| NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES We were originally incorporated in the State of
Colorado in August 1998 under the name “Network Acquisitions, Inc.” We changed our name to Cavion Technologies, Inc. in February
1999 and subsequently to Concord Ventures, Inc. in October 2006. On December 21, 2000, we filed for protection
under Chapter 11 of the United States Bankruptcy Code. In connection with the filing, on February 16, 2001, we sold our entire business,
and all of our assets, for the benefit of our creditors. After the sale, we still had liabilities of $8.4 million and were subsequently
dismissed by the Court from the Chapter 11 reorganization, effective March 13, 2001, at which time the last of our remaining directors
resigned. On March 13, 2001, we had no business or other source of income, no assets, no employees or directors, outstanding liabilities
of approximately $8.4 million and had terminated our duty to file reports under securities law. In February 2008, we were re-listed on
the OTC Bulletin Board. In April 2010, we re-domiciled in Delaware under
the name CCVG, Inc. (“CCVG”). Effective December 31, 2010, CCVG completed an Agreement and Plan of Merger and Reorganization
(the “Reorganization") which provided for the merger of two of our wholly-owned subsidiaries. As a result of this reorganization,
our name was changed to “Golden Dragon Inc.”, which became the surviving publicly quoted parent holding company. On May 9, 2014, we entered into a Share Purchase
Agreement (the “Share Purchase Agreement”) with CannaPharmaRx, Inc., a Colorado corporation (“Canna Colorado”),
and David Cutler, a former President, Chief Executive Officer, Chief Financial Officer and director of our Company. Under the Share Purchase
Agreement, Canna Colorado purchased 1,421,120 shares of our common stock from Mr. Cutler and an additional 9,000,000 restricted common
shares directly from us. On May 15, 2014, as amended and effective January
29, 2015, we entered into an Agreement and Plan of Merger (the “Merger”) pursuant to which Canna Colorado became a subsidiary
of our Company. In October 2014, we changed our legal name to
“CannaPharmaRx, Inc.” Pursuant to the Merger all of the shares of our
common stock previously owned by Canna Colorado were canceled. As a result of the aforesaid transactions, we became an early-stage pharmaceutical
company whose purpose was to advance cannabinoid research and discovery using proprietary formulation and drug delivery technology then
under development. In April 2016, we ceased operations. Our then
management resigned their respective positions with our Company with the exception of Mr. Gary Herick, who remained one of our officers
and directors until April 23, 2019. Effective December 31, 2018, the Company and
Hanover CPMD Acquisition Corp. (“CPMD Hanover”) a newly formed, wholly-owned subsidiary, entered into a Securities Purchase
Agreement with Alternative Medical Solutions, Inc., an Ontario, Canada corporation (“AMS”), its shareholders, wherein the
Company acquired all of the issued and outstanding securities of AMS. AMS is a corporation organized under the laws of the Province of
Ontario, Canada. As a result of the completion of the acquisition
of AMS on December 31, 2019, the Company no longer fit the definition of a “shell company,” as defined in Rule 405 of the
Securities Act and Rule 12b-2 of the Exchange Act. It filed the required disclosure on Form 8-K/A with the SEC on February 14, 2019, advising
that it was no longer a shell company pursuant to the aforesaid Rule. On January 6, 2021, the Company executed an Agreement
of Purchase and Sale through its wholly-owned subsidiary, Alternative Medical Solutions Inc for the sale of the lands and premises located
at Hanover, Ontario, Canada. The facility sold was a 48,750 square foot marijuana grow facility on a 6.7-acre parcel of land located
in Hanover, Ontario, Canada. To point of sale, the exterior construction of the building had been completed, however, no interior construction
had begun. The price was $2,000,000 CAD. As a result, and in anticipation of the closing, the Company recorded an impairment of goodwill
and fixed assets relating to the property of $7,962,694
at December 31, 2020. This property was security for a $1,000,000 US Note with Koze Investments LLC by way of a first ranking
charge. This transaction closed on July 9, 2021 and the note was repaid in full as principal of $1,000,000
plus accrued interest of $124,735
and penalties of $475,265.
