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PART
I—FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
BALANCE
SHEET
See
accompanying notes, which are an integral part of these financial statements.
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
STATEMENTS
OF OPERATIONS
Three
months ended April 30, 2023 and April 30, 2022
(Unaudited)
See
accompanying notes, which are an integral part of these financial statements.
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY
Three
months ended April 30, 2023 and April 30, 2022
See
accompanying notes, which are an integral part of these financial statements
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
STATEMENTS
OF CASH FLOWS
Three
months ended April 30, 2023 and April 30, 2022
(Unaudited)
See
accompanying notes, which are an integral part of these financial statements.
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2023
Note
1 – ORGANIZATION AND NATURE OF BUSINESS
Pineapple
Express Cannabis Company (f/k/a Minaro Corp.) is based in Los Angeles, California. The Company’s wholly owned operating subsidiary,
Ananas Growth Ventures, serves as an incubator, helping early-stage ventures and startups in the cannabis sector through funding, mentoring,
and training. The Company is also engaged in legal cannabis retail through its 50% owned equity method investee, Pineapple Consolidated
Inc. (“PCI”). PCI runs Pineapple Express, a cannabis retailer and owns and manages
retail cannabis ventures. PCI seeks to become a leading portfolio management company in the U.S. cannabis industry.
With its headquarters in Los Angeles, Pineapple Express is rapidly increasing its footprint throughout California and is looking to scale
into underdeveloped markets.
PCI
has executed management contracts for 10%
revenue sharing with eight entities in which it holds an equity interest through its wholly owned subsidiary, PNPL Holdings, Inc.
Those entities are shown below:
● |
PNPLXpress X, Inc. (“Van Nuys Dispensary”): 29%
as of April 30, 2023 (dispensary and delivery). |
● |
Goldstar Industrees (“Northridge Dispensary”):
49% as of April 30, 2023 (dispensary and delivery). |
● |
PNPLXpress, Inc. (“Hollywood Dispensary”): 10%
equity interest as of April 30, 2023 (dispensary and delivery). |
● |
PNPLXpress II, Inc. (“Northeast LA Dispensary”):
49% interest as of April 30, 2023 (dispensary and delivery). |
● |
Pineapple
Equities, Inc. (“Beverly Grove Dispensary”):
39% equity interest as of April 30, 2023 (dispensary and delivery). |
● |
5660 W. Pico & Hope (Mid-Wilshire Dispensary): 49% equity
interest as of April 30, 2023 (dispensary and delivery). |
● |
2378 Westwood
Partners (Westwood Dispensary): 49% equity interest as of April 30, 2023 (dispensary and delivery). |
● |
Pineapple Venice, Inc. (Venice Dispensary): 49% equity interest as of
April 30, 2023 (dispensary and delivery). |
Note
2 – GOING CONCERN
The
accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United
States (“GAAP”), which contemplate continuation of the Company as a going concern. Therefore, there is substantial doubt
about the Company’s ability to continue as a going concern. Management anticipates that the Company will be dependent, for the
near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able
to raise additional funds through the capital markets. There are no assurances that the Company
will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
Note
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
accompanying financial statements have been prepared in accordance with GAAP. The Company’s year-end is January 31.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2023
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities
are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available
evidence, are not expected to be realized.
Equipment
Equipment
is stated at cost, net of accumulated depreciation. The cost of equipment and software is depreciated using the straight-line method
over one and five years and the cost of leasehold improvement is depreciated using the straight-line method over one year. Expenditures
for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the equipment’s
useful life are capitalized. Equipment sold or retired, together with the related accumulated depreciation, is removed from the appropriate
accounts and the resultant gain or loss is included in net income.
Basic
Income (Loss) Per Share
The
Company computes income (loss) per share in accordance with the Financial Accounting Standards Board’s (the “FASB”)
Accounting Standards Codification (“ASC”) 260 “Earnings per Share”. Basic income (loss) per share is computed
by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the
period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive
loss per share excludes all potential common shares if their effect is anti-dilutive. For the three months ended April 30, 2023, there were
no potentially dilutive debt or equity instruments issued or outstanding.
Revenue
Recognition
The
Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”. ASC 606 was adopted on February
1, 2018. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity
recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction
price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
Specifically, Section 606-10-50 requires an entity to provide information about: (a) revenue recognized from contracts with customers,
including the disaggregation of revenue into appropriate categories; (b) contract balances, including the opening and closing balances
of receivables, contract assets, and contract liabilities; (c) performance obligations, including when the entity typically satisfies
its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract; and (d)
significant judgments, and changes in judgments, made in applying the requirements to those contracts. For the three months ended April
30, 2023, the Company did not generate any revenues.
Recent
Accounting Pronouncements
We
have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements
will have a material impact on the Company.
PINEAPPLE
EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
(f/k/a Minaro Corp.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2023
Impact
of COVID-19 on the Company
The
global outbreak of COVID-19 has led to severe disruptions in general economic activities, as businesses and governments have taken broad
actions to mitigate this public health crisis. Although the Company has not experienced any significant disruption to its business to
date, these conditions could significantly negatively impact the Company’s business in the future.
