NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
For the three months ended July 31,
2020
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION AND OPERATIONS
The Company was originally incorporated on April 12, 2004, in
the State of Nevada under the name of Ford-Spoleti Holdings, Inc. On June 4, 2009, the Company merged with Eagle Oil Holding Company,
a Nevada corporation, and the surviving entity, the Company, changed its name to “Eagle Oil Holding Company, Inc.”
Inception of the current Company occurred February 8, 2019 when the Company was acquired by Green Stream Holdings Inc. Previously
there was no activity from July 31, 2017 until the acquisition of February 8, 2019. On April 25, 2019, the Company changed its
name to “Green Stream Holdings Inc.” and is deemed to be a continuation of business of Eagle Oil Holding Company, Inc.
Additionally, the Company was reorganized that so that the Company became operating as a holding company of Green Stream Finance,
Inc., a Wyoming Corporation. That reorganization, inter alia, gave Madeline Cammarata, President of Green Stream Finance, Inc.,
the majority of the voting power in the Company. On April 25, 2019 the Company also filed the certificate of Amendment to Articles
of Incorporation with the Secretary of State of Nevada providing for reverse stock split: each thirty thousand shares of common
stock of the Company issued and outstanding immediately prior to the “effective time” of the filing were automatically
and without any action on the part of the respective holders thereof, be combined and converted into one (1) share of common stock,
provided that no fractional shares were to be issued in connection with said reverse stock split. On May 15, 2019, the Company
filed the articles of conversion with the secretary of state of Nevada, to convert the company from Nevada Corporation to Wyoming
Corporation. The Company is in good standing in the State of Wyoming as of September 25, 2019. The Company’s common shares
are quoted on the “Pink Sheets” quotation market under the symbol “GSFI.”
B. PRINCIPALS OF CONSOLIDATION
These consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary Green Stream Finance, Inc. based in the state of Wyoming. All material inter-company
balances and transactions were eliminated upon consolidation.
C. BASIS OF ACCOUNTING
The Company utilizes the accrual method of accounting,
whereby revenue is recognized when earned and expenses when incurred. The financial statements have been prepared
in accordance with generally accepted accounting principles for interim financial information. As such, the financial
statements do not include all of the information and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation
have been included and these adjustments are of a normal recurring nature.
D. 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the period. Actual results could differ from those estimates.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand; cash in banks
and any highly liquid investments with maturity of three months or less at the time of purchase. The Company maintains cash and
cash equivalent balances at several financial institutions, which are insured by the Federal Deposit Insurance Corporation up to
$250,000.
F. COMPUTATION OF EARNINGS PER SHARE
Net income per share is computed by dividing the net income
by the weighted average number of common shares outstanding during the period. Due to the net loss, the options
and stock conversion of debt are not used in the calculation of earnings per share because the stock conversions and options are
considered to be antidilutive.
G. INCOME TAXES
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and
tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The Company’s management has reviewed the Company’s
tax positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained
upon examination by the taxing authorities, therefore the implementation of this standard has not had a material effect on the
Company.
H. REVENUE RECOGNITION
Revenue for license fees is recognized upon the execution and
closing of the contract for the amount of the contract. Contract fees are generally due based upon various progress milestones.
Revenue from contract payments are estimated and accrued as earned. Any adjustments between actual contract payments and estimates
are made to current operations in the period they are determined.
I. FAIR VALUE MEASUREMENT
The Company determines the fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced
sale or liquidation. The carrying amounts reported in the balance sheet for cash, accounts receivable, inventory, accounts payable
and accrued expenses, and loans payable approximate their fair market value based on the short-term maturity of these instruments.
Fair value measurements are determined based on the assumptions
that market participants would use in pricing an asset or liability. US GAAP establishes a hierarchy for inputs used
in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that
the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation
methodologies into the following three levels:
·
|
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
|
·
|
Level 2: Significant other 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.
|
·
|
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.
|
J. STOCK-BASED COMPENSATION
The Company measures and recognizes compensation expense for
all share-based payment awards made to employees, consultants and directors including employee stock options based on estimated
fair values. Stock-based compensation expense recognized for the years ended December 31, 2014 and 2013 was $24,000
and $0 respectively. Stock-based compensation expense recognized during the period is based on the value of the portion
of share-based payment awards that vest during the period.
Share-based compensation expense recognized in the Company’s
consolidated statement of operations for the years ended December 31, 2014 included compensation expense for share-based payment
awards granted in December 31, 2014.
K. SALES AND ADVERTISING
The costs of sales and advertising are expensed as incurred.
Sales and advertising expense was $4,098 and $0 for the three months ended July 31, 2020 and 2019, respectively.
L. NEW ACCOUNTING PRONOUNCEMENTS
The Company reviews new accounting standards as issued. No new
standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of
these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated
financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated
financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements
because of the retro-active application of any accounting pronouncements issued subsequent to July 31, 2020 through the date these
financial statements were issued.
