Document And Entity Information
Document And Entity Information | 9 Months Ended |
Sep. 30, 2016shares | |
Document Information [Line Items] | |
Entity Registrant Name | CEN BIOTECH INC |
Entity Central Index Key | 1,653,821 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Entity Common Stock, Shares Outstanding (in shares) | 7,000,000 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Affiliated Entity [Member] | ||
CURRENT LIABILITIES | ||
Accrued Interest | $ 178,160 | $ 250,252 |
Loans Payable | 847,318 | |
President [Member] | ||
LONG-TERM DEBT | ||
Loans Payable – convertible notes | 1,388,121 | |
Cash | 31,573 | 3,016 |
Total Current Assets | 31,573 | 3,016 |
Furniture and equipment in use | 17,668 | |
Depreciation | 884 | |
Net furniture and equipment in use | 16,784 | |
Land | 1,064,651 | |
Construction In Progress | 1,096,816 | |
Leasehold Improvements in Progress | 6,105,711 | 6,130,644 |
Loans to CEN Ukraine | 310,188 | |
Lighting Patent | 2,364,133 | |
Total Assets | 8,828,389 | 8,295,127 |
Accounts Payable | 169,700 | 164,503 |
Accounts Payable – related parties | 62,994 | 75,000 |
Accrued Interest | 2,230,424 | 1,228,023 |
Accrued Expenses | 728,234 | 593,719 |
Loans Payable – related parties | 847,318 | 1,313,680 |
Loans Payable | 9,969,179 | 9,865,615 |
Total Current Liabilities | 14,186,009 | 13,490,792 |
Loans Payable – related party | 612,000 | |
Loans Payable – convertible notes | 850,002 | |
Total Liabilities | 16,424,132 | 14,102,792 |
STOCKHOLDERS’ DEFICIT | ||
Preferred Stock; unlimited number of shares authorized; 100,000 issued and outstanding | 10 | 10 |
Common Stock; unlimited number of shares authorized; 7,000,000 issued and outstanding | 82 | 82 |
Common Stock – Issuance related to patent acquisition; 3,125,000 to be issued | 3 | |
Accumulated Deficit | (7,595,838) | (5,807,757) |
Total Stockholders’ Deficit | (7,595,743) | (5,807,665) |
Total Liabilities and Stockholders’ Deficit | $ 8,828,389 | $ 8,295,127 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - shares | Sep. 30, 2016 | Dec. 31, 2015 |
Preferred stock, shares issued (in shares) | 100,000 | 100,000 |
Preferred stock, shares outstanding (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 7,000,000 | 7,000,000 |
Common stock, shares outstanding (in shares) | 7,000,000 | 7,000,000 |
Common stock, shares to be issued (in shares) | 3,125,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Affiliated Entity [Member] | ||||
Operating expenses | ||||
Salary and Consulting Fees | $ 24,000 | $ 24,000 | ||
General and Administrative | ||||
Sale of equipment | 2,321 | |||
Salary and Consulting Fees | 20,042 | 95,239 | 123,411 | |
General and Administrative | 147,873 | 180,402 | 431,902 | 475,800 |
Foreign Exchange Loss (Gain) | (1,480) | 54,123 | (1,679) | |
Total Expense | 170,393 | 200,444 | 605,264 | 597,532 |
Loss from operations | (170,393) | (200,444) | (602,943) | (597,532) |
Other Expenses | ||||
Interest | 353,727 | 313,701 | 1,020,051 | 922,271 |
Interest – related parties | 59,942 | 42,283 | 165,088 | 125,283 |
Total other expenses | 413,669 | 355,984 | 1,185,139 | 1,047,554 |
Net Loss | $ (584,062) | $ (556,428) | $ (1,788,081) | $ (1,645,086) |
Net Loss Per Share: Basic And Diluted (in dollars per share) | $ (0.08) | $ (0.08) | $ (0.26) | $ (0.24) |
Weighted Average Number of Shares Outstanding: Basic And Diluted (in shares) | 7,000,000 | 7,000,000 | 7,000,000 | 7,000,000 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,788,081) | $ (1,645,086) |
Adjustments to reconcile net gain (loss) to net cash used in operating activities | ||
Depreciation | 884 | |
Changes in | ||
Accounts Payable and Accrued Expenses | 232,912 | 61,113 |
Accrued Interest | 1,185,138 | 1,177,894 |
Cash Flows Used In Operating Activities | (369,147) | (406,079) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Due from CEN Ukraine | (310,188) | |
Leasehold Improvements In Progress | 7,265 | (47,673) |
Total Cash Flows Used in Investing Activities | (302,923) | (47,673) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds From Loans | 700,627 | 413,117 |
Total Cash Flows Provided by Financing Activities | 700,627 | 413,117 |
NET CHANGE IN CASH | 28,557 | (40,635) |
Cash, Beginning of Period | 3,016 | 44,433 |
Cash, End of Period | 31,573 | 3,798 |
NON-CASH TRANSACTIONS | ||
Interest Paid | ||
Income Taxes Paid | ||
Accrued Expense reclassified to Notes Payable | 105,206 | |
Accrued Interest reclassified to Notes Payable | 254,829 | |
Construction in Progress exchanged for Patent | 1,096,816 | |
Land exchanged for Patent | 1,064,651 | |
Loans Payable exchanged for Patent | 202,663 | |
Stock Issuable in exchange for Patent | 3 | |
