The accompanying notes are an integral part
of these unaudited condensed financial statements.
The accompanying notes are an integral part
of these unaudited condensed financial statements.
The accompanying notes are an integral part
of these unaudited condensed financial statements.
The accompanying notes are an integral part
of these unaudited condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015 (UNAUDITED)
NOTE 1 - CONDENSED INTERIM FINANCIAL STATEMENTS
The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2016 and
for all periods presented have been made.
Certain information and footnote
disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in
the United States of America have been condensed or omitted. It is suggested that these unaudited condensed financial
statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2016
audited financial statements. The results of operations for the nine months ended December 31, 2016 are not necessarily
indicative of the operating results for the full year.
Basis of Presentation
In the opinion of management, the accompanying
balance sheets and related interim statements of operations and cash flows, include all adjustments, consisting only of normal
recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United
States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results and outcomes may differ from management's
estimates and assumptions.
NOTE 2 - GOING CONCERN
These unaudited condensed financial statements
have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates
the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of December
31, 2016, the Company has not recognized any revenue and has accumulated operating losses of approximately $117,570 since inception.
The Company's ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements
and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating
and capital requirements of the Company. Amounts raised will be used for further development of the Company's products, to provide
financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes. While
the Company is putting forth its best efforts to achieve the above plans, there is no assurance that any such activity will generate
funds that will be available for operations.
These conditions raise substantial doubt about
the Company's ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments
relating to recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might
arise from this uncertainty.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
In accordance with the Securities and Exchange
Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) Topic 13,
Revenue Recognition
,
the Company recognizes revenues when it is realized or realizable and earned. The Company records revenues when the
following four fundamental criteria under SAB Topic 13 are met: (i) persuasive evidence of an arrangement exists; (ii) delivery
has occurred or services have been rendered; (iii) the price to the customer is fixed or determinable; and (iv) collection of the
resulting receivable is reasonably assured. Payments received before all of the relevant criteria for revenue recognition
are satisfied are recorded as advances from customers on the balance sheet. For the period from February 27, 2013 (inception)
to December 31, 2016, the Company did not recognize any revenue.
FIRST HARVEST CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015 (UNAUDITED)
Stock-Based Compensation
The Company accounts for stock-based compensation
in accordance with ASC 718 “Compensation – Stock Compensation” using the fair value method. All transactions
in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based
on the fair value of the equity instruments issued.
Earnings per Share
The basic earnings (loss) per share is calculated
by dividing the Company's net income (loss) available to common shareholders by the weighted average number of common shares issued
and outstanding during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss)
available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted
average number of shares outstanding is the basic weighted number of shares adjusted as of the first year for any potentially dilutive
debt or equity.
Recent Accounting Pronouncements
The Company's management has evaluated all
the recently issued accounting pronouncements through the filing date of these financial statements and does not believe that any
of these pronouncements will have a material impact on the Company's financial position and results of operations.
NOTE 4 - RELATED PARTY TRANSACTIONS
On February 27, 2013, the Company issued 300,000
shares of its Common Stock to a founder for cash of $3,000.
On April 22, 2013, a former officer loaned the Company $500 for audit fees. On June 27, 2014, a former
officer loaned the Company an additional $1,993 for audit fees. On October 23, 2014, a former officer loaned the Company an additional
$6,000 for audit fees. On July 1, 2015, a former officer loaned the Company an additional $5,250 for audit fees. On March 9, 2016,
a former officer loaned the Company an additional $6,000 for audit fees. On September 8, 2016, the Company issued to the former
officer 19,743 shares of its common stock in full settlement of the related party debt in the amount of $19,743. As of December
31, 2016 and March 31, 2016, $-0- and $19,743, respectively, of this loan remained due.
On May 9, 2016, a shareholder loaned the Company
$7,500 for audit fees. On May 11, 2016, a shareholder loaned the Company $1,000 for audit fees. On June 20, 2016, a shareholder
loaned the Company $1,500 for audit fees. During the quarter ended September 30, 2016, a shareholder loaned the Company $10,725
for audit and transfer agent fees. As of December 31, 2016, $20,725 of this loan remained due. The loan bears no interest and is
due upon demand.
The Company does not lease or rent any property.
Office services are provided without charge by a director. Such costs are immaterial to the financial statements and, accordingly,
have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons
may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy
for the resolution of such conflicts.
