| Nature of Business and Significant Accounting Policies | Note 1 – Nature of Business and Significant
Accounting Policies Nature of Business One World Pharma, Inc. (formerly Punto Group,
Corp.) was incorporated in Nevada on September 2, 2014. On February 21, 2019, One World Pharma, Inc. (“One World Pharma,”
the “Company,” “we,” “our” or “us”) entered into an Agreement and Plan of Merger
with OWP Merger Subsidiary, Inc., our wholly-owned subsidiary, and OWP Ventures, Inc. (“OWP Ventures”), which is the
parent company of One World Pharma SAS, a Colombian company (“OWP Colombia”). Pursuant to the Merger Agreement, we
acquired OWP Ventures (and indirectly, OWP Colombia) by the merger of OWP Merger Subsidiary with and into OWP Ventures, with OWP
Ventures being the surviving entity as our wholly-owned subsidiary (the “Merger”). As a result of the Merger (a) holders
of the outstanding capital stock of OWP Ventures received an aggregate of 39,475,398 shares of our common stock; (b) options to
purchase 825,000 shares of common stock of OWP Ventures at an exercise price of $0.50 automatically converted into options to purchase
825,000 shares of our common stock at an exercise price of $0.50; (c) the outstanding principal and interest under a $300,000 convertible
note issued by OWP Ventures became convertible, at the option of the holder, into shares of our common stock at a conversion price
equal to the lesser of $0.424 per share or 80% of the price we sell our common stock in a future “Qualified Offering”;
(d) 875,000 shares of our common stock owned by OWP Ventures prior to the Merger were cancelled; and (e) OWP Ventures’ chief
operating officer became our chief operating officer and two of OWP Ventures’ directors became members of our board of directors.
The Company’s headquarters are located in Las Vegas, Nevada, and all of its customers are expected to be outside of the United
States. On January 10, 2019, the Company changed its name from Punto Group, Corp. to One World Pharma, Inc. OWP Ventures is a holding company formed in
Delaware on March 27, 2018 to enter and support the cannabis industry, and on May 30, 2018, it acquired OWP Colombia. OWP Colombia
is a licensed cannabis cultivation, production and distribution (export) company located in Popayán, Colombia (nearest major
city is Cali). We plan to be the worldwide industry leader in the production and manufacturing of raw cannabis and hemp plant ingredients
for both medical and industrial uses. We have received licenses to cultivate, produce and distribute the raw ingredients of the
cannabis and hemp plant for medicinal, scientific and industrial purposes. Specifically, we are one of the only companies in Colombia
to receive seed, cultivation, extraction and export licenses from the Colombian government. Currently, we own approximately 30
acres and have a covered greenhouse built specifically to cultivate high-grade cannabis and hemp, with 221 acres available for
expansion under an exclusive contract. We planted our first crop of cannabis in 2018, which we began harvesting in the first quarter
of 2019. To date, we have not generated any revenues from our activities. The Merger was accounted for as a reverse merger
(recapitalization) with OWP Ventures deemed to be the accounting acquirer. Accordingly, the financial statements included in this
Quarterly Report on Form 10-Q reflect the historical operations of OWP Ventures and its wholly-owned subsidiary OWP SAS prior to
the Merger, and that of the combined company following the Merger. The historical financial information for One World Pharma, Inc.
(formerly Punto Group Corp.) prior to the Merger has been omitted. Basis of Presentation The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and
the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated. The unaudited condensed consolidated financial
statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion
of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included.
Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes,
are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2018, and Current Report on Form 8-K with respect to the Merger filed with the SEC
on February 25, 2019 and amended on April 30, 2019. The interim Condensed Consolidated Financial Statements should be read in conjunction
with that Annual Report on Form 10-K and Current Report on Form 8-K. Results for the interim periods presented are not necessarily
indicative of the results that might be expected for the entire fiscal year. Principles of Consolidation The accompanying consolidated financial statements
include the accounts of the following entities, all of which were under common control and ownership at March 31, 2019:
State of
Name of Entity Incorporation Relationship
One World Pharma, Inc. (1) Nevada Parent
OWP Ventures, Inc. (2) Delaware Subsidiary
One World Pharma S.A.S. (3) Colombia Subsidiary (1) (2) (3) The consolidated financial statements herein
contain the operations of the wholly-owned subsidiaries listed above. The Company’s headquarters are located in Las Vegas,
Nevada and substantially all of its production efforts are within Popayán, Colombia. Foreign Currency Translation The functional currency of the Company is Columbian
Peso (COP). The Company has maintained its financial statements using the functional currency, and translated those financial statements
to the US Dollar (USD) throughout this report. Monetary assets and liabilities denominated in currencies other than the functional
currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated
in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at
the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination
of net income (loss) for the respective periods. Comprehensive Income The Company has adopted ASC 220, Reporting
Comprehensive Income, which establishes standards for reporting and displaying comprehensive income, its components, and accumulated
balances in a full-set of general-purpose financial statements. Accumulated other comprehensive income represents the accumulated
balance of foreign currency translation adjustments. Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and the 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. Actual results could
differ from those estimates. Segment Reporting ASC Topic 280, “Segment Reporting,”
requires use of the “management approach” model for segment reporting. The management approach model is based on the
way a company’s management organizes segments within the company for making operating decisions and assessing performance.
The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations. Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting
Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures
about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of
this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts
of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management
to approximate fair value primarily due to the short term nature of the instruments. Cash and Cash Equivalents Cash and cash equivalents include cash on hand,
cash on deposit with various financial institutions in Columbia, and all highly-liquid investments with original maturities of
three months or less at the time of purchase. We have not held any cash equivalents to date. Cash in Excess of FDIC Insured Limits The Company maintains its cash in bank deposit
accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation
(FDIC) up to $250,000, under current regulations. The Company had $1,206,762 in excess of FDIC insured limits at March 31, 2019,
and has not experienced any losses in such accounts. Revenue Recognition The Company has adopted ASC 606 — Revenue
from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements
and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations
in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the
contract; and (5) recognize revenue when each performance obligation is satisfied. The Company recognizes revenue when products
are fully delivered, or services have been provided and collection is reasonably assured. We have not yet generated any revenue. Inventory Inventories are stated at the lower of cost
or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is determined
based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors
in evaluating net realizable value. Our cannabis products consist of cannabis flower grown in-house, along with produced extracts. Stock-Based Compensation The Company accounts for equity instruments
issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees
pursuant to ASC 505-50 (ASC 505-50). All transactions in which goods or services are the consideration received for the issuance
of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument
issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier
of the date on which the counterparty’s performance is complete or the date at which a commitment for performance by the
counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. Basic and Diluted Loss Per Share The basic net loss per common share is computed
by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed
by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding
plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were
not included in the calculation of diluted net loss per common share. Adoption of New Accounting Standards and
Recently Issued Accounting Pronouncements In June 2018, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic
718): Improvements to Nonemployee Share-Based Payment Accounting In February 2018, the FASB issued ASU No. 2018-02,
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In May 2017, the FASB issued ASU 2017-09, Compensation-Stock
Compensation (Topic 718): Scope of Modification Accounting In February 2016, the FASB established Topic
842, Leases Targeted Improvements Codification Improvements to Topic 842 Land Easement
Practical Expedient for Transition to Topic 842 The new standard became effective January 1,
2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of
initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative
period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition
requirements for existing leases also apply to leases entered into between the date of initial application and the effective date.
The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard
for the comparative periods. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition
approach as of the effective date of the initial application. Consequently, financial information will not be updated and the disclosures
required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a
number of optional practical expedients in transition. The Company elected the “package of practical expedients”, which
permits entities not to reassess under the new lease standard prior conclusions about lease identification, lease classification
and initial direct costs. The Company does not expect to elect the use-of-hindsight or the practical expedient pertaining to land
easements. The most significant effects of the adoption
of the new standard relate to the recognition of new ROU assets and lease labilities on our balance sheet for office operating
leases and providing significant new disclosures about our leasing activities. The new standard also provides practical expedients
for an entity’s ongoing accounting. The Company has also elected the short-term leases recognition exemption for all leases
that qualify. This means that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing
ROU assets and lease liabilities, for existing short-term leases of those assets in transition. The Company also currently expects
to elect the practical expedient to not separate lease and non-lease components for its leases. The new standard did not have a
material impact. In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers There are no other recently issued accounting
pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results
of operations, or cash flows. |
