Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Aug. 31, 2017 | Oct. 11, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Gala Global Inc. | |
Entity Central Index Key | 1,513,403 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --11-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 38,301,531 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Aug. 31, 2017 | Nov. 30, 2016 |
Current assets | ||
Cash | $ 60,540 | $ 10,841 |
Loan receivable - related party | 20,000 | 0 |
Prepaid expenses | 68,316 | 0 |
Prepaid deposits - related party | 110,000 | 0 |
Inventory | 2,241 | 2,241 |
Total current assets | 261,097 | 13,082 |
Equipment | 100,000 | 0 |
Total assets | 361,097 | 13,082 |
Current liabilities | ||
Accounts payable and accrued liabilities | 26,867 | 20,052 |
Accounts payable and accrued liabilities - related party | 21,959 | 94,039 |
Due to related parties | 33,367 | 249,835 |
Loans payable | 42,200 | 75,200 |
Loans payable to related parties | 20,564 | 22,064 |
Convertible note, net of unamortized discount of $186,149 and $nil, respectively | 93,851 | 0 |
Derivative liabilities | 513,297 | 0 |
Total liabilities | 752,105 | 461,190 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock authorized: Authorized: 10,000,000 shares with a par value of $0.001 per share issued and outstanding: 500,000 shares | 500 | 500 |
Common stock authorized: Authorized: 500,000,000 shares with a par value of $0.001 per share issued and outstanding: 38,301,590 and 1,369,224 shares, respectively | 38,302 | 1,369 |
Additional paid-in capital | 2,215,788 | 786,736 |
Deferred compensation | (309,223) | 0 |
Accumulated Deficit | (2,336,375) | (1,236,713) |
Total stockholders' deficit | (391,008) | (448,108) |
Total liabilities and stockholders' deficit | $ 361,097 | $ 13,082 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Aug. 31, 2017 | Nov. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 500,000 | 500,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares issued | 38,301,590 | 1,369,224 |
Common stock, shares outstanding | 38,301,590 | 1,369,224 |
Unamortized discount | $ 186,149 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | |
Operating expenses | ||||
Consulting fees | $ 23,852 | $ 0 | $ 23,852 | $ 17,500 |
Consulting fees - related party | 164,736 | 9,114 | 210,845 | 24,479 |
General and administrative | 28,822 | 8,638 | 54,075 | 38,125 |
General and administrative - related party | 68,344 | 9,000 | 124,865 | 27,000 |
Rent | 1,050 | 22,500 | 3,500 | 37,500 |
Total operating expenses | 286,804 | 49,252 | 417,137 | 144,604 |
Loss before other expense | (286,804) | (49,252) | (417,137) | (144,604) |
Other expense | ||||
Change in fair value of derivative liability | (197,308) | 0 | (207,340) | 0 |
Interest expense | (89,656) | (540) | (265,430) | (1,093) |
Loss on settlement of notes payable | (93,050) | 0 | (93,050) | 0 |
Loss on settlement of notes payable - related party | (28,371) | 0 | (116,705) | 0 |
Total other expense | (408,385) | (540) | (682,525) | (1,093) |
Net loss | $ (695,189) | $ (49,792) | $ (1,099,662) | $ (145,697) |
Net loss per share, basic and diluted | $ (.02) | $ (0.04) | $ (.06) | $ (.11) |
Weighted average common shares outstanding | 36,913,138 | 1,369,224 | 19,368,632 | 1,363,494 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Operating activities | ||
Net loss for the period | $ (1,099,662) | $ (145,697) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of discount on convertible note | 77,570 | 0 |
Amortization of debt issuance costs | 16,281 | 0 |
Change in fair value of derivative liability | 207,340 | 0 |
Common shares issued for services and compensation - related party | 210,777 | 0 |
Common shares issued for services | 8,852 | 0 |
Derivative expense | 161,353 | 0 |
Expenses paid by related parties on behalf of the Company | 0 | 8,157 |
Loss on settlement of related party debt | 116,705 | 0 |
Loss on settlement of debt | 93,050 | 0 |
Stock-based compensation | 0 | 17,500 |
Stock-based compensation - related party | 0 | 73,855 |
Changes in operating assets and liabilities: | ||
Inventory | 0 | (4,340) |
Prepaid expenses | (37,168) | 0 |
Prepaid expenses - related party | (10,000) | 0 |
Accounts payable and accrued liabilities | 12,668 | 11,925 |
Accounts payable and accrued liabilities - related party | 16,566 | (22,157) |
Net cash used in operating activities | (225,668) | (60,757) |
Investing activities | ||
Loan issued to related party | (20,000) | 0 |
Purchase of equipment | (100,000) | 0 |
