Each one in plain English, with the numbers worked through for a shareholder.
23 Feb 2024debt financing▼ BadMajor
On February 15, 2024 the lender's agent, Westmount Group LLC, gave notice that the company's August 2022 credit agreement is in default and the debt is accelerated and immediately due, with remaining commitments terminated. The stated defaults include two missed monthly interest payments of $91,454.13 (for November and December 2023). About $4.37M was owed, including $4,160,887.68 of principal. This turns the loan facility that was meant to fund acquisitions into a demanded debt, and no further borrowing is available. The filing does not say how the company will repay it.
This second amendment to the October 2022 Your Super acquisition report adds required financial statements: Your Super's unaudited results for the nine months to September 30, 2022 and pro forma combined statements with the company. Those statements show Your Super's nine-month revenue of $15.6M (versus $40.5M a year earlier) and a net loss of $6.8M, with a $7.6M line of credit on its balance sheet. No new deal terms; it follows the March 3, 2023 amendment that supplied the audited 2021 and 2020 figures.
7 Mar 2023asset acquisition disposition● NeutralMajor
On March 3, 2023 the company, through a new subsidiary Chopra HLCO LLC, bought certain assets of Chopra Global, LLC (digital, licensing and products businesses tied to Deepak Chopra) and closed the same day. The price is up to $5,000,000 cash plus newly issued shares: $1,000,000 cash and 1,400,000 shares were paid at closing, $2,500,000 is due March 31, 2023, and up to three earnouts of $1,000,000 each (half cash, half shares) depend on Chopra business net revenue exceeding $5.9M (Mar-Dec 2023), $11M (2024) and $15M (2025). The company also owes a 5% royalty on net revenue under a license. This is the second brand purchase after Your Super and issues new shares, diluting existing holders; the shares are locked up for three years. If the deferred $2.5M is not paid, the seller can terminate and the assets and closing shares revert.
This amendment restates the October 13, 2022 closing of the Your Super asset purchase, now naming the acquired subsidiaries (Your Superfoods B.V., Your Superfoods GmbH and Your Superfoods, Inc.), and adds Your Super's audited 2021 and 2020 financials. The 2021 auditor RBSM reported net losses of about $27 million for 2021 and substantial doubt about going concern. No new deal terms; the filing shows the size of losses at the business the company acquired.
27 Oct 2022capital raising announcement● NeutralMajor
On October 7, 2022 the company agreed to sell 500,000 more Seed Preferred shares at $2.00 for $1,000,000 to one U.S. accredited investor and one non-U.S. person. Only $100,000 of the $1,000,000 had been received so far. This is a new tranche beyond the earlier 5,000,000-share offering, and as before, much of the subscribed money was not yet in.
18 Oct 2022asset acquisition disposition● NeutralMajor
Under an asset purchase agreement dated October 13, 2022, the company acquired substantially all assets of Your Super, Inc., a non-GMO organic superfoods maker, for 3,200,000 common shares valued at $2.50 each ($8 million) plus forgiveness of the $7,614,444.40 loan bought in September. This completes the acquisition that the loan purchase was meant to enable. The shares are locked up for three years, the business will run through Your Super HLCO LLC, and founders Michael Kuech (employment, $225,000 plus EUR30,000 salary) and Kristel De Groot (consulting, $225,000) each received 300,000 options tied to EBITDA targets. Issuing 3,200,000 shares dilutes existing common holders.
On September 9, 2022 the company bought from CircleUp Credit Advisors LLC the loans made to Your Superfoods, Inc. and Your Super, Inc., paying $2,000,000 cash plus a warrant for 1,500,000 common shares. The loans stood at about $7.614 million including interest, which stopped accruing July 22, 2022. The company says it bought them to allow more time to negotiate a possible acquisition of Your Super's assets, a step toward a second brand purchase.
On about September 2, 2022 the company dismissed its auditor Prager Metis CPAs, LLP and hired RBSM, LLP, with the board approving the change. The filing says Prager's reports carried no adverse opinion except a going-concern doubt, and that there were no disagreements. It replaces the auditor engaged in 2019 and no reason for the change is given.
