The accompanying notes are an integral
part of these unaudited financial statements.
The accompanying notes are an integral part
of these unaudited financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
Plandaí Biotechnology, Inc.’s
(the “Company” or “Plandaí”) consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial
statements do not include any adjustment relating to recoverability and classification of recorded amounts of assets and liabilities
that might be necessary should the Company be unable to continue as a going concern.
The Company's continued existence is dependent
upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance
the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company.
Plandaí and its subsidiaries focus on
the development and production of proprietary botanical extracts for the nutraceutical and pharmaceutical industries. The Company
grows much of the live plant material used in its products on a 3,237 hectare (approx. 8,000 acre) estate it operates under a 49-year
notarial lease in the Mpumalanga region of South Africa. Plandaí uses a proprietary extraction process that is designed
to yield highly bioavailable products of pharmaceutical-grade purity. The first product brought to market was Phytofare™
Catechin Complex, a green-tea derived extract that has multiple potential wellness applications. Additional extracts utilizing
citrus, artemisia, and cannabis are in various stages of development and testing. The Company’s principle holdings consist
of land, farms and infrastructure in South Africa. The Company is actively pursuing additional financing and has had discussions
with various third parties, although no firm commitments have been obtained. Management believes these efforts will generate sufficient
cash flows from future operations to pay the Company's obligations and realize positive cash flow. There is no assurance any of
these transactions will occur.
NOTE 2 – SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The accompanying financial statements represent the results of operations for the three months ended September 30, 2015 and September
30, 2014. The Company has adopted the US dollar as the reporting currency for accounting and reporting purposes.
This summary of accounting policies for Plandaí
Biotechnology, Inc. and its wholly-owned subsidiaries, is presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation
of the financial statements.
Interim Financial Statements
The accompanying financial statements have
been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions
to form 10Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all
adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating
results for the three months ended September 30, 2015 are not necessarily indicative of the final results that may be expected
for the year ended June 30, 2016. For more complete financial information, these unaudited financial statements should be read
in conjunction with the audited financial statements for the year ended June 30, 2015 filed with the SEC.
Use of Estimates
The financial statements are prepared in
conformity with accounting principles generally accepted in the United States of America. In preparing the financial
statements, management is required to make estimates and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet and statement of
operations for the year then ended. Actual results may differ from these estimates. Estimates are used when accounting for
allowance for bad debts, collect ability of accounts receivable, amounts due to service providers, depreciation and
litigation contingencies, among others.
Business Combinations and Acquisitions
The disclosure requirements for business combination
and acquisitions are intended to enable users of financial statements to evaluate the nature and financial effects of:
|
·
|
A business combination that occurs either during the current reporting
period or after the reporting period, but before the financial statements are issued
|
|
·
|
Adjustments recognized in the current reporting period that relate
to business combinations that occurred in current and previous reporting periods
|
|
·
|
The nature of the relationship between the parent and a subsidiary
or investee when the parent does not have 100 percent ownership or control
|
The Company discloses each material business
combination in the period in which the business combination occurs. The Company also discloses information about acquisitions made
after the balance sheet date, but before the financial statements are issued. Gains or losses arising from the deconsolidation
of a business when the company loses control of that business are also disclosed. Acquisition costs incurred such as legal, advisory
and consulting fees are expensed as incurred. In accordance with ASC 805-10-25-1, ASC 805-10-05-4 and IFRS 3.4, 5, the Company
employs the Acquisition Method of accounting for routine acquisitions and combinations.
Net Loss Per Common Share
The Company adopted FASB ASC Topic 260,
Earnings
Per Share
. Basic earnings per share is based on the weighted effect of all common shares issued and outstanding and is calculated
by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the period. Diluted
earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common
shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming
conversion of all potentially dilutive securities outstanding. For all periods diluted earnings per share is not presented, as
potentially issuable securities are anti-dilutive.
In January
2014, the Company issued warrants to purchase 5,000,000 shares of the Company’s common stock which have a strike price of
$0.01/share; however, since the Company incurred a loss for all periods presented, the warrants are considered anti-dilutive. During
the year ended June 30, 2015, a total of 1,666,666 warrants were exercised utilizing a “cashless” option resulting
in the issuance of 1,629,212 shares of restricted common stock, leaving 3,333,334 outstanding exercisable warrants as of September
30, 2015.
