual results could materially differ from those estimates.
Revenue
Recognition
The
Company recognizes revenue when persuasive evidence of an arrangement exists, the price is fixed or determinable, and collectability
is reasonably assured, and delivery has occurred or services have been rendered. The Company offers the CB5 proprietary formula
various channels, e-commerce, and brick and mortar retail
The
Company includes shipping and handling costs in cost of sales. Amounts billed for shipping and handling are included with revenues
in the statement of operation.
The
Company recognizes an allowance for estimated future sales returns in the period revenue is recorded, based on pending returns
and historical return data, among other factors. Management did not believe any allowance for sales returns was required at December
31, 2019.
Advertising
Expense
Advertising
costs are expensed as incurred. Advertising expense amounted to $844,197 for the period June 7, 2019 (date of formation) to December
31, 2019.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
Accounts
Receivable
Accounts
receivable are carried at original invoice amount less the allowance for doubtful accounts based on a review of all outstanding
amounts at year end. Management determines the allowance for doubtful accounts based on a combination of write-off history, aging
analysis, and any specific known troubled accounts. Trade receivables are written off when deemed uncollectible.
Inventories
Inventories
primarily consist of finished goods and are stated at the lower of cost (first-in-first-out) or market. The Company maintains
an allowance for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their
estimated net realizable values.
Property
and Equipment
Property
and equipment consist of leasehold improvements, furniture and fixtures, machinery and equipment are stated at cost. Property
and equipment are recorded at cost. Depreciation of property and equipment is provided using the straight-line method over the
estimated useful lives of the assets, generally 5-7 year. Leasehold improvements are depreciated over the shorter of the useful
life of the improvement or the lease term, including renewal periods that are reasonably assured.
Cash
and Cash Equivalents
The
Company considers all deposits with financial institutions and all highly liquid investments with original maturities of three
months or less to be cash equivalents. There were no cash equivalents at December 31, 2019.
Impairment
of Long-lived Assets
In accordance
with ASC 360, “Property, Plant, and Equipment,” the Company reviews for impairment of long-lived assets and certain
identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. The
Company considers the carrying value of assets may not be recoverable based upon our review of the following events or changes
in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods;
loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the
asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future
cash flows expected to result from the use of the asset are less than its carrying amount.
As of
December 31, 2019, the Company was not aware of any events or changes in circumstances that would indicate that the long-lived
assets are impaired.
Fair
Value of Financial Instruments
The
Company records its financial assets and liabilities at fair value, which is defined under the applicable accounting standards
as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction between market participants on the measure date.
The Company uses valuation techniques to measure fair value, maximizing the use of observable outputs and minimizing the
use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the
first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
Fair
Value of Financial Instruments (continued)
Level
1 – Quoted prices in active markets for identical assets or liabilities.
Level
2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities.
Level
3 – Inputs include management's best estimate of what market participants would use in pricing the asset or liability at
the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.
As of
December 31, 2019, the Company believes that the carrying value of cash, account receivables, accounts payable, accrued expenses,
and other current assets and liabilities approximate fair value due to the short maturity of theses financial instruments. The
financial statements do not include any financial instruments at fair value on a recurring or non-recurring basis.
Income
Taxes
The
Company has elected to be taxed as an S-corporation. Accordingly, except for a minimal state tax, the Company is not taxed at
the corporate level; rather, the tax on corporate income is paid and the benefits of losses are recognized at the stockholder
level. Therefore, no provision or credit for federal income taxes has been included in the financial statements.
Certain
transactions of the Company are subject to accounting methods for income tax purposes which differ from the accounting methods
used in preparing the financial statements. Accordingly, the net income of the Company reported for federal income tax purposes
may differ from the net income reported in these financial statements. The major differences relate to accounting for depreciation
on property and equipment, stock compensation, and research credits.
The
Company has adopted ASC 740-10-25, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain
tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The
tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a
greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for
uncertain tax positions as a result of the implementation of ASC 740-10-25 for the year ended December 31, 2019.