The note was discharged accordingly. Effective February 25, 2019, the Company acquired
3,936,500 shares and 2,500,000 Warrants to purchase 2,500,000 shares of Common Stock of GN Ventures, Ltd, Alberta, Canada, f/k/a Great
Northern Cannabis, Ltd. (“GN”), in exchange for an aggregate of 7,988,963 shares of its Common Stock, from a former shareholder
of GN who the Company’s President and CEO is now. In May 2020, the Company exchanged 5,507,400 of its shares for 3,671,597 shares
of GN. GN owns a 60,000 square foot cannabis cultivation
and grow facility located on 38 acres in Stevensville, Ontario, Canada. Because the Company is a minority shareholder of GN and GN is
a privately held company, the Company cannot confirm that the information it currently has on GN’s operations is complete or fully
reliable. GN estimates annual total production capacity from the Stevensville facility of up to 12,500 kilograms of cannabis. Once completed
the Stevensville facility and GN’s subsidiary, 9869247 Canada Limited, received a license to cultivate from the Canadian Ministry
of Health on July 5, 2019. As a result, in October 2019, GN commenced cultivation activities and began generating revenues during the
first calendar quarter of 2020. Effective June 11, 2019, the Company entered into
a Securities Purchase Agreement with Sunniva, Inc, a British Columbia, Canada corporation (“Sunniva”) wherein the Company
agreed to acquire all of the issued and outstanding securities of Sunniva’s wholly-owned subsidiaries Sunniva Medical Inc. (“SMI”)
and 1167025 B.C. LTD (“1167025”) for CAD $16.0 million in cash and a note in the principal amount of CAD $4.0 million. These
companies were the owners of the Sunniva Canada Campus, which included construction assets for a planned 759,000 square-foot greenhouse
located on an approximately 114-acre property in Okanagan Falls, British Columbia. On June 8, 2020, the Company received a notice
of termination of this Purchase Agreement, as amended, from Sunniva. As a result, the Company incurred a charge of $1,881,126
due to the write-off of its deposit to Sunniva, banking fees and prepaid expenses associated with the failed acquisition of Sunniva. Description of Current Business We are involved in the cannabis industry in Canada.
Our principal business activities to date have been to evaluate, negotiate, acquire, and develop cannabis cultivation projects in Canada.
As of the date of this report we do not own or operate any businesses in the US. On January 6, 2022 the Company entered into a
20 year operating lease with Formosa Mountain Ltd. The leased facility is located in Cremona, Alberta, Canada. It was built in 2015 and
was previously operating as a cannabis production facility. It was decommissioned and the license was cancelled by the previous owner
making it ready for sale in 2020. CannaPharmaRx recommissioned the facility into
a new indoor cannabis farm during 2022. It is a 55,000 square foot facility with 11 growing rooms and 10 drying and packing rooms. The
Company received an Operating License from Health Canada on December 9, 2022, and a Cannabis License from the Canada Revenue Agency on
December 22, 2022. On February 21, 2023,
the Company entered into a Supply Agreement with Y.S.A. Holdings Ltd (“Y.S.A.), an Israeli corporation. The Company will supply
450kg of cannabis biomass in the form of dried flowers and dried trim per annum, over a two year period. No supplies have been delivered
to Y.S.A as of the date of this Report. Production and sales from this facility are anticipated
in Q3 of 2023. The expected date of the first harvest, under the new license, is on or about August 08 th Preliminary discussion with export partners, would
set conditional per gram pricing at approximately $3.30 CDN/gr. This pricing matrix would be based on achieving satisfactory test results
associated to tetrahydrocannabinol “THC” and cannabidiol “CBD” content of the dried flower. Expected revenues
for both harvests, if sold in their entirety, would be forecasted at $660,000 CDN. A third and fourth harvest are planned in Q4 with similarly
forecasted revenues. There can be no assurances that our crops will be successfully harvested, or that we can sell the harvest; and if
we are able to sell the harvest, that we can do so at the price/s we expect to receive. Basis of Presentation The accompanying financial statements have been
prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™”
(the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in
the United States. Certain amounts in prior periods have been reclassified to conform to the current presentation. All figures are in U.S. dollars unless indicated otherwise. Use of Estimates The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The most
significant estimates relate to purchase price allocation of acquired businesses, impairment of long-lived assets and goodwill, valuation
of financial instruments, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected
trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of
these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets
and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid temporary
cash investments with an original maturity of the year or less to be cash equivalents. On March 31, 2023, and December 31, 2022, the
Company had a cash overdraft and cash equivalents of $( 34,050 2,317 Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes
standards for the reporting and display of comprehensive income and its components in the financial statements. As of March 31, 2023,
and December 31, 2022, the Company determined that it had items that represented components of comprehensive income and, therefore, has
included a statement of comprehensive income in the financial statements. Reclassifications Certain prior year amounts have been reclassified
to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Leases The Company recognizes right of use assets and
corresponding liabilities for leases with terms greater than 12 months or leases that contain a purchase option that is reasonably certain
to be exercised. Each lease is classified as either finance or operating. This classification determines the presentation of corresponding
expenses over the lifetime of the lease. The Company records long-term leases as liabilities at the present value of the minimum lease
payments not yet paid. The Company’s incremental borrowing rate is used to determine the present value of the leases when the implicit
rate is not readily determinable. Certain lease contracts contain non-lease components such as maintenance, utilities, fuel and other
services. The Company recognizes both the lease and non-lease component for each right of use asset. Short-term leases (that have an initial term less
than 12 months or that are cancellable by the lessor and lessee without significant penalties) are expensed on a straight-line basis over
the lease term. Derivative Financial Instruments The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risk. Terms of convertible and other promissory notes are reviewed to determine
whether they contain embedded derivative instruments that are required to be accounted for separately from the host contract and recorded
on the balance sheet at fair value. The fair value of derivative liabilities is required to be revalued at each reporting date, with
corresponding changes in fair value recorded in the current period operating results. These derivative liabilities arose due to the issuance
of variably priced convertible notes. For the periods ended March 31, 2023 and December 31, 2022, the Company had derivative liabilities
of $ 772,611 1,008,868 Beneficial Conversion Features In accordance with FASB ASC 470-20, “Debt
