Exhibit 9.01 (a)
REPORT OFINDEPENDENTREGISTERED
PUBLICACCOUNTINGFIRM
AND
FINANCIAL STATEMENTS
ForthePeriodfrom Inception
onSeptember18,2014Through
December31,2014
TABLE OFCONTENTS
| Report of Independent Registered Public Accounting Firm | | F-3 | |
| | | | |
| Balance Sheet | | F-4 | |
| | | | |
| Statements of Operations | | F-5 | |
| | | | |
| Statement of Stockholders’ Deficit | | F-6 | |
| | | | |
| Statement of Cash Flows | | F-7 | |
| | | | |
| Notes to Financial Statements | | F-8 - F-11 | |
REPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
TotheBoardofDirectorsGreenLifeBotaniX,Inc.
WehaveauditedtheaccompanyingbalancesheetofGreenLifeBotaniX,Inc.(“theCompany”)asofDecember31,2014,andthe relatedstatementsof operations,stockholders’deficitand cashflowsfortheperiod frominceptiononSeptember18,2014throughDecember31,2014.ThesefinancialstatementsaretheresponsibilityoftheCompany’smanagement. Ourresponsibilityis to express an opinion on thesefinancialstatements based on our audit.
WeconductedourauditinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatements arefree ofmaterialmisstatement. The Company isnotrequired tohave,norwereweengaged toperform, an audit of itsinternal controloverfinancialreporting.Our auditincluded consideration ofinternal controloverfinancial reporting as a basisfordesigning audit proceduresthat are appropriate inthecircumstances,butnotforthepurpose ofexpressing an opinion on theeffectiveness oftheCompany’s internal controloverfinancial reporting.Accordingly,we express nosuch opinion.An audit also includesexamining, on a testbasis,evidencesupportingthe amountsand disclosures in thefinancialstatements,assessing theaccounting principlesusedand significantestimatesmade bymanagement, aswell as evaluatingthe overallfinancialstatementpresentation. We believe thatour audit provides areasonable basisforouropinion.
Inouropinionthefinancialstatementsreferred toabovepresentfairly,inallmaterialrespects,thefinancialpositionofGreenLifeBotaniX,Inc.asofDecember31,2014,andtheresultsofitsoperationsandcashflowsfortheperiodfrominceptiononSeptember 18,2014through December 31,2014, inconformitywithU.S. generallyacceptedaccounting principles.
TheaccompanyingfinancialstatementshavebeenpreparedassumingthattheCompanywillcontinueasagoingconcern.AsdiscussedinNote2tothefinancialstatements,theCompanyhasnotyet establishedanongoingsourceofrevenuessufficienttocover its operatingcostsandis dependentonfinancialsupportfromits officers,which raisessubstantial doubt about its ability tocontinueas agoing concern. Management’s plans concerning thesematters are alsodescribedinNote2.Thefinancialstatements donotinclude anyadjustments thatmightresultfromthe outcome of thisuncertainty.
/s/Sadler,Gibb&Associates,LLC
SaltLakeCity,UTMay1,2015
GREENLIFE BOTANIX, INC.
BALANCE SHEET
| | | December 31 |
| | | 2014 |
| | | |
| ASSETS | | |
| Current assets | | |
| Cash and cash equivalents | | $ | 2,191 | |
| Total current assets | | | 2,191 | |
| Total assets | | $ | 2,191 | |
| | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | |
| Current liabilities | | | | |
| Due to related parties | | | 16,100 | |
| Total current liabilities | | | 16,100 | |
| | | | | |
| Stockholders' equity (deficit) | | | | |
| Common stock, 100,000,000 shares authorized, par value | | | | |
| of $0.01; 1,000,000 shares issued and outstanding | | | 10,000 | |
| Additional paid-in capital | | | (10,000 | ) |
| Accumulated deficit | | | (13,909 | ) |
| Total stockholders' deficit | | | (13,909 | ) |
| Total liabilities and stockholders' deficit | | $ | 2,191 | |
The accompanying notes are an integral part of these financial statements.