The
Company is no longer subject to federal and state income tax examination by tax authorities for year ended before 2019, respectively.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and other receivables
arising from its normal business activities. The Company has a diversified customer base. The Company controls credit risk related
to accounts receivable through credit approvals, credit limits and monitoring procedures. The Company routinely assesses the financial
strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectable
accounts and, as a consequence, believes that its accounts receivable related credit risk exposure beyond such allowance is limited.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
|
Concentration
of Credit Risk (continued)
All
of the Company’s revenues are derived from the sale of the proprietary CB5 formula and related products. E-commerce accounted
for 44 % of revenues for the year ended December 31, 2019, respectively and brick and mortar retail accounted for 56% of revenues
for the year ended December 31, 2019, respectively. The Company’s principal market in 2019 was the United States, but the
Company plans to expand internationally in 2020. The Company maintains its cash and cash equivalents with various credit institutions.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, deposits of up to $250,000 at FDIC-insured institutions are
covered by FDIC insurance. At times, deposits may be in excess of the FDIC insurance limit; however, management does not believe
the Company is exposed to any significant related credit risk.
Leases
Prior
to December 31, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases.
Effective from December 31, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a
right-of-use asset and a lease liability for virtually all leases
On February
25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), to increase transparency and comparability
among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about
leasing transactions. ASC 842 requires that lessees recognize right of use assets and lease liabilities calculated based on the
present value of lease payments for all lease agreements with terms that are greater than twelve months.
ASC
842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented
in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance under
GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases.
For
operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments
as of the date of adoption using the IBR as of that date.
The
adoption of ASC 842 resulted in recording an adjustment to operating lease right of use assets and operating lease liabilities
of $1,214,052 million and $1,251,896 million, respectively as of December 31, 2019. The difference between the operating lease
ROU assets and operating lease liabilities at transition represented tenant improvements, and indirect costs that was derecognized.
The adoption of ASC 842 did not materially impact our results of operations, cash flows, or presentation thereof.
Recent
accounting pronouncement not yet effective
FASB ASU
2016-02 “Leases (Topic 842)” – In February 2016, the FASB issued ASU 2016-02, which will require lessees to
recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes,
the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based
on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting
is similar to the current model but updated to align with certain changes to the lessee model and the new revenue recognition
standard. This ASU is effective for fiscal year beginning after December 15, 2019, including interim periods within those fiscal
year beginning after December 15, 2020. The Company adopted ASC 842 (ASU 2016-02). The adoption of ASC 842 resulted in recording
an adjustment to operating lease right of use assets and operating lease liabilities of $1,214,052 million and $1,251,896 million,
respectively as of December 31, 2019. The difference between the operating lease ROU assets and operating lease liabilities at
transition represented tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially
impact our results of operation, cash flows, or presentation thereof.
FASB
ASU 2016-15 “Statement of Cash Flows (Topic 230)” – In August 2016, the FASB issued 2016-15. Stakeholders
indicated that there is a diversity in practice in how certain cash receipts and cash payments are presented and classified in
the statement of cash flows. ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing the existing
diversity in practice. This ASU is effective for annual reporting periods beginning after December 15, 2018, and interim
periods within those fiscal year beginning after December 15, 2019. Early adoption is permitted. Adoption of this
ASU will not have a significant impact on our statement of cash flows.
FASB
ASU 2016-12 “Revenue from Contracts with Customers (Topic 606)” – In May 2016, the FASB issued 2016-12.
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. ASU 2016-12 provides clarification on assessing collectability, presentation of sales taxes, noncash
consideration, and completed contracts and contract modifications.
