Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward
Looking Statements
The
following discussion should be read in conjunction with our unaudited financial statements and related notes included in Item
1, “Financial Statements,” of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the
fiscal year ended March 31, 2020. Certain information contained in this MD&A includes “forward-looking statements.”
Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity,
financial condition and results of operations, prospects and opportunities and are based upon information currently available
to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed
business, including many assumptions regarding future events. Actual results, performance, liquidity, financial condition and
results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in,
or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including those
risks described in detail in the section entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal
year ended March 31, 2020.
Forward-looking
statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable
by use of the words “may,” “should,” “would,” “will,” “could,” “scheduled,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,”
or “project” or the negative of these words or other variations on these words or comparable terminology.
In
light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no
assurance that the forward-looking statements contained in this section and elsewhere in this Quarterly Report on Form 10-Q will
in fact occur. Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required
by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as
a result of new information, future events, changed circumstances or any other reason.
Overview
This
Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the financial statements included
in this Form 10-Q, relate to the financial results of Omnia Wellness Inc. as of December 31, 2020 and prior to the Acquisition
(as defined below). Accordingly, it does not reflect material events that took place subsequent to December 31, 2020 in January
and February 2021 or the financial results of Omnia Corp. (as defined below) for the period ended December 31, 2020. We intend
to file such financial results separately in accordance with the rules and regulations of the Securities and Exchange Commission.
We
were incorporated in the State of Nevada on March 2, 2016 under the name “Glolex Inc.” Our business was originally
to provide a web based, round-the-clock, online legal consulting advice service.
As
of June 25, 2019, Maksim Charniak, our then sole executive officer and director, sold all of his shares of common stock of the
Company to Amer Samad, resulting in a change of control. As part of that transaction, Mr. Charniak resigned from all of his officer
and director positions, and Mr. Samad was appointed as the Chief Executive Officer, President, Chief Financial Officer and Secretary
of the Company, and was appointed to our Board of Directors. Mr. Samad also purchased 14,744,687 shares (as adjusted to reflect
the Company’s March 5, 2020 1:12.6374 forward stock split) of our common stock in a series of private transactions, resulting
in Mr. Samad owning 52,671,888 shares (as adjusted to reflect the Company’s March 5, 2020 1:12.6374 forward stock split),
or approximately 95.6% of the issued and outstanding shares of our common stock.
On
April 20, 2020, we entered into a Share Exchange and Reorganization Agreement (the “Exchange Agreement”) with Omnia
Wellness Corporation, or Omnia Corp., and the beneficial stockholders of Omnia Corp. to acquire 100% of the issued and outstanding
shares of capital stock of Omnia Corp. The transactions contemplated by the Exchange Agreement, which we refer to as the Acquisition,
were consummated on January 5, 2021, and, pursuant to the terms of the Exchange Agreement, among other things, all outstanding
shares of common stock of Omnia Corp., no par value, or the Omnia Corp. Shares, were exchanged for shares of our common stock,
based on the exchange ratio of one share of our common stock for every one Omnia Corp. Share. Accordingly, we acquired 100% of
Omnia Corp. in exchange for the issuance of shares of our common stock and Omnia Corp. became our wholly-owned subsidiary. Pursuant
to the Exchange Agreement for the Acquisition whereby Omnia Corp. became a wholly-owned subsidiary of the Company, each holder
of Omnia Corp. shares outstanding immediately prior to the Closing received shares of our common stock in exchange therefore based
on a one-for-one exchange ratio, with all fractional shares rounded up to the nearest whole share. Accordingly, we issued 2,500,000
and 2,250,000 shares of our common stock to M. Jainal Bhuiyan, a director and executive officer of the Company, and Nikolay Kukekov,
a director of the Company, respectively, 750,000 shares of our common stock to Lifestyle Healthcare LLC, an affiliate of Dr. Kukekov,
and 4,500,000 shares of our common stock to Lexxus, LLC, an affiliate of Steve Howe, the Executive Chairman and a director of
the Company. Furthermore, at the closing of the Acquisition an aggregate of $500,000 principal amount of convertible promissory
notes of Omnia Corp. converted in accordance with their terms into an aggregate of 1,269,665 shares of our common stock. Of such
shares, 729,730 were issued to Dr. Kukekov, and 539,935 were issued to Mr. Bhuiyan, or their respective affiliates. Also as
of the closing of the Acquisition, Mr. Samad, formerly our sole director and executive officer, agreed to cancel 52,656,888 shares
of our common stock owned beneficially and of record by him as part of the conditions to closing.
The
Company has generated no revenue for the nine months ended December 31, 2020.
