UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the Fiscal Year Ended March
31, 2020 |
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
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For the Transition Period from
________ to _________ |
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MOUNTAIN HIGH ACQUISITIONS CORP.
(Exact name of registrant as specified in its charter)
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| Colorado |
333-175825 |
27-3515499 |
| (State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
| of Incorporation) |
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Identification Number) |
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6501 E Greenway Parkway, #103-412
Scottsdale AZ 85254
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(Address of principal executive offices)
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| (760) 413-3927 |
| (Registrant’s Telephone Number) |
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
(Title of each Class)
Common Stock $0.0001 par value
Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes ☐ No ☑
Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13
or Section 15(d) of the Act. Yes ☐ No ☑
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 ☑
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). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☐ Accelerated Filer
☐
Non-Accelerated Filer
☐ Smaller Reporting
Company☑
Emerging Growth Company
☑
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ☐ No ☑
The aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant is $1,272,993 based
upon the price $0.008 at which the common stock was last sold as of
the last business day of the most recently completed fourth fiscal
quarter, multiplied by the approximate number of shares of common
stock held by persons other than executive officers, directors and
five percent stockholders of the registrant without conceding that
any such person is an “affiliate” of the registrant for purposes of
the federal securities laws. Our common stock is traded in the
over-the-counter market and quoted on the Over-The-Counter Bulletin
Board under the symbol “MYHI.”
As of June 29, 2020, there were 450,510,432 shares of the
registrant’s $0.0001 par value common stock issued and
outstanding.
Documents incorporated by reference: None
Table of Contents
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PART I |
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Item 1 |
Business |
4 |
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Item 1A |
Risk Factors |
5 |
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Item 1B |
Unresolved Staff Comments |
5 |
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Item 2 |
Properties |
5 |
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Item 3 |
Legal Proceedings |
5 |
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Item 4 |
Mine Safety Disclosures |
5 |
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PART II |
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Item 5 |
Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities |
7 |
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Item 6 |
Selected Financial Data |
7 |
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Item 7 |
Management's Discussion and Analysis of Financial Condition and
Results of Operations |
13 |
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Item 7A |
Quantitative and Qualitative Disclosures about Market
Risk |
13 |
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Item 8 |
Financial Statements and Supplementary Data |
13 |
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Item 9 |
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure |
31 |
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Item 9A |
Controls and Procedures |
31 |
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Item 9B |
Other Information |
31 |
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PART III |
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Item 10 |
Directors and Executive Officers and Corporate
Governance |
32 |
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Item 11 |
Executive Compensation |
35 |
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Item 12 |
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters |
36 |
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Item 13 |
Certain Relationships, Related Transactions and Director
Independence |
37 |
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Item 14 |
Principal Accounting Fees and Services |
37 |
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PART IV |
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Item 15 |
Exhibits |
39 |
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”) and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
These forward-looking statements are not historical facts but
rather are based on current expectations, estimates and
projections. We may use words such as “anticipate,” “expect,”
“intend,” “plan,” “believe,” “foresee,” “estimate” and variations
of these words and similar expressions to identify forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond our control, are difficult
to predict and could cause actual results to differ materially from
those expressed or forecasted. These risks and uncertainties
include the following:
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The availability and adequacy of our cash flow
to meet our requirements; |
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Economic, competitive, demographic, business
and other conditions in our local and regional
markets; |
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Changes or developments in laws, regulations
or taxes in our industry; |
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Actions taken or omitted to be taken by third
parties including our competitors, as well as legislative,
regulatory, judicial and other governmental
authorities; |
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Competition in our industry; |
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The loss of or failure to obtain any license
or permit necessary or desirable in the operation of our
business; |
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Changes in our business strategy, capital
improvements or development plans; |
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The availability of additional capital to
support capital improvements and development; and |
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Other risks identified in this report and in
our other filings with the Securities and Exchange Commission or
the SEC. |
This report should be read completely and with the understanding
that actual future results may be materially different from what we
expect. The forward looking statements included in this report are
made as of the date of this report and should be evaluated with
consideration of any changes occurring after the date of this
Report. We will not update forward-looking statements even though
our situation may change in the future and we assume no obligation
to update any forward-looking statements, whether as a result of
new information, future events or otherwise.
Use of Term
Except as otherwise indicated by the context hereof, references in
this report to “Company,” “MYHI,” “we,” “us” and “our” are
references to Mountain High Acquisitions Corp. All references
to “USD” or United States Dollars refer to the legal currency of
the United States of America.
PART
I
History
Prior to January 1, 2020, the Company was in the business of
providing infrastructure assets to licensed producers, processors
and retailers engaged in the cannabis industry. Due to the
restrictive regulatory and operational challenges the Company faced
in that business it was decided to pivot away from cannabis and
instead focus on opportunities in the hemp industry. The Company
plans to acquire assets such as equipment, real estate and
operating entities engaged in hemp related activities and to
repurpose its existing assets for use in hemp operations.
In May 2017, the Company formed MYHI-AZ to acquire equipment to
service the growing cannabis industry. In September 2017, the
Company entered into a consulting agreement with D9 Manufacturing,
"D9," to provide D9 customers with infrastructure equipment. Also,
in September 2017, MYHI-AZ purchased 2 intermodal grow containers
from D9 to be used in a grow operation in Arizona. MYHI-AZ leased
the grow containers to D9 for 3 years with the right to extend the
lease for an additional 2 years. The lease began August 15, 2017.
The lease provided for a monthly lease rate of $20,000 a month and
required advance payment for operating supplies and expenses. The
monthly lease rate was recorded as Revenue and an Account
Receivable while the advances were recorded as Other Receivable.
The monthly lease payments were to commence on harvesting of the
first crop. The containers were planted in October 2017 with an
expected harvest in January 2018. The initial grow operation
encountered a power failure which ultimately resulted in the loss
of the crop. The loss of this crop resulted in a deferral of
collection of the lease rental payments and the operating cost
payments. The power failure highlighted electrical issues with the
facility where the containers were being used and improvements to
the containers that could be made. The container improvements and
facility power requirement issue took months to resolve.
Effective June 5, 2018, MYHI-AZ and D9 agreed to convert the
current amount due under the operating lease, representing $150,000
in lease payments and $22,294 in operating expenses, into a
$135,000 note payable, (the "Note"), with a term of 3 years and
interest rate of 7% per annum, and to capitalize $35,000 for
improvements to the containers. The first payment on the Note was
due October 3, 2018. The Parties also agreed to terminate the
current lease effective March 31, 2018 and replace it with a new
lease beginning July 1, 2018 with lease payments of $5,000 per
month beginning November 1, 2018. This replacement lease was
terminated on March 31, 2019 as D9 was unable to successfully
complete a harvest. due to the ongoing power problems and a shift
in the focus of their company to extraction only. The Note however
remains in full force and effect. During the three month period
ended June 30, 2019, the Company decided to sell the containers to
generate capital to finance its own change in focus to extraction.
On August 20, 2019, the Company completed the sale of the
containers for proceeds of $100,000 (see note 5 to the
financials).
On August 18, 2018, the Company
entered into an Exchange Agreement (the “Exchange Agreement”) with
Alchemy Capital LLC (“Alchemy”) pursuant to which Alchemy, the sole
shareholder of One Lab Co (“Labco”), agreed to exchange 100% of the
capital stock of Labco for 88,000,000 restricted shares of the
Company (the “MYHI Shares”). The Exchange Agreement called for the
issuance of 20,000,000 MYHI Shares at Closing and 68,000,000 MYHI
Shares after certain equipment under order by Labco at the time
(the “Equipment”) was delivered pursuant to a Lease Agreement (the
“Lease”) between Labco and Workforce Labor Solutions, LLC (“the
Lessee”) . The Equipment consists of a state-of-the-art intermodal
extraction laboratory, engineered and designed specifically for
processing cannabis. The Lease calls for monthly payments of
$25,000 and has a five year term commencing November 1, 2018 with
an option to renew for a second five year term. As of March 31,
2020, the Lessee was in arrears on the lease. The Company has been
in constant discussion with the Lessee regarding this delinquency
but has been unable to come to a resolution of the matter. The
Company intends to terminate the lease agreement immediately and to
relocate the equipment at the earliest
opportunity.
In conjunction with the
acquisition of One Lab Co and its tangible assets including the
Equipment and the Lease, the Company also acquired intangible
assets such as industry relationships, access to capital resources
and acquisition opportunities. These intangible assets were
classified as Goodwill. MYHI issued the 88,000,000 shares of
restricted common stock in accordance with the terms of the
Exchange Agreement and recorded the acquisition of the Equipment at
a cost value of $159,666 and Goodwill of $4,605,134. As of March
31, 2019, the intangible asset was fully impaired.
Property Acquisitions
On May 8,
2020, The Company and Trilogy Capital, LLC entered into an Exchange
Agreement pursuant to which the Company agreed to purchase from
Trilogy all of the capital stock of GPS Associates, Inc., a
Delaware corporation ("GPS") in exchange for 215,250,000 restricted
shares of the Company (the “MYHI Shares"). Dr. Judy Pham is the
sole member and manager of Trilogy. Dr Pham is also the sole member
and manager of Alchemy Capital LLC ("Alchemy") which owns
53,727,273 shares of the Company's Common Stock. The audited
financial statements of GPS consisting of balance sheets as of
December 31, 2019 and 2018 and for the applicable interim periods
and the related statements of operations, stockholders equity and
cash flows for the years and interim periods then ended together
with proforma financial statements consisting of proforma unaudited
combined balance sheets as of December 31, 2019 and interim period
and unaudited proforma combined statement of operations for the
year ended December 31, 2019 and interim period will be filed
pursuant to the rules according to the Current Report on the from
8-K announcing this transaction.
As of the date of the Exchange Agreement, May 8, 2020, based on the
closing price, the 215,250,000 shares issued were valued at
$1,650,000.
On May 13, 2020, the Exchange was consummated.
Intellectual Property
The Company does not own any intellectual property and has yet to
incur any expenses for research and development other than as
disclosed herein.
Employees
As of the date of this Report, the Company has no full-time
employees or part-time employees. Our officers and directors have
consulting agreements with the Company to serve in these
capacities. We intend to increase the number of our employees and
consultants to meet our needs as the Company grows.
WHERE YOU CAN GET ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy our reports
or other filings made with the SEC at the SEC’s Public Reference
Room, located at 100 F Street, N.W., Washington, DC 20549. You can
obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. You can also access these
reports and other filings electronically on the SEC’s web site,
www.sec.gov.
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
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ITEM 1B. |
UNRESOLVED STAFF
COMMENTS |
None.
Our principal executive office is located at 6501 E Greenway
Parkway, Suite 103-412, Scottsdale, AZ 85254. Currently, this space
is sufficient to meet our needs. If we require additional space, we
do not foresee any significant difficulties in obtaining additional
space.
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ITEM 3. |
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 our director, officer or any affiliates, or any registered
or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.
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ITEM 4. |
MINE SAFETY DISCLOSURES |
Not applicable.
PART
II
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ITEM
5. |
Market for
the Company’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities |
Common Stock
Our Common Stock is currently quoted on the OTCQB, under the
trading symbol "MYHI". Because we are quoted on the OTCQB, our
securities may be less liquid, receive less coverage by security
analysts and news media, and generate lower prices than might
otherwise be obtained if they were listed on a national securities
exchange.
The following table sets forth the high and low bid prices for our
Common Stock per quarter for the past two years as reported by the
OTC Markets based on our fiscal year end March 31. These prices
represent quotations between dealers without adjustment for retail
mark-up, markdown or commission and may not represent actual
transactions.
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High |
Low |
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Year Ended March 31,
2020 |
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Quarter Ended March 31,
2020 |
0.0340 |
0.0055 |
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Quarter Ended December 31,
2019 |
0.0122 |
0.0060 |
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Quarter Ended September 30,
2019 |
0.0169 |
0.0099 |
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Quarter Ended June 30,
2019 |
0.0303 |
0.0120 |
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Year Ended March 31,
2019 |
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Quarter Ended March 31,
2019 |
0.0550 |
0.0280 |
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Quarter Ended December 31,
2018 |
0.0850 |
0.0380 |
|
|
Quarter Ended September 30,
2018 |
0.1050 |
0.0500 |
|
|
Quarter Ended June 30,
2018 |
0.1530 |
0.0520 |
Record Holders
As of March 31, 2020, an aggregate of 220,685,606 shares of our
Common Stock were issued and outstanding and were owned by
approximately 86 holders of record, based on information provided
by our transfer agent.
Recent Sales of Unregistered Securities
On April 23, 2020, the Company entered into a Securities Purchase
Agreement with Trilogy Capital LLC (“Trilogy”) pursuant to which
the Company agreed to issue 11,750,000 of its restricted common
shares (the “MYHI Shares”) to Trilogy and Trilogy agreed to
purchase the MYHI Shares for $94,000. The proceeds from the sale of
the MYHI Shares were used to pay the outstanding obligations of the
Company under a Convertible Promissory Note dated April 24, 2019
issued to St. George Investments, LLC.
