Organization and Nature of Operations

6 Months Ended

Jun. 30, 2022

Note 1 - Organization and Nature of Operations

Organization and Nature of Operations

The accompanying unaudited condensed consolidated unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 18, 2022 and Form 8-K/A for the year ended December 31, 2021, filed with the SEC on June 16, 2022.

It is management’s opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

On March 29, 2022, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada in order to effectuate a name change to Makamer Holdings, Inc.. The Certificate of Amendment became effective on March 29, 2022.

Makamer Holdings, Inc. (f/k/a Hometown International, Inc.) (the “Company”) was incorporated under the laws of the State of Nevada on May 19, 2014. Through its wholly owned subsidiary, Your Hometown Deli, LLC (“Your Hometown Deli”), the Company is the originator of a new “Delicatessen” concept, featuring “home-style” sandwiches and other entrees in a casual friendly atmosphere, designed to be comfortable community gathering places for guests of all ages. Targeted towards smaller towns and communities, the Company’s first and only store is located in Paulsboro, New Jersey.

On January 18, 2014, Your Hometown Deli was formed under the laws of the State of New Jersey. On May 29, 2014, Your Hometown Deli entered into a Membership Interest Purchase Agreement with the Company. For accounting purposes, this transaction was accounted for as a merger of entities under common control and has been treated as a recapitalization of the Company with Your Hometown Deli as the accounting acquirer. The historical financial statements of the accounting acquirer became the financial statements of the registrant. The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 5,000,000 shares issued to the shareholder of Your Hometown Deli in conjunction with the share exchange transaction has been presented as outstanding for all periods.

On July 1, 2022, the Company disposed of Your Hometown Deli, LLC remaining inventory for a sales price of $700 (See Notes 7 and 9).

On August 9, 2022, the Company disposed of its subsidiary Your Hometown Deli, LLC. All Your Hometown Deli, LLC transactions have been recorded as discontinued operations as of June 30, 2022 (See Notes 7 and 9).

On April 1, 2022 (“effective date”), the Company, completed its acquisition of Makamer, Inc., a Delaware corporation (“Makamer”), which was organized on September 3, 2021, to develop and market biodegradable resins with the goal of replacing traditional plastics with renewable and compostable materials to help reduce worldwide toxic plastic waste pollution. Pursuant to the terms of the Agreement and Plan of Merger and Reorganization, dated March 25, 2022 (the “Merger Agreement”), by and among the Company, Makamer Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company (the “Merger Sub”), and Makamer, at the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into Makamer, with Makamer continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger”). The entry into the Merger Agreement by the parties was previously reported in a Current Report on Form 8-K the Company filed with the SEC on March 31, 2022. The Merger became effective upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware on April 1, 2022 (See Note 8).

On the effective date, of the Merger the stockholders of Makamer exchanged a total of 19,986,667 shares of Makamer common stock (representing 100% of Makamer’s outstanding shares) for an aggregate of 30,000,000 shares of common stock of the Company (the “Merger Shares”), with each Makamer stockholder receiving a pro rata portion (1.5 shares for each share held) of the Merger Shares based upon the total number of shares of Makamer common stock held by such Makamer stockholder immediately prior to the effective date. The transaction resulted in a change in control and was treated as a reverse acquisition (See Notes 4 and 8).

In connection with the Merger, Makamer assigned its U.S. Provisional Patent Application No. 63/271,978, filed October 26, 2021, having the title “Biodegradable Plastic Composite Containing Fibers,” to the Company (See Note 8).

The Company agreed that $1,000,000 of the Company’s cash will be used to expand Makamer’s business, including for sales and marketing, research and development, evaluating other synergistic acquisitions, and working capital and general corporate purposes (See Note 8).

In connection with the Merger, certain pre-Merger stockholders of the Company agreed to return 1,450,000 shares of the Company’s common stock to the Company for cancellation within 30 days of the closing (the “Share Cancellation”). Following the issuance of the Merger Shares and the Share Cancelation, the Company will have an aggregate of 36,347,004 shares of common stock issued and outstanding (See Notes 4 and 8).

The Company is committed to revolutionize the plastics industry with the state of the art bio-optimized technologies to keep thermoplastic out of landfills and environment. Makamer was founded on the basis to solve the crisis of plastic pollution through sustainability engineering which will fundamentally change the way the world interacts with Makamer packaging products.

Makamer is a business whose planned principal operations are the research and development, manufacture, sales and marketing of bioplastics technologies and biodegradable products. The Company is currently conducting research and development activities advancing the bioplastics technologies and to operationalize certain provisional patented technologies that the Company owns so it can manufacture range of biodegradable products such as biodegradable resins, grocery bags, trash bags, straws, and cutleries etc.

In September 2021, the Company secured a research facility in McMaster University at the Department of Chemical Engineering, which houses its key research and development activities. In May 2022, the Company further secured additional laboratory facility in Inglewood, California, which houses its employees and research and development activities in California. The Company also is in the process of raising additional equity capital to support the on-going development activities and to begin the scale up manufacturing, sales and marketing of resins and products as soon as possible.

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s current technology before another company develops similar technology.

The Company’s accounting year end is December 31, which coincides with the fiscal year ends of each of our wholly owned subsidiaries, Your Hometown Deli, LLC and Makamer, Inc.

Impact of COVID-19

The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The COVID-19 pandemic has the potential to significantly impact the Company’s supply chain, distribution centers, or logistics and other service providers.

In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including weakened demand for products and services and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.

To date, we have maintained uninterrupted business operations with normal turnaround times for servicing our customers. We have implemented adjustments to our operations designed to keep employees safe and comply with federal, state, and local guidelines, including those regarding social distancing. The extent to which COVID19 may further impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and cannot be predicted with confidence. In response to COVID-19, the United States government has passed legislation and taken other actions to provide financial relief to companies and other organizations affected by the pandemic.

The ultimate impact of the COVID-19 pandemic on the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations.

Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition, and results of operations.

Liquidity, Going Concern and Management’s Plans

These condensed unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying financial statements, for the six months ended June 30, 2022, the Company had:

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Net loss from continuing operations of $3,826,873; and

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Net cash used in operating activities - continued operations was $766,036

Additionally, for the six months ended June 30, 2022, the Company had:

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Accumulated deficit of $9,564,904

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Stockholders’ equity of $1,031,300; and

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Working capital of $943,257

The Company has cash on hand of $913,509 at June 30, 2022. Although the Company intends to raise additional debt (third party and related party lenders) or equity capital (historically shareholder capital contributions and third-party debt), the Company expects to incur losses from operations and have negative cash flows from operating activities for the near-term. These losses could be significant as the Company executes its business plan.

These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Management’s strategic plans include the following:

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Pursuing additional capital raising opportunities,

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Continuing research and development on advancing bioplastics technologies, executing and commercializing its business operations,

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Continuing to secure supply chain and execute strategic partnering or distribution opportunities; and

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Identifying unique market opportunities that represent potential positive short-term cash flow.

MAKAMER HOLDINGS, INC. 10-Q