This
ASU is effective for annual reporting periods beginning after December 15, 2018, and interim periods beginning after December
15, 2019. We are currently assessing the potential impact this standard will have on our financial statements and related disclosures.
|
3.
|
PROPERTY
AND EQUIPMENT
|
Property
and equipment consisted of the following:
June
7, 2019 (date of formation) to December 31, 2019
|
|
Amount
|
|
|
|
Furniture and
equipment
|
|
$
|
14,381
|
|
Leasehold Improvement
|
|
|
102,666
|
|
Computer
|
|
|
409
|
|
|
|
|
|
|
Total property and
equipment
|
|
|
117,456
|
|
Total
accumulated depreciation
|
|
|
(2,984
|
)
|
|
|
|
|
|
Total
property and equipment, net
|
|
$
|
114,472
|
|
Depreciation
and amortization expense on property and equipment amounted to $2,984 for the period June 7, 2019 (date of formation) to December
31, 2019.
|
4.
|
LINES
OF CREDIT – RELATED PARTIES
|
Lines
of credit consisted of the following:
June
7, 2019 (date of formation) to December 31, 2019
|
|
Amount
|
|
|
|
July
2019 ($300,000 line of credit) - Line of credit with maturity date of June
30, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the maturity date.
|
|
$
|
80,681
|
|
|
|
|
|
|
July
2019 ($150,000 line of credit) - Line of credit with maturity date of June
30, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the maturity date.
|
|
|
65,300
|
|
|
|
|
|
|
July
2019 ($300,000 line of credit) - Line of credit with maturity date of June
30, 2021 with 6% interest per annum with unpaid principal balance and accrued interest payable on the maturity date.
|
|
|
260,040
|
|
|
|
|
|
|
Total lines of credit
|
|
|
406,021
|
|
|
|
|
|
|
Less:
Short-term portion
|
|
|
—
|
|
|
|
|
|
|
Total
lines of credit - current portion
|
|
$
|
406,021
|
|
July
2019 - $300,000 line of credit
On July
1, 2019, the Company entered into a line of credit agreement in the amount of $300,000 with maturity date of June 30, 2021. The
line of credit bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company
had unused line of credit of $219,319 as of December 31, 2019
July
2019 - $150,000 line of credit
On July
1, 2019, the Company entered into a line of credit agreement in the amount of $150,000 with maturity date of June 30, 2021. The
line of credit bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company
had unused line of credit of $84,700 as of December 31, 2019.
July
2019 - $300,000 line of credit
On July
1, 2019, the Company entered into a line of credit agreement in the amount of $300,000 with maturity date of June 30, 2021. The
line of credit bears interest at 6% per annum and interest and unpaid principal balance is payable on the maturity date. The Company
had unused line of credit of $39,960 as of December 31, 2019.
Total
interest expense under lines of credit for the period July 1, 2019 (date of formation) to December 31, 2019 was $12,214.
The
Company calculates earnings per share in accordance with ASC 260, “Earnings Per Share,” which requires a dual presentation
of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding
during the fiscal year. Dilutive earnings per share is computed on the basis of the weighted average number of shares plus potentially
dilutive common shares which would consist of stock options outstanding (using the treasury method), which was none since the
Company had net losses and any additional potential shares would be antidilutive.
The
following table sets forth the computation of basic and diluted net income per common share:
June
7, 2019 (date of formation) to December 31, 2019
|
|
Amount
|
|
|
|
Net loss
|
|
$
|
(2,866,073
|
)
|
Dividends
|
|
|
—
|
|
Stock
option
|
|
|
—
|
|
|
|
|
|
|
Adjusted
net income (loss) attribution to stockholders
|
|
$
|
(2,866,073
|
)
|
|
|
|
|
|
Weighted-average shares
of common stock outstanding
|
|
|
|
|
Basic
and Diluted
|
|
|
118,766,430
|
|
|
|
|
|
|
Net income (loss) attribute
to shareholders per share
|
|
|
|
|
Basic
and Diluted
|
|
$
|
(0.02
|
)
|
The
Company did not have material income tax provision (benefit) because of net loss and valuation allowances against deferred income
tax provision for the year ended December 31, 2019.
A reconciliation
of the Company’s effective tax rate to the statutory federal rate is as follows:
Description
|
|
Rate
|
|
|
|
Statutory
federal rate
|
|
|
21.00
|
%
|
State income taxes
net of federal income tax benefit and others
|
|
|
0.00
|
%
|
Permanent differences
for tax purposes and others
|
|
|
0.00
|
%
|
Change
in valuation allowance
|
|
|
-21.00
|
%
|
|
|
|
|
|
Effective
tax rate
|
|
|
0.00
|
%
|
The
income tax benefit differs from the amount computed by applying the U.S. federal statutory tax rate of 21%, primarily due to the
change in the valuation allowance and state income tax benefit, offset by nondeductible expenses.
Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
|
6.
|
INCOME
TAX PROVISION (continued)
|
The
components of deferred tax assets and liabilities are as follows:
Deferred
tax assets:
|
|
FY
2019
|
Net Operating
Loss
|
|
$
|
574,694
|
|
Stock-based compensation
|
|
|
—
|
|
Other
temporary differences
|
|
|
114,472
|
|
Total deferred tax
assets
|
|
|
684,166
|
|
|
|
|
|
|
Less:
Valuation Allowance
|
|
|
(684,166
|
)
|
|
|
|
|
|
Total
deferred tax assets
|
|
$
|
0
|
|
At December
31, 2019, the Company had available net operating loss carryovers of approximately $689,167. Per the Tax Cuts and Jobs Act (TCJA)
implemented in 2018, the two-year carryback provision was removed and now allows for an indefinite carryforward period. The carryforwards
are limited to 80% of each subsequent year's net income. As a result, net operating loss may be applied against future taxable
income and expires at various dates subject to certain limitations. The Company has a deferred tax asset arising substantially
from the benefits of such net operating loss deduction and has recorded a valuation allowance for the full amount of this deferred
tax asset since it is more likely than not that some or all of the deferred tax asset may not be realized.
The
Company files income tax returns in the U.S. federal jurisdiction and Nevada and is subject to income tax examinations by federal
tax authorities for tax year ended 2019 and later and by not subject to Nevada authorities for tax year ended 2019 and later.
The Company currently is not under examination by any tax authority. The Company’s policy is to record interest and penalties
on uncertain tax positions as income tax expense. As of December 31, 2019, the Company has no accrued interest or penalties related
to uncertain tax positions.
At year
ending December 31, 2019, the Company had cumulative net operating loss carryforwards for federal tax purposes of approximately
$689,167. In addition, the Company had state tax net operating loss carryforwards of approximately $0. The carryforwards may be
applied against future taxable income and expires at various dates subject to certain limitations.
|
7.
|
RELATED
PARTY TRANSACTIONS
|
The
Company had the following related party transactions:
|
·
|
Outside
Services – One of the Company’s outside contractor or consultant
is Mr. Thomas Ziemann, a shareholder of the Company. Mr. Thomas Ziemann provides various
consulting services to the Company. The Company recorded expense of $79,114 for period
June 7, 2019 (date of formation) to December 31, 2019 and had outstanding balance recorded
as accrued expense of $79,114 as of December 31, 2019.
|
|
·
|
Outside
Services – One of the Company’s outside contractor or consultant
is Mr. Daniel Capri, a shareholder and Chief Executive Officer of the Company. Mr. Daniel
Capri provides various consulting and management services to the Company. The Company
recorded expense of $16,295 for period June 7, 2019 (date of formation) to December 31,
2019 and had outstanding balance recorded as accrued expense of $16,295 as of December
31, 2019.
|
|
7.
|
RELATED
PARTY TRANSACTIONS (continued)
|
|
·
|
Outside
Services – One of the Company’s outside contractor or consultant
is Mr. Rob Ekstedt, a shareholder of the Company. Mr. Rob Ekstedt provides various consulting
services to the Company. The Company recorded expense of $4,000 for period June 7, 2019
(date of formation) to December 31, 2019 and had outstanding balance recorded as accrued
expense of $4,000 as of December 31, 2019.
|
|
·
|
Outside
Services – One of the Company’s outside contractor or consultant
is Mr. Mike Quaid, a shareholder of the Company. Mr. Mike Quaid provides various consulting
services to the Company. The Company recorded expense of $19,996 for period June 7, 2019
(date of formation) to December 31, 2019 and had outstanding balance recorded as accrued
expense of $19,996 as of December 31, 2019.
|
|
·
|
Line
of Credit – On July 1, 2019, the Company entered into a line of credit
agreement in the amount of $300,000 with Daniel Capri, the owner and founder of Whale
Sports and President of the Company. The maturity date of the line of credit is June
30, 2021.
