NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

Natur International Corp was formerly named Future Healthcare of America. Future Healthcare of America was founded in 2012 and was traded with stock ticker symbol FUTU. Future Healthcare of America was a provider of home healthcare services, including senior care, occupational and speech therapy, and pediatric nursing services.

The name change took place following the consummation of acquisition of Natur Holding B.V. and became effective Monday, January 7. The stock ticker symbol has become NTRU. Currently the healthcare services are being wound down.

Natur Holding B,V. (“we”, “our”, “the Company” or “Natur”) was founded in late 2015 and has its headquarters in Amsterdam, the Netherlands.

At the onset of the quarter, our product line up centered on a range of cold pressed juices and healthy snacks. These products were sold either directly or through distribution partners in the Netherlands and the United Kingdom. Beginning in the fourth quarter of 2018, and throughout the first quarter of 2019, the Company focus shifted from dependence on the legacy fruit and vegetable juices and snacks toward innovating a new line of hemp-derived natural food and beverage products. The Company products value proposition is to affordably provide the most culturally relevant, authentic, fresh fruit, vegetable and hemp-derived supplement consumer products to democratize clean, healthy, eating and drinking occasions, with plans to address the growing needs for products that address other personal needs in health, wellness and beauty care.

Through third party contract manufacturers, we apply patented technology to proprietary nutrient dense blends of fruit and vegetables, adding hemp-derived supplements. These are bottled or packed with technically advanced food and product safety measures and in some cases cold high-pressure processing to bring fresh tasting fruit, vegetable and hemp-derived supplement blends to market through more than fifteen product types. These newly innovated products are brought to market through Natur’s distribution channels of direct-to-business, direct-to-consumer and through select distributors.

Natur operated as a private enterprise in the Netherlands from its founding in 2015 through November 13, 2018, when it was acquired as a wholly owned subsidiary in a share exchange transaction by Future Healthcare of America on November 13, 2018, contemplated by that certain Share Exchange Agreement, among the Company and the former shareholders of Natur Holding, B.V. (the “Share Exchange Transaction”). In connection with the Share Exchange Transaction, the former shareholders of Natur received the equivalent of 215,759,999 shares of the Common Stock (the “Common Stock”), which was issued in part as 115,760,000 shares of Common Stock and in part as 100,000 shares of voting, convertible Series B Preferred Stock (the “Series B Preferred Stock”) representing 100,000,000 shares of Common Stock upon conversion. The Series B Preferred Stock will convert automatically upon the Company increasing the number of shares of Common Stock of its authorized capital, which it plans to do promptly so as to cause the conversion of the Series B Preferred Stock. Immediately after the Share Exchange Transaction, the former Natur shareholders collectively own the controlling position among the shareholders of the Company

The merger was accounted for as a reverse capitalization with Natur Holding BV being treated as the accounting acquirer. As such, the historical information for all periods presented prior to the merger date relate to Natur Holding BV. Subsequent to the merger date, the information relates to the consolidated entities of Natur with its subsidiary Natur Holding BV and the former subsidiaries of Future Healthcare of America, that are currently in the process of being wound down and presented as discontinued operations.

In connection with the acquisition, net cash received was $2,000,000 and costs incurred were $399,381 including professional fees for legal, accounting services and finance commission.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The Company prepares its financial statements using the accrual basis of accounting in accordance with United States generally accepted accounting principles (“US GAAP”).

Consolidation - The financial statements presented reflect the accounts of Natur Holding B.V. and it’s direct or indirect subsidiaries. All inter-company transactions have been eliminated in consolidation.

Use of Estimates in Financial Statement Preparation. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure 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.

Cash and Cash Equivalents. Cash equivalents include all highly liquid investments with original maturities of three months or less.

Accounts Receivable. Accounts receivable are comprised of unsecured amounts due from customers. The Company carries its accounts receivable at their face amounts less an allowance for bad debts. The allowance for bad debts is recognized based on management’s estimate of likely losses per year, based on past experience and review of customer profiles and the aging of receivable balances.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Inventory. Inventory, consisting of raw materials, work in progress and finished goods, is valued at the lower of the inventory’s costs or net realizable value, using the first in, first out method to determine the cost. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower.

Property and Equipment . Property and equipment are valued at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows:

Intangible Assets, and Long-Lived Assets. The Company recognizes an acquired intangible asset apart from goodwill whenever the intangible asset arises from contractual or other legal rights, or when it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. Such intangibles are amortized over their useful lives. Impairment losses are recognized if the carrying amount of an intangible asset subject to amortization is not recoverable from expected future cash flows and its carrying amount exceeds its fair value.

The Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Long lived assets are evaluated on a yearly basis and no impairment losses were incurred during the three months ended March 31, 2019. 

Related Party Transactions. The Board of Directors has adopted a Related Party Transaction Policy for the review of related person transactions. Under these policies and procedures, the management reviews related person transactions in which we are or will be a participant to determine if they are fair and beneficial to the Company. Financial transactions, arrangements, relationships or any series of similar transactions, arrangements or relationships in which a related person has or will have a material interest and that exceeds the lesser of: (i) $10,000, and (ii) one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, in the aggregate per year are subject to the boards review. Any member of the board who is a related person with respect to a transaction under review may not participate in the deliberation or vote requesting approval or ratification of the transaction. Transactions that are subject to the policy include any transaction, arrangement or relationship (including indebtedness or guarantees of indebtedness) in which the Company is a participant with a related person. The related person may have a direct or indirect material interest in the transaction. It is Company policy that the board shall approve any related party transaction before the commencement of the transaction. However, if the transaction is not identified before commencement, it must still be presented to the board for their review and ratification.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Revenue Recognition. Beginning on January 1, 2018, the Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods and services transferred to the customer. The following five steps are applied to achieve that core principle:

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the company satisfies a performance obligation

The Company’s performance obligations are satisfied at the point in time when products are received by the customer, which is when the customer has title and the significant risks and rewards of ownership. Therefore, the Company’s contracts have a single performance obligation (shipment of product). The Company primarily receives fixed consideration for sales of product.

The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment activity rather than a promised service to the customer. Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon delivery to the customer. The Company’s performance obligations are satisfied at that time.

Share-Based Payment Arrangement. The Company measures the cost of employee services received in exchange for an award of equity instruments (share-based payments, or SBP) based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the SBP award—the requisite service period (vesting period). For SBP awards subject to conditions, compensation is not recognized until the performance condition is probable of occurrence. The grant-date fair value of share options is estimated using the Black-Scholes-Merton option-pricing model. The Company adopted ASU 2018-07 in the first quarter of 2019 which aligns the accounting for share-based payment awards issued to employees and non-employees.

The fair value of each option granted during the period ended March 31, 2019 was estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the weighted average assumptions in the following table:

The expected term of options granted represents the period of time that options granted are expected to be outstanding. The expected volatility was based on the volatility in the trading of the Company’s common stock. The assumed discount rate was the default risk-free six-year interest rate in the Netherlands.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Revenues do not include sales or other taxes collected from customers.

The Company’s products are sold and distributed through various channels, which include selling directly to retail stores and other outlets such as food markets, institutional accounts and independent outlets. The Company typically collects payment from customers within 30 days from the date of sale. The following table presents our continued revenues disaggregated by geographical region for the period ended March 31, 2019:

The Company sells its products and extends credit, generally without requiring collateral, based on an ongoing evaluation of the customer’s business prospects and financial condition. The Company evaluates the collectability of its trade accounts receivable based on a number of factors, including the Company’s historic collections pattern and changes to a specific customer’s ability to meet its financial obligations. The Company has established an allowance for doubtful accounts to adjust the recorded receivable to the estimated amount the Company believes will ultimately be collected.

The nature of the Company’s contracts does not give rise to variable consideration, such as prospective and retrospective rebates.

The Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates less than 1% of sales could be at risk for return by customers. As the company do not deem this amount to be material no provision was recorded for the period ended 31 March, 2019. Returned product is recognized as a reduction of net sales.

Recent Accounting Pronouncements

Compensation—Stock Compensation: On June 20, 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, which aligns the accounting for share-based payment awards issued to employees and nonemployees. Under ASU No. 2018-07, the existing employee guidance will apply to nonemployee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attribution of compensation cost. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. The adoption had no impact on the Company’s historic financial statements.

Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This update requires the recognition of lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous guidance. The accounting for finance leases (capital leases) was substantially unchanged. The original guidance required application on a modified retrospective basis with adjustments to the earliest comparative period presented. In August 2018, the FASB issued ASU No. 2018-11, “Targeted Improvements to ASC 842,” which included an option to not restate comparative periods in transition and elect to use the effective date of ASU No. 2016-02 as the date of initial application, which the Company elected. As a result, the consolidated balance sheet prior to January 1, 2019 was not restated, and continues to be reported under previous guidance that did not require the recognition of operating lease liabilities and corresponding lease assets on the consolidated balance sheet. As a result of the adoption of ASU No. 2016-02 on January 1, 2019, the Company recorded operating lease right-of-use assets of $580,310 and operating lease liabilities of $578,007. The adoption of ASU No. 2016-02 had an immaterial impact on the Company’s condensed consolidated statement of income and c consolidated statement of cash flows for the three-month period ended March 31, 2019. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward the historical lease classification, not reassess prior conclusions related to expired or existing contracts that are or that contain leases, and not reassess the accounting for initial direct costs.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Foreign Currency Translation. The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. Pursuant to Section 830-10-45, the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.