On
March 5, 2020, the Company filed Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada
to, among other things, (i) increase the Company’s authorized shares of common stock from 75,000,000 to 100,000,000, (ii)
create and authorize 10,000,000 shares of “blank check” preferred stock, and (iii) effect a 1:12.6374 forward stock
split of the Company’s common stock. Share and per share data (except par value) for the periods presented reflect the effects
of the forward stock split. References to numbers of shares of common stock and per share data in the accompanying financial statements
and notes thereto relating to dates prior to the forward stock split have been adjusted to reflect the forward stock split on
a retroactive basis.
In
addition, on March 16, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation
with the Secretary of State of the State of Nevada to change the name of the Company from Glolex Inc. to Omnia Wellness Inc.
Results
of Operations
We
have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going
concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification
of liabilities that might be necessary should we be unable to continue in operation.
We
expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital
through, among other things, the sale of equity or debt securities, as, if and when we consummate the Acquisition.
Comparison
of Nine and Three Months Ended December 31, 2020 and 2019
General
and administrative expenses were approximately $ 9,383 and $48,341 for the three and nine months ended December 31, 2020, respectively,
compared to approximately $8,632 and $27,358 for the same periods in 2019. We believe that our general and administrative expenses
will increase over time as a result of the Acquisition and otherwise advance our programs, increase our headcount and operating
activities and incur expenses associated with being a public company.
Our
net (loss) for the nine and three months ended December 31, 2020, was ($48,341) and ($9,383) compared to a net loss of ($27,358)
and ($8,632) during the nine and three months ended December 31, 2019. During the fiscal quarter ended December 31, 2020 and fiscal
years ended March 31, 2020 and 2019, respectively, the Company did not generate any revenue.
Liquidity
and Capital Resources
The
following table summarizes total current assets, liabilities and working capital (deficit) at December 31, 2020 compared to March
31, 2020.
|
|
|
December 31, 2020
|
|
|
March 31, 2020
|
|
|
Total Assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total Liabilities
|
|
$
|
81,354
|
|
|
$
|
33,013
|
|
|
Working Capital (Deficit)
|
|
$
|
(81,354
|
)
|
|
$
|
(33,013
|
)
|
During
the nine months ended December 31, 2020, the Company had cash used in operating activities of ($9,515).
As
of December 31, 2020, we had cash of $0 and had a working capital deficit of ($81,354). We do not have sufficient working capital
to pay our expenses for the next 12 months. Our plan for satisfying our cash requirements and to remain operational for the next
12 months is through sale of shares of our capital stock, convertible debt or loans from shareholders or third parties. We do
not anticipate revenue during that same period of time. We cannot assure you we will be successful in meeting our working capital
needs.
We
expect that working capital requirements will continue to be funded through a combination of our existing funds, loans from shareholders
and/or third parties and further issuances of securities. We have no lines of credit or other bank financing arrangements. Additional
issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities
might have rights, preferences, or privileges senior to our common stock. Additional financing may not be available upon acceptable
terms, or at all.
Should
we not be able to continue to secure additional financing or funding when needed, we may be required to cease the administrative
functions necessary to remain in good standing, to remain reporting under the Securities Act of 1934, to identify and acquire
other assets of operations or to operate our business, any of which would have a material adverse effect on the value of any investment
in our Company.
Our
future capital requirements will depend on many factors, including the development of our business or any other business we may
acquire; the cost and availability of third-party financing for development; and administrative and legal expenses.
We
anticipate that we will incur operating losses for at least the next twelve months. Our prospects must be considered in light
of the risks, expenses and difficulties encountered by companies with no present business plan. There can be no assurance that
we will be successful in identifying a business plan, consummating the Acquisition or otherwise commencing a successful business
strategy, and the failure to do so could have a material adverse effect on our prospects, financial condition and results of operations.
Going
Concern
The
independent auditors’ report accompanying our March 31, 2020 financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming
that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities
and commitments in the ordinary course of business.
Our
financial statements are prepared using accounting principles generally accepted in the United States of America applicable to
a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business.
We have incurred continuous losses from operations, have an accumulated deficit of ($126,188) and had a working capital deficit
of ($81,354) at December 31, 2020, and have reported negative cash flows from operations since inception. In addition, we do not
currently have the cash resources to meet our operating commitments for the next twelve months. The Company’s ability to
continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by
entrance into established markets and the competitive nature in which we operate.
Our
ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash
needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be
successful in our efforts to raise additional debt or equity capital and/or that our cash generated by any of our future operations
will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern
for a reasonable period of time.
Cash
Flows from Operating Activities
We
have not generated positive cash flows from operating activities for the three and nine months ended December 31, 2020. Net cash
flows used in operating activities was and ($9,515) in the nine months ended December 31, 2020, compared to and $(19,092) for
the same period in 2019.
Cash
Flows from Financing Activities
We
have financed our operations primarily from either loans, advancements or the issuance of equity and debt instruments. For the
three and nine months ended December 31, 2020, net cash from financing activities was and $9,515, compared to $18,039 for the
same period in 2019.
Off-Balance
Sheet Arrangements
We
have no 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.