|
|
·
|
Line
of Credit – On July 1, 2019, the Company entered into a line of credit
agreement in the amount of $150,000 with Giang Hoang, a shareholder of the Company. The
maturity date of the line of credit is June 30, 2021.
|
|
·
|
Line
of Credit – On July 1, 2019, the Company entered into a line of credit
agreement in the amount of $300,000 with Michael Quaid, Chief Executive Officer of the
Company. The maturity date of the line of credit is June 30, 2021.
|
|
8.
|
COMMITMENTS
AND CONTINGENCIES
|
Operating
Leases
The
Company entered into the following operating facility lases:
|
·
|
Cheyenne
Fairways – On July 25, 2019, the Company entered into an operating facility
lease for its corporate office located in Las Vegas with 84 months term and with option
to extend from 2 years to 5 years at the market rate. The lease started on September
1, 2019 and expires on August 31, 2026.
|
|
·
|
Cheyenne
Technology Center – On September 16, 2019, the Company entered into an
operating facility lease for its retail and warehouse located in Las Vegas for 37 months
expiring on November 31, 2022.
|
The
two facility leases for two separate locations dated on July 25, 2019 and September 16, 2019. Rent expense paid under the lease
agreements for period June 7, 2019 (date of formation) to December 31, 2019 was $133,835.
For
operating leases, we calculated right of use assets and lease liabilities based on the present value of the remaining lease payments
as of the date of adoption using the incremental borrowing rate. The adoption of ASC 842 resulted in recording an adjustment to
operating lease right of use assets and operating lease liabilities of $1,173,515 million and $1,211,359 million as of December
31, 2019. The difference between the operating lease ROU assets and operating lease liabilities at transition represented existing
deferred rent expenses and tenant improvements, and indirect costs that was derecognized. The adoption of ASC 842 did not materially
impact our results of operations, cash flows, or presentation thereof.
|
8.
|
COMMITMENTS
AND CONTINGENCIES (continued)
|
Operating
Leases (continued)
In accordance
with ASC 842, the components of lease expense were as follows:
June
7, 2019 (date of formation) to December 31, 2019
|
|
Fairways
|
|
Technology
Center
|
|
Total
|
|
|
|
|
|
|
|
Operating
lease expense
|
|
$
|
37,044
|
|
|
$
|
3,523
|
|
|
$
|
40,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
lease expense
|
|
$
|
37,044
|
|
|
$
|
3,523
|
|
|
$
|
40,567
|
|
In accordance
with ASC 842, maturities and operating lease liabilities as of December 31, 2019 were as follows:
Year
ended December 31,
|
|
Fairways
|
|
Technology
Center
|
|
Total
|
|
|
|
|
|
|
|
Undiscounted
cash flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
$
|
244,963
|
|
|
$
|
29,389
|
|
|
$
|
274,352
|
|
2021
|
|
|
231,695
|
|
|
|
30,564
|
|
|
|
262,259
|
|
2022
|
|
|
238,252
|
|
|
|
26,332
|
|
|
|
264,584
|
|
2023
|
|
|
244,810
|
|
|
|
—
|
|
|
|
244,810
|
|
2024
|
|
|
251,367
|
|
|
|
—
|
|
|
|
251,367
|
|
Thereafter
|
|
|
434,974
|
|
|
|
—
|
|
|
|
434,974
|
|
Total
undiscounted cash flows
|
|
|
1,646,061
|
|
|
|
86,285
|
|
|
|
1,732,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discounted
cash flows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease
liabilities - current
|
|
|
223,277
|
|
|
|
27,388
|
|
|
|
250,665
|
|
Lease
liabilities - long-term
|
|
|
864,968
|
|
|
|
46,061
|
|
|
|
911,029
|
|
Total
discounted cash flows
|
|
|
1,088,245
|
|
|
|
73,449
|
|
|
|
1,161,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Difference
between undiscounted and discounted cash flows
|
|
$
|
557,816
|
|
|
$
|
12,836
|
|
|
$
|
570,652
|
|
|
8.