Patent Acquired with above consideration | $ 2,364,133 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | NOTE 1--BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 and notes thereto. Organization CEN Biotech, Inc. (“CEN” or the “Company”) was incorporated in Canada on August 4, 2013 as a subsidiary of Creative Edge Nutrition, Inc. (“Creative”), a public company incorporated in Nevada. Creative distributed the shares of CEN common stock on a pro rata basis to the Creative shareholders on February 29, 2016 at which time CEN became an independent public company. The financial statements also include the accounts of CEN Holdings, Inc. a Michigan corporation incorporated on May 13, 2016. Intercompany account balances and transactions are eliminated in consolidation. CEN is an early stage Canadian biopharmaceutical company founded to integrate agronomical and pharmaceutical principles for the purposes of growing, selling, processing and delivering pharmaceutical-grade medical marijuana in its pure and extracted form to patients in accordance with Health Canada’s newly-formed Marihuana for Medical Purposes Regulations (MMPR). CEN is actively pursuing business opportunities globally with the intent to grow, sell, process and deliver pharmaceutical grade medical marijuana in various drug delivery mechanisms within nations where it is legal. Basis of Accounting The Company’s financial statements are prepared using the accrual method of accounting using accounting principles generally accepted in the United States. The Company has elected a calendar year end. Use of Estimates and Assumptions Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260. Loss per Share Net loss per common share is computed pursuant to ASC 260-10-45. Basic and diluted net income per common share has been calculated by dividing the net income for the period by the basic and diluted weighted average number of common shares outstanding assuming that the Company incorporated as of the beginning of the first period presented. There were no dilutive shares outstanding as of September 30, 2016 or 2015. Subsequent Events The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them with the SEC on the EDGAR system. Recently Issued 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. |
Note 2 - Going Concern
Note 2 - Going Concern | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Substantial Doubt about Going Concern [Text Block] | NOTE 2 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern . As reflected in the accompanying financial statements, the Company had an accumulated deficit of $7,595,838 at September 30, 2016, and had no committed source of debt or equity financing. While the Company is attempting to obtain a license from Health Canada and generate revenues, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management believes that the actions presently being taken to obtain the license from Health Canada has a realistic chance of succeeding. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Note 3 - Contingencies and Unce
Note 3 - Contingencies and Uncertainties | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 3 – CONTINGENCIES AND UNCERTAINTIES On March 11, 2015, the Company’s application for a license to produce marijuana for medical purposes was formally rejected by Health Canada. The Company filed an application for judicial review in Canadian federal court on April 10, 2015 in order to obtain a reversal of this decision. The outcome of this legal proceeding cannot be predicted. The file is currently making its way through the legal process in Federal Court in Canada. Most recently, the license sought by the company under the MMPR has been declared to be of no force and effect by the Federal Court (but that declaration is put on hold for 6 months to allow the government to deal with new legislation). Based on these legal findings, the company has decided to withdraw its application for Judicial Review. |
Note 4 - Notes Payable
Note 4 - Notes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE 4 – NOTES PAYABLE The following short-term loans are outstanding: ● Global Holdings International, LLC This loan is secured by the Company’s equipment. ● Jeff Thomas ● Jeff Thomas ● Bill Chaaban (President of the Company) ● Bill Chaaban (President of the Company) ● Bill Chaaban (President of the Company) ● Bill Chaaban (President of the Company) There are 2 year convertible notes with a principal balance of $1,388,121 due to Mr. Chaaban. It bears interest at an annual rate of 12% and is convertible to 871,576 common shares. There are also multiple long-term convertible notes with a principle balance of $850,002. Two notes bear interest at 12% and all others bear interest at an annual rate of 5% and have conversion rights totaling up to 542,350 common shares. SUMMARY TABLE OF NOTES PAYABLE As of September 30, 2016 and 2015 SUMMARY OF NOTES PAYABLE 2016 2015 Loans Payable 9,969,179 9,881,855 Loans Payable – related parties 847,318 1,440,482 Long-Term Loans 850,002 - Long-Term Loans – related parties 1,388,121 612,000 Total of All Notes Payable $ 13,054,620 $ 11,934,337 |
Note 5 - Subsequent Events
Note 5 - Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | NOTE 5 - SUBSEQUENT EVENTS In accordance with ASC 855, Subsequent Events |
Note 6 - Related Party Transact
