UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  
For the quarterly period ended April 30, 2018  
  or  
[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  
For the transition period from   to    
Commission File Number 000-55467  

 

CANNABIS LEAF INCORPORATED

(Exact name of registrant as specified in its charter)
Nevada   47-2055848
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)
4500 9 th Ave NE, Seattle WA   98105
(Address of principal executive offices) (Zip Code)
206-430-6250
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ ] YES [X] NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
  [X] YES [  ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [X]
      Emerging growth company [  ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
  [  ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

  [  ] YES [  ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
111,314,000 common shares issued and outstanding as of June 18, 2018.
                                           

 

 

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION 2
Item 1.   Financial Statements 2
Item 2.   Management's Discussion and Analysis of Financial Condition or Plan of Operation 3
Item 3.   Quantitative and Qualitative Disclosures About Market Risk 6
Item 4.   Controls and Procedures 6
PART II - OTHER INFORMATION 7
Item 1.   Legal Proceedings 7
Item 1A.   Risk Factors 7
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds 7
Item 3.   Defaults Upon Senior Securities 7
Item 4.   Mine Safety Disclosures 7
Item 5.   Other Information 7
Item 6.   Exhibits 8
SIGNATURES 9

 

  1  

 

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements



Unaudited Condensed Financial Statements

 

Cannabis Leaf, Inc.

 

 

      Index  
Balance Sheets     F-1  
Statements of Operations     F-2  
Statements of Cash Flows     F-3  
Notes to the Unaudited Condensed Financial Statements     F-4 to F-6  

 

 

  2  

 

 

Cannabis Leaf, Inc.

BALANCE SHEETS

 

    As of   As of
    April 30,   January 31,
    2018   2018
      (Audited)
Assets                
Current assets                
Cash   $ —       $ —    
Total Assets     —         —    
                 
Liabilities and Shareholders' Deficit                
Current liabilities                
Accounts payable and accrued liabilities   $ 19,651     $ 17,660  
Loans payable     —         157,455  
Loans payable - related parties     18,600       47,134  
Total current liabilities     38,251       222,249  
Total liabilities     38,251       222,249  
                 
Shareholders' Deficit                
Common stock: 600,000,000 authorized; $0.001 par value                
51,314,000 and 50,340,000 shares issued and outstanding, respectively     51,314       50,340  
Additional paid in capital     423,396       17,242  
Accumulated deficit     (512,961 )     (289,831 )
Total Shareholders' Deficit     (38,251 )     (222,249 )
                 
Total Liabilities and Shareholders' Deficit   $ —       $ —    

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

   F- 1  

 

 

Cannabis Leaf, Inc.

STATEMENTS OF OPERATIONS

Unaudited

 

    Three Months Ended
    April 30,
    2018   2017
Operating Expenses                
General and administrative   $ 16,370       4,315  
   Total operating expenses     16,370       4,315  
                 
Operating Loss     (16,370 )     (4,315 )
                 
Other income (expense)                
Interest expense, net     (5,288 )     (738 )
Loss on extinguishment of debt     (201,472 )     —    
   Total other expenses     (206,760 )     (738 )
                 
Net Loss   $ (223,130 )   $ (5,053 )
                 
Basic and diluted loss per common share   $ (0.00 )   $ (0.00 )
Basic and diluted weighted average common shares outstanding     50,794,533       50,340,000  

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

   F- 2  

 

 

Cannabis Leaf, Inc.