with Conversion and Other Options” the Company records a beneficial conversion feature (“BCF”) related to the issuance
of convertible debt or preferred stock instruments that have conversion features at fixed rates that are in-the-money when issued. The
BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds equal to the intrinsic value of
that feature to additional paid-in capital. The intrinsic value is generally calculated at the commitment date as the difference between
the conversion price and the fair value of the common stock or other securities into which the security is convertible, multiplied by
the number of shares into which the security is convertible. If certain other securities are issued with the convertible security, the
proceeds are allocated among the different components. The portion of the proceeds allocated to the convertible security is divided by
the contractual number of the conversion shares to determine the effective conversion price, which is used to measure the BCF. The effective
conversion price is used to compute the intrinsic value. The value of the BCF is limited to the basis that is initially allocated to the
convertible security. Foreign Currency Translation The functional currency and the reporting currency
of the Company’s US operations is United States dollars, (“USD”). The functional currency of the Company’s Canadian
operations in Canadian dollars (“CAD”), Management has adopted ASC 830 “Foreign Currency Matters” for transactions
that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing
at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than
the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.
Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective
periods. Assets and liabilities of the Company’s
operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates.
Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical
rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate
component of stockholders' equity in the statement of stockholders' equity. These translation adjustments are reflected in accumulated
other comprehensive income, a separate component of the Company's stockholders' equity. Harmonized Sales Tax The Harmonized Sales Tax (“HST”) is
a combination of the Canadian Goods and Services Tax (“GST”) and Provincial Sales Tax (“PST”) that is applied
to taxable goods and services. By fusing sales tax at the federal level with sales tax at the provincial level, the participating provinces
harmonized both taxes into a single federal-provincial sales tax. HST is a consumption tax paid by the consumer at the point of sale (POS).
The vendor or seller collects the tax proceeds from consumers by adding the HST rate to the cost of goods and services. They then remit
the total collected tax to the government periodically. The HST is in effect in five of the ten Canadian
provinces: New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island. The HST is collected by the Canada
Revenue Agency (CRA), which remits the appropriate amounts to the participating provinces. The HST may differ across these five provinces,
as each province will set its own PST rates within the HST. In provinces and territories which have not enacted the HST, the CRA collects
only the 5% goods and services tax. The current rate in Ontario is 13%. Stock-Based Compensation The Company has adopted ASC Topic 718, (Compensation—Stock
Compensation) Goodwill and Intangible Assets Goodwill represents the future economic benefit
arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the
Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers. Intangible
assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line
basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist of customer relationships
and non-compete agreements. Their useful lives range from 10 15 Goodwill and indefinite-lived assets are not amortized
but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment
assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate
that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is a two-step process performed at
the reporting unit level. Step one compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting
unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach
and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines
fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors
that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach,
which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk
relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions
used in the income approach include the terminal value, growth rates, future capital expenditures, and changes in future working capital
requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market.
If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying
amount exceeds its fair value, then the second step must be completed to measure the amount of impairment, if any. Step two calculates
the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the reporting unit from the
fair value of the reporting unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of
the reporting unit’s assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired
on that date. If the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount
equal to the excess. Determining the fair value of a reporting unit
is judgmental and requires the use of significant estimates and assumptions, including revenue growth rates, strategic plans, and future
market conditions, among others. There can be no assurance that the Company’s estimates and assumptions made for purposes of the
goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions and estimates could cause the
Company to perform an impairment test before scheduled annual impairment tests. Long-Lived Assets The Company evaluates the recoverability of its
long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset
is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other
groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the
assets are written down to the estimated fair value. Fair Values of Assets and Liabilities The Company groups its financial assets and financial
liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and
the reliability of the assumptions used to determine fair value.
Level 1: Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2: Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments.
Level 3: Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. The fair value hierarchy also requires an entity
to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial Instruments The estimated fair value for financial instruments
was determined at discrete points in time based on relevant market information. These estimates involve uncertainties and could not be
determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts
payable, and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates
that approximate prevailing market rates. Income Taxes The Company accounts for income taxes under the
liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events
that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. Income (Loss) Per Share Income (loss) per share is presented in accordance
with Accounting Standards Update (“ASU”), Earning per Share 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 pronouncements
that have been issued that might have a material impact on its financial position or results of operations. The Company adopted ASC 842
on January 1, 2019. However, the adoption of the standard had no impact on the Company’s financial statements since all Company
leases are month to month or short-term rental. |
