NOTES
TO THE UNAUDITED FINANCIAL STATEMENTS
NOTE
1 -ORGANIZATION AND BASIS OF PRESENTATION
Pacificorp
Holdings, Ltd. (the "Company") was incorporated in the State of Nevada on October 6, 2014. 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.
Restatement
of Previously Issued Condensed Financial Statements
In connection
with the review of the Form 10-Q
, management determined that previously issued unaudited
condensed financial statements issued for the three months and six months ended July 31, 2017 contained an error with respect to
the license fees paid to the Licensor by the Company. The Company evaluated the impact of this error under the SEC’s authoritative
guidance on materiality and determined that the impact of this error for the three and six months ended July 31, 2017 and concluded
that it was material and the financial statements for the three and six month period ended July 31, 2017 should be corrected and
restated. On December 18, 2017, after review by our independent registered public accounting firm, the Company’s Board of
Directors concluded that the Company should restate our unaudited condensed financial statements for the three and six months ended
July 31, 2017 to reflect the correction of the previously identified error in the unaudited financial statements for this period.
The Company
restated the unaudited condensed balance sheet as of July 31, 2017 and the unaudited condensed statements of operations and cash
flows for the three months ended July 31, 2017. There was an impact to our total assets and our liabilities in the amounts of
$79,975 and 19,975 respectively, as a result of these errors.
Additionally, (See”
Note 11”).
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 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, 2017.
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.
Cash
and Cash Equivalents
The
Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible
into cash to be cash equivalents. As of July 31, 2017 and January 31, 2017, there were no cash equivalents.
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Income
Taxes
The
Company utilizes FASB ACS 740, “
Income Taxes
,” which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this
method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities
and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The
accounting guidance for uncertainties in income tax prescribes a comprehensive model for the financial statement recognition,
measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The
Company recognizes a tax benefit from an uncertain tax position in the financial statements only when it is more likely than not
that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based
on the technical merits and a consideration of the relevant taxing authority’s widely understood administrative practices
and precedents.
Interest
and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance
with ASC Topic 740-10-50-19.
We
have implemented certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and
disclosure for uncertain tax positions, as defined. ASC 740 seeks to reduce the diversity in practice associated with certain
aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC
740 and have analyzed filing positions in United States jurisdictions where we are required to file income tax returns, as well
as all open tax years in these jurisdictions. We have identified the United States as our "major" tax jurisdiction. Generally,
we remain subject to United States examination of our income tax returns.
Fair
Value of Financial Instruments
The
Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “
Fair Value
Measurements and Disclosures
" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair
value and requires expanded disclosures regarding fair value measurements.
FASB
ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer
a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement
date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs,
where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure
fair value:
|
-
|
Level 1: Quoted prices in active markets for identical assets or liabilities
|
|
-
|
Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the related assets or liabilities.
|
|
-
|
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
|
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 July 31, 2017 and 2016, there were no potentially dilutive securities.
Recent
Accounting Pronouncements
In
May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”)
amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand
the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the
FASB deferred the effective date of the revenue recognition guidance to reporting periods beginning after December 15, 2017. Early
adoption is permitted for reporting periods beginning after December 15, 2016.
In
August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as
a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments of an
entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides
guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures
will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern.
ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016,
with early adoption permitted. This standard has no material effect on our financial statements
In
November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”. The new guidance
requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent
on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within
those annual periods. This standard has no material effect on our financial statements
In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition
requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from
a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is
effective for fiscal years beginning after December 15, 2018, with early adoption permitted.
In
March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and
deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax
benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy
election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods
beginning after December 15, 2016, with early adoption permitted this standard has no material effect on our financial statements.
In
October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which
requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the
transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption
permitted. The Company is in the process of evaluating the impact of this ASU on its CFS.
In
November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash
to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows
reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. ASU
2016-18 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company
is in the process of evaluating the impact of this ASU on its CFS.
In
January 2017, the FASB issued an ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments
in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether
transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects
many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim
and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Company
is in the process of evaluating the impact of this ASU on its CFS.
In
July 2017, FASB issued ASU 2017-11, Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives
and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features, II. Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling
Interests with a Scope Exception. Part I of this ASU changes the classification analysis of certain equity-linked financial instruments
(or embedded features) with down round features and clarifies existing disclosure requirements. Part II does not have an accounting
effect. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018
with early adoption permitted. Management is currently evaluating the potential impact of these changes on the CFS of the Company.
As
of December 27, 2017, there are no recently issued accounting standards not yet adopted that would have a material effect on the
Company’s financial statements to have a material impact on the Company’s CFS.
Recent
Accounting Pronouncements – Not Adopted
In
August 2014, the FASB issued the FASB Accounting Standards Update No. 2014-15 “Presentation of Financial Statements—Going
Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU
2014-15”).