Net cash used in investing activities | (120,000) | 0 |
Financing activities | ||
Proceeds from related party debt | 28,867 | 0 |
Repayments of related party debt | 0 | (6,100) |
Proceeds from convertible note | 250,000 | 0 |
Proceeds from issuance of common shares | 108,000 | 0 |
Proceeds from note payable - related party | 8,500 | 2,064 |
Proceeds from loan payable | 0 | 65,000 |
Net cash provided by financing activities | 395,367 | 60,964 |
Increase in cash | 49,699 | 207 |
Cash, beginning of period | 10,841 | 1,804 |
Cash, end of period | $ 60,540 | $ 2,011 |
1. Organization And Nature Of O
1. Organization And Nature Of Operations | 9 Months Ended |
Aug. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Gala Global Inc. (the “Company”) was incorporated in the State of Nevada on March 10, 2010. The Company was formed to provide garment tailoring and alteration services. The Company has expanded into the Hemp and Cannabidiol (“CBD”) industry. The expansion is focusing on the development, research, and commercialization of products derived from the Hemp and Cannabis plant. The Company currently is finalizing its marketing strategy for a new CBD flavored thin-film strip. The film strip delivery system uses a dissolving film strip that is absorbed in the mouth. The film-strip method is an advanced method of providing CBD for dietary supplement. The Company also is seeking acquisition candidates in this area of interest in the nutraceutical and pharmaceutical industries. The Company also plans to enter into the medical marijuana cultivation industry as approved in the United States and Canada to build legalized cultivation operations. The Company’s services include the development of cannabinoid based health and wellness products; the development of medical grade compounds; the licensing of proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal herb industry. On May 8, 2017, Gala Global Inc. and Controlled Environment Genomics, Inc. (“CEG”) entered into a definitive agreement whereby GLAG is acquiring 80% of CEG. The transaction will be closing shortly. Controlled Environment Genomics, Inc. (CEG), Akron, Ohio, is a genomics company with expertise in digital plant gene sequencing, editing and cloning technologies. Genomics is an interdisciplinary field of science and branch of molecular biology focused on the structure, function, evolution and mapping of genomes, complete sets of DNA within single cells of an organism. CEG’s state-of-the-art genomics technology enables computerized genome sequencing and plant cloning using a fully automated turnkey solution for digitally sequencing the genomes of the world’s most desirable plant varieties based on flavor and nutrition. On August 3, 2017, Controlled Environment Genomics Inc. had successfully filed a provisional patent application on its proprietary, fully automated, computer-controlled, genetically modified plant cloning technology through the company’s IP legal counsel Tucker Ellis LLP, Los Angeles, Calif. Going Concern These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at August 31, 2017, the Company has generated no revenues and has an accumulated deficit of $2,336,375. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
2. Summary Of Significant Accou
2. Summary Of Significant Accounting Policies | 9 Months Ended |
Aug. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (a) Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. (b) Principles of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Cannabis Ventures Inc. (USA), Cannabis Ventures Inc. (Canada), from the date of their acquisition by the Company effective June 26, 2014 and CBD Life, Inc. from June 26, 2014 (date of acquisition) to December 30, 2016 (date of dissolution). All inter-company transactions and balances have been eliminated on consolidation. (c) Interim Financial Statements The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the nine months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ended November 30, 2017. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended November 30, 2016 included in our Form 10-K filed with the SEC. (d) 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 assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of inventory, valuation of derivative liability and share-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. (e) Inventory Inventory is comprised of Vape Mods purchased for resale, and is recorded at the lower of cost or net realizable value on a first-in first-out basis. The Company establishes inventory reserves for estimated obsolete or unsaleable inventory equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future market conditions. (f) Equipment Equipment is comprised of machinery capable of DNA fragment capabilities, is recorded at cost and amortized on a straight-line basis over an estimated useful life of five years. (g) Financial Instruments The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, loans payable to related parties, loans payable, and amounts due to related parties. The recorded values of all these financial instruments approximate their current fair values because of the short term nature of these financial instruments. (h) Revenue Recognition The Company earns revenue from the sale of Vape Mods, which are modified electronic cigarettes and vape pens. Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is assured. The Company is not exposed to any credit risks as amounts are prepaid prior to performance of services. (i) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation (j) Basic and Diluted Net Loss per Share The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share (k) Derivative Liability From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations. (l) Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. (m) Recent 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 accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
3. Deferred Compensation
3. Deferred Compensation | 9 Months Ended |
Aug. 31, 2017 | |
Retirement Benefits [Abstract] | |
Deferred Compensation | Deferred compensation is comprised of common shares issued to officers and directors of the Company for compensation services. During the nine months ended August 31, 2017, the Company issued 26,000,000 common shares with a fair value of $520,000 for compensation of which $210,777 was expensed during the period and the remaining $309,223 was recorded as deferred compensation within shareholders’ equity. |
4. Equipment
4. Equipment | 9 Months Ended |
Aug. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Cost $ Accumulated amortization $ August 31, 2017 $ November 30, 2016 $ Machinery 100,000 – 100,000 – |
5. Convertible Debenture
5. Convertible Debenture | 9 Months Ended |
Aug. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debenture | On May 15, 2017, the Company entered into a promissory note agreement with a non-related party for proceeds of $280,000, net of an original issuance discount and legal fees of $30,000 which were capitalized and amortized over the period of the convertible debenture. The promissory note is unsecured, bears interest at 10% per annum, and is due on November 30, 2017. The promissory note is convertible into common shares at the lesser of: (a) $0.35; or (b) 65% of the average of the three lowest volume weighted average price of the Company’s common shares in the 20 days preceding the notice of conversion limited by a conversion floor price of $0.05 per share. The embedded conversion option qualifies for derivative accounting under ASC 815-15, Derivatives and Hedging |
6. Derivative Liability
6. Derivative Liability | 9 Months Ended |
Aug. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | The Company records the fair value of the conversion price of the convertible debentures, as disclosed in Note 3, in accordance with ASC 815, Derivatives and Hedging The following inputs and assumptions were used to value the convertible debentures outstanding during the period ended August 31, 2017: Expected Volatility Risk-free Expected Dividend Expected (in years) May 15, 2017 convertible debenture: As at May 15, 2017 (date of issuance) 288% 1.02% 0% 0.5 As at May 31, 2017 (mark-to-market) 267% 1.08% 0% 0.5 As at August 31, 2017 (mark-to-market) 269% 1.01% 0% 0.5 |
7. Related Party Transactions
7. Related Party Transactions | 9 Months Ended |