The
extent to which the COVID-19 outbreak ultimately impacts the Company’s business, future revenues, results of operations and financial
condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the
duration and spread of the outbreak, its severity and longevity, the actions to curtail the virus and treat its impact (including an
effective vaccine), and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak
has subsided, the Company may be at risk of experiencing a significant impact to its business as a result of the global economic impact,
including any economic downturn or recession that has occurred or may occur in the future.
As
a result of the impact of COVID-19 on capital markets, the availability, amount, and type of financing available to the Company in the
near future is uncertain and cannot be assured and is largely dependent upon evolving market conditions and other factors.
The
Company intends to continue to monitor the situation and may adjust its current business plans as more information and guidance become
available.
Note
4 – RELATED PARTY TRANSACTIONS
The Company is owed $112,960 from its related party
equity method investee, Pineapple Consolidated, Inc. (“PCI”), as of April 30, 2023. This loan is unsecured, non-interest bearing
and due on demand.
Note
5 – COMMITMENTS AND CONTINGENCIES
The
Company currently subleases office space at 10351 Santa Monica Blvd. #420, Los Angeles, CA 90025 through PCI, the Company’s 50%
owned equity method investee. The monthly rent is waived and the lease is on a month-to-month basis while the Company
looks for a more permanent office location.
From
time-to-time, the Company is subject to various litigation and other claims in the normal course of business. The Company establishes
liabilities in connection with legal actions that management deems to be probable and estimable. No amounts have been accrued in the
financial statements with respect to any matters.
Note
6 – SUBSEQUENT EVENTS
In
accordance with ASC 855, “Subsequent Events”, the Company has analyzed its operations subsequent to April 30, 2023,
through June 22, 2023, and has determined that it does not have any material subsequent events to disclose in these unaudited
financial statements.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the financial condition and results of operations of Pineapple Express Cannabis Company (f/k/a Minaro
Corp.) and its subsidiaries (together, the “Company” or “Pineapple Express Cannabis”) should be read in conjunction
with our unaudited consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on
Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,”
“we,” “our,” and similar terms refer to the Company. Our discussion includes forward-looking statements based
upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results
and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the Risk Factors section of our Annual Report on Form 10-K for the year ended January 31, 2023,
filed with the Securities and Exchange Commission (the “SEC”) on May 24, 2023, as the same may be updated from time to time.
We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,”
“could,” and similar expressions to identify forward-looking statements.
Overview
We
are based in Los Angeles, California. Our wholly owned operating subsidiary, Ananas Growth Ventures, serves as an incubator, helping
early-stage ventures and startups in the cannabis sector through funding, mentoring, and training. We are also engaged in legal cannabis
retail through our 50% owned equity method investee, Pineapple Consolidated Inc. (“PCI”). PCI runs
Pineapple Express, a cannabis retailer, and owns and manages retail cannabis ventures. PCI seeks to become a leading
portfolio management company in the U.S. cannabis industry. With its headquarters in Los Angeles, Pineapple Express is rapidly increasing
its footprint throughout California and is looking to scale into underdeveloped markets.
PCI
has executed management contracts for 10% revenue sharing with eight entities in which it holds an equity interest through its
wholly owned subsidiary, PNPL Holdings, Inc. Those entities are shown below:
● |
PNPLXpress X, Inc. (“Van Nuys Dispensary”): 29%
as of April 30, 2023 (dispensary and delivery). |
● |
Goldstar Industrees (“Northridge Dispensary”):
49% as of April 30, 2023 (dispensary and delivery). |
● |
PNPLXpress, Inc. (“Hollywood Dispensary”): 10%
equity interest as of April 30, 2023 (dispensary and delivery). |
● |
PNPLXpress II, Inc (“Northeast LA Dispensary”):
49% interest as of April 30, 2023 (dispensary and delivery). |
● |
Pineapple
Equities, Inc (“Beverly Grove Dispensary”): 39% equity interest as of April 30, 2023 (dispensary and
delivery). |
● |
5660 W. Pico & Hope (Mid-Wilshire Dispensary): 49% equity
interest as of April 30, 2023 (dispensary and delivery). |
● |
2378 Westwood
Partners (Westwood Dispensary): 49% equity interest as of April 30, 2023 (dispensary and delivery). |
● |
Pineapple Venice, Inc. (Venice Dispensary): 49% equity interest as of April
30, 2023 (dispensary and delivery). |
Recent
Developments
On
December 18, 2022, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Yulia Lazaridou, our then-majority
stockholder, PCI, and the PCI stockholders (collectively, the “PCI Stockholders”).
Pursuant to the terms of the Exchange Agreement, the PCI Stockholders exchanged an aggregate of 50,000 shares of PCI common stock, representing
50% of the outstanding PCI common stock, for 18,000,000 shares of our common stock.
In
addition, on December 18, 2022, in a transaction related to and a condition to the Exchange, Ms. Lazaridou and the Company entered into
that certain Resignation, Separation and Release Agreement (the “Resignation Agreement”), pursuant to which (i) we redeemed
2,800,000 shares of Company common stock owned by Ms. Lazaridou (the “Lazaridou Shares”) in exchange for a payment by us
of $540,904; and (b) Ms. Lazaridou resigned as our sole director and officer, effective as of December 21, 2022.
