STWC (STWC) 10-Q 9 Oct 18 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	3 Months Ended
	Apr. 30, 2018	Jul. 31, 2018
Document and Entity Information:
Entity Registrant Name	STWC. Holdings, Inc.
Document Type	10-Q
Document Period End Date	Apr. 30, 2018
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	2,019
Document Fiscal Period Focus	Q1

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited for April 30, 2018) - USD ($)		Apr. 30, 2018		Jan. 31, 2018
Current assets:
Cash		$ 587		$ 27,925
Accounts Receivable, net				5,000
Inventory		29,265		11,888
Prepaid expenses and other assets		23,750		17,592
Total current assets		53,602		62,405
Tenant improvements and office equipment		3,521	[1]	3,773	[2]
Notes receivable		104,061		94,061
Trademark		7,838	[3]	8,021	[4]
Total assets		169,022		168,260
Current liabilities:
Accounts payable and accrued expenses		533,109		366,438
Due to related party		499,735		490,970
Deferred revenue		203,687		150,000
Total current liabilities		1,236,531		1,007,408
Stockholders' deficit
Common stock	[5]	0		0
Additional Paid in Capital		5,325,684		5,325,684
Retained deficit		(6,393,193)		(6,164,832)
Total stockholders' deficit		(1,067,509)		(839,148)
Total liabilities and stockholders' deficit		$ 169,022		$ 168,260
[1]	Net of accumulated amortization and depreciation of $24,955 at April 30, 2017.
[2]	Net of accumulated amortization and depreciation of $24,703 at January 31, 2018.
[3]	Net of accumulated amortization of $3,172 at April 30, 2018.
[4]	Net of accumulated amortization of $2,989 at January 31, 2018.
[5]	No par value, 100,000,000 shares authorized, 27,140,550 issued and outstanding.

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Statement of Income
Consulting services	$ 43,813	$ 128,500
Cost of consulting services	(10,000)	(58,693)
Gross profit	33,813	69,807
Operating costs and expenses
Rents and other occupancy	12,516	13,250
Compensation	146,204	120,979
Professional, legal and consulting	49,896	19,003
Depreciation and amortization	435	1,060
General and administrative	52,511	87,314
Total operating costs and expenses	261,562	214,606
Loss from continuing operations	(227,749)	(171,799)
Other costs and expenses
Interest and financing costs	(612)	(530)
Loss from continuing operations, before provision for taxes on income	(228,361)	(172,329)
Income/(loss) from continuing operations, net of tax	(228,361)	(172,329)
Loss from discontinued operations, net of tax		(276,313)
Net (loss)	$ (228,361)	$ (448,642)
Basic earnings and fully diluted loss per common share - Continuing operations	$ 0	$ 0
Basic earnings and fully diluted loss per common share - Discontinued operations	$ 0	$ 0
Basic and fully diluted weighted average number of shares outstanding	27,140,550	27,140,550

CONDENSED STATEMENT OF CASH FLO

CONDENSED STATEMENT OF CASH FLOWS (Unaudited) - USD ($)		3 Months Ended
		Apr. 30, 2018	Apr. 30, 2017
Cash flows from operating activities:
Net (loss)		$ (228,361)	$ (448,642)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and Amortization		252	480
Decrease in trademark		183	183
Increase in accounts receivable		5,000	(3,000)
Increase in inventory		(17,377)
Increase in prepaid expenses and other assets		(6,158)
Increase in deferred revenue		53,687
Increase in accounts payable and accrued expenses		166,671	153,724
Net cash flow used in operating activities from continuing operations		(26,103)	(296,858)
Net cash flow provided by operating activities from discontinued operations			161,664
Net cash flow used in operating activities		(26,103)	(135,591)
Cash flows from financing activities:
Cash advances for notes receivable	[1]	(10,000)	(4,000)
Cash advances from related parties		8,765	68,629
Net cash flows from financing activities from continuing operations		(1,235)	64,629
Net cash flows from financing activities		(1,235)	64,629
Net cash flows		(27,338)	(70,962)
Cash and equivalent, beginning of period		27,925	133,189
Cash and equivalent, end of period		587	62,227
Supplemental cash flow disclosures:
Cash paid for interest		$ 513	$ 42,809
[1]	For Puerto Rico notes receivable.