M. FURNITURE AND EQUIPMENT
Furniture and equipment are recorded at costs and consists
of furniture and fixtures, computers and office equipment. We compute depreciation using the straight-line method over the
estimated useful lives of the assets. Expenditures for major betterments and additions are charged to the property
accounts, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are
charged to expense.
N. INTELLECTUAL PROPERTY
Intangible assets (intellectual property) are recorded at cost
and are amortized over the estimated useful life of the asset. Management evaluates the fair market value to determine
if the asset should be impaired at the end of each year.
O. IMPAIRMENT OF LONG-LIVED ASSETS
The Company tests long-lived assets or asset groups for recoverability
when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which
could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse
changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected
for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses
or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely
than not be sold or disposed significantly before the end of its estimated useful life.
Recoverability is assessed based on the carrying amount of the
asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from
the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.
An impairment loss is recognized when the carrying amount is
not recoverable and exceeds fair value.
NOTE 2 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities
in the normal course of business. At July 31, 2020 the Company had a loss from operations, for the three months ended,
of $606,640, and an accumulated deficit of $975,702 and negative working capital of $633,190. The Company has not yet established
an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.
The Company depends upon capital to be derived from future financing
activities such as subsequent offerings of its common stock or debt financing in order to operate and grow the business. There
can be no assurance that the Company will be successful in raising such capital. The key factors that are not within
the Company's control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the
Company's business plan, the ability to raise capital in the future, the ability to expand its customer base, and the ability to
hire key employees to provide services. There may be other risks and circumstances that management may be unable to
predict.
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 classification of liabilities
that may result from the possible inability of the Company to continue as a going concern.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment at July 31, 2020 and April 30, 2020 consists of the following:
|
|
July 31, 2020
|
|
|
April 30, 2020
|
|
|
|
|
|
|
|
|
Furniture and Fixtures
|
|
$
|
915,654
|
|
|
$
|
915,564
|
|
Leasehold Improvements
|
|
|
172,245
|
|
|
|
–
|
|
Less: Accumulated Depreciation
|
|
|
–
|
|
|
|
–
|
|
Net Property and Equipment
|
|
$
|
1,087,899
|
|
|
$
|
915,564
|
|
Depreciation has not been charged since the projects
are not yet completed and the final cost has yet to be determined. Depreciation expense for the three months ended July 31,
2020 and 2019 was $0 respectively. Property and equipment are recorded at cost. Depreciation is computed on the straight-line
method, based on the estimated useful lives of the assets.
NOTE 4 – INTANGIBLE ASSETS
Intangible Assets at July 31, 2020 and April 30, 2020 consists of the following:
|
|
July 31, 2020
|
|
|
April 30, 2020
|
|
|
|
|
|
|
|
|
Intangible Assets
|
|
$
|
185,000
|
|
|
$
|
185,000
|
|
Less: Accumulated Amortization
|
|
|
–
|
|
|
|
–
|
|
Net Intangible Assets
|
|
$
|
185,000
|
|
|
$
|
185,000
|
|
The Company invests in various intellectual properties to
be developed into future projects. By definition these intangible assets are amortized over a 15 year period.
Amortization expense for the three months ended July 31, 2020 and 2019 was $0 respectively. At July 31, 2020, the Company has
determined that the intangible asset should not be impaired.
NOTE 5 –STOCKHOLDERS’ EQUITY/(DEFICIT)
AUTHORIZED SHARES & TYPES
As of July 31, 2020, we had 65,395,665
shares of Common Stock and of:
|
●
|
1,000,000 authorized shares of Convertible Series A Preferred
Shares. Convertible Series A Preferred Shares are convertible into the shares of Common Stock at a ratio of 1,000 shares of
Convertible Series A Preferred Shares to 1 share of Common Stock. There are 53,000 shares issued and outstanding or 53
votes.
|
|
●
|
1,000,000 authorized shares of Convertible Series B Preferred Shares. Convertible Series B Preferred Shares are convertible into the shares of Common Stock at a ratio of 1,000,000 shares of Common Stock for each single Convertible Series B Preferred Share. Additionally, the Preferred B Shares are non-dilutive. There are 600,000 shares issued and outstanding or 600,000,000,000 votes.
|
|
●
|
10,000,000 authorized shares of Convertible Series C Preferred Shares. Convertible Series C Preferred Shares are convertible into Common Stock at a ratio of 1,000 shares of Convertible Series C Preferred Share for one share of Common Stock. There are 760,000 shares issued and outstanding or 760 votes.
|
NOTE 6 – INCOME TAXES
Deferred tax assets arising as a result of net operation loss
carry forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.
Based on its evaluation, the Company has concluded that there
are no significant uncertain tax positions requiring recognition in its financial statements. The Company’s evaluation was
performed for the tax years ended July 31, 2020 and 2019 for U.S. Federal Income Tax and for the State of Wyoming.