This amendment re-reports the March 10, 2022 purchase of NOEO GmbH from director Anabel Oelmann for EUR25,000 cash (a related-party deal) and adds NOEO's audited financials for March 9 to December 31, 2021. They show sales of $170,489, a net loss of $24,788, total assets of $267,797 and total liabilities of $263,336, with an auditor going-concern warning. No new deal terms; it completes the financial-statement disclosure for the earlier acquisition.
On August 4, 2022 the company signed a credit agreement with lenders for term loans of up to $75,000,000 (expandable to $150,000,000), to be used to buy assets that meet criteria set by an administrative agent. Loans carry 12% interest, mature the earlier of 12 months after the final draw or an event of default, and are secured by a first lien on substantially all assets of the company and its subsidiaries plus the subsidiaries' stock. The company paid a $562,500 upfront fee, will pay the agent $12,500 a quarter, and issued the agent a seven-year warrant for up to 1,300,123 Seed Preferred shares at $2.00. The filing does not say any amount has been drawn yet; it is the company's first debt facility, and the warrant could add to Seed Preferred shares outstanding.
15 Mar 2022asset acquisition disposition▲ GoodMajor
On March 10, 2022 the company bought 100% of NOEO GmbH, a German direct-to-consumer adaptogen and wellness products business, for EUR25,000 cash. The seller, Anabel Oelmann, is a company director, so it is a related-party deal; this is the first acquisition under the holistic-nutrition plan set out in August 2021 and ends the company's shell status. The filing also reports that Larson Elmore resigned as president, CEO and director effective January 10, 2022 and Simon Belsham was appointed, and says the Seed Preferred offering is fully subscribed but expected to close in the quarter ending March 31, 2022. The text is truncated, so further details are not covered.
This amendment corrects the picture of the second Seed Preferred tranche: the shares are issued only when subscription funds arrive, and $8,350,000 was still owed by two individual subscribers. Of the $10,000,000 of subscriptions accepted in October and November 2021, 4,675,000 shares remained unissued, so the earlier filing overstated how much cash had actually come in.
The company reported a second tranche of 4,675,000 Seed Preferred Shares at $2.00 each for $9,350,000, sold to non-U.S. persons on November 30, 2021. This would bring the 5,000,000-share Seed Preferred offering to $10,000,000 in total, but the January 2022 amendment shows the shares had not all been issued.
15 Oct 2021capital raising announcement● NeutralMajor
On October 8, 2021 the company sold a first tranche of 325,000 new Seed Preferred Shares at $2.00 each, raising $650,000, and adopted new articles authorizing 290,000,000 common and 10,000,000 preferred shares. Seed Preferred holders get paid 1.5 times their purchase price ahead of common shareholders in a liquidation, and have no voting rights, so common holders rank behind them.
The company, now named The Healing Company Inc., said that with its major shareholder it will narrow its focus to finding a business combination in holistic nutrition. It states it has no definitive agreements with any candidate and that its plans depend on a business combination and/or selling its securities. The filing says its plan since 2010 had been to seek a merger or other combination, so this narrows the search to one sector rather than starting a new business.
AMC Auditing resigned as auditor effective April 10, 2019 after AMC was acquired by Prager Metis CPA's LLC, and the board engaged Prager. The filing says AMC's reports for fiscal 2017 and 2018 had no adverse opinion or qualification, and there were no disagreements.
Seale & Beers resigned as auditor effective October 31, 2016 because it was being acquired by AMC Auditing LLC, and the sole director engaged AMC. The filing says the reports for fiscal 2015 and 2016 had no adverse opinion but included a going concern paragraph, and there were no disagreements.
This amends the August 2009 auditor-change filing. It adds that the PCAOB revoked Moore & Associates' registration on August 27, 2009, that Moore declined the company's request for a letter to the SEC, and that any year Moore audited which must be included in filings would have to be re-audited by Seale and Beers.
The company, then named Lake Forest Minerals, Inc., dismissed its auditor Moore & Associates Chartered on August 10, 2009 and hired Seale and Beers, CPAs the same day. The filing says the earlier audit reports had no adverse opinion, apart from a going concern qualification in the financial statements in the 10-K for the year ended June 30, 2008, and that there were no disagreements with the old auditor.