Reclassifications
Prior year amounts have been reclassified to
conform to the current year presentation. There was no net impact on total assets, net (loss), comprehensive (loss) or the statement
of cash flows.
Recent Accounting Pronouncements
Recent accounting pronouncements issued by
the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a
material impact on the Company's present or future financial statements.
NOTE 3 – FIXED ASSETS
Fixed assets, stated at cost, less accumulated
depreciation at September 30, 2015 and June 30, 2015 consisted of the following:
|
|
September 30,
2015
|
|
June 30,
2015
|
Plant and Equipment
|
|
$
|
6,588,527
|
|
|
$
|
7,487,506
|
|
Machinery and Equipment
|
|
|
195,276
|
|
|
|
211,283
|
|
Leasehold Improvements
|
|
|
661,962
|
|
|
|
752,530
|
|
Furniture and Fixtures
|
|
|
71,802
|
|
|
|
81,626
|
|
Automobiles
|
|
|
79,770
|
|
|
|
90,684
|
|
Computers and Equipment
|
|
|
14,616
|
|
|
|
23,206
|
|
Less: Accumulated Depreciation
|
|
|
(695,435
|
)
|
|
|
(636,879
|
)
|
Fixed Assets, net
|
|
$
|
6,916,518
|
|
|
$
|
8,009,956
|
|
The reduction in fixed assets results from
a combination of depreciation expense and the fluctuation of the South African Rand against the U.S. Dollar, as all of the Company’s
fixed assets are located in South Africa.
Depreciation expense
Depreciation expense for the three months ended
September 30, 2015 and 2014 was $144,213 and $46,357, respectively. The Company did not commence depreciating the leasehold improvements
and construction in progress until such assets were placed in service. The difference between accumulated depreciation and depreciation
expense results from the application of the currency adjustment (see Note 7).
NOTE 4 – SEGMENT INFORMATION
Geographical Locations
The following information summarizes the financial
information regarding Plandaí Biotechnology Inc. and its operational South African subsidiaries for the periods presented:
As of June 30, 2015:
|
|
South Africa
|
|
United States
|
|
Total
|
|
Assets
|
|
|
$
|
8,406,177
|
|
|
$
|
98,404
|
|
|
$
|
8,504,581
|
|
|
Liabilities
|
|
|
$
|
10,402,092
|
|
|
$
|
6,419,225
|
|
|
$
|
16,821,317
|
|
As of September 30, 2015
|
|
South Africa
|
|
United States
|
|
Total
|
|
Assets
|
|
|
$
|
7,146,604
|
|
|
$
|
71,386
|
|
|
$
|
7,217,990
|
|
|
Liabilities
|
|
|
$
|
9,267,678
|
|
|
$
|
7,092,596
|
|
|
$
|
16,360,274
|
|
For the three-months ended September 30, 2015
|
|
South Africa
|
|
United States
|
|
Total
|
Revenues from external customers
|
|
$
|
40,831
|
|
|
$
|
—
|
|
|
$
|
40,831
|
|
Operating Expenses
|
|
$
|
533,793
|
|
|
$
|
386,203
|
|
|
$
|
919,996
|
|
Interest expense
|
|
$
|
192,223
|
|
|
$
|
117,657
|
|
|
$
|
309,880
|
|
Segment loss
|
|
$
|
685,186
|
|
|
$
|
503,859
|
|
|
$
|
1,189,045
|
|
For the three-months ended September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Africa
|
|
|
|
United States
|
|
|
|
Total
|
|
Revenues from external customers
|
|
$
|
26,387
|
|
|
$
|
—
|
|
|
$
|
26,387
|
|
Operating Expenses
|
|
$
|
341,662
|
|
|
$
|
1,159,047
|
|
|
$
|
1,500,709
|
|
Interest expense
|
|
$
|
85,402
|
|
|
$
|
32,491
|
|
|
$
|
117,893
|
|
Segment loss
|
|
$
|
106,496
|
|
|
$
|
504,460
|
|
|
$
|
610,956
|
|
NOTE 5 –NOTES PAYABLE
|
|
Interest Rate
|
|
Due Date
|
|
September 30,
2015
|
|
June 30,
2015
|
Loan Principal and Interest - Land Bank
|
|
See below
|
|
See below
|
|
|
7,414,982
|
|
|
|
8,401,900
|
|
Notes Payable – third party
|
|
6%
|
|
July 1, 2016
|
|
|
6,900,000
|
|
|
|
6,500,000
|
|
Less: Discount
|
|
|
|
|
|
|
(359,586
|
)
|
|
|
(375,687
|
)
|
|
|
|
|
|
|
|
13,955,396
|
|
|
|
14,526,213
|
|
Less: Current Portion
|
|
|
|
|
|
|
13,955,396
|
|
|
|
14,526,213
|
|
Long Term Debt, Net of Discount
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes Payable – Third Party
Between November 25, 2013 and June 4, 2015,
the Company issued a total of $6,500,000 in notes payable to a third party, the proceeds from which were used for working capital
purposes. In July 2015, the Company issued a note payable for $400,000 to the third party in exchange for cash of $384,170 and
payment of expenses on behalf of the Company of $15,830. The note bears interest at 6% per annum and was originally due February
1, 2016.
