UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2020 or
☐ TRANSITION REPORT
For the transition period from ____________________to _________________________
Commission file number 333-185408
| SIPUP CORPORATION | ||
| (Exact name of registrant as specified in its charter) |
| Nevada | 99-0382107 | |
|
(State
or other jurisdiction of
incorporation or organization) |
(I.R.S.
employer
identification no.) |
|
| 3 Kiryat Hamada, 3rd floor, Jerusalem, Israel | 9777603 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 1-305-999-5232
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbols(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Securities registered pursuant to section 12(g) of the Act: Common Stock, par value $0.001 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting 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 new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of May 31, 2020 was $457,500.
As of May 20 2021, Sipup Corporation had 24,044,000 shares issued and outstanding.
SIPUP CORPORATION INC.
2020 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
i
PART I
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K of Sipup Corporation, a Nevada corporation, contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things:
| ● | the uncertainty of profitability based upon our history of losses; |
| ● | risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern; |
| ● | Our stockholders will suffer dilution as the Company will seek future funding or any other financing facilities; and |
| ● | other risks and uncertainties related to our business plan and business strategy. |
This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
All references in this Form 10-K to the “Company”, “Sipup”, “we”, “us,” or “our” are to Sipup Corporation
1
Our Company
On June 2, 2019, the Company completed the acquisition of Enlightened Capital Ltd., an Israeli company with offices at Bnei-Brak, Israel (“Enlightened”) whereby Enlightened became a direct and wholly owned subsidiary of the Company. As consideration, the Company issued to Enlightened’s shareholders 18,000,000 common Stock, par value $0.001 per share.
Enlightened is engaged, in the field of green energy and is licensed to internationally trade in Certified Emission Reductions, also known as carbon credits (“CERs”), as issued by the UN until 2040 The Company, collectively with Enlightened are hereunder referred to as the “Group”.
The transaction was accounted for as a reverse asset acquisition in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Under this method of accounting, Enlightened was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the facts that, immediately following the Merger: (i) Enlightened’s stockholders owned a substantial majority of the voting rights in the combined company. As a result of the Recapitalization Transaction, the shareholders of Enlightened received the largest ownership interest in the Company, and Enlightened was determined to be the “accounting acquirer” in the Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Enlightened. The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.
On April 25, 2021, the Company entered into a Stock Exchange Agreement with VeganNation Services Ltd., a company formed under the laws of the State of Israel (“VeganNation”) and the shareholders of VeganNation pursuant to which VeganNation would become a wholly owned subsidiary of the Company, and the shareholders of VeganNation would receive an aggregate of 23,562,240 shares of common stock of the Company. The transaction is subject to customary closing conditions.
VeganNation is, a leading global plant-based company building an all-encompassing conscious consumer ecosystem, connecting and empowering plant-based and sustainable businesses and individuals. Management of the Company believes that the growth of sustainable and plant-based consumer goods presents a unique opportunity to participate in the fastest growing lifestyle globally.
In connection with the proposed transaction, the VeganNation stockholders are expected to receive comon stock of Sipup that will be equal to approximately 50% of the issued and outstanding common stock of the Company at the closing of the proposed merger, on a fully diluted basis. Following(and subject to) the closing of the proposed merger, VeganNation will effect a change in the Company’s Board of Directors and management.
Additionally, VeganNation has, on November 26, 2020, entered into a non-binding Letter of Intent (the “LOI”) to acquire a vegan industry company located in the United States (the “Target”) for a $4 million acquisition. VeganNation has assigned the LOI to the Company. As the Company has previously disclosed in its Current Report on Form 8-K filed with the SEC on April 26, 2021, the Company and Target have terminated all discussions relating to the acquisition of the Target
During December 2020 the company, in consideration of the advance of $50,000 for purposes of paying outstanding Company obligation to third parties, the Company issued to Adi Zim and Rosario Capital Ltd. its unsecured convertible promissory note in the principal amount of $50,000 (the “Note”). The Note is repayable upon the earlier of December 15, 2021 or the closing of the Stock Exchange Agreement with VeganNation. The Note is convertible into shares of the Company’s common stock at a rate equal to $0.10 per share,. As of November 30, 2020, the proceeds of the Note were not remitted to the Company.
Corporate History & Recent Events
On October 31, 2012, the Company was incorporated under the laws of the State of Nevada. Through fiscal year 2013, we were engaged in the production, packing and selling of flavored yogurts and have not generated any revenue; our independent auditors have issued an opinion about our ability to continue as a going concern in connection with our audited financial statements for the year ended November 30, 2020. Our accumulated deficit is $337,262 as of November 30, 2020. We currently have no revenue generating business and are focusing on finalizing the transactions discussed above.