In
connection with preparing financial statements for each annual and interim reporting period, an entity’s management should
evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s
ability to continue as a going concern within one year after the date that the
financial statements are issued
(or within
one year after the date that the
financial statements are available to be issued
when applicable). Management’s evaluation
should be based on relevant conditions and events that are known and reasonably knowable at the date that the
financial statements
are issued
(or at the date that the
financial statements are available to be issued
when applicable). Substantial doubt
about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate,
indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the
date that the financial statements are issued (or available to be issued). The term
probable
is used consistently with
its use in Topic 450, Contingencies.
When
management identifies conditions or events that raise substantial doubt about an entity’s ability to continue as a going
concern, management should consider whether its plans that are intended to mitigate those relevant conditions or events will alleviate
the substantial doubt. The mitigating effect of management’s plans should be considered only to the extent that (1) it is
probable that the plans will be effectively implemented and, if so, (2) it is probable that the plans will mitigate the conditions
or events that raise substantial doubt about the entity’s ability to continue as a going concern.
If
conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, but the substantial
doubt is alleviated as a result of consideration of management’s plans, the entity should disclose information that enables
users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the
footnotes):
|
a.
|
Principal
conditions or events that raised substantial doubt about the entity’s ability to continue as a going concern (before
consideration of management’s plans)
|
|
b.
|
Management’s
evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations
|
|
c.
|
Management’s
plans that alleviated substantial doubt about the entity’s ability to continue as a going concern.
|
If
conditions or events raise substantial doubt about an entity’s ability to continue as a going concern, and substantial doubt
is not alleviated after consideration of management’s plans, an entity should include a statement in the footnotes indicating
that there is
substantial doubt about the entity’s ability to continue as a going concern
within one year after the
date that the financial statements are issued (or available to be issued). Additionally, the entity should disclose information
that enables users of the financial statements to understand all of the following:
|
a.
|
Principal
conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern
|
|
b.
|
Management’s
evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations
|
|
c.
|
Management’s
plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity’s ability
to continue as a going concern.
|
The
amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim
periods thereafter. Early application is permitted.
In
February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability
Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date.
The
amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint
and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the
reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure
those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors
and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires
an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment
in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December
15, 2013. The adoption of ASU No. 2013-04 did not have a material impact on our financial statements.
In
April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting.
The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide
principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures.
The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting
periods beginning after December 15, 2013 and interim reporting periods therein. The adoption of ASU No. 2013-07 did not have
a material impact on our financial statements.
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- DEPOSIT ON LICENSE IMPAIRMENT
As
of July 31, 2017, the Company has paid a total of $79,975 as a deposit on their License with Affordable Green LLC. During the period ended July 31, 2017, the Company recorded impairment charges related to the deposit paid
to Affordable Green LLC totaling $79,975 as the Company failed to make the requisite payments under the terms of the agreement.
Additionally, there is not an amended or new agreement currently in place. The Company is continuing to make payments on the license
and is recognizing costs related to these activities as expenses during the period in which they are incurred.
All
funds used for the deposit on license were received by way of short term loans that bear a 5% annual interest rate.
NOTE
5 – NOTE PAYABLE FROM RELATED PARTY
As
of July 31, 2017 and January 31, 2017 and for the same periods in the previous year the Company received advances totaling $47,134
and $28,062 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. The Company has recorded
imputed interest of $1,309 and accrued interest of $325 respectively for the six month period ending July 31, 2017.
NOTE
6 – PREPAID EXPENSES
As
of July 31, 2017, the Company has prepaid expenses of $4,000 for legal fees.
NOTE
7 – RELATED PARTY CONTRIBUTIONS
During
the three month period ending July 31, 2017 and 2016 the Company received contributions totaling $0 and $5,700 from a related
party, these contributions were to pay for Audit fees and interim review fees. These contributions are not to be repaid and are
recorded under additional paid in capital.
NOTE
8 – NOTE PAYABLE
As
of July 31, 2017, the Company received advances totaling $94,975 from an unrelated party, the advances are unsecured and
bare an interest rate of 5% per annum, and are due upon demand giving 30 days written notice to the borrower. The Company
has recorded accrued interest of $1,164 for the six month period ending July 31, 2017.
NOTE
9 – FORWARD SPLIT
On
June 26, 2017, FINRA approved a 6 to 1 Forward split, all numbers reflected in the Financial Statements account for the forward
split and have been retroactively adjusted.
NOTE
10—CHANGE OF INDEPENDENT PUBLIC ACCOUNTING FIRM
On
December 14, 2017, Cannabis Leaf, Inc. (the “Company”) dismissed TAAD, LLP as its independent registered public accounting
firm.
TAAD
LLP’s report on the Company’s financial statements for the fiscal years ended January 31, 2017 and January 31, 2016
contained an opinion on the uncertainty of the Company to continue as a going concern because of the Company’s need to raise
additional working capital to service its debt and for its planned activity.