NOTE 5 - STOCKHOLDERS' EQUITY AND CONTRIBUTED
CAPITAL
Series A Convertible Preferred Stock
The Company was previously authorized to issue
5,000,000 shares of $0.001 par value Series A Preferred Stock. On March 29, 2013, the Company issued 200,000 shares of its Series
A Preferred Stock to shareholders in exchange for cash of $10,000. This Series A Preferred Stock was issued with a beneficial conversion
feature totaling $10,000. This non-cash expense related to the beneficial conversion features of those securities and is recorded
with a corresponding credit to paid-in-capital.
Each share of the Series A Preferred Stock
had no liquidation rights. Series A Preferred Stock were not entitled to receive any dividends nor were they entitled to any voting
rights with respect to the Series A Preferred Stock. Initially, any holder could convert any or all of the shares of Series A Preferred
Stock held by such holder at the ratio of one hundred (100) shares of Common Stock for every one (1) share of Series A Preferred
Stock. However, the beneficial owner of such Series A Preferred Stock could not convert their Series A Preferred stock where they
will beneficially own in excess of 4.9% of the shares of the Common Stock.
FIRST HARVEST CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015 (UNAUDITED)
On November 4, 2015, a shareholder of Series
A Preferred Stock converted 990 preferred shares to 9,900 shares of Common Stock.
On December 7, 2015, a shareholder of Series
A Preferred Stock converted 750 preferred shares to 7,500 shares of Common Stock.
On February 15, 2016, a shareholder of Series
A Preferred Stock converted 600 preferred shares to 6,000 shares of Common Stock.
On April 12, 2016, a shareholder of Series
A Preferred Stock converted 1,000 preferred shares to 10,000 shares of Common Stock.
On May 3, 2016, a shareholder of Series A Preferred
Stock converted 1,800 preferred shares to 18,000 shares of Common Stock.
On May 5, 2016, a shareholder of Series A Preferred
Stock converted 1,600 preferred shares to 16,000 shares of Common Stock.
On May 19, 2016, a shareholder of Series A
Preferred Stock converted 1,850 preferred shares to 18,500 shares of Common Stock.
On May 20, 2016, a shareholder of Series A
Preferred Stock converted 500 preferred shares to 5,000 shares of Common Stock.
On May 25, 2016, a shareholder of Series A
Preferred Stock converted 2,200 preferred shares to 22,000 shares of Common Stock.
On September 7, 2016, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada, which amended the existing terms
of the Series A Preferred Stock. The conversion ratio of the Series A Preferred Stock was reduced from 100 shares of Common Stock
for every share of Series A Preferred Stock to one (1) share of Common Stock for every share of Series A Preferred Stock and also
inserted an automatic conversion provision, whereby all of the outstanding Series A Preferred Stock on September 8, 2016 would
automatically convert into Common Stock at the conversion ratio.
On September 8, 2016, the remaining 188,710
shares of Series A Preferred Stock were converted to 188,710 shares of Common Stock.
As of December 31, 2016, there were no shares
of Series A Preferred Stock outstanding.
Blank Check Preferred Stock
On September 7, 2016, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada, which became effective on September
9, 2016. The Company removed the designations of the existing series of preferred stock (series A, series B and series C); and
authorized the creation of 10,000,000 shares of “blank check” preferred stock.
Common Stock
The Company is authorized to issue 500,000,000
shares of its $0.001 par value Common Stock, of which 540,704 shares were issued and outstanding as of December 31, 2016.
On November 4, 2015, a shareholder of Series
A Preferred Stock converted 990 preferred shares to 9,900 shares of Common Stock.
On December 7, 2015, a shareholder of Series
A Preferred Stock converted 750 preferred shares to 7,500 shares of Common Stock.
On February 4, 2016, the Company underwent
a change of control of ownership. VERSAI Inc. returned the 300,000 control shares to the Company’s then sole officer and director
that it had previously purchased on September 24, 2015 in order that the company may continue as a going concern. In consideration
for the return of the 300,000 common shares, the Company issued 50,000 restricted common shares to the lending group who provided
to VERSAI, Inc. the cash consideration to purchase the 300,000 control shares on September 24, 2015.
On February 15, 2016, a shareholder of Series
A Preferred Stock converted 600 preferred shares to 6,000 shares of Common Stock.