During March 2019 the Company issued Adi Zim Holdings Ltd. (“Adi”) 644,000 restricted shares of the Company’s common stock in consideration for remittance of $100,000 for purposes of paying outstanding Company obligation to third parties
During April 2019, the Company and Rosario Capital Ltd. (“Rosario”) have entered into additional service agreement, pursuant to which Rosario is providing to the Company certain financial advisory and other services. In consideration of any and all Rosario’s Services, the Company has issued to Rosario 900,000 restricted shares of common stock. The service agreement will be terminated on December 31, 2020. The fair value of the restricted shares as of the date of issuance was $144,000 using the share price on the day of issuance.
2
Insurance
We do not maintain any insurance. Because we do not have any insurance, if we are made a party of a legal action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.
Employees
As of May 20, 2021, we have two employees, all of whom are officers. None of our employees are subject to a collective bargaining agreement.
Offices
The Company’s principal offices are located at 3 Kiryat Hamada, 3rd floor, Jerusalem, Israel. Our telephone number is 1-305-999-5232.
Government Regulation
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies in any jurisdiction which we would conduct activities in the future. As of now there are no required governments approvals present that we need approval from or any existing government regulation on our business.
We currently have not obtained any copyrights, patents or trademarks. We do not anticipate filing any copyright or trademark applications related to any assets over the next 12 months.
Going Concern
Our cash balance is $Nil as of November 30, 2020. We do not believe that our cash balance is sufficient to fund our limited levels of operations beyond one year’s time.
Our independent registered public accountant has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated revenues and no revenues are anticipated until we complete our initial business development. There is no assurance we will ever reach that stage.
We anticipate that our current cash and cash equivalents and cash generated from operations, if any, will be insufficient to satisfy our liquidity requirements for at least the next 12 months. We will require additional funds prior to such time and the Company will seek to obtain these funds by selling additional capital through private equity placements, debt or other sources of financing. If we are unable to obtain sufficient additional financing, we may be required to reduce the scope of our planned operations, which could harm our business, financial condition and operating results. Additional funding to meet our requirements may not be available on favorable terms, if at all.
At the present time, we have been able to raise additional cash by selling of common stock, it will likely not be sufficient to support our planned operations. If we are unable to raise the cash needed to support our operations, we will either suspend product development and marketing activities until we do raise the cash, or cease operations entirely
Subject to raising working capital, for which we have no commitments, management may also consider other business opportunities, including a strategic merger or acquisition outside our current line of business, in order to increase shareholder value.
3
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.
Limited operating history; Need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
The Company is a smaller reporting company as defined by rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 1B. Unresolved Staff Comments.
Not applicable.
The Company does not own any property. We currently lease a virtual office at 30 Wall St. 8th floor, Manhattan, NY on a month to month basis. We believe that our facilities are suitable and adequate for our present needs.
The Company is not party to any legal proceedings, nor is there any known legal proceedings contemplated against the Company.
No director, officer or affiliate of the Company and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.
Item 4. Mine Safety Disclosures.
Not applicable.
4
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock is quoted on the OTC Pink Sheets under the symbol “SPUP.”
The following table sets forth, for the periods indicated, the high and low closing bid prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
| LOW | HIGH | |||||||
| Year Ended November 30, 2020 | ||||||||
| First Quarter | $ | 0.10 | $ | 0.12 | ||||
| Second Quarter | $ | 0.10 | $ | 0.10 | ||||
| Third Quarter | $ | 0.08 | $ | 0.10 | ||||
| Fourth Quarter | $ | 0.08 | $ | 0.08 | ||||
| LOW | HIGH | |||||||
| Year Ended November 30, 2019 | ||||||||
| First Quarter | $ | 0.15 | $ | 0.38 | ||||
| Second Quarter | $ | 0.16 | $ | 0.51 | ||||
| Third Quarter | $ | 0.16 | $ | 0.65 | ||||
| Fourth Quarter | $ | 0.11 | $ | 0.25 | ||||
| (1) | The above table sets forth the range of high and low closing bid prices per share of our common stock as reported on the OTCpink Sheets for the periods indicated. |
HOLDERS
As of the date of this Form 10-K the Company had 24,044,000 shares of our common stock issued and outstanding held by 14 holders of record.
DIVIDEND POLICY
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends.
SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS
We have no equity compensation or stock option plans. We may in the future adopt a stock option.