STATEMENTS OF CASH FLOWS

Unaudited

 

    Three Months Ended
    April 30,
    2018   2017
         
Cash Used in Operating Activities                
Net loss for the period   $ (223,130 )   $ (5,053 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Imputed interest expense     391       647  
Expenses paid by a related party     10,465       —    
Loss on extinguishment of debt     201,472       —    
Changes in non-cash working capital balances:                
Prepaid expenses     —         (3,951 )
Accounts payable and accrued liabilities     10,802       (4,510 )
Net cash used in operating activities     —         (12,867 )
                 
Cash Flows Used in Investing Activities                
Deposit on license     —         (25,000 )
Net cash used in Investing Activities     —         (25,000 )
                 
Cash Provided by Financing Activities                
Proceeds from related party loan     —         18,600  
Proceeds from unrelated party loan     —         25,000  
Net cash provided by Financing Activities     —         43,600  
                 
Net increase in cash for the period     —         5,733  
Cash at beginning of the period     —         489  
Cash at end of the period   $ —       $ 6,222  
                 
Supplemental Cash Flow Information:                
Cash paid for income taxes   $ —       $ —    
Cash paid for interest   $ —       $ —    
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES                
Issuance of common stock for debt settlement   $ 396,272     $ —    

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

   F- 3  

 

 

CANNABIS LEAF, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

APRIL 30, 2018

 

NOTE 1 -ORGANIZATION AND BASIS OF PRESENTATION

 

Cannabis Leaf, Inc. (the "Company") was incorporated in the State of Nevada on October 6, 2014, as Pacificorp Holdings, Ltd. 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 and is an exploration stage company. The Company has changed it business from a mining and exploration company and entered in to an exclusive license agreement with Affordable Green LLC of Tacoma WA. Additionally, the Company has changed its name as a result of a merger with the Company’s wholly owned subsidiary Cannabis Leaf, Inc. as a result of this merger Pacificorp adopted the name of the subsidiary. There were no assets purchased or shares exchanged.

 

NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The unaudited condensed financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. 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 Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2018. This interim Condensed Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments consist primarily of accounts payable and accrued liabilities and loans payable – related parties. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.

 

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 three months ended April 30, 2018 and 2017, there were no potentially dilutive securities.

 

   F- 4  

 

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 – NOTE PAYABLE FROM RELATED PARTY

 

As of April 30, 2018, and January 31, 2018, the Company received advances totaling $18,600 and $47,134 respectively from related parties, the advances are unsecured, of which $28,534 is non-interest bearing and is due upon demand giving 30 days written notice to the borrower. A balance of $18,600 was received from a related party and bares an interest rate of 5% per annum and is due upon demand giving 30 days written notice to the borrower. During the three months ended April 30, 2018, the Company issued 142,670 shares of common stock to settle the note payable of $28,534. As a result, the Company recognized a loss on extinguishment of debt of $26,893. The Company has recorded imputed interest of $391 and accrued interest of $243 respectively for the three months ended April 30, 2018.

 

NOTE 5 – RELATED PARTY CONTRIBUTIONS

 

During the three months ended April 30, 2018 and 2017, the Company received contributions totaling $10,465 and $0 from a related party, these contributions are not to be repaid and are recorded under additional paid in capital.

 

NOTE 6 – NOTE PAYABLE

 

As of January 31, 2018, the Company received advances totaling $157,455 from an unrelated party, the advances are unsecured and bares an interest rate of 5% per annum and is due upon demand giving 30 days written notice to the borrower. During the three months ended April 30, 2018, the Company issued 831,330 shares of common stock to settle the note payable of $157,455 and accrued interest of $8,811. As a result, the Company recognized loss on extinguishment of debt of $174,579. The Company has recorded accrued interest of $4,654 for the three months ended April 30, 2018.

 

   F- 5  

 

NOTE 7 –EQUITY

 

The Company has authorized 600,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

On March 20, 2018, the Company issued 831,330 and 142,670 restricted common shares in settlement of debt in the amounts of $166, 266 and $28,534 respectively (see Note 4 and 6).

 

As of April 30, 2018, and January 31, 2018, the company had 51,314,000 and 50,340,000 shares of common stock issued and outstanding, respectively.

 

NOTE 8 - SUBSEQUENT EVENTS

 

On May 3, 2018 the Company) entered into a Settlement and Release Agreement with AGH WA, LLC in order to terminate the License Agreement and cease the business relationship between the Parties, and remedy any defaults of the terms and conditions of the License Agreement.