Aug. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (a) As at August 31, 2017, the Company owed $33,367 (November 30, 2016 - $249,835) to a company controlled by a significant shareholder of the Company to fund payment of operating expenditures. During the period ended August 31, 2017, the Company settled $249,835 of related party debt with the issuance of 1,387,979 common shares. Refer to Note 7(b). The remaining amount owed is unsecured, non-interest bearing, and due on demand. (b) As at August 31, 2017, the Company owed $18,500 (November 30, 2016 - $10,000) to a company controlled by a significant shareholder of the Company. The amount owed is unsecured, non-interest bearing, and due on demand. (c) As at August 31, 2017, the Company owed $2,064 (November 30, 2016 - $2,064) to a significant shareholder of the Company. The amount is unsecured, bears interest at 3% per annum, and due 180 days from the date of issuance. As at August 31, 2017, accrued interest of $66 (November 30, 2016 - $15) has been included in accounts payable and accrued liabilities, related parties. (d) As at August 31, 2017, the Company owed $nil (November 30, 2016 - $10,000) to the former spouse of a significant shareholder of the Company for a note issued on September 21, 2016. Under the terms of the note, the amount due was unsecured, bore interest at 3% per annum, and was due 180 days from the date of issuance. In July 2017, the Company issued 128,750 common shares with a fair value of $38,625 to settle $10,000 of principal balance and $254 of accrued interest. (e) As at August 31, 2017, the Company owed $15,000 (November 30, 2016 - $79,333) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount owed is unsecured, non-interest bearing, and due on demand. During the three and nine months ended August 31, 2017, the Company incurred $58,911 (2016 - $9,000) and $115,432 (2016 - $27,000) of consulting expense relating to services provided to the Company. During the nine months ended August 31, 2017, the Company settled $88,333 of related party debt with the issuance of 490,742 common shares. Refer to Note 7(a). (f) On May 8, 2017, the Company entered into an agreement whereby the Company agreed to acquire 80% of the issued and outstanding common stock of Controlled Environment Genomics Inc ("CEG Inc"), in exchange for a new series of the Company’s preferred shares, and issue 5,000,000 restricted common shares in exchange for CEG's intellectual property. In the event that CEG, Inc. becomes its own public entity, the executive shall receive 51% ownership of the new entity, and the Company will retain the remaining 49%. As at May 31, 2017, the Company issued 5,000,000 common shares with a fair value of $100,000 to the Chief Executive Officer of the Company as a deposit for the proposed acquisition of intangible assets. As at August 31, 2017, the agreement to acquire the common stock of CEG Inc. and the intangible assets has not been finalized. Refer to Note 7(h). (g) During the nine months ended August 31, 2017, the Company issued 26,000,000 common shares with a fair value of $520,000 to officers and directors of the Company as compensation for services for a period of one year. As at August 31, 2017, the Company recorded $309,223 as deferred compensation within shareholders’ equity. During the three and nine months ended August 31, 2017, the Company recorded compensation expense of $130,146 and $210,777 respectively. (h) During the nine months ended August 31, 2017, the Company loaned $20,000 (November 30, 2016- $nil) to a company controlled by an officer of the Company for day-to-day expenses. The amount owing is unsecured, non-interest bearing, and due on demand. |
8. Common Shares
8. Common Shares | 9 Months Ended |
Aug. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Common Shares | (a) On January 30, 2017, the Company effected a share consolidation on a 100 old shares for 1 new share basis. The share consolidation has been applied retroactively to the earliest period presented. (b) On March 22, 2017, the Company issued 490,742 common shares with a fair value of $176,667 to settle outstanding debt of $88,333 owed to a director of the Company. The transaction resulted in a loss on settlement of debt of $88,334, which was recorded in the consolidated statement of operations. (c) On March 22, 2017, the Company issued 1,387,970 common shares to settle outstanding debt of $249,835 owed to a company controlled by a director of the Company. (d) On March 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a director of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $115,068 has been recorded in deferred compensation. (e) On March 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a director of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $115,068 has been recorded in deferred compensation. (f) On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Financial Officer of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $17,260 has been recorded in deferred compensation. (g) On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to an officer of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $17,260 has been recorded in deferred