The financial records of the Company are maintained in its local currency, the euro (“EUR”), which is the functional currency. Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the consolidated financial statements. Foreign currency translation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the consolidated statement of stockholders’ equity.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Unless otherwise noted, the rate presented below per U.S. $1.00 was the midpoint of the interbank rate as quoted by OANDA Corporation (www.oanda.com) contained in its consolidated financial statements. Translation of amounts from EUR into U.S. dollars has been made at the following exchange rates for the respective periods:

Cost of Revenues. Cost of revenue includes all direct expenses incurred to produce the revenue for the period. This includes, but is not limited to, costs for finished products, pick packing costs, storage costs and transportation costs. Cost of revenues are recorded in the same period as the resulting revenue.

Employee Benefits. Wages, salaries, bonuses and social security contributions are recognized as an expense in the year in which the associated services are rendered by employees. For any unused portion of vacation leave, an accrual is recorded for carry over to the following year.

Income Taxes. The Company is subject to US corporation tax. The US combined federal and state corporate tax rate is 23%. The company’s United States net operating losses totaled $3,483,928 as of December 31, 2017 and begin to expire in tax years 2032 and following. Net losses from US operating totaled $157,386 for 2018 and may be carried forward indefinitely. The company is subject to US Internal Revenue Code rules limiting the use of US net operating losses after the merger with Future Health Care of America during 2018 (described in Note 17). This limitation has no effect on the Company’s financial statements because the Company has recognized no deferred tax asset with respect to its net operating loss carryforwards. The NOLs are the cumulative NOL’s per the Company’s 2017 federal income tax return. The 382 limit will not be factored in until the company has income and the limit is therefore applicable.

Natur Holding, the Dutch subsidiary of Natur International Corp is structured as a Dutch limited liability company. Tax on the result is calculated based on the result before tax in the profit and loss account, taking into account losses available for set-off from previous years (to the extent that they have not already been included in the deferred tax assets) and exempt profit components and after the addition of non-deductible costs. Due account is also taken of changes which occur in the deferred tax assets and deferred tax liabilities in respect of changes in the applicable tax rate.

The corporate tax rate for profits above $238,812 (or €200,000) amounts to 25%. Below that amount the rate is 20%. Future profits can be carried back to prior year losses for a maximum of 9 years for the full amount of losses incurred.

In the financial statements of group companies, a tax charge is calculated on the basis of the accounting result. The corporate income tax that is due by these group companies is charged into the current accounts of the company.

Because of the compensable losses no deferred taxes are included in the financial statements. From incorporation of the company only the Corporation Tax return of 2015/2016 has been filed. All years are still subject to examination.

Fair Value of Financial Instruments. The carrying value of short-term instruments, including cash, accounts payable and accrued expenses, and short-term notes approximate fair value due to the relatively short period to maturity for these instruments. The long-term debt approximate fair value since the related rates of interest approximate current market rates.

Fair value is defined 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. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Income /(Loss) Per Share  - The Company computes income (loss) per share in accordance with Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260 Earnings Per Share, which requires the Company to present basic earnings per share and diluted earnings per share when the effect is dilutive (see Note 13).

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – GOING CONCERN

The Company considered its going concern disclosure requirements in accordance with ASC 240-40-50. The Company concluded that its negative working capital and decreased cash flows from operations are conditions that raised substantial doubt about the Company’s ability to continue as a going concern. Without a successful plan in place from management these conditions could negatively impact the Company’s ability to meets its financial obligations over the next year. In response, the Company has implemented a plan to alleviate such reasonable doubt as follows: (i) the Company will continue to generate additional revenue (and positive cash flows from operations) partly related to the Company’s expansion into new product lines during 2019 and partly related to the Company wide sales initiatives already implemented; (ii) in addition cost saving initiatives and an organization restructuring program that is almost completed, will have an additional positive impact on the cost-basis of the organization. Notwithstanding the foregoing, the Company will seek capital as needed, which may be either equity or debt, or both. The Company does not have any capital sources determined at this time, and capital may not be available when sought. The accompanying financial statements have been prepared assuming that the company will continue as a going concern. The company is currently undertaking a corporate restructuring exercise, which is further disclosed in Note 15 – subsequent events.

