NOTR Nowtransit Inc (PK)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

(Unaudited)

Note 1 - Nature of Organization

Nowtransit Inc. (the “Company,” “us,” “we,” “Nowtransit”) was incorporated in the State of Nevada on July 8, 2019. Through March 10, 2023 we had no operations and had not generated any material revenues since inception. Effective March 10, 2023, we closed on a Share Exchange Agreement with Best 365 Labs Inc. (“Best”), a Nevada corporation, wherein we acquired all of the shares of Best and Best became a wholly owned subsidiary of the Company (see Note 2).

Best was incorporated on October 12, 2021 in the State of Nevada. Best sells clinically-tested, affordably priced products to naturally battle the onslaught of bacteria and viruses through online sales and in various other distribution channels. Presently, the Company is selling Be On-Guard Mouth Spray, Be On-Guard Nasal Spray, Be On-Guard Brain Fog Support, ADHD 365 maximum brain support, and EZ Safer Surface Cleaner.

Note 2 - Reorganization & Recapitalization

On February 13, 2023, Nowtransit entered into a Share Exchange Agreement with Best and the shareholders of Best who collectively owned 9,588,000 shares of Best common stock, or 100% of the outstanding shares of Best common stock. The transaction consummated on March 10, 2023 (the “Closing”).

Upon the Closing, the Company issued the Best shareholders 34,371,100 shares of the Company’s common stock (see Note 6), representing approximately 85.39% of the shares of the Company’s common stock to be outstanding, in exchange for all of the shares of Best common stock held by Best shareholders. The transaction was accounted for as a reserve merger by Nowtransit and resulted in a recapitalization with Best being the accounting acquirer and Nowtransit being the accounting acquiree. As such, the consolidated financial statements presented are the historical financial statements of Best with retroactive adjustments to reflect the equity of Nowtransit, and the operations of Nowtransit from March 10, 2023, the effective date of the merger. Since Nowtransit was the legal acquirer, the resulting financial statements are in the name of Nowtransit. All share and per share information in the accompanying condensed consolidated financial statements and footnotes have been retroactively restated to reflect the recapitalization.

The following table summarizes the assets acquired and the liabilities assumed at the acquisition date of March 10, 2023:

During the three months ended March 31, 2023 the Company reported $0 in revenue and $5,295 in expenses for the accounting acquiree (Nowtransit) since the acquisition date (March 10, 2023).  Had Nowtransit and Best been combined since January 1, 2023 they would have reported revenues of $32,337, gross profit of $27,591, total operating expenses of $117,417, and a net loss of $89,826.

Note 3 - Going Concern

The condensed consolidated financial statements have been prepared on a going concern basis which assumes the Company will continue as 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 condensed consolidated financial statements, the Company had minimal revenues and a net loss during the three months ended March 31, 2023 and is showing total liabilities in excess of total assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is attempting to commence full-scale operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations long-term. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

Note 4 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and with the rules and regulations of the Securities and Exchange Commission, including the instructions to Form 10-Q and19 Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with US GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements. The financial statements are presented in US dollars and the Company has adopted a December 31 year end.

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 the financial statements and the reported amount of revenues and expenses. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks and any highly liquid investments with a maturity of three months or less to the extent the funds are not being held for investment purposes. As of March 31, 2023 and December 31, 2022, the Company had no cash equivalents.

The Company maintains one account at Wells Fargo Bank. Accounts at this institution are insured by the Federal Deposit Insurance Corporation up to $250,000.

Accounts Receivable and Allowance for Doubtful Accounts

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. Accounts and receivables are written off against the allowance after all attempts to collect a receivable have failed. As of March 31, 2023 and December 31, 2022, the allowance for doubtful accounts was $0.

Inventory

The Company’s inventory is recognized in accordance with Accounting Standards Codification (“ASC”) 303. The Company uses the lower of cost (determined using the first-in, first-out method) or net realizable value for valuing inventories. As of March 31, 2023 and December 31, 2022 the Company had $14,063 and $12,278 of finished goods on hand, respectively.