Note 1 - Organization

Note 1 - Organization	3 Months Ended
	Apr. 30, 2018
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	3 Months Ended
	Apr. 30, 2018
Notes
Note 2 - Summary of Significant Accounting Policies	Note 2 – Summary of significant accounting policies Use of estimates – Cash and cash equivalents – Prepaid expenses and other assets – Tenant improvements and office equipment – Tenant improvements and office equipment, net of accumulated amortization and depreciation are comprised of the following: April 30, 2018 January 31, 2018 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 26,276 26,276 28,476 28,476 Accumulated amortization and depreciation (24,955 ) (24,703) $ 3,521 $ 3,773 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 the three months ended April 30, 2018 and 2017, respectively, was $252 and $448, respectively. Income taxes – Long-Lived Assets – Trademarks Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 3,172 $ 7,838 Discontinued Operations Three Months Ended April 30, 2017 Rental income from the Regulated Entities (Affiliates) $ 928,798 Total revenues 928,798 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) 247,005 Rents and other occupancy 789,789 Depreciation and amortization 42,013 Total operating costs and expenses 1,078,807 Operating (loss)/income from discontinued operations 162,463 Other income and (expenses) Interest expense (482,829 ) Loss from discontinued operations $ (320,366 ) 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. The Company evaluated all new accounting pronouncements and deemed none resulted in changes to the financial statements.

Note 3 - Going Concern

Note 3 - Going Concern	3 Months Ended
	Apr. 30, 2018
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 April 30, 2018 of $6.4 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 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 the Company's 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	3 Months Ended
	Apr. 30, 2018
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. Management 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	3 Months Ended
	Apr. 30, 2018
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 April 30, 2018 and 2017, rent expense was $12,516 and $13,250, respectively. As of April 30, 2018, future minimum lease payments are as follows: For the Fiscal Year Ending January 31, Remainder of 2019 $ 40,250 2020 55,250 2021 56,250 2022 42,750 Thereafter — Total minimum lease payments $ 194,500

Note 6 - Note Receivable

Note 6 - Note Receivable	3 Months Ended
	Apr. 30, 2018
Notes
Note 6 - Note Receivable	Note 6 – Note Receivable The Company 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. In conjunction with these agreements, the Company as begun providing funds to operate the Puerto Rico operations, which will be evidenced by a promissory note. The terms have not been finalized on this note and currently there is no specified terms to the agreement. Through April 30, 2018 the Company has advanced $104,061 related to the note. For additional information see the Company's Current Report on Form 8-K filed with the SEC on June 19, 2018.

Note 7 - Due To Related Party

Note 7 - Due To Related Party	3 Months Ended
	Apr. 30, 2018
Notes
Note 7 - Due To Related Party	Note 7 – Due to Related Party The Company borrowed $8,765 from related parties to fund operations during the three months ended April 30, 2018. The loans do not carry an interest rate and do not have a maturity date. As of April 30, 2018 and January 31, 2018, the Company owed related parties $499,735 and $490,970, respectively.

Note 8 - Note Payable

Note 8 - Note Payable	3 Months Ended
	Apr. 30, 2018
Notes
Note 8 - Note Payable	Note 8 – Note Payable 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. This note has not been funded and as of April 30, 2018 there was no balance due under this note.

Note 9 - Contingencies

Note 9 - Contingencies	3 Months Ended
	Apr. 30, 2018
Notes
Note 9 - Contingencies	Note 9 – Contingencies The Company is currently 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 10 - Subsequent Events

Note 10 - Subsequent Events	3 Months Ended
	Apr. 30, 2018
Notes
Note 10 - Subsequent Events	Note 10 – 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 None. Unrecognized Subsequent Events None.

Note 2 - Summary of Significa_2

Note 2 - Summary of Significant Accounting Policies: Use of Estimates, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
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)	3 Months Ended
	Apr. 30, 2018
Policies
Cash and Cash Equivalents, Policy	Cash and cash equivalents –

Note 2 - Summary of Significa_4

Note 2 - Summary of Significant Accounting Policies: Prepaid expenses and other assets, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
Policies
Prepaid expenses and other assets, Policy	Prepaid expenses and other assets –

Note 2 - Summary of Significa_5

Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
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: April 30, 2018 January 31, 2018 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 26,276 26,276 28,476 28,476 Accumulated amortization and depreciation (24,955 ) (24,703) $ 3,521 $ 3,773 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 the three months ended April 30, 2018 and 2017, respectively, was $252 and $448, respectively.