Collectively, these notes total $6,900,000
and $6,500,000 as of September 30, 2015 and June 30, 2015, respectively, and were due and payable twelve months after issuance.
The Company subsequently renegotiated the due date on each of these notes to July 1, 2016 and is in discussions to further extend
the due dates until December 31, 2016. As of September 30, 2015 and June 30, 2015, the Company recorded accrued interest pertaining
to the outstanding notes payable in the amounts of $390,168 and $288,612, respectively.
Land and Agriculture Bank of South Africa
In June 2012, the Company, through the majority-owned
subsidiaries of Dunn Roman Holdings, Inc., executed final loan documents on a 100 million Rand (approx. $6.5 million USD at current
rates) financing with the Land and Agriculture Bank of South Africa (“Land Bank”). The total loan is comprised of multiple
agreements totaling, between Green Gold Biotechnologies (Pty) Ltd. and Breakwood Trading 22(Pty) Ltd., 100 million rand (approx.
$6.5 million USD at current rates). The loans all bear interest at the rate of prime plus 0.5% per annum and are all due in seven
years. In addition, the loans have a 25-month “holiday” in which no payments or interest are due until 25 months after
the first draw down of funds. The loans are collateralized by the assets and operations, including the Senteeko lease, agriculture
production and receivables of Dunn Roman Holdings, which is the African operating arm of Plandaí. In addition, Dunn Roman
Holdings was required to grant a 15% profit share agreement to the Land Bank which extends through the duration of the loan agreements
(7 years unless pre-paid). The profit share agreement extends only to profits generated by Dunn Roman Holdings exclusive of operations
of Plandaí and outside of South Africa. By way of loan covenants, the borrowing entities are required to maintain a debt
to equity ratio of 1.5:1, interest coverage ratio of 1.5:1, and security coverage ratio of 1:1, none of which are currently in
compliance. However, the Company consistently notified the Bank of this situation and has requested written documentation as to
the Bank’s intention. The Bank has provided documentation extending the “holiday” at least through December 2016.
As of and through the date of this report, the Land Bank has not provided any notice of default or requested compliance with the
terms of the loans.
During the year ended June 30, 2012, the Company
issued 1,500,000 shares of restricted common stock to three Dunn Roman shareholders in exchange for their shares of Dunn Roman
Holdings which had been previously issued. The acquired Dunn Roman shares were then provided to third parties in order to comply
with the BEE provisions associated with the loan from the Land Bank of South Africa, which required that 15% of Dunn Roman be owned
by non-white South Africans. The Company has therefore determined to treat the value of the shares issued to acquire the Dunn Roman
stock ($585,000, based on the value of shares on the date of issuance) as a cost of securing the financing and recorded as a loan
discount which is amortized over the life of the loan (7 years). During the three months ended September 30, 2015 the Company amortized
$16,101 leaving a debt discount balance of $359,586 at September 30, 2015.