|
COMMITMENTS
AND CONTINGENCIES (continued)
|
Operating
Leases (continued)
In accordance
with ASC 842, future minimum lease payments as of December 31, 2019 were as follows:
Year
ending
|
|
|
Fairways
|
Technology
Center
|
Total
|
|
|
|
|
|
|
Minimum lease payments
|
|
|
|
|
|
2020
|
|
|
$ 223,277
|
$ 27,388
|
$ 250,665
|
2021
|
|
|
187,112
|
25,784
|
212,896
|
2022
|
|
|
170,753
|
20,277
|
191,030
|
2023
|
|
|
155,707
|
-
|
155,707
|
2024
|
|
|
141,885
|
-
|
141,885
|
Thereafter
|
|
|
209,511
|
-
|
209,511
|
|
|
|
|
|
|
Present
values of minimum lease payments
|
|
|
$ 1,088,245
|
$ 73,449
|
$ 1,161,694
|
Contingencies
The
Company is subject to various legal proceedings from time to time as part of its business. As of December 31, 2019, the Company
was not currently party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or
in the aggregate, it believes would have a material adverse effect on its business, financial condition and results of operations.
During this period, the Company
did not have any material recognizable subsequent events required to be disclosed as of and for the year ended December 31, 2019
other than the following:
|
·
|
On
January 7, 2020, Boomer Holdings, Inc. executed an Agreement of Merger and Plan of Share
Exchange (the “Exchange Agreement”), with BNW, Boomer Naturals Holdings,
Inc., a Nevada corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders
of Boomer (the “Exchange”). Upon consummation of the transactions set forth
in the Exchange Agreement (the “Closing”), the Boomer Holdings, Inc. adopted
the business plan of Boomer. Pursuant to the terms of the Agreement, Boomer Holdings,
Inc. agreed to acquire all of the outstanding shares of Boomer in exchange for the issuance
of an aggregate 40,326,913 pre-split shares (the “Exchange Shares”) of the
Boomer Holdings, Inc. Common Stock. Pursuant to the terms of the Exchange Agreement,
BNW agreed to retire 8,000,000 shares of Boomer Holdings, Inc. Common Stock. As a result
of the Exchange, Boomer became a wholly-owned subsidiary of Boomer Holdings, Inc. and
following the consummation of the Exchange, the shareholders of Boomer will beneficially
own approximately Ninety-Four Percent (94%) of the issued and outstanding Common Stock
of Boomer Holdings, Inc..
|
|
·
|
On
January 10, 2020, Boomer Naturals executed a Trademark License Agreement (the “License
Agreement”) with Tommy Bahama Group, Inc. (“Tommy Bahama”) a wholly
owned subsidiary of Oxford Industries, Inc. Pursuant to the terms of the License Agreement,
Tommy Bahama agreed to license the Tommy Bahama trademark and other intellectual property
from Tommy Bahama in connection with the manufacture, sale, distribution, advertisement
and promotion of Boomer Holdings, Inc. products as more fully set forth in the License
Agreement. The License Agreement requires Boomer Holdings, Inc. to pay minimum royalties
for each license year and meet minimum net sales requirements of products under the licensed
marks each year. The License Agreement may be terminated by Tommy Bahama before the end
of the term for several reasons.
|
Boomer
Holdings Inc.
PROSPECTUS
Prospectus
dated March 11, 2020
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses
of Issuance and Distribution.
The following table sets
forth an estimate of the costs and expenses payable by us in connection with the offering described in this registration statement.
All of the amounts shown are estimates except the Securities and Exchange Commission registration fee:
|
|
SEC
registration fee
|
$1,634
|
Legal
fees and expenses
|
20,000
|
Accounting
fees and expenses
|
5,000
|
Printing
and engraving expenses
|
2,500
|
Transfer
agent and registrar fees and expenses
|
1,000
|
Other
expenses
|
2,000
|
|
|
Total
|
$
32,634
|
|
|
Item 14. Indemnification
of Directors and Officers.
