UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

 

Date of Report (Date of earliest event reported): September 3, 2021

 

  

PEREGRINE INDUSTRIES, INC.

(Exact name of Registrant as specified in its charter)

 

Florida

 

000-1061164

 

65-0611007

(State or other

jurisdiction of

incorporation)

 

(Commission
File

Number)

 

(IRS
Employer

Identification No.)

 

9171 W. Flamingo, Las Vegas, Nevada 89147

(Address of principal executive offices, including zip code)

 

(702) 888-1798

(Registrant’s telephone number, including area code)

 

____________________________________________

(Former Name or former address if changed from last report.)

 

Check the appropriate box below if the 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

 
Securities registered pursuant to Section 12(b) of the Act: NONE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

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 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

 

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 13(a) of the Exchange Act. ☐

 

 

 

 

Forward Looking Statements

 

Some of the statements contained in this Form 8-K that are not historical facts are “forward-looking statements” which can be identified by the use of terminology such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 8-K, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting operations, successful capital raises, market growth, services, and products. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

 

 

Our ability to attract and retain management and field personnel with experience in our industry;

 

 

Our ability to raise capital when needed and on acceptable terms and conditions;

 

 

The intensity of competition; and

 

 

General economic conditions.

 

All written and oral forward-looking statements made in connection with this Form 8-K that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

 

As used in this current report, the terms the “Company”, “Peregrine Industries, Inc.”, “PGID,” “M.A.C.E.,” “MACE Corporation,” we”, “us” and “our” refer to Peregrine Industries, Inc., a Florida company, which has become part of our Company upon the closing of the transactions discussed below.

 

 
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FORM 10 DISCLOSURE

 

As disclosed elsewhere in this report, on August 31, 2021, the focus of the Company’s business was changed. Item 2.01(f) of Form 8-K states that if the registrant was a shell company, as we were immediately before the Change of Control disclosed under Item 5.01 and the Departure and Appointment of Officers disclosed under Item 5.02, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10.

 

Accordingly, we are providing below the information that would be included in a Form 10 if we were to file a Form 10. Please note that the information provided below relates to the new business after the acquisition of control shares from Mace Corporation. As a result of the Merger, we ceased to be a “shell company.” Therefore, this Form 8-K provides the information with respect to Mace that would be included in a Form 10 filed by Mace. The Form 10 information is set forth below.

 

Section 1 – Registrant’s Business and Operations

 

Item 1.01 Entry into a Material Definitive Agreement

 

On July 30, 2021, our wholly owned subsidiary Mace Merger Corp., (“Mace Merger Corp.”), a Nevada corporation, entered into a Plan and Agreement of Merger with Mace Corporation (“Mace”), a Nevada corporation and the Merger was completed on September 3, 2021. Pursuant to the Plan and Agreement of Merger, Mace Merger Corp. agreed to merge into Mace, with Mace being the surviving corporation of the merger (the “Merger”). As a result of the Merger, Mace is to become a wholly owned subsidiary of Peregrine. Under the Plan and Agreement of Merger, the shareholders of Mace are to receive 250,000,000 shares of our common stock, $0.0001 par value. As there were 1,000,000,000 outstanding shares of Mace common stock immediately prior to the Merger, the Mace shareholders will receive one of our shares of common stock per four shares of Mace common stock. As a result of the Merger, and including our shares already owned by the officers and directors of Mace, the shareholders of Mace will own 60% of the shares of our common stock. As a contingent part of the Merger, our officers and directors will return to the Company treasury the 22,477,843 shares of common stock, which they now own.

 

The transaction is being accounted for as a reverse recapitalization. This means that, while Peregrine was the acquiring company from a legal perspective, Mace will be treated as the acquirer for accounting purposes.

 

The foregoing description of the Plan and Agreement of Merger does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Section 2 – Financial Information

 

Item 2.01 Completion of Acquisition or Disposition of Assets

 

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

 
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The Company completed the acquisition of Mace upon closing of the Merger. The closing occurred on September 3, 2021, upon the completion of the exchange and cancellation of shares by the MACE Shareholders. Under the terms of the Plan and Agreement of Merger, the shareholders of Mace received 250,000,000 shares of the Company’s common stock issued in exchange for 100% of the outstanding capital stock of Mace.

 

The Company’s common stock is currently quoted on OTC Markets Group, Inc. Pink under the symbol PGID.

 

The Merger and its related transactions were approved by the shareholders of a requisite number of shares of Mace and all of the issued and outstanding shares of Mace Merger Corp.

 

The Merger is being accounted for as a reverse acquisition and recapitalization. Mace is the acquirer for accounting purposes and the Company is the issuer. Accordingly, Mace historical financial statements for periods prior to the acquisition become those of the acquirer retroactively restated for the equivalent number of shares received in the Merger. The accumulated deficit of Mace is carried forward after the acquisition. Operations prior to the Merger are those of Mace. Earnings per share for the period prior to the Merger are restated to reflect the equivalent number of shares outstanding.

 

There were 23,002,063 shares of our common stock outstanding previous to this transaction, of which 22,477,843 shares were held by the officers, directors and 5%+ shareholders of Mace and will be returned to treasury in exchange for the Mace common shares held by each officer, director and 5%+ shareholder.

 

Thus, Mace was a related party of ours prior to the Merger, and we continue to be controlled by the officers, directors and 5%+ shareholders of Mace. Other than the common ownership and control, prior to the Merger, there were no material relationships between us and Mace, or any of their respective affiliates, directors or officers, or any associates of their respective officers or directors, other than as disclosed in this Current Report.

 

The shares issued in the Merger were not registered under the Securities Act but were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, Regulation S and Regulation D promulgated thereunder.

 

We believed these exemptions were available because:

 

* We are not a blank check company.

 

* The shares were issued to non-United States persons; or

 

As to shares issued to United States persons:

 

 

The issuance was not accompanied by general solicitation or advertising;

 

 

All certificates had restrictive legends

 

 

Shares were issued to persons with a pre-existing relationship with Mace’s directors, executive officers or employees, and contracted services.

 

 

Shares were issued to investors who represented that they were accredited investors.

 

In connection with the above transaction, although some of the investors may have also been accredited, we made the following available to all investors:

 

 

Access to all our books and records

 

 

Access to all material contracts and documents relating to our operations

 

 

The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the Mace shareholders were given access.

 

We intend to carry on the business of Mace, as our primary line of business.

 

 
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DESCRIPTION OF BUSINESS

 

Historical Overview

 

Peregrine Industries, Inc. was incorporated in Florida in 1995 for the purpose of designing and manufacturing heat pump pool heaters, residential air conditioners and parallel flow coils for the heating, ventilation and air conditioning industry.

 

In June 2002, the Registrant and its subsidiaries filed a petition for bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida. The Company emerged from bankruptcy in March 2004 free and clear of all liens, claims and obligations.

 

On July 17, 2017, Peregrine Industries, Inc., (the “Registrant”) issued a total of 22,477,843 or 97.7% of the issued common restricted shares of the Registrant’s common stock, par value $0.0001 (the “Shares”) to Dolomite Holdings Ltd., organized under the laws of the State of Israel and the corporate parent and principal shareholder of the Registrant (“Dolomite”). The Shares were issued upon the conversion by Dolomite, effective July 14, 2017, of principal and accrued interest owed by the Registrant to Dolomite evidenced by convertible notes and other short-term debt in the aggregate amount of $443,718, representing all of the liabilities of the Registrant at its fiscal year-ended June 30, 2017. The fair value of the shares was deemed to be the carrying value of the principal and accrued interest, $443,718. Dolomite was a related party therefore the settlement had no gain or loss. The issuance of the Shares was made in reliance upon the exemptions provided in Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and Regulation S promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Act”).

 

Effective July 21, 2017, Dolomite sold, transferred and assigned the total of 22,477,843 restricted shares of the Registrant’s common stock, to four persons, none of whom were affiliated with the Registrant or with Dolomite. The 22,477,843 Shares represented in excess of 97% of the Registrant’s total issued and outstanding Shares at July 21, 2017, resulting in a change of control of the Company.

 

On July 30, 2021, our wholly owned subsidiary Mace Merger Corp., (“Mace Merger Corp.”), a Nevada corporation, entered into a Plan and Agreement of Merger with Mace Corporation (“Mace”), a Nevada corporation and the merger was completed on September 3, 2021. Pursuant to the Plan and Agreement of Merger, Mace Merger Corp. agreed to merge into Mace, with Mace being the surviving corporation of the merger (the “Merger”). As a result of the Merger, Mace is to become a wholly owned subsidiary of Peregrine. Under the Plan and Agreement of Merger, the shareholders of Mace are to receive 250,000,000 shares of our common stock, $0.0001 par value. As there were 1,000,000,000 outstanding shares of Mace common stock immediately prior to the Merger, the Mace shareholders will receive one of our shares of common stock per four shares of Mace common stock. As a result of the Merger, and including our shares already owned by the officers and directors of Mace, the shareholders of Mace will own 60% of the shares of our common stock. A contingent part of the Merger, our officers and directors will return to the Company treasury the 22,477,843 shares of common stock, which they now own.

 

Introduction

 

Conceived in Las Vegas, Nevada in the year 2014 (and established in December 2015), Mace has since been developing the latest and greatest products for your baby, your home, and your body. In the years since our creation, we have attended several trade shows, become established as sellers on Amazon, and are working with advertising firms to help spread the message about our next generation company for your baby and family needs!

 

Over the past four years, we have undergone the rigorous process of creating our own products from the ground up and sending them out into the marketplace. From beginning to end, our process could be described as:

 

 

·

Research, Development: Design, Engineering, Mold, Prototype, Testing

 

 

 

 

·

Patent, Manufacturing, Production, Inventory, Marketing, wholesales and Disruptors.

 

Our principal executive office is located at 9171 W. Flamingo Road, Ste 110, Las Vegas, NV 89147. The telephone number at our principal executive office is (702) 888-1798. Our website is www.macecorporaiton.com, and our email address is honghmacecorp@gmail.com.

 

 
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Our fiscal year end is July 31.

 

Our company is in the development stage and has generated $374,242 in revenues for the year ended July 31, 2020.

 

Overview

 

Mace Baby

 

Our flagship product is the aMACEing Zero Leak Baby Bottle®, but it’s more than just another baby bottle; it’s our commitment to improving the precious feeding time that occurs between parent and child. To that end, we have settled for nothing less than making the bottle out of the safest plastics and forming the nipple from the safest silicon. The Zero Leak/Variable Flow nipple erases both the inconvenience of spills and the hazard of choking. It is the perfect companion for our Bottle Holder, which allows parents the convenience of feeding their baby while keeping their hands free. Our bottles, nipples, and holders are patented not just in the United States, but around the globe. Consumers all over the world can already buy our products.

 

Some of our other baby products include: the Baby Backseat Mirror, toddler toilet seats, organic skin care products, and more to come. With our Baby Backseat Mirror, a handy accessory for the car, parents can keep an eye on the children seated behind them without taking their eyes off the road. Our toddler toiler seats are a great tool for potty training your little one, and it was thoughtfully designed to best fit the shape of an actual toddler’s body. For mothers and babies alike, our line of skin care products includes an assortment of soap, oils, baby powder, disinfecting spray, and more.

 

Mace Home Goods

 

Our selection of home goods includes the Birthday Minder, Holiday Minder, and Water Purifier. Our minders are fun wall-mounted decorations that can add a festive touch to anyone’s birthday, as well as 16 major holidays celebrated in the United States. The Water Purifier can be easily attached to a variety of household appliances in order to remove all sorts of pollutants, parasites, and unwelcome substances.

 

Mace Health & Beauty (& Jewelry)

 

We have products to benefit women’s health and beauty as well, such as: moistening sprays, a heated eye treatment wand, and plans for future offerings as well. We have a variety of moistening sprays that can keep your skin hydrated. Our heated eye treatment wand uses thermal micro-currents to make facial skin firm while reducing redness, tension, and inflammation. A line of jewelry products is also being planned.

 

Our Mission

 

We’re working tirelessly to bring you other products we think you’ll love. It is our dream that these products, among others, will make Mace a household name in childcare.

 

Product Lines

 

 

aMACEing ZERO LEAK® Baby Bottle (with Leak Proof Nipple)

 

Mace Baby has introduced the aMACEing ZERO LEAK® Baby Bottle, bringing innovative design to the traditional baby bottle market. This leak-proof bottle is helping families enjoy the safest, most peaceful feeding experience. The design team at Mace set out to create a baby bottle that was not only leak-proof but which also simulated the flow of a mother’s nipple. Their patented design, features variable flow, allowing milk or formula to flow at the baby’s pace. Just like a mother’s nipple, the Mace leak-proof nipple adjusts to the baby’s rhythm. It puts the baby in control of feeding, making for a much more comfortable, peaceful experience during feeding time. It comes in two sizes (4’’ /7 oz and 6’’ /10 oz) and 4 choices of color. All of the component parts of our bottle are patented in the United States and many of the other industrialized countries around the world.

 

 
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Following is a list of some of our products:

 

The aMACEing Zero Leak Baby Bottle comes with a range of attractive features that support baby’s health and parents’ lifestyles in a number of other ways. These include:

 

 

·

BPA-free bottle and nipple

 

 

 

 

·

100% silicone nipple (works for months before any need for replacement)

 

 

 

 

·

Lead-free

 

 

 

 

·

Phthalates-free

 

 

 

 

·

Mace cap helps secure the bottle for safe transport

 

 

 

 

·

Mace collar makes opening and securing the bottle easier, especially for those with arthritis or a similar condition

 

 

 

 

·

Dishwasher-safe (top rack)

 

 

 

 

·

Oz and ML measurements on the bottle

 

 

 

 

·

The bottle is made in the USA

 

 

 

 

·

Bottles have passed TUVRheinland testing, SGS testing for lead, cadmium, and phthalates (US CA 65 and GB) and are FDA approved.

 

 

 

 

·

Winner of the Mom’s Choice Gold Recipient Award

 

 

 

 

·

Winner of the 2018 National Parenting Product Awards

 

 

 

These bottles have been the subject of rave reviews from industry bloggers[1][2][3], and are featured in a growing number of print and web publications including Las Vegas Baby Magazine[4] and Cincinnati Family Magazine[5]

 

[1] https://asimplepieceofme.com/mace-baby-leak-proof-bottles/

 

[2] https://parentinghealthy.com/the-mace-baby-bottles-are-leak-proof/

 

[3] http://www.mail4rosey.com/2019/08/so-we-love-this-amaceing-baby-bottle.html

 

[4] https://lasvegasbabymagazine.com/issues/issue5/mobile/index.html#p=18

 

[5] http://cincinnatifamilymagazine.com/uncategorized/things-we-like-on-the-go-baby-items

 

 
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Hands Free Bottle Holder

 

Mace’s Hands-Free Bottle Holder lets parents and caregivers watch their baby feed without having their arms and hands occupied. It is lightweight, sturdy, easily assembled, and it works perfectly with both sizes of its companion product, the ZERO LEAK® Baby Bottle. Our holders have passed SGS testing for lead, cadmium, and phthalates (US CA 65 and GB), as well as lead and phthalates testing for the Consumer Product Safety Information Act (CPSIA). We have filed patents for our bottle holders in the United States and many foreign countries. 

Kidesk

 

The Kidesk is a wonderful item that can serve as a creative outlet for children. Inside of the Kidesk, has plenty of space in which to store paper, and the backside has a convenient compartment for coloring tools. The option to fold it up and carry it around allows parents and their little ones to take art on the road. This desk can also be a potent tool to facilitate education, as you can bring the Kidesk almost anywhere.

 

 

Baby Backseat Mirror

 

If you are a parent concerned about your child’s safety, you always want to keep an eye on them. There have been too many reports about children left forgotten in their car seat; it is a real problem that must be eliminated whenever possible. That’s where our Baby Backseat Mirror comes in. Its wide-angle convex mirror ensures that you will always be able to view your child and their surroundings. A single glance before, during or after a drive should be enough to instantly remind the driver that the baby is still in the car or alert them if they are not. This product boasts a shatter-proof design and ball joints for flexible positioning. Assembly of the three component pieces is incredibly quick and easy. 

 

 

Toddler Toilet Seat

 

The Toddler Potty Chair is an ergonomic solution to a classic problem. The securely fastened armrests will help keep your child seated comfortably on the chair. The shape of the bowl was designed by researching the body shapes of actual toddlers, so it will accommodate the hips of as many children as possible.

 

 

Baby Body Thermometer

 

Mace Baby presents a sophisticated and convenient thermometer for all of your care-giving needs. It has a wide temperature range spanning 0-212°F or 0-100°C. With a 2-3.15-inch reading range, the thermometer can read from a distance. The thermometer can also quickly and accurately read temperatures in just .5 seconds, with the ability to remember up to 32 previous readings. Our thermometer supports both imperial and metric units. You can adjust this thermometer to any individual’s personal needs with the thermometer’s built-in settings. It detects more than just body temperature; this tool can also detect the temperature for the environment or for other solids and liquids such as food and milk.

 

 
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Pacifier Clips

 

Keep your baby’s pacifier or teething ting safe with this aMACEing clip-on holder! These BPA-free, Latex-free, and Lead-free clips come in six different colors and designs all packaged in one! Our pacifier clips are made for baby boys and baby girls alike. 

Baby Diaper Bag Backpack & Stroller Organizer

 

This diaper backpack conveniently stores almost everything you need for traveling with your baby. Carry diapers, baby bottles, blankets, baby wipes and baby food.

 

 

·

Holds up to 9 baby feeding bottles

 

 

 

 

·

2 outside zippered pockets

 

 

 

 

·

Includes a convenient changing pad and 2 reusable self-sealing bags

 

 

 

 

·

Key strap in main compartment for holding your keys

 

 

 

 

·

Also includes hooks for latching backpack onto stroller

 

Stroller Organizer

 

For the mom or dad who wants nothing more than to have everything in one place. The Stroller Organizer was designed with the idea of holding baby bottles, phones, wipes, and diapers. Includes hooks for latching onto stroller handles.

 

PillowKet

 

Your baby will love our PillowKet. Soft as can be, it is lightweight and will keep your baby warm during those cooler seasons. Absolutely cozy, cute and comfortable! A perfect snuggle on colder days. The PillowKet comes in a variety of colors and patterns. A United States patent has been filed for this product.

 

 
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PillowBed

 

Our PillowBed and Baby Bottle Holder are a perfect pair, giving babies a little extra boost while feeding. Babies and parents around the world will love our durable and waterproof PillowBed, sturdy and comfortable. This product is patented in the United States.

 

Mace Skin Care

 

All of our skin care products are organic (USDA certified), vegan, produced right here in the USA, and 100% natural. Our assortment consists of the following:

 

 

·

All-in-One Bar

 

 

o

This unscented bar is gentle enough for a baby and perfect for even those who are the most sensitive. Can be used for body and hair.

 

 

·

Baby Congestion Relief

 

 

o

A gentle and safe product to ease congestion for all your little ones.

 

 

·

Baby Oil

 

 

o

A calming bath and body oil created especially for baby. Can be used in the bath or rubbed directly on the baby’s skin. Great for healing dry or chafed skin.

 

 

·

Baby Powder

 

 

 

 

o

Apply baby powder lightly to keep dry and ease chafing. Great for adults too!

 

 

 

 

 

 

·

Diaper Butter

 

 

 

 

 

 

 

 

o

A nourishing salve for protecting healing and lubricating baby’s delicate skin.

 

 

 

 

 

 

·

Little’s Skin Helper

 

 

 

 

 

 

 

 

o

A wonderful balm that is anti-inflammatory, antioxidant, anti-septic, and anti-spasmodic.

 

 

 

 

 

 

·

Nursing Oil

 

 

 

 

 

 

 

 

o

Formulated with pure, organic oils to soothe nipples while nursing. Prevents dry or cracked skin with a blend of food-grade ingredients.

 

 

 

 

 

 

·

Perineum Oil

 

 

 

 

 

 

 

 

o

An anti-inflammatory and refreshing combination of oils created specifically to soothe a woman’s delicate skin. Recommended for both pre- and post-delivery.

 

 

 

 

 

 

·

Soothing Spray

 

 

 

 

 

 

 

 

o

Can be used to cleanse minor cuts and scrapes, soothe insect bites, relieve poison oak/ivy rashes and disinfect the skin after removal of a splinter.

 

 

 

 

 

 

·

Stretch Bye

 

 

 

 

 

 

 

 

o

An excellent emollient to use on pregnant bellies. It helps prevent stretch marks and soothes growing skin.

  

 
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aMACEing Baby Knit Soft Sleeping Bag

 

Premium quality knitting (in a crochet braid pattern) results in a soft, durable, and skin-friendly product. This product is thicker, warmer, and softer than comparable products in the market thanks to the combination of polar fleece lining, velvet, and thick knit wool. Can be used as a baby swaddle, sleeping bag, stroller wrap, or crib wrap. It is ideal for use in any season, and a perfect baby shower gift.

 

aMACEing Baby Nest

 

 

·

100% Cotton

 

·

Safe and breathable fabric

 

·

Double-sided with two adjustable patterns

 

·

Size is adjustable for your baby’s convenience

 

·

Lightweight and portable

 

·

Hidden zipper at the bottom disassembles the product for easy cleaning (machine washable)

 

 

aMACEing Baby Swaddle Wrap

 

Made of 100% cotton, this swaddle is ultra-soft and snuggly. Swaddling creates a womb-like environment which keeps your baby calm and secure! This helps your little one as well as you sleep tightly and soundly throughout the night!

 

aMACEing Cute Cushioned Baby Pillow

 

A comfortable baby pillow with a velvet surface that is gentle and smooth for the baby’s skin. This product is made of a breathable 3D air mesh design at the back to create a cooling effect to keep your baby’s head dry and cool.

 

The fabric is 100% cotton bonded with sponge to create the most durable and safest pillow for your baby!

 

This pillow is amazing to prevent flat head syndrome (Flat head syndrome pertains to flat spots on the back of the skull from sleeping on hard mattresses, or from sleeping on the baby’s back).

 

This pillow is the perfect baby shower gift and certainly a gift that can make anyone’s future baby be aMACEing.

 

 

aMACEing Egg-Shaped Baby Winter Sleeping Bag

 

A cute sleeping bag, suitable for autumn and winter, made with a delicate texture and is comfortable and soft.

 

 
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Multi-Functional Baby Door Hanger Organizer

 

Features multiple compartments. Hangs on standard door or closet rod, no hardware needed. Can be used to store and organize almost anything, including: blankets, toys, books, puzzles, games, stuffed animals, accessories, diapers, wipes, diaper rash creams, ointments, powder, oils, towels, lotions, shampoos, body wash and more!