In
order to fund the payment for the Lazaridou Shares, contemporaneous with the Exchange, on December 18, 2022, PCI loaned $540,904 to us.
The loan (the “PCI Loan”) matures on June 30, 2023 and earns interest at an annual rate of 1%.
In
addition, on December 18, 2022, Ms. Lazaridou, as sole director and majority stockholder, (i) elected Matthew Feinstein as sole director
of the Company; (ii) appointed Mr. Feinstein as Chief Executive Officer, President, Chairman of the Board and Interim Chief Financial
Officer of the Company; (iii) accepted Ms. Lazaridou’s resignation; (iv) approved the Exchange Agreement; and (v) approved the
Resignation Agreement.
As
a result of the above-described transactions, the Company is 50% owned by the PCI Stockholders and PCI is 50% owned by the Company.
On
December 30, 2022, we notified Financial Industry Regulatory Authority (“FINRA”) of our intent to change our corporate name
from “Minaro Corp.” to “Pineapple Express Cannabis Company” and to change our trading symbol. These corporate
actions are subject to FINRA review and clearance.
On
January 5, 2023, we filed Restated Articles of Incorporation (the “Restated Articles”) with the State of Nevada. The Restated
Articles had the effect of (i) changing our corporate name to “Pineapple Express Cannabis Company”; and (ii) creating a class
of 10,000,000 authorized shares of preferred stock. Until FINRA clears our name change and symbol change, our corporate name and trading
symbol will remain “Minaro Corp.” and MNAO, respectively, for trading purposes.
Results
of Operations
Three
Months Ended April 30, 2023 Compared to Three Months Ended April 30, 2022
Revenues
For
the three months ended April 30, 2023 and 2022, the Company generated revenues of $0 and $4,650, respectively. The decrease was primarily
due to the Company being in the process of transitioning its business to the cannabis industry.
Cost
of Goods Sold
For
the three months ended April 30, 2023 and 2022, the cost of goods sold was $0 and $0, respectively.
Total
Operating Expenses
Total
operating expenses for the three months ended April 30, 2023 and 2022 were $29,706 and $10,277, respectively. The increase was
primarily due to an increase in legal fees and audit fees, partly due to the sale of the Company and the acquisition of PCI by the
Company. Operating expenses for the three months ended April 30, 2023 consisted of bank charges of $0; depreciation expense of $115;
legal fees of $16,022; audit fees of $12,500; consulting fees of $0; and professional fees of $1,069. Operating expenses for the
three months ended April 30, 2022 consisted of bank charges of $62; depreciation expense of $939; legal fees of $0; audit fees of
$3,000; consulting fees of $0; and professional fees of $6,276.
Net
Income (Loss)
Net
income (loss) for the three months ended April 30, 2023 and 2022 was $179,708 and ($5,627), respectively. The increase in net income
was primarily due to recognition of gain from the PCI subsidiary using the equity-investment method.
Liquidity
and Capital Resources
As
of April 30, 2023, the Company had cash of $0 and an accumulated deficit of $403,402. To date, we have financed our operations
primarily through the issuance of debt and equity sourced capital.
The
following table sets forth a summary of our cash flows for the three months ended April 30, 2023 and 2022:
| |
Three Months Ended April 30, | |
| |
2023 | | |
2022 | |
Net cash used in operating activities | |
$ | (11,697 | ) | |
$ | (9,015 | ) |
Net cash provided by investing activities | |
| 11,697 | | |
| - | |
Net cash provided by financing activities | |
| - | | |
| 4,098 | |
Net decrease in cash | |
| - | | |
| (4,917 | ) |
Cash, beginning of period | |
| - | | |
| 5,269 | |
Cash, end of period | |
$ | - | | |
$ | 352 | |
Since
inception, we have financed our cash flow requirements primarily through issuance of common stock and debt financing. As we expand our
activities, we may continue to experience net negative cash flows from operations. We anticipate obtaining additional financing to fund
operations through additional common stock offerings, to the extent available, or to obtain additional financing to the extent necessary
to augment our working capital. There can be no assurance that we will be able to obtain financing on commercially acceptable terms,
if at all.
We
anticipate that we will incur operating losses in the next 12 months. Our lack of operating history makes predictions of future operating
results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered
by companies in their early stage of development, particularly companies in new and rapidly evolving markets. There can be no assurance
that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect.
Critical
Accounting Policies and Estimates
Our
management’s discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated
financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
The preparation of our unaudited consolidated financial statements requires us to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and
on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions.
Off-Balance
Sheet Arrangements
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
that are material to investors.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A
smaller reporting company is not required to provide the information required by this Item.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or
submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Principal Financial
Officer, to allow timely decisions regarding required disclosure.
As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Principal Financial Officer carried out an
evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2023. Based upon
his evaluation, our Chief Executive Officer and Principal Financial Officer concluded that, as of April 30, 2023, our disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Changes
in Internal Control over Financial Reporting
During
the three months ended April 30, 2023, there has been no change in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.