As of September 30, 2015, a total of
$7,415,414, which includes capitalized accrued interest, was owed to the Land Bank. The proceeds were used to purchase fixed
assets that are employed in South Africa to produce the company’s botanical extracts, fund the rehabilitation of the
Senteeko Tea Estate, including the repair of roads, bridges, and onsite management and farm worker housing, and the pruning,
weeding and fertilizing of the plantation. As the 25-month holiday in which no payments or interest are due expired in July
of 2014, the Company is required to make monthly payments of approximately 2,250,000R South African Rand (approximately
$168,700 US Dollars). During the three months ended September 30, 2015, the Company paid R2,200,580 (approximately $169,577
US Dollars) and accrued R2,543,384 in capitalized interest (approximately $195,993 US Dollars). Commencing August 2015, the
Company ceased making payments to the Land Bank and has been in discussions to renegotiate the payment terms of the
obligation. The Land Bank has been cooperative in this effort and has not expressed any intention to foreclose or accelerate
the debt balances. Inasmuch as the Company is out of compliance with certain loan covenants including the non-payment of
scheduled monthly amounts due under the various leases, the Company has elected to classify the entire balance owed to the
Land Bank as “current” in the accompanying balance sheet as of September 30 and June 30, 2015.
As of the dates presented, the long-term loan
balances were as follows:
Future maturities of long-term debt are as
follows:
|
|
|
|
|
|
|
2016
|
|
$
|
8,924,276
|
|
|
2017
|
|
|
2,024,000
|
|
|
2018
|
|
|
2,024,000
|
|
|
2019
|
|
|
983,120
|
|
|
|
|
$
|
13,955,396
|
|
NOTE 6 – CONVERTIBLE NOTES PAYABLE
|
|
Principal Balance
|
|
Loan Discount
|
|
Accrued interest
|
|
Total
|
June 30, 2014
|
|
|
15,717
|
|
|
|
(2,282
|
)
|
|
|
—
|
|
|
|
13,435
|
|
Issued in the year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Converted into shares of common stock
|
|
|
(15,717
|
)
|
|
|
2,282
|
|
|
|
—
|
|
|
|
(13,435
|
)
|
Amortization of debt discount
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Interest accrued
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
June 30, 2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Issued in the quarter
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Converted into shares of common stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Amortization of debt discount
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Interest accrued
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
September 30, 2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
The Company evaluated the terms of the conversion
features of its convertible debentures in accordance with ASC Topic No. 815 - 40,
Derivatives and Hedging - Contracts in Entity's
Own Stock
and determined they are indexed to the Company's common stock and the conversion features meet the definition of
a liability, and therefore bifurcated the conversion features and accounted for them as a separate derivative liability.
On August 20, 2013, the Company issued a convertible
promissory note for $350,000. The note bore interest at the rate of 8% per annum and became due and payable six months from the
date of issuance. During the first 90 days from issuance, the note was repayable without incurring any interest charges. The Company
was advanced $160,000 against the note, net of original issuance discounts of $30,578 which included prepaid interest and legal
expenses. The debt discount was recorded as a reduction (contra-liability) of the convertible debenture and was amortized over
the life of the convertible debenture.
The Company valued the conversion features
on these advances at origination at $355,638 using the Black Scholes valuation model with the following assumptions: dividend yield
of zero, 12-month term to maturity, risk free interest rate of 0.13% and annualized volatility of 184%. $182,869 of the value assigned
to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction
(contra-liability) to the convertible debenture and was amortized over the life of the convertible debenture. The balance of $172,769
of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed
on origination. ASC 815 requires assessment of the fair market value of derivative liability at the end of each reporting period
and recognition of any change in the fair market value as other income or expense.
As of June 30, 2014, a total of $174,479 of
the unpaid principal plus accrued interest had been converted into 2,132,839 shares of restricted common stock, leaving a balance
of $13,435, net of discount. In the year ended June 30, 2015, the balance plus accrued interest was converted into 144,296 shares
of common stock. The Company revalued the proportionate amount of the derivative liability to its fair value and recognized any
gain or loss on the change in fair value of the derivative liability as other income or expense in the statement of operations.
On issuance of shares of common stock on settlement of the note, the proportionate balance of the derivative liability together
with the proportionate balance of unamortized debt discount was transferred to additional paid in capital.
