Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | |
Oct. 31, 2016 | Jul. 31, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | STWC. Holdings, Inc. | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2016 | |
Trading Symbol | stwc | |
Amendment Flag | false | |
Entity Central Index Key | 1,400,683 | |
Current Fiscal Year End Date | --01-31 | |
Entity Common Stock, Shares Outstanding | 27,140,550 | |
Entity Public Float | $ 0 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited for October 31, 2016) - USD ($) | Oct. 31, 2016 | Jan. 31, 2016 | |||
Current assets: | |||||
Cash | $ 7,500 | $ 151,311 | |||
Accounts receivable | 6,000 | ||||
Assets of discontinued operations, net | 1,465,413 | 1,417,719 | |||
Total current assets | 1,478,913 | 1,569,030 | |||
Tenant improvements and office equipment | 3,179 | [1] | 9,167 | [2] | |
Equity method investment in unconsolidated subsidiary | 39,159 | 11,659 | |||
Trademark | 8,936 | [3] | 9,485 | [4] | |
Total assets | 1,530,187 | 1,599,341 | |||
Current liabilities: | |||||
Accounts payable and accrued expenses | 292,671 | 306,128 | |||
Due to related party | 156,650 | ||||
Liabilities of discontinued operations | 4,204,995 | 3,719,247 | |||
Total current liabilities | 4,654,316 | 4,025,375 | |||
Stockholders' deficit | |||||
Common stock | [5] | 0 | 0 | ||
Additional Paid in Capital | 3,152,658 | 3,152,658 | |||
Retained deficit | (6,276,787) | (5,578,692) | |||
Total stockholders' deficit | (3,124,129) | (2,426,034) | |||
Total liabilities and stockholders' deficit | $ 1,530,187 | $ 1,599,341 | |||
[1] | Net of accumulated amortization and depreciation of $21,272 October 31, 2016. | ||||
[2] | Net of accumulated amortization and depreciation of $15,284 at January 31, 2016. | ||||
[3] | Net of accumulated amortization of $2,074 at October 31, 2016. | ||||
[4] | Net of accumulated amortization of $1,525 at January 31, 2016. | ||||
[5] | No par value, 100,000,000 shares authorized, 27,140,550 issued and outstanding at October 31, 2016 and January 31, 2016. |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Statement of Income | ||||
Consulting services | $ 2,000 | |||
Cost of consulting services | $ (1,750) | |||
Gross profit | (1,750) | 2,000 | ||
Operating costs and expenses | ||||
Rents and other occupancy | $ 16,984 | $ 16,984 | 50,953 | 50,437 |
Compensation | 176,406 | 154,995 | 529,519 | 424,743 |
Professional, legal and consulting | 36,326 | 121,508 | 186,832 | 233,992 |
Depreciation and amortization | 2,037 | 2,250 | 6,537 | 6,750 |
General and administrative | 46,604 | 23,626 | 111,412 | 40,762 |
Total operating costs and expenses | 278,357 | 319,363 | 885,253 | 756,684 |
Loss from continuing operations | (278,357) | (319,363) | (887,003) | (754,684) |
Other costs and expenses | ||||
Loss on equity investment in unconsolidated subsidiary | 7,500 | |||
Interest and financing costs | (385) | (3,292) | ||
Loss from continuing operations, before provision for taxes on income | (278,742) | (319,363) | (882,795) | (754,684) |
Loss from continuing operations, net of tax | (278,742) | (319,363) | (882,795) | (754,684) |
Income (loss) from discontinued operations, net of tax | 276,561 | (184,458) | 184,700 | (2,263,723) |
Net (loss) | $ (2,181) | $ (503,821) | $ (698,095) | $ (3,018,407) |
Basic earnings and fully diluted loss per common share - Continuing operations | $ (0.01) | $ 0 | $ (0.03) | $ (0.03) |
Basic earnings and fully diluted loss per common share - Discontinued operations | $ 0.01 | $ 0 | $ 0 | $ (0.08) |
Basic and fully diluted weighted average number of shares outstanding | 27,140,550 | 30,630,701 | 27,140,550 | 27,147,217 |
CONDENSED STATEMENT OF CASH FLO
CONDENSED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2015 | |
Cash flows from operating activities: | ||
Net (loss) | $ (698,095) | $ (3,018,407) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and Amortization | 5,988 | 6,201 |
Decrease in trademark | 549 | 549 |
Income on equity investment in unconsolidated subsidiary | (7,500) | |
Increase in accounts receivable | (6,000) | |
Increase in accounts payable and accrued expenses | (13,457) | 105,759 |
Net cash flow used in operating activities from continuing operations | (718,515) | (2,905,898) |
Net cash flow used in operating activities from discontinued operations | 201,287 | (888,533) |
Net cash flow used in operating activities | (517,228) | (2,017,365) |
Cash flows from investing activities: | ||