For the outstanding amount relating to AMC this transaction relates to the purchase of bottled juices for resale. Total purchases relating to goods sold for the three-month period ended March 31, 2019 and the three-month period ended March 31, 2018 was $31,726, and $581,997, respectively.

For the loan from NL Life Sciences and STB Family Offices there is no repayment schedule in place. The interest rate is charged on the basis of EURIBOR + 3% on the average balance of the loan.

The other loans consist of the procurement of juices and consulting fees for the management team. No interest is being charged.

For the loan from Tridutch Holding B.V., there is no repayment schedule in place. The interest rate is charged on the basis of EURIBOR + 3% on the average balance of the loan. In 2018 accrued interest of $17,249 was added to the balance and additional borrowings of $128,043 were drawn down, partly offset by a positive exchange rate difference of $25,283. In 2019 accrued interest of $2,314 was added to the balance and no additional borrowings were drawn down, no repayments were made on the balance in either 2018 or 2019.

For the loan from Efficiency Life Fund is a repayment schedule in place to repay the loan in 10 installments from July 2019 to April 2020. The entire balance of 400,750 was drawn down in 2018 with no repayments made on the balance to date. The movement in 2019 relates wholly to exchange rate difference.

Convertible Loan 1

Party for loan 1 has granted a loan facility in the principle amount of $581,058 or €500,000 with the right, but not the obligation to convert the outstanding loan amounts into shares in the capital of Natur at a company valuation of $17.4 million or €15 million for a term from December 19, 2017, till the maturity date of December 31, 2018, at an interest rate of 10% per annum. No further drawdowns were made on the loan in 2018 or 2019 and the increased balance is due to the accrued interest as no repayment for capital or interest have been made. The lender has agreed to a term sheet for conversion of the debt into common stock at May 7, 2019. Please refer to Note 15, subsequent events.

Convertible Loan 2

On October 20, 2017, an amount of $929,692 or €800,000 was advanced to the Company for a loan agreement that was drafted but never signed. An interest rate of 5% per annum is calculated and the loan has a maturity date of February 28, 2018. The loan is convertible to shares of Natur at a company valuation of $23.3 million or €20 million. The loan is in default and lender has demanded payment and does not want to convert. No further drawdowns were made on the loan in 2018 or 2019 and the decreased balance is due to favorable movement in the exchange rate offsetting the additional accrued interest as no repayment for capital or interest have been made.

Convertible Loan 3

Natur Holding BV, the principle subsidiary of Natur International Corp, entered into a loan agreement with Dam! Holding BV, under which Natur Holding may borrow up to US$560,915 or €500,000. The final terms of the agreement were concluded on February 18, 2019.The full drawdown of US$560,915 was made in three tranches throughout January and February 2019 and was used for general expenses of Natur Holding and a partial repayment of their major supplier, as provided in the loan agreement. The loan amount can be made in Euros, in the same numeric amounts if certain additional conditions are met by Natur Holdings related to further capital restructuring of Natur Holdings, which the company has already undertaken.

Repayment is due after six months from the date of receipt of the initial funds in the Natur Holding’s account. The loan may be pre-paid in full or in part at any time. Interest, at the rate of 5% per annum, is due and payable quarterly. The loan carries a default interest rate of 11% per annum. The loan has the typical default provisions of a borrowing arrangement, including breach of the borrower obligations, bankruptcy of the borrower, significant changes in the borrower’s business, and dissolution of the borrower. The full amount of the loan is covered by the grant of a security interest in Natur Holdings.

The loan amount, if unpaid at maturity, may be converted into common stock of Natur International Corp. at the conversion price of $0.05 per common stock. The lender has agreed to a term sheet for conversion of the debt into common stock at April 29, 2019. Please refer to Note 15, subsequent events.

The convertible loan has been converted in the subsequent period. $8,671,743 of the balance was settled, using series C preferred shares and the remaining $3,000,000 was converted into long term debt. Please refer to Note 15, subsequent events.

NOTE 11 – OPTIONS & WARRANTS

On November 13, 2018, the Company closed a Subscription Agreement with Alpha Capital Anstalt wherein the Company granted the following warrants to purchase:

-A total of 33,000,000 shares of common stock, at $0.0606060 per share, exercisable for four years.

-A total of 6,000,000 shares of common stock, at $0.15 per share, exercisable for four years.