GREENLIFE BOTANIX, INC.
STATEMENT OF OPERATIONS
| | | From Inception on September 18, |
| | | 2014 Through |
| | | December 31, 2014 |
| | | |
| REVENUES | | $ | 570 | |
| COST OF GOODS SOLD | | | 788 | |
| GROSS PROFIT | | | (218 | ) |
| | | | | |
| OPERATING EXPENSES | | | | |
| General and administrative | | | 13,691 | |
| Total operating expenses | | | 13,691 | |
| LOSS FROM OPERATIONS | | | (13,909 | ) |
| Other income and expenses | | | — | |
| LOSS BEFORE PROVISION FOR INCOME TAXES | | | (13,909 | ) |
| Provision for income taxes | | | — | |
| | | | | |
| NET LOSS | | $ | (13,909 | ) |
| | | | | |
| BASIC AND DILUTED LOSS PER COMMON SHARE | | $ | (0.01 | ) |
| | | | | |
| BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | | | 1,000,000 | |
The accompanying notes are an integral part of these financial statements.
GREENLIFEBOTANIX,INC.
STATEMENTOFSTOCKHOLDERS'DEFICIT
| | | | | | | | | | | | Additional | | | | | | | | | |
| | | | Common Stock | | | | Paid-in | | | | Accumulated | | | | | |
| | | | Shares | | | | Amount | | | | Capital | | | | Deficit | | | | Total | |
| | | | | | | | | | | | | | | | | | | | | |
| Balance at inception on | | | | | | | | | | | | | | | | | | | | |
| September 18, 2014 | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued | | | | | | | | | | | | | | | | | | | | |
| as founders' shares | | | 1,000,000 | | | | 10,000 | | | | (10,000 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss from inception | | | | | | | | | | | | | | | | | | | | |
| through December 31, 2014 | | | — | | | | — | | | | — | | | | (13,909 | ) | | | (13,909 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, December 31, 2014 | | | 1,000,000 | | | $ | 10,000 | | | $ | (10,000 | ) | | $ | (13,909 | ) | | $ | (13,909 | ) |
Theaccompanyingnotesareanintegralpartofthesefinancialstatements.
GREENLIFE BOTANIX,INC.
STATEMENTOFCASHFLOWS
| | | From Inception on September 18, |
| | | 2014 Through |
| | | December 31, |
| | | 2014 |
| | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | |
| | | | | |
| Net loss | | $ | (13,909 | ) |
| Adjustments to reconcile net loss to cash | | | | |
| used in operating activities: | | | | |
| Expenses paid on behalf of the Company | | | 3,500 | |
| NET CASH FLOWS USED IN OPERATING ACTIVITIES | | | (10,409 | ) |
| CASH FROM INVESTING ACTIVITIES | | | — | |
| | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | |
| Proceeds from related party payables | | | 12,600 | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | | | 12,600 | |
| | | | | |
| NET INCREASE IN CASH | | | 2,191 | |
| CASH AT BEGINNING OF PERIOD | | | — | |
| CASH AT END OF PERIOD | | $ | 2,191 | |
| | | | | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | | | | |
| Cash paid for interest | | $ | — | |
| Cash paid for taxes | | $ | — | |
| | | | | |
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | |
| Common stock issued for founders' shares | | $ | 10,000 | |
Theaccompanyingnotesareanintegralpartofthese financialstatements.
GREENLIFE BOTANIX, INC.