Investment in unconsolidated subsidiary | (20,000) | (25,000) |
Net cash flow used in investing activities from continuing operations | (20,000) | (25,000) |
Net cash flow used in investing activities from discontinued activities | (75,000) | |
Net cash flow used in investing activities | (20,000) | (100,000) |
Cash flows from financing activities: | ||
Cash advances from related parties | 156,650 | |
Net cash flows provided by financing activities from continuing operations | 156,650 | |
Net cash flow provided by financing activities from discontinued activities | 236,767 | 1,446,406 |
Net cash flows provided by financing activities | 393,417 | 1,446,406 |
Net cash flows | (143,811) | (670,959) |
Cash and equivalent, beginning of period | 151,311 | 674,495 |
Cash and equivalent, end of period | 7,500 | 3,536 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | $ 576,251 | $ 47,482 |
Note 1 - Organization
Note 1 - Organization | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 1 - Organization | Note 1 Organization STWC HOLDINGS, INC., formerly known as Strainwise, Inc., (identified in these footnotes as "STWC" "we" "us" or the "Company") provides branding marketing, administrative, accounting, financial and compliance services ("Fulfillment Services") to entities in the cannabis retail and production industry. The Company was incorporated in the state of Colorado as a limited liability company on June 8, 2012, and subsequently converted to a Colorado corporation on January 16, 2014. The Company was established to provide sophisticated Fulfillment Services to medical and retail stores, and cultivation facilities in the regulated cannabis industry throughout the United States. Such Fulfillment Services would only be provided to stores and facilities located in geographical areas where the governing state and local ordinances allow for the unfettered provisions of such services. The Fulfillment Services that the Company is currently able to provide are summarized, as follows: Opportunity Assessment: For a standard fee, the Company will complete an Opportunity Assessment for a client, which would include financial modeling, completed with the Company's proprietary assessment software. Application Filing Assistance: Based upon the Company's knowledge of the various rules and regulations of respective state and local jurisdictions, the Company will provide turn-key application preparation and submission services for a client, and/or provide consulting assistance to a client who is self-preparing their application. Branding, Marketing and Administrative Consulting Services: Customers may contract with the Company to use the Strainwise®name, logo and affinity images in their retail store locations. A monthly fee will permit a branding customer to use the Strainwise® brand at a specific location. In addition, the Company will assist operators in marketing and managing their businesses, setting up new retail locations and general business planning and execution at an hourly rate. This includes services to establish an efficient, predictable production process, as well as, nutrient recipes for consistent and appealing marijuana strains. Accounting and Financial Services: For a monthly fee, the Company will provide a customer with a fully implemented general ledger system, with an industry centric chart of accounts, which enables management to readily monitor and manage all facets of a marijuana medical dispensary and cultivation facility. The Company will provide bookkeeping, accounts payable processing, cash management, general ledger processing, financial statement preparation, state and municipal sales tax filings, and state and federal income tax compilation and filings. Compliance Services: The rules, regulations and state laws governing the production, distribution and retail sale of marijuana can be complex, and compliance may prove cumbersome. Thus, customers may contract with the Company to implement a compliance process, based upon the number and type of licenses and permits for their specific business. The Company will provide this service on both an hourly rate and stipulated monthly fee. Lending: The Company will provide loans to individuals and businesses in the cannabis industry. The Company does NOT |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 2 - Summary of Significant Accounting Policies | Note 2 Summary of significant accounting policies Use of estimates Cash and cash equivalents