Notes to the Financial Statements
September 30, 2016
(Unaudited)
NOTE 1 - ORGANIZATION AND BUSINESS
OPERATIONS
Organization and Description of Business
ALTAIR INTERNATIONAL CORP. (the “Company”) was incorporated
under the laws of the State of Nevada on December 20, 2012. The Company’s physical address is 20704 N 90
th
Place,
Scottsdale, AZ 85254. The Company is in the development stage as defined under Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) 915-205 "Development-Stage Entities.”
The Company has entered into a strategic alliance with Cure Pharmaceutical
Corporation (“CURE”), a California company engaged in the development of oral thin film (“OTF”) for the
delivery of nutraceutical, over-the-counter and prescription products. Initially this alliance was comprised of an Exclusive License
and Distribution Agreement for CURE’s Sildenafil (commonly known as Viagra) Products throughout Asia, Brazil, the Middle
East and Canada acquired at a cost of $200,000 while a joint venture agreement for the procurement of converting and packaging
equipment specific for oral thin film products was proposed through a Letter of Intent. In addition, Altair and Cure agreed to
enter into further joint ventures or other business relationships for the purpose of completing the development and marketing of
additional products, and for license and distribution agreements for additional Cure products such as aspirin, sleep-aid, topical
muscle and joint pain relief, and electrolytes delivered through OTF or other methods. Altair has advanced $360,000 to CURE in
this regard.
On September 23, 2016, the Company and CURE
agreed to terminate the Exclusive License and Distribution Agreement for CU
RE’s
Sildenafil Products due to the unanticipated costs of obtaining regulatory approvals for the introduction of these pharmaceutical
products into the licensed markets and to replace it with an Exclusive License and Distribution Agreement for a family of sports
related nutraceutical products including a topical active for joint and muscle pain and OTF products for delivery of electrolyte,
energy, sleep and recovery actives, The Company will become the exclusive worldwide distributor for these products. The fee for
this new Exclusive License and Distribution Agreement was $560,000, comprised of the $200,000 fee paid for the Sildenafil agreement
and the $360,000 advanced as a deposit for future license and distribution agreements.
The
Company had previously planned to commence operations in the architectural field and to be responsible for the concept architectural
vision of future private and public buildings as well as municipal organized public areas. This plan was abandoned in the 2015
fiscal year in favor of the business operations described above.
Since
inception (December 20, 2012) through September 30, 2016, the Company has not generated any revenue and has accumulated losses
of $286,124.
In
management’s opinion all adjustments necessary for a fair statement of the results for the interim periods have been made,
and that all adjustments have been made to maintain the books in accordance with GAAP. Furthermore, sufficient disclosures have
been made in order to ensure that the interim financial statements will not be misleading.
NOTE
2 - GOING CONCERN
The financial
statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception
resulting in an accumulated deficit of $286,124 as of September 30, 2016 and further losses are anticipated in the development
of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary
financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management
intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and/or private
placement of common stock.
NOTE 3 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the
rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting
of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations
and cash flows of the Company as of and for the six month periods ending September 30, 2016 and 2015 and year ending March 31,
2016.
Cash and Cash Equivalents
For purposes of the statement of cash flows,
the Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company's bank accounts are deposited in
insured institutions. The funds are insured up to $250,000. At September 30, 2016 the Company's bank deposits did not exceed the
insured amounts.
Basic and Diluted Income (Loss) Per Share
The Company computes loss per share in accordance
with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders
by the weighted average number of outstanding common shares during the period. Diluted 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.
Income Taxes
The Company follows the liability method of
accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated
tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis
(temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Fair Value of Financial Instruments
FASB ASC 820 "Fair Value Measurements
and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The
hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable
in the market.
These tiers include:
Level 1: defined as observable
inputs such as quoted prices in active markets;
Level 2: defined as inputs other
than quoted prices in active markets that are either directly or indirectly observable; and
Level 3: defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The carrying amounts of financial assets and
liabilities, such as cash and accrued liabilities approximate their fair values because of the short maturity of these instruments.
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 disclosure of contingent assets and liabilities at the date the financial statements
and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 4 – SALES AND DISTRIBUTION LICENSE
On November 26, 2014, the Company entered into
a license and distribution agreement with Cure Pharmaceutical Corporation (“Cure”) for the exclusive rights to distribute
and sell in certain defined territories any product produced and supplied by Cure that contains Sildenafil delivered through an
oral thin film. The defined territories included Asia, Brazil, the Middle East and Canada. For the sake of clarity, Asia was further
defined as India, China, Malaysia, Indonesia, Taiwan, Japan, Philippines, and those other countries dependent on China’s
SDA certification for their approval protocol of the Products. There was no expiry date to this agreement. The agreement required
that the Company pay to Cure a fee in the aggregate amount of $200,000, payable in two equal $100,000 instalments. The Company
completed the purchase of the license in the 2015 fiscal year.