 

The Compensation and Settlement pertaining to entering into the Settlement and Release Agreement is an aggregate total of 2,600,000 restricted Common Shares.

 

On March 6, 2018, an Agreement and Plan of Merger (the “Agreement”) was entered into by the Company and Apotheca Biosciences, Inc. (“Apotheca Biosciences”), a Nevada corporation. Upon completion of the Agreement, the parties will merge with the surviving entity to operate under the name Apotheca Biosciences, Inc. Pursuant to the Agreement, the Company is to issue 60,000,000 Common Shares as instructed by Apotheca Biosciences, in exchange for all of the outstanding shares of Apotheca Biosciences. In anticipation of the closing, the Company reserved for issuance 60,000,000 restricted Common Shares (the "Shares"). The Shares were issued on May 15, 2018 to be held in trust until completion of the closing. The issuance of the Shares resulted in a change of control of the Company. Pursuant to the terms of the Agreement, Apotheca can appoint two directors to the Company's board. On May 21, 2018, the Company's added 2 additional board members. On May 22, 2018, a change of officers occurred.

 

 

 

   F- 6  

 

 

Item 2. Management's Discussion and Analysis of Financial Condition or Plan of Operation

 
FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our company”, mean Cannabis Leaf Incorporated, a Nevada corporation, unless otherwise indicated.

Corporate Overview  

We were incorporated in Nevada on October 6, 2014 under the name Pacificorp Holdings Ltd. Until 2017, we were a mineral exploration company with mining claims known as the Delcer Buttes (1-12) in Elko County, Nevada. On August 31, 2017, we elected to not renew the Delcer Buttes claims and subsequently, the claims reverted back to the Bureau of Land Management.

 

On March 29, 2017, we 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.

 

On May 4, 2017, we entered into an exclusive License Agreement with Affordable Green Washington LLC. The License Agreement was amended on June 1, 2017.

 

On June 2, 2017, our company entered into a short form Merger Agreement with our wholly owned subsidiary, Cannabis Leaf Incorporated, in order to effect a change of name of our company. Pursuant to the Merger Agreement, our company will be the surviving entity and will adopt the name of our subsidiary. Our subsidiary was incorporated solely for the purpose of the merger. Effective June 7, 2017, Articles of Merger and the Merger Agreement were filed with the Nevada Secretary of State, giving effect to the merger and the change of name of our company to Cannabis Leaf Incorporated. The Merger was approved by our board of directors and our subsidiary on June 2, 2017. In accordance with Nevada Revised Statutes (NRS) Section 92A.180, stockholder approval was not required.

 

  3  

 

 

On June 2, 2017, our board of directors approved an amendment to our Articles of Incorporation by filing a Certificate of Change, pursuant to NRS 78.209, increasing our authorized shares from 100,000,000 shares of common stock, $.001 par value to 600,000,000 shares of common stock, $.001 par value; and affecting a 6 for 1 forward stock split. The Certificate of Change was filed with the Nevada Secretary of State on June 5, 2017.

 

On August 1, 2017 Jason Sakowski a director of our company entered in to purchase agreements with the former directors and officers of our company to purchase an aggregate of twenty seven million (27,000,000) restricted common shares, resulting in a change in control. The purchase price for the shares is $10,000 and $5,000 respectively and is due and payable on or before March 31, 2018. To date this transaction has not closed.

 

On October 24, 2017, we entered into a Letter of Intent with Green Venture Capital Inc. (“Green Venture”) whereby our company is to be assigned Green Venture’s interest in a Letter of Intent (the “MMS Farms LOI”) that Green Venture has with MMS Farms, LLC (“MMS Farms”). MMS Farms owns a Tier 2 Recreational Marijuana Production and Processing License which allows MMS Farms to produce and process recreational marijuana under the laws of the State of Washington.