compensation. (h) On May 17, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Executive Officer of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $21,206 has been recorded in deferred compensation. (i) On May 17, 2017, the Company issued 5,000,000 common shares with a fair value of $100,000 to a company controlled by the Chief Executive Officer of the Company for the purchase of intangible assets, which has been recorded as related party prepaid deposit as the assets have not been transferred to the Company. (j) On July 6, 2017, the Company issued 1,500,000 common shares at $0.08 per common share pursuant to private placement for proceeds of $120,000. (k) On June 12, 2017, the Company issued 2,000,000 common shares for consulting services over a twelve month period with a fair value of $40,000. (l) On June 13, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Operating Officer of the Company for compensation services for a period of twelve months from the date of issuance. As at August 31, 2017, deferred compensation of $23,361 has been recorded in deferred compensation. (m) On July 21, 2017, the Company issued 553,625 common shares with a fair value of $166,088 to settle outstanding promissory notes and accrued interest of $44,666 resulting in a loss on settlement of debt of $121,422, including 128,750 common shares with a fair value of $38,625 to settle outstanding promissory notes and accrued interest of $10,254 resulting in a loss on settlement of debt of $28,371 to a related party. |
9. Share Purchase Warrants
9. Share Purchase Warrants | 9 Months Ended |
Aug. 31, 2017 | |
Equity [Abstract] | |
Share Purchase Warrants | On May 15, 2017, the Company issued 486,783 share purchase warrants with an exercise price of $0.09 per share for a period of five years in conjunction with the issuance of convertible debt. The fair value of the share purchase warrants was $105,396, calculated using the binomial option pricing model assuming no expected dividends, volatility of 199%, expected life of 5 years, and a risk free rate of 1.05%. The fair value of the share purchase warrants were recorded in the consolidated statement of operations as interest expense. Number of warrants Weighted average exercise price $ Balance, November 30, 2016 – – Issued 486,783 0.09 Balance, August 31, 2017 486,783 0.09 |
10. Supplemental Disclosures
10. Supplemental Disclosures | 9 Months Ended |
Aug. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures | Nine months ended Nine months ended Non-cash investing and financing activities: Common shares issued for consulting services – related party 210,777 70,937 Common shares issued for consulting services 8,852 17,500 Common shares issued for deposit on intangible assets – related party 100,000 – Common shares issued for prepaid expenses 31,148 – Common shares issued for deferred compensation 309,223 – Common shares issued for settlement of related party debt 348,422 – Common shares issued to settle third party debt 34,412 – Common shares issued to settle outstanding payables – 25,000 Expenses paid by related parties that increased related party debt 4,500 8,157 Preferred shares issued to settle related party payables – 24,167 Preferred shares issued to settle related party debt – 48,453 Supplemental disclosures: Interest paid – – Income tax paid – – |
11. Subsequent Events
11. Subsequent Events | 9 Months Ended |
Aug. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | We have evaluated subsequent events through to the date of issuance of the condensed consolidated financial statements, and the following subsequent events: (a) Subsequent to August 31, 2017, the Company issued 1,500,000 common shares to a non-related party for consulting services. |
2. Summary Of Significant Acc17
2. Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. |
Principles of Consolidation | (b) Principles of Consolidation These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Cannabis Ventures Inc. (USA), Cannabis Ventures Inc. (Canada), from the date of their acquisition by the Company effective June 26, 2014 and CBD Life, Inc. from June 26, 2014 (date of acquisition) to December 30, 2016 (date of dissolution). All inter-company transactions and balances have been eliminated on consolidation. |
Interim Financial Statements | (c) Interim Financial Statements The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the nine months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ended November 30, 2017. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended November 30, 2016 included in our Form 10-K filed with the SEC. |