Income Taxes

The provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized.

Revenue Recognition

The Company’s revenue is recognized in accordance with Accounting Standards Codification 606. The Company, through its online websites, operates in the Immune health supplement market. In addition to the website the Company has a Seller Central listing with Amazon and sells three products through the Amazon online platform. The Company offers products – Be-OnGuard Nasal Spray used against nasal bacteria, viruses and allergens; Be-OnGuard Mouth Spray used against oral bacteria, viruses and allergens; and Be-OnGuard EZ Safer Air used against airborne bacteria, viruses and allergens; Be On-Guard Brain Fog Support; and ADHD 365 maximum strength brain support. The Company’s performance obligation is to deliver product to customers therefore revenue is recognized once delivery occurs. Customers will remit payment at the time of order placement, therefore payment received by the Company prior to product delivery is recorded as deferred revenue. As of March 31, 2023 and December 31, 2022 deferred revenue was $0. Shipping and handling costs that occur are paid by the customer and is not recorded as revenue.

Advertising Costs

Advertising costs are expensed as incurred. During the three months ended March 31, 2023 and 2022, the Company incurred advertising costs of $25,562 and $0, respectively.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, stock options and warrants. There were no potentially dilutive common shares outstanding as of March 31, 2023.

Recent Accounting Pronouncements

The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements and has determined that there have been no standards that had, or will have, a material impact on its consolidated financial statements.

Note 5 - Related Party Transactions

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. Amounts represent advances or amounts paid in satisfaction of liabilities.

During the three months ended March 31, 2023 the Company purchased $7,093 worth of inventory from Ageless Holdings, LLC (“Ageless”), an entity owned and controlled by the Company’s members of management and board of directors, all of which was paid for as of March 31, 2023. Additionally, the Company received $73,727 worth of advances from Ageless to pay for operating expenses and the Company paid back $17,952 of the advances.

As of March 31, 2023 and December 31, 2022, the Company owed related parties a total of $101,131 and $45,356, respectively.

During the three months ended March 31, 2022 the Company’s CEO advanced the Company $106 and the Company purchased $799 worth of inventory from Ageless. Additionally, the Company received $1,000 worth of advances from Ageless to pay for operating expenses. The Company also issued 126,920 common shares to related parties for consulting services (see Note 6).

Note 6 - Equity

Common Stock

The Company has 75,000,000, $0.0001 par value shares of voting common stock authorized.

During the three months ended March 31, 2023, the Company issued 34,371,100 shares of common stock to Best shareholders in exchange for all of the shares of Best common stock (see Note 2) resulting in an increase in common stock of $3,437 and a decrease in additional paid-in-capital of $4,528.

During the three months ended March 31, 2022, the Company issued 2,284,556 shares to third parties for consulting services valued at $4,050 and issued 126,920 shares to related parties for consulting services valued at $225.

As of March 31, 2023 and December 31, 2022, the Company had 39,832,600 and 5,461,500 shares of common stock issued and outstanding, respectfully.

Preferred Stock

On October 19, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation authorizing up to 5,000,000 shares of Preferred Stock, par value $0.0001 per share, with such rights, preferences and limitations as may be set forth in resolutions adopted by the Board of Directors. On November 1, 2021, the Company filed a Certificate of Designation designating 1,000,000 shares of Preferred Stock as Series A Convertible Preferred Stock (the “Series A”). Each share of the Series A is convertible into three shares of the Company’s common stock at the holder's election, subject to a 4.99% beneficial ownership limitation which may be increased to 9.99% upon 61 days’ notice.

During the three months ended March 31, 2023 and 2022 there were no issuances of preferred stock. As of March 31, 2023 and December 31, 2022, the Company had 140,000 shares of Series A Convertible Preferred Stock outstanding.