Changes in Derivative Liabilities were as follows:
June 30, 2014
|
|
|
24,330
|
|
Value acquired during the period
|
|
|
—
|
|
Settled on issuance of common stock
|
|
|
(33,599
|
)
|
Settled on payment of outstanding principal and interest
|
|
|
—
|
|
Revaluation on settlement on issuance of common stock or reporting date
|
|
|
9,269
|
|
June 30, 2015
|
|
|
—
|
|
Value acquired during the period
|
|
|
—
|
|
Settled on issuance of common stock
|
|
|
—
|
|
Settled on payment of outstanding principal and interest
|
|
|
—
|
|
Revaluation on settlement on issuance of common stock or reporting date
|
|
|
—
|
|
September 30, 2015
|
|
|
—
|
|
NOTE 7 – DEFERRED LEASE OBLIGATIONS
Plandaí’s subsidiaries have two
long-term, material leases which either have escalating terms or included several months of “free” rent, including
the 49-year notarial lease for the Senteeko Tea Estate. In accordance with US Generally Accepted Accounting Principles, the Company
has calculated a straight-line monthly cost on the leases and recorded the corresponding difference between the amount actually
paid and the amount calculated as a Deferred Lease Obligation. As of September 30, 2015 and June 30, 2015 the amount of this deferred
liability was $1,418,123 and $1,513,976, respectively.
Plandaí’s subsidiary, Dunn Roman
Holdings – Africa (Pty) Ltd., executed a sublease on the Bonokado Farm in South Africa to a third party. Bonokado currently
farms avocado and macadamia nuts, neither of which factor into the Company’s future business model. The lease is for 20 years
and includes 24 months of deferred rent while the farm is rehabilitated by the sub-lessor. In accordance with US Generally Accepted
Accounting Principles, the Company has calculated a straight-line monthly value attributable to the lease and recorded the corresponding
difference between the amount actually paid and the amount calculated as a Lease Receivable in Other Assets. As of September 30,
2015 and June 30, 2015, the amount of this receivable was $91,956 and $91,955, respectively.
NOTE 8 – FOREIGN CURRENCY TRANSLATION ADJUSTMENT
The Company’s principle operations are
located in South Africa and the primary currency used is the South African Rand. Accordingly, the financial statements are first
prepared in using Rand and then converted to US Dollars for reporting purposes, with the average conversion rate between July and
September being used for income statement purposes and the closing exchange rate as of September 30 applied to the balance sheet.
Differences resulting from the fluctuation in the exchange rate are recorded as an offset to equity in the balance sheet. In the
three months ended September 30, 2015 and 2014, the Company recorded a foreign currency translation adjustment gain of $340,275189
and ($245,718), respectively.
NOTE 9 – COMMON STOCK
During the three months ended September 30,
2015, the Company issued a total of 1,264,600 shares of restricted common stock as follows:
-
The Company issued 1,164,600 restricted common shares for $75,000 cash.
-
The Company issued 100,000 restricted common shares for services valued
at $16,000.
Common Stock Issuable
Pursuant to five-year employment agreements
executed on March 1, 2013 by the Company with two of its officers, the Company is obligated to issue 3,000,000 common shares at
the end of each completed year for services rendered to the Company on the anniversary date of the agreements. The Company records
the value of these shares on quarterly basis based on the value of the stock on the date of the agreements (March 1, 2013). As
of September 30, 2015 and June 30, 2014, the common shares issuable pursuant to the employment agreements were $90,000 and $45,000,
respectively.
NOTE 10 – WARRANTS
On January 28, 2014, the Company signed an
agreement with Diego Pellicer, Inc. under which the Company received a license to use the Diego Pellicer name and likeness on a
future cannabis-based extract, which is under development. As consideration for the license, the Company issued warrants to purchase
5,000,000 shares of the Company’s common stock at a purchase price of $0.01 per share. The Company computed the value of
the warrants issued using the Black-Scholes method with the following assumptions:
|
·
|
Closing bid price of the common stock of $1.15 on the date the warrants
were issued
|
|
·
|
Expected term - 10 year
|
|
·
|
Risk free interest rate - 2.77%
|
|
·
|
Annualized volatility - 260%
|
The Company originally recorded a value of
$5,749,985 as an asset. However, as the cannabis extract was still in development, the intangible licenses asset balance was deemed
fully impaired as of June 30, 2014, leaving a zero asset balance. Accordingly, the Company recorded an impairment expense of $5,749,985.
Should the cannabis extract come to market, the value of the license will be re-evaluated.
In the year ended June 30, 2015, 1,666,666
warrants were exercised resulting in the issuance of 1,629,212 common shares.