On April 12, 2016, a shareholder of Series
A Preferred Stock converted 1,000 preferred shares to 10,000 shares of Common Stock.
FIRST HARVEST CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015 (UNAUDITED)
On May 3, 2016, a shareholder of Series A Preferred
Stock converted 1,800 preferred shares to 18,000 shares of Common Stock.
On May 5, 2016, a shareholder of Series A Preferred
Stock converted 1,600 preferred shares to 16,000 shares of Common Stock.
On May 19, 2016, a shareholder of Series A
Preferred Stock converted 1,850 preferred shares to 18,500 shares of Common Stock.
On May 20, 2016, a shareholder of Series A
Preferred Stock converted 500 preferred shares to 5,000 shares of Common Stock.
On May 25, 2016, a shareholder of Series A
Preferred Stock converted 2,200 preferred shares to 22,000 shares of Common Stock.
On August 10, 2016, the Company issued 175,000
shares of its Common Stock to an existing shareholder for services at par value.
On September 7, 2016, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada, which became effective on September
9, 2016. The Company increased the authorized number of shares of Common Stock from 185,000,000 to 500,000,000.
On September 8, 2016, 188,710 shares of Series
A Preferred stock were converted to 188,710 shares of Common Stock.
On September 8, 2016, the Company issued 1,975
shares of its Common Stock in settlement of $19,743 of the Company’s related-party debt.
On September 9, 2016, the Company issued 2,360
shares of its Common Stock in exchange for $15,000 of services provided to the Company.
Effective September 23, 2016, the Company's
board of directors authorized a one-for-ten reverse stock split (the “Reverse Split”). As a result of the Reverse Split,
every 10 shares of Common Stock issued and outstanding prior to the Reverse Split were converted into 1 new share of Common Stock.
All share and related information presented in these financial statements and accompanying footnotes have been adjusted to reflect
the decreased number of shares resulting from this action.
On October 5, 2016, the Company issued four
shares of common stock in connection with the settlement of fractional shares in connection with the reverse stock split effective
September 23, 2016.
On October 18, 2016, the Company issued 4,202
shares of its common stock in exchange for $15,000 worth of services provided to the Company.
On November 15, 2016, the Company issued 2,892
shares of its common stock in exchange for $15,000 of services provided to the Company.
As of December 31, 2016, there had been no
stock options or warrants granted.
NOTE 6 - SUBSEQUENT EVENTS
Convertible Short-Term Note Payable
On January 6, 2017, the Company entered a convertible
short-term promissory note (the “Note”) with a lender in which the lender advanced the Company $50,000. Interest accrues
at a rate of 6% per annum and is due at maturity. Unless earlier converted into the Company’s common stock (as discussed
below), the principal and accrued interest on the Note will be due and payable by the Company on the ninety-day anniversary date
of the Note – April 6, 2017. The Note is a general unsecured obligation of the Company. At the lender’s election, the
principal balance and accrued interest on the Note may be converted into common stock of the Company at a fixed rate of $0.75 per
share.
FIRST HARVEST CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2016 AND 2015 (UNAUDITED)
Merger Agreement
On February 10, 2017 (the “Closing Date”),
the Company entered into and closed an agreement and plan of merger and reorganization (the “Merger Agreement”), with
CV Acquisition Corp., a wholly-owned subsidiary of the Company (“Acquisition Corp.”), and Cannavoices, Inc. (“Cannavoices”).
Pursuant to the Merger Agreement, effective on the Closing Date (i) Acquisition Corp. merged with and into Cannavoices, such that
Cannavoices, the surviving corporation, became a wholly owned subsidiary of the Company, and (ii) the Company issued 23,267,231
shares of common stock to the shareholders of Cannavoices, representing approximately 97.7% of the Company’s outstanding
shares of common stock, following the closing of the Merger Agreement, in exchange for the cancellation of all of the issued and
outstanding shares of common stock of Cannavoices.
The sole officer, one of the directors and
(prior to closing of the Merger Agreement) the largest stockholder of Cannavoices was Kevin Gillespie, who is also the sole officer,
director and largest stockholder of the Company.
Effective on the Closing Date, pursuant to
the Merger Agreement, Cannavoices became a wholly-owned subsidiary of the Company. The acquisition of Cannavoices is treated as
a reverse acquisition, and the business of Cannavoices became the business of the Company. At the time of the reverse recapitalization,
the Company was not engaged in any active business.