5
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
From November 30, 2019 to November 30, 2020
For the year ended November 30, 2020, we had no revenue and had general and administrative expenses of $61,248 comprised of Professional fees and filings fees as compared to general and administrative expenses of $48,800 for the year ended November 30, 2019. In addition, we recorded interest expenses on loan of $11,367 resulting in a net loss of $72,615 as compared to interest expenses on loan of $6,090 for the year ended November 30, 2019.
Liquidity and Capital Resources
As of November 30, 2020, the company had $Nil cash and our liabilities were $261,082, consisting primarily of Accounts payable and accrued expenses of $88,200 and Loans from stockholders of $172,882. As of November 30, 2019, the company had $Nil cash and our liabilities were $274,867, consisting primarily of Accounts payable and accrued expenses of $113,352 and Loans from stockholders of $161,515.
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital. No substantial revenues are anticipated until after receiving sufficient financing and implementing our plan of operations. We must raise cash to implement our strategy and stay in business. The Company anticipates over the next 12 months the cost of being a reporting public company will be approximately $25,000.
Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be inadequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. Although we intend to finance these expenses with further issuances of securities, and debt issuances, no assurance can be provided that we will be able to raise funds on commercially acceptable terms or at all.
We anticipate that our current cash and cash equivalents and cash generated from operations, if any, will be insufficient to satisfy our liquidity requirements for at least the next 12 months. We will require additional funds prior to such time and the Company will seek to obtain those funds by selling additional capital through private equity placements, debt or other sources of financing. If we are unable to obtain sufficient additional financing, we may be required to reduce the scope of our planned operations, which could harm our business, financial condition and operating results. Additional funding to meet our requirements may not be available on favorable terms, if at all.
At the present time, we have been able to raise additional cash by selling of common stock; however it will likely not be sufficient to support our planned operations. If we are unable to raise the capital needed to support our operations, we will either suspend product development and marketing activities until we do raise the cash, or cease operations entirely. Because we have been unable to raise additional cash, Management may consider other business opportunities in order to maintain and increase shareholder value.
We are highly dependent upon the success of the private offerings of equity or debt securities, as described herein. Therefore, the failure thereof would result in the need to seek capital from other resources such as taking loans, which would likely not even be possible for the Company. At such time these funds are required, management would evaluate the terms of such debt financing. If the Company cannot raise additional proceeds via a private placement of its equity or debt securities, or secure a loan, the Company would be required to cease business operations. As a result, investors would lose all of their investment.
6
Significant Accounting Policies
For additional and relevant information please see Note 2 of the financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 8. Financial Statements and Supplementary Data.
The information called for by Item 8 is included following the “Index to Financial Statements” on page F-1 contained in this annual report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On May 20, 2020 (the “Dismissal Date”), the Board of Directors the Company dismissed Weinstein & Co C.P.A. (“Weinstein”) as the independent registered public accounting firm for the Company. On May 20, 2020, the Board engaged Halperin CPA, Financial Consulting & Management (“Halperin”) as the Company’s new independent registered public accounting firm. The decision to dismiss Weinstein resulted from an order (the “Order”) of the Securities and Exchange Commission (the “SEC”) denying W&CO the privilege of appearing or practicing before the SEC.
The reports of Weinstein on the Company’s financial statements for the two most recent fiscal years did not contain an adverse or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles, other than an explanatory paragraph relating to the Company’s ability to continue as a going concern.
During the two most recent fiscal years and through the Dismissal Date, there were (i) no disagreements between the Company and Weinstein on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement, if not resolved to the satisfaction of Weinstein, would have caused Weinstein to make reference thereto in their reports on the consolidated financial statements for such years, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
During the Company’s two most recent fiscal years and in the subsequent interim period through the Dismissal Date, neither the Company or anyone on its behalf consulted with Halperin regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company by Halperin that was an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of either a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.
7
Item 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
| - | Pertains to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of assets; |
| - | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America and receipts and expenditures are being made in accordance with authorizations of management and directors; and |
| - | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements. |
Under the supervision and with the participation of our management, including our principal executive officer and our financial officer, an evaluation was performed on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our and principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report for the purpose of gathering, analyzing and disclosing of information that the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms for the reasons set forth in our annual report on Form 10-K for the year ended November 30, 2020.
(b) Changes in Internal Controls.