On September 23, 2016, the Company and CURE agreed to terminate
the Exclusive License and Distribution Agreement for CURE’s Sildenafil Products due to unanticipated costs of obtaining regulatory
approvals for the introduction of these pharmaceutical products into the Asian markets and to replace it with an Exclusive License
and Distribution Agreement for a family of sports related nutraceutical products including a topical active for joint and muscle
pain and OTF products for delivery of electrolyte, energy, sleep and recovery actives, The Company will become the exclusive worldwide
distributor for these products. The fee for this new Exclusive License and Distribution Agreement was $560,000, comprised of the
$200,000 fee paid for the Sildenafil agreement and the $360,000 advanced as a deposit for future license and distribution agreements.
This Agreement has a ten year term and requires minimum product orders of $1,500,000 in the first 24 month from the effective date
of the Agreement and $1,500,000 for each year thereafter.
NOTE 5 – ADVANCES AND DEPOSITS
The Company and Cure agreed to enter into further
joint ventures or other business relationships for the purpose of completing the development and marketing of additional products
and for license and distribution agreements for additional Cure products. To September 23, 2016 the Company had advanced $360,000
to Cure for these purposes. As described in Note 4 above, these advances were applied to the $560,000 fee payable to CURE for the
Exclusive License and Distribution Agreement for sports related nutraceutical products, leaving a balance of $nil at September
30, 2016 ($360,000 as at September 30, 2015).
NOTE 6 – PROMISSORY NOTES
On March 6, 2015, the Company executed a convertible promissory
note for $100,000 with Williams Ten, LLC. The note was due in ninety days, had a $10,000 one-time interest payment due at maturity
and required the issuance of 10,000 shares of common stock. Any unpaid principal and interest at the end of the term was convertible
into shares of common stock at 50% of the average closing price for the ten days prior to the end of the term of the note. The
fair value of the common stock issued was determined to be $9,091 based on its fair value relative to the fair value of the debt
issued. This amount was recorded as a debt discount and was amortized utilizing the interest method of accretion over the term
of the note. In addition, due to the variable nature of the conversion feature which had no explicit limit on the number of shares
that could be required to be issued, the company bifurcated the conversion feature and accounted for it as a derivative liability.
The Company recorded the derivative liability at its fair value of $100,004 based on the Black Scholes Merton pricing model and
a corresponding debt discount of $90,909 and derivative expense charge of $9,095. On September 29, 2016, Williams Ten, LLC agreed
to cancel this Promissory Note and accept a new Convertible Promissory Note in the amount of $121,000, which included all accrued
interest and penalties. This Convertible Promissory Note bears interest at the rate of 6.00% per annum and has a one year term.
The Holder is entitled to convert any or all of the principal amount of this Note and any accrued interest, late fee, and extension
fee, if applicable, into such number of shares of the Company’s shares of common stock, par value $.0001 (the “Common
Stock”) as is obtained by dividing the entire principal amount of this Note plus any accrued interest by $0.01 per share.
As of September 30, 2016, the Company fair valued the derivative resulting in a gain on the change in the fair value of $4,250.
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1)
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On September 29, 2016, the Company issued a Convertible Promissory Note in the principal amount
of $13,850 to Strips Nutrition, Inc. as consideration for $13,850 in cash advances to the Company. This Convertible Promissory
Note bears interest at the rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the
principal amount of this Note and any accrued interest, late fee, and extension fee, if applicable, into such number of shares
of the Company’s shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the
entire principal amount of this Note plus any accrued interest by $0.01 per share. The company bifurcated the conversion feature
and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair value of $10,960 based
on the Black Scholes Merton pricing model and a corresponding debt discount of $10,960 to be amortized utilizing the interest method
of accretion over the term of the note. As of September 30, 2016, $30 of the debt discount has been amortized to interest expense.
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2)
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On September 29, 2016, the Company issued a Convertible Promissory Note in the principal amount
of $13,768.89 to Mr. Fred Lee as consideration for $13,768.89 in travel expenses incurred in assessing distribution opportunities
in Asia for the Company. This Convertible Promissory Note bears interest at the rate of 6.00% per annum and has a one year term.