Use of Estimates | (d) 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 assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of inventory, valuation of derivative liability and share-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Inventory | (e) Inventory Inventory is comprised of Vape Mods purchased for resale, and is recorded at the lower of cost or net realizable value on a first-in first-out basis. The Company establishes inventory reserves for estimated obsolete or unsaleable inventory equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future market conditions. |
Equipment | (f) Equipment Equipment is comprised of machinery capable of DNA fragment capabilities, is recorded at cost and amortized on a straight-line basis over an estimated useful life of five years. |
Financial Instruments | (g) Financial Instruments The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, loans payable to related parties, loans payable, and amounts due to related parties. The recorded values of all these financial instruments approximate their current fair values because of the short term nature of these financial instruments. |
Revenue Recognition | (h) Revenue Recognition The Company earns revenue from the sale of Vape Mods, which are modified electronic cigarettes and vape pens. Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is assured. The Company is not exposed to any credit risks as amounts are prepaid prior to performance of services. |
Stock-Based Compensation | (i) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation |
Basic and Diluted Net Loss Per Share | (j) Basic and Diluted Net Loss per Share The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share |
Derivative Liability | (k) Derivative Liability From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations. |
Beneficial Conversion Features | (l) Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. |
Recently Issued Accounting Pronouncements | (m) Recent 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 accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
4. Equipment (Tables)
4. Equipment (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Cost $ Accumulated amortization $ August 31, 2017 $ November 30, 2016 $ Machinery 100,000 – 100,000 – |
6. Derivative Liability (Tables
6. Derivative Liability (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Assumptions used | Expected Volatility Risk-free Expected Dividend Expected (in years) May 15, 2017 convertible debenture: As at May 15, 2017 (date of issuance) 288% 1.02% 0% 0.5 As at May 31, 2017 (mark-to-market) 267% 1.08% 0% 0.5 As at August 31, 2017 (mark-to-market) 269% 1.01% 0% 0.5 |
9. Share Purchase Warrants (Tab
9. Share Purchase Warrants (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Equity [Abstract] | |
Summary of Warrants Granted | Number of warrants Weighted average exercise price $ Balance, November 30, 2016 – – Issued 486,783 0.09 Balance, August 31, 2017 486,783 0.09 |
10. Supplemental Disclosures (T
10. Supplemental Disclosures (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow supplemental disclosures | Nine months ended Nine months ended Non-cash investing and financing activities: Common shares issued for consulting services – related party 210,777 70,937 Common shares issued for consulting services 8,852 17,500 Common shares issued for deposit on intangible assets – related party 100,000 – Common shares issued for prepaid expenses 31,148 – Common shares issued for deferred compensation 309,223 – Common shares issued for settlement of related party debt 348,422 – Common shares issued to settle third party debt 34,412 – Common shares issued to settle outstanding payables – 25,000 Expenses paid by related parties that increased related party debt 4,500 8,157 Preferred shares issued to settle related party payables – 24,167 Preferred shares issued to settle related party debt – 48,453 Supplemental disclosures: Interest paid – – Income tax paid – – |
1. Organization And Nature Of22
1. Organization And Nature Of Operations (Details Narrative) - USD ($) | Aug. 31, 2017 | Nov. 30, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (2,336,375) | $ (1,236,713) |
2. Summary Of Significant Acc23
2. Summary Of Significant Accounting Policies (Details Narrative) - shares | 9 Months Ended | 12 Months Ended |
Aug. 31, 2017 | Nov. 30, 2016 | |
Accounting Policies [Abstract] | ||
Potentially dilutive shares | 486,873 | 0 |