 

On April 26, 2018 our company provided a Notice of Termination to Green Venture with respect to the Letter of Intent entered into by our company and Green Venture on October 24, 2017. No Consideration has been paid to date.

 

On March 6, 2018, an Agreement for Plan of Merger (the “Agreement”) was entered into by our company and Apotheca Biosciences, Inc. (“Apotheca Biosciences”), a Nevada corporation. Such Agreement will result in the merger of Apotheca Biosciences into our company with our company to be the surviving entity under the name "Apotheca Biosciences, Inc.".

 

Pursuant to the Agreement, our company agreed to issue to Apotheca Biosciences sixty million (60,000,000) shares of our common stock in exchange for all of the shares of Apotheca Biosciences. This issuance will result in a change in control of our company. Upon execution of the Agreement, Apotheca Biosciences will receive the immediate right to the appointment of the directors and officers to our company, with our current officer resigning his officer positions. On April 24, 2018 our company issued 60,000,000 restricted common shares as the consideration under the Agreement.

 

On March 20, 2018 our company issued 831,330 and 142,670 restricted common shares in settlement of debt in the amounts of $166, 266 and $28,534 respectively.

 

On May 3, 2018 our company executed a Settlement and Release Agreement with Affordable Green Washington LLC (aka AGH WA, LLC) (the "Settlement Agreement") in order to terminate an Amended License Agreement dated June 1, 2017, cease the business relationship between the parties and remedy any defaults of the terms and conditions of the License Agreement. The compensation and settlement pertaining to Settlement Agreement is an aggregate total of 2,600,000 restricted common shares.

 

We have not ever declared bankruptcy, been in receivership, or involved in any kind of legal proceeding. We have minimal revenues and limited cash on hand. We have sustained losses since inception and have relied solely upon the sale of our securities for funding.

 

Business of the Company

 

Upon the completion of the Agreement with Apotheca Biosciences, we are now a company that develops cutting-edge medical products and nutraceuticals and formulates and delivers technologies for the healthcare and consumer care industry. Our pipeline of products includes, transdermal, sublingual, and nasal delivery technologies for precise and controlled dosing of cannabinoids.

 

  4  

 

Results of Operations

The following summary of our results of operations, for the three ended April 30, 2018, should be read in conjunction with our financial statements, as included in this Form 10-Q.

 

    Three Months Ended        
    April 30,   Change
    2018   2017   Amount   %
Revenues   $ —       $ —       $ —         —    
General and administrative     16,370       4,315       12,055       279 %
Interest expense, net     (5,288 )     (738 )     (4,550 )     617 %
Loss on extinguishment of debt     (201,472 )     —         (201,472 )     —    
Net Loss   $ (223,130 )   $ (5,053 )   $ (218,077 )     4316 %

 

Three months ending April 30, 2018 compared to three months ending April 30, 2017:

 

For the three months ended April 30, 2018, we incurred $16,370 in general and administrative expenses, $5,288 in interest expense and $201,472 in loss on extinguishment of debt, resulting in an operating and net loss of $223,130. For the three months ended April 30, 2017, we incurred $4,315 in general and administrative expenses and $738 in interest expense, resulting in an operating and net loss of $5,053.

 

Liquidity and Capital Resources

 

From October 6, 2014 (inception) through April 30, 2018, we have relied almost exclusively on funds raised from sales of shares of our common stock or by advances from related parties.

 

We may need to raise additional capital to carry out our business plan. There can be no assurance that we will be able to raise additional capital or if we are able to raise additional capital that the terms will be acceptable to us.

 

We had cash on hand of $Nil and $Nil at April 30, 2018 and January 31, 2018, respectively. Our primary needs for cash are for working capital.