The Holder is entitled to convert any or all of the principal amount of this Note and any accrued interest, late fee, and extension
fee, if applicable, into such number of shares of the Company’s shares of common stock, par value $.0001 (the “Common
Stock”) as is obtained by dividing the entire principal amount of this Note plus any accrued interest by $0.01 per share.
The company bifurcated the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative
liability at its fair value of $10,896 based on the Black Scholes Merton pricing model and a corresponding debt discount of $10,896
to be amortized utilizing the interest method of accretion over the term of the note. As of September 30, 2016, $30 of the debt
discount has been amortized to interest expense.
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3)
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On September 29, 2016, the Company issued a Convertible Promissory Note in the principal amount
of $160,000 to Mr. Brent McMahon as consideration for $160,000 in cash advances to the Company. This Convertible Promissory Note
bears interest at the rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the principal
amount of this Note and any accrued interest, late fee, and extension fee, if applicable, into such number of shares of the Company’s
shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount
of this Note plus any accrued interest by $0.01 per share. The company bifurcated the conversion feature and accounted for it as
a derivative liability. The Company recorded the derivative liability at its fair value of $126,612 based on the Black Scholes
Merton pricing model and a corresponding debt discount of $126,612 to be amortized utilizing the interest method of accretion over
the term of the note. As of September 30, 2016, $347 of the debt discount has been amortized to interest expense.
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4)
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On September 29, 2016, the Company issued a Convertible Promissory Note in the principal amount
of $84,373.25 to Evolution Equities Corporation, a related company, as consideration for $84,373.25 in expenses paid on behalf
of the Company. This Convertible Promissory Note bears interest at the rate of 6.00% per annum and has a one year term. The Holder
is entitled to convert any or all of the principal amount of this Note and any accrued interest, late fee, and extension fee, if
applicable, into such number of shares of the Company’s shares of common stock, par value $.0001 (the “Common Stock”)
as is obtained by dividing the entire principal amount of this Note plus any accrued interest by $0.01 per share. The company bifurcated
the conversion feature and accounted for it as a derivative liability. The Company recorded the derivative liability at its fair
value of $66,766 based on the Black Scholes Merton pricing model and a corresponding debt discount of $66,766 to be amortized utilizing
the interest method of accretion over the term of the note. As of September 30, 2016, $183 of the debt discount has been amortized
to interest expense.
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5)
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On September 23, 2016, the Company issued two Convertible Promissory Notes in the principal amounts
of $10,000 and $25,000 to Enpos Sports, LLC as consideration for $35,000 in cash advances to the Company. These Convertible Promissory
Notes bear interest at the rate of 6.00% per annum and have a one year term. The Holder is entitled to convert any or all of the
principal amount of these Notes and any accrued interest, late fees, and extension fees, if applicable, into such number of shares
of the Company’s shares of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the
entire principal amount of the Notes plus any accrued interest at the lesser of (i) 70% of the lowest closing bid price over the
5 trading days prior to conversion or (ii) $0.10 per share. Due to the variable nature of the conversion feature which has no explicit
limit on the number of shares that could be required to be issued, the company bifurcated the conversion feature and accounted
for it as a derivative liability on both notes. The Company recorded the derivative liability at its fair value of $27,673 based
on the Black Scholes Merton pricing model and a corresponding debt discount of $27,673 to be amortized utilizing the interest method
of accretion over the term of the note. As of September 30, 2016, the Company fair valued the derivative resulting in a loss on
the change in the fair value of $23. In addition, $531 of the debt discount has been amortized to interest expense.
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A summary of outstanding convertible
notes as of September 30, 2016 is as follows:
Note Holder
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Issue
Date
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Maturity
Date
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Stated
Interest
Rate
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Principal
Balance
9/30/2016
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Williams Ten, LLC
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|
9/29/2016
|
|
9/29/2017
|
|
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6
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%
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$
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121,000
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Strips Nutrition, Inc.
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|
9/29/2016
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9/29/2017
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6
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%
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13,850
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Mr. Fred Lee
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9/29/2016
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|
9/29/2017
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|
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6
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%
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|
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13,769
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Mr. Brent McMahon
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9/29/2016
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9/29/2017
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|
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6
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%
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|
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160,000
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Evolution Equities Corporation
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9/29/2016
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9/29/2017
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|
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6
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%
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|
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84,373
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Enpos Sports, LLC
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9/23/2016
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9/23/2017
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6
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%
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35,000
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Total
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427,992
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Less debt discount
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(241,786
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)
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Total
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|
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|
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|
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$
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186,206
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A summary of the activity of the derivative liability for the notes
above is as follows:
Balance at March 31, 2016
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$
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100,000
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Increase to derivative due to new issuances
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242,907
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Derivative (gain) due to mark to market adjustment
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(4,227
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)
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Balance at September 30, 2016
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$
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338,680
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NOTE 7 – LOANS PAYABLE
On July 22, 2015, the Company obtained a loan from a third party
in the amount of $25,000. This loan was non-interest bearing, was unsecured and had no fixed terms of repayment. The loan was repaid
in its entirety on September 29, 2016.