There were no changes in our internal control over financial reporting during quarter ended November 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
8
Management’s Annual Report on Internal Control Over Financial Reporting
As of November 30, 2020, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal control over financial reporting were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following internal control over financial reporting deficiencies that represent material weaknesses as of November 30, 2020.
| ● | Financial Reporting and Closing Process: We did not maintain an effective financial reporting and closing process to prepare financial statements in accordance with GAAP. We determined that controls over timely and complete financial statement reviews, effective journal entry controls, and appropriate reconciliation processes were missing or ineffective. Further, we were unable to complete regulatory filings timely as required by the rules of the SEC. |
| ● | Qualified Personnel: We lacked a sufficient number of qualified accounting personnel in key financial reporting positions to operate processes and controls over the year end close process. As a result, a reasonable possibility exists that material misstatements in our financial statements will not be prevented or detected on a timely basis. |
| ● | Control Monitoring: Our controls for monitoring the adequacy of the design and operating effectiveness of internal control over financial reporting across the Company were ineffective. As a result, a reasonable possibility exists that material misstatements in our financial statements will not be prevented or detected on a timely basis. |
Management believes that the material weaknesses above did not have an effect on our financial results
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated or plan to initiate the following series of measures.
Subject to raising capital, of which no assurance can be provided, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide management report in the Annual Report.
None
9
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
As of the date of this Form 10-K the Directors and Officers currently serving our Company are as follows:
| Name | Age | Positions and Offices | ||
| Mr. Isaac Thomas | 33 | Chief Executive Officer | ||
| Mr. Yochai Ozeri (1) | 44 | Chief Financial Officer | ||
| Mr. Netanel Salomon (1) | 32 | Vice President of Marketing and Investor Relations | ||
| Mr. Baruch Yadid (3) | 63 | Director |
The directors named above will serve until the next annual meeting of the stockholders or until their respective resignation or removal from office. Thereafter, directors are anticipated to be elected for one-year terms at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the Board of Directors.
Isaac Thomas, Age 33
Mr. Thomas serves as Chief Executive Officer of VeganNation Services Ltd., an Israeli company, a position he has held since January 2018. Mr. Thomas is an entrepreneur from the age of 16. Mr. Thomas’ career spans 17 years of entrepreneurial ventures in real estate and healthcare, where he acquired, developed, consulted and led visionary projects in the multifamily and senior housing sectors in the United States. In 2016, through a spiritual journey of meditation, Mr. Thomas has chosen to live a plant based lifestyle. In January 2018 Mr. Thomas founded VeganNation with the vision of creating the global platform and infrastructure to unite the global plant-base and sustainable economy into a true global, impactful economic ecosystem.
Yochai Ozeri, Age 44
Mr. Ozeri has been serving, since January 2012, as the Director of Finance and Treasurer of deltathree. In his current roles at deltathree, Mr. Ozeri serves as its principal financial officer and principal accounting officer. Prior to assuming the positions of at deltathree, Mr. Ozeri, served as Controller from August 2009 until January 2012. Founded in 1996, deltathree, Inc. is a global provider of Voice over Internet Protocol (VoIP) telephony services, products, and solutions for partners, resellers and direct consumers. Prior to joining deltathree, Mr. Ozeri served as a senior auditor at Kost, Forer, Gabbay & Kasierer, a member firm of Ernst & Young International, in its technology practice group. Mr. Ozeri is a Certified Public Accountant.
Netanel Salomon, Age 32
Mr. Solomon has been serving, since November 2014, as a sales executive in Binary Partners which experts in building traded platform online binary option and Forex platforms for dealers. Prior to assuming the positions of at Binary Partners, Mr. Salomon served from July 2013 as Vice President; sales and marketing in Webresult an internet marketing solutions company. Mr. Salmon has served from March 2012 to July 2013 as a consultant and manager of “call of the shofar” Israeli branch, a non-profit focuses on personal and relational transformation. From November 2010 to March 2012 as a youth guide in Gush Etzion regional municipality managing employment projects for youth on summer vacation.
Baruch Yadid, Age 63
In the last 10 years Mr. Yadid was involved in several real estates and commercial deals in Israel and abroad, he also played a major role in the successes of private companies.
Director Independence
None of our directors presently qualify as an 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 our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of director has not made a subjective determination as to its sole director that no relationships exist which, in the opinion of our board of director, 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 our board of director made these determinations, our board of director would have reviewed and discussed information provided by the director and us with regard to each director business and personal activities and relationships as they may relate to us and our management.
10
Conflicts of Interest
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our current directors. The Board of Director has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early development stage company, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
Involvement in Certain Legal Proceedings
There are no legal proceedings that have occurred in the past 10 years concerning our sole officer and director which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.
FAMILY RELATIONS
There are no family relationships among the directors and officers of Sipup Corporation.