Notes to Financial Statements
December 31, 2014
NOTE1–ORGANIZATIONANDDESCRIPTIONOFBUSINESS
GreenLifeBotaniX,Inc.(hereafter“theCompany”)isaNevadacorporationincorporatedonSeptember18,2014,withofficeandwarehousefacilitieslocatedinTustin,California.TheCompanyfocusedonthedevelopmentandsale of products containing andfeaturing non-psychoactive cannabidiol (“CBD”), upon which theenrichedhemp oilsegment ofthelucrativeburgeoningmarijuana space is based. TheUnited States FoodandDrugAdministrationconsidershemp oil(and its derivative CBD) a dietary supplementandnot amedication.Within the US, consumers do notneedaprescriptionandcan legally purchase andconsume CBD in any state.The Company,assuch,operates inthenutraceuticalindustry.
NOTE2–GOINGCONCERN
TheCompany'sfinancialstatementsarepreparedusinggenerallyacceptedaccountingprinciplesintheUnitedStatesofAmericaapplicabletoagoingconcernwhichcontemplatestherealizationofassetsandliquidationofliabilitiesinthenormalcourseofbusiness.TheCompanyhasnotyetestablishedanongoingsourceofrevenuessufficienttocover its operating costsand allow it tocontinue as agoingconcern. The abilityof the Company tocontinue as a goingconcernisdependentontheCompany obtainingadequatecapitaltofundoperatinglossesuntilitbecomesprofitable. IftheCompanyisunabletoobtainadequatecapital,itcouldbeforcedtoceaseoperations.
Inordertocontinueasagoingconcern,theCompanywillneed,amongotherthings,additionalcapitalresources.Management'splanistoobtainsuchresourcesfortheCompanybyobtainingcapitalfrommanagementandsignificantshareholderssufficienttomeetitsminimaloperatingexpensesandseekingequity and/or debtfinancing.Howevermanagement cannot provide any assurancesthat the Companywill besuccessful in accomplishing any of itsplans.
TheabilityoftheCompanytocontinueasagoingconcernisdependentuponitsabilitytosuccessfullyaccomplishthe plansdescribedin the precedingparagraph and eventuallysecureothersourcesoffinancing and attainprofitableoperations.TheaccompanyingfinancialstatementsdonotincludeanyadjustmentsthatmightbenecessaryiftheCompanyis unable to continueas agoingconcern.
NOTE3–SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES
BasisofPresentation
Managementacknowledgesthatitissolelyresponsibleforadoptingsoundaccountingpractices,establishingandmaintainingasystemofinternalaccountingcontrolandpreventinganddetectingfraud.TheCompany’ssystemofinternalaccounting controlisdesignedtoassure,among otheritems,that (1)recordedtransactions arevalid;(2)allvalid transactions are recordedand (3)transactions are recorded inthe period in a timelymanner to producefinancial statementswhichpresentfairly thefinancialcondition,resultsofoperationsand cashflowsofthecompanyfortherespective periods being presented.
TheCompany’sfinancialstatementsarepreparedusingtheaccrualbasisofaccountinginaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates.TheCompanyhaselectedaDecember31fiscalyear-end.
UseofEstimates
ThepreparationoffinancialstatementsinaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedate ofthefinancialstatementsandthereportedamountsofrevenues and expensesduringthe reporting period.Achangeinmanagements’estimates orassumptions couldhaveamaterialimpacton theCompany’sfinancial condition and resultsof operations during the period in which suchchanges occurred.
Actualresultscoulddifferfromthoseestimates.TheCompany’sfinancialstatementsreflectalladjustmentsthatmanagementbelievesarenecessary forthefairpresentationoftheirfinancialconditionandresultsof operationsfortheperiodspresented.
CashandCashEquivalents
Forpurposesofthestatementsofcashflows,cashequivalentsincludeallhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlesswhichare notsecuringanycorporate obligations.TheCompanymaintainsitscashinbankdepositaccounts,which,attimes,may exceed federallyinsuredlimits. TheCompanyhasnotexperiencedanylossesinsuch accounts.