3. Deferred Compensation (Detai
3. Deferred Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | Nov. 30, 2016 | |
Retirement Benefits [Abstract] | ||||
Stock issued for compensation, shares | 26,000,000 | |||
Stock issued for compensation, value | $ 520,000 | |||
Share-based compensation | $ 130,146 | 210,777 | $ 0 | |
Deferred compensation | $ 309,223 | $ 309,223 | $ 0 |
4. Equipment (Details)
4. Equipment (Details) - USD ($) | Aug. 31, 2017 | Nov. 30, 2016 |
Property, Plant and Equipment [Abstract] | ||
Equipment, gross | $ 100,000 | $ 0 |
Accumulated amortization | 0 | 0 |
Equipment, nete | $ 100,000 | $ 0 |
5. Convertible Debenture (Detai
5. Convertible Debenture (Details Narrative) - USD ($) | 9 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Nov. 30, 2016 | |
Proceeds from convertible debt | $ 250,000 | $ 0 | |
Unamortized discount | 186,149 | $ 0 | |
Convertible Debt [Member] | |||
Debt face amount | 280,000 | ||
Proceeds from convertible debt | 250,000 | ||
Payment of debt issuance costs | $ 30,000 | ||
Debt stated interest percent | 10.00% | ||
Debt maturity date | Nov. 30, 2017 | ||
Convertible debenture carrying amount | $ 93,851 | ||
Unamortized discount | 186,149 | ||
Unamortized discount on convertible note | 172,430 | ||
Unamortized discount on debt issuance costs | $ 13,719 |
6. Derivative Liability (Detail
6. Derivative Liability (Details) | 5 Months Ended | 6 Months Ended | 9 Months Ended |
May 15, 2017 | May 31, 2017 | Aug. 31, 2017 | |
Date of Issuance [Member] | |||
Expected volatility | 288.00% | ||
Risk-free interest rate | 1.02% | ||
Expected dividend yield | 0.00% | ||
Expected life (in years) | 6 months | ||
Mark-to-Market [Member] | |||
Expected volatility | 267.00% | 269.00% | |
Risk-free interest rate | 1.08% | 1.01% | |
Expected dividend yield | 0.00% | 0.00% | |
Expected life (in years) | 6 months | 6 months |
6. Derivative Liability (Deta28
6. Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | May 15, 2017 | Nov. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||
Fair value of derivative | $ 305,957 | |||||
Loss on change in fair value of derivative | $ (197,308) | $ 0 | $ (207,340) | $ 0 | ||
Derivative liabilities | $ 513,297 | $ 513,297 | $ 0 |
7. Related Party Transations (D
7. Related Party Transations (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | Nov. 30, 2016 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 33,367 | $ 33,367 | $ 249,835 | ||
Stock issued for compensation, shares | 26,000,000 | ||||
Stock issued for compensation, value | $ 520,000 | ||||
Share-based compensation | 130,146 | 210,777 | $ 0 | ||
Deferred compensation | 309,223 | $ 309,223 | 0 | ||
CEG, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued for acquisition, shares | 5,000,000 | ||||
Stock issued for acquisition, value | $ 100,000 | ||||
Related party (a) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 33,367 | $ 33,367 | 249,835 | ||
Stock issued for settlement of debt, shares issued | 1,387,979 | ||||
Stock issued for settlement of debt, debt amount settled | $ 249,835 | ||||
Related party (b) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 18,500 | 18,500 | 10,000 | ||
Related party (c) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 2,064 | 2,064 | 2,064 | ||
Accrued interest | 66 | 66 | 15 | ||
Related party (d) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | $ 0 | 10,000 | ||
Stock issued for settlement of debt, shares issued | 128,750 | ||||
Stock issued for settlement of debt, debt amount settled | $ 38,625 | ||||
Related party (e) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 15,000 | $ 15,000 | 79,333 | ||
Stock issued for settlement of debt, shares issued | 490,742 | ||||
Stock issued for settlement of debt, debt amount settled | $ 88,333 | ||||
Consulting expense | 58,911 | $ 9,000 | $ 115,432 | $ 27,000 | |
Related party (g) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued for settlement of debt, shares issued | 490,742 | ||||
Stock issued for settlement of debt, debt amount settled | $ 88,333 | ||||
Officers and Directors [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued for compensation, shares | 26,000,000 | ||||
Stock issued for compensation, value | $ 520,000 | ||||
Chief Executive Officer [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock issued for compensation, shares | 1,500,000 | ||||
Stock issued for compensation, value | $ 30,000 | ||||
Related party (h) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 20,000 | $ 20,000 | $ 0 |
8. Common Shares (Details Narra