A reconciliation of income taxes at statutory rates with the
reported taxes follows:
|
|
July 31, 2020
|
|
|
July 31, 2019
|
|
|
|
|
|
|
|
|
Loss before income tax benefit
|
|
$
|
975,702
|
|
|
$
|
–
|
|
Expected income tax benefit
|
|
|
(243,900
|
)
|
|
|
–
|
|
Non-deductible expenses
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Tax loss benefit not recognized for book purposes, valuation allowance
|
|
$
|
243,900
|
|
|
$
|
–
|
|
Total income tax
|
|
$
|
–
|
|
|
$
|
–
|
|
The Company has net operating loss carry forwards in the amount
of approximately $975,702 that will expire beginning in 2029. The deferred tax assets including the net operating
loss carry forward tax benefit of $975,702 total $243,900 which is offset by a valuation allowance. The other deferred
tax assets include accrued officer compensation, stock based compensation, and amortization.
The Company follows the provisions of uncertain tax positions.
The Company recognized approximately no increase in the liability for unrecognized tax benefits.
The Company has no tax position at July 31, 2020 for which the
ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized
tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the
periods presented. The Company had no accruals for interest and penalties at July 31, 2020. The open tax years are from 2019 through
2029.
NOTE 7 – RELATED PARTY TRANSACTIONS
During the three months ended July 31, 2020 and 2019 the Company’s
CEO had advanced $0 and $42,305 respectively of personal funds. As of July 31, 2020 and 2019 the Company owed the CEO $125,846
and $42,305 respectively.
NOTE 8 –NOTES AND OTHER LOANS PAYABLE
On December 11, 2019 the company agreed to pay Cheryl Hintzen
$40,000 in the form of a promissory note with a term of one year at 10 % interest compounded annually. The Company accrued
interest for the Three months ended January, 31, 2020 in the amount of $559. On January 8, 2020 the Company signed a promissory
note for $8,000 with Cheryl Hintzen. The note becomes due on March 8, 2020 and carries a per annum interest rate of
10%. The Company accrued interest for the Six months ended June 30, 2020 in the amount of $1,321.64.
On February 21, 2020 the Company borrowed $25,000 from GPL Ventures
with interest at a rate of 10% and a due date of July 31, 2020.
On March 12, 2020 the Company agreed to pay Dr. Jason Cohen
1,000,000 shares at a valuation of $.20 per share plus 8 % interest until the shares are issued. The interest accrued through end
is $2,147.95 which equates to 10,740 shares.
In the month July 13, 2020 the Company borrowed $250,000 from
Leonite Capital on a senior convertible note maturing in 6 months. The note had an Original Issue Discount of 10% and carries an
interest rate of 12% annually. Additionally the lender received 1,500,000 shares of restricted common shares. The Note converts
at the rate of $.10 per share had the Company has reserved 60,000,000 common shares for the conversion. For the three months ended
July 31, 2020 $1,369,96 interest was accrued for this note.
The following schedule is Notes Payable at July 31, 2020 and
April 30, 2020:
Description
|
|
July 31, 2020
|
|
|
April 30, 2020
|
|
|
|
|
|
|
|
|
Note payable to Cheryl Hintzen due December 11, 2021; interest at 10%
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
|
|
|
|
|
|
|
|
|
Note Payable to Cheryl Hintzen due March 8, 2020: interest 10%
|
|
|
14,000
|
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
Note payable to GPL Ventures due March 8, 2020; interest at 10%
|
|
|
–
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
Note payable Dr. Jason Cohen 1,000,000 shares @ $.20
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
Note payable escrow attorney for REG A shares
|
|
|
46,900
|
|
|
|
46,900
|
|
|
|
|
|
|
|
|
|
|
Note Payable to Leonite Capital due January 13, 2021 interest at @10%
|
|
|
277,778
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Total Notes Payable
|
|
$
|
578,678
|
|
|
$
|
340,900
|
|
NOTE 9 - SUBSEQUENT EVENTS
On
August 16, 2020, without either party admitting or denying any wrongdoing, the Company and certain of the Defendants (the “Settling
Defendants”) reached an agreement to settle the Action in consideration for the dismissal of the Action, mutual general
releases, the return, cancellation and retirement of the Settling Defendants’ 2,500,000 shares of the Company’s common
stock and any and all rights to any and all allegedly owned securities or debt of the Company including, but not limited the 150,000
shares of Series B Convertible Preferred Stock the Settling Defendants asserted they owned in a Schedule 13G filing, plus any
rights to any Purported Notes. The Company agreed to pay the Defendants the sum of Two Hundred Thousand Dollars ($200,000) by
November 5, 2020 and the parties agreed to not make any disparaging statements about each other. Eagle
Oil Parties and Green Stream Holdings Inc. have entered into a settlement agreement which either side admits any wrong doing,
etc. as per the agreement.