NOTES TO FINANCIAL STATEMENTS
NOTE 1 -ORGANIZATION AND BASIS OF PRESENTATION
Pacificorp Holdings, Ltd. (the "Company") was incorporated in the State of Nevada on October 6, 2014. The Company was organized to develop and explore mineral properties in the State of Nevada.
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in United States (US) dollars. The Company has not produced any revenue from its principal business.
NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The audited financial statements of the Company and the accompanying notes included in this Annual Report on Form 10-K are audited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
Cash and Cash Equivalents
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. As of January 31, 2017and January 31, 2016, there were no cash equivalents.
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 expenses during the reporting period. Actual results could differ from those estimates.
Impairment of Long Lived Assets
The Company tests its assets for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable, which includes comparing the carrying amount of a long-lived asset to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss would be measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. For the Company's mining claims, this test includes examining the discounted and undiscounted cash flows associated with value beyond proven and probable reserves, in determining whether the mining claim is impaired. The mining claim is fully impaired as of January 31, 2017 and 2016.
Start-up Expenses
The Company expenses costs associated with start-up activities as incurred. Accordingly, start-up costs associated with the Company's formation have been included in the Company's general and administrative expenses.
PACIFICORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
Mining Interests and Exploration Expenditures
Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mineral properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.
Income Taxes
The Company utilizes FASB ACS 740, “
Income Taxes
,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices and precedents.
Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.
We have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 and have analyzed filing positions in United States jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the United States as our "major" tax jurisdiction. Generally, we remain subject to United States examination of our income tax returns.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “
Fair Value Measurements and Disclosures
" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.
FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:
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Level 1: Quoted prices in active markets for identical assets or liabilities
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Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
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Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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PACIFICORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
Basic and Diluted Earnings Per Share
Net loss per share is calculated in accordance with FASB ASC 260,
Earnings Per Share
, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) is similarly calculated. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the years ended January 31, 2017and 2016, there were no potentially dilutive securities.
Recent Accounting Pronouncements
In January 2015, FASB issued Accounting Standards Update (ASU) No. 201501 Income Statement – Extraordinary and Unusual Items, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. Eliminating the concept of extraordinary items will save time and reduce costs for preparers because they will not have to assess whether a particular event or transaction event is extraordinary (even if they ultimately would conclude it is not). This also alleviates uncertainty for preparers, auditors, and regulators because auditors and regulators no longer will need to evaluate whether a preparer treated an unusual and/or infrequent item appropriately. This update is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early application is permitted.
In April 2015, the FASB issued ASU 2015-03,
Interest—Imputation of Interest (Subtopic 835-30)
(“ASU 2015-03”), as part of the initiative to reduce complexity in accounting standards. The update requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods beginning after December 15, 2015 and for interim periods within those fiscal years.
The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP.
The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our financial statements.
PACIFICORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our financial statements.
Recent Accounting Pronouncements – Not Adopted
In August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”).
In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the
financial statements are issued
(or within one year after the date that the
financial statements are available to be issued
when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the
financial statements are issued
(or at the date that the
financial statements are available to be issued
when applicable). Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term
probable
is used consistently with its use in Topic 450, Contingencies.
When management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.
If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
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a.
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Principal conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans)
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b.
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Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations
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c.
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Management’s plans that alleviated substantial doubt about the entity’s ability to continue as a going concern.
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If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating that there is
substantial doubt about the entity’s ability to continue as a going concern
within one year after the date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements to understand all of the following:
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a.
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Principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern
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b.
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Management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations
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c.
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Management’s plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern.
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The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.
PACIFICORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU No. 2013-04 did not have a material impact on our financial statements.
In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013,and interim reporting periods therein. The adoption of ASU No. 2013-07 did not have a material impact on our financial statements.
NOTE 3 – GOING CONCERN
The Company has sustained operating losses since inception. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
Management is endeavoring to begin exploration activities however, may not be able to do so within the next fiscal year. Management is also seeking to raise additional working capital through various financing sources, including the sale of the Company’s equity securities, which may not be available on commercially reasonable terms, if at all.