On May 8, 2020, The Company and Trilogy entered into an Exchange
Agreement pursuant to which the Company agreed to purchase from
Trilogy all of the capital stock of GPS Associates, Inc., a
Delaware corporation ("GPS") in exchange for 215,250,000 restricted
shares of the Company (the “MYHI Shares"). Dr. Judy Pham is the
sole member and manager of Trilogy. Dr Pham is also the sole member
and manager of Alchemy Capital LLC ("Alchemy") which owns 53,727,
273 shares of the Company's Common Stock. The audited financial
statements of GPS consisting of balance sheets as of December 31,
2019 and 2018 and for the applicable interim periods and the
related statements of operations, stockholders equity and cash
flows for the years and interim periods then ended together with
proforma financial statements consisting of proforma unaudited
combined balance sheets as of December 31, 2019 and interim period
and unaudited proforma combined statement of operations for the
year ended December 31, 2019 and interim period will be filed
pursuant to the rules according to the Current Report on the from
8-K announcing this transaction.
Re-Purchase of Equity Securities
None.
Dividends
We have not paid any cash dividends on our common stock since
inception and presently anticipate that all earnings, if any, will
be retained for development of our business and that no dividends
on our common stock will be declared in the foreseeable future. Any
future dividends will be subject to the discretion of our Board of
Directors and will depend upon, among other things, future
earnings, operating and financial condition, capital requirements,
general business conditions and other pertinent facts. Therefore,
there can be no assurance that any dividends on our common stock
will be paid in the future.
Securities Authorized for Issuance Under Equity Compensation
Plans
The Company has not authorized any securities for issuance under an
Equity Compensation Plan.
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ITEM 6. |
SELECTED FINANCIAL
DATA |
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
|
ITEM 7. |
Management's Discussion and Analysis
oF FINANCIAL CONDITION AND rESULTS of OperationS |
Important Information
Concerning Forward-Looking Statements
Certain statements in this Management’s Discussion and Analysis
section or MD&A, other than purely historical information,
including estimates, projections, statements relating to our
business plans, objectives and expected operating results, and the
assumptions upon which those statements are based, are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, or
the Exchange Act. These forward-looking statements generally are
identified by the words “may,” “will,” “could,” “would,” “should,”
“expect,” “intend,” “plan,” “anticipate,” “believe,”
“approximately,” “estimate,” “predict,” “project,” “potential,”
“continue,” “ongoing,” or the negative of these terms or other
comparable terminology, although the absence of these words does
not necessarily mean that a statement is not forward-looking.
Historical results may not indicate future performance. Our
forward-looking statements reflect our current views about future
events, are based on assumptions and are subject to known and
unknown risks and uncertainties that could cause actual results to
differ materially from those contemplated by these statements.
Factors that may cause differences between actual results and those
contemplated by forward-looking statements include, but are not
limited to, the risk factors described in this report. Except to
the extent required by law, we undertake no obligation to update or
revise any forward-looking statements, whether because of new
information, future events, a change in events, conditions,
circumstances or assumptions underlying such statements, or
otherwise.
Overview and
History
Mountain High Acquisitions Corp. (“Mountain High,” “we,” “us,” or
the “Company”) was incorporated in the State of Colorado on
September 22, 2010, under the name Wireless Attachments, Inc.
On March 11, 2014, the Company’s name changed from Wireless
Attachments, Inc. to Mountain High Acquisitions Corp. Additionally,
the Company’s ticker symbol, as of the open of business on March
12, 2014, changed from “WRSS” to “MYHI.”
Prior to January 1, 2020, the Company was in the business of
providing infrastructure assets to licensed producers, processors
and retailers engaged in the cannabis industry. Due to the
restrictive regulatory and operational challenges the Company faced
in that business it was decided to pivot away from cannabis and
instead focus on opportunities in the hemp industry.
The Company plans to acquire assets such as equipment, real estate
and operating entities engaged in hemp related activities and to
repurpose its existing assets for use in hemp operations. As
discussed below, the Company has acquired a company (GPS) engaged
in the formulation, manufacturing, branding, fulfillment and
distribution of hemp-derived CBD products at its cGMP,
FDA-registered facility in Santa Ana, California. GPS's continually
expanding product offering is sold directly to consumers online as
well as through wholesale partners (both online and brick and
mortar stores) under its retail brand name, Zen Drops. The product
offering includes tinctures, salves, gummies, transdermal patches
and oral thin films.
In May 2017, the Company formed MYHI-AZ to acquire equipment to
service the growing cannabis industry in Arizona. In September
2017, the Company entered into a consulting agreement with D9
Manufacturing, "D9," to provide D9 customers with infrastructure
equipment. Also, in September 2017, MYHI-AZ purchased 2 intermodal
grow containers (the “Containers”) from D9 to be used in a grow
operation in Arizona. MYHI-AZ leased the Containers to D9 for 3
years with the right to extend the lease for an additional 2 years.
The lease began August 15, 2017. The lease provided for a monthly
lease rate of $20,000 a month and required advance refundable
payments by MYHI-AZ for operating supplies and expenses. The
monthly lease payments were to commence on harvesting of the first
crop. The containers were planted in October 2017 with an expected
harvest in January 2018. The initial grow operation encountered a
power failure which ultimately resulted in the loss of the crop.
The loss of this crop resulted in a deferral of collection of the
lease rental and operating cost payments. The power failure
highlighted electrical issues with the facility where the
containers were being used and improvements to the containers that
could be made.
Effective June 5, 2018, MYHI-AZ and D9 agreed to convert the
current amount due under the operating lease, representing $150,000
in lease payments and $22,294 in operating expenses, into a
$135,000 note payable, (the "Note"), with a term of 3 years and
interest rate of 7% per annum, and to capitalize $35,000 for
improvements to the containers. The first payment on the Note was
due October 3, 2018. The Parties also agreed to terminate the
current lease effective March 31, 2018 and replace it with a new
lease beginning July 1, 2018 with lease payments of $5,000 per
month beginning November 1, 2018. This replacement lease was
terminated on March 31, 2019 as D9 was unable to successfully
complete a harvest. due to the ongoing power problems and a shift
in the focus of their company to extraction only. The Note however
remains in full force and effect. During the period ended June 30,
2019, the Company decided to sell the containers to generate
capital to finance its own change in focus to extraction. On August
20, 2019, the Company completed the sale of the containers for
proceeds of $100,000 (see note 5 to the financials).
On August 18, 2018, the Company
entered into an Exchange Agreement (the “Exchange Agreement”) with
Alchemy Capital LLC (“Alchemy”) pursuant to which Alchemy, the sole
shareholder of One Lab Co (“Labco”), agreed to exchange 100% of the
capital stock of Labco for 88,000,000 restricted shares of the
Company (the “MYHI Shares”). The Exchange Agreement called for the
issuance of 20,000,000 MYHI Shares at Closing and 68,000,000 MYHI
Shares after certain equipment under order by Labco at the time
(the “Equipment”) was delivered pursuant to a Lease Agreement (the
“Lease”) between Labco and Workforce Labor Solutions, LLC (“the
Lessee”) . The Equipment consists of a state-of-the-art intermodal
extraction laboratory, engineered and designed specifically for
processing cannabis. The Lease calls for monthly payments of
$25,000 and has a five year term commencing November 1, 2018 with
an option to renew for a second five year term. As of March 31,
2020, the Lessee was in arrears on the lease. The Company has been
in constant discussion with the Lessee regarding this delinquency
but has been unable to come to a resolution of the matter. The
Company intends to terminate the lease agreement immediately and to
relocate the equipment at the earliest
opportunity .
In conjunction with the
acquisition of One Lab Co and its tangible assets including the
Equipment and the Lease, the Company also acquired intangible
assets such as industry relationships, access to capital resources
and acquisition opportunities. These intangible assets were
classified as Goodwill. MYHI issued the 88,000,000 shares of
restricted common stock in accordance with the terms of the
Exchange Agreement and recorded the acquisition of the Equipment at
a cost value of $159,666 and Goodwill of $4,605,134. As of March
31, 2019, the intangible asset was fully impaired.
On May 8, 2020, Mountain High Acquisitions Corp, (“MYHI”) and
Trilogy Capital LLC ("Trilogy") entered into an Exchange Agreement
(the “Exchange Agreement”) pursuant to which MYHI agreed to
purchase from Trilogy all of the capital stock of GPS Associates,
Inc., a Delaware corporation ("GPS") in exchange (the "Exchange")
for 215,250,000 restricted shares of MYHI (the “MYHI Shares"). Dr.
Judy Pham is the sole member and manager of Trilogy. Dr Pham is
also the sole member and manager of Alchemy Capital, LLC
("Alchemy") which owns
53,727,273 shares of the MYHI's Common Stock.
Recent
Developments
As discussed in our subsequent event footnotes, the company has
acquired GPS Associates, Inc. GPS is a California based company
engaged in the formulation, manufacturing, branding, fulfillment
and distribution of hemp-derived CBD products at its cGMP,
FDA-registered facility in Santa Ana, California. GPS's team of
professionals includes physiologists, chemists, herbalists and
botanists committed to combining high-quality organic CBD with
synergistic organic, raw herbs to produce pure, premium consumer
products. All products manufactured by GPS are tested at
independent, third party laboratories to prove potency and
purity.
RESULTS OF
OPERATIONS
The following is a comparison of the Results of Operations for our
fiscal years ended March 31, 2020 and 2019.
Working Capital
The decrease in the working capital deficit can be attributed to
the Company settling $151,445 of accrued liabilities in the current
year.
| |
|
March 31, 2020 |
|
March 31, 2019 |
|
Current Assets |
|
$ |
65,227 |
|
|
$ |
44,153 |
|
|
Current Liabilities |
|
|
209,089 |
|
|
|
271,542 |
|
|
Working Capital (Deficit) |
|
$ |
(143,862 |
) |
|
$ |
(227,389 |
) |
Operating Revenues
During the year ended March 31, 2020
the Company had revenue of $0 compared to $141,120 for the year
ended March 31, 2019. The revenue for the year ended March 31, 2019
was for the lease on the 2 grow containers and the extraction
container .
As of June 30, 2019, the parties to the D9 lease agreement agreed
to terminate the lease, while the Labco lease was in default,
resulting in no revenues in 2020. Past revenues are no guarantee
the Company will generate future revenues.
Operating Expenses and Net Loss
During the year ended March 31, 2020, the Company was in the
business of providing infrastructure assets to licensed producers,
processors and retailers engaged in the cannabis industry. Due to
the restrictive regulatory and operational challenges the Company
faced in that business it was decided to pivot away from cannabis
and instead focus on opportunities in the hemp industry. The
Company plans to acquire assets such as equipment, real estate and
operating entities engaged in hemp related activities and to
repurpose its existing assets for use in hemp operations. For these
reasons, there has been a change in our operating expense, and net
loss.
The net loss for the year ended March
31, 2020 was $485,536 compared to a net loss of $5,434,865 for year
ended March 31, 2019 . The
primary reason for the decrease in net loss was in 2019 there was a
goodwill write off for $4,605,134 as well as a warrant
expense
for $597,000 in 2019
which did not appear in 2020.
The net loss for the year ended March
31, 2020 consisted of $100,907 for officer and
director
fees, $50,233 for depreciation
expense, $69,008 for professional fees, and $45,412 for selling,
general and administrative expense. Furthermore, the Company
recognized interest expense of $146,078, consisting of $12,500
amortized convertible note discounts, $121,053 of derivative
liability expense and $12,527 of regular interest expense, loss on
sale of equipment of $39,788 a $50,000 loss on an asset write-off
from the sale of its subsidiary, and
other income of
$15,892, of which $9,872 is a gain on derivative liability, and
$6,020 from interest on notes receivable.
The net loss for the year ended March
31, 2019 consisted of a $150,000 for officer and director
fees, $597,000 for warrant expense related to the
settlement of a securities purchase agreement, $58,811 for
depreciation expense, $104,895 for professional fees, and $41,066
for selling, general, and administrative expense .
Furthermore, the Company recognized a Goodwill write down of
$4,605,134 related to the intangible assets such acquired in 2018
from its purchase of One Labco. Total interest expense of $26,454.
The Company also recognized other income of
$7,375
as a result of interest on notes
receivable .
Liquidity and Capital
Resources
At March 31, 2020, the Company’s cash balance totaled $5,542
compared to $767 at March 31, 2019. The increase is primarily due
to additional funds being available at year end.
Other current assets consisted of
$7,500 in prepaids compared to $0 at March 31, 2019. The increase
is due to the prepayment for consulting and director and officer
fees. Deposits consisted of $5,652 compared to $0 at March 31,
2019. The increase is related to canceled travel
expenses . Notes
receivable ,
consisted of $46,533
compared to $43,386 at March 31, 2019 . Other assets consisted of $26,828 in notes
receivable non-current potion compared to $73,975 at March 31,
2019. The decreased is due to payments received on this
note.
Additionally, during the three month
period ended June 30, 2019, the Company decided to sell the
containers to generate capital to finance its own change in focus
to extraction. On August 20, 2019, the Company completed the sale
of the containers for proceeds of $100,000, recognizing a loss of
$39,788.
