The accompanying notes are an integral part of these unaudited financial statements.
The accompanying notes are an integral part of these unaudited financial statements.
The accompanying notes are an integral part of these unaudited financial statements.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
NOTE 1 – ORGANIZATION AND GOING CONCERN
We plan to focus on the development, sale
and distribution of hemp oil-based products that contain naturally occurring cannabinoids, including cannabidiol ("CBD")
and other products containing CBD-rich hemp oil (“Legal Hemp”).
Vitalibis (the “Company”) was
formed on April 11, 2014 as a Nevada corporation, under the name of Crowd 4 Seeds, Inc.
On January 9, 2017, the Company filed with
Secretary of State of Nevada to change its name to Sheng Ying Entertainment Corp. On April 24, 2017, the Financial Industry Regulatory
Authority (“FINRA”) approved the name change. The Company’s common stock symbol was also changed from CWWD to
SALL, effective April 25, 2017.
On January 18, 2018, our Board of Directors
approved an agreement and plan of merger to merge with and into our wholly-owned subsidiary, Vitalibis, Inc., a Nevada corporation,
and our name changed from Sheng Ying Entertainment Corp. to Vitalibis, Inc. Vitalibis, Inc. was formed solely to effect the change
of name and conducted no operations. The Company’s common stock symbol was also changed from SALL to VCBD, effective, March
7, 2018.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and generated
negative cash flows from operations since inception. Due to these conditions, it raised substantial doubt about its ability to
continue as a going concern. The financial statements do not include any adjustments that may result should the Company be unable
to continue as a going concern.
NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The unaudited interim financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial
statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange
Commission. Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted
in the United States of America for annual financial statements. In the opinion of the Company’s management, the accompanying
unaudited financial statements contain all the adjustments necessary (consisting only of normal recurring adjustments) to present
the financial position of the Company as of March 31, 2018 and the results of operations and cash flows for the periods presented.
The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for
the full fiscal year. These financial statements should be read in conjunction with the financial statements and related notes
thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Notes to the financial
statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent
year ended December 31, 2017 have been omitted.
Stock-based Compensation
Employee share-based payment compensation
is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service
period.
Share-based awards to non-employees are
expensed over the period in which the related services are rendered at their fair value.
NOTE 3 – STOCKHOLDERS’ DEFICIT
Common Stock
The Company effected a 2.5 for 1 forward
stock split of our
number of authorized shares of the Common Stock and a corresponding
increase in the number of issued and outstanding shares of Common Stock held by each stockholder of record as of February 8, 2018,
the “Effective Date” of the forward split, as set by
the Financial Industry Regulatory Authority (
“FINRA”
).
All shares referenced have been respectively adjusted to reflect this stock split.
On the Effective Date, our total authorized
shares of Common Stock increased from 45,000,000 to 112,500,000 shares, and our total issued and outstanding shares of Common Stock
increased from 10,804,000 to 27,010,000 shares; the par value of $0.001 will remain the same. Any fractional shares resulting from
the split will be rounded up to the next whole number. The total authorized shares of our Preferred Shares was not affected and
will remain at 5,000,000.
In March 2018, the Company sold 301,000
shares of its restricted common stock at a price of $1.00 per share, for total net proceeds of $301,000.
In March 2018,
the Company issued a total of 600,000 shares of common stock to 6 consultants. In addition, the Company committed to issue an additional
850,000 of shares that will vest between May 2018 and February 2019. The Company recorded $712,994 of compensation cost related
to these shares.
In March 2018,
the Company issued 200,000 shares of common stock valued at $200,000 to acquire a license from VOTOCAST, INC., as discussed in
Note 5. It was determined to be a transaction with an entity under common control and the share issuance was determined to be a
deemed distribution to the related party for the value of the shares in excess of the historical carry over basis of the asset.
NOTE 4 – TRANSACTION WITH RELATED
PARTIES
In March 2018,
the Company entered into an Agreement with VOTOCAST, INC. dba newkleus, a California corporation formed and owned by Steven Raack,
the President, CEO and a Director of the Company. The Company will receive an exclusive license in the cannabis industry for the
state-of-the-art newkleus™ technology to (1) facilitate Vitalibis’ micro-influencer sales model, and (2) enhance and
compliment Vitalibis’ social media strategy.
The Agreement
grants Vitalibis™ an exclusive license for the newkleus patent-pending, user-generated content (UGC) technology for all applications
in the cannabis industry. The integration of the newkleus technology allows Vitalibis to create an interactive digital community,
while concurrently acquiring valuable user data and content, all of which Vitalibis anticipates will (1) increase customer acquisition
and retention and (2) build direct, meaningful and loyal customer relationships.
The Company paid
200,000 shares upon execution of the agreement and a monthly fee ranging from $0 to $2,000 depending of usage volume. In addition,
newkleus will provide operational and business development consulting services.
During the three months ended March 31,
2018, $200 of cash was contributed to the Company by the Chief Financial Officer to open the Company’s bank account.
NOTE 5 – SUBSEQUENT EVENTS
In April 2018, the Company entered into
an agreement to develop its website and various user interfaces at a project cost of $100,000. A payment of $50,000 was due, and
paid, at the commencement of the contract, with the balance due at various milestones.
On April 27, 2018, OTC Markets approved
the move of the Company’s trading platform for its Common Stock from the OTC-BB (Pink Sheets) to the OTCQB Marketplace.