Other
than as disclosed in Item 4.01(a)(ii) TAAD, LLP’s report on the financial statements for either of the past two fiscal years
did not contain an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope, or
accounting principles, disclaimer of opinion, modification, or qualification in accordance with 304(a)(1)(ii) of Regulation S-K.
The
Company’s Board of Directors approved the decision to change its independent registered public accounting firm.
During
the fiscal years ended January 31, 2017 and January 31, 2016, and the subsequent interim periods and further through the date
of dismissal of, there have been no disagreements with TAAD, LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement if not resolved to the satisfaction of, would have caused
them to make reference to the subject matter of the disagreement(s) in connection with their report on the Company’s financial
statements for such years; and there were no reportable events, as listed in Item 304(a)(1)(v) of Regulation S-K.
During
the fiscal years ended January 31, 2017 and January 31, 2016, and further through the date of dismissal of TAAD, LLP , TAAD, LLP
did not advise the Company on any matter set forth in Item 304(a)(1)(v)(A) through (D) of Regulation S-K.
The
Company Dismissed TAAD LLP as a decision by Management
Engagement
of New Independent Registered Public Accounting Firm
On
December 15, 2017 the Company engaged (“BF Borgers CPA, PC) as our new independent registered public accounting firm to
audit the Company’s financial statements for the fiscal year ending January 31, 2018. During the past two fiscal years and
the subsequent interim periods preceding the engagement, the Company did not consult with BF Borgers CPA, PC regarding (i)
the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion
that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company
by BF Borgers CPA, PC concluding there was an important factor to be considered by the Company in reaching a decision as to an
accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term
is defined in Item 304 (a)(1)(iv) of Regulation S-K or a reportable event, as that term is described in Item 304 (a)(1)(v) of
Regulation S-K.
NOTE
11 – RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED CONDENSED FINANCIAL STATEMENTS
In
connection with the review of the Form 10-Q
, management determined that
previously issued unaudited condensed financial statements issued for the three months ended July 31, 2017 contained an error
with respect to the license fees paid to the Licensor. The Company
evaluated the impact of this error under the SEC’s authoritative guidance on materiality and determined that the impact
of this error for the three and six months ended July 31, 2017 condensed financial statements were material. On December 18,
2017, after review by our independent registered public accounting firm and legal counsel, the Company’s Board of
Directors concluded that the Company should restate our unaudited condensed financial statements for the three months ended
July 31, 2017 to reflect the correction of the previously identified error in the unaudited financial
statements.
With
respect to unaudited condensed financial statements issued for the three and six months ended July 31, 2017 contained an error
that in so far as the Company inadvertently omitted payments made to the Licensor in the amount of $19, 975. The Company has applied
the omitted payments and restated the balance sheet as of July 31, 2017 and the statements of operations and cash flows for the
three and six months ended July 31, 2017 to reflect the correcting book entry
CANNABIS LEAF INC.
|
BALANCE SHEETS
|
AS OF JULY 31, 2017
|
RESTATED
|
|
|
As originally
|
|
Amount of
|
|
As Restated
|
|
|
Presented
|
|
Restatement
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,722
|
|
|
$
|
—
|
|
|
$
|
4,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
4,000
|
|
|
|
—
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit on License
|
|
|
60,000
|
|
|
|
(79,975
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
68,722
|
|
|
$
|
(79,975
|
)
|
|
$
|
8,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
|
2,402
|
|
|
|
—
|
|
|
|
2,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Interest
|
|
|
—
|
|
|
|
1,489
|
|
|
|
1,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Payable
|
|
|
75,712
|
|
|
|
19,263
|
|
|
|
94,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note Payable - Related Party
|
|
|
47,459
|
|
|
|
(325
|
)
|
|
|
47,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES
|
|
|
125,573
|
|
|
|
20,427
|
|
|
|
146,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
125,573
|
|
|
|
(20,427
|
)
|
|
|
146,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $.001 par value, 600,000,000 shares authorized 50,340,000 shares issued and outstanding July 31, 2017.
|
|
|
50,340
|
|
|
|
—
|
|
|
|
50,340
|
|
Additional Paid in Capital
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Deficit accumulated
|
|
|
(107,191
|
)
|
|
|
(80,427
|
)
|
|
|
(187,618
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS' DEFICIT
|
|
|
(56,851
|
)
|
|
|
(80,427
|
)
|
|
|
(137,278
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
68,722
|
|
|
$
|
(60,000
|
)
|
|
$
|
8,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements
|
CANNABIS LEAF INC.
