UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

For the transition period from _______to___________________ to ___________

Commission file number001-37567.File Number 000-55557 

CEN BIOTECH, INC.

(Exact name of registrant as specified in its charter)

7405 Tecumseh Road East Suite 300 Windsor, Ontario N8T 1G2, Canada(519) 419-4958

(Registrant’s telephone number, including area code)

N/A

(Address of principal executive offices)

226-344-0660

(Registrant’s telephone number)Former name, former address and former fiscal year, if changed since last report) 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [ X ]X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ X ]X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth.growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):Act.

Large Accelerated Filer [  ]   Accelerated Filer [  ]       Non-Accelerated Filer [  ]      

Smaller Reporting Company [X ] EmergingIf an emerging growth company, [  ]      

Indicateindicate by check mark whetherif the registrant is an accelerated filer (as defined in Rule 12b-2has 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) YesAct. [  ] No [X  ]

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).: Yes [  ] No [X][X]

At November 17, 2017,Securities registered pursuant to Section 12(b) of the numberAct: 

As of August 19, 2019, there were 26,843,363, shares of the Registrant’s common stock, outstanding was 10,525,000.no par value per share (“common stock”), of the registrant outstanding.

PART I. FINANCIAL INFORMATION

PART I
ITEM 1. FINANCIAL STATEMENTS Contents Page CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:       Unaudited Condensed consolidated balance sheets F-1 Contents Page     Unaudited Condensed consolidated statements of operations CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: F-2     Unaudited Condensedcondensed consolidated statements of cash flows balance sheets                                               F-3 F-1     Unaudited condensed consolidated statements of operations                                     F-2 Unaudited condensed consolidated statements of shareholders’ deficit                                F-3 Unaudited condensed consolidated statements of cash flows                                     F-4 Notes to the unaudited condensed consolidated financial statements F-4 F-5   3 CEN BIOTECH, INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets (Unaudited)     June 30, 2019     December 31, 2018   ASSETS                 Current assets                 Cash and cash equivalents   $ 15,972     $ 3,193                     Property, plant and improvements                 Property and equipment, net     157,317       166,509   Other assets                 Operating lease right-of-use assets     250,484       -   Other receivable     419,958       418,905   Note receivable – related party     44,859       44,859   Advances to CEN Biotech Ukraine LLC – related party     995,328       875,328   Intangible assets, net     5,593,365       5,805,771                     Total assets   $ 7,477,283     $ 7,314,565                     LIABILITIES AND SHAREHOLDERS’ DEFICIT                 Current liabilities                 Accounts payable   $ 206,521     $ 206,521   Loans payable     10,119,178       10,107,205   Loans payable – related parties     1,362,318       1,360,806   Convertible notes payable     4,318,916       3,597,760   Convertible notes payable – related parties     926,368       926,368   Accrued interest     8,206,898       6,860,494   Accrued interest – related parties     1,119,126       946,227   Operating lease liabilities     42,306       -   Accrued expenses     492,235       402,377                     Total current liabilities     26,793,866       24,407,758                     Operating lease liabilities, less current portion     205,327       -   Patent acquisition liability     1,010,000       1,010,000   Convertible notes, less current portion     1,386,122       1,545,887   Convertible notes – related parties, less current portion     1,632,313       1,612,313                     Total liabilities     31,027,628       28,575,958                                                         Shareholders’ deficit                 Common stock; unlimited authorized shares; 26,813,363 and 25,473,363 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. No par value.     -       -   Additional paid-in capital     15,198,110       14,393,660   Accumulated deficit     (38,748,455 )     (35,655,053 ) Total shareholders’ deficit     (23,550,345 )     (21,261,393 ) Total liabilities and shareholders’ deficit   $ 7,477,283     $ 7,314,565   See accompanying notes to financial statements. F-1   CEN BIOTECH, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETSCondensed Consolidated Statements of Operations SEPTEMBER 30, 2017 (Unaudited) and DECEMBER 31, 2016       September 30,     December 31,       2017     2016   ASSETS          CURRENT ASSETS:                 Cash   $ 60,388     $ 62,381   Total Current Assets     60,388       62,381                     PROPERTY, EQUIPMENT & MACHINERY:                 Property and Equipment Placed in Service, Net     15,017       16,342   Improvement in Process     1,412,487       1,270,115   OTHER ASSETS:                 Other Receivable     122,861       -   Advance on Business Acquisition     775,328       425,328   Intangible Asset, Net     2,209,152       2,319,852   TOTAL ASSETS   $ 4,595,233     $ 4,094,019   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          CURRENT LIABILITIES:                 Accounts Payable   $ 85,767     $ 157,054   Accounts Payable - Related Parties     2,994       62,994   Accrued interest     4,016,484       2,717,478   Accrued Interest - Related Parties     503,056       107,140   Accrued Expenses     287,650       840,584   Loan Payable - Related Parties     849,127       846,448   Loan Payable     9,983,501       9,962,287   Loan Payable - Short Term Convertible Notes     885,207       -   Total Current Liabilities     16,613,786       14,693,985                     LONG TERM LIABILITIES:                 Loans Payable - Convertible Notes     2,150,904       1,391,603   Loans Payable - Convertible Notes - Related Parties     2,710,312       1,388,121   Total Long Term Liabilities     4,861,216       2,779,724   Total Liabilities     21,475,002       17,473,709                     STOCKHOLDERS' EQUITY (DEFICIT):                 Preferred stock; unlimited authorized shares; 100,000 issued and outstanding     10       10   Common stock; unlimited authorized shares; 10,525,000 issued and outstanding     85       85   Additional paid-in capital     10,000       10,000   Accumulated deficit     (16,889,864 )     (13,389,785 ) Total Stockholders' Equity (Deficit)     (16,879,769 )     (13,379,690 ) TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)   $ 4,595,233     $ 4,094,019       For the three months ended June 30,     For the six months ended June 30,       2019     2018     2019     2018   Operating expenses                                 Consulting fees   $ 178     $ 48,500     $ 19,120     $ 60,485   Consulting fees – related parties     37,759       45,839       68,959       77,039   Stock based compensation     546,150       179,800       713,550       347,200   General and administrative     412,527       694,595       600,212       1,136,434                                     Total operating expenses     996,614       968,734       1,401,841       1,621,158                                     Loss from operations     (996,614 )     (968,734 )     (1,401,841 )     (1,621,158 )                                   Other income (expense)                                 Interest expense     (714,791 )     (608,670 )     (1,416,679 )     (1,203,173 ) Interest expense – related parties     (114,226 )     (105,292 )     (227,439 )     (209,578 ) Interest income     2,052       -       4,097       -   Foreign exchange gain (loss)     (27,046 )     23,155       (51,540 )     53,598                                     Other expense, net     (854,011 )     (690,807 )     (1,691,561 )     (1,359,153 )                                   Net loss   $ (1,850,625 )   $ (1,659,541 )   $ (3,093,402 )   $ (2,980,311 )                                   Net loss per share:                                 Basic and diluted   $ (0.07 )   $ (0.07 )   $ (0.12 )   $ (0.12 )                                   Weighted average number of shares outstanding                                 Basic and diluted     26,173,473       25,222,721       25,836,540       25,188,132   See accompanying notes to financial statements. F-2 CEN BIOTECH, INC. AND SUBSIDIARY Condensed Consolidated Statements of Shareholders’ Deficit (Unaudited)             Common     Additional             Total       Common     Shares     Paid-in     Accumulated     Shareholders’       Shares     Amount     Capital     Deficit     Deficit                                             Balances, January 1, 2018     25,131,843     $ -     $ 9,110,041     $ (28,124,692 )   $ (19,014,651 )                                           Patent acquisition liability modification     -       -       4,380,000       -       4,380,000                                             Stock-based compensation     20,000       -       347,200       -       347,200                                             Issuance of common stock – interest shares     96,400       -       59,768       -       59,768                                             Issuance of common stock – legal consulting     125,000       -       77,500       -       77,500                                             Net loss     -       -       -       (2,980,311 )     (2,980,311 )                                           Balances, June 30, 2018     25,373,243     $ -     $ 13,974,509     $ (31,105,003 )   $ (17,130,494 )                                           Balances, January 1, 2019     25,473,363     $ -     $ 14,393,660     $ (35,655,053 )   $ (21,261,393 )                                           Stock-based compensation     1,250,000       -       713,550       -       713,550                                             Issuance of common stock – interest shares     90,000       -       90,900       -       90,900                                             Net loss     -       -       -       (3,093,402 )     (3,093,402 )                                           Balances, June 30, 2019     26,813,363     $ -     $ 15,198,110     $ (38,748,455 )   $ (23,550,345 ) See accompanying notes to financial statements. F-3 CEN BIOTECH, INC. AND SUBSIDIARY Condensed Consolidated Statements of Cash Flows (Unaudited)     For the six months ended June 30,       2019     2018   Cash flows from operating activities                 Net loss   $ (3,093,402 )   $ (2,980,311 ) Adjustments to reconcile net loss to net cash used in operating activities                 Depreciation     9,192       5,038   Amortization     212,406       212,406   Stock-based compensation – employees     713,550       347,200   Stock-based compensation – others     -       77,500   Non-cash interest expense     1,382,764       1,170,577   Non-cash interest expense – related parties     227,439       209,576   Deferred lease expense     -       27,152   Foreign exchange loss (gain)     51,540       (53,598 ) Changes in operating assets and liabilities which provided (used) cash                 Lease right-of-use assets     5,842       -   Other receivable     (1,053 )     (242,558 ) Accounts payable     (3,698 )     62,580   Operating lease liabilities     (8,693 )     -   Accrued expenses     89,858       44,103                     Net cash used in operating activities     (414,255 )     (1,120,335 )                   Cash flows from investing activities                 Advance on business acquisition     (120,000 )     -   Leasehold improvements in progress     -       (5,439 )                   Net cash used in investing activities     (120,000 )     (5,439 )                   Cash flows from financing activities                 Issuance of loans payable     -       380,000   Repayment of loans payable     -       (230,000 ) Issuance of loans payable – related parties     -       225,000   Issuance of convertible notes     533,034       707,800   Repayment of convertible notes     (6,000 )     (20,000 ) Issuance of convertible notes – related parties     20,000       -                     Net cash provided by financing activities     547,034       1,062,800                     Net increase (decrease) in cash and cash equivalents     12,779       (62,974 )                   Cash and cash equivalents, beginning of period     3,193       84,978                     Cash and cash equivalents, end of period   $ 15,972     $ 22,004                     Supplemental cash flows disclosures                 Cash paid for interest   $ 33,913     $ 32,598                     Non-cash transactions - investing and financing activities                 Patent acquisition liability modification   $ -     $ 4,380,000     See accompanying notes to financial statements.   