AUDIT COMMITTEE AND CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board of Directors established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early exploration stage company and has only four directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
There are no family relationships among our directors or officers. Other than as described above, we are not aware of any other conflicts of interest with any of our executive officers or directors.
CODE OF ETHICS
The Company has not adopted a code of ethics that applies to its principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company has not adopted a code of ethics because it currently has minimal operations.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. Based on our review of filings made on the SEC website, and the fact of us not receiving certain forms or written representations from certain reporting persons that they have complied with the relevant filing requirements, we believe that, during the year ended November 30, 2020, our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements.
11
Item 11. Executive Compensation.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our Officer for all services rendered in all capacities to us for the fiscal periods indicated.
| Name and Principal Position | Year |
Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($)(1) |
Total ($) |
||||||||||||||||
| Isaac Thomas Chief Executive Officer) | 2020 | - | - | - | - | - | ||||||||||||||||
| Yochai Ozeri | 2020 | - | - | - | - | - | ||||||||||||||||
|
Chief Financial Officer
(Principal Financial Officer) |
2019 | - | - | - | - | - |
Stock Option Grants
We have not granted any stock options to the executive officer since our inception. Upon the further development of our business, we will likely grant options to our sole director and officer consistent with industry standards for businesses similar to ours.
Employment Agreements
Mr. Ozeri and the Company entered into an employment agreement dated February 1, 2016 pursuant to which Mr. Ozeri will be paid a monthly base salary of $2,000 for the first three months. Thereafter, the Company’s board of directors or the appropriate committee will consider an increase in the base amount. Under the agreement, Mr. Ozeri will be entitled to participate in any future employee stock option plan that the Company establishes and will be issued non-qualified options for 500,000 shares of the Company’s common stock. Either the Company or Mr. Ozeri is entitled to terminate employment upon 60 prior days’ notice.
Director Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table lists, as of May 20, 2021, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 24,044,000 shares of our common stock issued and outstanding as of May 19, 2021. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock.
|
Shares
of
Common Stock (1) |
Percent
of
Class (2) |
|||||||
| Executive Officers and Directors | ||||||||
| Isaac Thomas, Chief Executive Officer & Director | - | * | ||||||
| Yochai Ozeri, Chief Financial Officer & Director | - | * | ||||||
| Netanel Salomon, Vice President & Director | - | * | ||||||
| Baruch Yadid, Director | ||||||||
| 5% or more Shareholders | ||||||||
| Adi Zim Holdings Ltd. (2) | 7,644,000 | 31 | % | |||||
| David Daniel (3) | 11,000,000 | 45.8 | % | |||||
| Nissim Barih (4) | 2,475,000 | 10.3 | % | |||||
| Rasario Capital Ltd (5) | 1,595,000 | 6.6 | % | |||||
| * | Less than one percent. |
12
| (1) | Under Rule 13d-3 of the Exchange Act, 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 number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. |
| (2) | Mr. Adi Zim_ holds sole voting and dispositive control of these securities. The address of Adi Zim Holdings Ltd. is Yosef Klausner 10, Ramla Israel. |
| (3) | David Daniel is the former shareholder of Enlightened. His address is Hanah Senesh 28, Beni Brak, Israel |
| (4) | The business address of Nissim Barih is 41 Shlomo Hamelech Street, Lod Israel. |
| (5) | Mr. Reuben Ablagon holds sole voting and dispositive control of these securities. The address of Rosario Capital Ltd is 2 Weizman Street, Tel Aviv Israel. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Currently, there are no contemplated transactions that the Company may enter into with our officers, directors or affiliates. If any such transactions are contemplated, we will file such disclosure in a timely manner with the Commission on the proper form making such transaction available for the public to view.
The Company has no formal written employment agreement or other contracts with our current officers and there is no assurance that the services to be provided by them will be available for any specific length of time in the future.
Item 14. Principal Accounting Fees and Services.
Audit and Non-Audit Fees
On May 20, 2020, the Company appointed Halperin Ilanit (“Halperin”) as the independent registered public accounting firm, for the Company for the fiscal year ended November 30, 2020 and 2019. Aggregate fees for professional services rendered for the Company by Halperin are set forth below:
| 2020 | 2019 | |||||||
| Audit fees | $ | 14,000 | $ | 14,000 | ||||
| Audit-related fees | 10,000 | - | ||||||
| Tax fees | - | - | ||||||
| All other fees | - | - | ||||||
| Total | $ | 24,000 | $ | 14,000 | ||||
13
PART IV
ITEM 15. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements.
The Financial Statements filed as part of this Annual Report are identified in the Index to Financial Statements on page F-1 hereto.