Tenant improvements and office equipment Tenant improvements and office equipment, net of accumulated amortization and depreciation are comprised of the following: October 31, 2016 January 31, 2016 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 22,251 22,251 24,451 24,451 Accumulated amortization and depreciation (21,272 ) (15,284 ) $ 3,179 $ 9,167 Tenant improvements are amortized over the term of the lease, and office equipment is depreciated over its useful lives, which has been deemed by management to be three years. Amortization and depreciation expense related to tenant improvements and office equipment for each of the three months ended October 31, 2016 and 2015 was $1,854 and $2,067, respectively. Amortization and depreciation expense related to tenant improvements and office equipment for each of the nine months ended October 31, 2016 and 2015 was $5,988 and $6,201, respectively. Income taxes Investment in Unconsolidated Entity Accounting Standard Codification 810-10, Consolidation-Overall Long-Lived Assets Trademarks Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 2,074 $ 8,936 Discontinued Operations Discontinued Operations Income Statement Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 Rental income from the Regulated Entities (Affiliates) $ 973,798 $ 1,063,125 $ 2,921,393 $ 3,480,090 Total revenues 973,798 1,063,125 2,921,393 3,480,090 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) (325,807 ) 19,850 (657,018 ) 1,412,234 Rents and other occupancy 800,438 912,681 2,425,100 3,069,548 Depreciation and amortization 54,554 45,876 136,418 193,873 Total operating costs and expenses 529,185 978,407 1,904,500 4,675,655 Operating (loss)/income from discontinued operations 444,613 84,718 1,016,893 (1,195,565 ) Other income and (expenses) Loss from cancellation of lease and related tenant improvement loan (62,503 ) (62,503 ) Interest expense (168,052 ) (207,061 ) (832,193 ) (622,968 ) Loss from discontinued operations $ 276,561 $ (184,458 ) $ 184,700 $ (1,881,036 ) The Company anticipates continued expenses through the end of calendar 2017 related to the discontinued operations. The individual assets and liabilities of the discontinued agricultural business are combined in the captions "Assets of discontinued operation" and "Liabilities of discontinued operation" in the consolidated Balance Sheet. The carrying amounts of the major classes of assets and liabilities included part of the discontinued business are presented in the following table: Discontinued Operations Balance Sheet October 31, 2016 January 31, 2016 ASSETS Due from Regulated Entities (Affiliates), net of collection allowance reserve of $2,565,516 and $3,222,535 at October 31, 2016 and January 31, 2016, respectively. $ $ Prepaid rent 134,112 Tenant improvements and office equipment, net of accumulated amortization and depreciation of $186,443 and $62,025 at October 31, 2016 and January 31, 2016, respectively 505,968 630,386 Commercial operating property, net of accumulated amortization of $34,667 and $22,667 at October 31, 2016 and January 31, 2016, respectively 625,333 637,333 Prepaid expenses and other assets 200,000 150,000 Total assets $ 1,465,413 $ 1,417,719 LIABILITIES Accounts payable and accrued expenses $ $ 34,477 Settlement of equipment advance payable 150,100 Accrued interest payable 397,692 138,458 Deferred rent 1,139,643 965,319 Mortgage payable 202,660 357,010 Convertible notes payable 2,073,883 Notes payable 2,465,000 Total liabilities $ 4,204,995 $ 3,719,247 The Company discontinued providing services under the Master Service agreements to the Regulated Entities on June 30, 2015. There were no components of major assets and liabilities associated with the discontinued operations at October 31, 2016 and 2015 and at January 31, 2016. The summarized discontinued operating results for the three Nine months ended October 31, 2015, respectively, are, as follows: Three Months Ended October 31, 2015 Nine Months Ended October 31, 2015 Revenues $ $ 764,071 Expenses (1,146,758 ) $ $ (382,687 ) Comprehensive Income (Loss) - Net income per share of common stock Earnings per Share Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and ensure that there are proper controls in place to ascertain that the Company's financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Note 3 - Going Concern
