Notes to the Condensed Consolidated
Financial Statements
7
3
I-WELLNESS MARKETING GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
March 31, 2017
|
|
June 30, 2016
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash
|
$
|
23,967
|
$
|
19,218
|
Amounts receivable
|
|
1,504
|
|
-
|
Inventory
|
|
6,345
|
|
6,487
|
Total Current Assets
|
|
31,816
|
|
25,705
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
Deposits
|
|
3,547
|
|
5,638
|
Property and equipment, net
|
|
129,271
|
|
146,358
|
|
|
|
|
|
TOTAL ASSETS
|
$
|
164,634
|
$
|
177,701
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS DEFICIENCY
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Bank indebtedness
|
$
|
-
|
$
|
13,621
|
Accounts payable
|
|
199,191
|
|
175,901
|
Accrued liabilities
|
|
2,274
|
|
2,325
|
Convertible notes payable
|
|
479,750
|
|
407,678
|
Current portion of deferred lease incentive
|
|
1,417
|
|
1,448
|
Due to related parties
|
|
466,183
|
|
474,981
|
Total Current Liabilities
|
|
1,148,815
|
|
1,075,954
|
Long Term Liabilities
|
|
|
|
|
Deferred lease incentive
|
|
7,083
|
|
7,241
|
TOTAL LIABILITIES
|
|
1,155,898
|
|
1,083,195
|
|
|
|
|
|
STOCKHOLDERS DEFICIENCY
|
|
|
|
|
Common Stock
|
|
|
|
|
300,000,000 shares authorized, at $0.001 par value:
|
|
|
|
|
66,937,845 shares issued and outstanding
|
|
66,937
|
|
66,937
|
Additional Paid-In Capital
|
|
167,826
|
|
95,805
|
Accumulated Other Comprehensive Income
|
|
73,752
|
|
67,286
|
Accumulated Deficit
|
|
(1,299,779)
|
|
(1,135,522)
|
|
|
|
|
|
Total Stockholders Deficiency
|
|
(991,264)
|
|
(905,494)
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIENCY
|
$
|
164,634
|
$
|
177,701
|
Nature of operations and continuance of business (Note 1)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
I-WELLNESS MARKETING GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
March 31,
2017
|
|
March 31,
2016
|
|
March 31,
2017
|
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
REVENUE
|
$
|
121,040
|
$
|
103,836
|
$
|
329,307
|
$
|
308,330
|
COST OF GOODS SOLD
|
|
(76,357)
|
|
(67,097)
|
|
(207,618)
|
|
(207,788)
|
GROSS MARGIN
|
|
44,683
|
|
36,739
|
|
121,689
|
|
100,542
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Depreciation
|
|
4,654
|
|
5,329
|
|
13,994
|
|
16,393
|
General and administrative
|
|
11,718
|
|
11,597
|
|
32,751
|
|
38,534
|
Interest expense
|
|
25,279
|
|
17,914
|
|
94,352
|
|
40,062
|
Management wages
|
|
8,463
|
|
6,561
|
|
35,026
|
|
21,306
|
Professional fees
|
|
23,629
|
|
7,471
|
|
67,996
|
|
17,239
|
Rent
|
|
13,177
|
|
12,363
|
|
41,827
|
|
29,091
|
TOTAL OPERATING EXPENSES
|
|
86,920
|
|
61,235
|
|
285,946
|
|
162,625
|
NET LOSS FROM OPERATIONS
|
|
(42,237)
|
|
(24,496)
|
|
(164,257)
|
|
(62,083)
|
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
(2,792)
|
|
-
|
|
6,466
|
|
11,492
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS
|
$
|
(45,029)
|
$
|
(24,496)
|
$
|
(157,791)
|
$
|
(50,591)
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE
Basic and diluted
|
$
|
(0.00)
|
$
|
(0.00)
|
$
|
(0.00)
|
$
|
(0.00)
|
WEIGHTED AVERAGE OUTSTANDING SHARES
Basic and diluted
|
|
66,937,845
|
|
64,137,845
|
|
66,937,845
|
|
64,137,845
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
I-WELLNESS MARKETING GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
|
|
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
$
|
(164,257)
|
$
|
(62,083)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
13,994
|
|
16,393
|
Non-cash interest expense
|
|
|
|
|
|
72,072
|
|
21,861
|
Amortization of deferred lease incentive
|
|
|
|
|
|
(189)
|
|
(1,056)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Amounts receivable
|
|
|
|
|
|
(1,504)
|
|
-
|
Inventory
|
|
|
|
|
|
142
|
|
-
|
Deposits
|
|
|
|
|
|
2,091
|
|
-
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
23,239
|
|
5,617
|
Net cash used in operating activities
|
|
|
|
|
|
(54,412)
|
|
(19,268)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Bank indebtedness
|
|
|
|
|
|
(13,621)
|
|
(2,592)
|
Advances from convertible debt
|
|
|
|
|
|
72,072
|
|
21,861
|
Proceeds from related parties
|
|
|
|
|
|
500
|
|
-
|
Net cash provided by financing activities
|
|
|
|
|
|
58,951
|
|
19,268
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange on cash
|
|
|
|
|
|
210
|
|
(768)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
|
|
|
4,749
|
|
(768)
|
|
|
|
|
|
|
|
|
|
CASH, BEGINNING OF PERIOD
|
|
|
|
|
|
19,218
|
|
20,043
|
CASH, END OF PERIOD
|
|
|
|
|
$
|
23,967
|
$
|
19,275
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
|
$
|
-
|
$
|
-
|
Income taxes paid
|
|
|
|
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
1.
NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS
I-Wellness Marketing Group Inc. (the Company), was incorporated under the laws of the State of Nevada on June 16, 2010 as Monarchy Ventures Inc., with authorized capital stock of 300,000,000 shares at $0.001 par value. The Company owns a 100% interest in The Spud Shack Fry Company Ltd., a counter-service restaurant located in New Westminster, B.C, and also owns the worldwide marketing rights to a health and fitness app called 60K, currently under development for iPhone, Android, tablets and desktop computers.
While the Company is attempting to generate sufficient revenues, the Companys cash position may not be enough to support the Companys daily operations. Management intends to raise additional funds by way of increasing revenue, or through a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Companys ability to further implement its business plan and generate sufficient revenues.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Form 10-K of the Company for the year ended June 30, 2016. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending June 30, 2017. For further information, these unaudited financial statements and the related notes should be read in conjunction with the Companys audited financial statements for year ended June 30, 2016 included in the Companys report on Form 10-K.
2. RELATED PARTIES
As of March 31, 2017, the Company had amounts due to the President, Vice President, and a company controlled by the Vice President, of $466,183 (June 30, 2016 - $474,981). These amounts are unsecured, non-interest bearing, and due on demand.
During the nine months ended March 31, 2017, $35,026 (2016 - $21,306) was incurred as remuneration to officers and directors of the Company.
3. PROPERTY AND EQUIPMENT
|
|
|
|
|
|
|
|
March 31, 2017
|
June 30, 2016
|
|
Cost
|
Accumulated
Depreciation
|
Net Book Value
|
Cost
|
Accumulated
Depreciation
|
Net Book Value
|
Computer equipment
|
$ 5,300
|
$ 5,051
|
$ 249
|
$ 5,418
|
$ 4,985
|
$ 433
|
Furniture and fixtures
|
89,863
|
55,691
|
34,172
|
91,866
|
50,768
|
41,098
|
Leasehold improvements
|
149,234
|
54,384
|
94,850
|
152,561
|
47,734
|
104,827
|
|
$ 244,397
|
$ 115,126
|
$ 129,271
|
$ 246,845
|
$ 103,487
|
$ 146,358
|
4. COMMITMENT
The Company is committed until August 29, 2022 for payments totaling C$273,965 for premises under lease. The remaining minimum lease payments over the next five years are as follows:
|
|
2017
|
C$ 19,625
|
2018
|
50,868
|
2019
|
50,868
|
2020
|
50,868
|
2021
|
50,868
|
Thereafter
|
50,868
|
|
C$ 273,965
|
7
5. CONVERTIBLE NOTES PAYABLE
The Company has outstanding various promissory notes as at March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date Issued
|
|
Amount
|
|
Term
|
|
Interest Rate
|
|
Conversion Rate
|
August 1, 2013
|
|
$
|
75,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.01
|
|
April 27, 2014
|
|
|
50,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
April 27, 2014
|
|
|
30,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
May 1, 2014
|
|
|
45,705
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
May 1, 2014
|
|
|
32,570
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
June 1, 2014
|
|
|
35,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
July 3, 2014
|
|
|
86,599
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
January 1, 2015
|
|
|
24,018
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
July 31, 2015
|
|
|
28,786
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
July 1, 2016
|
|
|
11,188
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
October 1, 2016
|
|
|
43,329
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
January 24, 2017
|
|
|
10,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
January 31, 2017
|
|
|
315
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
February 28, 2017
|
|
|
2,015
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
March 31, 2017
|
|
|
5,225
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
|
|
$
|
479,750
|
|
|
|
|
|
|
|
|
|
|
|
The Company has outstanding various promissory notes as at June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date Issued
|
|
Amount
|
|
Term
|
|
Interest Rate
|
|
Conversion Rate
|
August 1, 2013
|
|
$
|
75,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.01
|
|
April 27, 2014
|
|
|
50,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
April 27, 2014
|
|
|
30,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
May 1, 2014
|
|
|
45,705
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
May 1, 2014
|
|
|
32,570
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
June 1, 2014
|
|
|
35,000
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
July 3, 2014
|
|
|
86,599
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
January 1, 2015
|
|
|
24,018
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
July 31, 2015
|
|
|
28,786
|
|
|
Demand
|
|
|
5
|
%
|
|
$
|
0.001
|
|
|
|
$
|
407,678
|
|
|
|
|
|
|
|
|
|
|
|
The Company assessed the conversion options of the promissory notes granted during the nine months ended March 31, 2017 and determined they had beneficial conversion features with intrinsic values in excess of the principal balance. Therefore, the Company recorded debt discounts of $72,072 for the nine months ended March 31, 2017 (2016 $21,861). In addition, as these promissory notes are payable on demand, the debt discounts were fully amortized to interest expense as of March 31, 2017.
The amount of interest payable on these notes was $68,158 as of March 31, 2017 (June 30, 2016 - $51,178) and is included in accounts payable.
During the nine months ended March 31, 2017, $nil (2016 - $10,000) of debt was converted into common shares (2016 10,000,000).
8