Under
our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any
proceeding, including a lawsuit, because of her position, if she acted in good faith and in a manner she reasonably believed to
be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director
is successful on the merits in a proceeding as to which she is to be indemnified, we must indemnify her against all expenses incurred,
including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably
incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification
is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding
indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under
Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public
policy, as expressed in the Act and is, therefore, unenforceable.
Item 15. Recent Sales of
Unregistered Securities
On
August 5, 2916, the Company sold 24,000,000 shares of Company’s common stock, par value $0.001 per share (the “Common
Stock”)to its founder Marina Funt for $8,000.
On
January 7, 2020, the Company executed an Agreement of Merger and Plan of Share Exchange (the “Exchange Agreement”),
with BNW, Boomer Naturals Holdings, Inc., a Nevada corporation (“Boomer”), Boomer Naturals, Inc., and the shareholders
of Boomer (the “Exchange”). Upon consummation of the transactions set forth in the Exchange Agreement (the “Closing”),
the Company adopted the business plan of Boomer. Pursuant to the Agreement, the Company agreed to acquire all of the outstanding
shares of Boomer in exchange for the issuance of an aggregate 120,980,739 shares of the Company’s Common Stock.
In
connection with each of the preceding unregistered sales and issuances of securities, , the Company relied upon the exemption
from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated
thereunder for transactions not involving a public offering.
Item 16. Exhibits and Financial
Statement Schedules
|
*
|
To
be filed by amendment.
|
Item 17. Undertakings
The undersigned registrant
hereby undertakes:
1. To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement:
|
i.
|
To
include any prospectus required by section 10(a)(3) of the Securities Act;
|
|
ii.
|
To
reflect in the prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Securities
and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement.
|
|
iii.
|
To
include any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such information in
the registration statement, provided, however, that paragraphs (1)(i), (1)(ii)
and (1)(iii) do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
|
2. That, for the purpose
of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
3. To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
4. That, for the purpose
of determining liability under the Securities Act to any purchaser:
|
i.
|
If
the registrant is relying on Rule 430B (Section 430B of this chapter):
|
|
A.
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part
of the registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
|
|
B.
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part
of a registration statement in reliance on Rule 430B relating to an offering made pursuant
to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act shall be deemed to be part of and included
in the registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration statement relating to
the securities in the registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a registration statement
or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that
is part of the registration statement will, as to a purchaser with a time of contract
of sale prior to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective date; or
|
|
ii.
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b)
as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the registration statement as of
the date it is first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use.
|
5. That, for the purpose
of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
i.
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering
required to be filed pursuant to Rule 424;
|
|
ii.
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned registrant;
|
|
iii.
|
The
portion of any other free writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by or on behalf
of the undersigned registrant; and
|
|
iv.
|
Any
other communication that is an offer in the offering made by the undersigned registrant
to the purchaser.
|
6. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, Boomer Holdings Inc., a Nevada corporation, has duly caused this Registration Statement on Form
S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, Nevada, on April 24,
2020.
BOOMER HOLDINGS INC.
|
|
|
By:
|
/s/ Michael Quaid
|
|
Name: Michael Quaid
|
|
Title: Chief Executive Officer
|
Each person whose signature
appears below constitutes and appoints Michael Quaid and Daniel Capri and each of them singly, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and any
and all additional registration statements pursuant to Rule 462(b) of the Securities Act and to file the same, with all exhibits
thereto and all other documents in connection therewith, with the SEC, granting unto each said attorney-in-fact and agents full
power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or either of them or their, his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the
capacities indicated.
|
|
|
SIGNATURE
|
TITLE
|
DATE
|
|
|
|
/s/
Daniel Capri.
Daniel
Capri.
|
President,
Treasurer and Chairman
(Principal
Financial Officer)
|
April
24, 2020
|
|
|
|
/s/
Michael Quaid
Michael
Quaid
|
Chief
Executive Officer, Director
(Principal
Executive Officer)
|
April
24, 2020
|
|
|
|
/s/
Thomas Ziemann
Thomas
Ziemann
|
Chief
Operating Officer, Director
|
April
24, 2020
|
|
|
|
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