 

 

Health Supplements

 

In order to reach out to entirely new groups of people, Mace has devised a set of health supplements (all of which are produced in the USA) that seek to improve life for people with various deficiencies or conditions. Included are products that aim to make sexual encounters more fulfilling. Our assortment consists of the following:

 

 

·

Astaxanthin

 

 

A powerful, natural antioxidant with proprietary blend HB-12, which supports joint, skin, and eye health naturally.

 

 

·

Eye Health Essential

 

 

Promotes optimal eye function and supports healthy retinal tissue.

 

 

·

Triple Strength Fish Oil

 

 

Promotes cardiovascular health and immune system response.

 

 

·

Joint Health 3X

 

 

Promotes joint mobility, flexibility, strength, and lubrication.

 

 

·

Prostate Support

 

 

Supports prostate and urinary health.

 

 

·

Sheep Placenta

 

 

Assists with the body’s natural repair and regeneration process while improving skin quality.

 

 

·

MACE Pleasure

 

 

Enhances stamina, energy, and performance.

 

 

·

Climax Organic Sensation Oil

 

 

Maintains firmness, moisture, and sensitivity.

 

 
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Heated Eye Treatment Wand

 

An all-in-one tool that uses micro-currents, thermal energy, and massage technology. Our heated eye treatment wand helps make skin firm and tight, aiding in the effectiveness and absorption of applied products, such as serums or creams. It reduces redness, tension and inflammation. With an innovatively designed head, it allows for every inch of skin around the eyes and the corner of the mouth to be reached. Plus, the convenient size allows it to be taken anywhere. It is proven safe for everyday use.

 

Steam/Moisturizing Spray

 

Our line of moisturizing sprays comes in 6 varieties, each with different capabilities. Their main purpose is to release stored water as a soothing mist over a wide radius. These make great gifts for friends and family in dry climates.

 

 

Mace Holiday Minder & Birthday Minder

 

The Mace Holiday Minder is a wall-mounted frame bearing cards that mark the occasion for 16 major United States holidays.

 

The Mace Birthday Minder is the “sister product” of the Holiday Minder. This simple, easy-to-use product will ensure that no one’s birthday is forgotten.

 

The Minders can also be customized to:

 

 

·

Announce special achievements such as student/employee of the month

 

 

 

 

·

Display motivational quotes

 

 

 

 

·

Be used in restaurants to show the daily special

 

 

 

 

·

And more! The only limit is your imagination

  

They are made of sturdy ABS plastic. Frames come in your choice of black, white, or burgundy. Patents have been filed for both of these products in the United States.

 

Water Purifier

 

This product from our “Home Goods” line can keep the water clean in any number of appliances around the house. Hassle-free installation means that the process is quick and intuitive. The conveniently compact size is also appealing. Our purifier uses only the highest-quality carbon rods to ensure the immaculate quality of your water. This BlackMagic carbon stick is technology that has been utilized in modern medicine to great effect.

 

 

 

 

  

Molds

 

Some of our most significant, high-value assets are the plastic molds for our primary baby products. These injection molds allow for the efficient production of each and every component that comprises our bottles, nipples, and holders. The net value of our molds was valued at $111,807.00 as of July 31, 2020. In addition, we had production equipment valued at $29,075 as of July 31, 2020. We have molds ready to manufacture products and product components in both China and the United States.

 

The following is a comprehensive list of molds owned by Mace Corporation:

 

Item No.

Mold/Equipment No.

Name of Mold/Equipment

Description

Qty.

1

TYM-W4040

Silicone Nipple Slitting Fixture/智能化控制色浆比例的直压式注胶液态硅胶注射成型机

卧式120吨伺服硅胶直射成型机

1

2

V1.0

Colorant pump/液体硅胶注射成型机控制系统

 

1

3

379A

Bottle holder wall/侧板

2 cavity molds, made of FDA approved ABS plastic.

1

4

380A

Bottle holder arch/弯管

4 cavity molds 2+2, made of FDA approved ABS plastic.

1

5

381A

Bottle holder feet/熊掌

4 cavity molds, FDA approved Rubber feet.

1

6

382A

Bottle holder support/介子

4 cavity molds, FDA approved Rubber support.

1

7

383A

Bottle holder Screw/固定螺丝

2 cavity molds, FDA approved Nylon Screw.

1

8

384

Bottle holder Clamp/夹子

1 cavity mold, FDA approved Nylon Clamp.

1

9

385A

Bottle holder insert/堵头

8 cavity molds, FDA approved Rubber insert.

1

10

388A

Holiday Minder/大相框

16 inch Holiday Minder molding

1

11

389A

Birthday Minder/小相框

10 inch Birthday Minder molding

1

12

391A

Filler Piece/垫片

Filler piece for clamp molding

1

13

396A

Clamp/爪子

70% silicone clamp molding

1

14

392A

Female Screw/螺母

ABS screw molding

1

15

17101B

Bottle holder wall/侧板

2 cavity molds, made of FDA approved ABS plastic.

1

16

17100B

Bottle holder arch/弯管

4 cavity molds 2+2, made of FDA approved ABS plastic.

1

17

A001

Nipple/奶嘴

4 cavity mold for FDA approved baby bottle silicone nipple, upgrade version from the first one.

2

18

A54

Lock/拧盖

4 cavity injection mold for baby bottle lock.

1

19

A53

Cap/盖帽

4 cavity injection mold for baby bottle cap.

1

20

A55

Bottle Holder Assemble Tool/架子安装

8 cavity mold, made of FDA approved ABS plastic.

1

21

A01

Nipple Slitting fixture/奶嘴切割装置

Nipple Slitting Fixture.

2

22

MC050918_1

Nipple Slitting fixture/奶嘴切割装置

Nipple Slitting Fixture.

1

23

180701-01

Nipple/奶嘴

8 cavity mold for FDA approved baby bottle silicone nipple, upgrade version from the first one.

1

24

MC111219_2

Nipple/奶嘴

4 cavity mold for FDA approved baby bottle silicone nipple, upgrade version from the first one.

1

25

MC112320

Nipple Slitting fixture/奶嘴切割装置

Nipple Slitting Fixture.

1

26

MC080816-2

Baby Nipple(外协)

4 cavity mold for FDA approved baby bottle silicone nipple

1

27

38996

Auxiliary parts

Proof of concept

1

28

39544

Auxiliary parts

Upon approval of proof of concept

1

29

MC22417

Nipple Slitting Fixture

Nipple slitting tool

1

30

MC062617

Nipple Slitting Fixture

Nipple slitting tool

1

31

MC071316-1 Rev.2

4 inch bottle

4 cavity blow mold

1

32

MC071316-1 Rev.2

6 inch bottle

4 cavity blow mold

1

33

386A

Bottle cap

4 cavity injection mold for baby bottle cap.

1

34

387A

Bottle lock

4 cavity injection mold for baby bottle collar

1

 

 
14

 

 

Inventory

 

As of July 31, 2020, our inventory was valued at $785,500.

 

Plan of Operations for the next 1 to 3 Months

 

The following are our principal plan of operations for the next one to three months, which are aimed at helping the Company grow:

 

Our goals over the next 3 months are as follows:

 

 

·

Locating more buyers, especially through direct sales and through the use of general advertising. To that end, we will continue to focus on revenues from Amazon.com.

 

·

Acquiring more distributors, especially those that can assist in increasing our international sales.

 

·

Continue our strategy of increasing our product’s exposure, which should lead to steady gains in sales.

 

·

Formulate new, appealing lines of products to develop our brand even further.

 

Marketing and Sales

 

We will consider all avenues to market our products and focus on advertising for the products that we believe will have the highest return on investment. We intend to focus on integrating overlapping marketing strategies among our three product lines, which we believe is crucial. Our primary marketing strategies will utilize today’s social media markets, along with traditional mail, phone and relationship building strategies. Our sales strategy is to communicate and demonstrate our abilities to improve parents lives by providing safe and quality products.

 

Government Regulation

 

Several of our products have tested successfully under multiple regulatory bodies and standards. Our baby bottle passed the “volatile N-nitrosamines” test for FDA 500.450 and the “extractable fraction”, “soluble fraction”, and “density” requirements of FDA21 CFR 177.1520. Furthermore, the material used for the caps and locks has been granted approval for food contact under EU regulations. Our bottle holder passed SGS tests for lead, cadmium, and phthalates for US CA 65 and GB, as well as SGS tests for CPSIA section 101 (lead) and 108 (phthalates). Our skin care products are also certified organic by the USDA.

 

Employees

 

We currently have approximately 10 full-time and 0 part-time employees and independent contractors located in Las Vegas and Asia. We have access to a large number of part time people on whom we can call as needed. As our research and development activities increase, we expect to hire additional personnel to meet our technology and administrative office needs. We believe our employee relations are satisfactory. None of our employees are represented by a union.

 

 
15

 

 

Liquidity and Capital Reserves

 

A component of our operating plan impacting our expansion is the ability to obtain additional capital through additional equity and/or debt financing for purposes of future product development. Additionally, we anticipate obtaining additional financing to fund acquisitions through common stock offerings and bank borrowings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to pursue other avenues.

 

Description of Property

 

Our operations were previously conducted from an approximately 2,800 square foot office space at 9171 W Flamingo, Las Vegas, Nevada, U.S.A. We own the building. Located in the Flamingo Trails Professional Plaza, we can be contacted by phone at (702) 888-1798. We consider our current office space arrangements adequate and will reassess our needs based upon the future growth of the company.

 

Legal Proceedings

 

The Company does not know of any material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which the Company’s directors, officers or any affiliates, or any registered or beneficial shareholder, are an adverse party or have a material interest adverse to its interest.

 

RISK FACTORS

 

Risks Relating to Our Business and Marketplace

 

At this stage of our business operations, we may never achieve our goals for profitability or generate any additional significant amount of revenues, thus potential investors have a high probability of losing their investment. If we are unable to continue as a going concern, you will lose your investment.

 

There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will be able to operate profitably. Our future operating results will depend on many factors, including our ability to raise adequate working capital, demand for our products, the level of our competition and our ability to attract and maintain key management and employees.

 

Additional challenges to our health, our market, and the government may arise as the situation regarding COVID-19 evolves.

 

New coronavirus mutations or waves of cases could have an adverse effect to our business. The extent to which our operations could be impacted depends on a number of factors. These factors include: The long-term effectiveness of the COVID-19 vaccines, the global distribution of said COVID-19 vaccines, the manifestation of stronger variants of the virus, and the ability of governments and organizations around the world to continue adapting to a shifting and unpredictable pandemic landscape. Our operations could be significantly hindered if any of our officers were to be infected by the novel coronavirus, and the possibility of further economic downturns still exists.

 

We have limited existing brand identity and customer loyalty; if we fail to market our brand to promote our service offerings, our business could suffer.

 

Because our products, have only recently been introduced to market, we currently do not have strong brand identity or brand loyalty. We believe that establishing and maintaining brand identity and brand loyalty is critical to attracting customers once we have a commercially viable product offered by our subsidiaries. In order to attract customers to our products, we may be forced to spend substantial funds to create and maintain brand recognition among consumers. We believe that the cost of our sales campaigns could increase substantially in the future. If our branding efforts are not successful, our ability to earn revenues and sustain our operations will be harmed.

 

We may not be able to successfully compete against companies with substantially greater resources.

 

The industries in which we operate in general are subject to intense and increasing competition. Some of our competitors may have greater capital resources, facilities, and diversity of product lines, which may enable them to compete more effectively in this market. Our competitors may devote their resources to developing and marketing products that will directly compete with our product lines. Due to this competition, there is no assurance that we will not encounter difficulties in obtaining revenues and market share or in the positioning of our planned products. There are no assurances that competition in our respective industries will not lead to reduced prices for our proposed products. If we are unable to successfully compete with existing companies and new entrants to the market this will have a negative impact on our business and financial condition.

 

 
16

 

 

New online store features could fail to attract new customers, retain existing customers, or generate revenue.

 

Our business strategy is partly dependent on our ability to develop online store features to attract new customers and retain existing ones. Staffing changes, changes in customer behavior or development of competing networks may cause customers to switch to competing online stores or decrease their use of our online store. To date, our online retail platform, is only in its early-stages and it has begun to generate revenue for the Company. There is no guarantee that individual customers will use these features and as a result, we may fail to generate greater revenue. Additionally, any of the following events may cause decreased use of our online store:

 

 

Emergence of competing websites and online retail stores;

 

 

 

 

Inability to convince potential customers to shop at our online store;

 

 

 

 

A decrease or perceived decrease in the quality of products at our online store(s);

 

 

 

 

An increase in content/products that are irrelevant to our users;

 

 

Technical issues on certain platforms or in the cross-compatibility of multiple platforms;

 

 

 

 

An increase in the level of advertisements by competitors may lower traffic acquisition rates;

 

 

 

 

A rise in safety or privacy concerns; and

 

 

 

 

An increase in the level of spam or undesired content on the sites.

 

We face intense competition, and we may not be able to compete effectively, which could reduce demand for our services and adversely affect our business and potential market share.

 

The market for our services is intensely and increasingly competitive and subject to rapidly changing technology and evolving standards. In addition, many companies in our target market are offering, or may soon offer, products and services that may compete with our services. Our current primary competitors generally fall into two categories: large companies and small operations. We expect competition to increase as other established and emerging companies enter the market, as customer requirements evolve and as new products and cleaning technologies are introduced.

 

Many of our competitors, particularly large companies, have longer operating histories, significantly greater financial, technical, marketing, distribution, professional services or other resources and greater name recognition than we do. In addition, many of our competitors have strong relationships with our potential customers and extensive knowledge of the industry. As a result, they may be able to respond more quickly to new or emerging customers and changes in customer requirements. Increased competition may lead to price cuts, alternative pricing structures or the introduction of products and services available for free or a nominal price. We may not be able to compete successfully against current and future competitors, and our business, results of operations and financial condition will be harmed if we fail to meet these competitive pressures.

 

Our ability to compete successfully in our market depends on a number of factors, both within and outside of our control. Some of these factors include ease and speed of service deployment and use, performance and scalability, the quality and reliability of our customer service and support, total cost of ownership, return on investment for the customer. Any failure by us to compete successfully in any one of these or other areas will adversely affect our business, results of operations and financial condition.

 

Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others. By doing so, these competitors may increase their ability to meet the needs of our potential customers. In addition, our prospective indirect sales channel partners may establish cooperative relationships with our competitors.

 

We face a few possible risk factors regarding patent protection:

 

 

·

Being a company with relatively few personnel, there is a risk that we may not have the ability to efficiently discover when other companies in this crowded market are infringing on our patents.

 

·

If we discover a patent infringement, we face the burden of having to defend our patent in court, resulting in a timely and costly legal battle.

  

 
17

 

 

Patents and Trademarks

 

 

 

 

 

Mace Corporation Patent Number List (United States)

 

 

 

 

 

 

 

 

 

 

 

 

 

DOCKET NO. :

 

PATENT NAME

 

SERIAL NO./DATE FILED

 

ISSUE DATE

 

STATUS

 

2747P4005DES

 

BABY BOTTLE

 

29/558,679 : 03/21/2016

 

6/20/2018

 

ISSUED

 

2747P4006DES

 

COLLAR FOR A BABY BOTTLE

 

29/558,680 : 03/21/2016

 

4/18/2018

 

ISSUED

 

2747P4007DES

 

CAP FOR A BABY BOTTLE

 

29/558,681 : 03/21/2016

 

11/20/2018

 

ISSUED

 

2747P4025DES

 

CARRIER FOR BABY BOTTLES

 

29/560,217 :04/04/2016

 

6/14/2017

 

ISSUED

 

2747P4026CIP2

 

BOTTLE HOLDING SYSTEM AND CONFIGURATIONS THEREOF

 

15/426,889 : 02/07/2017

 

5/5/2020

 

MAINTENANCE FEES DUE: 2023, 2027, 2031

 

2747P4034DES

 

BABY BIB

 

29/561,376 : 04/15/2016

 

11/1/2017

 

ISSUED

 

2747P4035DES

 

HOLIDAY CALENDAR KEYCHAIN

 

29/561,482 : 04/15/2016

 

6/7/2017

 

ISSUED

 

2747P4066DES

 

BABY BOTTLES

 

29/573,097 : 08/02/2016

 

 

 

NOA due 6/25/21

 

2747P4069DES

 

BABY BOTTLE NIPPLE

 

29/573,337 : 08/04/201

 

4/16/2019

 

ISSUED

 

2747P4070DES

 

CAP FOR A BABY BOTTLE

 

29/574,225 : 08/12/2016

 

6/7/2017

 

ISSUED

 

2747P4077DES

 

HANGER HAVING MULTIPLE HANGING ARMS

 

29/577,012 : 09/08/2016

 

1/2/2018

 

ISSUED

 

2747P4122DES

 

PILLOW BED FOR AN INFANT

 

29/587,069 : 12/09/2016

 

2/13/2018

 

ISSUED

 

274794241

 

BABY BOTTLE NIPPLE AND METHOD OF FORMING OPENING THEREIN

 

15/581,241 FILED: 04/28/2017

 

 

 

Final OA Due 04/14/2021 (No later than 07/14/2021)

 

2747P4290DES

 

BABY BOTTLE NIPPLE

 

29/632,959 FILED: 01/11/2018

 

10/1/2019

 

ISSUED

 

2747P4305

 

DEVICE AND METHOD FOR FORMING AN OPENING IN A BABY BOTTLE NIPPLE

 

15/986,644 : 05/22/2018

 

 

 

MAINTENANCE FEES DUE: 2024, 2028, 2032

 

 

Mace Corporation Trademarks

 

 

 

 

DOCKET NO.:

TITLE

SERIALNO./FILED

ISSUE DATE

2747T3381

aMACEing

87/229,730:11/08/2016

8/21/2018

2747T3392

MC DESIGN

87/310,531:01/23/2017

11/21/2017

2747T3412

MACE CORP (W/BEAR DESIGN)

87/229,610:11/08/2016

11/21/2017

2747T3424

M.A.C.E

87/527,203:7/13/2017

7/9/2019

2747T3481

aMACEing Zero Leak

87/908,532:5/4/2018

7/9/2019

 

 
18

 

 

Mace Corporation Patents (Foreign)

P4026CIP2: Bottle Holding System And Configurations Thereof

DOCKET NO.:

SERIAL NO./DATE FILED

STATUS

China

 

Accepted

2747P4026CIP2_EU

EP17181809.9 FILED: 07/18/2017

Annual Renewal Fee due July 31, 2021

2747P4026CIP2_JP

JAPAN APPLICATION NO.: 2017-149291 FILED: 08/01/2017

Examination fee paid October 9th, 2020

2747P4026CIP2_KR

KOREA APPLICATION NO.: 10-2017-0085712 FILED: 07/06/2017

Examination filed 7/1/2020

2747P4026CIP2_MAL

MALAYSIA APPLICATION NO.: PI 2017000901 FILED: 06/14/2017

Request for Modified Substantive Examination : JUNE 15th, 2022

2747P4026CIP2_MX

MEXICO APPLICATION NO.: MX/A/2017/009896 FILED: 07/31/2017

PENDING

2747P4026CIP2_NZ

NZ APPLICATION NO.: 738969 FILED: 01/08/2018

PENDING

2747P4026CIP2_PH

PH APPLICATION NO.: 1-2017-000149 FILED: 05/05/2017

Response filed to OA 11/20/2020

2747P4026CIP2_RU

RUSSIA APPLICATION NO.: 2017119210 FILED: 06/08/2017

Renewal fee due by June 1st, 2021

2747P4026CIP2_THAI

THAI APPLICATION NO.: 1701004296 FILED: 08/01/2017

Examination Due Date

February 21,2024

2747P4026CIP2_VN

VIETNAM APPLICATION NO.: 1/2017/02830 FILED: 07/24/2017

Grant Fees Paid 04/23/2021

 

 

 

P4241: Baby Bottle Nipple And Method Therein

DOCKET NO.:

APP. NO./DATE FILED

STATUS

2747P4241_AU

AU APPLICATION NO.: 2018200189 FILED: 01/10/2018

PENDING

2747P4241_EU

EU APPLICATION NO: 18158919.3 FILED: 02/27/2018

Response to OA filed 03/03/2021

Annuity due 02/28/2022

2747P4241_KR

KOREA APPLICATION NO.: 10-2018-0008666 FILED: 01/24/2018

Examination request filed 01/21/2021

2747P4241_MAL

MALAYSIA APPLICATION NO.: 2018000116 FILED: 01/26/2018

Substantive Examination : April 26th, 2023

2747P4241_MX

MX App No.: MX/A/2018/005426

Filed: 04/27/2018

PENDING

2747P4241_NZ

NZ APPLICATION NO.: 738969

FILED: 01/08/2018

PENDING

2747P4241_PH

PH APPLICATION NO.: 1-2018-000027 FILED: 01/29/2018

PENDING

2747P4241_SING

SINGAPORE APPLICATION NO.: 1020180041W FILED: 01/31/2018

Examination due October 28, 2021

2747P4241_THAI

THAI APPLICATION NO: 1801002320 FILED ON: 04/19/2018

Examination due February 21, 2024

2747P4241_TK

TK APPLICATION NO: 2018/04504

FILED ON :03/30/2018

PENDING

2747P4241_TW

Taiwan App. No.: 107100645

Filed on: 01/08/2018

Examination due February 21, 2024 - Estimated cost $1200.00

2747P4241_VN

VN APPLICATION NO: 1-2018-01829 FILED ON: 04/27/2018

Filed Examination 10/21/2020

 

Our controlling stockholders have significant influence over the Company.

 

As of the merger, the Company’s officers and directors own or control 60% of the outstanding common stock. As a result they will possess a significant influence over our affairs and may have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could materially and adversely affect the market price of our common stock. Minority shareholders of the Company will be unable to affect the outcome of stockholder voting as long as our officers and director retains a controlling interest.

 

 
19

 

 

Our current officers and directors may set salaries and perquisites in the future, which the Company is unable to support with its current assets.

 

There are as yet no written employment agreements, and our officers and directors may decide to award themselves salaries and other benefits. The Company does not have significant revenues, and there is no guarantee that have significant revenue in the near future. We will be unable to support any higher salaries or other benefits for management, which will cause us to cease operations.

 

We will likely need additional capital in the future to finance our planned growth, which we may not be able to raise or it may only be available on terms unfavorable to us or our stockholders. Ultimately, this may result in our inability to fund our working capital requirements and harm our operational results.