(a)(2) Financial Statement Schedules.
Financial Statement Schedules have been omitted because the information required to be set forth therein is not applicable or is shown on the financial statements or notes thereto.
(a)(3) Exhibits.
We hereby file, as exhibits to this Annual Report, those exhibits listed on the Exhibit Index immediately following the signature page hereto.
14
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on May 20, 2021.
| SIPUP CORPORATION, INC. | ||
| Date: May 20, 2021 | By: | /s/ Isaac Thomas |
| Isaac Thomas | ||
|
Chief
Executive Officer
(Principal Executive Officer) |
||
| Date: May 20, 2021 | By: | /s/ Yochai Ozeri |
| Yochai Ozeri | ||
|
Chief Financial Officer (Principal Financial Officer) |
||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| Signature | Title | Date | ||
| /s/ Isaac Thomas | Chief Executive Officer and Director | May 20, 2021 | ||
| Isaac Thomas | (Principal Executive Officer) | |||
| /s/ Yochai Ozeri | Chief Financial Officer and Director | May 20, 2021 | ||
| Yochai Ozeri | (Principal Financial and Accounting Officer) | |||
| /s/ Baruch Yadid | Director | May 20, 2021 | ||
| Baruch Yadid | ||||
| /s/ Natanel Salomon | Director, Vice President | May 20, 2021 | ||
| Natanel Salomon |
15
SIPUP CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Contents:
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
SIPUP CORPORATION, INC.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of SIPUP Corporation, Inc (the “Company”) as of November 30, 2020 and 2019, the related statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for each of the two years in the period ended November 30, 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 November 30, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended November 30, 2020, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not yet generated material revenues from its operations to fund its activities and is therefore dependent upon external sources for financing its operations. As of November 30, 2020, the Company has incurred accumulated deficit of $286,910 and negative operating cash flows. These factor among others, as discussed in Note 1 to the financial statements raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of’ these uncertainties.
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 audit. 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 audit 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 audit, 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
/s/ Halperin Ilanit
Certified Public Accountants (Isr.)
Tel Aviv, Israel
May 20, 2021
We have served as the Company’s auditor since 2020
F-2
PART I
FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETS
(In dollars)
| Year ended November 30, | ||||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Prepaid expenses (Note 4) | 7,200 | 93,600 | ||||||
| Total assets | $ | 7,200 | $ | 93,600 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| Accounts payable and accrued expenses | 88,200 | 113,352 | ||||||
| Loan from stockholder (Note 3) | 172,882 | 161,515 | ||||||
| Total liabilities | 261,082 | 274,867 | ||||||
| Stockholders’ deficiency: | ||||||||
| Common stock, $0.001 par value; 75,000,000 shares authorized; 24,044,000 shares issued and outstanding on November 30, 2020 November 30, 2019 respectively | 24,044 | 24,044 | ||||||
| Additional paid-in capital | 64,631 | 64,631 | ||||||
| Shareholder debt due to issuance of shares | (55,647 | ) | (55,647 | ) | ||||
| Accumulated deficit | (286,910 | ) | (214,295 | ) | ||||
| Total stockholders’ deficiency | (253,882 | ) | (181,267 | ) | ||||
| Total liabilities and stockholders’ deficiency | $ | 7,200 | $ | 93,600 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
CONSOLIDATED STATEMENTS OF OPERATIONS
(In dollars, except share and per share data)
| Year ended November 30, | ||||||||
| 2020 | 2019 | |||||||
| Revenues: | $ | - | $ | - | ||||
| Operating expenses: | ||||||||
| General and administrative expenses | 61,248 | 48,800 | ||||||
| Total operating expenses | 61,248 | 48,800 | ||||||
| Interest on shareholder loan | 11,367 | 6,090 | ||||||
| Net loss | $ | (72,615 | ) | $ | (54,890 | ) | ||
| Net loss per share-basic and diluted attributable to common stockholders | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Basic and diluted weighted average number of shares outstanding | 24,044,000 | 23,523,397 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
(In dollars)
| Common Stock | Shareholder | |||||||||||||||||||||||
|
Number of Outstanding Shares |
Amount |
Additional Paid-in Capital |
Accumulated Deficit |
debt
due to
issuance of shares |
Total Stockholders’ Deficiency |
|||||||||||||||||||
| Balance at November 30, 2018 | 18,000,000 | 18,000 | - | (159,405 | ) | - | (141,405 | ) | ||||||||||||||||
| Effect of Reverse Capitalization | 6,044,000 | 6,044 | 64,631 | 70,675 | ||||||||||||||||||||
| Shareholder debt due to issuance of shares | (55,647 | ) | (55,647 | ) | ||||||||||||||||||||
| Loss for the period | (54,890 | ) | (54,890 | ) | ||||||||||||||||||||
| Balance at November 31, 2019 | 24,044,000 | 24,044 | 64,631 | (214,295 | ) | (55,647 | ) | (181,267 | ) | |||||||||||||||