F-4   CEN BIOTECH, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 AND THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 (Unaudited)     For the Three Months Ended     For the Nine Months Ended       September 30,     September 30,       2017     2016     2017     2016   REVENUE   $ -     $ -     $ -     $ -                                     OPERATING EXPENSES                                 Salary and Consulting Fees     195,381       -       498,158       95,239   Salary and Consulting Fees - Related Parties     -       24,000       -       24,000   General and Administrative     272,438       160,148       1,145,632       444,177   Foreign Exchange Loss (Gain)     49,094       (1,480 )     93,237       54,123   Total Operating Expenses     516,913       182,668       1,737,027       617,539   Loss from operations     516,913       182,668       1,737,027       617,539                                     OTHER INCOME OF EXPENSES                                 Sale of Equipment     -       -       -       2,321   Interest     (518,894 )     (353,727 )     (1,552,275 )     (1,020,051 ) Interest - Related Parties     (85,947 )     (59,942 )     (210,777 )     (165,088 ) Total Other Income of Expenses     (604,841 )     (413,669 )     (1,763,051 )     (1,182,818 ) Net Loss   $ (1,121,754 )   $ (596,337 )   $ (3,500,079 )   $ (1,800,357 )                                   Net Loss Per Share: Basic and Diluted     (0.11 )     (0.09 )     (0.33 )     (0.26 )                                   Weighted Average Number of Shares Oustanding: Basic and Diluted     10,525,000       7,000,000       10,525,000       7,000,000   See accompanying notes to financial statements. CEN BIOTECH, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016 (Unaudited)     September 30,     September 30,       2017     2016   Cash Flows from Operating Activities                 Net Income (Loss)   $ (3,500,079 )   $ (1,800,356 ) Adjustments to Reconcile Net (Loss) to Net Cash Used in Operating Activities                 Depreciation & Amortization     112,026       13,159   Changes in Operating Assets and Liabilities                 (Increase) in Other Receivable     (122,861 )     -   Increase (Decrease) in Accounts Payable & Acrued Expenses     (624,221 )     244,918   Increase (Decrease) in Accounts Payable - Related Parties     (60,000 )     (12,006 ) Increase (Decrease) in Accrued Interest     1,694,922       1,185,138   Net Cash Flows Used in Operating Activities     (2,500,213 )     (369,147 )                   Cash Flows from Investing Activities                 Leasehold Improvements and Other Assets     (142,372 )     7,265   Advance on Business Acquisition     (350,000 )     (310,188 ) Net Cash (Used in) Provided by Investing Activities     (492,372 )     (302,923 )                   Cash Flows from Financing Activities                 Proceeds from Notes     -       174,815   Proceeds from Convertible Notes     759,300       525,812   Proceeds from Convertible Notes - Related Parties     2,231,292       -   Net Cash (Used in) Provided by Financing Activities     2,990,592       700,627                     Net Increase (Decrease) in Cash and Cash Equivalents     (1,993 )     28,557   Cash and Cash Equivalents, Beginning of Year     62,381       3,016   Cash and Cash Equivalents, End of Year   $ 60,388     $ 31,573                     Supplemental Cash Flow Information                 Cash Paid For;                 Interest   $ 33,716     $ -   Income Taxes Paid     -       -   Accrued Expense Reclassified to Notes Payable     831,628       105,206   Accrued Interest Reclassified to Notes Payable     -       254,829   Patent Acquisition:                 Construction in Progress Exchanged for Patent   $ -       1,096,816   Land Exchanged for Patent     -       1,064,651   Loans Payable Exchanged for Patent     -       202,663   Stock Issued in Exchange for Patent     -       3   Patent Acquired with Above Consideration   $ -     $ 2,364,133   See accompanying notes to financial statements. CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements (Unaudited) (All amounts are in US dollars unless otherwise stated.)   NOTE 1--BASIS1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the condensed consolidated financial statements of the Company for the year ended December 31, 20162018 and notes thereto. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s annual report on Form 10-K for the year ended December 31, 2018.   Organization CEN Biotech, Inc. (“CEN” or the “Company”) was incorporated in Canada on August 4, 2013 as a subsidiary of Creative Edge Nutrition, Inc. (“Creative”), a public company incorporated in Nevada. Creative distributed the shares of CEN common stock on a pro rata basis to the Creative shareholders on February 29, 2016 at which time CEN became an independent public company. The financial statements also include the accounts of CEN Holdings, Inc. a Michigan corporation that was incorporated on May 13, 2016 as a wholly-owned subsidiary of the Company and was terminated on March 20, 2017. Intercompany account balances and transactions are eliminated in the consolidated financial statements. CEN is an early stage Canadian biopharmaceutical company founded to integrate agronomical and pharmaceutical principles for the purposes of growing, selling, processing and delivering pharmaceutical-grade medical marijuana in its pure and extracted form to patients in accordance with Health Canada’s newly-formed Marijuana for Medical Purposes Regulations (MMPR) and any other Canadian legislation that permits the legal use of marijuana. CEN is actively pursuing business opportunities globally with the intent to grow, sell, process and deliver pharmaceutical grade medical marijuana in various drug delivery mechanisms within jurisdictions where it the use of marijuana is generally permitted by consumers for medical or recreational purposes. Basis of Accounting The Company’s financial statements are prepared using the accrual method of accounting using U.S. GAAP.  The Company has elected a calendar year end. The functional currency of the Company is the U.S. Dollar. All amounts presented in the Company’s financial statements are in U.S. Dollars. Use of Estimates and Assumptions Preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.  The Company has adopted the provisions of ASC 260.   Impairment of Long-Lived Assets The Company's recently acquired a patent which is accounted for as a definite-lived intangible asset in accordance with ASC 360 "Impairment and Disposal of Long-Lived Assets" ("ASC 360"). CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. There were no impairment charges taken during the period ended September 30, 2017. Loss per Share   Net loss per common share is computed pursuant to ASC 260-10-45. Basic and diluted net incomeloss per common share has been calculated by dividingis computed based on the net income for the period by the basic and diluted weighted average number of common shares outstanding assumingduring the period. Diluted net loss per share is calculated by dividing net loss by the diluted weighted average common shares outstanding, which includes the effect of potentially dilutive securities. During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of net loss per share. Diluted earnings per share is similarly computed except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock and convertible notes, if including such potential shares of common stock is dilutive. For the three-months ended June 30, 2019 and 2018, the common stock equivalents of the convertible note agreements were not included in diluted earnings per share computations because their effect was antidilutive. Share Purchase Agreement On July 31, 2018, the Company incorporatedentered into a Share Purchase Agreement with AstralENERGY Solar Manufacturing Corporation, LTD. (“AstralENERGY”) to acquire 70% of the outstanding common stock of AstralENERGY. The Company will issue an aggregate 2,500,000 shares of common stock of the Company as consideration for the acquisition. AstralENERGY is a manufacturer of architecturally designed solar panels for residential and commercial solar production and has also developed integrated multi-function LED street lighting systems. Consummation of the acquisition is subject to the completion of certain conditions specified in the agreement. As of August 19, 2019, this transaction has not closed. Merger Agreement On June 21, 2019, Company entered into a Merger Agreement (the “Merger Agreement”) with Caduceus Software Systems Corp. (“CSOC”), Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”).  Pursuant to the Merger Agreement, the Company, the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to which the Company will merge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”). F-5 Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same may be amended from time to time (the “WBCA”) in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the WBCA. The Merger will become effective when Articles of Merger are filed with the Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”). Upon the Effective Time, each share of the Company’s issued and outstanding common stock, no par value per share, (the “CEN Common Stock”) shall be converted into and shall become one (1) fully paid and nonassessable share of common stock, par value $0.001 per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and no payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and no cash or other consideration shall be delivered or deliverable in exchange therefor. Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least four (4) persons total, and thereafter to add three (3) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC. The Merger Agreement includes customary representations, warranties and covenants by the respective parties. For example, in the Merger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be complete and will be based on the books and records of CSOC, and fairly present the financial condition of CSOC as of the beginningrespective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects. The Company and CSOC have each agreed, that from the Effective Time, until the first period presented. to occur of the Closing or the termination of the Merger Agreement, not to solicit or initiate discussions with third parties regarding other acquisition proposals. Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing: ● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); ● complete a 1 for 5,000 reverse split of the CSOC Common Stock; ● redeem or terminate any derivatives of CSOC; ● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws; ● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and ● file a Form 14f-1 with the SEC at least 10 days prior to the Closing. F-6 Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing: ● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and ● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock. Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon: ● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing; ● CSOC having no liabilities as of the Closing; ● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and ● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders. Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is not cured within five (5) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (1) bring an action for specific performance of the Merger Agreement or (2) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement. The Merger Agreement can be terminated any time prior to the Closing pursuant to the following: ● mutual written consent of the Company and CSOC; ● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger; ● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement; ● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement; ● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing; ● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing; ● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or ● by either the Company or CSOC if the Closing has not occurred by August 30, 2019. F-7 If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC may then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000. If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company may then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000 and an additional sum of $50,000. If the Merger Agreement is terminated because the Closing does not occur for any reason, other than the default thereunder of any of the parties, the parties shall not owe each other any payment amounts. The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any such person with the other party in connection with transactions contemplated by the Merger Agreement. There werecan be no dilutive shares outstandingassurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all. As of August 19, 2019, the Merger Agreement has not closed. The Company has not determined how to account for this transaction as of September 30, 2017 or 2016.August 19, 2019. NOTE 2 – NEW ACCOUNTING STANDARD   Subsequent EventsAdoption of New Accounting Standard   The Company followsadopted Accounting Standards Codification (ASC) 842, “Leases” using the guidancemodified retrospective approach, effective January 1, 2019, on its condensed consolidated financial statements. The comparative information has not been restated and continues to be reported under the lease accounting standard in ASC 855-10-50effect for the disclosure of subsequent events. those periods. The Company evaluates subsequent events from the date ofnew lease standard requires all leases to be reported on the balance sheet throughas right-of-use assets and lease obligations. We elected the date whenpractical expedients permitted under the financial statements are issued.  Pursuant to ASU 2010-09 transition guidance of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them with the SEC on the EDGAR system.new standard.   Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Reclassification Certain amounts in prior period consolidated financial statements have been reclassified to conform current period presentation. NOTE 2 3 – GOING CONCERN UNCERTAINTY / MANAGEMENT PLANS   The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplatecontemplating continuation of the Company as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normalnormal course of business. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern as theconcern. The Company had total liabilities in excess of its total assets, thehas incurred significant operating losses and negative cash flows from operations since inception. The Company had an accumulated deficit of $16,889,864$38,748,455 at SeptemberJune 30, 2017,2019 and had no committed source of additional debt or equity financing. The Company has not had any operating revenue and does not foresee any operating revenue in the near term. The Company has relied on the saleissuance of its securitiesloans payable and convertible debt instruments to finance its expenses, including a notenotes that isare in default, and is secured by the Company’s equipment, as described in Note 4.Notes 7, 8, 9, and 10. The Company will be dependent upon raising additional capital through placement of our common stock, notes or other securities in order to implement its business plan or additional borrowings, including from related parties. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. F-8   The Company’s cash position may not be sufficient to support the Company’s daily operations or its ability to undertake any business activity that will generate net revenue.   CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements   The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.NOTE 4 – PROPERTY, PLANT AND IMPROVEMENTS, NET   NOTE 3 – CONTINGENCIES AND UNCERTAINTIES On March 11, 2015, the Company’s application under the MMPR for a license to produce marijuana for medical purposes was formally rejected by Health Canada. The Company filed an application for judicial review in Canadian federal court on April 10, 2015 in order to obtain a reversal of this decision. We discontinued this action in February 2016. CEN continues to pursue reliefProperty and damages and on or about February 2, 2016, filed a Statement of Claim against the Attorney General of Canada in the Ontario Superior Court of Justice, for $15 million and other damages and relief. This case is in the discovery phase. We cannot provide any assurances as to the timing or decision or outcome related to our action seeking damages. NOTE 4 – NOTES PAYABLE Short term loans payableequipment, net consists of the following at Septemberas of:     June 30, 2019     December 31, 2018   Leasehold improvements   $ 166,163     $ 166,163   Furniture and equipment     17,668       17,668   Accumulated depreciation     (26,514 )     (17,322 )                   Net property, plant and improvements   $ 157,317     $ 166,509   Depreciation expense was $4,596 for each of the three-months ended June 30, 20172019 and 2018, respectively, and $9,192 and $5,038 for the six months ended June 30, 2019 and 2018, respectively. NOTE 5 – ADVANCES TO CEN BIOTECH UKRAINE At June 30, 2019 and December 31, 2016:2018, the Company had advances of $995,328 and $875,328, respectively, to CEN Biotech Ukraine, LLC, a related party, (see Note 13). The advances were for the purpose of funding the operations of CEN Biotech Ukraine, LLC and are unsecured, non-interest bearing, and are due on demand.   Description     2017     2016   Short term loan payable to Global Holdings International, LLC, which bears interest at 15% per annum after defaulting on the maturity date of June 30, 2016. This note is secured by the Company's equipment.     $ 9,675,000     $ 9,675,000                       Short term mortgage payable, for the original amount of $385,000 CAD, bears interest at 22% per annum with a maturity date of September 21, 2018.       308,501       287,287                       Total Short Term Loans Payable     $ 9,983,501     $ 9,962,287   NOTE 5 – SHORT TERM LOANS PAYABLE – RELATED PARTY Short term loans payable to related parties consist of the following at September 30, 2017 and December 31, 2016: Description     2017     2016   Short term related party loan payable to Bill Chaaban, President of Cen Biotech, bears interest at 10% per annum. This is an unsecured loan with a maturity date of December 31, 2017.     $ 247,627     $ 244,948                       Short term related party loan payable to a former director of Creative Edge, bears interest at 10% per annum. This is an unsecured loan with a maturity date of December 31, 2017.       601,500       601,500                       Total Short Term Loans Payable     $ 849,127     $ 846,448   CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements   NOTE 6 – SHORT TERM CONVERTIBLE NOTES Short term convertible notes consist of the following at September 30, 2017 and December 31, 2016: Description     2017     2016   Short term convertible note payable, bearing interest at 7% per annum with conversion rights for 335,833 common shares.     $ 885,207     $ -   Total Short Term Convertible Notes     $ 885,207     $ -   NOTE 7 – LONG TERM CONVERTIBLE NOTES Long term convertible notes consist of the following at September 30, 2017 and December 31, 2016: Description     2017     2016   Long term convertible notes payable to multiple private investors, bearing interest at 5% per annum with conversion rights to common shares. All notes have a maturity date of 2 years from inception.     $ 2,150,904     $ 1,167,412   Long term convertible notes, bearing interest at 12% per annum       -       224,191   Total Short Term Loans Payable     $ 2,150,904     $ 1,167,412   NOTE 8 – LONG TERM CONVERTIBLE NOTES RELATED PARTY Long term convertible notes to related parties consist of the following at September 30, 2017 and December 31, 2016: Description     2017     2016   Long term convertible note related party due to Bill Chaaban, President of Cen Biotech, bearing interest at 12% per annum. This note is convertible to 871,576 common shares with a maturity due date of December 31, 2018.     $ 1,388,121     $ 1,388,121                       Long term convertible notes related party, bearing interest at 5% per annum. This note is convertible to 550,000 common shares with maturity dates in 2018.       1,050,000       -                       Long term convertible note related party, bearing interest at 5% per annum. This note is convertible to 30,000 common shares with a maturity due date of October 26, 2018.       48,000       -                       Long term convertible notes payable, bearing interest at 12% per annum.       224,191       -                       Total Long Term Convertible Notes Related Party     $ 2,710,312     $ 1,388,121   CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements NOTE 9 – PATENT ACQUISITIONINTANGIBLE ASSETS   On September 12, 2016, the Company completed the transactionexecuted an agreement dated August 31, 2016, to acquire assets, including patented Colda patent related to LED Lighting, Technology, from Tesla Digital, Inc., a Canadian Corporation, and Stevan (Steve) Pokrajac.Pokrajac (the “Sellers”).   The materialMaterial consideration given by Company was: (a) Shares of CEN common stock equal to $5 million upon commencement of public trading (b) The transfer of real properties located at 135 North Rear Road, Lakeshore, Ontario, Canada having a fair value of $2,161,467 and 1517-1525 Ridge Road having a purchase cost (including other related disbursements) to the Company of $202,666.   (a) The patent remains in the name of Tesla Digital, Inc. until full settlement of the terms of the agreement. In the interim, pursuant to an updated agreement executed on April 15, 2019 between the Company and the Sellers, CEN has reaffirmed the rights to use the patented technology. Cen Biotech common stock that will equal $5 million on the date of issuance. (b) The transfer of real properties located at 135 North Rear Road, Lakeshore, Ontario, Canada having a book value of $2,161,467 USD and 1517-1525 Ridge Road having a purchase cost (including other related disbursements) to the Company of approximately $182,488.   In addition, the Company willagreed to employ Stevan PokrajakPokrajac, by an LED subsidiary that the Company plans to form, but which has not yet been formed, in connection with the development of the acquired technology with compensation equal to $200,000 per year.year, commencing with the start of operations. F-9 In March 2018, the Tesla agreement was amended to replace the $5 million stock consideration commitment with a commitment to issue one million registered shares of CEN common stock with a closing date of September 30, 2018. On October 4, 2018, this agreement was amended to extend the closing date to December 15, 2018. On April 3, 2019, the Company entered into an amendment which extended the closing date of the agreement to December 31, 2019. The modification of the agreement converted a fixed value of shares to a fixed number of shares. Accordingly, the liability was reduced and additional paid in capital was increased by $4,380,000 to reflect the fair value of the shares committed at the date of the amendment. As of June 30, 2019 and December 31, 2018, the fair value of this liability was $1,010,000. This liability will be remeasured at each reporting date using the current fair value of CEN’s common shares.   The CompanyCompany intends to explore using the Coldpatented LED Lighting Technology across manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired, other than the patent, included oldcertain machinery and raw materials. materials, which were old and non-functioning and accordingly, had no fair value. The Company has assignedintangible assets consists of the following:     June 30, 2019     December 31, 2018                     Lighting patent   $ 6,797,000     $ 6,797,000   Accumulated amortization     (1,203,635 )     (991,229 )                   Net   $ 5,593,365     $ 5,805,771   As of June 30, 2019 and December 31, 2018, there is no value to these since their value was not relevant to or calculated inimpairment expense recognized based on the Company’s offer for acquisition. Therefore no impairmentexpectations that it will be necessary if these assets are disposed of.able to monetize the patent.   The lighting patent is being amortized straight-line over 16 years. Expected amortization expense is $424,812 per year through 2031, with the remaining $283,215 to be amortized in 2032. F-10 NOTE 10 7 – COMMITMENTS AND CONTINGENCIESLOANS PAYABLE   Our $21,475,002Loans payable consist of indebtedness includes accrued interest of $4,519,540, as well as notes payable, notes payable to related parties, convertible notes and convertible notes to related parties totaling $16,579,050 with maturity dates as outlined below. the following:     June 30, 2019     December 31, 2018   Loan payable to Global Holdings International, LLC, which bears interest at 15% per annum after defaulting on the maturity date of June 30, 2016. This note is secured by the Company's equipment.   $ 9,675,000     $ 9,675,000                     Mortgage payable in default to ARG & Pals, Inc., for the original amount of CAD $385,000. The mortgage bears interest at 22% per annum, and matured on November 21, 2018.     294,178       282,205                     Loan payable in default to an individual, issued January 17, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.     50,000       50,000                     Loan payable in default to an individual, issued April 13, 2018, with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.     100,000       100,000                     Total loans payable (all current)   $ 10,119,178     $ 10,107,205   We are in default of $9,675,000 of debt that is secured by certain equipment that we value at approximately $10,533. We expect$9,000. The remainder of our operatingdebt that is in default is not secured. During the three-month periods ended June 30, 2019 and administrative expenses2018, 18,000 and 26,000 common shares were issued to be at least $2,400,000 annually. The convertible notes are due 2 years from issuance with notes maturingindividuals for loans made to CEN, respectively. Accordingly, during the three-month periods ended June 30, 2019 and 2018, $18,180 and $16,120 in interest expense and additional paid-in capital was recorded, respectively. During the six-month periods ended June 30, 2019 and 2018, 36,000 and 2019.42,400 common shares were issued to individuals for loans made to CEN, respectively. Accordingly, during the six-month periods ended June 30, 2019 and 2018, $36,360 and $26,288 in interest expense and additional paid-in capital was recorded, respectively.   F-11   NOTE 8 – LOANS PAYABLE- RELATED PARTY Loans payable - related party consists of the following:     June 30, 2019     December 31, 2018   Loan payable in default to the spouse of Bill Chaaban, President of CEN, bears an interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.   $ 235,818     $ 234,306                     Loan payable in default to a former director of Creative, former parent company, bears interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.     601,500       601,500                     Loan payable to R&D Labs Canada, Inc., whose president is Bill Chaaban, also the President of CEN, bearing interest at 8% per annum. This is an unsecured loan with a maturity date of October 2, 2019. R&D Labs Canada is a company owned by Bill Chaaban’s spouse.     300,000       300,000                     Loan payable in default to the spouse of Joseph Byrne, CEO of CEN, issued January 12, 2018 with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.     100,000       100,000                     Loan payable in default to Alex Tarrabain, a Director of CEN, issued January 17, 2018 with a 30-day maturity, bearing share interest of 3,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.     75,000       75,000                     Loan payable in default to Joseph Byrne, CEO of CEN, issued January 24, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.     