 

We have and expect to continue to have substantial capital expenditure and working capital needs. In the near future we expect that we will need to raise funds, together with cash generated from operations and our current cash, cash equivalents and short-term investments to meet our working capital and capital expenditure requirements for the next one to three years.

 

If there is low consumer demand for our products, operating difficulties or other factors, many of which are beyond our control, which causes our revenues or cash flows from operations, if any, to decrease, we may be limited in our ability to spend the capital necessary to complete our development, marketing and growth programs. We will require additional financing, in addition to anticipated cash generated from our operations, to fund our planned growth. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In such a capital restricted situation, we may curtail our marketing, development, and operational activities or be forced to sell some of our assets on an untimely or unfavorable basis, each of which could have a material adverse effect on our results of operations and financial condition.

 

We depend on certain key employees and believe the loss of any of them would have a material adverse effect on our business.

  

We depend on the continued services of our management team, including Miaohong Hanson, President and Chief Executive Officer, Lili Fan, Secretary and Treasurer, Ting Wang, Chief Financial Officer and Donghai Shi, Executive Vice President, and Director and controlling shareholder. While we have no assurance that our current management will produce successful operations, the loss of such personnel could have an adverse effect on meeting our production and financial performance objectives. We have no assurance that we will not lose the services of these or other key personnel and may not be able to timely replace any personnel if we do lose their services.

 

We have not implemented various voluntary corporate governance measures, in the absence of which, stockholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

 

Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE, or the Nasdaq Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges and NASDAQ are those that address board of directors’ independence, audit committee oversight, and the adoption of a code of ethics.

 

We have not yet adopted any of these other corporate governance measures and, since our securities are not listed on a national securities exchange or NASDAQ, we are not required to do so. We have not adopted corporate governance measures such as an audit or other independent committees of our board of directors as we presently have only three directors. If we expand our board membership in future periods to include additional directors, we may seek to establish an audit and other committees of our board of directors. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. For example, in the absence of audit, nominating and compensation committees comprised of at least a majority of independent directors, decisions concerning matters such as compensation packages to our senior officers and recommendations for director nominees are made by a majority of directors who have an interest in the outcome of the matters being decided. Prospective investors should consider our current lack of corporate governance measures in making their investment decisions.

 

 
20

 

 

We may be exposed to potential risks relating to our internal controls over financial reporting.

 

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the Securities and Exchange Commission adopted rules requiring public companies to include a report of management on the company’s internal controls over financial reporting in their annual reports, including Form 10-K. We are subject to the requirement of having our annual report contain management’s assessment of the effectiveness of the Company’s internal control over financial reporting. We are currently evaluating the effect that compliance with Section 404 will have on our consolidated operating results and financial condition, and the cash flow necessary to implement SOX 404, in order to allow our management to report on our internal controls.

 

We expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX 404. We are unable at this time to quantify the amount we will spend to develop the necessary documentation and testing required by SOX 404. If we do not have sufficient resources to fund the documentation and testing required by SOX 404, and to engage qualified staff or consultants to assist us with compliance issues as required in connection with our audits, we will not be able to fulfill our obligation publicly-reporting company and we may have difficulty attracting additional equity or debt financing, each of which could materially adversely affect our business.

 

We have adopted broad indemnification and liability limiting provisions for purposes of protecting our officers and directors.

 

We have adopted broad indemnification and liability limiting provisions regarding its officers and directors in our Articles of Incorporation and Bylaws. Stockholders will have only limited recourse against individual officers and directors as a result of these provisions.

 

We do not anticipate paying dividends to our stockholders in the near future, which may limit our ability to attract investments.

 

We do not anticipate paying dividends in the near term. We expect to retain income, if any, for working capital and investment needs. It is anticipated that any income received from operations will be devoted to future operations. The timing and payment of cash or other distributions, if any, will be left to the discretion of the Board of Directors.

 

Our articles of incorporation, bylaws and Florida Law contain provisions that could discourage an acquisition or change of control.

 

Our articles of incorporation authorize our board of directors to issue common stock without stockholder approval. We have not authorized nor issued any shares of preferred stock. If our board of directors elects to issue shares of preferred stock, it could be more difficult for a third party to acquire control of us. In addition, provisions of the articles of incorporation and bylaws could also make it more difficult for a third party to acquire control of us.

 

These statutory anti-takeover measures may have certain negative consequences, including an effect on the ability of the stockholders of the Company or other individuals to (i) change the composition of the incumbent board of directors; (ii) benefit from certain transactions which are opposed by the incumbent board of directors; and (iii) make a tender offer or attempt to gain control of the Company, even if such attempt were beneficial to the Company and our stockholders. Since such measures may also discourage the accumulations of large blocks of our common stock by purchasers whose objective is to seek control of our company or have such common stock repurchased by us or other persons at a premium, these measures could also depress the market price of our common stock. Accordingly, our stockholders may be deprived of certain opportunities to realize the “control premium” associated with take-over attempts.

 

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

 

We have a limited number of personnel that are required to perform various roles and duties. Furthermore, we have one individual, our CEO who is responsible for monitoring and ensuring compliance with our internal control procedures. These individuals developed our internal control procedures and are responsible for monitoring and ensuring compliance with those procedures, but neither is an accountant. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the shareholders.

 

 
21

 

 

Risks Related to Our Common Stock.

 

There is no active public market for our stock and there may never be such a market.

 

There is no active public market for our stock, which means that even if an exemption from the Securities Act is available to an investor for the resale of our stock, there may be no one willing to buy it. Although we have a symbol (“PGID”) and we are quoted on OTC Markets Group, Inc. Pink, there is no active trading in our common stock. We cannot assure investors that a public market of our stock will ever materialize. Investors should be prepared to hold an investment in our stock indefinitely.

 

Because our common stock is deemed a low-priced “Penny” stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

 

Since our common stock is, by definition, a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment even if a market develops for our stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

 

 

·

Deliver to the customer, and obtain a written receipt for, a disclosure document;

 

·

Disclose certain price information about the stock;

 

·

Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

 

·

Send monthly statements to customers with market and price information about the penny stock; and

 

·

In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

 

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

 

Future sales of our common stock may result in a decrease in the market price of our common stock, even if our business is doing well.

 

The market price of our common stock, when and if established, could drop due to sales of a large number of shares of our common stock in the market after the offering or the perception that such sales could occur. This could make it more difficult to raise funds through future offerings of common stock.

 

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our audited consolidated financial statements and the related notes for the year ended July 31, 2020, and the nine months ended April 30, 2021, that appear elsewhere in this current report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” beginning on page 16 of this current report.

  

Our consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

 
22

 

 

Cash Requirements

 

Over the next 6 months we intend to carry on business to market, package and distribute our family-based products. We anticipate that we will incur the following operating expenses during this period:

 

Payroll: $182,000

Selling Expenses: $15,000

Professional Fees: $33,000

Insurance: $10,000

Engineering, Research & Development: $20,000

Inventory: $90,000

Patent: $15,000

 

We will require funds of approximately $365,000 over the next six months to operate our business. This capital will be used to build out infrastructure, purchase inventory, upgrade our website, accounting, legal and marketing expenses.

 

These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on their investment in our common stock. Further, we may continue to be unprofitable.

 

Purchase of Significant Equipment

 

We do not anticipate the purchase or sale of any plant or significant equipment during the next 12 months.

 

Going Concern

 

There is significant doubt about our ability to continue as a going concern.

 

Our Company had a Stockholders’ Equity at July 31, 2020 of $1,743,758 as our assets exceeded our liabilities. The continuity of our future operations is dependent upon our ability to increase sales and brand awareness. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to continue relying upon the issuance of equity securities to finance our operations. However there can be no assurance we will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable.

 

Our flagship product is the aMACEing Zero Leak Baby Bottle®, but it’s more than just another baby bottle; it’s our commitment to improving the precious feeding time that occurs between parent and child. To that end, we have settled for nothing less than making the bottle out of the safest plastics and forming the nipple from the safest silicon. The Zero Leak/Variable Flow nipple erases both the inconvenience of spills and the hazard of choking. It is the perfect companion for our Bottle Holder, which allows parents the convenience of feeding their baby while keeping their hands free. Our bottles, nipples, and holders are patented not just in the United States, but around the globe. Consumers all over the world can already buy our products.

 

Some of our other baby products include: the Baby Backseat Mirror, toddler toilet seats, organic skin care products, and more to come. With our Baby Backseat Mirror, a handy accessory for the car, parents can keep an eye on the children seated behind them without taking their eyes off the road. Our toddler toiler seats are a great tool for potty training your little one, and it was thoughtfully designed to best fit the shape of an actual toddler’s body. For mothers and babies alike, our line of skin care products includes an assortment of soap, oils, baby powder, disinfecting spray, and more.

 

The financial statement does not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result should we cease to continue as a going concern.

 

Use of Estimates

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts and notes receivable, the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.

 

 
23

 

 

RESULTS OF OPERATIONS OF MACE CORPORATION

 

Working Capital

 

July 31,

2020

$

 

 

July 31,

2019

$

 

Cash

 

 

102,286

 

 

 

413,182

 

Current Assets

 

 

989,006

 

 

 

1,319,661

 

Current Liabilities

 

 

32,776

 

 

 

198,738

 

Working Capital (Deficit)

 

 

956,230

 

 

 

1,120,923

 

 

Cash Flows

 

July 31,

2020

$

 

 

July 31,

2019

$

 

Cash Flows provided by (used in) Operating Activities

 

 

(398,362 )

 

 

(618,553 )

Cash Flows provided by Financing Activities

 

 

107,704

 

 

 

4,437

 

Cash Flows provided by Investing Activities

 

 

(20,239 )

 

 

(10,794 )

Net Increase (decrease) in Cash During Period

 

 

(310,897 )

 

 

(624,910 )

 

Results for the year ended July 31, 2020 compared to the year ended July 31, 2019

 

Operating Revenues

 

The Company received revenues of $374,242 and $99,741 for the years ended July 31, 2020 and 2019, respectively.

 

Cost of Revenues

 

The Company’s cost of revenues for the years ended July 31, 2020 and 2019 was $205,611 and $34,409, respectively.

 

Gross Profit

 

The Company received gross profits of $168,631 and $65,332 for the years ended July 31, 2020 and 2019, respectively.

 

General and Administrative Expenses

 

General and administrative expenses consisted primarily of consulting fees, professional fees, and legal and accounting expenses. For the year ended July 31, 2020, general and administrative expenses were $136,348 compared to $192,586 for the year ended 2019. The primary operating expenses for 2020 were for salary, payroll, professional services and general and administrative expenses.

 

Other Income (Expense)

 

The Company did not have any other income (expense) for the year ended July 31, 2020 and had $4,854 expense for the year ended July 31, 2019.

 

Net Income (loss)

 

The net loss for the year ended July 31, 2020, was $796,596 compared to $653,654 for the year ended July 31, 2019.

 

Liquidity and Capital Resources

 

The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing of funds.

 

At July 31, 2020, the Company had total current assets of $989,006 compared to $1,319,661 at July 31, 2019. Current assets consisted primarily of cash, and inventory. At July 31, 2020, the Company had total current liabilities of $32,776 compared to $198,738 at July 31, 2019. Current liabilities consisted primarily of accounts payable and accrued liabilities. The decrease in our current liabilities was attributed to the decrease in customer deposits and loan from related party.

 

We had a positive working capital of $956,230 as of July 31, 2020.

 

 
24

 

 

Cash flow from Operating Activities

 

During the year ended July 31, 2020, cash used in operating activities was $(398,362) compared to $(618,553) for the year ended July 31, 2019. The increase in the amounts of cash used in operating activities was primarily due to the increase in stock-based compensation of $387,000 and increase in inventory to $22,500.

 

Cash flow from Financing Activities

 

For the year ended July 31, 2020, cash provided by financing activity was $107,704 compared to $4,437 provided during the year ended July 31, 2019.

 

Results for the Quarter Ended April 30, 2021

 

Working Capital

 

April 30,

2021

$

 

Cash

 

 

26,154

 

Current Assets

 

 

922,868

 

Current Liabilities

 

 

33,247

 

Working Capital (Deficit)

 

 

889,621

 

 

Cash Flows

 

April 30,

2020

$

 

Cash Flows provided by (used in) Operating Activities

 

 

-

 

Cash Flows provided by Financing Activities

 

 

79,982

 

Cash Flows provided by Investing Activities

 

 

(44,297 )

Net Increase (decrease) in Cash During Period

 

 

35,685

 

 

Results for the Nine Months Ended April 30, 2021

 

Operating Revenues

 

The Company received revenues of $54,290 for the nine months ended April 30, 2021.

 

Cost of Revenues

 

The Company’s cost of revenues for the nine months ended April 30, 2021 was $22,294.

 

Gross Profit

 

The Company received gross profits of $31,996 for the nine months ended April 30, 2021.

 

General and Administrative Expenses

 

General and administrative expenses consisted primarily of consulting fees, professional fees, and legal and accounting expenses. For the nine months ended April 30, 2021, general and administrative expenses were $71,846, amortization and impairment was $75,581 and salary and payroll costs were $83,486. The primary operating expenses for the nine months ended April 30, 2021 were $230,913 and were made up of salary, payroll, professional services and general and administrative expenses.

 

Other Income (Expense)

 

The Company had other income (expense) for the nine months April 30, 2021 of $21,043 of proceeds from government grants for the nine months ended April 30, 2021.

 

 
25

 

 

Net Income (loss)

 

The net loss for the nine months ended April 30, 2021, was $198,917.

 

Going Concern

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive business activities. For these reasons, we have included in our audited financial statements that there is substantial doubt that we will be able to continue as a going concern without further financing.

 

The Company is a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the accompanying financial statements, the Company had Total Stockholders’ Equity at July 31, 2020, of $1,862,595 as its liabilities exceeded its assets. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs for the next fiscal year and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. As of July 31, 2020, the Company has a net loss of $796,596, and if the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

During the year ended July 31, 2020, Company has net cash used in operating activities of $398,362 as well as stock compensation non-cash expenses of $387,000 and a net loss of $796,596. The Company raised $107,704 from financing activities in the year ended July 31, 2020, which resulted in a positive working capital of $102,286 as of July 31, 2020. If the Company is unable to raise additional adequate capital, it could be forced to cease operations.

 

Future Financings.

 

We will continue to rely on equity sales of the Company’s common shares in order to continue to fund business operations. Issuances of additional shares will result in dilution to existing shareholders. There is no assurance that the Company will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our business plan of selling our family and baby / infant related products.

 

Since inception, we have financed our cash flow requirements mainly through issuance of common stock and loans to third parties. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of revenues. Additionally, we anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. In the future we will need to generate sufficient revenues from sales in order to eliminate or reduce the need to sell additional stock or obtain additional loans. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.

 

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth.

 

To address these risks, we must, among other things, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our business model and website, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

 

 
26

 

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

 

Recently Issued Accounting Pronouncements

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Quantitative and Qualitative Disclosures about Market Risk

 

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives.

 

Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

 

Contractual Obligations

 

As a “smaller reporting company,” we are not required to provide tabular disclosure obligations.

 

Inflation

 

Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future.

 

Seasonality

 

Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, in the event that we succeed in bringing our planned products to market.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

 

 
27

 

 

Cash and Cash Equivalents

 

For purposes of reporting within the statement of cash flows, our company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Revenue Recognition

 

Our company is in the development stage and has yet to realize revenues from operations. We recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

 

Share-based Compensation

 

Our company follows the provisions of FASB Accounting Standards Codification (“ASC”) 718, “Share-Based Payment.” which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Equity instruments issued to non-employees for goods or services are accounted for at either the fair market value of the goods and services rendered or on the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50-30.

 

Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the year. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As our company has a loss for the years ended July 31, 2020, and 2019 the potentially dilutive shares are anti-dilutive and therefore they are not added into the earnings per share calculation.

 

Income Taxes

 

Our company accounts for income taxes pursuant to ASC 740. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. Our company maintains a valuation allowance with respect to deferred tax assets. Our company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration our financial position and results of operations for the current year. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry forward year under the Federal tax laws. Changes in circumstances, such as our company generating taxable income, could cause a change in judgment about the realization of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value of Financial Instruments

 

Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value 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 measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) a reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

 
28

 

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Our company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts our company could realize in a current market exchange. As of July 31, 2020, and 2019, the carrying value of accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.

 

Patent and Intellectual Property

 

Our company expenses the costs associated with obtaining a patent or other intellectual property purchased for research and development and has no alternative future use. For the periods ended July 31, 2020, and 2019, no events or circumstances occurred for which an evaluation of the alternative future use of patent or intellectual property was required.

 

Impairment of Long-Lived Assets

 

Our company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. For the years ended July 31, 2020, and 2019, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

 

Estimates

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. Actual results could differ from those estimates made by management.

 

Description of Property

 

Our operations were previously conducted from an approximately 2,800 square foot office space at 9171 W Flamingo, Las Vegas, Nevada, U.S.A. We own the building. Located in the Flamingo Trails Professional Plaza, we can be contacted by phone at (702) 888-1798. We consider our current office space arrangements adequate and will reassess our needs based upon the future growth of the company.

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth as of September 7, 2021, certain information regarding beneficial ownership of our common stock by:

 

 

Each executive officer who in this proxy statement are collectively referred to as the “Named Executive Officers;”

 

Each person known to us to beneficially own 5% or more of our common stock;

 

Each of our directors; and

 

All of our executive officers (as that term is defined under the rules and regulations of the SEC) and directors as a group.

 

We have determined beneficial ownership in accordance with Rule 13d-3 under the Exchange Act. Beneficial ownership generally means having sole or shared voting or investment power with respect to securities. Unless otherwise indicated in the footnotes to the table, each shareholder named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite the shareholder’s name. We have based our calculation of the percentage of beneficial ownership on 250,524,221 shares of the Company’s common stock outstanding on September 7, 2021.

  

 
29

 

 

Name of Beneficial Owner

 

Amount and Nature of Beneficial Ownership(1)

 

 

Percentage of Beneficial Ownership(2)

 

Directors and Officers:

 

 

 

 

 

 

Miaohong Hanson, CEO & President

 

 

23,750,000 (3)

 

 

9.5 %

Ting Wang, CFO

 

 

125,000

 

 

 

.05 %

Dong Hai Shi, Executive Vice President

 

 

122,500,000

 

 

 

49 %

Lili Fan, Secretary and Treasurer

 

 

3,295,000

 

 

 

1.3 %

Ronaldo Panida, Director

 

 

1,266,500

 

 

 

.5 %

Daniel Slater, Director

 

 

13,750

 

 

 

.005 %

Jeff Rorick, Director

 

 

125,000

 

 

 

.05 %

5% Shareholders

 

 

 

 

 

 

 

 

Edgardo Clores

 

 

46,060,682

 

 

 

18.4 %

All executive officers and directors as a group (7 persons)

 

 

151,075,250

 

 

 

60 %

(1)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding.

(2)

Based on 250,524,221 shares issued and outstanding.

(3)

Is controlled by 308 Sunny Ventures Series LLC, which is wholly owned by Miaohong Hanson.

 

Changes in Control

 

We do not currently have any arrangements which if consummated may result in a change of control of our company.

 

DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Directors and Executive Officers

 

The following table sets forth information regarding our executive officers, directors and significant employees, including their ages as of September 7, 2021:

 

As of September 7, 2021, We had ten-full-time employees, and no part-time employees. The directors and executive officers of the Company as of September 7, 2021, are as follows:

 

Name

 

Position

 

Age

 

Date of Appointment

Miaohong Hanson

 

CEO, President, Director

 

56

 

August 17, 2017

Dong Hai Shi

 

Executive Vice President, Director

 

57

 

August 17, 2017

Ting Wang

 

CFO

 

32

 

July 21, 2021

Lili Fan

 

Secretary and Treasurer

 

32

 

August 17, 2017

Ronaldo Panida

 

Director

 

59

 

August 17, 2017

Daniel Slater

 

Director

 

28

 

November 1, 2019

Jeff Rorick

 

Director

 

66

 

November 1, 2019

 

 
30

 

 

Miaohong Hanson, President, CEO and Director, Age 56. Ms. Hanson has served as President and CEO of Mace Corporation from December 2015 to present. Ms. Hanson is also Chief Executive Officer of Peregrine Industries Inc. Ms. Hanson brings a wealth of knowledge in the field of business development, management, and all stages of product line development. She has managed companies in the United States and Asia. Ms. Hanson is also the Chairwoman of the Board of Directors of Mace Corporation and Peregrine Industries, Inc. Ms. Hanson was Chief Financial Officer and Vice President for J.C. Hanson & Associates, and was previously Vice President and Manager of Purchases, Sales, and Customer Service (South China) for Jiangxi Techmed Inkjet Co. Ltd. Ms. Hanson has studied Business Accounting at Arizona Western College and Business at Zhejiang University. Ms. Hanson is Las Vegas Branch Chairperson of the Zhejiang Chamber of Commerce of America, Chairperson of the Zhejiang Association of Las Vegas and Vice President of Asian Culture Alliance, as well as Administrative Vice Minister of the World of Traditional Culture Research Institute, SaiShang LuXi Academy of Art, World Federation of Literary Artist, American Branch. Ms. Hanson speaks fluent Chinese and English. Ms. Hanson was selected for the Board of Directors because of her general business experience and management knowledge of United States and Asian markets.

 

Dong Hai Shi, Executive Vice President and Director, Age 57. Dong Hai Shi has served as Executive V.P. of Mace Corporation from December 2015 to present. He is also the founder and chairman of Hong Kong WeChat Business E-Commerce Ltd and USA WeChat Business E-Commerce, Inc. He was founder and chairman of Shang Hai Tong Architectural Ltd., Shang Hai Ao Tong Property Management Inc., and Shang Hai Si Tong Construction Ltd. He was the president of his own construction company in Shang Hai from 2005 to 2009. He speaks fluent Chinese and some English. Mr. Shi was selected for the Board of Directors because of his general business experience, knowledge, contacts, and multiple businesses in Asia.

 

Ting Wang, Chief Financial Officer, Age 32. Ting Wang has served as Staff Accountant and Executive Assistant of Mace Corporation from September 2019 to the present and has served as The bookkeeper from July 2016 to September 2017. She is highly motivated, detail-oriented, and energetic with a strong work ethic, skilled in but not limited to accounts payable, accounts receivable, account reconciliations, payroll processing, and financial statements. Over the course of her 5-year career, she has developed a skill set directly relevant to her role, including working effectively as part of a team as well as independently, handling multiple tasks, and meet deadlines. She also is a Staff Accountant of Appliance Parts Center since February 2020. She is a fluent speaker, reader, and writer of English and Mandarin. She graduated with a Bachelor of Science degree in Accounting from University of Nevada, Las Vegas.

 

Lili Fan, Secretary and Treasurer, Age 32. Lili Fan has served as Secretary of Mace Corporation from October 2017 to the present and has served as Executive Assistant/Office Manager from April 2016 to October 2017. She is a detail-oriented professional who has been consistently praised as efficient by coworkers and management. Over the course of her 10-year career, she has developed a skill set directly relevant to the officer role, including executive support, operations management, and customer service. She has consistently demonstrated communication, teamwork, and management abilities in every aspect of her role at Mace Corporation. She was International Sales Manager/Raw Materials Purchaser of Zhe Jiang Wei Hao Inkjet Technology Co.; Ltd from 2014 to 2016. She is a fluent speaker, reader, and writer of English, Mandarin, and Cantonese. She graduated with a Bachelor of Science degree in Business Administration from W. P. Carey School of Business of Arizona State University.

 

Ronaldo Panida, Director, Age 59. Ronaldo Panida is and has been employed by Wal-Mart Vision Center as a Vision Center Manager, since 2016. He was previously a District Manager for the Optical Division in Reno, NV, Hawaii and Alaska. Duties were, Operations, Budgeting and Compliance. He attended Leeward College of University of Hawaii major in Liberal Arts. Attended Kenway School of Accounting and received a Diploma as a Fullcharge Accountant in Hawaii. Mr. Panida later became an Optical Technician in Hawaii and received a Refracting Optician Diploma. Mr. Panida is currently a Licensed Optician in both the state of Nevada and the state of Hawaii. He is certified in both American Board of Optician and National Contact Lens Certified. Mr. Panida was selected as a director because of his business experience in a retail environment.

 

Jeff Rorick, Director, Age 66. Jeff Rorick is an Information Systems professional with extensive experience in Retail Operations. He has been a Chief Information Officer and member of the Executive Committee since 2003. His core strength is in Applications Development with expertise in Supply Chain Management, Marketing and Store Systems. His key strengths include planning, team building, communication and decision making. He has maintained excellent relationships with members of senior management and was a key member involved in merger activities in both the grocery and drug sectors. Despite retiring at the end of 2014, he is still taking on consulting opportunities. He has completed two years of general education with emphasis on Accounting and Information Systems, and attended and sponsored numerous management, leadership and technical training programs.

 

Daniel Slater, Director, Age 28. Daniel Slater has handled a variety of tasks and processes during the almost two years he has been employed at Mace Corporation. Some of those activities include: preparation of stock certificates, managing out-of-office shipments, reviewing board resolutions, and responsibility for sales and reconciliations in the Mace accounting system. Prior to his employment, he has proven himself to be a diligent student, graduating from UNLV with a Bachelor of Science in Business Administration; Accounting degree in 2015, and again from UNLV with a Master of Science in Accounting degree in 2017.

 

 
31

 

 

None of our officers or directors in the last five years has been the subject of any conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses), the entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities; a finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or the entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person’s involvement in any type of business or securities activities.

 

There are no family relationships among and between our directors, officers, persons nominated or chosen by the Company to become directors or officers, or beneficial owners of more than five percent (5%) of the any class of the Company’s equity securities.

 

Significant Employees

 

Other than the foregoing named officers and directors, we have no full-time employees whose services are materially significant to our business and operations who are employed at will by the Company.

 

Family Relationships

 

There are no family relationships between any of our directors, executive officers and proposed directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

 

1.

been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

 

 

2.

had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

 

 

3.

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

 

 

4.

been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

 

5.

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

 

6.

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

 
32

 

 

Compliance with Section 16(a) of the Securities Exchange Act of 1934

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended July 31, 2020, Forms 5 and any amendments thereto furnished to us with respect to the year ended July 31, 2020, and the representations made by the reporting persons to us, we believe that during the year ended July 31, 2020, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.

 

Code of Ethics

 

We have not adopted a code of ethics that applies to our officers, directors and employees. When we do adopt a code of ethics, we will disclose it in a Current Report on Form 8-K.

 

Audit Committee and Audit Committee Financial Expert

 

Our board of directors has determined that it does not have a member of its audit committee that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K and is “independent” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.

 

We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our sole director does not believe that it is necessary to have such committees because believes the functions of such committees can be adequately performed by the sole member of our board of directors.

 

EXECUTIVE COMPENSATION

 

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to our named executive Officer paid by us during the year ended July 31, 2020 and 2019, in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock
Awards
($)

 

Option Awards
($)

 

Non-Equity Incentive Plan Compensation ($)

 

Non-Qualified Deferred Compensation Earnings

($)

 

All Other Compensation
($)

 

Totals
($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Miaohong Hanson,

CEO, Pres, Director

 

2020

 

 

27,750

 

0

 

0

 

0

 

0

 

0

 

0

 

 

27,750

 

2019

 

 

57,000

 

0

 

0

 

0

 

0

 

0

 

0

 

 

57,000

Dong Hai Shi

 

2020

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

E.V.P., Director

 

2019

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Ting Wang

 

2020

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

CFO

 

2019

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Lili Fan

 

2020

 

 

15,000

 

0

 

0

 

0

 

0

 

0

 

0

 

 

15,000

Secretary and Treasurer

 

2019

 

 

36,000

 

0

 

0

 

0

 

0

 

0

 

0

 

 

36,000

Ronaldo Panida

 

2020

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Director

 

2019

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Daniel Slater

 

2020

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Director

 

2019

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Jeff Rorick

 

2020

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

Director

 

2019

 

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

 

0

 

 
33

 

 

Except for the following there are no compensatory plans or arrangements, including payments to be received from the Company with respect to any executive Officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.

 

Outstanding Equity Awards at Fiscal Year-End

 

No executive Officer received any equity awards, or holds exercisable or unexercisable options, as of the year ended July 31, 2020.

 

OPTION AWARDS

 

 

STOCK AWARDS

 

Name

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

 

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)

 

 

Option Exercise Price ($)

 

 

Option Expiration Date

 

 

Number of Shares or Units of Stock that have not Vested (#)

 

 

Market Value of Shares or Units of Stock that have not Vested
($)

 

 

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested
($)

 

 

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested
($)

 

(a)

 

(b)

 

 

(c)

 

 

(d)

 

 

(e)

 

 

(f)

 

 

(g)

 

 

(h)

 

 

(i)

 

 

(j)

 

None

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

Long-Term Incentive Plans

 

There are no arrangements or plans in which the Company would provide pension, retirement or similar benefits for our Director or executive Officer.

 

Compensation Committee

 

The Company currently does not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

 

Security Holders Recommendations to Board of Directors

 

The Company welcomes comments and questions from the shareholders. Shareholders can direct communications to the Chief Executive Officer, Miaohong Hanson, at our executive offices. However, while the Company appreciates all comments from shareholders, it may not be able to individually respond to all communications. Management attempts to address shareholder questions and concerns in press releases and documents filed with the SEC so that all shareholders have access to information about the Company at the same time. Miaohong Hanson collects and evaluates all shareholder communications. All communications addressed to the Director and executive Officer will be reviewed by Miaohong Hanson unless the communication is clearly frivolous.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Related Party Transactions

 

On December 2, 2015, the Company entered into an instalment contract with Hong Kong WeChat Business E-Commerce Limited to sell to WeChat, which became a related party by virtue of the number of shares WeChat owned, 490,000,000 common shares at $0.01 per share. The payments were to be a minimum of $80,000 per month for twenty-four months with the balance due in one final payment. During the years ended July 31, 2018, 2017 and 2016 the Company issued, in fulfillment of its contract with Hong Kong WeChat, 134,000,000, 190,000,000 and 128,000,000 of its common shares at of $0.01 per share and received cash of $1,340,000, $1,900,000, and $1,280,000 and respectively.

 

 
34

 

 

During the year ended July 31, 2016, the Company loaned $87,153 to a related party founder. The non-interest loan was repaid, by a cash payment of $36,000, assumption of $50,563 by a founder that has a receivable from the Company and a further cash payment of $590. The loan was collateralized by two vehicles.

 

Through July 31, 2018, the Company’s office and warehouse premises, was located at 3854 Schiff Dr., Las Vegas, Nevada, and was leased, on behalf of the Company, by a related party. The rent expense which totaled $40,065 for the year ended July 31, 2018, plus $10,493 at the year ended July 31, 2017, had been recorded as payable to the related party. The obligation to repay bore no interest or time frame. On July 31, 2019, the related party was owed $53,918 as the debt was reduced by his absorption of third-party receivable of $50,563. The $53,918.20 was repaid on October 2, 2019.

 

During the year ended July 31, 2020, the Company paid administrative overhead, in the amount of $14,097, for a publicly traded entity under common control and management. Total working capital advances through July 31, 2020 and 2019 to the same entity were $54,176 and $40,079.

 

Loan to Related Party

 

During fiscal year ended July 31, 2016, the Company advanced $87,153 to a related party consultant. $36,000 was repaid, by the consultant, in cash, during fiscal year ended July 31, 2017; $50,563 was repaid by netting it against a Company payable to a related party and reducing the subscription receivable accordingly; the remaining $590 was paid by cash during the 2018 fiscal year. The Company has no formal policy with regard to such future advances.

 

During the year ended July 31, 2020, the Company paid administrative overhead, in the amount of $14,097, for a publicly traded entity under common control and management. Total working capital advances through July 31, 2020 and 2019 to the same entity were $54,176 and $40,079.

 

Other than the aforementioned related party transactions, during the last two full fiscal years and the current fiscal year or any currently proposed transaction, there are no other transactions involving the Company, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for its last three fiscal years.

 

Promoters and Certain Control Persons

 

We did not have any promoters at any time during the past five fiscal years.

 

Compensation of Directors

 

No member of our board of directors received any compensation for his services as a director during the year ended July 31, 2020, for our company.

 

Compensation of Directors

 

Directors are permitted to receive fixed fees and other compensation for their services as Directors. The Board of Directors has the authority to fix the compensation of Directors. No amounts have been paid to, or accrued to, Directors in such capacity.

 

Director Independence

 

The Board of Directors is currently composed of five (5) members. Miaohong Hanson, and Dong Hai Shi, do not qualify as independent Directors in accordance with the published listing requirements of the NASDAQ Global Market. Ronaldo Panida, Daniel Slater, and Jeff Rorick qualify as Independent Director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the Director is not, and has not been for at least three years, one of the Company’s employees and that neither the Director, nor any of his family members has engaged in various types of business dealings with us. In addition, the Board of Directors has not made a subjective determination as to each Director that no relationships exist which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director, though such subjective determination is required by the NASDAQ rules. Had the Board of Directors made these determinations, the Board of Directors would have reviewed and discussed information provided by the Directors and the Company with regard to each Director’s business and personal activities and relationships as they may relate to the Company and its management.

 

 
35

 

 

Legal Proceedings

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

 

Common Stock

 

Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing fifty percent (50%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our Articles of Incorporation do not provide for cumulative voting in the election of directors.

 

The holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available, therefore.

 

Upon liquidation, dissolution or winding up, the holders of shares of our common stock will be entitled to receive pro rata all assets available for distribution to such holders.

 

In the event of any merger or consolidation with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash). Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

 

Dividend Policy

 

We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future.

 

Share Purchase Warrants

 

We have not issued and do not have outstanding any warrants to purchase shares of our common stock.

 

Options

 

We have not issued and do not have outstanding any options to purchase shares of our common stock.

 

Convertible Securities

 

We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.

 

 
36

 

 

MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

 

Our common stock is currently quoted on the OTCQB under the symbol PGID, an inter-dealer automated quotation system for equity securities not included on The NASDAQ Stock Market. While there is trading activity in the Company’s stock, the market is not particularly active. Quotation of the Company’s securities on the OTCQB limits the liquidity and price of the Company’s common stock more than if the Company’s shares of common stock were listed on The NASDAQ Stock Market or a national exchange. For the periods indicated, the following table sets forth the high and low bid prices per share of common stock. The below prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

 

 

 

FISCAL YEAR ENDED JULY 31

 

 

 

2020

 

 

2019

 

 

 

HI

 

 

LOW

 

 

HI

 

 

LOW

 

 

 

 

 

 

 

 

 

 

 

 

 

 

October 31

 

$ 0.75

 

 

$ 0.75

 

 

$ 1.00

 

 

$ 1.00

 

January 31

 

 

0.51

 

 

 

0.51

 

 

 

1.00

 

 

 

1.00

 

April 30

 

 

0.20

 

 

 

0.20

 

 

 

0.30

 

 

 

0.30

 

July 31

 

 

0.26

 

 

 

0.26

 

 

 

0.31

 

 

 

0.31

 

 

(b) As of July 31, 2020, our shares of common stock were held by approximately 60 stockholders of record. The Company’s transfer agent is VStock Transfer, LLC.

 

(c) Dividends

 

We currently do not pay cash dividends on our common stock and have no plans to reinstate a dividend on our common stock.

 

(d) Sale of Unregistered Securities

 

On July 17, 2017, Peregrine Industries, Inc., issued a total of 22,477,843 of its restricted common shares, par value $0.0001, to Dolomite Holdings Ltd., the corporate parent and principal shareholder of the Registrant, at that time. The Shares were issued upon the conversion by Dolomite, effective July 14, 2017, of principal and accrued interest owed by the Registrant to Dolomite evidenced by convertible notes and other short-term debt in the aggregate amount of $443,718, representing all of the liabilities of the Registrant at its fiscal year-ended June 30, 2017. The fair value of the shares is determined to be the carrying value of the principal and accrued interest of $443,718 since Dolomite was related party. Therefore the settlement didn’t have any gain or loss.

 

The issuance of the Shares was made in reliance upon the exemptions provided in Section 4(2) of the Securities Act of 1933, as amended and Regulation S promulgated by the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.

 

Effective July 21, 2017, Dolomite sold, transferred and assigned a total of 22,477,843 restricted shares of the Registrant’s common stock, par value $0.0001 that it acquired upon the conversion of all liabilities owed by the Registrant to Dolomite, to four persons, none of whom were affiliated with the Registrant or with Dolomite. The 22,477,843 Shares represented in excess of 97% of the Registrant’s total issued and outstanding Shares at July 21, 2017, resulting in a change of control of the Company.

 

(e) Equity Compensation Plans

 

We have no equity compensation plans.

 

Rule 144 Shares

 

In general, under Rule 144, a person who is not one of our affiliates and who is not deemed to have been one of our affiliates at any time during the three months preceding a sale and who has beneficially owned shares of our common stock for at least six months would be entitled to sell them without restriction, subject to the continued availability of current public information about us (which current public information requirement is eliminated after a one-year holding period).

 

A person who is an affiliate and who has beneficially owned shares of a company’s common stock for at least six months, subject to the continued availability of current public information about us, is entitled to sell within any three-month period a number of shares that does not exceed the greater of:

 

 

·

one percent of the number of shares of our company’s common stock then outstanding, which, in our case, will equal approximately 2,730,000 shares as of the date of this Current Report on Form 8-K; or

 

 
37

 

 

Rule 144 is not available for either a reporting or non-reporting shell company, as defined under Rule 405 of the Securities Act, unless our company: has ceased to be a shell company; is subject to the Exchange Act reporting obligations; has filed all required Exchange Act reports during the preceding twelve months; and at least one year has elapsed from the time the company filed with the SEC, current Form 10 type information reflecting its status as an entity that is not a shell company.

 

Penny Stock

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

 

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

 

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

 

Dividends

 

The Company has not declared, or paid, any cash dividends since inception and does not anticipate declaring or paying a cash dividend for the foreseeable future.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

We do not have any equity compensation plans.

 

Stock Transfer Agent

 

The Company’s new stock transfer agent is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11516.

 

Share Purchase Warrants

 

None.

 

Indemnification of Directors and Officers

 

Our Bylaws, as amended, provide to the fullest extent permitted by Florida law that our directors or officers shall not be personally liable to us or our shareholders for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended, is to eliminate our rights and our shareholders (through shareholders’ derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. We believe that the indemnification provisions in our Articles of Incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers.

 

 
38

 

 

The Florida Business Corporation Act provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he or she was a director, officer employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful.

 

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 Securities 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 Securities Act and will be governed by the final adjudication of such issue.

 

In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid one of our directors, officers or controlling persons 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

Section 3 – Securities and Trading Markets

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information provided in Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

The shares were issued pursuant to the exemption from registration found in Regulation D, Regulation S and through Section 4(2) promulgated under the Securities Act of 1933, as amended.

 

Section 5 Corporate Governance and Management

 

Item 5.01 Changes in Control of Registrant.

 

The information provided in Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On December 1, 2017, the Board of Directors of Peregrine Industries (the “Company”) approved a change in the fiscal year end from June 30 to July 31, effective the fiscal year commencing on July 1, 2019. The Company expects to make the fiscal year change on a prospective basis and will not adjust operating results for previous periods. However, the change will impact the prior year comparability of each of the fiscal quarters and annual period in 2020 in future filings. The Company believes this change will provide benefits, including aligning its reporting periods to be consistent with an intended merger with an operating company.

 

 
39

 

 

Since the change in the Company’s year-end is from the last day of the month ended June 30 and the new fiscal year-end will be within one month, the new fiscal year will commence with the end of the old fiscal year, and because the change is not deemed a change in fiscal year for purposes of reporting subject to Rule 13a-10 or 15d-10, a transition report is not required to be filed on Form 10-K for the month ending July 31, 2019. The first interim report of fiscal 2020 is for the quarter ending October 31, 2019.

 

Item 5.06 Change in Shell Company Status.

 

As a result of the consummation of the Merger in Item 1.01 and the additions of business operations described in this Current Report on Form 8-K, we believe that we are no longer a “shell company,” as that term is defined in Rule 405 under the Securities Act and Rule 12b-2 under the Exchange Act.

 

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

Audited Financial Statements of Mace Corporation – filed herewith.

 

(d) Exhibits

 

Exhibit Number

 

Description of Exhibit

 

Filing

3.1

 

Articles of Merger Filed August 3, 2021 with the Florida Secretary of State

 

Filed herewith.

10.01

 

Plan and Agreement of Merger by and between the Company and MACE Corporation.

 

Filed herewith.

 

 
40

 

 

SIGNATURE

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned hereunto duly authorized.

 

PEREGRINE INDUSTRIES, INC.

 

 

 

By:

/s/ Miaohong Hanson

 

 

 

 

Title:

Chief Executive Officer, President, Director

 

 

Dated: September 17, 2021

 

/s/ Dong Hai Shi

 

September 17, 2021

Thomas Hemingway, Executive Vice President, Director

 

Date

 

 

 

/s/ Ting Wang

 

September 17, 2021

Ting Wang, Chief Financial Officer

 

Date

 

 

 

/s/ Lili Fan

 

September 17, 2021

Lili Fan, Secretary and Treasurer

 

Date

 

 

 

/s/ Ronaldo Panida

 

September 17, 2021

Ronaldo Panida, Director

 

Date

 

 

 

/s/ Daniel Slater

 

September 17, 2021

Daniel Slater, Director

 

Date

 

 

 

/s/ Jeff Rorick

 

September 17, 2021

Jeff Rorick, Director

 

Date

 

 
41

 

  

Peregrine Industries, Inc.

(d/b/a Mace Corporation)

 

TABLE OF CONTENTS

 

FOR THE YEARS ENDED July 31, 2020 and 2019

 

Report of Independent Registered Public Accounting Firm BF Borgers CPA, PC

 

43

 

Balance Sheets as of July 31, 2020 and 2019

 

44

 

Statements of Operations for the Years Ended July 31, 2020 and 2019

 

45

 

Statements of Changes in Stockholders ‘Deficit for the Years Ended July 31, 2020 and

 

46

 

Statements of Cash Flows for the Ended July 31, 2020 and 2019

 

47

 

Notes to the Financial Statements

 

48

 

 

 
42

Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors of Mace Corporation

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Mace Corporation (the “Company”) as of as of July 31, 2020 and 2019, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the two years in the period ended July 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2020, in conformity with accounting principles generally accepted in the United States.

 

Going Concern Uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 audits 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 to 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 audits we are required to obtain an understanding of internal control over financial reporting 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.

 

/s/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s auditor since 2020.