| Loss for the period | (72,615 | ) | (2,615 | ) | ||||||||||||||||||||
| Balance at November 31, 2020 | 24,044,000 | 24,044 | 64,631 | (286,910 | ) | (55,647 | ) | (253,882 | ) | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In dollars)
| Year Ended November 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (72,615 | ) | $ | (54,890 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Interest on shareholder’s loan | 11,367 | 6,090 | ||||||
| Stock based compensation | 86,400 | 43,200 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| (Decrease) Increase in accounts payable and accrued expenses | (25,152 | ) | 5,600 | |||||
| Net cash used in operating activities | - | - | ||||||
| Increase in cash and cash equivalents | - | - | ||||||
| Cash and cash equivalents at beginning of period | - | - | ||||||
| Cash and cash equivalents at end of period | $ | - | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
Sipup Corporation (the “Company”) is a Nevada Corporation incorporated on October 31, 2012. For additional information see subsequent events
Merger Transaction
On June 2, 2019, the Company completed the acquisition of Enlightened Capital Ltd., an Israeli company with offices at Bnei-Brak, Israel (“Enlightened”) whereby Enlightened became a direct and wholly owned subsidiary of the Company. As consideration, the Company issued to Enlightened’s shareholders 18,000,000 common Stock, par value $0.001 per share.
Enlightened is engaged, in the field of green energy and is licensed to internationally trade in Certified Emission Reductions, also known as carbon credits (“CERs”), as issued by the UN until 2040.
The transaction was accounted for as a reverse asset acquisition in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Under this method of accounting, Enlightened was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the facts that, immediately following the Merger: (i) Enlightened’s stockholders owned a substantial majority of the voting rights in the combined company. As a result of the Recapitalization Transaction, the shareholders of Enlightened received the largest ownership interest in the Company, and Enlightened was determined to be the “accounting acquirer” in the Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Enlightened. The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.
Going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of November 30, 2020, the Company has an accumulated deficit of $286,910 from operations and has earned no revenues to cover its operating costs. The Company intends to fund future operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending November 30, 2020.
The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP).
Basis of Presentation
The Company maintains its accounting records on an accrual basis in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). These financial statements are presented in US dollars.
F-7
Use of estimates in the preparation of consolidated financial statements
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 and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to the going concern assumptions.
Cash and cash equivalents, and Restricted cash
Cash equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.
Earnings per Share
The Company computes net loss per share in accordance with ASC 260, “Earnings Per Share” ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potential dilutive common shares, which comprise options granted to employees. As November 30, 2020, the Company had no potentially dilutive shares.
Income Taxes
Income taxes are accounted for in accordance with ASC Topic 740, “Income Taxes.” Under the asset and liability method, deferred tax assets and liabilities are recognized for the future consequences of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (temporary differences). Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are recovered or settled. Valuation allowances for deferred tax assets are established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Stock based compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.
F-8
Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
| - | Level 1: Quoted prices in active markets for identical instruments. |
| - | Level 2: Other significant observable inputs (including quoted prices in active markets for similar instruments); |
| - | Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain investments). |
NOTE 3 – LOAN FROM STOCKHOLDER
| As of year ended, | ||||||||
|
November 30,
2020 |
November 30,
2019 |
|||||||
| Loan from shareholder (*) | $ | 158,862 | $ | 147,495 | ||||
| Loan from related party (**) | 14,020 | 14,020 | ||||||
| $ | 172,882 | $ | 161,515 | |||||
| (*) | The loan is unsecured, bears annual 2.56% interest and has no repayment term. This loan is repayable on demand |
| (**) | The loan is unsecured, bears no interest and has no repayment term. This loan is repayable on demand |
NOTE 4 – STOCKHOLDERS’ DEFICIT
Common stock
During March 2019, the Company issued Adi Zim Holdings Ltd. (“Adi”) 644,000 restricted shares of the Company’s common stock in consideration for remittance of $100,000 for purposes of paying outstanding Company obligation to third parties.