At
March 31, 2020, the Company had total current
liabilities of $209,089
compared with total
liabilities of $271,542 at March 31, 2019. The decrease was
due to the Company converting notes payable during the year and a
decrease in accrued liabilities of $138, 945 resulting from the
deconsolidation of its subsidiaries Greenlife BotaniX. The accrued
liabilities were owed to Brent McMahon, a related party. The gain
to the company of the removal of liabilities in the books has been
reflected as an increase in Additional Paid in Capital of $201,445
as the transaction was with a related party controlled by a stockholder in the
company, resulting in the effective treatment of the gain as a
stockholder contribution.
At March 31, 2020, the Company had a
working capital deficit of $143,862 compared to a working capital deficit of $227,389
at March 31, 2019.
Cash
Flows
| |
|
Year
ended
March 31, 2020 |
|
Year
ended
March 31, 2019 |
|
Cash Flows from (used in) Operating Activities |
|
$ |
(195,225 |
) |
|
$ |
51,784 |
|
| Cash
Flows from (used in) Investing Activities |
|
|
100,000 |
|
|
|
(35,000 |
) |
|
Cash Flows from (used in) Financing Activities |
|
|
100,000 |
|
|
|
(125,481 |
) |
| Net
Increase (decrease) in Cash during period |
|
$ |
4,775 |
|
|
$ |
(108,697 |
) |
There are currently no, known
trends, or any known demands, commitments, events or uncertainties
that will result in or are likely to result in the Company’s
liquidity increasing or decreasing.
We will likely need to raise additional capital to fund the
acquisitions on which we have entered into binding terms sheets. We
may explore capital raising transactions in the form of debt,
equity or both. At this time, we are unable to state how much
additional capital we may need. As of the date of this Report, we
have no commitment from any investor or investment-banking firm to
provide us with any funding. Further, no assurance can be given
that any future financing will be available or, if available, that
it will be on terms that are satisfactory to the Company. Even if
the Company can obtain additional financing, it may contain undue
restrictions on our operations, in the case of debt financing or
cause substantial dilution for our stockholders, in case of equity
financing. Failure to obtain this additional financing may have a
material negative impact on our ability to generate profits on a
regular basis in the future.
Upon successfully consummating our planned acquisitions and merging
those operations into our own operations, we believe we will
generate positive cash flow from our operations. If we are
successful in achieving this objective, we do not believe we will
need to raise additional capital to execute our business strategy,
as we anticipate that the revenue generated from the fully
integrated acquisitions will be sufficient to allow us to implement
our current business plan. However, there can be no assurance that
we will be able to successfully complete any of the contemplated
acquisitions. However, if we do not experience a positive impact on
our operations from acquisitions we may consummate or if unforeseen
developments occur that negatively impact our cash flow, we may
need to raise additional capital to execute our business
strategy.
The Company’s results of operations have not been affected by
inflation and management does not expect inflation to have a
material impact on the Company’s operations in the future.
Cash Flows
from Operating
Activities
During the year ended March 31, 2020,
the Company used $195,225 of cash for operating activities compared to the
cash provided of $51,784 for
operating activities during the year ended March 31, 2019. The
decrease in cash used for operations for the year ended March 31,
2020 was due to the operating loss of $485,536, depreciation expense of $50,233, amortization of
the discount on convertible debt of $12,500 , loss
on sale of equipment of $39,788, forgiveness of the Greenlife
receivable of $50,000, a decrease of accounts payable of $(17,071),
a $44,000 decrease in
other receivables, an increase of $5,652 in
deposits
for credits on travel expense, a
$7,500 increase in prepaid expense, an increase of $305
in accounts payable, related party, interest expense of $11,543,
accrued interest of $984 and $111,181 of derivative
liability.
Cash Flows
from Investing
Activities
During the year ended March 31, 2020,
the Company’s cash flow from investing activities increased due to
the receipt of $100,000 from the sale of an
asset,
compared to $35,000
used to purchase an asset in the period ended
March 31, 2019.
Cash Flows
from Financing
Activities
During the year ended March 31, 2020,
the Company’s net cash received from financing activities was
$100,000 from proceeds of borrowing on a convertible
note .
During the year ended March 31,
2019 , the Company’s net cash used by financing
activities was $125,481. $117,361 was related to an account
receivable converted to an interest-bearing note
receivable. Furthermore, a total of $8,120 was recorded for shares
returned.
Going Concern
We have not attained profitable
operations
and are dependent upon obtaining
financing to pursue any extensive acquisitions and
activities . For
these reasons, as discussed in Note 1 of our notes to the financial
statements, our
auditors stated in their report on
our audited financial statements that they have substantial doubt
that we will be able to continue as a going concern. The
accompanying consolidated financial statements have been prepared
in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the
Company as a going concern. The Company has incurred a net loss of
$485,536 for the
year ended March 31, 2020 and has an accumulated deficit of
$15,610,923 and a working capital deficit of $143,862 as of March
31, 2020. In addition, the Company had $5,542 of cash
on hand at year end as well has sustained recurring operating
losses. These
conditions raise substantial doubt as
to the Company’s ability to continue as a going concern. These
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. These
consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. Management plans to continue to raise capital to fund the
Company’s operations and believes that it can continue to raise
equity or debt financing to support its operations until the
Company is able to generate positive cash flow from
operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to stockholders.
Future Financings
We will continue to rely on equity
sales of our common shares and
debt financing in order to continue to fund our business
operations. Issuances of additional shares will result in dilution
to existing stockholders. There is no assurance that we will
achieve any additional sales of the equity securities or arrange
for debt or other financing to fund our operations and other
activities.
Critical Accounting
Policies
Our financial statements and accompanying notes have been prepared
in accordance with United States generally accepted accounting
principles applied on a consistent basis. The preparation of
financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we
use to prepare our financial statements. A complete summary of
these policies is included in the notes to our financial
statements. A few of these are noted below, but a complete list
appears in our notes to our financial statements. In general,
management's estimates are based on historical experience, on
information from third party professionals, and on various other
assumptions that are believed to be reasonable under the facts and
circumstances. Actual results could differ from those estimates
made by management.
Revenue Recognition
As of January 1, 2018, we adopted ASU
No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09).
Leasing revenue recognition is specifically excluded and
therefore the new standard is only applicable to service fee and
consulting revenue. A five-step model has been introduced for
an entity to apply when recognizing revenue. The new guidance also includes enhanced
disclosure requirements. The guidance was effective January
1, 2018. The adoption did not have an impact on our financial
statements.
Under ASC 606, an entity
recognizes revenue when its customer obtains control of promised
goods or services, in an amount that reflects the consideration
which the entity expects to receive in exchange for those goods or
services. To determine the appropriate amount of revenue to be
recognized for arrangements determined to be within the scope of
ASC 606, the Company performs the following five steps: (i)
identification of the promised goods or services in the contract;
(ii) determination of whether the promised goods or services are
performance obligations including whether they are distinct in the
context of the contract; (iii) measurement of the transaction
price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations;
and (v) recognition of revenue when (or as) the Company satisfies
each performance obligation. The Company only applies the five-step
model to contracts when it is probable that the entity will collect
consideration it is entitled to in exchange for the goods or
services it transfers to the customer.
Our revenue in 2019 represented lease
revenue for the grow containers pursuant to the Company's lease
with D9 and extraction equipment lease pursuant to the Labco share
exchange agreement. D9 is
not a related party. For the year ended March 31, 2020, the Company
recorded no revenue.
Fixed Assets
Fixed Assets are stated at cost.
Depreciation is provided on fixed assets using the straight-line
method over an estimated service life of five years for
equipment.
The cost of normal maintenance and
repairs is charged to operating expenses as incurred. Material
expenditures which increase the life of an asset are capitalized
and depreciated over the estimated remaining useful life of the
asset.
Long-lived assets, which include
property, equipment, goodwill and identifiable intangible assets,
are reviewed for impairment whenever events or changes in business
circumstances indicate impairment may exist. If the Company
determines that the carrying value of a long-lived asset may not be
recoverable, a permanent impairment charge is recorded for the
amount by which the carrying value of the long-lived asset exceeds
its estimated fair value. If an initial assessment indicates it is
more likely than not an impairment may exist, it is evaluated by
comparing the unit’s estimated fair value to its carrying value.
Fair value is generally estimated using an income approach that
discounts estimated future cash flows using discount rates judged
by management to be commensurate with the applicable risk.
Estimates of future sales, operating results, cash flows and
discount rates are subject to changes in the economic environment,
including such factors as the general level of market interest
rates, expected equity market returns and the volatility of markets
served, particularly when recessionary economic circumstances
continue for an extended period of time. Management believes the
estimates of future cash flows and fair values are reasonable;
however, changes in estimates due to variance from assumptions
could materially affect the evaluations.
Fixed assets as of March 31, 2020 and
2019, respectively, have not been impaired.
Derivatives
Derivatives are recognized initially at fair value. Subsequent to
initial recognition, derivatives are measured at fair value, and
changes are therein generally recognized in profit or loss.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
Recently Issued Accounting Pronouncements
Recent authoritative guidance issued by the FASB (including
technical corrections to the FASB Accounting Standards
Codification), the American Institute of Certified Public
Accountants, and the SEC, did not, or are not expected to have a
material effect on the Company’s consolidated financial
statements.
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK |
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
|
Item
8. |
Financial
Statements AND SUPPLEMENTARY DATA |
MOUNTAIN HIGH ACQUISITIONS CORP.
Financial
Statements
As of and for the Years
Ended March 31, 2020 and March 31,
2019
| Report of Independent
Registered Public Accounting Firm |
|
2 |
|
| Consolidated Balance Sheets |
|
3 |
|
| Consolidated Statements of
Operations |
|
4 |
|
| Consolidated Statements of Cash
Flows |
|
5 |
|
| Consolidated Statements of
Stockholder’s Equity (Deficit) |
|
6 |
|
| Notes to the Financial Statements |
|
7 |
|
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Mountain High
Acquisitions Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of
Mountain High Acquisitions Corp. (the "Company") as of March 31,
2020 and 2019, the related statements of operations, stockholders'
equity (deficit), and cash flows for the years then ended, and the
related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the
Company as of March 31, 2020 and 2019, and the results of its
operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the
United States.
Substantial Doubt about the Company’s Ability to Continue as a
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company has suffered
recurring losses from operations, has a significant accumulated
deficit, has negative working capital and has limited cash. In
addition, the Company continues to experience negative cash flows
from operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engage
to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
/s/ BF Borgers CPA PC
We have served as the Company's auditor since 2016.