During the fiscal year ended March 31, 2016, the Company obtained
a loan from a third party in the amount of $4,175. A further $9,990 was loaned to the Company in the six months ended September
30, 2016. This loan is non-interest bearing, is unsecured and has no fixed terms of repayment.
In the three month period ended March 31, 2016, the Company obtained
loans from a third party in the total amount of $11,350. In the three month period ended June 30, 2016, the Company received a
further $2,500 in loans from this same third party. These loans totaling $13,850 were non-interest bearing, unsecured and had no
fixed terms of repayment. On September 29, 2016 these loans were settled through the issuance of a Convertible Promissory Note
as described in item 6(2) above.
NOTE 8 – COMMON STOCK
The Company has 75,000,000 common shares authorized with a par value
of $0.001 per share.
During the period December 20, 2012 (inception) to March 31, 2013,
the Company sold a total of 3,000,000 shares of common stock for total cash proceeds of $3,000. In November and December 2013,
the Company sold a total of 1,235,000 shares of common stock for total cash proceeds of $24,700. During the period December 20,
2012 (inception) to March 31, 2014, the Company sold a total of 4,235,000 shares of common stock for total cash proceeds of $27,700.
On February 9, 2015, the Company affected a seven for one forward
split of its common stock. As a result of this forward split, the Company had 29,645,000 common shares issued and outstanding at
March 31, 2015.
During the twelve month period ended March 31, 2016, the Company
sold a total of 302,000 common shares for total cash consideration of $265,006. The Company had 29,947,000 common shares issued
and outstanding at March 31, 2016.
No further issuances were made in the six months ended September
30, 2016. The Company had 29,947,000 common shares issued and outstanding at September 30, 2016.
NOTE 9 – RELATED PARTY TRANSACTIONS
From inception through September 29, 2016, the Directors loaned
the Company $84,374 net of repayments to pay for incorporation costs, general and administrative expenses and professional fees,
the acquisition of sales and distribution licenses and advances to Cure Pharmaceutical. On September 29, 2016, this amount
was settled through the issuance of a convertible promissory note as described item 6(5) above.
On September 29, 2016, the Company entered into a consulting agreement
with the Company’s sole officer and director for the provision of management and financial services. This agreement calls
for a one time payment of $10,000 on signing of the agreement, and payments of $5,000 per month for six months, terminating on
March 30, 2017. In addition, an amount of $5,000 for services provided in September, 2016 is payable on either the termination
of the contract or completion of a minimum $500,000 financing. As of September 30, 2016, $10,000.00 had been paid and $5,000.00
was payable pursuant to this contract. In addition, if financing of greater than $200,000 is obtained during the term of this contract,
the consultant has agreed to exchange 21,000,000 shares registered in his name for 6,000,000 newly issued restricted shares.
NOTE 10 – SUBSEQUENT EVENTS
Subsequent to September 30, 2016,
the Company issued 2,010,000 common shares pursuant to the terms of the Promissory Notes detailed in Note 6 to these financial
statements.
Subsequent to September 30, 2016,
the Company issued a convertible promissory note for funds received in the amount of $8,594.48. This note bears interest at the
rate of 6.00% per annum and has a one year term. The Holder is entitled to convert any or all of the principal amount of this note
and any accrued interest, late fees, and extension fees, if applicable, into such number of shares of the Company’s shares
of common stock, par value $.0001 (the “Common Stock”) as is obtained by dividing the entire principal amount of the
Notes plus any accrued interest at the lesser of (i) 70% of the lowest closing bid price over the 5 trading days prior to conversion
or (ii) $0.10 per share.
On December 31, 2016, the Company
received a share subscription in the amount of $30,000.00 for the purchase of 3,000,000 shares at $0.01 per share.
In accordance with ASC 855-10, the
Company has analyzed its operations from October 1, 2016 to January 9, 2017 and has determined that it has no other material subsequent
events to disclose in these financial statements.
END OF NOTES TO FINANCIAL STATEMENTS