50,000       50,000                     Total loans payable - related party     1,362,318       1,360,806   Less: current portion     1,362,318       1,360,806                     Long-term portion loans payable - related party   $ -     $ -   Attributable related party accrued interest was $411,345 and $357,373 as of June 30, 2019 and December 31, 2018, respectively. Interest expense attributable to related party loans was $54,428 and $43,367 for the three-months ended June 30, 2019 and 2018, respectively, and was $108,512 and $86,409 for the six-months ended June 30, 2019 and 2018, respectively. During both three-month periods ended June 30, 2019 and 2018, 27,000 common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the three-month periods ended June 30, 2019 and 2018, $27,270 and $16,740 in related party interest expense and additional paid-in capital was recorded, respectively. During both six-month periods ended June 30, 2019 and 2018, 54,000 common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the six-month periods ended June 30, 2019 and 2018, $54,540 and $33,480 in related party interest expense and additional paid-in capital was recorded, respectively. CEN BIOTECH, INC.F-12 NOTE 9 – CONVERTIBLE NOTES Convertible notes payable consists of the following:     June 30, 2019     December 31, 2018   Convertible note payable, due on demand, bearing interest at 7% per annum with conversion rights for 335,833 common shares.   $ 844,111     $ 809,755                     Convertible notes payable to multiple private investors, including certain notes in default, bearing interest at 5% per annum with conversion rights for 3,013,190 common shares, maturing at various dates between May 2018 and May 2021.     4,860,927       4,333,892                     Total convertible notes payable     5,705,038       5,143,647   Less current portion     4,318,916       3,597,760   Convertible notes payable, less current portion   $ 1,386,122     $ 1,545,887   These notes may be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of 3,349,023 common shares. As of August 19, 2019, we are currently in default of $2,054,707 of convertible notes payable, which are convertible into 1,287,652 shares of common stock. NotesF-13 NOTE 10 – CONVERTIBLE NOTES - RELATED PARTY Convertible notes - related party consists of the following at:     June 30, 2019     December 31, 2018   Convertible note due to the spouse of Bill Chaaban, President of CEN, which bears an interest at 12% per annum. This note is convertible to 867,576 common shares with a maturity date of August 17, 2020.   $ 1,388,122     $ 1,388,122                     Convertible notes in default due to Harold Aubrey de Lavenu, a Director of CEN, bearing interest at 5% per annum. These notes are convertible to 548,980 common shares which matured on March 31, 2019.     878,368       878,368                     Convertible note in default due to Alex Tarrabain, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 30,000 common shares and matured on March 31, 2019.     48,000       48,000   Convertible notes due to Joseph Byrne, CEO of CEN, bearing interest at 12% per annum. This note is convertible to 140,120 common shares with a maturity date of August 17, 2020.     224,191       224,191                     Convertible note due to Darren Ferris, brother of Ameen Ferris, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 12,500 common shares with a maturity date of June 19, 2021.     20,000       -                     Total convertible notes payable - related party     2,558,681       2,538,681   Less current portion     926,368       926,368                     Convertible notes payable - related party, less current portion   $ 1,632,313     $ 1,612,313   Attributable related party accrued interest was $707,781 and $588,854 as of June 30, 2019 and December 31, 2018, respectively. Interest expense attributable to related party convertible notes was $59,798, and $61,925 for the three months ended June 30, 2019 and 2018, respectively, and was $118,927 and $123,169 for the six-months ended June 30, 2019 and 2018, respectively. These notes may be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of 1,599,176 common shares. As of August 19, 2019, we are currently in default of $926,368 of convertible notes payable, which are convertible into 578,980 shares of common stock. F-14 NOTE 11 – INCOME TAXES A reconciliation of the effective tax rate of the income tax benefit and the statutory income tax rates applied to the Condensed Consolidated Financial Statements Description     Maturity Date     Amount   Note Payable - Related Party     12/31/17     $ 247,627   Note Payable - Related Party     12/31/17     $ 601,500   Note Payable     6/30/2016     $ 9,675,000   Note Payable     9/21/2018     $ 308,501   Convertible Notes - Short Term     $ 885,207   Convertible Notes     Q1 2018     $ 62,040   Convertible Notes     Q2 2018     $ 463,572   Convertible Notes     Q3 2018     $ 90,200   Convertible Notes     Q4 2018     $ 1,600   Convertible Notes     Q1 2019     $ 566,475   Convertible Notes     Q2 2019     $ 357,000   Convertible Notes     Q3 2019     $ 603,818   Convertible Notes     Q4 2019     $ 6,197   Convertible Notes Related Party     12/31/18     $ 1,388,122   Convertible Notes Related Party     Q2 2018     $ 100,000   Convertible Notes Related Party     Q4 2018     $ 450,000   Convertible Notes Related Party     Q1 2019     $ 500,000   Convertible Notes Related Party     Q4 2018     $ 48,000   Convertible Notes Related Party           $ 224,191               $ 16,579,050   loss before income taxes is as follows for the three and six-months ended June 30:       2019     2018                     Income tax benefit at Canadian statutory rate     26.5 %     26.5 % Valuation allowance     (26.5 %)     (26.5 %)                   Effective income tax rate     0 %     0 % As of June 30, 2019, the Company has net operating loss carry forwards of approximately $23,100,000that may be available to reduce future years’ taxable income. Such carry forwards typically expire after 20 years. The Company currently has carry forwards that begin to expire in 2034. Future tax benefits which may arise as a result of these losses have not been recognized in these condensed consolidated financial statements, because the Company believes that it is more likely than not that the carryforwards will expire unused and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The deferred tax asset and associated valuation allowance are as follows:     June 30, 2019     December 31, 2018                     Deferred tax asset - net operating losses   $ 6,100,000     $ 9,700,000   Deferred tax asset valuation allowance     (6,100,000 )     (9,700,000 )                   Net deferred tax asset   $ -     $ -   The change in the valuation allowance amounted to ($3,900,000) and $400,000 for the three-months ended June 30, 2019 and 2018, respectively, and ($3,600,000) and $800,000 for the six-months ended June 30, 2019 and 2018, respectively. All other temporary differences are immaterial both individually and in the aggregate to the condensed consolidated financial statements.   Company management analyzes its income tax filing positions in Canadian federal and provincial jurisdictions where it is required to file income tax returns, for all open tax years in these jurisdictions, to identify potential uncertain tax positions. As of June 30, 2019, there are no uncertain income tax positions taken or expected to be taken that would require recognition of a liability or disclosure in the condensed consolidated financial statements. The Company is subject to routing audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Generally, the Company is no longer subject to income tax examinations for years prior to 2015. NOTE 11 12 – LEASESHAREHOLDERS’ DEFICIT / STOCK ACTIVITY   The Company leases space for operations in Canada which requires a monthly rent paymentis authorized to issue an unlimited number of $3,205. Installment amounts at September 30, 2017 for the following five years are as follows:common shares and an unlimited number of special voting shares. Common shares have no stated par value.   Year Ended December 31,     Amount   2017     $ 9,616   2018       38,462   2019       38,462   2020       38,462   2021       28,847   Total     $ 153,850   As of June 30, 2019, 4,948,199 shares of common stock are committed to the holders of the convertible notes.   F-15   CEN BIOTECH, INC. Notes to the Condensed Consolidated Financial Statements NOTE 12 13 – RELATED PARTY TRANSACTIONS The Company has received loans from several related parties, as described above in Notes 8 and 10. There are advances of $995,328 and $875,328 to CEN Ukraine as of June 30, 2019 and December 31, 2018, respectively, which such advances were made for the purpose of funding the operations of CEN Ukraine. CEN Ukraine was founded by Bill Chaaban. Prior to December 3, 2017, Bill Chaaban directly owned 51% of CEN Ukraine. Subsequent to December 3, 2017, Mr. Chaaban directly owned 25.5% of CEN Ukraine. CEN Ukraine was founded to seek agricultural and pharmaceutical opportunities in Ukraine. Bill Chaaban personally funded the establishment and initial phases of CEN Ukraine. On December 14, 2017, the Company entered into a controlling interest purchase agreement with Bill Chaaban and another shareholder of CEN Ukraine for 51% of the outstanding equity interests of CEN Ukraine. The consideration will be paid by issuing common shares of the Company. The agreement, which is subject to certain conditions, has not closed as of August 19, 2019, as the Company needs to raise additional funds in order to proceed with the closing.   On July 12, 2017,, Mr. Bill Chaaban resigned as Chief Executive Officer of the Company. The resignation did not result from any disagreements with the Company or its management. Mr. Chaaban will continue to serve as Chairman of the Board and as President of the Company. Mr. Chaaban holds long term convertible notes bearing interest 12% per annum and are convertible to 871,576 common shares with a maturity date of August 17, 2018. On July 12, 2017, the CompanyCompany’s Shareholders elected individuals to serve as Directors on the Board. These individuals hold long termlong-term convertible notes payable issued prior to the election. All notes payable bear interest at 5% per annum and are convertible to common shares with various maturity dates. They became related parties when they were elected. During the three-months ended June 30, 2019 and 2018, the Company incurred payroll and consulting expenses of $33,800 and $45,839, respectively, and $65,000 and $77,039 during the six-months ended June 30, 2019 and 2018, respectively, with certain Board Members and Officers. As of June 30, 2019 and December 31, 2018, $189,800 and $124,800, respectively, were payable for such services. During 2017, the Company purchased equipment from R&D Labs Canada, Inc., whose president is Bill Chaaban, in exchange for a $300,000 note payable. This equipment was then sold to CEN Ukraine for a loss of $255,141 in exchange for a $44,859 note receivable, payable in 10 equal installments beginning in 2017 through 2026. No payments have been received as of June 30, 2019, however, management expects this balance to be collectible. The Company leases 20 North Rear Road, a 10.4 acre site of land in Canada, through a sublease from a relative of the Company’s President. There are two buildings on the site – one of 27,000 square feet and one of 53,000 square feet. There is also a 4,000 square foot vault for security purposes. The Company constructed improvements to this property, including structures and equipment for growing marijuana, security fencing required for licensing as a marijuana producer, and other infrastructure. These improvements were fully impaired during the 4th quarter of 2018. The 20 North Rear Road lease agreement began on September 1, 2013 and required annual rent payments of CAD $339,000, including tax. At December 31, 2016, the balance sheet included accrued rent of $552,934, owed to Jamaal Shaban (“Lessor”), cousin of Bill Chaaban. Concurrently, the Lessor had fallen behind on a mortgage payable on the property. Effective January 2017, the Company entered into agreements to terminate the initial lease, enter into a convertible debt note with the Lessor’s creditor, and begin a new lease agreement for the same property. The new lease agreement calls for monthly rental payments of CAD $4,000 plus taxes for a period of five years. In exchange, the Company issued convertible notes payable of $824,446 in satisfaction of the accrued rent and future rent. The lease has been accounted for as an operating lease, and the amount of the note in excess of the accrued rent was treated as a deferred lease asset amortized over the 5-year lease. However, in conjunction with the impairment in the 4th quarter of 2018, the remaining deferred lease asset was fully expensed. As of June 30, 2019, the operating right of use asset was $83,408 and the associated liability was $80,351, utilizing an 8% discount rate. During the three-months ended June 30, 2019 and 2018, lease expenses of $9,106 and $22,689, respectively, and $15,092 and $45,572 during the six-months ended June 30, 2019 and 2018, respectively, related to this agreement were recognized within general and administrative expenses. F-16 The Company also leases office space in Windsor, Ontario from R&D Labs Canada, Inc., whose president is Bill Chaaban. Under the lease agreement effective October 1, 2017, monthly rents of CAD $2,608 are due through September 2022, at which point monthly rents of CAD $3,390 are due. As of June 30, 2019, the operating right of use asset was $167,076 and the associated liability was $167,282, utilizing an 8% discount rate. During the three-months ended June 30, 2019 and 2018, lease expenses of $7,060 and $5,942, respectively, and $12,039 and $12,010 during the six-months ended June 30, 2019 and 2018, respectively, related to this agreement were recognized within general and administrative expenses. As of June 30, 2019, the weighted average remaining lease term was approximately 6.6 years and the weighted average discount rate used to determine operating lease liabilities was 8%. NOTE 14 – STOCK BASED COMPENSATION   NOTE Adoption of Equity Compensation Plan On November 29, 2017, the Board adopted the 2017 Equity Compensation Plan (the “Plan”) providing for the granting of options to purchase shares of common stock, restricted stock awards and other stock-based awards to directors, officers, employees, advisors and consultants. The Company reserved 20,000,000 shares of common stock for issuance under the Plan. The Plan is intended to provide equity incentives to persons retained by our Company. 13Equity Compensation Grants- SUBSEQUENT EVENTS On November 30, 2017, the Company granted a one-time equity award (“Equity Award”) of 20,000 restricted shares of the Company’s common stock pursuant to a Restricted Stock Agreement, to each of the following executives and directors of the Company: Bahige “Bill” Chaaban, Chairman of the Board and President of the Company; Joseph Byrne, Chief Executive Officer and Director; Richard Boswell, Senior Executive Vice President, Chief Financial Officer and Director; Brian Payne, Vice President and Director; Donald Strilchuck, Director; Harold Aubrey de Lavenu, Director; Alex Tarrabain, Director; and Ameen Ferris, Director. The Equity Awards vested immediately.   In accordance with ASC 855, Subsequent Events,addition, as part of this one-time equity award, Donald Strilchuck, Director, received an additional 1,000,000 restricted shares of the Company's common stock for security consulting services, of which 550,000 vested immediately and the remaining vesting ratably each month over the next 36 months. Other individuals received a total of 1,870,000 restricted shares of the Company's common stock for consulting services performed, of which 1,330,000 vested immediately and the remaining vesting ratably each month over the next 36 months. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date. On June 7, 2018, the Company has evaluated subsequent events from Septemberelected Dr. Usamakh Saadikh to serve as a director of the Company. As compensation for his role as a Director, the company granted a one-time equity award of 20,000 shares of the Company’s common stock. This award vested immediately. F-17 On June 19, 2018, the Company entered into an agreement with a law firm for the payment of its services under which the Company issued 125,000 shares of its common stock. This award vested immediately. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date. On December 31, 2018, the Company issued 12,120 shares of its common stock to individuals for the payment of their services. These awards vested immediately. The expense related to the stock awarded to non-employees for services rendered was recognized on the grant date. Employment Agreements On November 30, 2017, through November employment agreements were entered into with four key members of management: ● Under the Employment Agreement with Bahige (Bill) Chaaban, President of the Company, Mr. Chaaban will receive compensation in the form of a base annual salary of $31,200 and a grant of 8,750,000 shares of restricted stock of the Company, of which 7,400,000 vested immediately and the remaining vesting ratably each month over the next 36 months. ● Under the Employment Agreement with Joseph Byrne, Chief Executive Officer of the Company, Mr. Byrne will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 325,000 vested immediately and the remaining vesting ratably each month over the next 36 months. ● Under the Employment Agreement with Richard Boswell, former Senior Executive Vice President and Chief Financial Officer of the Company, currently serving as Senior Executive Vice President of the Company, Mr. Boswell will receive compensation in the form of a base annual salary of $31,200 and a grant of 4,500,000 shares of restricted stock of the Company, of which 4,140,000 vested immediately and the remaining vesting ratably each month over the next 36 months. ● Under the Employment Agreement with Brian Payne, Vice President of the Company, Mr. Payne will receive compensation in the form of a base annual salary of $31,200 and a grant of 750,000 shares of restricted stock of the Company, of which 300,000 vested immediately and the remaining vesting ratably each month over the next 36 months. On May 16, 2019, the Board appointed Alex Tarrabain, one of the members of the Company’s Board to serve as the Company’s Chief Financial Officer and as one of the Vice Presidents of the Company effective May 21, 2019 (the “Effective Date”). Richard Boswell, who served as the Company’s Chief Financial Officer since July 2017, resigned from his position as the Company’s Chief Financial Officer as of the Effective Date, and will continue to serve in his position as the Company’s Senior Executive Vice President going forward focusing on the Company’s strategic activities and will also continue to serve as a member of the Company’s Board. In conjunction with the above, on May 16, 2019, an employment agreement was entered into with Mr. Tarrabain: ● Under the Employment Agreement with Alex Tarrabain, Chief Financial Officer and as one of the Vice Presidents of the Company, Mr. Tarrabain will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 350,000 vested immediately and the remaining vesting ratably each month over the next 36 months. F-18 Restricted Stock Awards The total grant-date fair value of the restricted shares noted in the employment agreements and equity compensation grants sections above was $12,698,241 as of June 30, 2019 and $11,435,741 as of December 31, 2018. During the three and six-month periods ended June 30, 2019 and 2018, 1,250,000 restricted shares with a grant date fair value of $1,262,500 and 145,000 restricted shares with a grant date fair value of $89,900, respectively, were awarded. The grant-date fair value is calculated utilizing an enterprise valuation model as of the date the awards are granted. With the exception of immediately vesting portions of awards, shares typically vest pro-rata over the requisite service period, which is generally three years from the grant-date. Non-vested restricted stock awards participate in dividends and recipients are entitled to vote these restricted shares during the vesting period. During the three-month periods ended June 30, 2019 and 2018, 712,500 and 337,500, respectively, and during the six-month periods ended June 30, 2019 and 2018, 1,050,000 and 675,000 of these shares vested. The fair value of the restricted stock which vested amounted to $588,000 and $209,250 for the three-months ended June 30, 2019 and 2018, respectively, and $797,250 and $418,500 for the six-months ended June 30, 2019 and 2018, respectively. Compensation expense recognized in connection with the restricted stock awards was $546,150 and $179,800 for the three-months ended June 30, 2019 and 2018, respectively, and $713,550 and $347,200 for the six-months ended June 30, 2019 and 2018, respectively. Legal expense, included within general and administrative, recognized in connection with the restricted stock awards was $77,500 for the three and six-months ended June 30, 2018. Non-vested restricted stock award activity for the six-months ended June 30, 2019 and 2018 are as follows:     Number of Shares     Weighted- Average Grant Date Fair Value per Share     Weighted- Average Remaining Contractual Term (Years)   Non-vested at January 1, 2018     3,962,500     $ 0.62       2.92   Granted     145,000       0.62       -   Vested     (820,000 )     0.62       -   Forfeited     -       -       -   Non-vested at June 30, 2018     3,287,500     $ 0.62       2.50                             Non-vested at December 31, 2018     2,612,500     $ 0.62       2.00   Granted     1,250,000       1.01       -   Vested     (1,050,000 )     0.83       -   Forfeited     -       -       -   Non-vested at June 30, 2019     2,812,500     $ 0.74       1.97   The fair value of the restricted stock grants was based on the valuation of a third-party specialist. Unrecognized compensation expense related to restricted stock amounted to approximately $1,847,850 as of June 30, 2019. This expense will be recognized over vesting period of the respective awards. F-19 NOTE 15 – NET LOSS PER SHARE During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of diluted net loss per share. Based on the Company’s application of the as-converted and treasury stock methods, all common stock equivalents were excluded from the computation of diluted earnings per share due to net losses as of June 30, 2019 and 2018. Common stock equivalents that were excluded for the three and six-month periods ended June 30, 2019 and 2018 are as follows:     Three-months Ended June 30,     Six-months Ended June 30,       2019     2018     2019     2018   Convertible debt     4,882,922       4,291,436       4,746,243       3,969,963   NOTE 16 – CONTINGENCY In connection with the distribution by Creative of CEN’s common stock on February 29, 2016 and the Form 10 registration statement filed by CEN to register its shares of common stock under the Exchange Act, CEN received comments by the Staff of the Securities and Exchange Commission, including a letter dated May 4, 2016 in which the Staff noted that they “…continue to question the absence of Securities Act registration of the spin-off distribution”. In the event that the distribution of shares of CEN’s common stock was a distribution that required registration under the Securities Act, then the Company could be subject to enforcement action by the SEC that claims a violation of Section 5 of the Securities Act and could be subject to a private right of action for rescission or damages. Based on management’s estimate, any potential liability related to this matter would not be material. NOTE 17 2017,– FAIR VALUE DISCLOSURES Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. The fair value of the Company’s financial instruments are as follows:             Fair Value Measured at Reporting Date Using               Carrying Amount     Level 1     Level 2     Level 3     Fair Value   At June 30, 2019:                                         Cash and cash equivalents   $ 15,972     $ -     $ 15,972     $ -     $ 15,972   Other receivables   $ 419,958     $ -     $ -     $ 419,958     $ 419,958   Note receivable - related party   $ 44,859     $ -     $ -     $ 44,859     $ 44,859   Advances to CEN Biotech                                         Ukraine, LLC - related party   $ 995,328     $ -     $ -     $ 995,328     $ 995,328   Loans payable   $ 10,119,178     $ -     $ -     $ 10,119,178     $ 10,119,178   Loans payable - related parties   $ 1,362,318     $ -     $ -     $ -     $ -   Patent acquisition liability   $ 1,010,000     $ -     $ -     $ 1,010,000     $ 1,010,000   Convertible notes payable   $ 5,705,038     $ -     $ -     $ 6,240,408     $ 6,240,408   Convertible notes payable - related parties   $ 2,558,681     $ -     $ -     $ -     $ -   F-20     Carrying Amount     Level 1     Level 2     Level 3     Fair Value   At December 31, 2018:                                         Cash and cash equivalents   $ 3,193     $ -     $ 3,193     $ -     $ 3,193   Other receivables   $ 418,905     $ -     $ -     $ 418,905     $ 418,905   Note receivable - related party   $ 44,859     $ -     $ -     $ 44,859     $ 44,859   Advances to CEN Biotech                                         Ukraine, LLC - related party   $ 875,328     $ -     $ -     $ 875,328     $ 875,328   Loans payable   $ 10,107,205     $ -     $ -     $ 10,107,205     $ 10,107,205   Loans payable - related parties   $ 1,360,806     $ -     $ -     $ -     $ -   Patent acquisition liability   $ 1,010,000     $ -     $ -     $ 1,010,000     $ 1,010,000   Convertible notes payable   $ 5,143,647     $ -     $ -     $ 5,534,810     $ 5,534,810   Convertible notes payable - related parties   $ 2,538,681     $ -     $ -     $ -     $ -   The fair values of other receivables (including related accrued interest), note receivable - related party, and advances to CEN Biotech Ukraine, LLC approximates carrying value due to the terms of the instruments. The fair value of the loans payable approximates carrying value due to the terms of such instruments and applicable interest rates. The fair value of convertible notes payable is based on the par value plus accrued interest through the date of issuancereporting due to the terms of such instruments and interest rates. It is not practicable to estimate the fair value of loans payable – related parties and convertible notes payable – related parties due to their related party nature. The fair value of the last quarterly financial statements, and has determined that it has no material subsequent eventspatent acquisition liability is based upon a valuation report obtained from a 3rd party valuation specialist. This valuation report utilized a cash-free asset value model to disclose.estimate enterprise value based upon similar companies.   F-21   ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION   Explanatory Note Background and Overview Unless otherwise noted, references in this Form 10-Q to “CEN,” the “Company,” “we,” “our” or “us” means CEN Biotech, Inc. (“CEN” or the “Company”) is a Canadian holding company, incorporated in Canada on August 4, 2013 as a subsidiary of Creative Edge Nutrition, Inc. (“Creative”), the registrant, The following discussion and analysis provides information which management believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to financial statements, which are included in this report. This management's discussion and analysis or plan of operation should be read in conjunction with the financial statements and notes thereto of the Company for the year ended December 31, 2016. Because of its nature of a development stage company, the reported results will not necessarily reflect the future. Corporate Overview and History In November 2013,Nevada corporation. Creative announced plans to separate into two publicly-traded companies: one comprising ofseparated its planned specialty pharmaceutical business located in Canada the other comprised of its nutritional supplements business. As part of the separation, Creative transferredby transferring substantially all of the assets and liabilities of the planned specialty pharmaceutical business to CEN. TheCEN and effecting a distribution was through a pro rata distribution(the “Spin-Off Distribution”) of CEN sharescommon stock to Creative shareholders on February 29, 2016 that2016. The Spin-Off Distribution was expectedintended to be tax free for U.S. Federalfederal income tax purposes. Prior to the Spin-Off Distribution, CEN initially pursued the cannabis business in Canada and obtained funding to build the initial phase of its comprehensive seed-to-sale facility and applied to obtain a license in Canada to begin operating its state-of-the-art medical marijuana cultivation, processing, and distribution facility in Lakeshore, Ontario. On March 11, 2015, the Company’s application for a license to produce marijuana for medical purposes was incorporatedformally rejected by Canadian regulatory authority. On February 1, 2016 the Company commenced legal action against the Attorney General of Canada in the Ontario Superior Court of Justice for damages for detrimental reliance, economic loss, and prejudgment and post judgment interest, costs of the proceeding and other relief that the court may seem just. As of August 19, 2019 the action in the Ontario Superior Court of Justice is still ongoing. After evaluating this action, the Company decided to not pursue the development of its medical marijuana business and instead to seek to develop and pursue other businesses that are related to the cannabis and other industries, including Light Emitting Diode (“LED”) lighting and hemp-based industrial, medical and food products that have a tetrahydrocannabinol (“THC”) that is below 0.3%.  We are currently focused on the manufacturing, production and development of products within the cannabis industry, including LED lighting technology and hemp-based products. The Company intends to continue to explore the usage of hemp, which it now intends to cultivate for usage in industrial, medical and food products. At present we are not able to estimate if or when we will be able to generate any revenues. Our condensed consolidated financial statements have been prepared assuming that we will continue as a wholly-owned subsidiary of Creative on August 2013.going concern; however, given our recurring losses from operations, management has determined there is substantial doubt about our ability to continue as a going concern.   AcquisitionNear Term Operating Plan Our near-term operating plans are based on us obtaining financing through debt or equity raises of Tesla Digitalapproximately $50,000,000 USD. Generally, the funds are planned to be invested as follows: $25 million in hemp activities, $20 million in LED lighting manufacturing and $5 million in general operating costs. There can be no assurance that the Company will be able to raise the foregoing funds or proceed as planned. 4 Recent Developments   On September 12, 2016,June 21, 2019, Company entered into a Merger Agreement (the “Merger Agreement”) with CSOC, Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”). Pursuant to the Merger Agreement, the Company, completed the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to acquire assets, including patented Cold LED Lighting Technology, from Tesla Digital, Inc., a Canadian Corporation, and Stevan (Steve) Pokrajac. The material consideration given by Company in this acquisition was: (a) Cen Biotech common stock that will equal $5 million on the date of issuance. (b) The transfer of real properties located at 135 North Rear Road having a book value of $2,161,467 USD and 1517-1525 Ridge Road having a purchase cost (including other related disbursements) to the Company of approximately $182,488. In addition,which the Company will employ Stevan Pokrajakmerge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”). Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same may be amended from time to time (the “WBCA”) in connection with the developmentMerger, in such form as is required by, and executed in accordance with the relevant provisions of, the acquired technologyWBCA. The Merger will become effective when Articles of Merger are filed with compensationthe Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”). Upon the Effective Time, each share of the Company’s issued and outstanding common stock, no par value per share, (the “CEN Common Stock”) shall be converted into and shall become one (1) fully paid and nonassessable share of common stock, par value $0.001 per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to $200,000 per year.the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and no payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and no cash or other consideration shall be delivered or deliverable in exchange therefor. Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least four (4) persons total, and thereafter to add three (3) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC.   The Company intends to explore usingMerger Agreement includes customary representations, warranties and covenants by the Cold LED Lighting Technology across manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired other than the patent included old machinery and raw materials. The Company has assigned no value to these since their value was not relevant to or calculatedrespective parties. For example, in the Company’s offer for acquisition. Therefore no impairmentMerger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be necessary if these assets are disposed of. The Company has invested approximately $200,000 to move equipment, pay for design workcomplete and develop prototypes in connection with the Company’s strategy to develop sales opportunities in commercial, municipal and automotive lighting. Our financial statements assume that 3,125,000 shares of CEN common stock will be issued as consideration for this acquisition based on a price per share of $1.60. The acquisition agreement contemplated that the number of shares will be based on the fair value determined within 180 days afterbooks and records of CSOC, and fairly present the acquisition.financial condition of CSOC as of the respective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects.           Our historical financial statementsThe Company and CSOC have each agreed, that from the Effective Time, until the first to occur of the Closing or the termination of the Merger Agreement, not to solicit or initiate discussions with third parties regarding other acquisition proposals. Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing: ● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); ● complete a 1 for 5,000 reverse split of the CSOC Common Stock; ● redeem or terminate any derivatives of CSOC; ● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws; ● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and ● file a Form 14f-1 with the SEC at least 10 days prior to the Closing. 5 Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing: ● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and ● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock. Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon: ● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing; ● CSOC having no liabilities as of the Closing; ● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and ● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders. Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is not cured within five (5) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (1) bring an action for specific performance of the Merger Agreement or (2) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement. The Merger Agreement can be terminated any time prior to the Closing pursuant to the following: ● mutual written consent of the Company and CSOC; ● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger; ● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement; ● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement; ● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing; ● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing; ● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or ● by either the Company or CSOC if the Closing has not occurred by August 30, 2019. 6 If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC may then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000. If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company may then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000 and an additional sum of $50,000. If the Merger Agreement is terminated because the Closing does not occur for any reason, other than the default thereunder of any of the parties, the parties shall not owe each other any payment amounts. The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been prepared on a stand-alone basismade, by any such person with the other party in conformityconnection with U.S. GAAP.transactions contemplated by the Merger Agreement.   RESULTS OF OPERATIONSThere can be no assurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all. As of August 19, 2019, the Merger Agreement has not closed. The Company has not determined how to account for this transaction as of August 19, 2019. Results of Operations   We have incurred recurring losses and we have not commenced revenue generating operations to date. Our expenses to date are primarily our general and administrative expenses and fees, costs and expenses related to acquisitions and operations. Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.   We The accompanying condensed consolidated financial statements have been prepared in contemplating continuation of the Company as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. The Company had an accumulated deficit of $38,748,455 at June 30, 2019 and had no committed source of debt or equity financing. The Company has not had any operating revenue and does not foresee any operating revenue in the near term. The Company has relied on the issuance of loans payable and convertible debt instruments to finance its expenses, including a note that is in default and is secured by the Company’s equipment and certain unsecured convertible notes payable. The Company will require additional capital to meet our operating requirements. We will seek to raisebe dependent upon raising additional capital through amongplacement of our common stock, notes or other things,securities in order to implement its business plan or additional borrowings, including from related parties. There can be no assurance that the sale of equity or debt securities. There are no assurances that weCompany will be successful in this or any of our endeavors or become financially viable andeither situation in order to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.   We haveThe Company’s cash position may not entered intobe sufficient to support the Company’s daily operations or its ability to undertake any line of business activity that will generates any net revenue. Our expenses to date are primarily our general and administrative expenses and fees, costs and expenses related to acquisitions and operations. 7   Operating SummaryResults of Operations for the Three Months and Six-Months Ended SeptemberJune 30, 2019 and 2018: The following tables reflect our operating results for the three and six-months ended June 30, 2017 2019 and 2016 2018, respectively:       Three-months ended           Operating Summary   June 30, 2019     June 30, 2018     Change   Revenues, net   $ -     $ -       -   Cost of Goods Sold     -       -       -   Gross Profit     -       -       -   Operating Expenses     996,614       968,734       2.9 % Loss from Operations     996,614       968,734       2.9 % Other Expense     854,011       690,807       23.6 % Net Loss   $ 1,850,625     $ 1,659,541       11.5 %     Six-months ended           Operating Summary   June 30, 2019     June 30, 2018     Change   Revenues, net   $ -     $ -       -   Cost of Goods Sold     -       -       -   Gross Profit     -       -       -   Operating Expenses     1,401,841       1,621,158       (13.5 )% Loss from Operations     1,401,841       1,621,158       (13.5 )% Other Expense     1,691,561       1,359,153       24.5 % Net Loss   $ 3,093,402     $ 2,980,311       3.8 % Revenue   We have not recognized $0 in revenue during the three monthsor six-months ended SeptemberJune 30, 20172019 and during the three months ended September 30, 2016,2018, as we have not commenced revenue generating operations to date.   Operating Expenses  Expenses During the three months ended September 30, 2017, our operating expenses were $516,913 compared to $182,668 during the same period for the prior fiscal year. During the three months ended SeptemberJune 30, 2017,2019, our operating expenses were $996,614 compared to $968,734 during the three months ended June 30, 2018. During the three months ended June 30, 2019, our operating expenses were comprised of salary and consulting fees of $195,381, foreign currency exchange loss$37,937, stock-based compensation expense of $49,094, as well as other$546,150, and general and administrative itemexpenses of $272,438.$412,527. By comparison, forduring the three months ended SeptemberJune 30, 2016,2018, our operating expenses were comprised of salary and consulting fees of $24,000, foreign currency gain$94,339, stock-based compensation expense of $1,480 as well as other$179,800, and general and administrative itemsexpenses of $160,148. $694,595. Expenses incurred during the three months ended SeptemberJune 30, 20172019 compared to the three months ended SeptemberJune 30, 20162018 increased primarily due to increases in the use of consultants and travel expenses. The primary reasons for these increases are more consulting services and travel to continue development of our projects, and professional feesstock-based compensation related to legal services for compliance and regulatory work. Other Income and Expense Items During the three months ended September 30, 2017, our other income and expense items totaled $604,841 expense compared to $413,669 expense for the three months ended September 30, 2016. During the three months ended September 30, 2017, our other income and expense items were comprised of interest fees of $518,894 and related parties interest of $85,947. By comparison, for the three months ended September 30, 2016, our other income and expense items were of interest fees of $353,727 and related parties interest of $59,942. The Company has not produced revenue and has borrowed money to fund operating activities, resulting in higher interest expenses. NetLoss Our net loss for the three months ended September 30, 2017 was $1,121,754 compared to a net loss of $596,337 for the three months ended September 30, 2016 primarily due to the factors discussed above. Operating Summary for the Nine Months Ended September 30, 2017 and 2016 Revenue We recognized $0 in revenue during the nine months ended September 30, 2017 and during the nine months ended September 30, 2016, as we have not commenced revenue generating operations to date. OperatingExpensesadditional awards.   During the ninesix months ended SeptemberJune 30, 2017,2019, our operating expenses were $1,737,027$1,401,841 compared to $617,539$1,621,158 during the same period for the prior fiscal year.six months ended June 30, 2018. During the ninesix months ended SeptemberJune 30, 2017,2019, our operating expenses were comprised of salary and consulting fees of $498,158, foreign currency exchange loss$88,079, stock-based compensation expense of $93,237, as well as other$713,550, and general and administrative itemexpenses of $1,145,632.$600,212. By comparison, forduring the ninesix months ended SeptemberJune 30, 2016,2018, our operating expenses were comprised of salary and consulting fees of $95,239, salary$137,524, stock-based compensation expense of $347,200, and consulting fees related parties, $24,000, foreign currency loss of $54,123 as well as other general and administrative itemsexpenses of $444,177. $1,136,434. Expenses incurred during the ninesix months ended SeptemberJune 30, 20172019 compared to the ninesix months ended SeptemberJune 30, 2016 increased2018 decreased primarily due to increasesdecreases in the use of consultantsgeneral and travel expenses. The primary reasons for these increases are more consulting services and travel to continue development of our projects, and professional feesadministrative expenses related to travel, legal, services for compliance and regulatory work.other professional fees. 8   Other Income and Expense Items During the ninethree months ended SeptemberJune 30, 2017,2019, our other income and expense, items totaled $1,763,052 expensenet was $854,011 compared to $1,182,818 expense for$690,807 during the ninethree months ended SeptemberJune 30, 2016.2018. During the ninethree months ended SeptemberJune 30, 2017,2019, our other income and expense items were comprised of interest feesexpense of $1,552,275$829,017, interest income of $2,052, and related parties interestforeign exchange loss of $210,777.$27,046. By comparison, forduring the ninethree months ended SeptemberJune 30, 2016,2018, our other income and expense items were comprised of interest feesexpense of $1,020,051$713,962, and related partiesforeign exchange gain of $23,155. The increase during the period is due to interest expense on additional notes and loans issued to fund operations. During the six months ended June 30, 2019, our other income and expense, net was $1,691,561 compared to $1,359,153 during the six months ended June 30, 2018. During the six months ended June 30, 2019, our other income and expense items were comprised of $165,088,interest expense of $1,644,118, interest income of $4,097, and foreign exchange loss of $51,540. By comparison, during the six months ended June 30, 2018, our other income and expense items were comprised of interest expense of $1,412,751, and foreign exchange gain of $53,598. The increase during the period is due to interest expense on additional notes and loans issued to fund operations. Income Taxes As of June 30, 2019, the Company has net operating loss carryforwards of approximately $23,100,000 that may be available to reduce future years’ taxable income. As of June 30, 2019, the Company has a deferred tax asset of approximately $6,100,000 which has been completely offset by a valuation allowance. The Company believes that it is more likely than not that the carryforwards will expire unused as well as sale of equipment of $2,321. Thethe Company has not producedbeen able to commence revenue and has borrowed moneygenerating activities to fund operating activities, resulting in higher interest expenses.date. Net Loss   NetLoss Our net loss forduring the ninethree months ended SeptemberJune 30, 20172019 was $3,500,079$1,850,625 compared to a net loss of $1,800,356 for$1,659,541 during the ninethree months ended SeptemberJune 30, 2016 primarily2018 due to the factors discussed above.   Our net loss during the six months ended June 30, 2019 was $3,093,402 compared to a net loss of $2,980,311 during the six months ended June 30, 2018 due to the factors discussed above.   Liquidity and Capital Resources   As of SeptemberJune 30, 2017, we had2019 and December 31, 2018, our liquid assets consisted of $4,595,233, comprised of: cash of $60,388, property, plant$15,972 and equipment, net of $15,017, patent asset of $2,209,152, improvements in process of $1,412,487, loans due from CEN Biotech Ukraine of $775,328 and other accounts receivable of $122,861. $3,193, respectively. 9 As of SeptemberJune 30, 2017, we had liabilities2019, our indebtedness includes a patent acquisition liability of $21,475,002, comprised of: accounts payable of $85,767, accounts payable – related party of $2,994,$1,010,000, accrued interest of $4,016,484,$8,206,898, accrued interest to related parties of $503,056, accrued expenses of $287,650, short term convertible notes$1,119,126, as well as loans payable, loans payable to related parties, of $849,127, loans payable of $9,983,501, short term convertible notes of $885,207, long term convertible notes of $2,150,904 and long term convertible notes to related parties of $2,710,312. Our $21,475,002 of indebtedness includes accruedshare interest, of $4,016,484, accruedloans payable share interest to related parties of $503,056 as well as notes payable, notes payable to related parties, convertible notes and convertible notes to related parties totaling $16,579,050,$19,745,215, with maturity dates as outlined below. The convertible notes are due 2 years from issuance with notes maturing in 2018 through 2021. We are in default of $9,675,000 of debt that is secured by certain equipment that we value at approximately $10,533.$9,000. We are also currently in default of $3,606,075 of unsecured debt. We expect our operating and administrative expenses to be at least $2,400,000 annually. The convertible notes are due 2 years from issuance with notes maturing in 2018 and 2019.   Description   Maturity Date     Amount     Maturity Date     Amount   Note Payable - Related Party   12/31/17     $ 247,627   Note Payable - Related Party   12/31/17       601,500   Note Payable   6/30/2016       9,675,000   Note Payable   9/21/2018       308,501   Convertible Notes - Short Term       885,207   Loan Payable   6/30/2016     $ 9,675,000   Loan Payable   11/21/2018       294,178   Loan Payable – Related Party   12/31/2018       837,318   Loan Payable – Related Party   10/2/2019       300,000   Loan Payable – Share Interest   7/16/2019       150,000   Loan Payable – Share Interest – Related Party   7/16/2019       225,000   Convertible Notes   On Demand       844,111   Convertible Notes   Q2 2018       14,000   Convertible Notes   Q4 2018       68,000   Convertible Notes   Q1 2019       1,046,287   Convertible Notes   Q2 2019       405,000   Convertible Notes   Q1 2018       62,040     Q3 2019       791,017   Convertible Notes   Q2 2018       463,572     Q4 2019       457,701   Convertible Notes   Q3 2018       90,200     Q1 2020       575,800   Convertible Notes   Q4 2018       1,600     Q2 2020       117,000   Convertible Notes   Q1 2019       566,475     Q3 2020       514,264   Convertible Notes   Q2 2019       357,000     Q4 2020       338,824   Convertible Notes   Q3 2019       603,818     Q1 2021       201,034   Convertible Notes   Q4 2019       6,197     Q2 2021       332,000   Convertible Notes Related Party   12/31/18       1,388,122     Q1 2019       926,368   Convertible Notes Related Party   Q2 2018       100,000     Q3 2020       1,612,313   Convertible Notes Related Party   Q4 2018       450,000     Q2 2021       20,000   Convertible Notes Related Party   Q1 2019       500,000   Convertible Notes Related Party   Q4 2018       48,000   Convertible Notes Related Party       224,191           $ 16,579,050                 Total Total     $ 19,745,215     We intend to fund our expenses through the issuance and sale of additional securities. We do not have any commitments from any persons to purchase any securities and there can be no assurance that we will be able to raise sufficient funds, or any funds, to pay our liabilities as they become due and payable.   Six months ended June 30, 2019 and 2018   Cash Flows from Operating Activities  Activities We have not generated positive cash flows from operating activities. During the ninesix months ended SeptemberJune 30, 2017,2019, we used $2,500,213$414,255 in operating activities compared to $369,147$1,120,335 used in operating activities during the ninethree months ended SeptemberJune 30, 2016.2018. The increase isdecrease in the use of operating cash between the two periods related primarily due to operating expenses.a decrease in the extensions of credit under the other receivables category and a larger portion of the current loss relating to non-cash interest and stock-based compensation expense.   Cash Flows from Investing Activities  Activities Our use of cash flow for investing activities during the first ninesix months ended SeptemberJune 30, 2017 totaling $492,3722019 was $120,000 compared to use of $5,439 during the same period in 2016six months ended June 30, 2018. During the six months ended June 30, 2019, our use of $302,923. The increase is duecash flows for investing activities were comprised solely of advances to acquisitionCEN Ukraine of fixed assets and advance on acquisitions in 2017.$120,000. By comparison, during the six months ended June 30, 2018, our use of cash flows for investing activities was comprised solely of leasehold improvements of $5,439.  10   Cash Flows from Financing Activities  Activities During the first ninesix months ended SeptemberJune 30, 2017, financing activities equaled $2,990,592. This included loans (net foreign exchange)2019, we received $553,034 through issuance of convertible notes to investors and related parties to fund our working capital requirementsrequirements. During the six months ended June 30, 2018, we received $1,312,800 through issuance of $16,553,398. This includes new convertible notes held byand share interest loans to investors duringto fund our working capital requirements. During the first ninesix months ended SeptemberJune 30, 2017 totaling $2,990,592, with conversion rights totaling up to 1,842,723 common shares.2019 and 2018, $6,000 and $250,000 of the convertible notes and share interest loans payable were repaid.    CEN has no committed source of debt or equity financing. Our President isExecutive team and Board are seeking additional financing from histheir business contacts, but no assurances can be given that such financing will be obtained or, if obtained, on what terms. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the fiscal period ended December 31, 2016 that states that our lack of committed resources causes substantial doubt about our ability to continue as a going concern.   Fluctuations of foreign exchange rates may adversely affect our reported results. Our planned operations will be conducted solely in Canada. Exchange rate fluctuations between the U.S. and Canadian dollar result in fluctuations in reported amounts from Canadian operations in our consolidated financial statements. Currently, the U.S. Dollar is the functional currency, because the bulk of the Company’s transactions have been in U.S. dollars, and because the Company has received the vast majority of its funding in U.S. dollars. Therefore, any change in the exchange rate will affect our reported sales, expenses and net income. We have not entered into hedging transactions with respect to our foreign currency exposure, but may do so in the future. We cannot be assured that fluctuations in foreign currency exchange rates will not have a material adverse impact on our business, financial condition or results of operations. Recently Issued Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Critical Accounting Policies The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 1to the financial statements, included elsewhere in this filing, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements. Seasonality The Company does not currently expect its planned business to be seasonal in nature. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a publicreporting company that will increase our operating costs or cash requirements in the future.     