Lakewood, CO
July 1, 2020
|
MOUNTAIN
HIGH ACQUISITIONS CORP. |
|
CONSOLIDATED BALANCE SHEETS |
| |
|
|
|
|
|
|
|
March
31, |
|
March
31, |
|
|
|
2020 |
|
2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,542 |
|
|
$ |
767 |
|
| Prepaids |
|
|
7,500 |
|
|
|
— |
|
| Deposits |
|
|
5,652 |
|
|
|
— |
|
|
Notes receivable-current |
|
|
46,533 |
|
|
|
43,386 |
|
|
TOTAL CURRENT ASSETS |
|
|
65,227 |
|
|
|
44,153 |
|
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
|
Notes receivable - long term |
|
|
26,828 |
|
|
|
73,975 |
|
|
TOTAL OTHER ASSETS |
|
|
26,828 |
|
|
|
73,975 |
|
|
FIXED
ASSETS (NET) |
|
|
115,835 |
|
|
|
305,856 |
|
|
TOTAL ASSETS |
|
$ |
207,890 |
|
|
$ |
423,984 |
|
| |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,473 |
|
|
$ |
21,544 |
|
|
Accounts payable - related
party |
|
|
305 |
|
|
|
— |
|
|
Accrued liabilities |
|
|
— |
|
|
|
149,955 |
|
|
Accrued interest |
|
|
2,474 |
|
|
|
1,490 |
|
|
Convertible notes payable, net of
discounts $0 and $0 as of March 31, 2020 and 2019,
respectively. |
|
|
90,656 |
|
|
|
98,553 |
|
|
Derivative liability |
|
|
111,181 |
|
|
|
— |
|
|
TOTAL CURRENT LIABILITIES |
|
|
209,089 |
|
|
|
271,542 |
|
| |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
(DEFICIT): |
|
|
|
|
|
|
|
|
| Series B Preferred stock, $0.0001 par value;
250,000,000 shares authorized, 100,000 and 100,000 shares
issued and outstanding as of March 31, 2020 and March 31,
2019 respectively |
|
|
10 |
|
|
|
10 |
|
| Common stock, $0.0001 par value; 500,000,000 shares
authorized, 220,685,605 and 203,832,914 shares issued and
outstanding as of March 31, 2020 and March 31, 2019
respectively |
|
|
22,069 |
|
|
|
20,383 |
|
|
Additional paid in capital |
|
|
15,587,645 |
|
|
|
15,257,436 |
|
|
Accumulated (deficit) |
|
|
(15,610,923 |
) |
|
|
(15,125,387 |
) |
|
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT) |
|
|
(1,199 |
) |
|
|
152,442 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) |
|
$ |
207,890 |
|
|
$ |
423,984 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these consolidated financial statements |
|
MOUNTAIN HIGH ACQUISITIONS CORP. |
|
CONSOLIDATED STATEMENT OF OPERATIONS |
|
(AUDITED) |
|
|
|
|
|
|
|
|
|
For the Year Ended
March 31, |
|
|
|
2020 |
|
2019 |
|
Operating revenues |
|
|
|
|
|
|
|
|
|
Leasing revenue |
|
$ |
— |
|
|
$ |
141,120 |
|
|
Cost of revenue |
|
|
— |
|
|
|
— |
|
| Gross
profit |
|
|
— |
|
|
|
141,120 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
50,233 |
|
|
|
58,811 |
|
| Office
and director fees |
|
|
100,907 |
|
|
|
150,000 |
|
|
Professional fees |
|
|
69,008 |
|
|
|
104,895 |
|
| Selling,
general and administrative expenses |
|
|
45,412 |
|
|
|
41,066 |
|
|
Warrant expense |
|
|
— |
|
|
|
597,000 |
|
|
Total operating expenses |
|
|
265,560 |
|
|
|
951,772 |
|
| (Loss)
from operations |
|
|
(265,560 |
) |
|
|
(810,652 |
) |
|
|
|
|
|
|
|
|
|
|
| Other
income (expense) |
|
|
|
|
|
|
|
|
| Goodwill
write-off |
|
|
— |
|
|
|
(4,605,134 |
) |
| Loss on
sale of equipment |
|
|
(39,788 |
) |
|
|
— |
|
| Loss on
asset write-off |
|
|
(50,000 |
) |
|
|
— |
|
| Interest
expense: |
|
|
|
|
|
|
|
|
| Interest
expense |
|
|
(12,527 |
) |
|
|
(26,454 |
) |
|
Amortization of convertible debt discounts |
|
|
(12,500 |
) |
|
|
— |
|
|
Derivative liability expense |
|
|
(121,053 |
) |
|
|
— |
|
| Other
income (expense) |
|
|
6,020 |
|
|
|
7,375 |
|
|
Gain on derivative liability |
|
|
9,872 |
|
|
|
— |
|
|
Total other income (expense) |
|
|
(219,976 |
) |
|
|
(4,624,213 |
) |
|
Net income (loss) |
|
$ |
(485,536 |
) |
|
$ |
(5,434,865 |
) |
|
|
|
|
|
|
|
|
|
|
| Net
Income (loss) per share-basic and diluted |
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
(0.00 |
) |
|
|
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic and diluted |
|
|
211,827,723 |
|
|
|
143,712,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| The
accompanying notes are an integral part of these consolidated
financial statements |
|
MOUNTAIN HIGH ACQUISITIONS CORP. |
|
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) |
| FROM
MARCH 31, 2017 TO MARCH 31, 2020 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Series B |
|
|
|
|
|
Additional |
|
|
|
Total
Shareholders’ |
| |
|
Preferred Stock |
|
Common Stock |
|
Paid-in |
|
Accumulated |
|
Equity |
| |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
(Deficit) |
| Balance March 31, 2017 |
|
|
— |
|
|
|
— |
|
|
|
72,691,389 |
|
|
|
7,269 |
|
|
|
5,925,827 |
|
|
|
(6,338,799 |
) |
|
|
(405,703 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares issued for services
rendered |
|
|
100,000 |
|
|
|
10 |
|
|
|
2,570,000 |
|
|
|
257 |
|
|
|
328,917 |
|
|
|
— |
|
|
|
329,184 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss on market value of Preferred shares |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,084,300 |
|
|
|
— |
|
|
|
2,084,300 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note payable conversion |
|
|
— |
|
|
|
— |
|
|
|
20,947,193 |
|
|
|
2,095 |
|
|
|
682,190 |
|
|
|
— |
|
|
|
684,285 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Warrants |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
115,100 |
|
|
|
— |
|
|
|
115,100 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Convertible Note Payable Beneficial
Conversion Feature |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
471,500 |
|
|
|
— |
|
|
|
471,500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,351,723 |
) |
|
|
(3,351,723 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance March 31, 2018 |
|
|
100,000 |
|
|
$ |
10 |
|
|
|
96,208,582 |
|
|
$ |
9,621 |
|
|
$ |
9,607,834 |
|
|
$ |
(9,690,522 |
) |
|
|
(73,057 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares issued for services
rendered |
|
|
— |
|
|
|
— |
|
|
|
80,000 |
|
|
|
8 |
|
|
|
6,072 |
|
|
|
0 |
|
|
|
6,080 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note payable conversion |
|
|
— |
|
|
|
— |
|
|
|
10,099,332 |
|
|
|
1,010 |
|
|
|
289,250 |
|
|
|
0 |
|
|
|
290,260 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cashless warrants issued |
|
|
— |
|
|
|
— |
|
|
|
9,500,000 |
|
|
|
950 |
|
|
|
596,050 |
|
|
|
0 |
|
|
|
597,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| One Lab Co contribution |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
159,667 |
|
|
|
— |
|
|
|
159,667 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| One Lab Co purchase |
|
|
— |
|
|
|
— |
|
|
|
88,000,000 |
|
|
|
8,800 |
|
|
|
4,596,334 |
|
|
|
— |
|
|
|
4,605,134 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares issued to consultant |
|
|
— |
|
|
|
— |
|
|
|
225,000 |
|
|
|
23 |
|
|
|
10,321 |
|
|
|
— |
|
|
|
10,344 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares returned |
|
|
|
|
|
|
|
|
|
|
(280,000 |
) |
|
|
(28 |
) |
|
|
(8,092 |
) |
|
|
— |
|
|
|
(8,120 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,434,865 |
) |
|
|
(5,434,865 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance March 31, 2019 |
|
|
100,000 |
|
|
$ |
10 |
|
|
|
203,832,914 |
|
|
$ |
20,383 |
|
|
$ |
15,257,436 |
|
|
$ |
(15,125,387 |
) |
|
$ |
152,442 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Note payable conversion |
|
|
— |
|
|
|
— |
|
|
|
16,852,691 |
|
|
|
1,686 |
|
|
|
128,764 |
|
|
|
— |
|
|
|
130,449 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deconsolidation of Greenlife |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
201,445 |
|
|
|
— |
|
|
|
201,445 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(485,536 |
) |
|
|
(485,536 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance March 31, 2020 |
|
|
100,000 |
|
|
$ |
10 |
|
|
|
220,685,605 |
|
|
|
22,069 |
|
|
|
15,587,645 |
|
|
|
(15,610,923 |
) |
|
|
(1,199 |
) |
|
MOUNTAIN HIGH
ACQUISITIONS CORP. |
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
(AUDITED) |
|
|
|
|
|
|
|
|
|
For the Year ended
March 31, |
|
|
|
2020 |
|
2019 |
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net (loss) |
|
|
(485,536 |
) |
|
|
(5,434,865 |
) |
|
Adjustments to reconcile net loss to net cash (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
50,233 |
|
|
|
58,811 |
|
|
Amortization of discount on convertible note |
|
|
12,500 |
|
|
|
— |
|
| Goodwill
write off |
|
|
— |
|
|
|
4,605,134 |
|
| Stock
for services |
|
|
— |
|
|
|
16,422 |
|
| Loss on
sale of equipment |
|
|
39,788 |
|
|
|
— |
|
| Loss on
asset write-off |
|
|
50,000 |
|
|
|
— |
|
| Interest
expense |
|
|
11,543 |
|
|
|
26,454 |
|
| Warrants
expense |
|
|
— |
|
|
|
597,000 |
|
| Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
(Decrease) in accounts payable |
|
|
(17,071 |
) |
|
|
(128,410 |
) |
| Increase
in accounts payable, related party |
|
|
305 |
|
|
|
|
|
|
(Increase) in prepaid expenses |
|
|
(7,500 |
) |
|
|
— |
|
| Increase
in derivative liability |
|
|
111,181 |
|
|
|
— |
|
|
(Increase) in accounts receivable |
|
|
— |
|
|
|
150,000 |
|
| Decrease
in other receivables |
|
|
44,000 |
|
|
|
22,293 |
|
|
(Increase) in other assets - deposits |
|
|
(5,652 |
) |
|
|
— |
|
| Increase
in accrued interest |
|
|
984 |
|
|
|
|
|
|
(Decrease) in accrued liabilities |
|
|
— |
|
|
|
138,945 |
|
|
Net cash provided (used) by operating activities |
|
|
(195,225 |
) |
|
|
51,784 |
|
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Purchased of fixed assets |
|
|
— |
|
|
|
(35,000 |
) |
|
Proceeds from sale of asset |
|
|
100,000 |
|
|
|
— |
|
|
Net cash provided by investing activities |
|
|
100,000 |
|
|
|
(35,000 |
) |
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| Accounts
receivable converted to note receivable |
|
|
— |
|
|
|
(117,361 |
) |
| Proceeds
from shares for services |
|
|
— |
|
|
|
(8,120 |
) |
|
Proceeds from convertible notes |
|
|
100,000 |
|
|
|
— |
|
|
Net cash (used) provided by financing activities |
|
|
100,000 |
|
|
|
(125,481 |
) |
| |
|
|
|
|
|
|
|
|
| NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
4,775 |
|
|
|
(108,697 |
) |
| |
|
|
|
|
|
|
|
|
| CASH AND
CASH EQUIVALENTS |
|
|
|
|
|
|
|
|
|
Beginning of the period |
|
|
767 |
|
|
|
109,464 |
|
| End
of the period |
|
$ |
5,542 |
|
|
|
767 |
|
| |
|
|
— |
|
|
|
|
|
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
|
|
|
Taxes paid |
|
$ |
— |
|
|
$ |
— |
|
|
Note payable conversions into common stock |
|
$ |
130,449 |
|
|
$ |
— |
|
|
Goodwill impairment |
|
$ |
— |
|
|
$ |
4,605,134 |
|
|
Interest paid |
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| The
accompanying notes are an integral part of these consolidated
financial statements |
Note
1 -
Organization and Basis of Presentation
Organization and Line of Business
Prior to January 1, 2020, the Company was in the business of
providing infrastructure assets to licensed producers, processors
and retailers engaged in the cannabis industry. Due to the
restrictive regulatory and operational challenges the Company faced
in that business it was decided to pivot away from cannabis and
instead focus on opportunities in the hemp industry.
The Company plans to acquire assets such as equipment, real estate
and operating entities engaged in hemp related activities and to
repurpose its existing assets for use in hemp operations. As
discussed below, the Company has acquired a company (GPS) engaged
in the formulation, manufacturing, branding, fulfillment and
distribution of hemp-derived CBD products at its cGMP,
FDA-registered facility in Santa Ana, California. GPS's continually
expanding product offering is sold directly to consumers online as
well as through wholesale partners (both online and brick and
mortar stores) under its retail brand name, Zen Drops. The product
offering includes tinctures, salves, gummies, transdermal patches
and oral thin films.
On May 22, 2016 the Company completed the acquisition of Greenlife
Botanix ("Greenlife") a Colorado corporation. The Company issued
10,000,000 restricted shares of its common stock to the
shareholders of Greenlife in exchange for their 100% interest in
Greenlife. The shares were valued at the market value on the date
of issuance, $0.23, for a total consideration of $2,300,000. The
amount paid for Greenlife was recorded as Goodwill due to the start
up nature of Greenlife and the minimal net assets of Greenlife at
the time of acquisition. Subsequent to the purchase of Greenlife
the Company executed a rescission agreement with Freedom Seed and
Feed, "FSF", which prevented Greenlife from becoming a fully
integrated cosmetic company. Due to the rescission of FSF and the
remarketing of the Greenlife product line the Company evaluated the
book value of the asset and elected to impair the goodwill value of
Greenlife and expensed the $2,300,000 book value in the year ended
March 31, 2017.
On March
31, 2020, the Company sold its 100% interest in GreenLife to
Evolution Equities Corporation, a Nevada Corporation for the sum of
$1.00. At the time of the sale, GreenLife had no assets and had
liabilities in the amount of $201,445. Of the liabilities that were
in GreenLife, $138,945 were owed to Brent McMahon, a related party.
The gain on deconsolidation has
been reflected as an increase in Additional Paid in Capital of
$201,445 as the transaction was with a related
party controlled by a stockholder in the company,
resulting in the effective treatment of the gain as a stockholder
contribution. The company assesses its joint ventures and
partnerships at inception to determine if any meet the
qualifications of a variable interest entity ("VIE") in accordance
with Accounting Standards Codification ("ASC") 810,
"Consolidation." If a joint venture or partnership is a VIE and the
company is the primary beneficiary, the joint venture or
partnership is fully consolidated. Management has determined
GreenLife does not meet the definition of a business under ASC 805
and is therefore not subject to VIE guidance and should remain
deconsolidated after the sale date. Furthermore, the Company
forgave the balance of $50,000 due from Greenlife on the
transaction date, resulting in at $50,000 loss.
In May 2017, the Company formed
MYHI-AZ , an
Arizona Corporation to acquire equipment to service the growing
cannabis industry. In September 2017, the Company entered into a
consulting agreement with D9 Manufacturing, "D9," to provide D9
customers with infrastructure equipment. Also, in September 2017,
MYHI-AZ purchased 2 intermodal grow containers from D9 to be used
in a grow operation in Arizona. MYHI-AZ leased the grow containers
to D9 for 3 years with the right to extend the lease for an
additional 2 years. The lease began August 15, 2017. The lease
provided for a monthly lease rate of $20,000 a month and required
advance payment for operating supplies and expenses. The monthly
lease rate was recorded as Revenue and an Account Receivable while
the advances were recorded as Other Receivable. The monthly lease
payments were to commence on harvesting of the first crop. The
containers were planted in October 2017 with an expected harvest in
January 2018. The initial grow operation encountered a power
failure which ultimately resulted in the loss of the crop. The loss
of this crop resulted in a deferral of collection of the lease
rental payments and the operating cost payments. The power failure
highlighted electrical issues with the facility where the
containers were being used and improvements to the containers that
could be made. The container improvements and facility power
requirement issue took a few months to resolve.
Effective June 5, 2018, MYHI-AZ and
D9 agreed to convert the current amount due under the operating
lease, representing $150,000 in lease payments and $22,294 in
operating expenses, into a $135,000 note payable, (the "Note"),
with a term of 3 years and interest rate of 7% per annum, and to
capitalize $35,000 for improvements to the containers. The first
payment on the Note was due October 3, 2018. The Parties also
agreed to terminate the current lease effective March 31, 2018 and
replace it with a new lease beginning July 1, 2018 with lease
payments of $5,000 per month beginning November 1, 2018. This
replacement lease was terminated on March 31, 2019 as D9 was unable
to successfully complete a harvest. due to the ongoing power
problems and a shift in the focus of their company to extraction
only. The Note however remains in full force and effect. During the
three month period ended June 30, 2019, the Company decided to sell
the containers to generate capital to finance its own change in
focus to extraction. On August 20, 2019, the Company completed the
sale of the containers for proceeds of $100,000 (see note
5).
On August 18, 2018, the Company
entered into an Exchange Agreement (the “Exchange Agreement”) with
Alchemy Capital LLC (“Alchemy”) pursuant to which Alchemy, the sole
shareholder of One Lab Co (“Labco ”), a
Nevada Corporation agreed to exchange 100% of the capital stock of
Labco for 88,000,000 restricted shares of the Company (the “MYHI
Shares”). The Exchange Agreement called for the issuance of
20,000,000 MYHI Shares at Closing and 68,000,000 MYHI Shares after
certain equipment under order by Labco at the time (the
“Equipment”) was delivered pursuant to a Lease Agreement (the
“Lease”) between Labco and Workforce Labor Solutions, LLC (“the
Lessee”). The Equipment consists of a state-of-the-art intermodal
extraction laboratory, engineered and designed specifically for
processing cannabis. The Lease calls for monthly payments of
$25,000 and has a five year term commencing November 1, 2018 with
an option to renew for a second five year term. As of March 31,
2020, the Lessee was in arrears on the lease. The Company has been
in constant discussion with the Lessee regarding this delinquency
but has been unable to come to a resolution of the matter. The
Company intends to terminate the lease agreement immediately and to
relocate the equipment at the earliest opportunity.
In conjunction with the
acquisition of One Lab Co and its tangible assets including the
Equipment and the Lease, the Company also acquired intangible
assets such as industry relationships, access to capital resources
and acquisition opportunities. These intangible assets were
classified as Goodwill. MYHI issued the 88,000,000 shares of
restricted common stock in accordance with the terms of the
Exchange Agreement and recorded the acquisition of the Equipment at
a cost value of $159,666 and Goodwill of $4,605,134. As of March
31, 2019, the intangible asset was fully impaired.
On May 8, 2020, Mountain High Acquisitions Corp, (“MYHI”) and
Trilogy Capital LLC ("Trilogy") entered into an Exchange Agreement
(the “Exchange Agreement”) pursuant to which MYHI agreed to
purchase from Trilogy all of the capital stock of GPS Associates,
Inc., a Delaware corporation ("GPS") in exchange (the "Exchange")
for 215,250,000 restricted shares of MYHI (the “MYHI Shares"). Dr.
Judy Pham is the sole member and manager of Trilogy. Dr Pham is
also the sole member and manager of Alchemy Capital, LLC
("Alchemy") which owns
53,727,273 shares of the MYHI's
Common Stock .
GPS is a California based company engaged in the formulation,
manufacturing, branding, fulfillment and distribution of
hemp-derived CBD products at its cGMP, FDA-registered facility in
Santa Ana, California. GPS's team of professionals includes
physiologists, chemists, herbalists and botanists committed to
combining high-quality organic CBD with synergistic organic, raw
herbs to produce pure, premium consumer products. All products
manufactured by GPS are tested at independent, third party
laboratories to prove potency and purity.
Going Concern
The accompanying consolidated
financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going
concern. The Company has incurred a net loss of $485,536 for the
year ended March 31, 2020 and has an accumulated deficit of
$15,610,923 and a working capital deficit of $143,862 as of March
31, 2020. In addition, the Company had $5,542 of cash
on hand at year end as well has sustained recurring operating
losses. These
conditions raise substantial doubt as
to the Company’s ability to continue as a going concern. These
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty. These
consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. Management plans to continue to raise capital to fund the
Company’s operations and believes that it can continue to raise
equity or debt financing to support its operations until the
Company is able to generate positive cash flow from
operations.
Note 2 – Summary of Significant
Accounting Policies
Basis of
Presentation
The accompanying consolidated financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America (“US GAAP”). The
accompanying consolidated financial statements have been presented
in United States Dollars ($ or “USD”). The fiscal year end is March
31.
Principles of Consolidation
The accounts of the Company and its wholly–owned subsidiaries
MYHI-AZ and One Lab Co are included in the accompanying
consolidated financial statements. All intercompany balances and
transactions were eliminated on consolidation.
Use of Estimates
The preparation of financial statements in conformity with US GAAP
requires management to make estimates and assumptions. These
estimates and assumptions 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. It is possible that accounting
estimates and assumptions may be material to the Company due to the
levels of subjectivity and judgment involved.
Fair Value of Financial Instruments
Fair value is the price that would be received from selling an
asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in
an orderly transaction between market participants as of the
measurement date. Applicable accounting guidance provides a
hierarchy for inputs used in measuring fair value that prioritize
the use of observable inputs over the use of unobservable inputs,
when such observable inputs are available. The three levels of
inputs that may be used to measure fair value are as follows:
● 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 with insufficient volume or
infrequent transactions (less active markets), or model-driven
valuations in which all significant inputs are observable or can be
derived principally from, or corroborated with, observable market
data.
● Level 3 - Fair value is derived
from valuation techniques in which one or more significant inputs
are unobservable, including assumptions and judgments made by the
Company.
Assets and liabilities are classified based on the lowest level of
input that is significant to the fair value measurements. The
Company reviews the fair value hierarchy classification on a
quarterly basis. Changes in the observable inputs may result in a
reclassification of assets and liabilities within the three levels
of the hierarchy outlined above.
The carrying amounts of certain financial instruments, such as cash
equivalents, short term investments, accounts receivable, accounts
payable and accrued liabilities, approximate fair value due to
their relatively short maturities.
Concentrations
For the years ended March 31, 2020 and 2019, one customer accounted
for nil% and 100%, respectively, of the Company’s revenues.
Cash and Cash Equivalents
Cash and cash equivalents include
cash on hand and cash in time deposits, certificates of deposit and
all highly liquid debt instruments with original maturities of
three months or less .
Financial instruments that
potentially subject the Company to concentration of credit risk
consist principally of cash deposits. Accounts at each institution
are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $250,000. At March 31, 2020 and 2019, the Company had $0 and
$0 in excess of the FDIC insured limit,
respectively.
Revenue Recognition
As of January 1, 2018, we adopted ASU
No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09).
Leasing revenue recognition is specifically excluded and
therefore the new standard is only applicable to service fee and
consulting revenue. A five-step model has been introduced for
an entity to apply when recognizing revenue. The new guidance also includes enhanced
disclosure requirements. The guidance was effective January
1, 2018. The adoption did not have an impact on our financial
statements.
Under ASC 606, an entity
recognizes revenue when its customer obtains control of promised
goods or services, in an amount that reflects the consideration
which the entity expects to receive in exchange for those goods or
services. To determine the appropriate amount of revenue to be
recognized for arrangements determined to be within the scope of
ASC 606, the Company performs the following five steps: (i)
identification of the promised goods or services in the contract;
(ii) determination of whether the promised goods or services are
performance obligations including whether they are distinct in the
context of the contract; (iii) measurement of the transaction
price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations;
and (v) recognition of revenue when (or as) the Company satisfies
each performance obligation. The Company only applies the five-step
model to contracts when it is probable that the entity will collect
consideration it is entitled to in exchange for the goods or
services it transfers to the customer.
Our revenue in 2019 represented lease
revenue for the grow containers pursuant to the Company's lease
with D9 and the extraction equipment lease pursuant to the Labco
share exchange agreement. D9 is
not a related party. For the year ended March 31, 2020, the Company
recorded no revenue.
Fixed Assets
Fixed Assets are stated at cost. Depreciation is provided on fixed
assets using the straight-line method over an estimated service
life of five years for equipment.
The cost of normal maintenance and repairs is charged to operating
expenses as incurred. Material expenditures which increase the life
of an asset are capitalized and depreciated over the estimated
remaining useful life of the asset.
Long-lived assets, which include property, equipment, goodwill and
identifiable intangible assets, are reviewed for impairment
whenever events or changes in business circumstances indicate
impairment may exist. If the Company determines that the carrying
value of a long-lived asset may not be recoverable, a permanent
impairment charge is recorded for the amount by which the carrying
value of the long-lived asset exceeds its estimated fair value. If
an initial assessment indicates it is more likely than not an
impairment may exist, it is evaluated by comparing the unit’s
estimated fair value to its carrying value. Fair value is generally
estimated using an income approach that discounts estimated future
cash flows using discount rates judged by management to be
commensurate with the applicable risk. Estimates of future sales,
operating results, cash flows and discount rates are subject to
changes in the economic environment, including such factors as the
general level of market interest rates, expected equity market
returns and the volatility of markets served, particularly when
recessionary economic circumstances continue for an extended period
of time. Management believes the estimates of future cash flows and
fair values are reasonable; however, changes in estimates due to
variance from assumptions could materially affect the
evaluations.
Fixed assets as of March 31, 2020 and 2019, respectively, have not
been impaired.
Intangible Assets
The Company accounts for intangibles
in accordance with ASC 350, Intangibles -Goodwill and Other. The Company evaluates
intangibles, at a minimum, on an annual basis and whenever events
and changes in circumstances suggest that the carrying amount may
not be recoverable. Impairment of intangibles is tested by
comparing the carrying amount to the fair value. The fair values
are estimated using undiscounted projected net cash flows. If the
carrying amount exceeds its fair value, intangibles are considered
impaired and a second step is performed to measure the amount of
impairment loss, if any. The Company evaluates the impairment of
intangibles as of the end of each fiscal year or whenever events or
changes in circumstances indicate that an intangible asset’s
carrying amount may not be recoverable. These circumstances
include:
|
· |
a
significant decrease in the market value of an asset; |
|
· |
a
significant adverse change in the extent or manner in which an
asset is used; or |
|
· |
an
accumulation of costs significantly in excess of the amount
originally expected for the acquisition of an asset. |
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic
740, Income Taxes. ASC 740 requires a company to use the
asset and liability method of accounting for income taxes, whereby
deferred tax assets are recognized for deductible temporary
differences, and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities
and their tax bases. 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.
Under ASC 740, a tax position is recognized as a benefit only if it
is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to
occur. The amount recognized is the largest amount of tax benefit
that is greater than 50% likely of being realized on examination.
For tax positions not meeting the “more likely than not” test, no
tax benefit is recorded. The portion of the benefits associated
with tax positions taken that exceeds the amount measured as
described above is reflected as a liability for unrecognized tax
benefits in the balance sheets along with any associated interest
and penalties that would be payable to the taxing authorities upon
examination. Applicable interest and penalties associated with
unrecognized tax benefits are classified as additional income taxes
in the statements of operations. The open tax years are 2012, 2013,
2014, 2015, 2016, 2017, 2018 and 2019.
The Company has no tax positions at
March 31, 2020 or March 31, 2019, for which the ultimate
deductibility is highly certain but for which there is uncertainty
about the timing of such deductibility.
Basic and Diluted Loss Per Share
Earnings per share is calculated in accordance with the ASC Topic
260, Earnings Per Share. Basic earnings per share is based
upon the weighted average number of common shares outstanding.
Diluted earnings per share is based on the assumption that all
dilutive convertible shares and stock warrants were converted or
exercised. Dilution is computed by applying the treasury stock
method. Under this method, 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.
Recent Accounting Pronouncements
Recent authoritative guidance issued by the FASB (including
technical corrections to the FASB Accounting Standards
Codification), the American Institute of Certified Public
Accountants, and the SEC, did not, or are not expected to have a
material effect on the Company’s consolidated financial
statements.
Note 3 – Note Receivable
In May 2017, the Company formed MYHI-AZ to acquire equipment to
service the growing cannabis industry. In September 2017, the
Company entered into a consulting agreement with D9 Manufacturing,
"D9," to provide D9 customers with infrastructure equipment. Also,
in September 2017, MYHI-AZ purchased 2 intermodal grow containers
from D9 to be used in a grow operation in Arizona. MYHI-AZ leased
the grow containers to D9 for 3 years with the right to extend the
lease for an additional 2 years. The lease began August 15, 2017.