The following table summarizes share warrants
activity for the periods presented:
|
|
Number of Share Warrants
|
|
Weighted Average Exercise Price ($) per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Warrants outstanding, June 30, 2014
|
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
Issued
|
|
|
|
5,000,000
|
|
|
$
|
0.01
|
|
|
|
9.5 years
|
|
|
Exercised
|
|
|
|
(1,666,666
|
)
|
|
$
|
0.01
|
|
|
|
9.0 years
|
|
|
Cancelled
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Expired
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Warrants outstanding, June 30, 2015
|
|
|
|
3,333,334
|
|
|
$
|
0.01
|
|
|
|
8.5 years
|
|
|
Issued
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Expired
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Warrants outstanding, September 30, 2015
|
|
|
|
3,333,334
|
|
|
$
|
0.01
|
|
|
|
8.5 years
|
|
|
Warrants exercisable, September 30, 2015
|
|
|
|
3,333,334
|
|
|
$
|
0.01
|
|
|
|
8.5 years
|
|
The following table summarizes information
about warrants outstanding as of September 30, 2015:
Exercise Price
|
|
Number of Warrants Outstanding
|
|
Weighted Average Life of Warrants Outstanding In Years
|
$
|
0.01
|
|
|
|
3,333,334
|
|
|
8.5 years
|
|
|
|
|
|
3,333,334
|
|
|
|
NOTE 11 – NON-CONTROLLING INTEREST
Plandaí owns 100% of Dunn Roman Holdings—Africa,
which in turn owns 74% of Breakwood Trading 22 (Pty), Ltd. and 84% of Green Gold Biotechnologies (Pty), Ltd., in order to be compliant
with the Black Economic Empowerment rules imposed by the South African Land Bank. While the Company, under the Equity Method of
Accounting, is required to consolidate 100% of the operations of its majority-owned subsidiaries, that portion of subsidiary net
equity attributable to the minority ownership, together with an allocated portion of net income or net loss incurred by the subsidiaries,
must be reflected on the consolidated financial statements. On the balance sheet, non-controlling interest has been shown in the
Equity Section, separated from the equity of Plandaí, while on the income statement, the minority shareholder allocation
of net loss has been shown in the Consolidated Statement of Operations.
NOTE 12 – RELATED PARTY TRANSACTIONS
The Company had the following related party
transactions during the three months ended September 30, 2015.
Related Party Payables
As of September 30, 2015 and June 30, 2015,
the Company owed a total of $14,229 and $16,176, respectively, to Roger Duffield, our Chief Executive Officer, for advances made
to one of the Company’s South African subsidiaries in the ordinary course of business. The advances are non-interest bearing
and payable on demand.
Compensation to Officers and Management
Pursuant to employment agreements executed
on March 2, 2013 with two of the Company’s officers, the Company is also obligated to issue 3,000,000 common shares at the
end of each completed year for services rendered to the Company. At September 30 and June 30, 2015, with regards to the future
issuance of 3,000,000 shares, the Company accrued compensation expense for services completed in the amount of $90,000 and $45,000,
respectively, as common stock issuable.
NOTE 13 – SUBSEQUENT EVENTS
Management has evaluated subsequent events
pursuant to the requirements of ASC Topic 855 and has determined that no material subsequent events exist through the date of this
filing apart from the following:
|
·
|
Between November 2015 and June 28, 2016, the Company sold 14,975,000
shares of restricted common stock to unaffiliated third parties for cash of $413,230. The issuance of these shares was exempt from
registration under the Securities Act in reliance on an exemption provided by Section 4(2) of that Act.
|
|
·
|
The Company issued a total of $475,000 in convertible promissory
notes to various third parties, receiving net proceeds of $445,500. The difference between the face value of the note and net proceeds
includes loan origination fees, legal fees, and prepaid interest. The notes are due between November 12, 2016 and May 16, 2017.
The notes convert at a discount to market of between 40-50% off the lowest intra-day trading price over the 15-20 day period prior
to conversion. The notes bear interest between 8-10%.
|
|
·
|
On December 31, 2015, the Company received $50,526 and issued a promissory
note in the amount of £35,000. The note is due December 31, 2016 and bears interest at the rate of 15% per annum, which is
payable every six months.
|
|
·
|
On February 29, 2016, the Company accepted the resignation of Jamen
Shively from the Board of Directors. On that same day, the Company terminated the employment of Jessica Gutierrez as Executive
Vice President and Corporate Secretary. Callum Cottrell-Duffield, who presently serves as Vice President of Sales and Marketing,
and as a Director, was appointed Corporate Secretary.
|
|
·
|
The Company issued a total of 5,871,700 shares for services rendered,
including 3,200,000 shares to officers and employees of the Company under previously executed employments contracts.
|