This Annual Report on Form 10-K ("Annual Report"), including the "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
contains forward-looking statements regarding future events and our future
results that are based on current expectations, estimates, forecasts, and
projections about the industry in which we operate and the beliefs and
assumptions of our management. Words such as "expects," "anticipates,"
"targets," "goals," "projects," "may," "will," "would," "could," "intends,"
"plans," "believes," "seeks," "estimates," variations of such words, and similar
expressions are intended to identify such forward-looking statements. These
forward looking statements may include, among others, statements concerning our
expectations regarding our business, growth prospects, revenue trends, operating
costs, results of operations, working capital requirements, access to funding,
competition and other statements of expectations, beliefs, future plans and
strategies, anticipated events or trends, and similar expressions concerning
matters that are not historical facts. These forward-looking statements are
subject to risks, uncertainties, and assumptions that are difficult to predict.
Therefore, actual results may differ materially and adversely from expectations
expressed or implied in forward-looking statements. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in this Report under the section entitled "Risk Factors" in Item 1A of Part I
and elsewhere, and in other reports we file with the SEC, specifically the most
recent report on Form 10. While forward-looking statements are based on
reasonable expectations of our management at the time that they are made, you
should not rely on them. We undertake no obligation to revise or update publicly
any forward-looking statements for any reason.
Executive Overview
The Company is in the business of building and operating sustainable
photovoltaic ("PV") solar powered, state of the art, greenhouse facilities which
grow high value greenhouse produce.
As its initial development project, the Company expects to purchase, develop and
operate four adjoining parcels of approximately 39 acres each, totaling
approximately 157 acres in rural Pueblo County, Colorado ("Pueblo Complex"). The
Pueblo Complex is currently majority owned by VitaNova Partners, LLC
("VitaNova"). The Pueblo Complex has an existing greenhouse facility consisting
of 90,000 sq ft of growing space and 15,000 sq ft of warehouse space, another
partially built greenhouse and two parcels of vacant land.
In 2020, VitaNova began acquiring and now owns or controls a supermajority of
the preferred or controlling equity interests of the four parcels in the Pueblo
Complex. The Pueblo Complex was significantly underpowered with only 300KVA of
electrical power and no natural gas available. The lack of power made the
initial greenhouse facility unsuitable for its intended purpose. Since acquiring
control VitaNova has installed 1500KVA electrical service and is retrofitting
the existing greenhouse with electrical environmental equipment that can be
solar powered.
The Company received preliminary approval from C-PACE, a Colorado specialized
solar financing program by federal, state and county governments. The Company is
in the process of developing engineering necessary to developed complete the
C-Pace financing application.
The Company recently completed a private placement and raised $556,129 by
issuing 55,612,900 common shares along with 55,612,900 2-year warrants
exercisable at $0.20 per share. VitaNova and John McKowen ("McKowen") are
considered affiliates and control entities of the Company. The Company currently
has no independent directors. Both VitaNova and the Company have a common board
member, Mr. McKowen. The Company expects to appoint independent directors after
the purchase of Directors and Officers insurance.
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On July 5, 2018, Mr. McKowen purchased a control block of 440,000 common shares
of the acquired shell and appointed himself as its sole board member and Chief
Executive Officer. On July 17, 2020, Mr. McKowen transferred the control block
to VitaNova and began restructuring the Company. The Company currently is a non
reporting publicly traded shell on OTC Market Pink Sheets, symbol VTNA. As part
of the restructuring, the Company issued 55,612,837 common shares to VitaNova
and 29,369,230 common shares to Mr. McKowen, which is proportional to Mr.
McKowen's ownership of VitaNova.
Mr. McKowen was also issued 88,107,690, of which 58,738,460 shares that are
subject to repurchase by the Company for a price of $0.0001 per share. Of the
58,738,460 shares 29,369,230 shares will be released from repurchase if warrants
issued in Company's recent private placement are exercised to acquire at least
42,140,266 shares of Common Stock; and 29,369,230 shares will be released from
repurchase if, prior to December 31, 2022, the Company completes a "sale lease
back" of a solar powered property and receives gross proceeds of a least
$6,000,000 from the sale. For purposes of federal securities laws, Mr. McKowen
is deemed to beneficially own 56,052,837 shares purchased by VitaNova because of
his ability to control VitaNova, as an officer and member of VitaNova.
On February 1, 2021, the Company filed a registration statement Form 10 to
voluntarily register common stock, par value $.0001per share of the Company,
pursuant to Section 12(g) of the Securities Exchange Act of 1934, or the
Exchange Act. The Company believes that when the Form 10 becomes effective, 60
days after the Form 10 filing, it will no longer be a shell company.
The United States Tax Code in renewable energy facilities offers investors
incentives. Investors in a solar facility that begins construction in 2021 and
2022 will receive an investment tax credit for 26% of the cost of a photovoltaic
system when it goes into service. Under the federal code, renewable energy
systems qualify for a five year Modified Accelerated Cost-Recovery System
(MACRS) depreciation schedule. The exact benefit of this depreciation is
complicated and varies depending on the investors tax rate, but typically it
adds up to an additional 25% of a solar energy project's cost being offset by
reduced tax payments.
Our Critical Accounting Policies
New Accounting Pronouncements
From time to time, the Financial Accounting Standards Board (the "FASB") or
other standards setting bodies issue new accounting pronouncements. The FASB
issues updates to new accounting pronouncements through the issuance of an
Accounting Standards Update ("ASU"). Unless otherwise discussed, the Company
believes that the impact of recently issued guidance, whether adopted or to be
adopted in the future, is not expected to have a material impact on the
Company's financial statements upon adoption.
Revenue Recognition (ASC 606)
During the twelve months ended December 31, 2020, the Company recognized $13,125
from a sub-lease on farm land which the Company leased from a non-related third
party. The $13,125 is recognized in the month earned for the following reasons:
? the Company did not transfer control of the leased asset to sub-lessee;
? sub-lessee payments are made monthly for the month period under the lease
agreement;
? there was no variable consideration;
? the Company provided no licenses to sub-lessee;
? there are no multi-element arrangements in this sub lease agreement, and
? there are no contract costs.
Results of Operations
For Fiscal Years Ended December 31, 2019 and December 31, 2020
For the years ended December 31, 2019 we generated no revenue. During the year
ended December 31, 2020, we recognized revenues from sub-leasing operations of
$13,125 compared to no revenues from leasing operations during the year ended
December 31, 2019. We entered into the sub-lease as of July 1, 2020. For the
twelve months ended December 31, 2020, we recognized a direct cost of revenue of
$13,125.
During the year ended December 31, 2020, expenses from operations were $297,519
compared to $4,515 for the year ended December 31, 2019. The increase of
$293,004 was primarily due to higher general and administrative expense
resulting from the efforts to prepare the Company to become a fully reporting
company with the SEC.
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During the year ended December 31, 2020, there were no other income or expense
items.
These figures produced a net loss of $297,519 for the year ended December 31,
2020, compared to a net loss of $4,515 for the year ended December 31, 2019.
Liquidity and Capital Resources
Resources
We believe our existing cash, cash equivalents and anticipated additional
capital from financing activities will be sufficient to meet our anticipated
cash needs for at least the next twelve months. Our future working capital
requirements will depend on many factors, including the, solar projects and
expansion of our greenhouse development. To the extent our cash, cash
equivalents and cash flows from operating activities are insufficient to fund
our future activities, we may need to raise additional funds through public or
private equity or debt financing. We also may need to raise additional funds in
the event we determine in the future to affect one or more acquisitions of
businesses, technologies and products. If additional funding is required, we may
not be able to affect an equity or debt financing on terms acceptable to us or
at all.
We historically have funded our operations primarily from the following sources:
? equity and debt proceeds through private placements;
? revenue generated from operations; and
? loans and lines of credit.
On August 17, 2020, the Company executed a 6% Promissory Note for up to
$1,000,000 with VitaNova as an available line of credit. The Company has not
drawn on this line of credit.
Cash flow from operations has not historically been sufficient to sustain our
operations without the above additional sources of capital. During 2020, the
company's funds were held as due the company in a bank account owned by
VitaNova. For the year ending December 31, 2020 VitaNova held $51,179 for the
benefit of the Company. Cash flow consumed by our operating activities totaled
$351,091 for the year ended December 31, 2020, compared to operating activities
consuming no cash for the year ended December 31, 2019.
During the year ended December 31, 2020 we recognized $351,091 from the sale of
equity. We had no cash flows from financing activities in the year ended
December 31, 2019.
In both years ended December 31, 2020 and 2019 we had no cash activities from
investing activities.
As of December 31, 2020, we had $78,913 in current assets and $11,925 in current
liabilities.
Requirements
On July 1, 2020, the Company entered into a five-year lease for a 157 irrigated
acre farm, located at 2083 County Road 104, Walsenburg, Colorado 81089. The
lease rate is $5,250 per month. The Company, at its sole discretion, can
terminate this lease if after six months from July 1, 2020, the Company is
unable to obtain necessary licenses and permits from state or local authorities.
Subsequently, the Company terminated the lease in January, 2021. The Company
currently has no lease obligations or requirements.
The Company has not entered into any agreements that require a commitment of
cash.
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