The lease provided for a monthly lease rate of $20,000 a month and
required advance payment for operating supplies and expenses. The
monthly lease rate was recorded as Revenue and an Account
Receivable while the advances were recorded as Other Receivable.
The monthly lease payments were to commence on harvesting of the
first crop. The containers were planted in October 2017 with an
expected harvest in January 2018. The initial grow operation
encountered a power failure which ultimately resulted in the loss
of the crop. The loss of this crop resulted in a deferral of
collection of the lease rental payments and the operating cost
payments. The power failure highlighted electrical issues with the
facility where the containers were being used and improvements to
the containers that could be made. While the container improvements
were made, the facility power requirement issues were never fully
resolved.
Effective September 11, 2018, MYHI-AZ and D9 agreed to convert the
current amount due under the operating lease, representing $150,000
in lease payments and $22,294 in operating expenses, into a
$135,000 note payable, (the "Note"), with a term of 3 years and
interest rate of 7% per annum, and to capitalize $35,000 for
improvements to the containers. The first payment on the Note was
due October 3, 2018.
In addition, and in anticipation of the resolution of the power
issues at the grow facility, the Parties agreed to terminate the
current lease effective March 31, 2018 and replace it with a new
lease beginning July 1, 2018 with lease payments of $5,000 per
month beginning November 1, 2018. This replacement lease was
terminated on March 31, 2019 as D9 was unable to successfully
complete a harvest due to the ongoing power problems and a shift in
the focus of their company to extraction only. The Note however
remained in full force and effect.
As of March 31,
2020, the Company evaluated
the collectability of the note and believes the balance of $73,361
is collectible. D9 is current in its required Note
payments.
Note 4 – Prepaids
Prepaids as of March 31, 2020 and 2019, were $7,500 and $0,
respectively. These include a $5,000 prepayment to our director and
officer for future services, and $2,500 for outside consultant.
Note 5 – Fixed Assets
Fixed assets consist of the following at March 31, 2020 and 2019,
respectively:
| |
|
For the year ended
March 31, 2020
|
|
For the year ended
March 31, 2019
|
|
Extraction Equipment |
|
$ |
159,667 |
|
|
$ |
159,667 |
|
|
Grow Equipment |
|
|
— |
|
|
|
235,000 |
|
|
Total cost |
|
$ |
159,667 |
|
|
$ |
394,667 |
|
|
Less: Accumulated depreciation and
amortization |
|
|
(43,832 |
) |
|
|
(88,811 |
) |
|
Total |
|
$ |
115,835 |
|
|
$ |
305,856 |
|
Total depreciation expense for the
years ended March 31, 2020 and 2019 was $50,233 and $58,811,
respectively.
Loss on Sale of Equipment
During the three-month period ended June 30, 2019, the Company
decided to sell the grow containers with a carrying value of
$139,788, to generate capital to finance its own change in focus to
extraction. On August 20, 2019, the Company completed the sale of
the containers for proceeds of $100,000, recognizing a loss on sale
of equipment of $39,788.
Note 6 – Accrued liabilities
As of March 31, 2020 and
2019 , total accrued liabilities consisted of $0 and
$149,955, respectively.
As of March 31, 2020 and 2019, a
total of $0 and $138,945, respectively was related to a liability
due to Brent McMahon, a 24% shareholder of the
Company ,
for Greenlife BotaniX, (“Greenlife”) selling and administrative
expenses paid by him between 2015 and 2017. In addition, as of March
31, 2020 and 2019, a total of $0 and $12,500, respectively was
related to Greenlife office lease expenses.
On March 31, 2020, the Company sold its 100% interest in GreenLife
to Evolution Equities Corporation, a Nevada Corporation for the sum
of $1.00. At the time of the sale, GreenLife had no assets and had
liabilities in the amount of $201,445. Of the liabilities that were
in GreenLife, $138,945 were owed to Brent McMahon, a related party.
Management has determined that Greenlife does not meet the
definition of a business per ASC 805 and was not a Variable
Interest Entity (VIE). The gain to the company of the removal of
liabilities in the books has been reflected as an increase in
Additional Paid in Capital of $201,445 as the transaction was with
a related party. The company assesses its joint ventures and
partnerships at inception to determine if any meet the
qualifications of a variable interest entity ("VIE") in accordance
with Accounting Standards Codification ("ASC") 810,
"Consolidation." If a joint venture or partnership is a VIE and the
company is the primary beneficiary, the joint venture or
partnership is fully consolidated. Management has determined
GreenLife does not meet this test.
Note 7 – Equity
Preferred
Stock
The Company has 250,000,000 shares of Series B preferred stock with
a par value of $0.0001 per share.
On June 9, 2017, the Company authorized up to 200,000 shares of
Series B stock issuable. The shares have liquidation preference as
well as 20:1 voting rights. The stated value of the shares are
$0.75 per share and are redeemable by the Company, at the Company’s
option, at any point after June 9, 2020 with 30 days notice for the
$0.75 per share. The shares are convertible by the Holder at $0.075
per share at any point up until the day before they are
redeemed.
On June 12, 2017, the Company issued
100,000 shares of Series B Convertible Preferred stock, par value
$0.0001, to an outside consulting firm for consulting services,
valued at $109,700, which was recorded as consulting fees in the
three months ended June 30, 2017. Due to the super voting provision
of the Series B Convertible Preferred stock the Company recorded a
loss on valuation of the shares of $2,084,300, the equivalent of
20,000,000 shares less the associated consulting expense of
$109,700.
These are the only shares of Series B
Preferred Stock outstanding as of March 31, 2020 and
2019.
Common
Stock
Effective June 12, 2017, the Company increased its authorized
shares of common stock to 500,000,000 shares with a par value of
$0.0001 per share.
During the year ended March 31, 2020, the Company converted
$130,449 of convertible notes into 16,852,691 shares of common
stock.
Note 8 - Notes
Payable
On April 24, 2019, the Company entered in a convertible note
payable in the amount of $112,500. The Company recorded discounts
of $2,500 of debt
offering costs and an original issue discount of $10,000 on
issuance. During the year ended March 31, 2020, the Company fully
amortized these discounts, resulting in $12,500 of interest
expense.
The Company determined there to be an
embedded derivative liability present
per the criteria of ASC 815, which requires the elements of the
instrument to be bifurcated. The note had conversion provisions
allowing the holder to convert the note into shares of the Company
at a discount, as described in the table below. The Company
recorded a derivative liability of $121,053 which was calculated at
issuance (April 24, 2019) based on the amount the note could be
converted into at that time, over and above the note
payable.
At March
31, 2020 the balance on the outstanding convertible note payable
with interest accrued in the amount of $93,130 net of $0
discounts.
As of March 31, 2020, the value of
the derivative liability was
$111,181, and the company reduced the derivative liability by
$9,872 by recognizing a gain on the reduction in other income
section of the income statement.
Further details of the outstanding convertible
note as of March 31, 2020 are as follows:
|
Note holder |
St George Investments LLC |
|
Original principal amount |
$112,500 |
|
Debt Offering Costs |
$ (2,500) |
|
Original Issue Discount |
$ (10,000) |
|
Net proceeds to the
Company |
$ 100,000 |
|
Term |
12 months |
|
Interest rate |
10% computed on the basis of a 360
day year comprised of twelve thirty month days, compounded
daily |
|
Security |
Not secured |
|
Prepayment rights |
The Company had the right to prepay
the Note with five trading days notice at 125% of the outstanding
balance |
|
Conversion rights |
On notice, the Note holder had the
right to convert all or a portion of the outstanding balance of the
Note into common shares of the Company at a rate of 65% of the
average of the 2 lowest closing bid prices in the 20 trading days
preceding the notice. Should the company not be, or stop
being DTC / DWAC eligible, the discount rate will increase by
5 % for each instance. |
Interest expense for
this note for the year ending March 31, 2020 and 2019 was $10,630
and $0.
Accrued interest for this note for
the year ending March 31, 2020 and 2019 was $2,474 and
$0.
Outstanding balances on convertible
notes as of March 31, 2020 and 2019 were $93,130
and $98,553.
Furthermore, total outstanding
derivative liability on the convertible notes as of March 31, 2020
and 2019 were $111,181 and $0. Subsequently on April 23, 2020 the
convertible note, with then-outstanding principal of $93,130 and
accrued interest of $2,474 was settled and paid in full.
In addition, on January 23, 2017, the Company took out a note of
$10,000, at 5% interest with a third party. On January 17, 2020,
the Company converted all then-outstanding principal of $10,000 and
accrued interest of $1,490 into 383,059 shares of the Company’s
common stock. This note had a balance at March 31, 2020 and 2019,
respectively, of $0 and $11,092. Accrued interest as of March 31,
2020 and 2019 was $0 and $1,011.
On January 23, 2018, the Company took
out a note of $335,000, at 10% interest with a third party. A total
of 18,129,731 shares of the Company’s common stock was issued to
settle the note from 2018 to 2019. This loan had a balance as of
March 31, 2020 and 2019, respectively, of $0 and
$87,461.
Accrued interest as of March 31, 2020
and 2019 was $0 and $479.
Accrued interest as of March 31, 2020
and 2019 was $2,474 and $1,490.
Note 9 - Related Party Transactions
Effective April 1, 2017, Alan Smith
assigned his consulting agreements and all future amounts due under
the agreements to Evolution Equities Corp, "Evolution". Evolution
is a related party due to Mr. Smith's 100% ownership interest and positions in the company. Evolution
was paid $100,907 for the year ended March 31, 2020 and $90,000 for
the year ended March 31, 2019. As of March 31, 2020 and 2019, the
amount owed to Evolution was $305 and $0,
this amount is included in Accounts Payable and is non-interest
bearing and due on demand. Additionally, the Company has retained
KWPR Group, “KWPR”, a public relations company to assist with web
site maintenance, press release preparation and social network
posts. KWPR is a related party as the owner Kelly Wood is wife to
the CEO Mr. Alan Smith. As of March 31, 2020, and 2019 the total
fees paid to KWPR were $30,000 and
$0 .
Additionally, as of March 31, 2020 and 2019, prepaids due to the
director and officer and outside consultant were $7,500 and $0,
respectively. These include a $5,000 prepayment to our director and
officer for future services, and $2,500 for outside
consultant.
On March 31, 2020, the Company sold its 100% interest in GreenLife
to Evolution Equities Corporation , an entity owned and
controlled by Mr. Smith, for the sum of $1.00. At the time of
the sale, GreenLife had no assets and had liabilities in the amount
of $201,445. Of the liabilities that were in GreenLife, $138,945
were owed to Brent McMahon, a related party. The gain on
deconsolidation has been
reflected as an increase in Additional Paid in Capital of $201,445
as the transaction was with a related party controlled by a
stockholder in the company, resulting in the effective treatment of
the gain as a stockholder contribution. The company assesses its
joint ventures and partnerships at inception to determine if any
meet the qualifications of a variable interest entity ("VIE") in
accordance with Accounting Standards Codification ("ASC") 810,
"Consolidation." If a joint venture or partnership is a VIE and the
company is the primary beneficiary, the joint venture or
partnership is fully consolidated. Management has determined
GreenLife does not meet does not meet the definition of a business
under ASC 805 and is therefore not subject to VIE guidance and
should remain deconsolidated after the sale date. Furthermore, the
Company forgave the balance of $50,000 due from Greenlife on the
transaction date, resulting in a $50,000 loss.
Note 10 – Officer and Director fees
During the year ended
March 31, 2020 and 2019, respectively, the total
officer
and director fees paid were $100,907
and $90,000 to the Company’s CEO and Director. Additionally, as of March 31, 2019 a total
of $60,000 was paid to the former CFO and Director of the Company,
but there were no amounts paid to the former CFO and director
during
the period ending March 31, 2020.
There were no amounts accrued and unpaid as of March 31, 2020 or
2019, respectively.
Note 11 – Commitments and Contingencies
As of March 31, 2020, and 2019 and for the fiscal years then ended,
the Company identified no material commitments and contingencies
requiring disclosure or adjustment to the financial
statements.
Note 12 – Income Taxes
The Company accounts for income taxes using the asset and liability
approach Under this approach, deferred tax assets and liabilities
are recognized based on anticipated future tax consequences, using
currently enacted tax laws, attributable to temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts calculated for income
tax purposes.
The Company had federal
net operating loss carryforwards as of March 31, 2020 and 2019 of
approximately $5,871,365 and $5,434,865 expiring in various
years through 2040. The tax benefit of these net
operating losses has been offset by a full allowance for
realization. The use of the net operating loss carryfowards may be
limited due to a change in control.
The Company’s effective tax rate
differs from the high statutory rate for the year ended March 31,
2020 and 2019, due to the following (expressed as a
percentage of pre-tax income):
| |
|
|
|
Federal taxes at statutory
rate |
|
$ |
21.0 |
% |
| State taxes, net of federal tax
benefit |
|
|
5.0 |
% |
|
Valuation allowance |
|
|
(26.0 |
)% |
|
Effective income tax rate |
|
$ |
0.0 |
% |
The corporate tax rate in Arizona is 6.98% and the corporate tax
rate in Colorado is 4.63%. Were the Company to have income in both
locations, there would be offsetting deductions, thus the Company
does not believe we would pay the full tax rate in both locations.