Note 6 - Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | NOTE 6- RELATED PARTY TRANSACTIONS There are loans of $310,188 to CEN Biotech Ukraine. CEN Biotech Ukraine was founded by Bill Chaaban. Bill Chaaban currently owns 51% OF CEN Biotech Ukraine. CEN Biotech Ukraine was founded to seek agricultural and pharmaceutical opportunities in Ukraine. Bill Chaaban has personally funded CEN Biotech Ukraine. |
Note 7 - Patent Acquisition
Note 7 - Patent Acquisition | 9 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | NOTE 7 – PATENT ACQUISITION On September 12, 2016, the Company completed the transaction to acquire assets, including patented Cold LED Lighting Technology, from Tesla Digital, Inc. (A Canadian Corporation) and Stevan (Steve) Pokrajac. . The material consideration given by Company includes: (a) 3,125,000 shares of Cen Biotech stock. The issuance is to be completed, at the Company discretion, within no more than 180 from the closing date. (b) The transfer of real properties located at 135 North Rear Road having a book value of $2,161,467 USD and 1517-1525 Ridge Road having a purchase cost (including other related disbursements) to the Company of approximately $182,488. (c) Non-material consideration includes employment with operating company formed to realize the potential of the acquired technology. The company plans to explore manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired other than the patent included old machinery and raw materials. The company has assigned no value to these since their value was not relevant to or calculated in the company’s offer for acquisition. Therefore no impairment will be necessary if these assets are disposed of. |
Note 4 - Notes Payable (Tables)
Note 4 - Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | SUMMARY OF NOTES PAYABLE 2016 2015 Loans Payable 9,969,179 9,881,855 Loans Payable – related parties 847,318 1,440,482 Long-Term Loans 850,002 - Long-Term Loans – related parties 1,388,121 612,000 Total of All Notes Payable $ 13,054,620 $ 11,934,337 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation (Details Textual) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details Textual) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Retained Earnings (Accumulated Deficit) | $ (7,595,838) | $ (5,807,757) |
Note 4 - Notes Payable (Details
Note 4 - Notes Payable (Details Textual) | 9 Months Ended |
Sep. 30, 2016USD ($)shares | |
Notes Payable to Banks [Member] | Global Holdings International [Member] | |
Short-term Debt | $ 9,675,000 |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
First 10% Note Payable to Bill Chaaban [Member] | President [Member] | |
Short-term Debt | $ 113,348 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Second 10% Note Payable to Bill Chaaban [Member] | President [Member] | |
Short-term Debt | $ 93,762 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Third 10% Note Payable to Bill Chaaban [Member] | President [Member] | |
Short-term Debt | $ 16,805 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Fourth 10% Note Payable to Bill Chaaban [Member] | President [Member] | |
Short-term Debt | $ 23,029 |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Unsecured Debt [Member] | Jeff Thomas [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Long-term Debt | $ 595,000 |
Unsecure Debt 2 [Member] | Jeff Thomas [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Long-term Debt | $ 6,500 |
Loans Payable [Member] | President [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
Long-term Debt | $ 1,388,121 |
Debt Instrument, Term | 2 years |
Convertible Debt [Member] | President [Member] | Common Stock [Member] | |
Debt Instrument, Convertible, Number of Equity Instruments | 871,576 |
Convertible Notes One and Two [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 12.00% |
Convertible Note, All Others [Member] | |
Debt Instrument, Interest Rate, Stated Percentage | 5.00% |
Notes Payable, Noncurrent | $ 850,002 |
Debt Conversion Rights, Common Stock, Shares | shares | 542,350 |
Note 4 - Notes Payable - Summar
Note 4 - Notes Payable - Summary of Notes Payable (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Affiliated Entity [Member] | |||
Loans Payable | $ 847,318 | $ 1,440,482 | |
Long-Term Loans | 1,388,121 | 612,000 | |
Loans Payable | 9,969,179 | $ 9,865,615 | 9,881,855 |
Long-Term Loans | 850,002 | ||
Total of All Notes Payable | $ 13,054,620 | $ 11,934,337 |
Note 6 - Related Party Transa18
Note 6 - Related Party Transactions (Details Textual) - CEN Biotech Ukraine [Member] | Sep. 30, 2016USD ($) |
President [Member] | |
Equity Method Investment, Ownership Percentage | 51.00% |
Due from Related Parties | $ 310,188 |
Note 7 - Patent Acquisition (De
Note 7 - Patent Acquisition (Details Textual) - Acquisition of Assets from Tesla Digital, Inc. and Stevan Pokrajac[Member] | Sep. 12, 2016USD ($)shares |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 3,125,000 |
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Maximum Period from Closing Date to Issue Shares | 180 days |
Noncash or Part Noncash Acquisition, Noncash Consideration, Carrying Value of Properties to be Transferred | $ 2,161,467 |
Noncash or Part Noncash Acquisition, Noncash Consideration, Original Cost of Property Transferred | $ 182,488 |