Note 3 - Going Concern | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 3 - Going Concern: | Note 3 Going concern: The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, the Company has not achieved profitable operations, and have cumulative losses through October 31, 2016 of $6.3 million. The Company's losses to date raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon the Company's achieving a sustainable level of profitability. The Company intends to continue financing its future development activities and its working capital needs largely from the private sale of its securities, with additional funding from other traditional financing sources, including convertible term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. However, the financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Note 4 - Fair Value of Financia
Note 4 - Fair Value of Financial Instruments | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 4 - Fair Value of Financial Instruments | Note 4 Fair value of financial instruments The carrying amounts of cash and current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor do the Company utilize derivative instruments in the management of the Company's foreign exchange, commodity price or interest rate market risks. The FASB Codification clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Note 5 - Operating Leases
Note 5 - Operating Leases | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 5 - Operating Leases | Note 5 Operating Leases The Company entered into a lease agreement with an affiliate for the Company's corporate office needs, consisting of 6,176 square feet of office space. The lease originally provided for a 31-month period, that commenced in January 2014 through October 31, 2016. The lease was extended in November 2016 for a 5-year period ending October 31, 2021. This lease to the Company is on the same terms and conditions as is the direct lease between the affiliate and the independent lessor. Consequently, the Company believes that the lease terms to the Company are comparable to lease terms the Company would receive directly from third party lessors in the Company's market, because the related party terms mirror the terms of the direct lease between the independent, third party lessor and the affiliated entity. During the three months ended October 31, 2016 and 2015, rent expense for each period was $16,984. During the nine months ended October 31, 2016 and 2015, rent expense was $50,953 and $50,437, respectively. As of October 31, 2016, future minimum lease payments are as follows: For the Fiscal Year Ending January 31, Remainder of 2017 $ 13,250 2018 53,250 2019 54,250 2020 55,250 2021 56,250 2022 42,750 Thereafter Total minimum lease payments $ 275,000 |
Note 6 - Due To Related Party
Note 6 - Due To Related Party | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 6 - Due To Related Party | Note 6 Due to Related Party The Company borrowed $156,650 from related parties to fund operations during the six months ended October 31, 2016. The loans do not carry an interest rate and do not have a maturity date. As of October 31, 2016, the Company owed related parties $156,650. The Company did not owe any money to related parties as of January 31, 2016. |
Note 7 - Contingencies
Note 7 - Contingencies | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 7 - Contingencies | Note 7 Contingencies Subsequent to the end of the quarter, the Company was named as a defendant in one civil suit filed with the District Court of the City and County of Denver, Colorado (the "Court"): This discussion of the Headgate Agreement is qualified in its entirety by the provisions of the agreement, which was attached as an Exhibit to the Company's Current Report on Form 8-K filed with the SEC on June 19, 2018. |
Note 8 - Subsequent Events
Note 8 - Subsequent Events | 9 Months Ended |
Oct. 31, 2016 | |
Notes | |
Note 8 - Subsequent Events | Note 8 Subsequent Events GAAP requires an entity to disclose events that occur after the balance sheet date but before financial statements are issued or are available to be issued ("subsequent events") as well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, ("recognized subsequent events"). The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but arose subsequent to that date ("non-recognized subsequent events"). Recognized Subsequent Events Subsequent to the end of the quarter the Company discontinued its rental of real property business and cancelled all remaining leases and settled all remaining related operations. These operations are now presented as discontinued operations on the Company's financial statements. A summary of the discontinued operations is included in Note 2 Summary of Significant Accounting Policies Unrecognized Subsequent Events Subsequent to the end of the quarter the Company expects to dissolve Sentinel Strainwise, LLC in 2018. The agreement between the Company and the Confederated Tribes of Warm Springs described in the Company's 10-K report for the period ending January 31, 2016 was terminated on or around December 22, 2016. As a result of the termination of the agreement, the funds held by Sentinel Strainwise, LLC, a joint venture company in which the Company holds 50% equity interest, were distributed back to the partners of the joint venture. Subsequent to the end of the quarter, the Company has entered into management and licensing agreements with a private entity in Puerto Rico 49% owned by Erin Phillips to operate five dispensaries and two cultivation operations in Puerto Rico. While public companies are not currently allowed to own a beneficial interest in licensed cannabis businesses in Puerto Rico, the Company intends to negotiate the right to acquire the private company at an agreed to price in the event that regulations permit public company ownership in the future. Subsequent to the end of the quarter, in order to continue to fund ongoing California operations, on or around April 6, 2018, the Company entered into a loan agreement ("Loan Agreement") with Green Acres Partners, LLC, a California limited liability company ("Green Acres") whereby Green Acres agreed to loan the Company $205,000 in exchange for a promissory note ("Note") issued by the company in the principal amount of $205,000. The Note matures no later than September 1, 2020, with payments to begin no later than September 1, 2018; however, payments may begin sooner than such date in the event operations in San Diego begin sooner. The Note carries an interest rate of 12% per year, with an 18% default interest rate. The principal balance of the Note may be accelerated upon default or transfer. This discussion of the Note and loan agreement is qualified in its entirety by the provisions of those documents, which are attached hereto as Exhibits. The Company will require additional capital, which it may be required to raise on unfavorable terms, in order to continue its operations. For additional information on the above subsequent events see the Company's Current Report on Form 8-K filed with the SEC on June 19, 2018. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Use of Estimates, Policy | Use of estimates |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Cash and Cash Equivalents, Policy | Cash and cash equivalents |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Property, Plant and Equipment, Policy | Tenant improvements and office equipment Tenant improvements and office equipment, net of accumulated amortization and depreciation are comprised of the following: October 31, 2016 January 31, 2016 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 22,251 22,251 24,451 24,451 Accumulated amortization and depreciation (21,272 ) (15,284 ) $ 3,179 $ 9,167 Tenant improvements are amortized over the term of the lease, and office equipment is depreciated over its useful lives, which has been deemed by management to be three years. Amortization and depreciation expense related to tenant improvements and office equipment for each of the three months ended October 31, 2016 and 2015 was $1,854 and $2,067, respectively. Amortization and depreciation expense related to tenant improvements and office equipment for each of the nine months ended October 31, 2016 and 2015 was $5,988 and $6,201, respectively. |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: Income Tax, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Income Tax, Policy | Income taxes |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: Investment, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Investment, Policy | Investment in Unconsolidated Entity Accounting Standard Codification 810-10, Consolidation-Overall |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies: Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy | Long-Lived Assets |
Note 2 - Summary of Significa_8
Note 2 - Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Goodwill and Intangible Assets, Policy | Trademarks Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 2,074 $ 8,936 |