|
STATEMENTS OF OPERATIONS
|
THE THREE MONTHS ENDED JULY 31, 2017
|
|
|
As originally
|
|
Amount of
|
|
As Restated
|
|
|
Presented
|
|
Restatement
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
18,853
|
|
|
|
—
|
|
|
|
18,853
|
|
Impairment of Deposit on License
|
|
|
—
|
|
|
|
79,975
|
|
|
|
79,975
|
|
Total operating expenses
|
|
|
18,853
|
|
|
|
79,975
|
|
|
|
98,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
1,608
|
|
|
|
452
|
|
|
|
2,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(20,461
|
)
|
|
$
|
(80,427
|
)
|
|
$
|
(100,888
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - Basic and Diluted
|
|
$
|
0.00
|
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, Basic and diluted
|
|
|
50,340,000
|
|
|
|
—
|
|
|
|
50,340,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
CANNABIS LEAF INC.
|
STATEMENTS OF OPERATIONS
|
SIX MONTHS ENDED JULY 31, 2017
|
RESTATED
|
|
|
As originally
|
|
Amount of
|
|
As Restated
|
|
|
Presented
|
|
Restatement
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
23,168
|
|
|
|
—
|
|
|
|
23,168
|
|
Impairment of Deposit on License
|
|
|
—
|
|
|
|
79,975
|
|
|
|
79,975
|
|
Total operating expenses
|
|
|
23,168
|
|
|
|
79,975
|
|
|
|
103,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
2,346
|
|
|
|
452
|
|
|
|
2,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(25,514
|
)
|
|
$
|
(80427
|
)
|
|
$
|
(105,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - Basic and Diluted
|
|
$
|
0.00
|
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Weighted average shares outstanding, Basic and diluted
|
|
|
50,340,000
|
|
|
|
—
|
|
|
|
50,340,000
|
|
See accompanying notes to the financial statements
CANNABIS
LEAF, INC.
STATEMENTS
OF CASH FLOWS
SIX
MONTHS ENDED JULY 31, 2017
RESTATED
|
|
As Originally Presented
|
|
Amount of Restatement
|
|
As Restated
|
|
|
|
|
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(25,514
|
)
|
|
$
|
(80,427
|
)
|
|
$
|
(105,941
|
)
|
Imputed Interest Expense
|
|
|
1,309
|
|
|
|
—
|
|
|
|
1,309
|
|
Accrued Interest
|
|
|
1,037
|
|
|
|
452
|
|
|
|
1,489
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of deposit on license
|
|
|
0
|
|
|
|
79,975
|
|
|
|
79,975
|
|
Prepaid Expenses
|
|
|
(4,000
|
)
|
|
|
—
|
|
|
|
(4,000
|
)
|
Accounts Payable
|
|
|
(2,199
|
)
|
|
|
—
|
|
|
|
(2,199
|
)
|
Net Cash (Used) in Operating activities
|
|
$
|
(29,367
|
)
|
|
$
|
—
|
|
|
$
|
(29,367
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit on License
|
|
|
(60,000
|
)
|
|
|
(19,975
|
)
|
|
|
(79,975
|
)
|
Net cash (used) in Investing activities
|
|
|
(60,000
|
)
|
|
|
(19,975
|
)
|
|
|
(79,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from note payable - related party
|
|
|
18,600
|
|
|
|
—
|
|
|
|
18,600
|
|
Proceeds from note payable
|
|
|
75,000
|
|
|
|
19,975
|
|
|
|
94,975
|
|
Net cash provided by financing activities
|
|
|
93,600
|
|
|
|
19,975
|
|
|
|
113,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash during the period
|
|
|
4,233
|
|
|
|
—
|
|
|
|
4,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
489
|
|
|
|
—
|
|
|
|
489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
4,722
|
|
|
$
|
—
|
|
|
$
|
4,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
See
accompanying notes to the financial statements
NOTE 12—SUBSEQUENT EVENTS
On August 1, 2017,
Jason Sakowski the registrants current President and CEO and a director entered in to purchase agreements with the former directors
and officers of the Registrant to purchase an aggregate total of twenty seven million (27,000,000) Restricted Common Shares, resulting
in a change in control of the Registrant. The purchase price for the shares is $10,000 and $5,000 respectively and is due and payable
on or before March 31, 2018.
The Share Purchase Agreements contains other
terms and conditions. The foregoing summary description of the terms of the Share Purchase Agreements may not contain all information
that is of interest to the reader. For further information regarding the terms and conditions of the Share purchase Agreements,
may viewed in their entirety which were filed as Exhibit 10.1and 10.2 respectively on Form 8-K.
As of July 31, 2017, the license agreement with Affordable Green LLC is in default. However, the Company and
Affordable Green are working together to remedy the default and to finalize a new agreement or another amendment to the current
agreement. To date the Company has paid a total of $114,975 as a deposit on their License with Affordable Green LLC and subsequently
have paid an additional $27,480 for an aggregate total of $142,455 as of January 31, 2018. All funds received were by way of short
term loans that bear a 5% annual interest rate.