Note 2 - Summary of Significa_6

Note 2 - Summary of Significant Accounting Policies: Income Tax, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
Policies
Income Tax, Policy	Income taxes –

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)	3 Months Ended
	Apr. 30, 2018
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)	3 Months Ended
	Apr. 30, 2018
Policies
Goodwill and Intangible Assets, Policy	Trademarks Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 3,172 $ 7,838

Note 2 - Summary of Significa_9

Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
Policies
Discontinued Operations, Policy	Discontinued Operations Three Months Ended April 30, 2017 Rental income from the Regulated Entities (Affiliates) $ 928,798 Total revenues 928,798 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) 247,005 Rents and other occupancy 789,789 Depreciation and amortization 42,013 Total operating costs and expenses 1,078,807 Operating (loss)/income from discontinued operations 162,463 Other income and (expenses) Interest expense (482,829 ) Loss from discontinued operations $ (320,366 )

Note 2 - Summary of Signific_10

Note 2 - Summary of Significant Accounting Policies: Comprehensive Income, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
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)	3 Months Ended
	Apr. 30, 2018
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, Policy (Policies)	3 Months Ended
	Apr. 30, 2018
Policies
Recently Issued Accounting Pronouncements, Policy	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. The Company evaluated all new accounting pronouncements and deemed none resulted in changes to the financial statements.

Note 2 - Summary of Signific_13

Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy: Property, Plant and Equipment (Tables)	3 Months Ended
	Apr. 30, 2018
Tables/Schedules
Property, Plant and Equipment	April 30, 2018 January 31, 2018 Leasehold improvements $ 2,200 $ 2,200 Office equipment, furniture and fixtures 26,276 26,276 28,476 28,476 Accumulated amortization and depreciation (24,955 ) (24,703) $ 3,521 $ 3,773

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)	3 Months Ended
	Apr. 30, 2018
Tables/Schedules
Schedule of Intangible Assets and Goodwill	Gross Carrying Amount Accumulated Amortization Net Trademarks $ 11,010 $ 3,172 $ 7,838

Note 2 - Summary of Signific_15

Note 2 - Summary of Significant Accounting Policies: Discontinued Operations, Policy: Disposal Groups, Including Discontinued Operations (Tables)	3 Months Ended
	Apr. 30, 2018
Tables/Schedules
Disposal Groups, Including Discontinued Operations	Three Months Ended April 30, 2017 Rental income from the Regulated Entities (Affiliates) $ 928,798 Total revenues 928,798 Operating costs and expenses Reserve for amounts due from Regulated Entities (Affiliates) 247,005 Rents and other occupancy 789,789 Depreciation and amortization 42,013 Total operating costs and expenses 1,078,807 Operating (loss)/income from discontinued operations 162,463 Other income and (expenses) Interest expense (482,829 ) Loss from discontinued operations $ (320,366 )

Note 5 - Operating Leases_ Sche

Note 5 - Operating Leases: Schedule of Future Minimum Rental Payments for Operating Leases (Tables)	3 Months Ended
	Apr. 30, 2018
Tables/Schedules
Schedule of Future Minimum Rental Payments for Operating Leases	For the Fiscal Year Ending January 31, Remainder of 2019 $ 40,250 2020 55,250 2021 56,250 2022 42,750 Thereafter — Total minimum lease payments $ 194,500

Note 2 - Summary of Signific_16

Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy: Property, Plant and Equipment (Details) - USD ($)	Apr. 30, 2018	Jan. 31, 2018
Details
Leasehold Improvements, Gross	$ 2,200	$ 2,200
Furniture and Fixtures, Gross	$ 26,276	$ 26,276

Note 2 - Summary of Signific_17

Note 2 - Summary of Significant Accounting Policies: Property, Plant and Equipment, Policy (Details) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Details
Accumulated Depreciation, Depletion and Amortization, Property, Plant and Equipment, Period Increase (Decrease)	$ 252	$ 448

Note 2 - Summary of Signific_18

Note 2 - Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy (Details) - USD ($)	Apr. 30, 2018	Jan. 31, 2018
Details
Finite-Lived Intangible Assets, Accumulated Amortization	$ 2,440	$ 2,257

Note 5 - Operating Leases (Deta

Note 5 - Operating Leases (Details) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017
Details
Rents and other occupancy	$ 12,516	$ 13,250

Note 6 - Note Receivable (Detai

Note 6 - Note Receivable (Details)	3 Months Ended
	Apr. 30, 2018USD ($)
Details
Increase (Decrease) in Notes Payable, Current	$ 104,061

Note 7 - Due To Related Party (

Note 7 - Due To Related Party (Details) - USD ($)	3 Months Ended
	Apr. 30, 2018	Apr. 30, 2017	Jan. 31, 2018
Details
Cash advances from related parties	$ 8,765	$ 68,629
Due to related party	$ 499,735		$ 490,970