Note 2 - Summary of Significa_9
Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Discontinued Operations, Policy | Discontinued Operations Discontinued Operations Income Statement Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 Rental income from the Regulated Entities (Affiliates) $ 973,798 $ 1,063,125 $ 2,921,393 $ 3,480,090 Total revenues 973,798 1,063,125 2,921,393 3,480,090 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) (325,807 ) 19,850 (657,018 ) 1,412,234 Rents and other occupancy 800,438 912,681 2,425,100 3,069,548 Depreciation and amortization 54,554 45,876 136,418 193,873 Total operating costs and expenses 529,185 978,407 1,904,500 4,675,655 Operating (loss)/income from discontinued operations 444,613 84,718 1,016,893 (1,195,565 ) Other income and (expenses) Loss from cancellation of lease and related tenant improvement loan (62,503 ) (62,503 ) Interest expense (168,052 ) (207,061 ) (832,193 ) (622,968 ) Loss from discontinued operations $ 276,561 $ (184,458 ) $ 184,700 $ (1,881,036 ) The Company anticipates continued expenses through the end of calendar 2017 related to the discontinued operations. The individual assets and liabilities of the discontinued agricultural business are combined in the captions "Assets of discontinued operation" and "Liabilities of discontinued operation" in the consolidated Balance Sheet. The carrying amounts of the major classes of assets and liabilities included part of the discontinued business are presented in the following table: Discontinued Operations Balance Sheet October 31, 2016 January 31, 2016 ASSETS Due from Regulated Entities (Affiliates), net of collection allowance reserve of $2,565,516 and $3,222,535 at October 31, 2016 and January 31, 2016, respectively. $ $ Prepaid rent 134,112 Tenant improvements and office equipment, net of accumulated amortization and depreciation of $186,443 and $62,025 at October 31, 2016 and January 31, 2016, respectively 505,968 630,386 Commercial operating property, net of accumulated amortization of $34,667 and $22,667 at October 31, 2016 and January 31, 2016, respectively 625,333 637,333 Prepaid expenses and other assets 200,000 150,000 Total assets $ 1,465,413 $ 1,417,719 LIABILITIES Accounts payable and accrued expenses $ $ 34,477 Settlement of equipment advance payable 150,100 Accrued interest payable 397,692 138,458 Deferred rent 1,139,643 965,319 Mortgage payable 202,660 357,010 Convertible notes payable 2,073,883 Notes payable 2,465,000 Total liabilities $ 4,204,995 $ 3,719,247 The Company discontinued providing services under the Master Service agreements to the Regulated Entities on June 30, 2015. There were no components of major assets and liabilities associated with the discontinued operations at October 31, 2016 and 2015 and at January 31, 2016. The summarized discontinued operating results for the three Nine months ended October 31, 2015, respectively, are, as follows: Three Months Ended October 31, 2015 Nine Months Ended October 31, 2015 Revenues $ $ 764,071 Expenses (1,146,758 ) $ $ (382,687 ) |
Note 2 - Summary of Signific_10
Note 2 - Summary of Significant Accounting Policies: Comprehensive Income, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Comprehensive Income, Policy | Comprehensive Income (Loss) - |
Note 2 - Summary of Signific_11
Note 2 - Summary of Significant Accounting Policies: Earnings Per Share, Policy (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Earnings Per Share, Policy | Net income per share of common stock Earnings per Share |
Note 2 - Summary of Signific_12
Note 2 - Summary of Significant Accounting Policies: Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Oct. 31, 2016 | |
Policies | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and ensure that there are proper controls in place to ascertain that the Company's financial statements properly reflect the change. New pronouncements assessed by the Company recently are discussed below: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Note 2 - Summary of Signific_13
Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy: Property, Plant and Equipment (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment | October 31, 2016 January 31, 2016 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 22,251 22,251 24,451 24,451 Accumulated amortization and depreciation (21,272 ) (15,284 ) $ 3,179 $ 9,167 |
Note 2 - Summary of Signific_14