A summary of the status of the warrants granted is presented below for the three months ended:

On January 16, 2019, the company completed compensatory arrangements with three board members of Natur International Corp. with the following terms:

Mr. Anthony Joel Bay, through La Bay Ventures Inc., will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of NTRU. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.

Mr. Rudolf Derk Huisman, through Pas Beheer BV, will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of NTRU. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – OPTIONS & WARRANTS - continued

Mr. Robert A. Paladino, through Cavalier Aire LLC., will be issued a six-year option to purchase an aggregate of 7,319,321 shares of common stock of NTRU. The option granted by NTRU provides for equal quarterly vesting of the shares commencing March 31, 2019, over three years ending December 31, 2021, with the right to exercise vested shares at $.030303 per share at any time until March 31, 2025, the sixth-year anniversary. The option provides for cashless exercise and may be registered for resale at the election of NTRU. If the service agreement is terminated for a breach thereof, all vested and unvested options will terminate, but if the service agreement is otherwise terminated, then only then vested options will continue to be exercisable for the full term.

A summary of the status of the share options is presented below for the three months ended:

The fair value of all stock options outstanding at 31 March, 2019 is $1,559,013 at a weighted average fair value of $0.071 per option.

NOTE 12 – LEASES

The Company leases identified assets comprising real estate.  Real estate leases consist primarily of office space. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately.

Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company’s operating leases are generally comprised of real estate. Operating leases are included shown separately in the unaudited consolidated balance sheet. On adoption of ASC 842 the Company recorded operating lease right-of-use assets of $580,310 and operating lease liabilities of $578,007. We do not believe the standard will materially affect our consolidated net earnings.

Right-of-use (“ROU”) assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date if the implicit rate cannot be determined. ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and interest expense calculated using the amortized cost basis.

The Company’s leases have remaining lease terms of less than 3 years, which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.  The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less. The effect of short-term leases on the Company’s ROU assets and lease liabilities was not material.

As of March 31, 2019, our operating leases have a weighted-average remaining lease term of 2.25 years and a weighted-average discount rate of 4%.

The future minimum obligations under operating leases in effect as of December 31, 2018 having a noncancelable term in excess of one year as determined prior to the adoption of ASC 842 are as follows:

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – LOSS PER SHARE

At March 31, 2019 the Company had 131,425,194 shares issues and outstanding at a nominal value of $.001. besides that, the Company has 2,397.130 preferred A shares and 100,000 preferred B shares.  Alpha capital Anstalt has two outstanding warrants issued at November 13, 2018 with 4 years term. The first warrant has an exercise price of $0.0606 for 36,000,000 shares the second warrant is 6,000,000 at $0.15 exercise price, the company has reserved 16,240,000 shares for management and Employee Stock Ownership Plan. At December 31, 2018, the Company had 129,049,192 shares of common stock issued and outstanding.

Because the company is in a net loss position, basic and diluted earnings per share are the same as the inclusion of potential dilutable shares would be anti-dilutive.

NOTE 14 – DISCONTINUED OPERATIONS AND ASSETS/LIABILITIES HELD FOR DISPOSAL

Effective November 30, 2018, the Company has closed down the London office and shops as part of the restructuring plan. Functionally the operations were shut down before December 31, 2018 and therefore we have qualified it as discontinued operations the sale of assets is in process. The existing support functions have been transferred to the headquarters in Amsterdam as part of the centralization of support staff initiative.

As of March 22, 2019 the company Naturalicious UK Limited has been put into liquidation and the matters are being dealt with by a qualified administration firm in the United Kingdom. A board meeting was held on March 22, 2019 with all creditors and it was agreed to liquidate the company. At this moment in time the rights & obligations of the company are handled by the administration firm and the legal obligation over the liabilities are extinguished. As the parent company no longer has any rights or obligations to the subsidiary it has been removed from the consolidation and the net liability position of the company is released and recognized as a gain on disposal.

Effective August 31, 2018, Natur International Corp closed the offices of its Casper, Wyoming operations. The increase in costs coupled with a decrease in business activity, lead to the decision to close the Casper, Wyoming operations. In closing the office, the Company transitioned its clients to new service providers, and terminated employees as the transition happened. The month to month lease was terminated with the landlord on August 31, 2018, and the office was closed the same day. We have one part-time employee, working remotely, primarily on the collection of accounts receivable.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 – DISCONTINUED OPERATIONS AND ASSETS/LIABILITIES HELD FOR DISPOSAL - continued

The following table presents the carrying amounts of the major classes of assets and liabilities included in our discontinued operations as presented on our Unaudited Consolidated Balance Sheet as of March 31, 2019.

NATUR INTERNATIONAL CORP.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS