PART I – FINANCIAL INFORMATIONPure Harvest Cannabis Group, Inc.

Item 1. FinancialConsolidated Statements

THE POCKET SHOT COMPANY

Balance Sheets (Unaudited)

See accompanying notes to the condensed unaudited financial statements.

THE POCKET SHOT COMPANY

Income Statements (Unaudited) of Operations

For The Three and Six Months Ended June 30, 20182019 and 20172018

SeeThe accompanying notes to the condensed unauditedare an integral part of these consolidated financial statements.statements

The Pocket Shot CompanyPure Harvest Cannabis Group, Inc.

STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED December 31, 2016 and 2017 and SIX MONTHS ENDED June 30, 2018

See accompanying notes to the condensed unaudited financial statements.

THE POCKET SHOT COMPANY

Consolidated Statements of Cash Flows (Unaudited)

For The Six Months Ended June 30, 20182019 and 20172018

SeeThe accompanying notes to the condensed unauditedare an integral part of these consolidated financial statements.statements

Pure Harvest Cannabis Group, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2019

Unaudited

The accompanying notes are an integral part of these consolidated financial statements

Pure Harvest Cannabis Group, Inc.

(Formerly The Pocket Shot CompanyCompany)

Notes to CombinedConsolidated Financial Statements

June 30, 2018 and December 31, 20172019

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

The Pocket Shot Company formerly Pocket Shot, LLC, a Colorado limited liability company, was initially formed on April 18, 2004. Under a 351 Exchange Agreement, the members chose to contribute all of their membership interests in the LLC to The Pocket Shot Company,as a Colorado corporation in exchange for sharesApril 2004.

On December 31, 2018 the Company acquired all of the outstanding common stock of the corporationPure Harvest Cannabis Producers, Inc., (“PHCP”) in accordance with the terms and provisionsexchange for 17,906,016 (post-split) shares of the agreement.Company’s common stock. The effective datetransaction was accounted for as a reverse acquisition. The accompanying consolidated financial statements are those of PHCP prior to December 31, 2018 and exclude the exchange was January 1, 2006. financial position, results of operations, cash flows and stockholders’ equity of the Pocket Shot Company prior to December 31, 2018. See “Reverse Acquisition” below for additional information.

As a result of the acquisition of PHCP, the Company’s new business involves the acquisitions and operations of licensed marijuana cultivation facilities, manufacturing facilities and dispensaries.

The Company has developed a plastic pouchwill continue to collect royalties for the packaging of alcohol under the trademarks Pocketshot and Pocket Shot. They collect royalty income from licensing the right to use theCompany’s patent and the trademarks in connection with manufacturing filling and packaging the pouches withsale of Pocket Shot branded specialty alcohol and the distribution, sale and advertisingbeverage pouches.

The Company changed its name to Pure Harvest Cannabis Group, Inc. in February 2019.

On March 15, 2019, shareholders owning a majority of the products underCompany’s outstanding shares approved the brand name.following amendments to the Company’s Articles of Incorporation:

Increasing the authorized capital stock of the Company to 250,000,000 shares of common stock, $0.01 par value, and 25,000,000 shares of preferred stock, $0.01 par value. The preferred stock may be issued in one or more series as may be determined by the Company’s Board of Directors. The designations, powers, rights, preferences, qualifications, restrictions and limitations of the preferred stock shall be established from time to time by the Company’s Board of Directors; and

Forward splitting the outstanding shares of the Company’s common stock on a two-for-one basis.

The Company’s accounting year end is December 31.

Basis of PresentationReverse Acquisition

TheseOn December 31, 2018 the Company (“The Pocket Shot Company”) acquired all of the outstanding common stock of PHCP in exchange for 17,906,016 (post-split) shares of the Company’s common stock. In addition, the shareholders of PHCP were issued warrants to purchase 17,906,016 (post-split) shares of the Company’s common stock. The warrants have an exercise price of $4.00 per share and a life of three years. The issuance of the warrants did not have an impact on the financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

Management’s Representation of Interim Financial Statementswas reflected similar to the shares issued to PHCP as discussed below.

The transaction was accounted for as a reverse acquisition since: (i) the shareholders of PHCP owned the majority of the outstanding common stock of the Company after the share exchange; (ii) a majority of the directors of the Company are also directors of PHCP; and (iii) the old officers of the Company were replaced with officers designated by PHCP. Effective December 31, 2018, the Company’s stockholders’ equity was retroactively recapitalized as that of PHCP, while the stockholders’ equity of the Company was recorded as being acquired in the reverse acquisition. The Company and PHCP remain separate legal entities (with the Company as the parent of PHCP). The accompanying unauditedconsolidated financial statements are those of PHCP prior to December 31, 2018 and exclude the financial position, results of operations, cash flows and stockholders’ equity of The Pocket Shot Company prior to December 31, 2018.

All references to common stock, share and per share amounts have been prepared byretroactively restated to reflect as if the transaction had taken place as of the beginning of the earliest period presented.

The Company’s assets and liabilities pre- reverse acquisition:

The following summarized unaudited consolidated pro forma information shows the results of operations of the Company without audit pursuant tohad the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interimreverse acquisition occurred on January 1, 2017:

Pro-forma:

The summarized consolidated pro forma results are not necessarily indicative of results which would have occurred if the reverse acquisition had been in effect for the periods presented. Further, the summarized unaudited consolidated pro forma results are not intended to be a full year. These financial statements should be read in conjunction with the audited financial statements at December 31, 2016 and December 31, 2017 as presented in the Company’s Registration Statement on Form S-1 and subsequent annual reports on Form 10-K filed with the Securities and Exchange Commission.projection of future results.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.

In the opinion of management, the accompanying unaudited condensed financial statements contain all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the Company’s financial position as of June 30, 2019 and the results of its operations for the six months then ended. The condensed balance sheet as of December 31, 2018 is derived from the December 31, 2018 audited financial statements. Significant accounting policies have been consistently applied in the interim financial statements. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the entire year.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, however, the above conditions raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Management plans to fund future operations by raising capital and or seeking joint venture opportunities.

Principles of Consolidation

The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”).

The consolidated financial statements include the accounts of the Company and its majority owned subsidiary, PHCP. All significant consolidated transactions and balances have been eliminated in consolidation. The operations of the Company are included in the consolidated financial statement from the date of the Agreement.

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimate of fair value of share-basedshare based payments and derivative instruments and recorded debt discount, valuation of deferred tax assets and valuation of in-kind contribution of services and interest.assets.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of six months or less to be cash equivalents. At June 30, 2018 and December 31, 2017, the Company cash equivalents totaled $39,101and $35,737 respectively.

Accounts Receivable

We record accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable balances and is charged to other income (expense) in the combined statements of operations. We calculate this allowance based on our history of write-offs, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our customers. As of December 31, 2016June 30, 2019 and December 31, 2017,2018, an allowance for estimated, uncollectible accounts was determined to be unnecessary.

Inventory

Inventory is reported at the lower of cost or market on the first-in, first-out (FIFO) method. Our inventory is subject to obsolescence. Accordingly, quantities on hand are periodically monitored for items no longer being sold, which are written off. All inventory is stored at the manufacturer and maintained by them. Inventory consists of pouches, display and shipping boxes and no inventory is deemed obsolete.

Machinery and Equipment

Machinery and equipment is recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant machinery and equipment categories are as five years.

A summary of machinery and equipment as of June 30, 2018 and December 31, 2017, is as follows:

Depreciation expense for the six months ended June 30, 2018 and 2017 was $13,417 and $14,375, respectively.

Cost of Sales

The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines.

Advertising and Promotion

This category includes costs of website design and maintenance and event sponsorships.

General and Administrative

This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses.

Travel and Entertainment

This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

Revenue Recognition

The Company records revenue under the adoption of ASC 606 by analyzing exchanges with its customers using a five-step analysis such as identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The Company’s policy is to record revenue as earned when a firm commitment, indicating sales quantity and price exists, delivery has taken place and collectability is reasonably assured. The Company records sales of finished products once the customer places the order and the product is shipped. Delivery is considered to have occurred when title and risk of loss have transferred to the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are netted with gross sales. The Company accounts for such provisions during the same period in which the related revenues are earned. Provisions for discounts, returns, allowances, customer rebates and other adjustments are minimal and are recorded as a reduction of revenue

Cost of Sales

The costs associated with our royalty income are packaging, a royalty of $1.20 per case, and repair and maintenance costs of our filling machines.

General and Administrative

This category includes costs of legal and accounting, telephone, office supplies, product samples, insurance, registration costs, and consulting expenses.

Travel and Entertainment

This category includes the costs of air travel, hotels, meals and reimbursed automotive expenses.

Stock-Based Compensation

The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards using the Black-Scholes option pricing model. Share based expense paid through direct stock grants is expensed over the vesting period or upon issuance for awards with no further service requirements. During the six months ended June 30, 2019 and 2018 the Company recognized stock-based compensation expense of $323,000 and $0, respectively. See Note 6 for additional information.

Fair Value of Financial Instruments

The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

The guidance also establishes a fair value hierarchy for measurements of fair value as follows:

The carrying amount of the Company’s financial instruments approximates their fair value as of June 30, 20182019 and December 31, 2017,2018, due to the short-term nature of these instruments.

Net Loss per Share

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. As of June 30, 2019 and 2018, dilutive instruments consisted of warrants to purchase shares of the Company’s common stock, the effects of which due to the net loss are anti-dilutive.

Recent Accounting Pronouncements

In June 2014,February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an AmendmentASU, Leases, which requires lessees to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, includingrecognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risksstandard is substantially unchanged. Additional qualitative and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities).quantitative disclosures are also required. The Company adopted the standard effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this pronouncementstandard update:

The Company has inventoried all leases where the Company is a lessee as of the initial date of application and has examined other contracts with suppliers, vendors, customers and other outside parties to identify whether such contracts contain an embedded lease as defined under the new guidance. As of June 30, 2019, Company’s only lease was a month to month lease, which is immaterial to the consolidated financial statements.

As a result of the above, the adoption of ASC 842 did not have a material effect on the consolidated financial statements. The Company will review for the years ended December 31, 2016 and December 31, 2017.existence of embedded leases in future agreements.

In June 2014,2018, the FASB issued Accounting Standards Update (“ASU”)ASU No. 2014-12,2018-07, “Compensation –- Stock Compensation ((Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employeesCompensation - Stock Compensation (which currently only includes share-based payments in whichto employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the terms of the award provide that a performance target that affects vesting couldaccounting for share-based payments to nonemployees and employees will be achieved after the requisite service period.substantially aligned. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relatesASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU areNon-Employees. This standard is effective for annual periods and interim periods within thosepublic companies for annual periods beginning after December 15, 2015. Earlier2018, including interim periods within those fiscal years, with early adoption is permitted. Entities may apply the amendments in thispermitted as long as ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is2014-09 has been adopted. The Company adopted the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance ison January 1, 2019. The adoption did not expected to have a material impact on our results of operations, cash flows orconsolidated financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.statements.

The Company reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

NOTE 3 – RELATED PARTY TRANSACTIONTRANSACTIONS

Consulting services are provided by shareholders. ForEffective January 1, 2019, the Company entered into employment agreements with its two officers. Under the terms of the agreement the combined minimum annual compensation is $350,000. During the six months ended June 30, 2019, the Company accrued $188,388 in connection with these agreements and $24,174 for expenses, both of which are included in due to related parties on the accompanying consolidated balance sheet and within general and administrative expenses on the accompanying statement of operations. See Note 6 for discussion regarding common stock issued in connection with the employment agreements.

Prior to the reverse acquisition, the Company entered into an agreement with Jarrold R. Bachmann, a former officer and a current shareholder, to pay royalties of $1.20 on a per case basis for sales of the Company’s product The Pocket Shot. Amounts due as of June 30, 2019 and 2018 under the agreement were insignificant.

NOTE 4 – ROYALTY INCOME

Under the terms of an existing license agreement, for which was entered into prior to the reverse acquisition, the Company receives royalty income in exchange for the license to manufacture, fill and 2017, no fees were paid.distribute the Company’s product, a plastic pouch containing specialty alcohol beverages. The initial term of the agreement was for five years, expiring in 2010, with automatic renews for succeeding terms of two years each unless either party has given a written notice of its election to terminate the agreement at least one hundred, eighty calendar days prior to the end of any initial or extended term.

The board of directors has approved and granted Jarrold R. Bachmann an officer and shareholder,Licensee is required to pay the Company a $1.20royalty per case as provided in the agreement. All royalties due to the Company accrue upon the sale of the products, regardless of the time of collection by the Licensee. In addition, all of the Company’s revenues, prior to the reverse acquisition, have been historically generated from this contract. The loss of this royalty would have a substantial impact on salesthe Company’s operations. Prior to the reverse acquisition, the Company has operated in a single business segment, licensing its product to customers in the United States.

NOTE 5 - EARNEST MONEY DEPOSIT

In February 2019 the Company entered into an agreement to buy property located approximately 35 miles west of Pocket Shot effective January 1, 2006. Royalty expenseDenver, Colorado. As required by the agreement, the Company placed an earnest money deposit of $20,000 with an escrow agent. The deposit of $20,000 was to be applied to the purchase price at closing. The Company subsequently assigned its rights to purchase the property to an unrelated third party and then leased the property from the unrelated third party. The Company has determined it will not receive any credit for the six months endeddeposit and has charged the amount to general and administrative expense.

NOTE 6 –NOTES PAYABLE

In 2017, the Company entered into three promissory notes with third parties. Total proceeds received were $117,000 for which were used for operations. The promissory notes are unsecured, payable on demand and do not incur interest.

NOTE 7 – NOTES RECEIVABLE

In May and June 30, 2018 and 2017 were $1,967 and $2,376 respectively.2019, the Company advanced $28,593 to two unrelated individuals in connection with potential acquisitions for the Company. The amounts are to be repaid, without interest, in October 2019.

NOTE 48 – STOCKHOLDERS’ DEFICIT

The company has authorized and issued 6,508,657 and 6,458,657 common shares with a par valueChange in Articles of $0.00 as of June 30, 2018 and December 31, 2017, respectively.Incorporation

UnderOn March 15, 2019, shareholders owning a 351 Exchange Agreement effective January 1, 2006,majority of the former membersCompany’s outstanding shares approved the following amendments to the Company’s Articles of Pocket Shot, LLC agreedIncorporation:

Increasing the authorized capital stock of the Company to contribute all of their membership interests in the LLC to The Pocket Shot Company, a Colorado corporation, in exchange for 4,943,657250,000,000 shares of common stock, no$0.01 par value, per share,and 25,000,000 shares of preferred stock, $0.01 par value. The preferred stock may be issued in one or more series as may be determined by the Company’s Board of Directors. The designations, powers, rights, preferences, qualifications, restrictions and limitations of the corporationpreferred stock shall be established from time to time by the Company’s Board of Directors; and

Forward splitting the outstanding shares of the Company’s common stock on a two-for-one basis.

The name change, trading symbol change (PCKK to PHCG) and forward stock split became effective in accordancethe public market on May 2, 2019 and have been retroactively reflected for all periods presented.

Stock-Based Compensation

In connection with the terms and provisionsemployment agreements discussed in Note 3, the Company entered into an agreement to issue a total of 1,600,000 shares of common stock to two officers. The shares vest over a one year period commencing on January 1, 2019. The Company valued the common stock at $760,000, using the closing market price of the Company’s common stock on the date of the agreement. Upon approvalThe Company is expensing the value of off the common stock over the vesting period which mirrors the service period. During the three months ended June 30, 2019, the Company recognized $190,000 of stock-based compensation. As of June 30, 2019, remaining stock-based compensation of $570,000 for which will be recognized through the remainder of 2019.

In January 2019, the Company authorized the issuance of 140,000 shares of common stock to a consultant for services rendered. The Company valued the common stock at $133,000, using the closing market price of the boardCompany’s common stock on the date of directors, the corporation has subsequently issued 675,000agreement. The Company expensed the value of the common stock upon issuance as there were no additional performance criteria.

Offering of Common Stock and Warrants

In February 2019, the Company commenced a private offering of its common stock for up to $10 million in proceeds. The Company is offering up to 20 million shares of common stock at a purchase price of $0.50 per share. In addition, for each share and warrantspurchased the investor will receive a warrant to purchase 675,000one additional share of common stock at a price of $2.00 per share. The warrants expire on December 31, 2021 or sooner at the Company’s option, if the Company’s stock trades for a price of $3.00 per share for 10 days with an average volume of 100,000 shares per day. During the three months ended June 30, 2019, the Company received deposits of $442,500 related to the sale of 885,000 shares of common stock for $1 per share.and warrants. The Company has reflected the deposits as a current liability as the related common stock and warrants have expired unexercised.

On June 22, 2009,yet to be issued and the board of directors approved the issuance of 50,000 shares of common stock to Michael Grove in consideration of past services as the Corporation’s consulting accountant.

In September 2016, the company issued 790,000 common shares with a par value of $0.00 in exchange for $79,000.

In January 2018, the Board of Directors authorized the issuance of 50,000 shares to an unrelated individual in exchange for business consulting services. This unregistered sale of equity securities was undertaken pursuant to the exemptions from registration.offering is still open.

NOTE 5 – COMMITMENTS AND CONTINGENCIESReverse Acquisition

The Company has developed a plastic pouchSee Note 1 for the packaging of alcohol under the marks Pocketshot and Pocket Shot. The Company (the Licensor) entered into an initial agreement dated August 10, 2005 with Frank-Lin Distillers, Ltd (the Licensee) to fill and package the Company’s product. The initial term of the agreement was for five years. The agreement automatically renews for succeeding terms of two years each unless either party has given a written notice of its election to terminate the agreement at least one hundred, eighty calendar days prior to the end of any initial or extended term.

NOTE 6 – ROYALTY INCOME

Under the terms of an existing License agreement, the company receives Royalty income in exchange for the license to manufacture, fill and distribute the Company’s product, a plastic pouch for the packaging of alcohol. The Licensee is required to pay the Licensor a royalty per case as provided in the agreement. All royalties due to the Licensor shall accrue upon the sale of the products, regardless of the time of collection by the Licensee.

NOTE 7 – CONCENTRATION OF SALES AND SEGMENTED DISCLOSURE

For the six months ended June 30, 2018 and the year ended December 31, 2017, the company’s revenue was generated in the form of royalty income from a single license agreement. The company has operated in a single business segment, licensing their product to customers in the United States.

NOTE 8 – WARRANTS

In the year ended December 31, 2015, the Company offered 790,000 shares of common stock at $0.10 per share (shares issued in August-September 2016), which included 790,000 warrants (1-for-1) exercisable at $0.50 per share of common stock and carrying a term of 2 years. All 790,000 warrants have now expired unexercised. A summary of warrant activity is as follows:connection with the reverse acquisition.

NOTE 9 – SUBSEQUENT EVENTS

In May 2019 the Company entered into a lease agreement for a property in Colorado intended to be used in a planned retail store front. The initial term of the lease is for a period of 3 years and the Company has approved a commitment fee of 400,000 shares of common stock as part of the agreement.

On July 30, 2019 David Lamadrid and Sterling Scott resigned as officers and directors of the Company. In connection with their resignations Mr. Lamadrid agreed to return to the Company 1,750,000 shares, and Mr. Scott agreed to return to the Company 1,200,000 shares of the Company’s common stock. These shares, upon their return to the Company, will be cancelled and will represent authorized but unissued shares.

The Company has evaluated subsequent events through the filing date of these consolidated financial statements and has disclosed that there are no suchother events that are material to the financial statements to be disclosed.

Item 2. Management’s Discussion and Analysis

On December 31, 2018 Pure Harvest Cannabis Producers, Inc. (“PHC”) was acquired by the Company. At the time of Financial Condition and Resultsthe acquisition, the Company had 13,617,314 (post-split) outstanding shares of Operations.common stock. The Company issued 17,906,016 (post-split) shares of its common stock, as well as warrants to purchase an additional 17,906,016 (post-split) shares of the Company’s common stock to the shareholders of PHC in exchange for all of the outstanding shares of PHC. The warrants issued to the former shareholders of PHC allow the holder to acquire one share of the Company’s common stock at a price of $4.00 per share at any time on or before December 31, 2021. PHC is now a wholly owned subsidiary of the Company.

Forward-Looking StatementsThe transaction was accounted for as a reverse acquisition since: (i) the shareholders of PHC owned the majority of the outstanding common stock of the Company after the share exchange; (ii) a majority of the directors of the Company are also directors of PHC; and Associated Risks.(iii) the old officers of the Company were replaced with officers designated by PHC. Effective December 31, 2018, the Company’s stockholders’ equity was retroactively recapitalized as that of PHC. The Company and PHC remain separate legal entities (with the Company as the parent of PHC).

This form 10-Q contains certain statements that are forward-looking withinOn February 5, 2019 the meaningCompany changed its name to Pure Harvest Cannabis Group, Inc. On March 15, 2019 shareholders owning a majority of the Private Securities Litigation Reform ActCompany’s outstanding shares approved a two-for-one forward split of 1995. For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate, or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risksCompany’s common stock. The name change, forward stock split and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally andthe change in the industriesCompany’s trading symbol (from “PCKK” to “PHCG”) become effective in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.the public market May 2, 2019.

As reflecteda result of the acquisition of PHC the Company’s new business plan includes the acquisition of licensed medical and recreational marijuana dispensaries, cultivation facilities and production facilities in states which allow publicly traded companies to own and operate dispensaries, cultivation facilities and production facilities. Depending on the accompanying financial statements, asmarkets entered and state regulation, the Company’s plan may also include: asset purchases, management/consulting operating agreements, or similar allowable agreements. The Company plans to use a combination of June 30, 2018, we had an accumulated deficit totaling $(466,343). This raises substantial doubts about our abilitycash, shares of common or preferred stock, notes, or other financing vehicles to continue as a going concern.complete these acquisitions.

Plan of OperationAs an alternative to a standard acquisition, the Company may use joint ventures and/or licensing arrangements to provide the Company with the same economic benefits as would be obtained from an outright acquisition.

The Company was incorporated underis dedicated to the lawsresearch and development of the Statehighest quality products to support patient health and well-being. The Company intends to develop into a large vertically integrated producer and distributor of cannabis initially targeting states with attractive markets that have legalized cannabis for both medicinal and adult-use. The Company will also enter markets that are in various stages of legalization with branded hemp derived CBD and terpene infused product lines. In addition to products tailored to marijuana retail dispensaries, the Company’s line will incorporate infused product options including beverages, edibles, topicals, concentrates, and distillates.

On January 15, 2019 the Company signed a Non-Binding Letter of Intent with an unrelated third party to acquire the assets of a licensed marijuana dispensary located west of Denver, Colorado. The Letter of Intent provides that the Company will pay $280,000 in cash, assume certain liabilities and issue 2,500,000 restricted shares of the Company’s post-split common stock for the assets that are purchased.

On May 3, 2019 the Company leased two buildings, consisting of approximately 2,750 square feet combined, located along Interstate 70 approximately 38 miles west of Denver, Colorado. The lease expires on April 30, 2022, but may be renewed for an additional five years at the option of the Company. The monthly rent is $8,000 for the initial three year term, increasing to $10,000 per month if the Company elects to extend the term of the lease. The lease is a “triple net” lease, which requires the Company, in addition to the monthly rent, to pay the cost of all utilities, insurance, repairs, maintenance and real estate taxes. The Company plans to remodel the buildings so they can be used for the marijuana retail dispensary described above.

The Company has an option to purchase the buildings at prices ranging between $1,400,000 and $1,600,000 at various dates prior to May 1, 2022.

The Company issued the landlord 400,000 shares of its post-split common stock in consideration for the option to purchase the buildings

On January 26, 2019 the Company signed a Non-Binding Letter of Intent with an unrelated third party to acquire the assets of a licensed marijuana cultivation facility located in Denver, Colorado. The Letter of Intent provides that the Company will pay $400,000 in cash, assume certain liabilities, and issue 2,000,000 restricted shares of the Company’s post-split common stock for the assets that are purchased.

On February 17, 2019 the Company signed a Non-Binding Letter of Intent with unrelated third parties to acquire a 51% interest in a California corporation which plans to develop a CBD oil infused yerba mate beverage. The Letter of Intent provides that the Company will pay $400,000 in cash and issue 1,000,000 restricted shares of the Company’s post-split common stock for a 51% interest in the California corporation. If the acquisition is completed, the Company has the option to acquire an additional 30% interest in the California corporation for $1,500,000. As of May 15, 2019, the California corporation was in the start-up stage and had not generated any revenue.

The non-binding Letters of Intent which we have signed do not prevent the other parties from entering into Letters of Intents or binding agreements with third parties.

The acquisition of marijuana dispensaries, cultivation facilities and manufacturing facilities in Colorado, on December 7, 2005. Our company holds aCalifornia or other jurisdictions is subject to the approval of government authorities which license and regulate marijuana dispensaries in their applicable jurisdictions. No assurance can be given that any such approvals can be obtained.

As of August 22, 2019, the Company had not acquired any dispensaries, cultivation facilities or any other entities and did not have any definitive agreements relating to any acquisition.

The Company will continue to collect royalties for licensing the Company’s patent and several trademarks related toin connection with the “Pocketmanufacturing and sale of the Pocket Shot” an innovative concept that provides the consumer with “grab & go” convenience. Alcoholic beverages have been packaged in attractive, user-friendly 50ml single serving bottle-shaped plastic stand-up pouch, and non-alcoholic energy drinks will be produced branded specialty alcohol beverage pouches.

Results of Operations

Material changes in the near future. They are easy to stow and use by pouring from a bottleneck spout, similar to a bottle, and are ideal for active lifestyles.

Our primary method of selling is through distributors using an agreement that provides a monthly royalty for us.

We had no operations prior to 2005. Though we had incomeline items in the Company’s Statement of Operations for the three and six months ended June 30, 2018, our operating expenses were more than our net income during those periods. We have minimal cash, several intangible assets which consist of our patent, trademarks, business plan, relationships, and contacts, and some tangible assets of inventory, equipment, and machinery. We2019 as compared to the same period last year, are lacking liquidity and need cash infusions from investors or shareholders to provide capital, or loans from any sources, none of which have been arranged nor assured.discussed below:

Results of OperationsCapital Resources and Liquidity

For the Three Months Ended June 30, 2018

During the three months ended June 30, 2018, we recognized total revenuesThe Company’s sources and (uses) of $30,593 compared to $24,687 for the three months ended June 30, 2017. The increase of $5,906 was a result of an increase in sales of Pocket Shots. During the three months ended June 30, 2018, we recognized a gross margin of $17,172 compared to $16,141 during the three months ended June 30, 2017. The increase of $1,031 was due to an increase in sales, as the overall cost of sales also rose by $4,875 because more units were sold. During the three months ended June 30, 2018, we recognized a net loss of $489 compared to a net loss of $25,691 during the three months ended June 30, 2017. The net loss decreasing by $25,202 was mainly a result of decreased operating expenses of $24,171, including decreased general and administrative expenses by $22,006 for the quarter ended June 30, 2018 compared to that period in the year prior.

For the Six Months Ended June 30, 2018

For the six months ended June 30, 2018, we had $54,306 in revenues compared to $37,441 for the same period one year earlier, an increase of $16,865. For the six months ended June 30, 2018, our total operating expenses were $52,684 as compared to $56,957cash for the six months ended June 30, 2017. During the six months ended June 30,2019 and 2018 we recognized a net loss of $19,236 compared to a net loss of $32,010 during the six months ended June 30, 2017. For the six months ended June 30, 2018, we incurred expenses of $35,600 for general and administrative expenses compared to $38,001 for the same period in 2017. For the six months ended June 30, 2018, we incurred $3,114 for travel expenses compared to $4,262 for the same period in 2017. The net effect of these changes, was a decrease in operating expenses of $4,273.are shown below:

The abilityCompany does not know of the Companyany trends, demands, commitments, events or uncertainties that will result in, or that are reasonable likely to continue as a going concern is dependent on the Company obtaining the adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

Financing Activities

During the quarter ended June 30, 2018 the Company received $0 from subscription agreements or private placement offerings. The Company also received shareholder contributionsresult in, the amount of $0Company’s liquidity increasing or decreasing in the three months ended June 30, 2018.

We intend to seek additional funding through public or private financings to fund our operations through fiscal 2018 and beyond. However, if we are unable to raise additional capital when required or on acceptable terms, or achieve cash flow positive operations, we may have to significantly delay product development and scale back operations both of which may affect our ability to continue as a going concern.

Investing Activitiesany material way.

The Company had no investing activities for the three months ended June 30, 2018.

Liquidity and Capital Resources

For the Six Months Ended June 30, 2018

At June 30, 2018, we have total current assetsmay sell additional shares of $107,875 consisting of $39,101 in cash and cash equivalents, accounts receivables of $8,306 and inventory of $60,468. Current liabilities at June 30, 2018 were $24,590 and consisted of accounts payable of $15,973 and of a royalty payable to Mr. Bachmann for $2,259. At June 30, 2018, we had working capital of $83,285. During the three months ended June 30, 2018, $3,364 was provided in cash by our operating activities. The net loss of $19,236 for the period was partially offset in cash flow by $6,588 in inventory, $6,648 in accounts receivable, and $13,417 in depreciation, however $13,198 due to related party reduced to the overall net cash provided to the Company to $3,364 for the six months ended June 30, 2018. There were no financing activities for the six months ended June 30, 2018.

We do not currently have any consulting agreements.

We do not currently have any outstanding debts, including promissory notes common stock and/or other bank debt.

As at June 30, 2018, our cash balance was $39,101 as comparedsecurities to $39,966 at December 31, 2017. Our planraise capital for satisfying our cash requirements for the next twelve months is through the sale of shares of our common stock, third party financing, and/or traditional bank financing. We do anticipate generating sufficient amounts of revenues to meet our working capital requirements but would like to seek alternative funding sources in order to generate growth. Consequently, we intend to make appropriate plans to ensure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

For the Year Ended December 31, 2017

At December 31, 2017, we had total current assets of $117,746 consisting of $35,737 in cash and cash equivalents, accounts receivables of $14,953 and inventory of $67,056. Current liabilities at December 31, 2017 were $33,643 and consisted of $13,194 in accounts payable, $19,556 payable to a shareholder and $893 in royalty payable to Mr. Bachmann. At December 31, 2017, we had working capital of $84,103.

During the year ended December 31, 2017, we used $85,122 in cash in our operating activities. A net loss of $79,387 for the period was reconciled by such non-cash items as $28,712 in depreciation, $13,499 in accounts receivable, and $2,383 in royalty payable to Mr. Bachmann. A total of $19,556 was due to related parties at December 31, 2017.

During the year ended December 31, 2017, we used $0 in investing activities. During the year ended December 31, 2016, we used $63,169 in investing activities.

During the years ended December 31, 2017 and 2016, $0 was received from financing activities. During the years ended December 31, 2017 and 2016, we issued 0 shares of our restricted common stock. During the years ended December 31, 2017 and 2016, we issued $0 in convertible promissory notes.

Amounts owed in accounts payable totaled $(13,194) and $(1,958), royalty payable totaled $2,383 and $2,413, and amount due to related parties of $(19,556) and $0 as of December 31, 2017 and 2016, respectively.

The board of directors approved and granted Jarrold R. Bachmann an officer and shareholder, a $1.20 per case royalty on sales of Pocket Shot effective January 1, 2006. Royalty expense for the years ending December 31, 2017 and 2016 were $2,383 and $2,413 respectively.

Going Concern

We have only a very limited amount of cash and have incurred operating losses and limited cash flows from operations since inception. As of June 30, 2018 and December 31, 2017, we had retained deficit of $466,343 and $447,108 respectively and we will require additional working capital to fund operations through 2018 and beyond. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements included in this Form 10-Q do not include any adjustments related to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern. The audited financial statements included in the Company’s recent annual report on Form 10-K have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern.

Based on our financial history since inception, in their report on the financial statements for the period ended December 31, 2017, our independent registered public accounting firm no longer expressed substantial doubt as to our ability to continue as a going concern. However, thereits operations. There is no assurance that any revenuethe Company will be realizedsuccessful in the future.raising any additional capital.

There can be no assurance that we will have adequate capital resources to fund planned operations or that any additional funds will be available to us when needed or at all, or, if available, will be available on favorable terms or in amounts required by us. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.

Short Term

On a short-term basis, we have not generated revenues sufficient to cover our growth oriented operations plan. Based on prior history, we may continue to incur losses until such a time that our revenues are sufficient to cover our operating expenses and growth oriented operations plan. As a result we may need additional capital in the form of equity or loans, none of which is committed as of this filing.

Capital Resources

We have only common stock as our capital resource, and our assets, cash and receivables.

We have no material commitments for capital expenditures within the next year, however, as operations are expanded substantial capital will be needed to pay for expansion and working capital.

Need for Additional Financing

We do not currently have capital sufficient to meet our growth plans. We have made equity and debt offerings in order to support our growth plans, to date, and may do so in the future.

No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow coverage of our expenses as they may be incurred.

Off Balance Sheet Arrangements

NoneAs of June 30, 2019, the Company did not have any off balance sheet arrangements.

Item 3. QuantitativeCritical Accounting Policies and Qualitative Disclosures About Market Risk.Estimates

We areSee Note 2 to the June 30, 2019 financial statements included as part of this report for a smaller reporting company as defined by Rule 12b-2description of the Exchange ActCompany’s critical accounting policies and are not required to provide the information required under this item.estimates.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

DisclosureWe maintain a set of disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in ourthe reports filed or submitted under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periodperiods specified inby the SEC’sCommission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and proceduresare also designed to ensurewith the objective of ensuring that this information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principalchief executive officer and principalchief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management has carried out an evaluation of We evaluated the effectiveness of the design and operation of our company’s disclosure controls and procedures. Due toprocedures (as defined in Rule 13a-15(e) under the lackSecurities Exchange Act, as amended) as of personnel and outside directors,the end of the period covered by this report. As a result of this evaluation, management acknowledgesconcluded that there may be deficiencies in theseour disclosure controls and procedures however, management haswere not identified any material weaknesses relatedeffective as of June 30, 2019 due to the Company’s internal control over financial reporting for the quarter ended June 30, 2018.following material weakness:

Changes in Internal Control Overover Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f))that occurred during the quarter ended June 30, 20182019 that have materially affected,affect, or are reasonably likely to materially affect, our internal controlscontrol over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Not Applicable to Smaller Reporting Companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In January 2018, the Board of Directors authorized the issuance of 50,000 shares to an unrelated individual in exchange for business consulting services. This unregistered sale of equity securities was undertaken pursuant to the exemptions from registration afforded under Section 4(a)(2) of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits.The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

SIGNATURES

Pursuant to the requirements ofIn accordance with Section 1213 or 15(d) of the Securities and Exchange Act, of 1934, the Registrant has duly caused this reportReport to be signed on its behalf by the undersigned, thereunto duly authorized.

THE POCKET SHOT COMPANY

(Registrant)authorized on the 22nd day of August 2019.