Note 2 - Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy: Schedule of Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Intangible Assets and Goodwill | Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 2,074 $ 8,936 |
Note 2 - Summary of Signific_15
Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy: Disposal Groups, Including Discontinued Operations (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Disposal Groups, Including Discontinued Operations | Discontinued Operations Income Statement Three Months Ended October 31, Nine Months Ended October 31, 2016 2015 2016 2015 Rental income from the Regulated Entities (Affiliates) $ 973,798 $ 1,063,125 $ 2,921,393 $ 3,480,090 Total revenues 973,798 1,063,125 2,921,393 3,480,090 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) (325,807 ) 19,850 (657,018 ) 1,412,234 Rents and other occupancy 800,438 912,681 2,425,100 3,069,548 Depreciation and amortization 54,554 45,876 136,418 193,873 Total operating costs and expenses 529,185 978,407 1,904,500 4,675,655 Operating (loss)/income from discontinued operations 444,613 84,718 1,016,893 (1,195,565 ) Other income and (expenses) Loss from cancellation of lease and related tenant improvement loan (62,503 ) (62,503 ) Interest expense (168,052 ) (207,061 ) (832,193 ) (622,968 ) Loss from discontinued operations $ 276,561 $ (184,458 ) $ 184,700 $ (1,881,036 ) |
Note 2 - Summary of Signific_16
Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy: Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Discontinued Operations Balance Sheet October 31, 2016 January 31, 2016 ASSETS Due from Regulated Entities (Affiliates), net of collection allowance reserve of $2,565,516 and $3,222,535 at October 31, 2016 and January 31, 2016, respectively. $ $ Prepaid rent 134,112 Tenant improvements and office equipment, net of accumulated amortization and depreciation of $186,443 and $62,025 at October 31, 2016 and January 31, 2016, respectively 505,968 630,386 Commercial operating property, net of accumulated amortization of $34,667 and $22,667 at October 31, 2016 and January 31, 2016, respectively 625,333 637,333 Prepaid expenses and other assets 200,000 150,000 Total assets $ 1,465,413 $ 1,417,719 LIABILITIES Accounts payable and accrued expenses $ $ 34,477 Settlement of equipment advance payable 150,100 Accrued interest payable 397,692 138,458 Deferred rent 1,139,643 965,319 Mortgage payable 202,660 357,010 Convertible notes payable 2,073,883 Notes payable 2,465,000 Total liabilities $ 4,204,995 $ 3,719,247 |
Note 2 - Summary of Signific_17
Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy: Schedule of Other Nonoperating Income (Expense) (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Other Nonoperating Income (Expense) | Three Months Ended October 31, 2015 Nine Months Ended October 31, 2015 Revenues $ $ 764,071 Expenses (1,146,758 ) $ $ (382,687 ) |
Note 5 - Operating Leases_ Sche
Note 5 - Operating Leases: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) | 9 Months Ended |
Oct. 31, 2016 | |
Tables/Schedules | |
Schedule of Future Minimum Rental Payments for Operating Leases | For the Fiscal Year Ending January 31, Remainder of 2017 $ 13,250 2018 53,250 2019 54,250 2020 55,250 2021 56,250 2022 42,750 Thereafter Total minimum lease payments $ 275,000 |
Note 2 - Summary of Signific_18
Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy: Property, Plant and Equipment (Details) - USD ($) | Oct. 31, 2016 | Jan. 31, 2016 |
Details | ||
Leasehold Improvements, Gross | $ 2,200 | $ 2,200 |
Furniture and Fixtures, Gross | $ 22,251 | $ 22,251 |
Note 2 - Summary of Signific_19
Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||||
Accumulated Depreciation, Depletion and Amortization, Property, Plant and Equipment, Period Increase (Decrease) | $ 1,854 | $ 2,067 | $ 5,988 | $ 6,201 |
Note 2 - Summary of Signific_20
Note 2 - Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy (Details) - USD ($) | Oct. 31, 2016 | Jan. 31, 2016 |
Details | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 2,074 | $ 1,525 |
Note 5 - Operating Leases (Deta
Note 5 - Operating Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2016 | Oct. 31, 2015 | |
Details | ||||
Rents and other occupancy | $ 16,984 | $ 16,984 | $ 50,953 | $ 50,437 |
Note 6 - Due To Related Party (
Note 6 - Due To Related Party (Details) | 9 Months Ended |
Oct. 31, 2016USD ($) | |
Details | |
Cash advances from related parties | $ 156,650 |
Due to related party | $ 156,650 |