8. Common Shares (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | |
Reverse stock split | 100 old shares for 1 new share | |||
Loss on settlement of debt | $ (93,050) | $ 0 | $ (93,050) | $ 0 |
Stock issued for compensation, shares | 26,000,000 | |||
Stock issued for compensation, value | $ 520,000 | |||
Proceeds from stock issuance | $ 108,000 | $ 0 | ||
Settlement of Debt [Member] | ||||
Stock issued for settlement of debt, shares issued | 553,625 | |||
Stock issued for settlement of debt, share value | $ 166,088 | |||
Stock issued for settlement of debt, interest amount settled | 44,666 | |||
Loss on settlement of debt | $ (121,422) | |||
Private Placement [Member] | ||||
Stock issued new, shares | 1,500,000 | |||
Proceeds from stock issuance | $ 120,000 | |||
Consulting Services [Member] | ||||
Stock issued for services, shares | 2,000,000 | |||
Stock issued for services, value | $ 40,000 | |||
Chief Financial Officer [Member] | ||||
Stock issued for compensation, shares | 1,500,000 | |||
Stock issued for compensation, value | $ 30,000 | |||
Deferred compensation | 17,260 | $ 17,260 | ||
Officer [Member] | ||||
Stock issued for compensation, shares | 1,500,000 | |||
Stock issued for compensation, value | $ 30,000 | |||
Deferred compensation | 17,260 | $ 17,260 | ||
Chief Executive Officer [Member] | ||||
Stock issued for compensation, shares | 1,500,000 | |||
Stock issued for compensation, value | $ 30,000 | |||
Deferred compensation | 21,206 | $ 21,206 | ||
Company Controlled by CEO [Member] | ||||
Stock issued for acquisition, shares | 5,000,000 | |||
Stock issued for acquisition, value | $ 100,000 | |||
Chief Operating Officer [Member] | ||||
Stock issued for compensation, shares | 1,500,000 | |||
Stock issued for compensation, value | $ 30,000 | |||
Deferred compensation | 23,361 | $ 23,361 | ||
Related Party [Member] | Settlement of Debt [Member] | ||||
Stock issued for settlement of debt, shares issued | 128,750 | |||
Stock issued for settlement of debt, share value | $ 38,625 | |||
Stock issued for settlement of debt, interest amount settled | 10,254 | |||
Loss on settlement of debt | $ (28,371) | |||
Director [Member] | ||||
Stock issued for compensation, shares | 10,000,000 | |||
Stock issued for compensation, value | $ 200,000 | |||
Deferred compensation | $ 115,068 | $ 115,068 | ||
Director [Member] | ||||
Stock issued for settlement of debt, shares issued | 490,742 | |||
Stock issued for settlement of debt, share value | $ 176,667 | |||
Stock issued for settlement of debt, debt amount settled | 88,333 | |||
Loss on settlement of debt | $ (88,334) | |||
Company Controlled by a Director [Member] | ||||
Stock issued for settlement of debt, shares issued | 1,387,970 | |||
Stock issued for settlement of debt, debt amount settled | $ 249,835 |
9. Share Purchase Warrants (Det
9. Share Purchase Warrants (Details) - Warrants [Member] | 9 Months Ended |
Aug. 31, 2017$ / sharesshares | |
Warants outstanding, beginning balance | shares | 0 |
Warrants issued | shares | 486,783 |
Warants outstanding, ending balance | shares | 486,783 |
Weighted average exercise price, beginning balance | $ / shares | |
Weighted average exercise price, warrants issued | $ / shares | .09 |
Weighted average exercise price, ending balance | $ / shares | $ 0.09 |
9. Share Purchase Warrants (D32
9. Share Purchase Warrants (Details Narrative) | Aug. 31, 2017USD ($) |
Warrants [Member] | |
Fair value of warrants issued | $ 105,396 |
10. Supplemental Disclosures (D
10. Supplemental Disclosures (Details) - USD ($) | 9 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Non-cash investing and financing activities: | ||
Common shares issued for consulting services – related party | $ 210,777 | $ 70,937 |
Common shares issued for consulting services | 8,852 | 17,500 |
Common shares issued for deposit on intangible assets – related party | 100,000 | 0 |
Common shares issued for prepaid expenses | 31,148 | 0 |
Common shares issued for deferred compensation | 309,223 | 0 |
Common shares issued for settlement of related party debt | 348,422 | 0 |
Common shares issued to settle third party debt | 34,412 | 0 |
Common shares issued to settle outstanding payables | 0 | 25,000 |
Expenses paid by related parties that increased related party debt | 4,500 | 8,157 |
Preferred shares issued to settle related party payables | 0 | 24,167 |
Preferred shares issued to settle related party debt | 0 | 48,453 |
Supplemental disclosures: | ||
Interest paid | 0 | 0 |
Income tax paid | $ 0 | $ 0 |