Neutra Corp.

What they do

Neutra Corp. was incorporated in Nevada in 2011 and reincorporated in Wyoming in 2019. It markets and sells hemp-derived products, including those containing delta-8-THC and other cannabinoids, and has an agreement with Artillery Labs to sell CBD products online. It also generates consulting income from business development services and acquired Vivis Corporation in 2019.

Revenue drivers

• CBD product sales — Sales of hemp-derived CBD products, primarily through an online sales infrastructure. In the quarter ended April 30, 2024, CBD product sales were $2,955.
• Business development consulting — Consulting services provided to one customer. In the quarter ended April 30, 2024, consulting revenue was $29,420, the majority of total revenue.
• Hemp-derived cannabinoid products — The company states it primarily sells hemp-derived products, including delta-8-THC and other cannabinoids, but specific revenue from these products is not separately disclosed.

Recent performance

For the three months ended April 30, 2024, Neutra reported revenue of $32,375, up from $5,842 in the prior-year period, driven by $29,420 in consulting income. Cost of goods sold was $1,420, and net loss narrowed to $16,352 from $71,996 a year earlier. General and administrative expenses decreased to $43,546 from $50,781, while interest expense rose to $867 from $199. As of April 30, 2024, cash on hand was $333, and working capital was negative $987,030.

Strategy

Neutra intends to continue selling hemp-derived products, including delta-8-THC and other cannabinoids, while seeking to expand through additional license relationships and product sales. The company plans to raise capital through public or private financing, borrowing, or other sources to fund its business activities. If adequate funds are not available, management states it will allocate funding first to meet State, Federal, and SEC requirements. The company also aims to research and bring new technology to the nutraceutical space.

Risks

• Going concern and liquidity — The company has negative working capital of $987,030 and cash of $333 as of April 30, 2024, and states that current cash is insufficient to commercialize products or fully develop its business strategy.
• Regulatory risk — Hemp-derived products, including delta-8-THC, face significant federal, state, and local regulation, and the FDA has not established their health and safety impacts; adverse regulatory action could bankrupt the company.
• Limited revenue history — Neutra has generated only limited revenues to date, with annual revenue of $67,996 in fiscal 2023, and its activities have been primarily limited to developing its business plan and research and development.
• Dependence on financing — The company will not have necessary capital to fully develop or execute its business plan unless it secures additional financing, and there is no assurance such financing will be available on suitable terms.

Outlook

Management states that it does not have adequate funds to fully execute its business plan for the next twelve months unless it obtains additional funding. It intends to pursue capital through public or private financing, as well as borrowing and other sources. If adequate funds are not available, the company's ability to continue operations may be significantly hindered.