SummaryJumpstart Our Business Startups Act of Material Contractual Commitments2012   The following is a summaryJumpstart Our Business Startups Act of 2012 (the “JOBS Act”) provides that an emerging growth company can take advantage of certain exemptions from various reporting and other requirements that are applicable to public companies that are not emerging growth companies. We currently take advantage of some, but not all, of the reduced regulatory and reporting requirements that are available to us for as long as we qualify as an emerging growth company. Our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our material contractual commitmentsinternal control over financial reporting for as of September, 2017. The Company currently leases space for operations in Canada. Operating Lease     Total     Less than 1 Year     1 - 3 Years     3 - 5 years     More than 5 Years   Office Lease     $ 153,850     $ 9,616     $ 76,925     $ 67,309     $ -   Total     $ 153,850     $ 9,616     $ 76,925     $ 67,309     $ -   long as we qualify as an emerging growth company.   InflationRecent Accounting Pronouncements   Management believes that inflation has not had a significant effect on our resultsAdoption of operations. Future LegislationNew Accounting Standard   The federal governmentCompany adopted Accounting Standards Codification (ASC) 842, “Leases” using the modified retrospective approach, effective January 1, 2019, on its condensed consolidated financial statements. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods. The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of Canada is reviewing the Cannabis laws. Possessing and selling cannabis for non-medical purposes is still illegal everywhere in Canada and until new legislation and new rules are in place, current laws remain in effect. We understand that the Canadian government has a commitment to revise the regulatory regime. We cannot provide any assurance that the cannabis regulatory scheme will be revised, the date that Canada will enact any new legislation or if the legislation will be beneficial to our future prospects.standard.   ITEM 3Item 3. Quantitative and Qualitative Disclosures About Market Risk.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company isAs a smaller reporting company, we are not required to provide the information requiredcalled for by this Item.   ITEM 4 CONTROLS AND PROCEDURESItem 4. Controls and Procedures.   Management’s Report on Internal Controls over Disclosure Controls(a) Evaluation of disclosure and Procedurescontrols and Financial Reportingprocedures.   OurAs of June 30, 2019, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment and evaluated the effectiveness of the Company's disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is responsiblerequired to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 11 Management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2019. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of June 30, 2019. Management recognized the need for establishingadditional resources in the area of accounting and maintaining adequatefinancial reporting controls and procedures. As a result, we have outsourced the accounting and financial reporting oversight roles to a qualified accounting firm with public company reporting expertise. (b) Changes in internal control over financial reporting.  The Company's On May 16, 2019, Alex Tarrabain, one of the members of the Company’s Board was appointed to serve as the Company’s Chief Financial Officer and as one of the Vice Presidents of the Company effective May 21, 2019 (the “Effective Date”), and Richard Boswell, who served as the Company’s Chief Financial Officer since July 2017, resigned from his position as the Company’s Chief Financial Officer as of the Effective Date, and continues to serve in his position as the Company’s Senior Executive Vice President going forward focusing on the Company’s strategic activities and will also continue to serve as a member of the Company’s Board. Other than the foregoing, there were no changes in our internal control over financial reportingis designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our internal control over disclosure controls and procedures and financial reporting includes those policies and procedures that: ● Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP; ● that our receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and ● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. As of September 30, 2017, our management conducted an assessment of the effectiveness of the Company's internal control over disclosure controls and procedures and financial reporting.  In making this assessment, management followed an approach based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (known as “COSO”).  Based on this assessment, management determined that the Company's internal control over disclosure controls and procedures and financial reporting as of September 30, 2017 was effective. Duringoccurred during the quarter ended SeptemberJune 30, 2017, there were no changes in the Company's internal control over financial reporting2019 that have materially affected, or are reasonably likely to materially affect, its internal control over disclosure controls and procedures and financial reporting. The Company’s management, including the Company’s CEO/CFO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. This quarterly report does not include an attestation report of the Company's registered public accounting firm regardingour internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report. PART II Item 1 Legal Proceedings Health Care Canada. On March 11, 2015, the Company’s application under the MMPR for a license to produce marijuana for medical purposes was formally rejected by Health Canada. The Company filed an application for judicial review in Canadian federal court on April 10, 2015 in order to obtain a reversal of this decision. We discontinued this action in February 2016 after a February 24, 2016 decision in a case in which the Company was not a party (Neil Allard, Tanya Beemish, David Hebert And Shawn Davey V. Her Majesty The Queen In Right Of Canada). The Canadian federal court decision determined that the plaintiff’s Charter rights have been infringed by the MMPR and that such infringement is not in accordance with the principles of fundamental justice or otherwise justified. We understand that the federal government of Canada is re-evaluating the MMPR regime and the legalization or permitting of marijuana for medical and other uses including the right of persons to grow, harvest, manufacture and distribute marijuana related products. CEN continues to pursue relief and damages and on or about February 2, 2016, filed a Statement of Claim against the Attorney General of Canada in the Ontario Superior Court of Justice, claiming the following: (a) damages for detrimental reliance in the sum of Fifteen Million Dollars ($15,000,000.00); (b) damages for pure economic loss in an undetermined amount; (c) prejudgment and post judgment interest in accordance with sections 128 and 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, and section 31 of the Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50, as amended; (d) the costs of this proceeding on a substantial indemnity basis, plus all applicable taxes; and (e) such further and other relief as the court seems just. This case is in the discovery phase. We cannot provide any assurances as to the timing or decision or outcome related to our action seeking damages.     SEC Comment.PART II. OTHER INFORMATION   ITEM 1. LEGAL PROCEEDINGS. From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operation if determined adversely to us. Item 1A. Risk Factors. As a smaller reporting company, we are not required to provide the information called for by this Item. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. During the three and six-months ended June 30, 2019, CEN entered into loans and associated extension agreements with various parties. In connection with the distribution by Creativeconsideration for such loans and associated extensions, CEN granted various individuals total aggregate amount of CEN’s common stock on February 29, 201645,000 and the Form 10 registration statement filed by CEN to register its90,000 unregistered shares of common stock underof CEN during the Exchange Act, CEN received comments by the Staff of the Securitiesthree and Exchange Commission, including a letter dated May 4, 2016 in which the Staff noted that they “…continue to question the absence of Securities Act registration of the spin-off distribution”. In the event that the distributionsix-months ended June 30, 2019, respectively. The above issuances of shares of CEN’s common stock was a distribution that required registration underwere issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), thenand the Company could be subjectprovisions of Regulation D promulgated thereunder or in reliance on the provisions of Regulation S promulgated thereunder. 12 During the three and six-months ended June 30, 2019, we issued $406,000 and $553,034, respectively, of convertible notes to enforcement action byinvestors and related parties to fund our working capital requirements. These notes bear interest at 5% per year and are convertible at the SEC that claims a violationoption of the holder into 253,750 and 345,422, respectively, common shares. The above issuances of convertible notes were issued in reliance on Section 54(a)(2) of the Securities Act of 1933, as amended and could be subjectthe provisions of Regulation D promulgated thereunder or in reliance on the provisions of Regulation S promulgated thereunder. Item 3. Defaults Upon Senior Securities.               CEN has a payment default with respect to the term loan payable to Global Holdings International, LLC, in the principal amount of $9,675,000 and which bears compound interest at 15% per annum which was due on September 30, 2016. The aggregate amount due under this loan as of August 19, 2019 is approximately $17,600,000. Interest and default interest and related fees currently accrue at approximately $600,000 per quarter. This note is secured by some of the Company's equipment which we value at approximately $9,000. CEN has a payment default with respect to certain unsecured convertible loans payable to private rightinvestors and related parties, in the principal amount of action for rescission or damages.$2,981,075 and which bear interest at 5% per annum which were due prior to August 19, 2019. The aggregate amounts due under these loans as of August 19, 2019, including accrued interest, is approximately $4,200,000. Interest and default interest and related fees currently accrue at approximately $55,000 per quarter. Item 4. Mine Safety Disclosures. Not applicable. Item 5. Other Information. None.   13 Item 6. Exhibits.   Item 1A. Risk Factors Exhibit No. Description The financial statement schedules and exhibits filed as part of this Quarterly Report on Form 10-Q are as follows:  a.     Exhibits Exhibit No. Description 2.1 Form of Merger Agreement dated June 21, 2019, between CEN Biotech, Inc. and Caduceus Software Systems Corp. and Caduceus Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC June 21, 2019).     3.1 As a smaller reporting company, we are not required Articles of Incorporation of Cen Biotech, Inc. (Incorporated by reference to provideExhibit 3.1 to the information called for by this Item. Company’s Registration Statement (Commission file number 000-55557) on Form 10 filed with the SEC January 4, 2016.) Item 2 Unregistered Sales of Equity Securities and Use of Proceeds     3.2 None By-Laws of Cen Biotech, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement (Commission file number 000-55557) on Form 10 filed with the SEC January 4, 2016.) Item 3 Defaults upon Senior Securities     10.1 Amendment dated April 3, 2019, to Share Purchase Agreement dated August 31, 2016, and executed September 12, 2016, as amended, between CEN has a payment default with respectBiotech, Inc. and Stevan Pokrajac and Tesla Digital Inc. and Tesla Digital Global Group Inc. (Incorporated by reference to Exhibit 10.1 to the term loan payable to Global Holdings International, LLC, inCompany’s Current Report on Form 8-K filed with the principal amount of $9,675,000 and which bears interest at 15% per annum which was due on June 30, 2016. The aggregate amount due under this loan as of the date of the filing of this report is $13,555,954. Interest and default interest and related fees accrue at $450,000 per quarter. This note is secured by some of the Company's equipment which we value at approximately $10,533. Item 4 Mine Safety DisclosuresSEC April 8, 2019).     10.2 N/A Item 5 Other InformationTerm Sheet dated May 15, 2019, between CEN Biotech, Inc. and Caduceus Software Systems Corp. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).     10.3 None Item 6 Exhibits Executive Employment Agreement dated May 16, 2019, between CEN Biotech, Inc. and Alex Tarrabain. (Incorporated by reference to Exhibit Number Description 31.1* Section 302 Certification of Chief Executive Officer10.1 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).   10.4 Restricted Stock Agreement dated May 16, 2019, between CEN Biotech, Inc. and Alex Tarrabain. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).     31.2*31.1 Section 302 Certification of Chief FinancialExecutive Officer pursuant to Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1**31.2 Certification of the Chief Financial Officer pursuant to Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.* 32.2**32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.* 101.INS XBRL*** Instance Document     101.SCH XBRL***101.INS XBRL Instance* 101.SCH XBRL Taxonomy Extension Schema DocumentSchema* 101.CAL XBRL*** XBRL Taxonomy Extension Calculation Linkbase DocumentCalculation* 101.DEF XBRL Taxonomy Extension Definition* 101.LAB XBRL Taxonomy Extension Labels* 101.PRE XBRL Taxonomy Extension Presentation*     * Filed herein. 101.DEF XBRL*** Furnished herewith.	Taxonomy Extension Definition Linkbase Document
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