During April 2019, the Company and Rosario Capital Ltd. (“Rosario”) have entered into additional service agreement, pursuant to which Rosario is providing to the Company certain financial advisory and other services. In consideration of any and all Rosario's Services, the Company has issued to Rosario 900,000 restricted shares of common stock. The service agreement will be terminated on December 31, 2020. The fair value of the restricted shares as of the date of issuance was $144,000 using the share price on the day of issuance. During the year ended November 30, 2020 the Company recorded $86,400 as professional fees.
F-9
NOTE 5 – INCOME TAXES
a. Provision for income taxes
No provision for income taxes was required for the year ended November 30, 2020 and 2019 due to net losses in these periods.
b. In accordance with ASC 740-10, the components of deferred income taxes are as follows:
| As of November 30, | ||||||||
| 2020 | 2019 | |||||||
| Net operating losses carryforwards | $ | 60,251 | $ | 45,002 | ||||
| Less valuation allowance | (60,251 | ) | (45,002 | ) | ||||
| Net deferred tax assets | $ | - | $ | - | ||||
The Company provided a valuation allowance equal to the deferred income tax assets for period ended November 30, 2020 because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
As of November 30, 2020, the Company had approximately $286,910 in tax loss carryforwards that can be utilized future periods to reduce taxable income and expire by the year 2038.
The Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits. The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed.
NOTE 6 – RELATED PARTY TRANSACTION
The following transactions were carried out with related parties:
| As of November 30, | ||||||||
| 2020 | 2019 | |||||||
| General and administrative expenses | $ | 86,400 | $ | 43,200 | ||||
| Interest on shareholder’s loan | 11,367 | 6,090 | ||||||
For additional information please refer to Note 3.
F-10
NOTE 7 – SUBSEQUENT EVENTS
(i) During December 2020 the company, in consideration of the advance of $50,000 for purposes of paying outstanding Company obligation to third parties, the Company issued to Adi Zim and Rosario Capital Ltd. its unsecured convertible promissory note in the principal amount of $50,000 (the “Note”). The Note is repaybale upon the earlier of December 15, 2021 and the closing of the Stock Exchange Agreement with VeganNation.The Note is convertible into shares of the Company’s common stock at a rate equal to $0.10 per share, and upon (and subject to) the conversion of the Note. During the three months ended February 28, 2021 the Company received $45,000 out of $50,000.
(ii) On April 25, 2021, the Company entered into a Stock Exchange Agreement with VeganNation Services Ltd., a company formed under the laws of the State of Israel (“VeganNation”) and the shareholders of VeganNation pursuant to which VeganNation would become a wholly owned subsidiary of the Company, and the shareholders of VeganNation would receive an aggregate of 23,562,240 shares of common stock of the Company. The transaction is subject to customary closing conditions.
VeganNation is, a leading global plant-based company building an all-encompassing conscious consumer ecosystem, connecting and empowering plant-based and sustainable businesses and individuals. Management of the Company believes that the growth of sustainable and plant-based consumer goods presents a unique opportunity to participate in the fastest growing lifestyle globally.
In connection with the proposed transaction, the VeganNation stockholders are expected to receive comon stock of Sipup that will be equal to approximately 50% of the issued and outstanding common stock of the Company at the closing of the proposed merger, on a fully diluted basis. Following the closing of the proposed merger, VeganNation will effect a change in the Company’s Board of Directors and management
F-11
EXHIBIT INDEX
16
Exhibit 31.1
CERTIFICATION UNDER SECTION 302
I, Isaac Thomas, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Sipup Corporation for the year ended November 30, 2020; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 20, 2021 | /s/ Isaac Thomas |
|
Isaac Thomas, Chief Executive Officer
|
Exhibit 31.2
CERTIFICATION UNDER SECTION 302
I, Yochai Ozeri, certify that:
| 1. | I have reviewed this annual report on Form 10-K of Sipup Corporation for the year ended November 30, 2020; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 20, 2021 | /s/ Yochai Ozeri |
|
Yochai Ozeri, Principal Financial and Accounting Officer |
Exhibit 32.1
CERTIFICATION UNDER SECTION 906
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Sipup Corporation, Inc., a Nevada corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:
|
(1)
|
the Annual Report for the year ended November 30, 2020 (the “Form 10-K”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | and the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: May 20, 2021 | /s/ Isaac Thomas |
|
Isaac Thomas, Chief Executive Officer
(Principal Executive Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION UNDER SECTION 906
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Sipup Corporation, Inc., a Nevada corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:
|
(1)
|
the Annual Report for the year ended November 30, 2020 (the “Form 10-K”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | and the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: May 20, 2021 | /s/ Yochai Ozeri |
|
Yochai Ozeri, Chief Executive Officer (Principal Financial and Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.