 

Lakewood, CO

March 2, 2021

 

 
43

Table of Contents

 

Mace Corporation

 

Balance Sheets

 

 

 

July 31

 

 

 

2020

 

 

2019

 

Assets

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 102,286

 

 

$ 413,182

 

Accounts receivable

 

 

34,805

 

 

 

4,457

 

Inventory

 

 

785,500

 

 

 

808,000

 

Loan to related party

 

 

54,176

 

 

 

40,079

 

Prepaid expenses and other current assets

 

 

12,239

 

 

 

53,943

 

Total current assets

 

 

989,006

 

 

 

1,319,661

 

 

 

 

 

 

 

 

 

 

Long term assets

 

 

 

 

 

 

 

 

Office furniture and equipment - net

 

 

1,128

 

 

 

3,608

 

Production equipment - net

 

 

29,075

 

 

 

41,601

 

Land

 

 

62,307

 

 

 

62,307

 

Patents - cost

 

 

276,196

 

 

 

255,957

 

Production molds - net

 

 

111,807

 

 

 

181,215

 

Building and building improvements- net

 

 

393,076

 

 

 

410,933

 

Total long term assets

 

 

873,589

 

 

 

955,621

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 1,862,595

 

 

$ 2,275,282

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 32,730

 

 

$ 37,391

 

Customer deposits

 

 

46

 

 

 

107,430

 

Loan from related party

 

 

-

 

 

 

53,918

 

Total current liabilities

 

 

32,776

 

 

 

198,738

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Cares Act Payment Protection Program

 

 

76,061

 

 

 

-

 

SBA Economic Injury Disaster Loan

 

 

10,000

 

 

 

-

 

 

 

 

86,061

 

 

 

-

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 914,624,292 and 900,507,992 shares issued and outstanding as of July 31, 2020 and 2019 respectively

 

 

91,462

 

 

 

90,050

 

Additional paid in capital

 

 

5,193,344

 

 

 

4,730,944

 

Accumulated deficit

 

 

(3,541,048 )

 

 

(2,744,451 )

Total stockholders' equity

 

 

1,743,758

 

 

 

2,076,543

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$ 1,862,595

 

 

$ 2,275,282

 

 

 

 

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

 

 
44

Table of Contents

 

Mace Corporation

Statement of Operations

 

 

For the Years Ended

 

 

 

July 31

 

 

 

2020

 

 

 2019

 

 

 

 

 

 

 

 

Revenue, net

 

$ 374,242

 

 

$ 99,741

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

Product cost

 

 

205,611

 

 

 

34,409

 

Cost of sales

 

 

205,611

 

 

 

34,409

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

168,631

 

 

 

65,332

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Amortization and impairment

 

 

102,270

 

 

 

104,779

 

General and administrative expenses

 

 

136,348

 

 

 

192,586

 

Rent expense

 

 

-

 

 

 

6,808

 

Research and development

 

 

-

 

 

 

103,166

 

Salary and payroll costs

 

 

726,609

 

 

 

316,501

 

Total operating expenses

 

 

965,227

 

 

 

723,840

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(796,596 )

 

 

(658,508 )

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

Excess proceeds from disposal of long term asset

 

 

-

 

 

 

4,854

 

Total other income

 

 

-

 

 

 

4,854

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

$ (796,596 )

 

$ (653,654 )

Basic and diluted loss per share

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

 

907,206,710

 

 

 

900,384,762

 

 

 

 

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

 

 
45

Table of Contents

 

Mace Corporation

Statements of Stockholders' Equity

For the Years Ended July 31, 2020 and 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common

Shares

 

 

Par Value

 

 

Additional

Paid in

Capital

 

 

Accumulated

Deficit

 

 

Total

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of July 31, 2018

 

 

899,904,272

 

 

$ 89,990

 

 

$ 4,724,967

 

 

$ (2,090,798 )

 

$ 2,724,159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issued for services

 

 

160,000

 

 

$ 16

 

 

$ 1,584

 

 

 

-

 

 

$ 1,600

 

Common shares issued for cash

 

 

443,700

 

 

$ 44

 

 

$ 4,393

 

 

 

-

 

 

$ 4,437

 

Loss for the year ended July 31, 2019

 

 

-

 

 

$ -

 

 

$ -

 

 

$ (653,654 )

 

$ (653,654 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of  July 31, 2019

 

 

900,507,972

 

 

$ 90,050

 

 

$ 4,730,944

 

 

$ (2,744,452 )

 

$ 2,076,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issued to founder

 

 

12,500,000

 

 

 

1,250

 

 

 

 

 

 

 

-

 

 

 

1,250

 

Common shares issued for services

 

 

1,935,000

 

 

 

194

 

 

 

386,806

 

 

 

-

 

 

 

387,000

 

Common shares issued for cash

 

 

125,000

 

 

 

13

 

 

 

24,988

 

 

 

-

 

 

 

25,000

 

Assumption of founder debt

 

 

 

 

 

 

 

 

 

 

50,563

 

 

 

-

 

 

 

50,563

 

Cancelation of common shares

 

 

(443,700 )

 

 

(44 )

 

 

(4,393 )

 

 

-

 

 

 

(4,437 )

Cash contributed by investor

 

 

-

 

 

 

-

 

 

 

4,437

 

 

 

-

 

 

 

4,437

 

Loss for the year ended July 31, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(796,596 )

 

 

(796,596 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of July 31, 2020

 

 

914,624,272

 

 

$ 91,462

 

 

$ 5,193,344

 

 

$ (3,541,048 )

 

$ 1,743,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

 

 
46

Table of Contents

 

Mace Corporation

Statements of Cash Flow

 

 

For the Years Ended

 

 

 

July 31

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$ (796,596 )

 

$ (653,654 )

Adjustments to reconcile net income (loss) to 

 

 

 

 

 

 

 

 

net cash used in used in operating activities

 

 

 

 

 

 

 

 

Common stock issued for services

 

 

387,000

 

 

 

1,600

 

Common stock issued to founder

 

 

1,250

 

 

 

-

 

Depreciation

 

 

102,270

 

 

 

104,779

 

Gain on disposal of fixed asset

 

 

-

 

 

 

(4,854 )

Rent expenses paid directly by related party loan

 

 

-

 

 

 

3,360

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Increase in related party account  receivable

 

 

(30,347 )

 

 

(4,457 )

Increase in related party loan receivable

 

 

(14,097 )

 

 

(18,740 )

Decrease (increase) in inventory

 

 

22,500

 

 

 

(50,478 )

Decrease (increase) in prepaid expenses and other current assets

 

 

41,704

 

 

 

(17,183 )

Decrease (increase) in customer deposit

 

 

(107,384 )

 

 

67,300

 

Increase in accounts payable and accrued expenses

 

 

(4,661 )

 

 

(46,227 )

Cash provided by (used in) operating activities

 

 

(398,362 )

 

 

(618,553 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Cash used for acquisition of equipment

 

 

-

 

 

 

23,015

 

Cash used to acquire patents

 

 

(20,239 )

 

 

(33,809 )

Cash used in investing activities

 

 

(20,239 )

 

 

(10,794 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Repayment of notes payable

 

 

(3,357 )

 

 

-

 

Proceeds from sale of common stock

 

 

25,000

 

 

 

4,437

 

Proceeds form SBA Payroll Protection Plan

 

 

86,061

 

 

 

-

 

Cash flows provided by financing activities

 

 

107,704

 

 

 

4,437

 

 

 

 

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH

 

 

(310,897 )

 

 

(624,910 )

Cash at beginning of year

 

 

413,182

 

 

 

1,038,092

 

Cash at end of year

 

$ 102,286

 

 

$ 413,182

 

 

 

 

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

   

 
47

Table of Contents

 

Mace Corporation

Financial Notes for the years ended July 31, 2020 and 2019

  

NOTE 1 - ORGANIZATION AND OPERATIONS

 

The Company was incorporated, as Mace Corporation., on September 17, 2014, under the laws of the State of Nevada. Mace has created some next generation baby products. Our inventions such as the “Leak Resistant Nipple” will aid in keeping your baby dry and comfortable. The “Bottle Holder” will help parents feed the baby hands-free. Mace Corporation has undertaken to implement its business plan through a network of distributors providing Mace products to local, regional and national customers.

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Summary of Significant Accounting Policies

 

This summary of significant accounting policies of Mace Corporation is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements.

 

Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company maintains its cash in United States’ dollars in United States’ bank accounts which balances, may exceed the federal insured limit of $250,000.

 

Revenue Recognition

 

The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

 

The Company has assessed the impact of the guidance by performing the following five steps analysis:

 

Step 1: Identify the contract

Step 2: Identify the performance obligations

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue

 

 
48

Table of Contents

 

The Company generates revenue from the sale of items used for the care of babies. Although the Company plans to sell, its products through distributors, the bulk of current revenue is derived through internet and social media venues. Revenue is recognized upon delivery of services and when the Company has the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed. Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occurs when shipping is performed, and the customers assume risk of loss. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Accounts receivable as of July 31, 2020 and 2019 were $34,805 and $4,477, net of allowance for doubtful accounts of $0 and $0, respectively. respectively. An allowance for doubtful accounts will be provided for those accounts receivable considered to be uncollectable based on historical experience and management’s evaluation of outstanding accounts receivable at the end of the period. Management has reviewed the current accounts receivable and has concluded that no allowance was necessary as of July 31, 2020 nor 2019. Bad debts will be written off against the allowance when identified.

 

Inventory

 

As at July 31, 2020 and 2019 respectively the Company had $785,500 and $808,000 worth of inventory, stated at the lower of cost or market, valued on an average cost basis. The inventory is reviewed at least quarterly and adjusted for obsolescence and discrepancies. Managements’ evaluation was that there was no impairment required on July 31, 2020.

 

Loan to Related Party

 

During fiscal year ended July 31, 2016, the Company advanced $87,153 to a related party consultant. $36,000 was repaid, by the consultant, in cash, during fiscal year ended July 31, 2017; $50,563 was repaid by netting it against a Company payable to a related party and reducing the subscription receivable accordingly; the remaining $590 was paid by cash during the 2018 fiscal year. The Company has no formal policy with regard to such future advances.

 

During the year ended July 31, 2020, the Company paid administrative overhead, in the amount of $14,097, for a publicly traded entity under common control and management. Total working capital advances through July 31, 2020 and 2019 to the same entity were $54,176 and $40,079.

 

Prepaid Expenses and Product Deposits

 

Prepaid expenses, totaling $12,239 at July 31, 2020 and $53,943 at July 31, 2019, consist of cash paid in advance for services to be provided. The Company outsources all of the manufacturing processes and has paid deposits, of $6,000 and $50,892, respectively, to its manufacturers at July 31, 2020 and 2019. During that same time period the Company paid 6,241 and $3,051 for prepaid services.

 

Property and Equipment

 

Property and equipment consists primarily of office furniture and equipment stated at original cost less accumulated depreciation. Depreciation is calculated using the straight-line method based on the estimated useful life of the underlying asset, generally three to five years. Expenditures for repairs and maintenance are expensed as incurred.

 

 
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Production Molds

 

The building of production molds is outsourced to specialists and is recorded at the total cost to acquire each. The molds are built to specifications that include the number of parts anticipated to be produced. The cost of the mold is depreciated on a straight-line basis over 5 years. Cost of repairs and maintenance will be expensed as incurred. The value of each mold is reviewed quarterly and will be impaired, when necessary, based on managements’ valuation of the molds continuing viability. Depreciation of $69,408 was recorded for each of the years ended July 31, 2020 and 2019, respectively.

 

Patents

 

Patent costs consist of the legal fees paid to prepare, file and process the patent applications. Patents will be amortized, utilizing the straight-line method, over the useful life of the patent and will be reviewed quarterly to determine if impairment is required. Research and development are not included in the cost of patents, and, are expensed as incurred.

 

Land and Building

 

On September 27, 2017, the Company purchased property consisting of land and building at a total cost of $502,474, allocating $440,167 to the building and $62,307 to land. The building has been built out to serve as the Company’s office headquarters. The building is being depreciated on a straight-line basis over 25 years.

 

Related Parties

 

The Company accounts for all transactions and balances with related parties in accordance with ASC 850, “Related Party Disclosures”.

 

Loss per Share

 

Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities included in the calculation as their effect was antidilutive.

 

Income taxes

 

The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

 

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

 

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of July 31, 2018, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

 

 
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The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

 

The Company classifies tax-related penalties and net interest as income tax expense. As of July 31, 2020 and 2019, no income tax expense has been incurred.

 

Share-Based Compensation

 

The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718 Compensation—Stock Compensation. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period.

 

Fair Value Measurement

 

The Company adopted FASB 820 – Fair Value Measurement and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results but did expand certain disclosures.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

The Company did not have any Level 2 or Level 3 assets or liabilities as of July 31, 2020.

 

Recent Accounting Pronouncements

 

The Company has evaluated the recent accounting pronouncements through the date of this report and believes that none of them will have a material effect on the company’s financial statements.

 

NOTE 3 - GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since its inception the Company has been engaged, substantially, in developing its business plan and products. As shown in the financial statements, during the years ended July 31, 2020 and 2019, the Company incurred net losses of $796,596 and $653,654 and as of the same dates had accumulated deficits of $3,541,048 and $2,744,451. The Company has sufficient cash on hand to support current operations through July 2021. If the Company is unable to generate revenue, after that and is unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether.

 

 
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The financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company is taking steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) raising additional equity financing; 2) developing the business model to generate sales.

 

NOTE 4 - RELATED PARTY TRANSACTIONS

 

On December 2, 2015, the Company entered into an instalment contract with Hong Kong WeChat Business E-Commerce Limited to sell to WeChat, which became a related party by virtue of the number of shares WeChat owned, 490,000,000 common shares at $0.01 per share. The payments were to be a minimum of $80,000 per month for twenty-four months with the balance due in one final payment. During the years ended July 31, 2018, 2017 and 2016 the Company issued, in fulfillment of its contract with Hong Kong WeChat, 134,000,000, 190,000,000 and 128,000,000 of its common shares at of $0.01 per share and received cash of $1,340,000, $1,900,000, and $1,280,000 and respectively.

 

During the year ended July 31, 2016, the Company loaned $87,153 to a related party founder. The non-interest loan was repaid, by a cash payment of $36,000, assumption of $50,563 by a founder that has a receivable from the Company and a further cash payment of $590. The loan was collateralized by two vehicles.

 

Through July 31, 2018, the Company’s office and warehouse premises, was located at 3854 Schiff Dr., Las Vegas, Nevada, and was leased, on behalf of the Company, by a related party. The rent expense which totaled $40,065 for the year ended July 31, 2018, plus $10,493 at the year ended July 31, 2017, had been recorded as payable to the related party. The obligation to repay bore no interest or time frame. On July 31, 2019, the related party was owed $53,918 as the debt was reduced by his absorption of third-party receivable of $50,563. The $53,918.20 was repaid on October 2, 2019.

 

NOTE 5 - INCOME TAXES

 

The total net operating loss carryover as of July 31, 2020, is estimated to be $3,146,935 and was $2,738,588 as of July 31, 2019. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forward for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forward may be limited as to its use in future years.

 

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

 

 

 

July 31

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Operating loss

 

$ 3,146,935

 

 

$ 2,738,588

 

 

 

 

 

 

 

 

 

 

Deferred tax benefit

 

 

660,856

 

 

 

575,104

 

Valuation allowance

 

 

(660,856 )

 

 

(575,104 )

 

 

 

 

 

 

 

 

 

Net deferred tax asset

 

$ -

 

 

$ -

 

 

 
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NOTE 6 – PAYCHECK PROTECTION PROGRAM

 

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which includes provision for a Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”). The PPP allows qualifying businesses to borrow up to $10 million calculated based on qualifying payroll costs. The loan is guaranteed by the federal government and does not require collateral. On May 4, 2020, the Company accepted a Bank of America PPP Loan, in the amount of $76,061. The PPP Loan matures on April 30, 2022 and bears interest at a rate of 1.0% per annum, unless forgiven. Monthly amortized principal and interest payments are deferred for six months after the date of disbursement. The PPP Loan funds were received on May 4, 2020. The PPP Loan contains events of default and other provisions customary for a loan of this type. The PPP provides that (1) the use of PPP Loan amount shall be limited to certain qualifying expenses, (2) 100 percent of the principal amount of the loan is guaranteed by the SBA and (3) an amount up to the full principal amount may qualify for loan forgiveness in accordance with the terms of CARES. As of July 31, 2020, the Company was in full compliance with all covenants with respect to the PPP Loan. The Company expects to use the full proceeds of the PPP loan in accordance with the provisions of CARES. As of July 31, 2020, the balance of the PPP Loan was $76,061, which does not include accrued interest, from the date of the advance on May 4, 2020. We are communicating with Bank of America on the PPP Loan Forgiveness Application and expect full forgiveness as we have met all stated requirements.

 

NOTE 7 - STOCKHOLDERS’ EQUITY

 

As of July 31, 2020, there were 1,000,000,000 shares of common stock authorized having a par value of $0.0001 per share and there were 914,624,292 issued and outstanding and an accumulated deficit of $3,541,048.

 

Common Stock

 

During the year ended July 31, 2019, the Company issued 160,000 common restricted shares to four individuals for services provided, recorded at a cost of $1,600 and issued 443,700 common restricted shares for cash of $4,437.

 

On January 28, 2020, the Company sold, for cash, 125,000 common restricted shares to an investor, recorded at a cost of $0. 20 per share.

 

On February 3, 2020, the Company issued 12,500,000 common restricted shares to a founder, recorded, at a cost of $0.0001 per share.

 

On February 3, 2020, the Company issued 1,935,000 common restricted shares to six service providers, recorded at a cost of $0.20 per share.

 

NOTE 8 – COVID 19

 

The 2019 novel coronavirus (COVID-19) pandemic and responses to this crisis, including actions taken by federal, state and local governments, have had an impact on the operations of the company, including, without limitation, the following: reduced staffing due to employee suspected conditions and social distancing measures; constraints on productivity; management and staff non-essential business-related travel was constrained due to stay-at-home orders; most employees have shifted to remote work resulting in loss of productivity; consumers visiting dispensaries operated under license impacted by stay-at-home orders Management has made reasonable alternative arrangements, including attempts to render meetings and other workflow processes more efficient despite remote work; however, these have had limited success as at-home working conditions differ and certain employees roles are not amenable to work from home. Management continues to monitor the COVID-19 pandemic situation and federal, state and local recommendations and will provide updates as appropriate.

 

NOTE 9 – SUBSEQUENT EVENTS

 

The Company has evaluated events that have occurred after the balance sheet and through the date the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed below.

 

On February 24, the company received approval from SBA for the full forgiveness amount on Paycheck Protection Program (PPP) loan.

 

 
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Peregrine Industries, Inc.

(d/b/a Mace Corporation)

 

 

TABLE OF CONTENTS

 

FOR THE QUARTER ENDED APRIL 30, 2021

 

Balance Sheets as of April 30, 2021

 

 55

 

Statements of Operations for the Quarter Ended April 30, 2021

 

56

 

Statements of Changes in Stockholders ‘Deficit for the Quarter Ended April 30, 2021

 

57

 

Statements of Cash Flows for the Quarter Ended April 30, 2021

 

58

 

Notes to the Financial Statements

 

59

 

 

 
54

Table of Contents

 

Mace Corporation

 

Balance Sheet

 

(unaudited)

 

 

 

April 30

 

 

 

2021

 

Assets

 

Current assets

 

 

 

Cash and cash equivalents

 

$ 26,154

 

Accounts receivable

 

 

29,192

 

Inventory

 

 

790,511

 

Loan to related party

 

 

65,754

 

Prepaid expenses and other current assets

 

 

11,257

 

Total current assets

 

 

922,868

 

 

 

 

 

 

Long term assets

 

 

 

 

Production equipment - net

 

 

21,883

 

Land

 

 

62,307

 

Patents and trademarks - cost

 

 

306,494

 

Production molds - net

 

 

71,751

 

Building and building improvements- net

 

 

379,871

 

Total long term assets

 

 

842,306

 

 

 

 

 

 

Total assets

 

$ 1,765,174

 

 

 

 

 

 

Liabilities and Stockholders' Equity

Current liabilities

 

 

 

 

Accounts payable and accrued expenses

 

$ 33,247

 

Customer deposits

 

 

-

 

Loan from related party

 

 

-

 

Total current liabilities

 

 

33,247

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

Cares Act Payment Protection Program

 

 

76,061

 

SBA Economic Injury Disaster Loan

 

 

89,982

 

 

 

 

166,043

 

Stockholders' equity

 

 

 

 

Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 914,624,292 and 900,507,992 shares issued and outstanding as of July 31, 2020 and 2019 respectively

 

 

91,462

 

Additional paid in capital

 

 

5,193,344

 

Accumulated deficit

 

 

(3,718,922 )

Total stockholders' equity

 

 

1,565,884

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$ 1,765,174

 

 

 

 

 

 

(see accompanying notes which are an integral part of these audited financial statements)

 

 
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Mace Corporation

Statement of Operations

(unaudited)

 

 

For the

Nine Months

 

 

 

Ended

 

 

 

April 30,

2021

 

 

 

 

 

Revenue, net

 

$ 54,290

 

 

 

 

 

 

Cost of sales

 

 

 

 

Product cost

 

 

22,294

 

Cost of sales

 

 

22,294

 

 

 

 

 

 

Gross profit

 

 

31,996

 

 

 

 

 

 

Operating expenses

 

 

 

 

Amortization and impairment

 

 

75,581

 

General and administrative expenses

 

 

71,846

 

Salary and payroll costs

 

 

83,486

 

Total operating expenses

 

 

230,913

 

 

 

 

 

 

Loss from operations

 

 

(198,917 )

 

 

 

 

 

Other income

 

 

 

 

Proceeds from government grants

 

 

21,043

 

Total other income

 

 

21,043

 

 

 

 

 

 

Net loss for the year

 

$ (177,874 )

Basic and diluted loss per share

 

$ (0.00 )

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

Basic and diluted

 

 

914,624,272

 

 

 

 

 

 

(see accompanying notes which are an integral part of these audited financial statements)

   

 
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Mace Corporation

Statements of Stockholders' Equity

For the Nine Months Ended April 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares

 

 

Par Value

 

 

Additional

Paid in Capital

 

 

Accumulated

Deficit

 

 

Total

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of July 31, 2019

 

 

900,507,972

 

 

$ 90,050

 

 

$ 4,730,944

 

 

$ (2,744,451 )

 

$ 2,076,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares issued to founder

 

 

12,500,000

 

 

 

1,250

 

 

 

 

 

 

 

-

 

 

 

1,250

 

Common shares issued for services

 

 

1,935,000

 

 

 

194

 

 

 

386,806

 

 

 

-

 

 

 

387,000

 

Common shares issued for cash

 

 

125,000

 

 

 

13

 

 

 

24,988

 

 

 

-

 

 

 

25,000

 

Assumption of founder debt

 

 

 

 

 

 

 

 

 

 

50,563

 

 

 

-

 

 

 

50,563

 

Cancelation of common shares

 

 

(443,700 )

 

 

(44 )

 

 

(4,393 )

 

 

-

 

 

 

(4,437 )

Cash contributed by investor

 

 

-

 

 

 

-

 

 

 

4,437

 

 

 

-

 

 

 

4,437

 

Loss for the year ended July 31, 2020

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(796,596 )

 

 

(796,596 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances as of July 31, 2020

 

 

914,624,272

 

 

$ 91,462

 

 

$ 5,193,344

 

 

$ (3,541,047 )

 

$ 1,743,759

 

Loss for the nine months ended April 30, 2021

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(177,874 )

 

 

(177,874 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances, April 30, 2021

 

 

914,624,272

 

 

$ 91,462

 

 

$ 5,193,344

 

 

$ (3,718,921 )

 

$ 1,565,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

 

 
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Mace Corporation

Statements of Cash Flow

 

 

For the

Nine Months

Ended

 

 

 

April 30,

2021

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net loss

 

$ (177,874 )

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

 

 

 

 

Depreciation

 

 

75,581

 

Changes in operating assets and liabilities

 

 

 

 

Increase in related party account receivable

 

 

5,612

 

Increase in related party loan receivable

 

 

(11,578 )

Decrease (increase) in inventory

 

 

(5,011 )

Decrease (increase) in prepaid expenses and other current assets

 

 

982

 

Decrease (increase) in customer deposit

 

 

(46 )

Increase in accounts payable and accrued expenses

 

 

517

 

Cash provided by (used in) operating activities

 

 

-

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Cash used for acquisition of equipment

 

 

(2,000 )

Cash used to acquire molds

 

 

(12,000 )

Cash used to acquire patents

 

 

(30,297 )

Cash used in investing activities

 

 

(44,297 )

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds form Government Protection Plans

 

 

79,982

 

Cash flows provided by financing activities

 

 

79,982

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH

 

 

35,685

 

Cash at beginning of year

 

 

102,286

 

Cash at end of year

 

$ 137,970

 

 

 

 

 

 

see accompanying notes which are an integral part of these audited financial statements

 

 
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NOTE 1 - ORGANIZATION AND OPERATIONS

 

The Company was incorporated, as Mace Corporation., on September 17, 2014, under the laws of the State of Nevada. Mace has created some next generation baby products. Our inventions such as the “Leak Resistant Nipple” will aid in keeping your baby dry and comfortable. The “Bottle Holder” will help parents feed the baby hands-free. Mace Corporation has undertaken to implement its business plan through a network of distributors providing Mace products to local, regional and national customers.

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Summary of Significant Accounting Policies

 

This summary of significant accounting policies of Mace Corporation is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management who are responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements.

 

In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and observer comments;” The amendments in ASU No. 2017-13 amends the earlier adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU 2016-02. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight-line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and adoption beginning on January 1, 2019.

 

Use of estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company maintains its cash in United States’ dollars in United States’ bank accounts which balances, may exceed the federal insured limit of $250,000.

 

Revenue Recognition

 

The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

 

 
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The Company has assessed the impact of the guidance by performing the following five steps analysis:

 

Step 1: Identify the contract

Step 2: Identify the performance obligations

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue

 

The Company generates revenue from the sale of items used for the care of babies. Although the Company plans to sell, its products through distributors, the bulk of current revenue is derived through internet and social media venues. Revenue is recognized upon delivery of services and when the Company has the right to invoice the customer using the allowable practical expedient under ASC 606-10-55-18 since the right to invoice the customer corresponds with the performance obligations completed. Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occurs when shipping is performed, and the customers assume risk of loss. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration.

 

Recent Accounting Pronouncements

 

The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change. The Company currently does not have any recent accounting pronouncements that they are studying and feel may be applicable.

 

Revenue is derived from the sale of the “baby items” invented by the Company. Revenue through April 30, 2021, is minimal as the Company is in its infancy and has been focused on product development, manufacturing and the creation of a distributorship network.

 

Revenue is recognized when persuasive evidence of an arrangement exists, pricing is fixed and determinable, collection is reasonably assured and delivery or performance of service has occurred. Customer prepayments are reflected as deferred revenue as long as there is persuasive evidence that the purchased product will be shipped within a reasonable time.

 

The Company recognizes revenue when it is realized or realizable and earned. Product sales are recognized upon delivery of the products.

 

The Company must meet all of the following four criteria in order to recognize revenue:

 

 

·

Persuasive evidence of an arrangement exists

 

·

Delivery has occurred

 

·

The sales price is fixed or determinable

 

·

Collection is reasonably assured

 

Payments received in advance of satisfaction of the relevant criteria for revenue recognition are recorded as advances from customers.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Accounts receivable as of April 30, 2021 were $29,192. An allowance for doubtful accounts will be provided for those accounts receivable considered to be uncollectable based on historical experience and management’s evaluation of outstanding accounts receivable at the end of the period. Management has reviewed the current accounts receivable and has concluded that no allowance was necessary as of April 30, 2021. Bad debts will be written off against the allowance when identified.

 

 
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Inventory

 

On April 30, 2021, the Company had $790,511 worth of inventory, stated at the lower of cost or market, valued on an average cost basis. The inventory is reviewed at least quarterly and adjusted for obsolescence and discrepancies. Managements’ evaluation was that there was no impairment required on April 30, 2021.

  

Loan to Related Party

 

During fiscal year ended July 31, 2016, the Company advanced $87,153 to a related party consultant. $36,000 was repaid, by the consultant, in cash, during fiscal year ended July 31, 2017; $50,563 was repaid by netting it against a Company payable to a related party and reducing the subscription receivable accordingly; the remaining $590 was paid by cash during the 2018 fiscal year. The Company has no formal policy with regard to such future advances.

  

During the year ended July 31, 2020, the Company paid administrative overhead, in the amount of $14,097, for a publicly traded entity under common control and management. Total working capital advances through July 31, 2020 and 2019 to the same entity were $54,176 and $40,079.

 

Prepaid Expenses and Product Deposits

 

Prepaid expenses, totaling $11,257 at April 30, 2021 consist of cash paid in advance for services to be provided.

 

Property and Equipment

 

Property and equipment consists primarily of office furniture and equipment stated at original cost less accumulated depreciation. Depreciation is calculated using the straight-line method based on the estimated useful life of the underlying asset, generally three to five years. Expenditures for repairs and maintenance are expensed as incurred.

 

Production Molds

 

The building of production molds is outsourced to specialists and is recorded at the total cost to acquire each. The molds are built to specifications that include the number of parts anticipated to be produced. The cost of the mold is depreciated on a straight-line basis over 5 years. Cost of repairs and maintenance will be expensed as incurred. The value of each mold is reviewed quarterly and will be impaired, when necessary, based on managements’ valuation of the molds continuing viability. Depreciation of $52,056 was recorded for the nine months ended April 30, 2021.

 

Patents

 

Patent costs consist of the legal fees paid to prepare, file and process the patent applications. Patents will be amortized, utilizing the straight-line method, over the useful life of the patent and will be reviewed quarterly to determine if impairment is required. Research and development are not included in the cost of patents, and, are expensed as incurred.

 

Land and Building

 

On September 27, 2017, the Company purchased property consisting of land and building at a total cost of $502,474, allocating $440,167 to the building and $62,307 to land. The building has been built out to serve as the Company’s office headquarters. The building is being depreciated on a straight-line basis over 25 years.

 

Related Parties

 

The Company accounts for all transactions and balances with related parties in accordance with ASC 850, “Related Party Disclosures”.

 

 
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Loss per Share

 

Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities included in the calculation as their effect was antidilutive.

 

Income taxes

 

The Company follows ASC Topic 740 for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

 

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

 

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of July 31, 2018, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

 

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

 

The Company classifies tax-related penalties and net interest as income tax expense. As of April 30, 2021, no income tax expense has been incurred.

 

Share-Based Compensation

 

The Company accounts for stock-based compensation to employees in accordance with FASB ASC 718 Compensation—Stock Compensation. Stock-based compensation to employees is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period.

 

Fair Value Measurement

 

The Company adopted FASB 820 – Fair Value Measurement and Disclosures, or ASC 820, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results but did expand certain disclosures.

 

 
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Table of Contents

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

 

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

 

The Company did not have any Level 2 or Level 3 assets or liabilities as of July 31, 2020.

 

Recent Accounting Pronouncements

 

The Company has evaluated the recent accounting pronouncements through the date of this report and believes that none of them will have a material effect on the company’s financial statements.

 

NOTE 3 - GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since its inception the Company has been engaged, substantially, in developing its business plan and products. As shown in the financial statements, during the nine months ended April 30, 2021, the Company incurred a net losses of $177,874 and as of the same date had an accumulated deficit of $3,718,922. The Company has sufficient cash on hand to support current operations through July 2022. If the Company is unable to generate revenue, after that and is unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether.

 

The financial statements do not include any adjustment relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

The Company is taking steps to provide the necessary capital to continue its operations. These steps include but are not limited to: 1) raising additional equity financing; 2) developing the business model to generate sales.

 

NOTE 4 - RELATED PARTY TRANSACTIONS

 

On December 2, 2015, the Company entered into an instalment contract with Hong Kong WeChat Business E-Commerce Limited to sell to WeChat, which became a related party by virtue of the number of shares WeChat owned, 490,000,000 common shares at $0.01 per share. The payments were to be a minimum of $80,000 per month for twenty-four months with the balance due in one final payment. During the years ended July 31, 2018, 2017 and 2016 the Company issued, in fulfillment of its contract with Hong Kong WeChat, 134,000,000, 190,000,000 and 128,000,000 of its common shares at of $0.01 per share and received cash of $1,340,000, $1,900,000, and $1,280,000 and respectively.

 

During the year ended July 31, 2016, the Company loaned $87,153 to a related party founder. The non-interest loan was repaid, by a cash payment of $36,000, assumption of $50,563 by a founder that has a receivable from the Company and a further cash payment of $590. The loan was collateralized by two vehicles.

 

Through July 31, 2018, the Company’s office and warehouse premises, was located at 3854 Schiff Dr., Las Vegas, Nevada, and was leased, on behalf of the Company, by a related party. The rent expense which totaled $40,065 for the year ended July 31, 2018, plus $10,493 at the year ended July 31, 2017, had been recorded as payable to the related party. The obligation to repay bore no interest or time frame. On July 31, 2019, the related party was owed $53,918 as the debt was reduced by his absorption of third-party receivable of $50,563. The $53,918.20 was repaid on October 2, 2019.

 

 
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Table of Contents

 

NOTE 5 - INCOME TAXES

 

The total net operating loss carryover as of July 31, 2020, is estimated to be $3,146,935 and was $2,738,588 as of July 31, 2019. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forward for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forward may be limited as to its use in future years.

 

The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:

 

 

 

July 31

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

Operating loss

 

$ 3,146,935

 

 

$ 2,738,588

 

 

 

 

 

 

 

 

 

 

Deferred tax benefit

 

 

660,856

 

 

 

575,104

 

Valuation allowance

 

 

(660,856 )

 

 

(575,104 )

 

 

 

 

 

 

 

 

 

Net deferred tax asset

 

$ -

 

 

$ -

 

  

NOTE 6 – PAYCHECK PROTECTION PROGRAM

 

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which includes provision for a Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”). The PPP allows qualifying businesses to borrow up to $10 million calculated based on qualifying payroll costs. The loan is guaranteed by the federal government and does not require collateral. On May 4, 2020, the Company accepted a Bank of America PPP Loan, in the amount of $76,061. The PPP Loan matures on April 30, 2022, and bears interest at a rate of 1.0% per annum, unless forgiven. Monthly amortized principal and interest payments are deferred for six months after the date of disbursement. The PPP Loan funds were received on May 4, 2020. The PPP Loan contains events of default and other provisions customary for a loan of this type. The PPP provides that (1) the use of PPP Loan amount shall be limited to certain qualifying expenses, (2) 100 percent of the principal amount of the loan is guaranteed by the SBA and (3) an amount up to the full principal amount may qualify for loan forgiveness in accordance with the terms of CARES. As of July 31, 2020, the Company was in full compliance with all covenants with respect to the PPP Loan. The Company expects to use the full proceeds of the PPP loan in accordance with the provisions of CARES. As of July 31, 2020, the balance of the PPP Loan was $76,061, which does not include accrued interest, from the date of the advance on May 4, 2020. We are communicating with Bank of America on the PPP Loan Forgiveness Application and expect full forgiveness as we have met all stated requirements.

 

NOTE 7 - STOCKHOLDERS’ EQUITY

 

As of April 30, 2021, there were 1,000,000,000 shares of common stock authorized having a par value of $0.0001 per share and there were 914,624,292 issued and outstanding and an accumulated deficit of $3,718,922.

 

 
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Common Stock

 

During the year ended July 31, 2019, the Company issued 160,000 common restricted shares to four individuals for services provided, recorded at a cost of $1,600 and issued 443,700 common restricted shares for cash of $4,437.

 

On January 28, 2020, the Company sold, for cash, 125,000 common restricted shares to an investor, recorded at a cost of $0. 20 per share.

 

On February 3, 2020, the Company issued 12,500,000 common restricted shares to a founder, recorded, at a cost of $0.0001 per share.

 

On February 3, 2020, the Company issued 1,935,000 common restricted shares to six service providers, recorded at a cost of $0.20 per share.

  

NOTE 8 – COVID 19

 

The 2019 novel coronavirus (COVID-19) pandemic and responses to this crisis, including actions taken by federal, state and local governments, have had an impact on the operations of the company, including, without limitation, the following: reduced staffing due to employee suspected conditions and social distancing measures; constraints on productivity; management and staff non-essential business-related travel was constrained due to stay-at-home orders; most employees have shifted to remote work resulting in loss of productivity; consumers visiting dispensaries operated under license impacted by stay-at-home orders Management has made reasonable alternative arrangements, including attempts to render meetings and other workflow processes more efficient despite remote work; however, these have had limited success as at-home working conditions differ and certain employees roles are not amenable to work from home. Management continues to monitor the COVID-19 pandemic situation and federal, state and local recommendations and will provide updates as appropriate.

 

NOTE 9 – SUBSEQUENT EVENTS

 

The Company has evaluated all other subsequent events through August 10, 2021, which is the date these consolidated financial statements were issued and found there are no other events to report.

 

 
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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

 

On August 16, 2021, Peregrine Industries, Inc. (the “Company”) entered into a share exchange and merger agreement (the “Share Exchange and Merger Agreement”) pursuant to which the Company acquired (the “Transaction”) 100% of the outstanding common shares of Mace Corporation. The consideration paid for the shares was one share of the Company for each 4 shares held by Mace shareholders or a total of 250,000,000 Peregrine common shares for 1,000,000,000 Mace common shares. The closing of the transaction occurred on August 16, 2021.

 

The following tables and accompanying notes (collectively the “Pro forma Financial Statements”) present the Company’s statements of income and balance sheet on a pro forma combined basis after giving effect to the transaction. The information in the tables below under the heading “Unaudited Pro Forma Combined Statement of Income” for the nine months ended April 30, 2021, give effect to the transaction as if it had taken place on April 30, 2021 (the “Unaudited Pro Forma Combined Statements of Income”). The information in the table below under the heading “Unaudited Pro Forma Combined Balance Sheet” as of April 30, 2021, gives effect to the transaction as if it had taken place on April 30, 2021 (the “Unaudited Pro Forma Combined Balance Sheet”).

 

The pro forma adjustments are based upon currently available information and certain assumptions that the Company’s management believes are reasonable. The unaudited pro forma combined financial information is presented for informational purposes only and is not intended to present or be indicative of what the results of operations or financial position would have been had the events actually occurred on the dates indicated, nor is it meant to be indicative of future results of operations or financial position for any future period or as of any future date. The unaudited pro forma combined financial information does not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings or operating synergies that may result from the transaction.

 

The historical financial information of the Company being presented in these Unaudited Pro Forma Financial Statements is derived from the Company’s unaudited statement of income for the nine months ended April 30, 2021, and unaudited balance sheet as of April 30, 2021, which were prepared in accordance with GAAP.

 

The historical financial information of the assets being presented in these Unaudited Pro Forma Financial Statements is based on the unaudited combined statement of operations for the nine months ended April 30, 2021 and the unaudited balance sheet at April 30, 2021, which were prepared in accordance with US GAAP.

 

Note 1 — Basis of presentation

The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination.

 

The asset acquisition was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, the Company has estimated the fair value of the Mace net assets acquired and conformed the accounting policies of Mace to its own accounting policies.

 

 
66

 

 

The unaudited pro forma condensed consolidated financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

The pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the business combination of Mace Corporation as a result of restructuring activities and other planned cost savings initiatives following the completion of the merger.

 

Note 2 — Financing transaction

The Company completed the acquisition of Mace Corporation through a 1 for 4 share exchange. The Company issued 250,000,000 restricted common in return for the 1,000,000,000 Mace common shares outstanding on the date of the merger.

 

Note 3 — Preliminary purchase price allocation

The Company has performed a preliminary valuation analysis of the fair market value of Mace’s assets and liabilities and is acquiring them at the stated values as reflected on the April 30, 2021, balance sheet.

 

Note 4 – Real estate

As a result of the transaction, the Company will acquire the property at 9171 W. Flamingo Rd., Ste. 110 Las Vegas, NV and will continue to operate the Mace business from that location.

 

 
67

 

 

Consolidated Pro Forma Balance Sheet

 

(after giving effect to adjustments a thru d)

 

April 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mace

Corporation

 

 

Peregrine Industries, Inc

 

 

adjustments

 

 

Total

 

Assets

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$ 26,154

 

 

$ 3,000

 

 

 

 

 

 

 

 

 

 

$ 29,154

 

Accounts receivable

 

 

29,192

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

29,192

 

Inventory

 

 

790,511

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

790,511

 

Loan to related party

 

 

65,754

 

 

 

-

 

 

 

 

 

d

 

 

65,754

 

 

 

131,508

 

Prepaid expenses and other current assets

 

 

11,257

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

11,257

 

Total current assets

 

 

922,868

 

 

 

3,000

 

 

 

 

 

 

 

 

 

 

 

 

925,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long term assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production equipment - net

 

 

21,883

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

21,883

 

Land

 

 

62,307

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

62,307

 

Patents and trademarks - cost

 

 

306,494

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

306,494

 

Production molds - net

 

 

71,751

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

71,751

 

Building and building improvements- net

 

 

379,871

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

379,871

 

Total long term assets

 

 

842,306

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

842,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 1,765,174

 

 

$ 3,000

 

 

 

 

 

 

 

 

 

 

 

$ 1,768,175

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 33,247

 

 

$ -

 

 

 

 

 

d

 

 

2

 

 

$ 33,249

 

Loan from related party

 

 

-

 

 

 

65,656

 

 

 

65,656

 

 

d

 

 

 

 

 

 

131,312

 

Total current liabilities

 

 

33,247

 

 

 

65,656

 

 

 

 

 

 

 

 

 

 

 

 

 

98,903

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cares Act Payment Protection Program

 

 

76,061

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

76,061

 

SBA Economic Injury Disaster Loan

 

 

89,982

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

89,982

 

 

 

 

166,043

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

166,043

 

Stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a

 

 

8,538

 

 

 

 

 

Common stock

 

 

91,462

 

 

 

2,300

 

 

 

2,248

 

 

b,c

 

 

25,000

 

 

 

125,052

 

 

 

 

 

 

 

 

 

 

 

 

8,538

 

 

a

 

 

 

 

 

 

 

 

Additional paid in capital

 

 

5,193,344

 

 

 

599,384

 

 

 

25,000

 

 

c,b

 

 

2,248

 

 

 

5,761,439

 

Accumulated deficit

 

 

(3,718,922 )

 

 

(664,339 )

 

 

 

 

 

 

 

 

 

 

 

 

(4,383,261 )

Total stockholders' equity

 

 

1,565,884

 

 

 

(62,655 )

 

 

 

 

 

 

 

 

 

 

 

 

1,503,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$ 1,765,174

 

 

$ 3,000

 

 

 

 

 

 

 

 

 

 

 

 

$ 1,768,175

 

 

After giving effect to the following transactions:

a)

85,375,708 Mace common shares issued subsequent to April 30, 2021 to fulfill Mace obligation under its 2015 share purchase agreement.

b)

cancelation of 22,477,483 Peregrine common shares owned by common management

c)

250,000,000 Peregrine shares issued to Mace shareholders on a 1/4 basis per August 16, 2021 Share Exchange and Merger agreement

d)

eliminate intercompany balances

 

 
68

 

 

 

 

Mace

Corporation

 

 

Peregrine Industries, Inc.

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenue, net

 

$ 54,290

 

 

$ -

 

 

$ 54,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Product cost

 

 

22,294

 

 

 

-

 

 

 

22,294

 

Cost of sales

 

 

22,294

 

 

 

-

 

 

 

22,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

31,996

 

 

 

-

 

 

 

31,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Amortization and impairment

 

 

75,581

 

 

 

-

 

 

 

75,581

 

General and administrative expenses

 

 

71,846

 

 

 

11,479

 

 

 

83,325

 

Salary and payroll costs

 

 

83,486

 

 

 

-

 

 

 

83,486

 

Total operating expenses

 

 

230,913

 

 

 

11,479

 

 

 

242,392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(198,917 )

 

 

(11,479 )

 

 

(210,396 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from government grants

 

 

21,043

 

 

 

-

 

 

 

21,043

 

Total other income

 

 

21,043

 

 

 

-

 

 

 

21,043

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Net loss for the year

 

$ (177,874 )

 

$ (11,479 )

 

$ (189,353 )

Basic and diluted loss per share

 

$ (0.00 )

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

914,624,272

 

 

 

23,002,043

 

 

 

250,524,200

 

 

 
69

 


pgid_ex31.htm

EXHIBIT 3.1

 

ARTICLES OF MERGER

OF

 

MACE MERGER CORP.

(a Nevada corporation)

 

WITH AND INTO

 

PEREGRINE INDUSTRIES, INC.

(a Florida corporation)

 

_______________________________

 

Pursuant to Section 607.1105

of the Florida Business Corporation Act

 

_______________________________

 

Pursuant to Section 607.1105 of the Florida Business Corporation Act (the “FBCA”), these Articles of Merger provide as follows:

 

ARTICLE I

State of Incorporation; Surviving Corporation

 

The name and state of incorporation of each of the constituent corporations of the merger is as follows:

 

Name

State of Incorporation

 

 

 

 

Mace Merger Corp.

Nevada

 

 

 

 

Peregrine Industries, Inc.

Florida

 

 

Peregrine Industries, Inc., a Florida Corporation, shall be the surviving corporation.

 

ARTICLE II

Plan of Merger

 

The Agreement and Plan of Merger providing for the merger of Peregrine Industries, Inc. (“PGID”), with and into Mace Merger Corp., with Peregrine Industries, Inc. as the surviving entity, of the merger of Mace Corporation and Mace Merger Corp., a Nevada corporation (“MMSUB”). The Surviving Company’s name shall stay as Peregrine Industries, Inc.

 

 

1

 

 

ARTICLE III

Approval of the Plan

 

The Board of Directors of Mace Corporation. and PGID reviewed, considered and, on July 30, 2021, pursuant to an action by unanimous written consent in accordance with Section 607.0821 of the FBCA, duly adopted the Agreement and Plan of Merger, and presented the Agreement and Plan of Merger to the majority shareholders of Mace Corporation in accordance with Section 601.1101 of the FBCA. Thereafter, the sole shareholder of MMSUB adopted and approved the Agreement and Plan of Merger on July 30, 2021, pursuant to an action by written consent in accordance with section 607.0704 of the FBCA.

 

Since the merger involved only a parent and its wholly-owned subsidiary, no approval of PGID’s shareholders were required.

 

ARTICLE IV

Effective Time

 

These Articles of Merger shall become effective on the date and at the time accepted for filing by the Department of State of the State of Florida.

 

IN WITNESS WHEREOF, the undersigned duly authorized officers of the constituent corporations have caused these Articles of Merger to be executed this 30th day of July 2021.

 

MACE MERGER CORP., a Nevada Corporation

 

 

 

 

 

By:

/s/ Miaohong Hanson

 

 

Name:

Miaohong Hanson

 

 

Title:

President

 

 

 

 

 

 

PEREGRINE INDUSTRIES, INC., a Florida Corporation

 

 

 

 

 

By:

/s/ Miaohong Hanson

 

 

Name:

Miaohong Hanson

 

 

Title:

President

 

 

 

2

 


pgid_ex101.htm

EXHIBIT 10.1

 

PEREGRINE INDUSTRIES, INC.,

 

MACE CORPORATION,

 

&

 

MACE MERGERCORP

 

SHARE EXCHANGE & MERGER AGREEMENT

 

 

THIS SHARE EXCHANGE AGREEMENT (the “Agreement”) is made this 30th day of July 2021, by and among Peregrine Industries, Inc., a Florida corporation (“PGID”), Mace Merger Sub, a special purpose Florida corporation established for the purpose of effecting a reverse triangular merger with PGID, the Company and the Selling Shareholders (“Merger Sub”), Mace Corporation, a Nevada company (the “Company”) and the shareholders of the Company as set forth on Exhibit A attached hereto (collectively, the “Selling Shareholders”), on the other hand.

 

BACKGROUND

 

A. The respective Boards of Directors of PGID and the Company have determined that an acquisition of 100% of the Company’s outstanding shares by PGID through a reverse triangular merger with the Company and the Selling Shareholders (the “Exchange”), upon the terms and subject to the conditions set forth in this Agreement, would be fair and in the best interests of their respective shareholders, and such Boards of Directors, along with the Selling Shareholders, have approved such Exchange, pursuant to which one hundred percent (100%) of the shares of capital stock of the Company issued and outstanding immediately prior to the Effective Time (as defined in Section 1.04) and all securities convertible or exchangeable into capital stock of the Company (collectively the “Shares”) will be exchanged (including by reservation for future issuances) for the right to receive 250,000,000 common shares of stock of PGID, which will represent ninety two (92%) of the outstanding shares of PGID, which represent and control ninety two percent (92%) of the voting power of PGID (the “Exchange Shares”). Concurrently, as a contribution to the Company the PGID officers and directors will return, to the PGID treasury, the 22,477,843 which they now own.

 

B. At the Closing, the Selling Shareholders will merge the Company into Merger Sub, which will then dissolve by operation of law, the Company will become a 100%-owned subsidiary of PGID and the Selling Shareholders’ ownership interest in PGID, as represented by the Exchange Shares, shall represent approximately 92% of the issued and outstanding shares of PGID, including, without limitation, in respect of any shares of PGID preferred stock that have been issued or reserved for future issuance or into which any options, warrants, securities, instruments or other rights of any nature are convertible.

 

C. PGID, the Company and the Selling Shareholders desire to make certain representations, warranties, covenants and agreements in connection with the Exchange and also to prescribe various conditions to the Exchange.

 

D. For federal income tax purposes, the parties intend that the Exchange shall qualify as reorganization under the provisions of Section 368(a) (1) (B) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:

 

ARTICLE I

 

THE EXCHANGE

 

1.01 Exchange. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Florida Business Corporations Act (“FBCA”), at the Closing (as hereinafter defined), the parties shall do the following:

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
1

 

 

(a) The Selling Shareholders will sell, convey, assign, and transfer the Shares to PGID by delivering to PGID stock certificates issued in the name of the Company (MACE Corporation) evidencing the Shares (the “Share Certificates”). The Shares transferred to PGID at the Closing shall constitute 100% of the issued and outstanding common stock of the Company.

 

(b) As consideration for its acquisition of the Shares, PGID shall issue the Exchange Shares to the Selling Shareholders by delivering share certificates to the Selling Shareholders registered in the name of the Selling Shareholders, or their nominees, evidencing the Exchange Shares (the “Exchange Shares Certificates”) in such amounts attributable to the Selling Shareholders as set forth on Exhibit A hereto. The Exchange Shares shall equal no less than 92% of the outstanding shares of PGID’s stock, including, without limitation, in respect of any shares of PGID stock that are issued or have been reserved for future issuance or into which any options, warrants, securities, instruments or other rights of any nature are convertible.

 

(c) For federal income tax purposes, the Exchange is intended to constitute a “reorganization” within the meaning of Section 368 of the Code, and the parties shall report the transactions contemplated by this Agreement consistent with such intent and shall take no position in any tax filing or legal proceeding inconsistent therewith. The parties to this Agreement hereby adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. None of PGID, the Company or the Selling Shareholders has taken or failed to take, and after the Effective Time (as defined below), PGID shall not take or fail to take, any action which reasonably could be expected to cause the Exchange to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

 

1.02 Effect of the Exchange. The Exchange shall have the effects set forth in the applicable provisions of the FBCA.

 

1.03 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article IV, the closing of the Exchange (the “Closing”) will take place at 10:00 a.m. New York Time on the business day within three (3) business days of satisfaction of the conditions set forth in Article IV (or as soon as practicable thereafter following satisfaction or waiver of the conditions set forth in Article IV) (the “Closing Date”).

 

1.04 Effective Time of Exchange. As soon as practicable following the satisfaction or waiver of the conditions set forth in Article IV, the parties shall make all filings or recordings required under the FBCA. The Exchange shall become effective at such time as is permissible in accordance with the FBCA (the time the Exchange becomes effective being the “Effective Time”). PGID and the Company shall use reasonable efforts to have the Closing Date and the Effective Time to be the same day.

 

1.05 Director/Officers. On or before the Closing Date, PGID shall cause the appointment of the individuals set forth on Schedule 1.05 to be the officers and directors of PGID and shall cause the concurrent resignation of the officers of PGID as set forth on Schedule 1.05. The Selling Shareholders shall have the right to nominate one director to the board of PGID by sending written notice to PGID. In such case, PGID shall be required to appoint the Selling Shareholders’ nominee within 10 business days of receipt of written notice.

 

1.06 Exchange Reversal. (a) Notwithstanding anything else to the contrary herein, but subject to the following terms and conditions of this Section 1.06, each party to this agreement agrees that in the event that the Company fails to (i) file its quarterly and annual reports on forms 10-Q and 10-K (the “Reports”) in a timely manner for the 14-month period following the date hereof or (ii) the rights to own and use the aMACEing Products (as defined below) is terminated during the 14-month period following the date hereof, the transactions contemplated by this Agreement may be reversed and will lose all force and effect. For the avoidance of doubt, it is agreed that so long as the Company files a Rule 12b-25 notice of extension and then files the relevant Report within the time period prescribed by Rule 12b-25 for such Report, that particular Report will be deemed to be filed in a timely manner.

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
2

 

 

(b) In the event of (i) or (ii) from the first sentence of this Section 1.06 occurring or being reasonably likely to occur, the Company will provide prompt written notice thereof to Company and / or PGID CEO. In such case, PGID CEO shall, subject to sub-paragraph (c) of this Section 1.06 below, have the right to send a written notice of reversal of the transactions contemplated by this Agreement to the Company and/or MACE CEO or CFO (emails sent to the last address known to PGID CEO will be sufficient to constitute notice). In such case, the Company appoints Miaohong Hanson, acting on her own, as its attorney-in-fact to enter into any agreements and to take any actions that may be helpful or necessary to unwind and reverse the transactions contemplated by this Agreement. In this connection and for the avoidance of doubt, it is agreed that Miaohong Hanson has all corporate power and authority required to accomplish the foregoing.

 

(c) In the event that the Company is unable to file a Report or cure a material breach of the use and ownership of the aMACEing Products due to lack of funds, PGID is hereby granted an option to advance the funds to make any required payments to file the relevant Report(s) or cure a breach of the aMACEing Products to the Company in exchange for the issuance and delivery of a convertible note for the amount of the funds so advanced.

 

(d) Notwithstanding anything else to the contrary in this Agreement, this Section 1.06 shall no longer have any force or effect on the date that is 14 months from the date hereof.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

 

2.01 Representations and Warranties of the Company. Except as set forth in the disclosure schedule delivered by the Company to PGID at the time of execution of this Agreement (the “Company Disclosure Schedule”), the Company represents and warrants to PGID as follows:

 

(a) Organization, Standing and Power. The Company is duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect (as defined in Section 6.02).

 

(b) Subsidiaries. The Company does not own directly or indirectly, any equity or other ownership interest in any company, corporation, partnership, joint venture or otherwise.

 

(c) Capital Structure. The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of capital stock reserved for issuance under the Company’s various option and incentive plans is specified on Schedule 2.01(c). Except as set forth in Schedule 2.01(c), no shares of capital stock or other equity securities of the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable and not subject to preemptive rights. There are no outstanding bonds, debentures, notes or other indebtedness or other securities of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters. Except as set forth in Schedule 2.01(c), there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which they are bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company common stock or other securities under the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder (the “Securities Act”) or other agreements or arrangements with or among any security holders of the Company with respect to securities of the Company.

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
3

 

 

(d) Corporate Authority; Non contravention. The Company has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and when delivered by the Company shall constitute a valid and binding obligation of the Company, enforceable against the Company and the Selling Shareholders, as applicable, in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to a loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of the Company under, (i) the Company’s certificate of incorporation, memorandum of association, articles of association, bylaws or other organizational or charter documents of the Company, (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to the Company, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to the Company or could not prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement.

 

(e) Governmental Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any court, administrative agency or commission, or other federal, state or local government or other governmental authority, agency, domestic or foreign (a “Governmental Entity”), is required by or with respect to the Company in connection with the execution and delivery of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the Securities Act or the Exchange Act.

 

(f) (i) As of July 30, 2021, the date of this Agreement, the aMACEing Products owned and controlled by the Company (the “AMACEing Products”) (the “AMACEing Products Date”), there has been no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company, whether as a result of any legislative or regulatory change, revocation of any license or rights to do business, fire, explosion, accident, casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God, public force or otherwise and no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operation or prospects, of the Company except in the ordinary course of business.

 

(ii) Since the AMACEing Products Date, the Company has not suffered any damage, destruction or loss of physical property (whether or not covered by insurance) affecting its condition (financial or otherwise) or operations (present or prospective), nor has the Company, except as disclosed in writing to PGID, issued, sold or otherwise disposed of, or agreed to issue, sell or otherwise dispose of, any capital stock or any other security of the Company and has not granted or agreed to grant any option, warrant or other right to subscribe for or to purchase any capital stock of any other security of the Company or has incurred or agreed to incur any indebtedness for borrowed money.

 

(g) Absence of Certain Changes or Events. Since the AMACEing Products Date, the Company has conducted its business only in the ordinary course consistent with past practice, and there is not and has not been any:

 

(i) material adverse change with respect to the Company;

 

(ii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement;

 

(iii) incurrence, assumption or guarantee by the Company of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices and as disclosed to PGID in writing;

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
4

 

 

(iv) creation or other incurrence by the Company of any lien on any asset other than in the ordinary course consistent with past practices;

 

(v) transaction or commitment made, or any contract or agreement entered into, by the Company relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by the Company of any contract or other right, in either case, material to the Company, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;

 

(vi) labor dispute, other than routine, individual grievances, or, to the knowledge of the Company, any activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;

 

(vii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;

 

(viii) write-offs or write-downs of any assets of the Company;

 

(ix) creation, termination or amendment of, or waiver of any right under, any material contract of the Company;

 

(x) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on the Company;

 

(xi) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to the Company; or

 

(xii) agreement or commitment to do any of the foregoing.

 

(h) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.

 

(i) Litigation; Labor Matters; Compliance with Laws.

 

(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to the Company or prevent, hinder or materially delay the ability of the Company to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the Company having, or which, insofar as reasonably could be foreseen by the Company, in the future could have, any such effect.

 

(ii) The Company is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to Company.

 

(iii) The conduct of the business of the Company complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
5

 

 

(j) Benefit Plans. The Company is not a party to any Benefit Plan under which the Company currently has an obligation to provide benefits to any current or former employee, officer or director of the Company. As used herein, “Benefit Plan” shall mean any employee benefit plan, program, or arrangement of any kind, including any defined benefit or defined contribution plan, stock ownership plan, executive compensation program or arrangement, bonus plan, incentive compensation plan or arrangement, profit sharing plan or arrangement, deferred compensation plan, agreement or arrangement, supplemental retirement plan or arrangement, vacation pay, sickness, disability, or death benefit plan (whether provided through insurance, on a funded or unfunded basis, or otherwise), medical or life insurance plan providing benefits to employees, retirees, or former employees or any of their dependents, survivors, or beneficiaries, severance pay, termination, salary continuation, or employee assistance plan.

 

(k) Certain Employee Payments. The Company is not a party to any employment agreement which could result in the payment to any current, former or future director or employee of the Company of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director as a result of the transactions contemplated by this Agreement, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code), or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.

 

(l) Properties & Tangible Assets.

 

(i) The Company has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by the Company or acquired after the date thereof which are, individually or in the aggregate, material to the Company’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by the Company is held by it under valid, subsisting and enforceable leases of which the Company is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.

 

(ii) The Company has good and marketable title to, or in the case of leased property, a valid leasehold interest in, the office space, computers, equipment and other material tangible assets which are material to its business. Each such tangible asset is in all material respects in good operating condition and repair (subject to normal wear and tear), is suitable for the purposes for which it presently is used, and, except as to leased assets, free and clear of any and all security interests. The Company does not have any knowledge of any dispute or claim made by any other person concerning such right, title and interest in such tangible assets.

 

(m) Intellectual Property.

 

(i) As used in this Agreement, “Intellectual Property” means all right, title and interest in or relating to all intellectual property, whether protected, created or arising under the laws of the United States or any other jurisdiction or under any international convention, including, but not limited to the following: (a) service marks, trademarks, trade names, trade dress, logos and corporate names (and any derivations, modifications or adaptations thereof), Internet domain names and Internet websites (and content thereof), together with the goodwill associated with any of the foregoing, and all applications, registrations, renewals and extensions thereof (collectively, “Marks”); (b) patents and patent applications, including all continuations, divisional, continuations-in-part and Provisionals and patents issuing thereon, and all reissues, reexaminations, substitutions, renewals and extensions thereof (collectively, “Patents”); (c) copyrights, works of authorship and moral rights, and all registrations, applications, renewals, extensions and reversions thereof (collectively, “Copyrights”); (d) confidential and proprietary information, trade secrets and non-public discoveries, concepts, ideas, research and development, technology, know-how, formulae, inventions (whether or not patentable and whether or not reduced to practice), compositions, processes, techniques, technical data and information, procedures, designs, drawings, specifications, databases, customer lists, supplier lists, pricing and cost information, and business and marketing plans and proposals, in each case excluding any rights in respect of any of the foregoing that comprise or are protected by Patents (collectively, “Trade Secrets”); and (e) Technology. For purposes of this Agreement, “Technology” means all Software, information, designs, formulae, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, programs, subroutines, tools, materials, specifications, processes, inventions (whether or not patentable and whether or not reduced to practice), apparatus, creations, improvements and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other embodiments of any of the foregoing, in any form or media whether or not specifically listed herein. Further, for purposes of this Agreement, “Software” means any and all computer programs, whether in source code or object code; databases and compilations, whether machine readable or otherwise; descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and all documentation, including user manuals and other training documentation, related to any of the foregoing.

   

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
6

 

 

(ii) Schedule 2.01(m) sets forth a list and description of the Intellectual Property required for the Company to operate, or used or held for use by the Company, in the operation of its business, including, but not limited to (a) all issued Patents and pending Patent applications, registered Marks, pending applications for registration of Marks, unregistered Marks, registered Copyrights of the Company and the record owner, registration or application date, serial or registration number, and jurisdiction of such registration or application of each such item of Intellectual Property, (b) all Software developed by or for the Company and (c) any Software not exclusively owned by the Company and incorporated, embedded or bundled with any Software listed in clause (b) above (except for commercially available software and so-called “shrink wrap” software licensed to the Company on reasonable terms through commercial distributors or in consumer retail stores for a license fee of no more than $10,000).

 

(iii) To the best of the Company’s knowledge, the Company has a valid and enforceable right to use all Intellectual Property listed for the Company in Schedule 2.01(m) (and any other Intellectual Property required to be listed in Schedule 2.01(m)) as the same are used, sold, licensed and otherwise commercially exploited by the Company and no such Intellectual Property has been abandoned. The Intellectual Property owned by the Company and the Intellectual Property licensed to it pursuant to valid and enforceable written aMACEing Products include all of the Intellectual Property necessary and sufficient to enable the Company to conduct its business in the manner in which such business is currently being conducted. The Intellectual Property owned by the Company and its rights in and to such Intellectual Property are valid and enforceable.

 

(iv) The Company has not received, and is not aware of, any written or oral notice of any reasonable basis for an allegation against the Company of any infringement, misappropriation, or violation by the Company of any rights of any third party with respect to any Intellectual Property, and the Company is not aware of any reasonable basis for any claim challenging the ownership, use, validity or enforceability of any Intellectual Property owned, used or held for use by the Company. The Company does not have any knowledge that any third party is infringing, misappropriating, or otherwise violating (or has infringed, misappropriated or violated) any such Intellectual Property.

 

(v) The consummation of the transactions contemplated by this Agreement will not adversely affect the right of the Company to own or use any Intellectual Property owned, used or held for use by it.

 

(n) [reserved]

 

(o) Board Recommendation. The Board of Directors of the Company has unanimously determined that the terms of the Exchange are fair to and in the best interests of the Selling Shareholders of the Company and recommends that the Selling Shareholders approve the Exchange.

 

(p) Ownership of Stock. The Selling Shareholders own all of the issued and outstanding shares of capital stock of the Company, free and clear of all liens, claims, rights, charges, encumbrances, and security interests of whatsoever nature or type.

 

(q) Material Agreements

 

(i) Schedule 2.01(q) lists the following contracts and other agreements (“Material Agreements”) to which either the Company or the Selling Shareholders are a party: (a) any agreement (or group of related agreements) for the lease of real or personal property, including capital leases, to or from any person providing for annual lease payments in excess of $10,000 (b) any licensing agreement, or any agreement forming a partnership, strategic alliances, profit sharing or joint venture; (c) any agreement (or group of related agreements) under which it has created, incurred, assumed, or guaranteed any indebtedness for borrowed money in excess of $10,000, or under which a security interest has been imposed on any of its assets, tangible or intangible; (d) any profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other material plan or arrangement for the benefit of its current or former officers and managers or any of the Company’s employees; (e) any employment or independent contractor agreement providing annual compensation in excess of $10,000 or providing post-termination or severance payments or benefits or that cannot be cancelled without more than 30 days’ notice; (f) any agreement with any current or former officer, director, shareholder or affiliate of the Company; (g) any agreements relating to the acquisition (by merger, purchase of stock or assets or otherwise) by the Company of any operating business or material assets or the capital stock of any other person; (h) any agreements for the sale of any of the assets of the Company, other than in the ordinary course of business; (i) any outstanding agreements of guaranty, surety or indemnification, direct or indirect, by the Company; (j) any royalty agreements, licenses or other agreements relating to Intellectual Property (excluding licenses pertaining to “off-the-shelf” commercially available software used pursuant to shrink-wrap or click-through aMACEing Products on reasonable terms for a license fee of no more than $10,000); and (k) any other agreement under which the consequences of a default or termination could reasonably be expected to have a material adverse effect on the Company.

 

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(ii) The Company has made available to PGID either an original or a correct and complete copy of each written Material Agreement. Except as set forth on Schedule 2.01(q), with respect to each Material Agreement to which the Company or the Selling Shareholders are a party thereto: (A) the agreement is the legal, valid, binding, enforceable obligation of the Company or any of the Selling Shareholders and is in full force and effect in all material respects, subject to bankruptcy and equitable remedies exceptions; (B)(1) neither the Company nor the Selling Shareholders party thereto is in material breach or default thereof, (2) no event has occurred which, with notice or lapse of time, would constitute a material breach or default of, or permit termination, modification, or acceleration under, the Material Agreement; or (3) the Company has not received any notice or has any knowledge that any other party is, in default in any respect under any Material Agreement; and (C) neither the Company nor the Selling Shareholders have repudiated any material provision of the agreement.

 

(r) Material Agreement Defaults. The Company is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any Material Agreements; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this section, a Material Agreement includes agreements which, if breached by the Company or the Selling Shareholders in such a manner would (i) permit any other party to cancel or terminate the same (with or without notice of passage of time), (ii) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from the Company or the Selling Shareholders, or (iii) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.

 

(s) Tax Returns and Tax Payments.

 

(i) The Company has filed with the appropriate taxing authorities all Tax Returns required to be filed by it (taking into account all applicable extensions). All such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by the Company have been paid (whether or not shown on any Tax Return and whether or not any Tax Return was required). The unpaid Taxes of the Company did not, as of the date hereof, exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Company Financial Statements (rather than in any notes thereto). Since the Balance Sheet Date, the Company has not incurred any liability for Taxes outside the ordinary course of business consistent with past custom and practice. As of the Closing Date, the unpaid Taxes of the Company will not exceed the reserve for Tax liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the books and records of the Company.

 

(ii) No material claim for unpaid Taxes has been made or become a lien against the property of the Company or is being asserted against the Company, and no extension of the statute of limitations on the assessment of any Taxes has been granted to the Company and is currently in effect.

 

(iii) As used herein, “Taxes” shall mean all taxes of any kind, including, without limitation, those on or measured by or referred to as income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium value added, property or windfall profits taxes, customs, duties or similar fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any governmental authority, domestic or foreign. As used herein, “Tax Return” shall mean any return, report or statement required to be filed with any governmental authority with respect to Taxes.

 

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(t) Environmental Matters. The Company is in compliance with all Environmental Laws in all material respects. The Company holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on the Company, and is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. The Company has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on the Company. “Environmental Laws” means all applicable foreign, federal, state and local statutes, rules, regulations, ordinances, orders, decrees and common law relating in any manner to contamination, pollution or protection of human health or the environment, and similar state laws. “Hazardous Material” means any toxic, radioactive, corrosive or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics, which in any event is regulated under any Environmental Law.

 

(u) Accounts Receivable. All of the accounts receivable of the Company that are reflected in the Company Financial Statements or the accounting records of the Company as of the Closing Date (collectively, the “Company Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The Company Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.

 

(v) Full Disclosure. All of the representations and warranties made by the Company in this Agreement, and all statements set forth in the certificates delivered by the Company at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by the Company pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to PGID or its representatives by or on behalf of any of the Company or its affiliates in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

2.02 Representations and Warranties of PGID. PGID represents and warrants to the Company and the Selling Shareholders as follows:

 

(a) Organization, Standing and Corporate Power. PGID is duly organized under the laws of the State of Florida and has the requisite corporate power and authority and all government licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and carry on its business as now being conducted. PGID is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed (individually or in the aggregate) would not have a material adverse effect with respect to PGID Shares of common stock of PGID, par value $0.0001 (“PGID Common Stock”), are quoted on the OTCQB, operated by OTC Market Group, Inc. under the symbol “PGID.”

 

(b) Subsidiaries. PGID does not own directly or indirectly, any equity or other ownership interest in any company, corporation, partnership, joint venture or otherwise.

 

(c) Capital Structure of PGID. As of the date of this Agreement, the authorized capital stock of PGID consists of 1,500,000,000 shares of PGID Common Stock, $0.0001 par value, of which 23,002,063 shares of PGID Common Stock are issued and outstanding, and 10,000,000 shares of preferred stock, $0.0001 par value (“PGID Preferred Stock”), of which zero shares are issued or outstanding, and no shares of PGID Common Stock or PGID Preferred Stock are issuable upon the exercise of warrants, convertible notes, options or otherwise except as set forth in the PGID SEC Documents (as defined herein). Except as set forth above, no shares of capital stock or other equity securities of PGID are issued, reserved for issuance or outstanding. All shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable, free and clear of all liens, claims, rights, charges, encumbrances, and security interests of whatsoever nature or type, not subject to preemptive rights, and issued in compliance with all applicable state and federal laws concerning the issuance of securities.

 

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(d) Corporate Authority; Non contravention. PGID has all requisite corporate and other power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by PGID and the consummation by PGID of the transactions contemplated hereby have been (or at Closing will have been) duly authorized by all necessary corporate action on the part of PGID This Agreement has been duly executed and when delivered by PGID shall constitute a valid and binding obligation of PGID, enforceable against PGID in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity. The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and compliance with the provisions hereof will not, conflict with, or result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of or “put” right with respect to any obligation or to loss of a material benefit under, or result in the creation of any lien upon any of the properties or assets of PGID under, (i) its articles of incorporation, bylaws, or other charter documents of PGID (ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise or license applicable to PGID, its properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any judgment, order, decree, statute, law, ordinance, rule, regulation or arbitration award applicable to PGID, its properties or assets, other than, in the case of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults, rights, losses or liens that individually or in the aggregate could not have a material adverse effect with respect to PGID or could not prevent, hinder or materially delay the ability of PGID to consummate the transactions contemplated by this Agreement.

 

(e) Government Authorization. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity, is required by or with respect to PGID in connection with the execution and delivery of this Agreement by PGID, or the consummation by PGID of the transactions contemplated hereby, except, with respect to this Agreement, any filings under the FBCA, the Securities Act or the Exchange Act.

 

(f) Financial Statements. The financial statements of PGID included in the reports, schedules, forms, statements and other documents filed by PGID with the Securities and Exchange Commission (“SEC”) (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the “PGID SEC Documents”), comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with U.S. generally accepted accounting principles (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present the financial position of PGID as of the dates thereof and the results of operations and changes in cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end audit adjustments as determined by PGID’s independent accountants). PGID has not incurred any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) except those reasonable expenses accrued in the normal course of business operations. As of their respective dates or, if amended, as of the date of the last such amendment, each of the PGID SEC Documents, including any financial statements or schedules included therein (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, (ii) were complete and accurate in all material respects, and (iii) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and the applicable rules and regulations of the SEC thereunder.

 

(g) Absence of Certain Changes or Events. Except as disclosed in the PGID SEC Documents, since the date of the most recent financial statements included in the PGID SEC Documents, PGID has conducted its business only in the ordinary course consistent with past practice in light of its current business circumstances, and there is not and has not been any:

 

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(i) material adverse change with respect to PGID;

 

(ii) condition, event or occurrence which could reasonably be expected to prevent, hinder or materially delay the ability of PGID to consummate the transactions contemplated by this Agreement;

 

(iii) incurrence, assumption or guarantee by PGID of any indebtedness for borrowed money other than in the ordinary course and in amounts and on terms consistent with past practices or as disclosed to the Company in writing;

 

(iv) creation or other incurrence by PGID of any lien on any asset other than in the ordinary course consistent with past practices;

 

(v) transaction or commitment made, or any contract or agreement entered into, by PGID relating to its assets or business (including the acquisition or disposition of any assets) or any relinquishment by PGID of any contract or other right, in either case, material to PGID, other than transactions and commitments in the ordinary course consistent with past practices and those contemplated by this Agreement;

 

(vi) labor dispute, other than routine, individual grievances, or, to the knowledge of PGID, any activity or proceeding by a labor union or representative thereof to organize any employees of PGID or any lockouts, strikes, slowdowns, work stoppages or threats by or with respect to such employees;

 

(vii) payment, prepayment or discharge of liability other than in the ordinary course of business or any failure to pay any liability when due;

 

(viii) write-offs or write-downs of any assets of PGID;

 

(ix) creation, termination or amendment of, or waiver of any right under, any material contract of PGID;

 

(x) damage, destruction or loss having, or reasonably expected to have, a material adverse effect on PGID;

 

(xi) other condition, event or occurrence which individually or in the aggregate could reasonably be expected to have a material adverse effect or give rise to a material adverse change with respect to PGID; or

 

(xii) agreement or commitment to do any of the foregoing.

 

(h) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by PGID to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement.

 

(i) Litigation; Labor Matters; Compliance with Laws.

 

(i) There is no suit, action or proceeding or investigation pending or, to the knowledge of PGID, threatened against or affecting PGID or any basis for any such suit, action, proceeding or investigation that, individually or in the aggregate, could reasonably be expected to have a material adverse effect with respect to PGID or prevent, hinder or materially delay the ability of PGID to consummate the transactions contemplated by this Agreement, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against PGID having, or which, insofar as reasonably could be foreseen by PGID, in the future could have, any such effect.

 

(ii) PGID is not a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is it the subject of any proceeding asserting that it has committed an unfair labor practice or seeking to compel it to bargain with any labor organization as to wages or conditions of employment nor is there any strike, work stoppage or other labor dispute involving it pending or, to its knowledge, threatened, any of which could have a material adverse effect with respect to PGID

 

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(iii) The conduct of the business of PGID complies with all statutes, laws, regulations, ordinances, rules, judgments, orders, decrees or arbitration awards applicable thereto.

 

(j) Benefit Plans. PGID is not a party to any Benefit Plan under which PGID currently has an obligation to provide benefits to any current or former employee, officer or director of PGID.

 

(k) Certain Employee Payments. PGID is not a party to any employment agreement or other agreement of any nature which could result in the payment to any current, former or future director or employee of PGID of any money or other property or rights or accelerate or provide any other rights or benefits to any such employee or director, whether or not (i) such payment, acceleration or provision would constitute a “parachute payment” (within the meaning of Section 280G of the Code) or (ii) some other subsequent action or event would be required to cause such payment, acceleration or provision to be triggered.

 

(l) Material Agreement Defaults. PGID is not, or has not, received any notice or has any knowledge that any other party is, in default in any respect under any PGID Material Agreement; and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a material default. For purposes of this Agreement, a “PGID Material Agreement” means any contract, agreement or commitment that is effective as of the Closing Date to which PGID is a party (i) with expected receipts or expenditures in excess of $100, (ii) requiring PGID to indemnify any person, (iii) granting exclusive rights to any party, (iv) evidencing indebtedness for borrowed or loaned money in excess of $100 or more, including guarantees of such indebtedness, or (v) which, if breached by PGID in such a manner would (A) permit any other party to cancel or terminate the same (with or without notice of passage of time) or (B) provide a basis for any other party to claim money damages (either individually or in the aggregate with all other such claims under that contract) from PGID or (C) give rise to a right of acceleration of any material obligation or loss of any material benefit under any such contract, agreement or commitment.

 

(m) Properties. PGID has valid land use rights for all real property that is material to its business and good, clear and marketable title to all the tangible properties and tangible assets reflected in the latest balance sheet as being owned by PGID or acquired after the date thereof which are, individually or in the aggregate, material to PGID’s business (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business), free and clear of all material liens, encumbrances, claims, security interest, options and restrictions of any nature whatsoever. Any real property and facilities held under lease by PGID are held by them under valid, subsisting and enforceable leases of which PGID is in compliance, except as could not, individually or in the aggregate, have or reasonably be expected to result in a material adverse effect.

 

(n) Intellectual Property. PGID owns or has valid rights to use the Trademarks, trade names, domain names, copyrights, patents, logos, licenses and computer software programs (including, without limitation, the source codes thereto) that are necessary for the conduct of its business as now being conducted. All of PGID’s licenses to use Software programs are current and have been paid for the appropriate number of users. To the knowledge of PGID, none of PGID’s Intellectual Property or PGID Products infringe upon the rights of any third party that may give rise to a cause of action or claim against PGID or its successors. The term “PGID Products” means any Products granting any right to use or practice any rights under any Intellectual Property (except for such agreements for off-the-shelf products that are generally available for less than $10,000), and any written settlements relating to any Intellectual Property, to which the Company is a party or otherwise bound.

 

(o) Board Determination. The Board of Directors of PGID has unanimously determined that the terms of the Exchange are fair to and in the best interests of PGID and its shareholders.

 

(p) Liabilities. PGID has no liabilities or obligations of any nature (whether fixed or unfixed, secured or unsecured, known or unknown and whether absolute, accrued, contingent, or otherwise) except for $200,000 (the “Liability Cap”).

 

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(q) Accounts Receivable. All of the accounts receivable of PGID that are reflected in the PGID SEC Documents or the accounting records of PGID as of the Closing Date (collectively, the “PGID Accounts Receivable”) represent or will represent valid obligations arising from sales actually made or services actually performed in the ordinary course of business and are not subject to any defenses, counterclaims, or rights of set off other than those arising in the ordinary course of business and for which adequate reserves have been established. The PGID Accounts Receivable are fully collectible to the extent not reserved for on the balance sheet on which they are shown.

 

(r) Environmental Matters. PGID is in compliance with all Environmental Laws in all material respects. PGID holds all permits and authorizations required under applicable Environmental Laws, unless the failure to hold such permits and authorizations would not have a material adverse effect on PGID, and is compliance with all terms, conditions and provisions of all such permits and authorizations in all material respects. PGID has no liability, absolute or contingent, under any Environmental Law that if enforced or collected would have a material adverse effect on PGID There are no past, pending or threatened claims under Environmental Laws against PGID and PGID is not aware of any facts or circumstances that could reasonably be expected to result in a liability or claim against PGID pursuant to Environmental Laws.

 

(s) Full Disclosure. All of the representations and warranties made by PGID in this Agreement, and all statements set forth in the certificates delivered by PGID at the Closing pursuant to this Agreement, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such representations, warranties or statements, in light of the circumstances under which they were made, misleading. The copies of all documents furnished by PGID pursuant to the terms of this Agreement are complete and accurate copies of the original documents. The schedules, certificates, and any and all other statements and information, whether furnished in written or electronic form, to the Company or its representatives by or on behalf of PGID and the PGID Stockholders in connection with the negotiation of this Agreement and the transactions contemplated hereby do not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

2.03 Representations and Warranties of Selling Shareholders

 

The Selling Shareholders jointly and severally represent and warrant to PGID as follows:

 

(a) Ownership of the Shares. The Selling Shareholders own all of the Shares, free and clear of all liens, claims, rights, charges, encumbrances, and security interests of whatsoever nature or type, and the Selling Shareholders represent and warrant that the Shares represent the entire ownership interest of the Selling Shareholders in the Company.

 

(b) Power of Selling Shareholders to Execute Agreement. The Selling Shareholders have the full right, power, and authority to execute, deliver, and perform this Agreement.

 

ARTICLE III

 

ADDITIONAL AGREEMENTS AND COVENANTS

 

3.01 Best Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Exchange and the other transactions contemplated by this Agreement. PGID and the Company shall mutually cooperate in order to facilitate the achievement of the benefits reasonably anticipated from the Exchange.

 

3.02 Public Announcements. PGID, on the one hand, and the Company, on the other hand, will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law or court process. Each of the parties hereto agree that the initial press release or subsequent releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.

 

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3.03 Expenses. Subject to Section 2.02(h), all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.

 

3.04 Post-Exchange Capitalization. At Closing, PGID will have no more than 1,023,002,063 shares of PGID Common Stock issued and outstanding including the Exchange Shares.

 

3.05 Current Report. PGID shall file a Current Report on Form 8-K with the SEC within four (4) business days of the Closing Date containing information about the Exchange (the “8-K Report”). Additionally, within seventy-one (71) days from the date that the 8-K report was required to filed, the Company shall have completed, and PGID shall have received from the Company, audited financial statements and proforma financial statements as required to be filed by PGID pursuant to the Exchange Act in an amendment to the 8-K Report.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.01 Conditions to Each Party’s Obligation to Effect the Exchange. The obligation of each party to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

 

(a) No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Exchange shall have been issued by any court of competent jurisdiction or any other Governmental Entity having jurisdiction and shall remain in effect, and there shall not be any applicable legal requirement enacted, adopted or deemed applicable to the Exchange that makes consummation of the Exchange illegal.

 

(b) Governmental Approvals. All authorizations, consents, orders, declarations or approvals of, or filings with, or terminations or expirations of waiting periods imposed by, any Governmental Entity having jurisdiction which the failure to obtain, make or occur would have a material adverse effect on PGID or the Company shall have been obtained, made or occurred.

 

(c) No Litigation. There shall not be pending or threatened any suit, action or proceeding before any court, Governmental Entity or authority (i) pertaining to the transactions contemplated by this Agreement or (ii) seeking to prohibit or limit the ownership or operation by the Company, PGID or any of its subsidiaries, (iii) or to dispose of or hold separate any material portion of the business or assets of the Company or PGID.

 

(d) Company and Selling Shareholders Approval. The Company and the Selling Shareholders shall have each adopted and approved this Agreement and the Exchange in accordance with applicable law.

 

(e) No Material Adverse Change. None of the events listed in Sections 2.01(g) and 2.02(g) shall have occurred or exist.

 

4.02 Conditions Precedent to Obligations of PGID The obligation of PGID to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

 

(a) Representations, Warranties and Covenants. The representations and warranties of the Company and the Selling Shareholders in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and the Company and the Selling Shareholders shall each have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by each of them prior to the Effective Time.

 

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(b) Consents. PGID shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third parties as necessary in connection with the transactions contemplated hereby have been obtained.

 

(c) Officer’s Certificate of the Company. PGID shall have received a certificate executed on behalf of the Company by an executive officer of the Company confirming that the conditions set forth in Section 4.02(a) have been satisfied.

 

(d) Delivery of the Share Certificate. The Company shall have delivered the Share Certificates to PGID on the Closing Date.

 

(e) Secretary’s Certificate of the Company. PGID shall have received a certificate, dated as of the Closing Date, from the Secretary of the Company, certifying (i) as to the incumbency and signatures of the officers of the Company, who shall execute this Agreement and documents at the Closing, and (ii) that attached thereto is a true and complete copy of (A) the articles or certificate of incorporation of the Company and all amendments thereto, (B) the bylaws of the Company and all amendments thereto, and (C) resolutions of the Board of Directors of the Company and its shareholders authorizing the execution, delivery and performance of this Agreement by the Company.

 

(f) Due Diligence Investigation. PGID shall be reasonably satisfied with the results of its due diligence investigation of the Company in its sole and absolute discretion.

 

(g) [Reserved]

 

4.03 Conditions Precedent to Obligation of the Company. The obligation of the Company to effect the Exchange and otherwise consummate the transactions contemplated by this Agreement is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

 

(a) Representations, Warranties and Covenants. The representations and warranties of PGID in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or material adverse effect, which representations and warranties as so qualified shall be true and correct in all respects) both when made and on and as of the Closing Date, and PGID shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it prior to the Effective Time.

 

(b) Consents. The Company shall have received evidence, in form and substance reasonably satisfactory to it, that such licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and other third parties as necessary in connection with the transactions contemplated hereby have been obtained.

 

(c) Officer’s Certificate of PGID The Company shall have received a certificate executed on behalf of PGID by an executive officer of PGID, confirming that the conditions set forth in Section 4.03(a) have been satisfied.

 

(d) Board Resolutions. The Company shall have received resolutions duly adopted by PGID’s Board of Directors approving the execution, delivery and performance of the Agreement and the transactions contemplated by the Agreement.

 

(e) Due Diligence Investigation. The Company shall be reasonably satisfied with the results of its due diligence investigation of PGID in its sole and absolute discretion.

 

(f) New Directors and Officers. PGID shall also have delivered to the Company letters of resignation executed by each of the PGID officers set forth on Schedule 1.05 to be effective on or before the Closing Date, and evidence of appointment of those new directors and officers set forth on Schedule 1.05.

 

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(g) Indemnification Agreements. PGID shall have delivered to each of its directors and officers an executed indemnification agreement in substantially the form attached hereto as Exhibit B.

 

ARTICLE V

 

INDEMNIFICATION AND RELATED MATTERS

 

5.01 Survival of Representations and Warranties. The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive until twelve (12) months after the Effective Time (except for with respect to Taxes which shall survive for the applicable statute of limitations plus ninety (90) days, and covenants that by their terms survive for a longer period).

 

5.03 Notice of Indemnification. Promptly after the receipt by any indemnified party (the “Indemnitee”) of notice of the commencement of any action or proceeding against such Indemnitee, such Indemnitee shall, if a claim with respect thereto is or may be made against any indemnifying party (the “Indemnifying Party”) pursuant to this Article V, give such Indemnifying Party written notice of the commencement of such action or proceeding and give such Indemnifying Party a copy of such claim and/or process and all legal pleadings in connection therewith. The failure to give such notice shall not relieve any Indemnifying Party of any of its indemnification obligations contained in this Article V, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. Such Indemnifying Party shall have, upon request within thirty (30) days after receipt of such notice, but not in any event after the settlement or compromise of such claim, the right to defend, at its own expense and by its own counsel reasonably acceptable to the Indemnitee, any such matter involving the asserted liability of the Indemnitee; provided, however, that if the Indemnitee determines that there is a reasonable probability that a claim may materially and adversely affect it, other than solely as a result of money payments required to be reimbursed in full by such Indemnifying Party under this Article V or if a conflict of interest exists between Indemnitee and the Indemnifying Party, the Indemnitee shall have the right to defend, compromise or settle such claim or suit; and, provided, further, that such settlement or compromise shall not, unless consented to in writing by such Indemnifying Party, which shall not be unreasonably withheld, be conclusive as to the liability of such Indemnifying Party to the Indemnitee. In any event, the Indemnitee, such Indemnifying Party and its counsel shall cooperate in the defense against, or compromise of, any such asserted liability, and in cases where the Indemnifying Party shall have assumed the defense, the Indemnitee shall have the right to participate in the defense of such asserted liability at the Indemnitee’s own expense. In the event that such Indemnifying Party shall decline to participate in or assume the defense of such action, prior to paying or settling any claim against which such Indemnifying Party is, or may be, obligated under this Article V to indemnify an Indemnitee, the Indemnitee shall first supply such Indemnifying Party with a copy of a final court judgment or decree holding the Indemnitee liable on such claim or, failing such judgment or decree, the terms and conditions of the settlement or compromise of such claim. An Indemnitee’s failure to supply such final court judgment or decree or the terms and conditions of a settlement or compromise to such Indemnifying Party shall not relieve such Indemnifying Party of any of its indemnification obligations contained in this Article V, except where, and solely to the extent that, such failure actually and materially prejudices the rights of such Indemnifying Party. If the Indemnifying Party is defending the claim as set forth above, the Indemnifying Party shall have the right to settle the claim only with the consent of the Indemnitee.

 

ARTICLE VI

 

GENERAL PROVISIONS

 

6.01 Notices. Any and all notices and other communications hereunder shall be in writing and shall be deemed duly given to the party to whom the same is so delivered, sent or mailed at addresses and contact information set forth below (or at such other address for a party as shall be specified by like notice.) Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be deemed given and effective on the earliest of: (a) on the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (Pacific Standard Time) on a business day, (b) on the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a business day or later than 5:30 p.m. (Pacific Standard Time) on any business day, (c) on the second business day following the date of mailing, if sent by a nationally recognized overnight courier service, or (d) if by personal delivery, upon actual receipt by the party to whom such notice is required to be given.

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
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If to PGID:

 

Attention:

PGID

9171 W Flamingo Rd Ste 110

Las Vegas, NV, 89147

 

If to the Company:

 

Attention:

Mace Corporation

9171 W Flamingo Rd Ste 110

Las Vegas, NV, 89147

 

All Notices to the Selling Shareholders shall be sent “care of” the Company.

 

6.02 Definitions. For purposes of this Agreement:

 

(a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person;

 

(b) “material adverse change” or “material adverse effect” means, when used in connection with the Company or PGID, any change or effect that either individually or in the aggregate with all other such changes or effects is materially adverse to the business, assets, properties, condition (financial or otherwise) or results of operations of such party and its subsidiaries taken as a whole (after giving effect in the case of PGID to the consummation of the Exchange);

 

(c) “ordinary course of business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency);

 

(d) “person” means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity;

 

(e) “subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, fifty percent (50%) or more of the equity interests of which) that is owned directly or indirectly by such first person; and

 

(f) “security interest” means any mortgage, pledge, lien, encumbrance, deed of trust, lease, charge, right of first refusal, easement, servitude, proxy, voting trust or agreement, transfer restriction under any shareholder or similar agreement or any other security interest, other than (i) mechanic’s, materialmen’s, and similar liens, (ii) statutory liens for taxes not yet due and payable, (c) purchase money liens and liens securing rental payments under capital lease arrangements, (iii) pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other similar social security legislation; and (iv) encumbrances, security deposits or reserves required by law or by any Governmental Entity.

 

6.03 Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

PEREGRINE, INC., MACE CORPORATION SHARE EXCHANGE & MERGER AGREEMENT

 
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6.04 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the other agreements referred to herein constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon any person other than the parties any rights or remedies.

 

6.05 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

6.06 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

 

6.07 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States located in the State of Florida, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court, and (b) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any state court other than such court.

 

6.08 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

6.09 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re-execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.

 

6.10 Attorneys Fees. In the event any suit or other legal proceeding is brought for the enforcement of any of the provisions of this Agreement, the parties hereto agree that the prevailing party or parties shall be entitled to recover from the other party or parties upon final judgment on the merit’s reasonable attorneys’ fees, including attorneys’ fees for any appeal, and costs incurred in bringing such suit or proceeding.

 

6.11 Currency. All references to currency in this Agreement shall refer to the lawful currency of the United States of America.

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