RevenueRecognition
InaccordancewiththeSecuritiesandExchangeCommission’s(“SEC”)StaffAccountingBulletinNo.104,RevenueRecognition,theCompanywillrecognizerevenuewhenitisrealizedorrealizableandearned.TheCompanymustmeetallofthe followingfourcriteriaunderSAB104torecognizerevenue:
| · | Persuasiveevidenceofanarrangementexists |
| · | Thesalespriceisfixedordeterminable |
| · | Collectionisreasonablyassured |
Costofsalesisthedirectcostassociatedwiththeearningofrevenueandpredominantlyincludesthecostoftheproductandshippingtothecustomer.
IncomeTaxes
Incometaxesareaccountedforundertheassetandliabilitymethod.Deferredtaxassetsandliabilitiesarerecognizedforthefuturetaxconsequencesattributabletodifferencesbetweenthefinancialstatementcarryingamountsofexistingassetsandliabilities andtheir respective tax basesandoperatingloss andtax credit carry forwards. Deferredtax assetsand liabilities aremeasured using enacted tax rates expected to apply to taxableincome intheyears in which those temporary differences are expected to berecovered or settled. Theeffect on deferred taxassetsand liabilities of achange in tax rates is recognized inincome in the period thatincludes the enactment date. A valuation allowance is providedfor deferred taxassets ifit ismorelikely thannottheseitemswilleitherexpire before theCompanyis able torealizetheirbenefits,orthatfuturedeductibilityisuncertain.
TheCompanyalsofollowstheguidancerelatedtoaccountingforincometaxuncertainties.Inaccountingforuncertaintyinincometaxes,theCompanyrecognizesthefinancialstatement benefit ofatax positiononlyafter determiningthat the relevant tax authoritywould more likely thannot sustainthe positionfollowing an audit. For taxpositionsmeeting themorelikely than not threshold,theamountrecognizedin thefinancialstatements is thelargestbenefitthat has agreater than 50 percent likelihood ofbeing realized uponultimate settlementwith therelevant taxauthority. No liabilityforunrecognized tax benefitswas recorded as ofDecember31,2014.
FairValueMeasurements
Thefairvalueofafinancialinstrumentistheamountthatcouldbereceiveduponthesaleofanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Financialassetsaremarkedtobidpricesandfinancial liabilitiesaremarked tooffer prices. Fairvaluemeasurements donotincludetransactioncosts.Afairvaluehierarchyisusedtoprioritizethe qualityandreliabilityofthe information usedtodeterminefairvalues.Categorizationwithinthefairvaluehierarchyisbasedonthelowestlevelofinputthatissignificanttothefairvaluemeasurement.Thefairvaluehierarchyisdefinedintothefollowingthreecategories:
Level1:Quotedmarketpricesinactive marketsforidenticalassetsorliabilities
Level2:Observablemarket-basedinputsorinputsthatarecorroboratedbymarketdata
Level3:Unobservableinputsthatarenotcorroboratedbymarketdata
Stock-BasedCompensation
TheCompanyrecordsstock-basedcompensationatfairvalueasofthedateofgrantandrecognizesthecorrespondingexpenseovertherequisiteserviceperiod(usuallythevestingperiod),utilizingtheBlack-Scholesoption-pricingmodel.ThevolatilitycomponentofthecalculationisbasedonthehistoricvolatilityoftheCompany’sstockorthe expectedfuturevolatility. The expectedlife assumption is primarily based onhistorical exercise patterns andemployeepost-vesting terminationbehavior.Therisk-freeinterest rateforthe expected term of the option is basedon the U.S. Treasuryyield curve in effect atthetime ofgrant.
LossperCommonShare
Basicearningspersharearecalculateddividingincomeavailabletocommonstockholders bytheweightedaveragenumberofcommonsharesoutstanding.Dilutedearningspersharearebasedontheassumptionthatalldilutiveconvertiblesharesandstockoptionsandwarrantswereconverted orexercised.Dilutioniscomputedby applyingthe treasurystockmethod.Underthismethod,warrants andoptions areassumed tobeexercisedatthebeginningofthe period(oratthetime ofissuance, iflater),and asiffundsobtainedtherebywere used topurchasecommonstockattheaveragemarketpriceduringtheperiod. Therewerenosuchdilutivesharesoutstanding as ofDecember31,2014.