 

Working Capital

 

    April 30,   January 31,   Change
    2018   2018   Amount   %
Current Assets   $ —       $ —       $ —         —    
Current Liabilities     38,251       222,249       (183,998 )     (83 %)
Working Deficiency   $ (38,251 )   $ (222,249 )   $ 183,998       (83 %)

 

Cash Flows

    Three Months Ended    
    April 30,    
    2018   2017   Change
Cash Flows used in Operating Activities   $ —       $ (12,867 )   $ 12,867  
Cash Flows from Investing Activities     —         (25,000 )     25,000  
Cash Flows from Financing Activities     —         43,600       (43,600 )
Net Decrease in Cash During Period   $ —       $ 5,733     $ (5,733 )

 

  5  

 

As at April 30, 2018 our company’s cash balance was $Nil and total assets were $Nil. As at January 31, 2018, our company’s cash balance was $Nil and total assets were $Nil.

 

As at April 30, 2018, our company had total liabilities of $38,251, compared with total liabilities of $222,249 as at January 31, 2018.

 

As at April 30, 2018, our company had working capital deficiency of $38,251 compared with working capital deficit of $222,249 as at January 31, 2018. The decrease in working capital deficiency was primarily attributed to a decrease in loan payable and loan payable – related parties.

 

Cash Flow from Operating Activities

 

During the three months ended April 30, 2018, our company used $0 in cash from operating activities, compared to $12,867 cash used in operating activities during the three months ended April 30, 2017.

 

Cash Flow from Investing Activities

 

During the three months ended April 30, 2018, our company used $0 in cash for investing activities, compared to $25,000 cash used for investing activities during the three months ended April 30, 2017.

 

Cash Flow from Financing Activities

 

Net cash from financing activities was $0 for the three months ended April 30, 2018 compared to net cash from financing activities of $43,600 for the three months ended April 30, 2017.

 

Off-Balance Sheet Arrangements

 

We have no 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 is material to stockholders.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 
As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures



Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2018. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms as a result of the following material weaknesses:

  6  

 

 

The specific material weakness identified by our management was ineffective controls over certain aspects of the financial reporting process because of a lack of a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with our financial reporting requirements and inadequate segregation of duties. A "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements would not be prevented or detected on a timely basis.

 

We expect to be materially dependent upon a third party to provide us with accounting consulting services for the foreseeable future. Until such time as we have a chief financial officer with the requisite expertise in U.S. GAAP, there are no assurances that the material weaknesses in our disclosure controls and procedures and internal control over financial reporting will not result in errors in our financial statements which could lead to a restatement of those financial statements.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended Aril 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

Item 1. Legal Proceedings



We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
 

Item 1A. Risk Factors


As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


None.

Item 3. Defaults Upon Senior Securities


None.

Item 4. Mine Safety Disclosures


Not Applicable.

Item 5. Other Information

 
None.

  7  

 

Item 6. Exhibits

 

Exhibit

Number

  Description   Incorporated by Reference
        Form   Exhibit   Filing Date
(3)   (i) Articles of Incorporation (ii) Bylaws            
3.1   Articles of Incorporation   S-1   3.1   April 21, 2015
3.2   By-laws   S-1   3.2   April 21, 2015
3.3   Articles of Merger   8-K   3.1   June 22, 2017
3.4   Agreement of Merger   8-K   3.2   June 22, 2017
3.5   Certificate of Change   8-K   3.3   June 22, 2017
14.1   Code of Ethics   S-1   14.1   April 21, 2015
31.1 *   Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer            
32.1 **   Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer            
101.INS   XBRL Instance Document            
101.SCH   XBRL Taxonomy Extension Schema Document            
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document            
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document            
101.LAB   XBRL Taxonomy Extension Label Linkbase Document            
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document            

 

* Filed herewith.

** Furnished herewith

  8  

 

 

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

    CANNABIS LEAF INCORPORATED
    (Registrant)
Dated:  June 20, 2018   /s/ Saeed Talari
    Saeed Talari
    President, Chief Executive Officer, Chief Financial Officer, Chairman and Director
    (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
     
  9