If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced and the new equity securities may have rights, preferences or privileges senior to those of the holders of our common stock.
NOTE 4– STOCK SUBSCRIPTIONS RECEIVED
Between July 25 and September 12, 2014 the Company received $29,390 for common stock subscriptions. 6,000,000 of these shares were subscribed for by the officers and directors of the Company at $.001 per share. The remaining 2,390,000 shares were subscribed for by third parties at $.01 per share. At January 31, 2016, the Company has issued all shares related to these common stock subscriptions.
NOTE 5 – LOAN FROM RELATED PARTY
During the period from inception to January 31, 2017 the Company received advances totaling $28,534 from the CEO of the Company, the advance is unsecured, non-interest bearing and is due upon demand giving 30 days written notice to the borrower. The company has calculated imputed interest of $3,015 and recorded under additional paid in capital.
PACIFICORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 – SUBSEQUENT EVENTS
On March 15, 2017, Mr. Laurie Stephenson was appointed as a member of the board of directors. Additionally, Mr. Stephenson was appointed President, CEO, Secretary and Treasurer of the Corporation, immediately following the resignation of Wan Soo Lee as an officer of the Corporation.
On March 15, 2017 Mr. Kook Chong Yoo tendered his resignation as an officer and director of the Corporation. Additionally, On March 15, 2017 Mr. Wan Soo Lee tendered his resignation as an officer of the Corporation. Mr. Lee will remain as a director of the Corporation.
Additionally, there have been no conflicts with the Corporation or other board members during Mr. Yoo’s tenure as an officer and director and Mr. Lee’s tenure as an officer.
On March 29, 2017 the Registrant entered into a Letter of Intent with Affordable Green Washington LLC of Tacoma WA to obtain an exclusive license to market and distribute Affordable Green’s Products in the State of Washington.
The terms of the Letter of Intent are $50,000 on or before April 30, 2017, $50,000 on or before May 31, 2017 and a balance of $2,000,000 within six months for an aggregate total of $2,100,000.
On May 2, 2017 Mr. Jason Sakowski was appointed to the board of directors and as an officer of the Corporation. Immediately following Mr. Sakowski’s appointment Laurence Stephenson resigned his positions as an officer and director of the Corporation.
There have been no conflicts with the Corporation or other board members during Mr. Stephenson’s tenure as an officer and director and his resignation was a result of conflicting schedules and personal reasons.
On May 4, 2017, the Company entered into an exclusive License Agreement with Affordable Green Washington LLC.
The License Fees shall be due and payable as follows:
$25,000 Due upon execution of the agreement receipt of which has been acknowledged by all parties; $25,000 Due on or before May 15, 2017; and $50,000 Due on or before May 31, 2017; and $2,000,000 on or before September 30, 2017, with closing to occur on or before May 31, 2017.
The fee of $25,000 due upon signing of the agreement was paid by a third party on behalf of the Company.
There can be no assurance that the Company will be able to raise the requisite funding associated with the terms and conditions of the License Agreement.
The Licensor may terminate the Agreement upon delivery of written notice to the Licensee if the Licensee has not fulfilled its obligations, and such obligations are not fulfilled within sixty (60) days following delivery to the Licensee by the Licensor of written notice identifying the non-fulfilment and stating its intention to terminate this Agreement if the obligations are not fulfilled within the thirty (60) days.
The License also provides the Company with the right of first refusal to other states that has approved the medical and non-medical application of Marijuana and related products, and first right of refusal for the country of Canada which has scheduled the legalization of Marijuana for medical and non-medical use in 2018. Additionally, the agreement provides the Company with the opportunity to white paper license (use their own Brand) with permission from Affordable Green Washington LLC.
The License Agreement contains customary representations and warranties, any breaches of the representations and warranties will be subject to customary indemnification provisions, subject to specified aggregate limits of liability. The foregoing summary description of the terms of the License Agreement may not contain all information that is of interest to the reader. The license agreement may be read in its entirety as Exhibit 10.1 to form 8-K filed with the SEC on May 9, 2017.
On May 4, 2017, Director Wan Soo Lee resigned his position as a director.