RecentlyAdoptedAccountingPronouncements
TheCompanyhasevaluatedrecentaccountingpronouncementsandtheiradoptionhasnothadorisnotexpectedtohaveamaterialimpactontheCompany’sfinancialpositionorstatements.
NOTE4–RELATEDPARTYTRANSACTIONS
Frominception,theCompanyhasreceivedfundfromanofficertocovertheoperatingexpensesoftheCompany.Theaggregate total ofthese advances is$16,100, $3,500ofwhich relatedtoexpenses paidonbehalfof theCompanybytherelatedparty.These advancesare unsecured, aredue ondemandandbearnointerest.
NOTE5–STOCKHOLDERS’DEFICIT
Thetotalnumberofcommonsharesauthorizedthatmay be issued bytheCompanyis100,000,000 shareswithaparvalueof$0.01pershare.Therearenopreferredsharesauthorizedtobeissued.Therewere1,000,000sharesofcommonstock issuedandoutstanding atDecember31, 2014.
DuringtheyearendedDecember31,2014,theCompanyissued1,000,000sharesofcommonstock,asfounders’sharesand wererecordedatavalueofzero.
NOTE6–INCOMETAXES
Netdeferredtaxassetsconsistofthefollowingcomponents:
| | | December 31, |
| | | 2014 |
| Deferred tax asset: | | | | |
| Net operating loss carryforwards | | $ | (4,868 | ) |
| Valuation allowance | | | 4,868 | |
| Net deferred tax asset | | $ | — | |
NOTE6–INCOMETAXES(CONTINUED)
TheincometaxprovisiondiffersfromtheamountofincometaxdeterminedbyapplyingtheU.S.federalandstateincomestatutorytaxratestopretaxincome(loss)fromcontinuingoperationsasfollows:
| | | December 31, |
| | | 2014 |
| Tax benefit at statutory rates | | $ | (4,868 | ) |
| Change in valuation allowance | | | 4,868 | |
| Net provision for income taxes | | $ | — | |
TheCompanyhasaccumulatednetoperatinglosscarryoversofapproximately$4,868asofDecember31,2014whichareavailabletoreducefuturetaxableincome.Duetothechange inownershipprovisions of the TaxReformActof1986,netoperatinglosscarryforwardsforfederalincometaxreportingpurposesmaybesubjecttoannuallimitations. Achangeinownershipmaylimitthe utilizationofthenet operatinglosscarryforwardsinfutureyears. The taxlosses begin to expirein2033. The fiscalyearended2014remains open to examinationby federaltax authoritiesand other taxjurisdictions.
NOTE7–SUBSEQUENTEVENTS
SubsequenttotheperiodendedDecember31,2014,theCompanyissued1,000,000sharesofcommonstockforservices.
OnFebruary8,2015,theCompanyenteredintoaShareExchangeAgreement(the“ShareExchangeAgreement”)withMountainHighAcquisitionCorp.,aColoradocorporation(“MYHI”),andthecontrollingstockholdersofCompany(the“CompanyShareholders”).Pursuant totheShareExchangeAgreement, MYHIacquired100 percentshares of common stock of Company and inexchangefor 25,000,000 restrictedshares of its MYHIcommon stock tothe Company Shareholders. As aresult of the Share ExchangeAgreement, the Company willbecame awholly-owned subsidiaryof MYHI. The ShareExchange Agreement contains customary representations,warrantiesand conditions toclosing. The closing of the ShareExchange (the “Closing”) isanticipated to close by April 30, 2015.
TheCompanyhasevaluatedsubsequenteventsthroughthedateofthisreportandhasnot identifiedanyfurtherreportableevents.
F-11