Management is continuing to monitor the state taxes (as well as
Federal) to insure we are utilizing the best strategies to keep our
effect tax rate as low as legally possible.
As of March 31,
2020 , the components of these temporary differences
and the deferred tax asset were as follows:
| |
|
|
| Deferred
Tax assets: |
|
|
|
Net
operating loss carryforward |
|
$ |
1,526,555 |
|
|
Less:
valuation allowance |
|
|
(1,526,555 |
) |
|
Net deferred tax assets |
|
$ |
— |
|
As of March 31,
2019 , the components of these temporary differences
and the deferred tax asset were as follows:
| |
|
|
| Deferred
Tax assets: |
|
|
|
Net
operating loss carryforward |
|
$ |
1,413,065 |
|
|
Less:
valuation allowance |
|
|
(1,413,065 |
) |
|
Net deferred tax assets |
|
$ |
— |
|
The following tables set forth the components of deferred income
taxes as of March 31, 2020 and 2019:
| |
|
March 31, 2020 |
|
March 31 2019 |
| Deferred tax
assets: |
|
|
|
|
|
|
|
|
| Bad
debt allowance |
|
$ |
— |
|
|
|
— |
|
|
Accrued expenses |
|
|
— |
|
|
|
— |
|
|
Share based compensation accruals |
|
|
— |
|
|
|
— |
|
|
Net operating loss carryforwards |
|
|
5,871,365 |
|
|
|
5,434,865 |
|
|
Unrealized losses |
|
|
0 |
|
|
|
0 |
|
|
Total deferred tax assets |
|
|
5,871,365 |
|
|
|
5,434,865 |
|
|
Less: valuation allowance |
|
|
(5,871,365 |
) |
|
|
(5,434,865 |
) |
|
Net deferred tax assets |
|
$ |
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
| Deferred tax
liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid expenses |
|
$ |
— |
|
|
|
— |
|
|
Fixed assets |
|
|
— |
|
|
|
— |
|
|
Goodwill and intangible assets |
|
|
— |
|
|
|
— |
|
|
Unrealized gains |
|
|
— |
|
|
|
— |
|
|
Total deferred tax liabilities |
|
|
— |
|
|
|
— |
|
|
Less: valuation allowance |
|
|
(—) |
|
|
|
(—) |
|
|
Net deferred tax liabilities |
|
$ |
— |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
Total deferred tax assets, net |
|
$ |
— |
|
|
|
— |
|
Note 13 – Subsequent Events
On April
23, 2020, the Company entered into a Securities Purchase Agreement
with Trilogy
Capital, LLC pursuant to which the
Company agreed to issue 11,750,000 of its restricted common shares
(the “MYHI Shares”) to Trilogy and Trilogy agreed to purchase the
MYHI Shares for $94,000. The proceeds from the sale of the MYHI
Shares were used to pay the outstanding obligations of the Company
under a Convertible Promissory Note dated April 24, 2019 issued to
St. George Investments, LLC, which totaled $90,656
of principal and $2,474 of accrued interest as of April 23,
2020.
Share Exchange Agreement
On May 8,
2020, The Company and Trilogy entered into an Exchange Agreement
pursuant to which the Company agreed to purchase from Trilogy all
of the capital stock of GPS Associates, Inc., a Delaware
corporation ("GPS") in exchange for 215,250,000 restricted shares
of the Company (the “MYHI Shares"). Dr. Judy Pham is the sole
member and manager of Trilogy. Dr Pham is also the sole member and
manager of Alchemy Capital LLC ("Alchemy") which owns 53,727,273
shares of the Company's Common Stock. The audited financial
statements of GPS consisting of balance sheets as of December 31,
2019 and 2018 and for the applicable interim periods and the
related statements of operations, stockholders equity and cash
flows for the years and interim periods then ended together with
proforma financial statements consisting of proforma unaudited
combined balance sheets as of December 31, 2019 and interim period
and unaudited proforma combined statement of operations for the
year ended December 31, 2019 and interim period will be filed
pursuant to the rules according to the Current Report on the from
8-K announcing this transaction.
As of the date of the Exchange Agreement, May 8, 2020, based on the
closing price, the 215,250,000 shares issued were valued at
$1,650,000.
On May 13, 2020, the Exchange was consummated.
As an interim step to assure the acquisition of GPS by MYHI,
pursuant to an Exchange Agreement dated as April 10, 2020 between
Trilogy and the shareholders of GPS (the "GPS/Trilogy
Transaction"), Trilogy purchased all of the capital stock of GPS
for $300,000 and 5,000,000 shares of the common stock of MYHI
(subject to adjustment based on the future value of the MYHI shares
and the EBITDA of GPS). The 5,000,000 shares were to be delivered
to the GPS shareholders upon the consummation of the Exchange
referred to in Item 1.01. Subsequent to the closing of the
GPS/Trilogy Transaction, Trilogy provided financing to GPS for the
acquisition of equipment and the purchase of raw material
inventories. Among other things, the financing enabled GPS to
increase its revenues from the sale of hand sanitizers as discussed
below under "Description of GPS" which in turn increased the
valuation of GPS used by MYHI in its purchase of GPS.
Description of GPS
GPS is a California based company engaged in the formulation,
manufacturing, branding, fulfillment and distribution of
hemp-derived CBD products at its cGMP, FDA-registered facility in
Santa Ana, California. GPS's team of professionals includes
physiologists, chemists, herbalists and botanists committed to
combining high-quality organic CBD with synergistic organic, raw
herbs to produce pure, premium consumer products. All products
manufactured by GPS are tested at independent, third party
laboratories to prove potency and purity.
GPS's continually expanding product offering is sold directly to
consumers online as well as through wholesale partners (both online
and brick and mortar stores) under its retail brand name, Zen
Drops. The product offering includes tinctures, salves, gummies,
transdermal patches and oral thin films.
However, GPS's primary focus is manufacturing products for its
white label clients nationwide. In this regard, GPS acts as a
contract manufacturer. The labeling is with the client company's
logo and branding and sold through the client's channels to its
customers.
The GPS product development team blends organic raw herbs with CBD
isolate and CBD distillate extracted from organically grown hemp to
ensure safety, potency and purity. Also, the graphic design team
creates logos, labels and other marketing assets to assist its
white-label clients, the objective being to provide the client’s
CBD brand with maximum visual impact in the market.
Once a white label client has approved the custom formulation and
branded art work developed by GPS, the client’s new CBD product
goes into production at GPS’s facility. All batches come with a
certificate of analysis of the cannabinoid breakdown from a
third-party testing facility. After testing, the products are
bottled, capped, sealed and labeled with the client’s custom
labels. The entire order is then packed and shipped to the white
label client.
To meet the demand created by the
Coronavirus pandemic, GPS has expanded its operations to produce
medical grade, alcohol-based hand sanitizer - proven to be 99.9%
effective against germs. Additional production and bottling
equipment has been acquired to rapidly expand GPS’s manufacturing
capacity for this product line. The hand sanitizer line is
formulated to include powerful botanical constituents such as red
thyme oil, which has exceptional antiviral, antimicrobial and
antiseptic properties .
In accordance with FASB ASC 855-10, Subsequent Events, the Company
has analyzed its operations subsequent to March 31, 2020 to the
date these consolidated financial statements were issued, and has
determined that it does not have any additional material subsequent
events to disclose in these consolidated financial statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Based on an evaluation as of the date of the end of the period
covered by this report, our Chief Executive Officer and Chief
Financial Officer, conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures,
as required by Exchange Act Rule 13a-15. Based on that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of
March 31, 2020 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 by the SEC’s rules and forms.
Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to
be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief
Executive Officer and our Chief Financial Officer, to allow timely
decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate control over financial reporting (as defined in Rule
13a-15(f) promulgated under the Exchange Act. Our management
assessed the effectiveness of our internal control over financial
reporting as of March 31, 2020. In making this assessment
management conducted an
evaluation of the effectiveness of our internal control over
financial reporting based on the criteria in Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013) (COSO). Our
management has concluded that, as of March 31, 2020, our internal
control over financial reporting is effective based on these
criteria.
Changes in Internal Control and Financial
Reporting
There has been no change in our internal control over financial
reporting identified in connection with our evaluation we conducted
of the effectiveness of our internal control over financial
reporting as of March 31, 2020, that occurred during our fourth
fiscal quarter that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
This annual report does not include an attestation report of the
Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not
subject to attestation by the Company’s registered public
accounting firm pursuant to temporary rules of the SEC that permit
the Company to provide only management’s report in this annual
report.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
Identification of Director(s) and Executive
Officer(s)
The following table sets forth the name(s) and age(s) of our
current director(s) and executive officer(s):
| Name |
|
Age |
|
Position(s)
Held |
|
Date
of Appointment |
|
Other Public
Company Directorships Held |
| |
|
|
|
|
|
|
|
|
|
Alan Smith |
|
|
69 |
|
|
President, Chief Executive Officer, Treasurer, Secretary and
Director |
|
|
March 5, 2014 |
|
|
Altair International Corporation
|
| Raymond
Watt |
|
|
44 |
|
|
Director |
|
|
August 18, 2018 |
|
|
None |
Term of Office
Each of our directors is appointed to hold office until the next
annual meeting of our stockholders and until his/her respective
successor is elected and qualified, or until his or her earlier
death, resignation or removal. Our officers are appointed by our
Board of Directors to hold office until the next annual meeting of
the Board and until his/her respective successor is duly appointed
and qualified, or until his or her earlier death, resignation or
removal.
Background and Business Experience
The business experience during the past five years of each of the
persons presently listed above as an Officer or Director of the
Company is as follows:
Mr. Alan Smith – During the past five years, Alan Smith, has
provided independent financial consulting services to a variety of
startup and development stage companies in the technology, resource
and consumer products sectors as President and CEO of Evolution
Equities Corporation. These services have included corporate
reorganizations and restructuring, the development of internal
systems and controls and assistance with financing in both the
private and public markets. He has also been an active investor in
startup ventures while managing his own personal equity portfolio.
Mr. Smith is a Chartered Professional Accountant (retired) and has
provided audit, tax and financial consulting services to a wide
variety of small to medium sized companies during his 36 year
career. During this period, Mr. Smith became known for his
proficiency in negotiating highly advantageous acquisitions,
reorganizing operations, improving efficiencies, and establishing
financial controls. The primary focus of Mr. Smith’s career
however, has been the successful restructuring of companies in
transition and leading the development of business plans to assist
them in procurement of short to medium term financing, many through
public offerings. Mr. Smith obtained his
Chartered Accountant designation in 1978 from the Institute of
Chartered Accountants of Ontario. He was also a member of the
Institute of Chartered Accountants of British Columbia from 1980
until his retirement in 1999. Additionally, Mr. Smith earned an MBA
in 1975 from Queen’s University at Kingston, Ontario and a Bachelor
of Applied Science (Civil Engineering) in 1973, also from Queen’s
University.
Mr. Raymond
Watt – During the past five years, Mr. Watt has successfully
started and sold numerous technology companies and has a 20-year
plus experience in both Software Development and Enterprise System
Outsourcing. Previously, Mr. Watt served as the Chief Technical
Officer of EOH Oracle Services, a group within the largest
Information Technology firm listed on the South African Stock
Exchange. He has served on the board of Braingear AG, a
medical-device focused biotech company, as well as GRI Bio, a San
Diego based pharmaceutical company. Mr. Watt received his B.Sc. in
Computer Science from NorthWest University and an MBA in
Information technology from Bond University in Australia. Mr. Watt
is an active member of the Coastal San Diego chapter of the Young
Presidents Organization (YPO), and currently serves as their
Chapter Chair.
Identification of Significant
Employees
As of the date of this Report, the
Company has no full-time employees or part-time employees, other
than our officers and directors. We intend to increase the number
of our employees and consultants to meet our needs as the Company
grows.
Family Relationships
There are no family relationships among our officers, directors or
persons nominated for such positions.
Involvement in Certain Legal Proceedings
During the past ten years no director, executive officer, promoter
or control person of the Company has been involved in the
following:
|
(1) |
A
petition under the Federal bankruptcy laws or any state insolvency
law which was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or
property of such person, or any partnership in which he was a
general partner at or within two years before the time of such
filing, or any corporation or business association of which he was
an executive officer at or within two years before the time of such
filing; |
|
(2) |
Such
person was convicted in a criminal proceeding or is a named subject
of a pending criminal proceeding (excluding traffic violations and
other minor offenses); |
|
(3) |
Such
person was the subject of any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him
from, or otherwise limiting, the following activities: |
|
i. |
Acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool
operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an
associated person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an
affiliated person, director or employee of any investment company,
bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection
with such activity; |
|
ii. |
Engaging in any type of business practice;
or |
|
iii. |
Engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with
any violation of Federal or State securities laws or Federal
commodities laws; |
|
(4) |
Such
person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any Federal or
State authority barring, suspending or otherwise limiting for more
than 60 days the right of such person to engage in any activity
described in paragraph (f)(3)(i) of this section, or to be
associated with persons engaged in any such activity; |
|
(5) |
Such
person was found by a court of competent jurisdiction in a civil
action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by
the Commission has not been subsequently reversed, suspended, or
vacated; |
|
(6) |
Such
person was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any Federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading Commission
has not been subsequently reversed, suspended or
vacated; |
|
(7) |
Such
person was the subject of, or a party to, any Federal or State
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged
violation of: |
|
i. |
Any
Federal or State securities or commodities law or regulation;
or |
|
ii. |
Any
law or regulation respecting financial institutions or insurance
companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order; or |
|
iii. |
Any
law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or |
|
(8) |
Such
person was the subject of, or a party to, any sanction or order,
not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.
1(a)(29))), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or
persons associated with a member. |
Audit Committee and Audit Committee Financial
Expert
The Company does not have an audit committee or an audit committee
financial expert (as defined in Item 407 of Regulation S-K) serving
on its Board of Directors. All current members of the Board of
Directors have sufficient financial expertise for overseeing
financial reporting responsibilities. The Company has not yet
employed an audit committee financial expert on its Board due to
the inability to attract such a person.
The Company intends to establish an audit committee of the board of
directors, which will consist of independent directors. The audit
committee’s duties will be to recommend to the Company’s Board of
Directors the engagement of an independent registered public
accounting firm to audit the Company’s financial statements and to
review the Company’s accounting and auditing principles. The audit
committee will review the scope, timing and fees for the annual
audit and the results of audit examinations performed by the
internal auditors and independent registered public accounting
firm, including their recommendations to improve the system of
accounting and internal controls. The audit committee will at all
times be composed exclusively of directors who are, in the opinion
of the Company’s Board of Directors, free from any relationship
which would interfere with the exercise of independent judgment as
a committee member and who possess an understanding of financial
statements and generally accepted accounting principles.
Code of Ethics
The Company has not adopted a Code of Ethics because the Company
has only two directors, one of whom also serves as sole executive
officer of the Company. The Board of Directors chose not to reduce
to writing standards designed to deter wrongdoing and promote
honest and ethical conduct as they believe that the Company’s very
small size and the limited number of personnel who are responsible
for its operations make a formal Code of Ethics unnecessary.
Compliance with Section 16(a) of the Exchange Act
We do not yet have a class of equity securities registered under
the Securities Exchange Act of 1934, as amended. Hence,
compliance with Section 16(a) thereof by our officers and directors
is not required.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation paid to our
executive officers during the twelve month periods ended March 31,
2020 and March 31, 2019:
|
Summary Compensation
Table |
|
Name and Principal
Positions |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation
($) |
Non-Qualified Deferred Compensation in
Earnings ($) |
All Other Compensation ($) |
Total ($) |
|
Alan Smith – President, CEO, ,
Treasurer, and Director (1) |
2020 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$100,907(3) |
$100,907 |
| 2019 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$90,0000 (3) |
$90,000 |
| |
|
|
|
|
|
|
|
|
|
| Richard Stifel-CFO, Secretary and Director
(2) |
2020 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| |
2019 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$60,000 (4) |
$60,000 |
(1) Mr. Smith was appointed as the
Company’s sole Chief Executive Officer, Chief Financial
Officer, Secretary, Treasurer and Director on March
5, 2014.
(2) Mr. Stifel was appointed as the Company's Chief Financial
Officer, Secretary and a Director on October 1, 2014. Mr. Stifel
resigned from all positions with the Company on November 30,
2018.
(3) Mr. Smith’s compensation was paid in cash directly to his
wholly owned company Evolution Equities Corporation.
(4) Mr. Stifel’s compensation was paid in cash directly to his
wholly owned company RGS Resources LLC.
Narrative Disclosure to Summary Compensation
Table
There are no employment contracts,
compensatory plans or arrangements, including payments to be
received from the Company with respect to any executive officer,
that would result in payments to such person because of his or her
resignation, retirement or other termination of employment with the
Company, or its subsidiaries, any change in control, or a change in
the person’s responsibilities following a change in control of the
Company . The
Board of Directors has not currently approved any agreements which
would call for a payout or termination benefits on any of these
items.
Outstanding Equity Awards at Fiscal Year-End
No officer(s) or director(s) of the Company received any equity
awards, or holds exercisable or non-exercisable options, as of the
year ended March 31, 2020.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for director(s) or executive
officer(s).
Compensation of Directors
Our directors receive no extra compensation for their service on
our Board of Directors.
Compensation Committee
We currently do not have a compensation committee of the Board of
Directors. The Board of Directors as a whole determines executive
compensation.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS |
The following table sets forth certain information concerning the
number of shares of our Common Stock owned beneficially as of March
31, 2020, by: (i) each of our director(s); (ii) each of our named
executive officer(s); and (iii) each person or group known by us to
beneficially own more than 5% of our outstanding shares of common
stock. Unless otherwise indicated, the shareholders
listed below possess sole voting and investment power with respect
to the shares they own.
|
Name and Address of Beneficial
Owner |
Title of Class |
Amount and Nature of Beneficial
Ownership (1)
|
Percent of Class (2)
(%)
|
|
Alan
Smith (3)
6501
E Greenway Pkwy #103-412
Scottsdale, AZ 85254
|
Common |
10,962,017 |
5.38% |
|
Dr
Judy Pham (4)
578
Washington Blvd Ste 578
Marina Del Rey, CA 90292
|
Common |
53,727,273 |
26.36% |
|
All Officers and Directors as a
Group (2) |
Common |
10,962,017 |
5.38% |
|
(1) |
The
number and percentage of shares beneficially owned is determined
under rules of the SEC and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power
and also any shares which the individual has the right to acquire
within 60 days through the exercise of any stock option or other
right. The persons named in the table have sole voting and
investment power with respect to all shares of common stock shown
as beneficially owned by them, subject to community property laws
where applicable and the information contained in the footnotes to
this table. |
|
(2) |
Based
on 220,685,606 issued and outstanding shares of our Common Stock as
of March 31, 2020. |
|
(3) |
Alan
Smith, an officer and director, owns 10,962,017 shares of our
Common Stock. |
|
(4) |
Dr.
Judy Pham is the sole Member of Alchemy Capital LLC which in turn
owns 53,727,273 shares of our Common Stock. |
Changes in Control
There are no present arrangements or pledges of the Company’s
securities which may result in a change in control of the
Company.
|
ITEM 13. |
CERTAIN RELATIONSHIPS, RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE |
Related Party Transactions
None of the director(s) or executive officer(s) of the Company, nor
any person who owned of record or was known to own beneficially
more than 5% of the Company’s outstanding shares of its Common
Stock, nor any associate or affiliate of such persons or companies,
has any material interest, direct or indirect, in any transaction
that has occurred during the past fiscal year, or in any proposed
transaction, which has materially affected or will affect the
Company except as noted below.
Subsequent to March 31, 2020, the Company entered into a Securities
Purchase Agreement pursuant to which the Company agreed to issue
11,750,000 restricted shares to Trilogy Capital LLC for $94,000.
The proceeds from the sale of the Shares were used to pay off the
outstanding Convertible Promissory Note dated April 24, 2019 issued
to St. George Investments, LLC.
Additionally, the Company entered into an Exchange Agreement with
Trilogy Capital LLC, in which the Company agreed to purchase from
Trilogy all of the capital stock of GPS Associates, Inc. (GPS), in
exchange for 215,250,000 shares in the Company. Dr. Judy Pham is
the sole member and manager of Trilogy. The Company and its Board
of Directors believed it was in its best interest to acquire GPS in
order to increase its revenues and cash flow.. The Board determined
the purchase price based on negotiations with the Seller, inclusive
of the terms available for the sale.
Dr. Pham is the sole member of
Alchemy Capital, LLC which owns 53,727,273
shares
of the Company’s common
stock . As a result of these issuance, through her
ownership in Trilogy and Alchemy now beneficially owns
249,727,273shares representing % of the outstanding shares of
common stock in the Company .
With regard to any future related party transaction, we plan to
fully disclose any and all related party transactions in the
following manner:
x disclosing such
transactions in reports where required;
x disclosing in any and
all filings with the SEC, where required;
x obtaining disinterested
directors’ consent; and
x obtaining shareholder
consent where required.
Director Independence
For purposes of determining director independence, we have applied
the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on
which shares of Common Stock are quoted does not have any director
independence requirements. The NASDAQ definition of “Independent
Director” means a person other than an Executive Officer or
employee of the Company or any other individual having a
relationship which, in the opinion of the Company’s Board of
Directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director.
According to the NASDAQ definition, Alan Smith is not an
independent director because he is also an executive officer of the
Company.
Review, Approval or Ratification of Transactions with Related
Persons
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the
information under this item.
ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES
The Company has selected BF Borgers CPA PC as our principal
auditor. We do not anticipate they will be present at the next
stockholder’s meeting. The fees shown below reflect the fees billed
to us by BF Borgers CPA PC during the respective periods.
| |
|
Year Ended
March 31, 2020
|
|
Year Ended
March 31, 2019
|
| Audit fees |
|
$ |
31,320 |
|
|
$ |
32,940 |
|
| Audit-related fees |
|
$ |
0 |
|
|
$ |
0 |
|
| Tax fees |
|
$ |
0 |
|
|
$ |
0 |
|
| All other fees |
|
$ |
0 |
|
|
$ |
0 |
|
| Total |
|
$ |
31,320 |
|
|
$ |
32,940 |
|
Audit Fees
During the fiscal year ended March 31, 2020, we incurred
approximately $31,320 in fees to our principal independent
accountants for professional services rendered in connection with
the audit and review of our financial statements for fiscal year
ended March 31, 2020.
During the fiscal year ended March 31, 2019, we incurred
approximately $32,940 in fees to our principal independent
accountants for professional services rendered in connection with
the audit and review of our financial statements for fiscal year
ended March 31, 2019.
Audit-Related Fees
The
aggregate fees billed during the fiscal years ended March 31, 2020
and 2019 for assurance and related services by our principal
independent accountants that are reasonably related to the
performance of the audit or review of our financial statements (and
are not reported under Item 9(e)(1) of Schedule 14A)
were $nil and $nil,
respectively.
Tax Fees
The
aggregate fees billed during the fiscal years ended March 31, 2020
and 2019 for professional services rendered by our principal
accountant tax compliance, tax advice and tax planning were
$nil and
$nil,
respectively.
All Other Fees
The aggregate fees billed during the fiscal years ended
March 31, 2020 and 2019 for products and services provided
by our principal independent accountants (other than the services
reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A) were
$31,320 and $32,940, respectively.
In the above table, in accordance with the SEC’s definitions and
rules, “audit fees” are fees for professional services for the
audit of a company’s financial statements included in the annual
report on Form 10-K, for the review of a company’s financial
statements included in the quarterly reports on Form 10-Q, and for
services that are normally provided by the accountant in connection
with statutory and regulatory filings or engagements;
“audit-related fees” are fees for assurance and related services
that are reasonably related to the performance of the audit or
review of a company’s financial statements; “tax fees” are fees for
tax compliance, tax advice, and tax planning; and “all other fees”
are fees for any services not included in the first three
categories.
Our policy is to pre-approve all audit and permissible non-audit
services performed by the independent accountants. These services
may include audit services, audit-related services, tax services
and other services. We do not currently have an Independent Audit
Committee. Our Board of Directors approved all services that our
independent accountants provided to us in the past two fiscal
years.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
|
Exhibit
Number
|
Description
of Exhibit |
Filing |
| 31.01 |
Certification of Principal
Executive Officer Pursuant to Rule 13a-14 |
Filed
herewith. |
| 31.02 |
Certification of Principal
Financial Officer Pursuant to Rule 13a-14 |
Filed
herewith. |
| 32.01 |
CEO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act |
Filed
herewith |
| 32.02 |
CFO Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act |
Filed
herewith |
| 101.INS* |
XBRL Instance
Document |
Filed
herewith. |
| 101.SCH* |
XBRL Taxonomy Extension Schema
Document |
Filed
herewith. |
| 101.CAL* |
XBRL Taxonomy Extension
Calculation Linkbase Document |
Filed
herewith. |
| 101.LAB* |
XBRL Taxonomy Extension Labels
Linkbase Document |
Filed
herewith. |
| 101.PRE* |
XBRL Taxonomy Extension
Presentation Linkbase Document |
Filed
herewith. |
| 101.DEF* |
XBRL Taxonomy Extension
Definition Linkbase Document |
Filed
herewith. |
|
(b) |
*Pursuant to Regulation S-T, this
interactive data file is deemed not filed or part of a registration
statement or prospectus for purposes of Sections 11 or 12 of the
Securities Act of 1933, is deemed not filed for purposes of Section
18 of the Securities Exchange Act of 1934, and otherwise is not
subject to liability under these sections. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
MOUNTAIN HIGH ACQUISITIONS CORP.
Dated: July 2, 2020
/s/ Alan
Smith
By:
Alan Smith
Its: President, CEO, CFO, Secretary, Treasure and Director
Pursuant to the requirement of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates
indicated:
Dated: July 2, 2020
/s/ Alan
Smith
Alan Smith
Its: President, CEO, CFO, Secretary, Treasurer and Director
40
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