| NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature
of Operations The
Greater Cannabis Company, Inc. (the “Company”) was formed in March 2014 as a limited liability company under the name, The
Greater Cannabis Company, LLC. The Company was a wholly owned subsidiary of Sylios Corp (“Sylios”) until March 10, 2017. On
July 31, 2018, the Company acquired 100% 9,411,998 Each share of Series A Convertible Preferred Stock is convertible into 50 94% Green
C was incorporated on December 21, 2017 under the laws of the Province of Ontario Canada with its principal place of business in North
York, Ontario. Green
C was the owner of an exclusive, worldwide license for an eluting transmucosal patch platform (“ETP”) for non-invasive drug
delivery in the cannabis field as further described in the exclusive license agreement dated June 21, 2018 with Pharmedica Ltd. (see
Note J). The
Company’s business plan is to (i) commercialize its ETP technology and (ii) concentrate on cannabis related investment and development
opportunities through direct equity investments, joint ventures, licensing agreements or acquisitions. Principles
of Consolidation The
consolidated financial statements include the accounts of The Greater Cannabis Company, Inc., and its wholly owned subsidiaries Green
C Corporation and Biocanrx Inc. THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Interim
Financial Statements The
interim financial statements as of June 30, 2021 are unaudited and have been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. These statements reflect all normal and recurring adjustments that, in the opinion of management,
are necessary for a fair presentation of the information contained herein. Operating results for the six and three months ended June
30, 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. Certain
information and finance disclosures normally included in financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations.
These unaudited financial statements should be read in conjunction with our audited financial statements and notes for the year ended
December 31, 2020 as included in our report on Form 10-K. Cash
and Cash Equivalents Investments
having an original maturity of 90 days or less that are readily convertible into cash are considered to be cash equivalents. For the
periods presented, the Company had no cash equivalents. Income
Taxes In
accordance with Accounting Standards Codification (ASC) 740 - Income Taxes, the provision for income taxes is computed using the asset
and liability method. The asset and liability method measures deferred income taxes by applying enacted statutory rates in effect at
the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial
statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance
is provided when it is more likely than not that a deferred tax asset will not be realized. We
expect to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority
would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to
be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax
positions not meeting the threshold, no financial statement benefit is recognized. As of June 30, 2021, we had no uncertain tax
positions. We recognize interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. We
currently have no foreign federal or state tax examinations nor have we had any foreign federal or state examinations since our inception.
To date, we have not incurred any interest or tax penalties. Use
of Estimates The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported amounts of revenue and expenses during the reporting periods.
Actual results could differ from those estimates. Financial
Instruments and Fair Value of Financial Instruments We
follow ASC Topic 820, Fair Value Measurements and Disclosures ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC Topic 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Level
1: Observable
inputs such as quoted market prices in active markets for identical assets or liabilities
Level
2: Observable
market-based inputs or unobservable inputs that are corroborated by market data
Level
3: Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The
carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial
assets and liabilities measured using level three inputs on a recurring basis are those that are adjusted to fair value each time
a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to
fair value when a significant event occurs. Except for derivative liabilities, we had no financial assets or liabilities carried and
measured on a recurring or nonrecurring basis during the reporting periods. (see Note-G) Derivative
Liabilities We
evaluate convertible notes payable, stock options, stock warrants or other contracts to determine if those contracts or embedded components
of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40, Derivative
Instruments and Hedging: Contracts in Entity’s Own Equity The
result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and
is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability,
the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of
a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.
Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified
to a liability account at the fair value of the instrument on the reclassification date. Long-lived
Assets Long-lived
assets such as property and equipment and intangible assets are periodically reviewed for impairment. We test for impairment losses on
long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not
be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the
future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve
management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from
those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined
through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals,
as considered necessary. THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Equity
Instruments Issued to Non-Employees for Acquiring Goods or Services The Company in the current period has updated for ASU 2018-07 as it
was effective in 2019. The Company is evaluating the impact of the new ASU, however, it is not expected to have a material impact on
the financial statements. Related
Parties A
party is considered to be related to us if the party directly or indirectly or through one or more intermediaries, controls, is controlled
by, or is under common control with us. Related parties also include our principal owners, our management, members of the immediate families
of our principal owners and our management and other parties with which we may deal if one party controls or can significantly influence
the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing
its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties,
or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one
or more of the transacting parties might be prevented from fully pursuing its own separate interests, is also a related party. THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue
recognition: The
Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”)
on January 1, 2018. In accordance with ASC 606, revenue is recognized when promised goods or services are transferred to customers in
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, in accordance
with the following five-step process:
● Identify
the contract(s) with a customer
● Identify
the performance obligations
● Determine
the transaction price
● Allocate
the transaction price
● Recognize
revenue when the performance obligations are met For
the periods presented prior to the adoption of ASC 606, revenues from long-term construction contracts were recognized in accordance
with ASC Topic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” The
Company recognizes construction contract revenue over time using the percentage-of-completion method, based primarily on contract cost
incurred to date compared to total estimated contract cost. Cost of revenue includes an allocation of depreciation, amortization and
general overhead cost. Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined. The
Company generally provides limited warranties for work performed under its construction contracts with periods typically extending for
a limited duration following substantial completion of the Company’s work on a project. The
Company classifies construction-related receivables and payables that may be settled in periods exceeding one year from the balance sheet
date, if any, as current assets and liabilities consistent with the length of time of its project operating cycle. For example:
● Contract
assets represent costs and estimated earnings in excess of billings represent the excess of contract costs and profits (or contract
revenue) over the amount of contract billings to date and are classified as a current asset.
● Contract
liabilities represent billings in excess of costs and estimated earnings represent the excess of contract billings to date over the
amount of contract costs and profits (or contract revenue) recognized to date and are classified as a current liability. Contract
liabilities result when either: 1) costs are incurred related to certain claims and unapproved change orders, or 2) the appropriate contract
revenue amount has been recognized in accordance with the percentage-of-completion accounting method, but a portion of the revenue recorded
cannot be billed currently due to the billing terms defined in the contract. Claims occur when there is a dispute regarding both a change
in the scope of work and the price associated with that change. Unapproved change orders occur when there is a dispute regarding only
the price associated with a change in scope of work. For both claims and unapproved change orders, the Company recognizes revenue, but
not profit, when it is determined that recovery of incurred cost is probable and the amounts can be reliably estimated. Advertising
Costs Advertising
costs are expensed as incurred. For the periods presented, we had no Loss
per Share We
compute net loss per share in accordance with FASB ASC 260. The ASC specifies the computation, presentation and disclosure requirements
for loss per share for entities with publicly held common stock. Basic
loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net
loss per common share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock
options, warrants and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net loss per
share are excluded from the calculation. For the periods presented, the Company excluded 470,599,900 see NOTE F -
NOTES PAYABLE TO THIRD PARTIES see NOTE H
- CAPITAL STOCK AND WARRANTS Recently
Enacted Accounting Standards In
May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts
with Customers, which supersedes nearly all prior revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is
to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which
an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle
and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under prior U.S.
GAAP. As amended by the FASB in July 2015, the standard became effective for annual periods beginning after December 15, 2017, and interim
periods therein. ASU 2014-09 has had no impact on our Financial statements for the periods presented. THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE
A – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In
March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations,
to clarify the implementation guidance on principal versus agent considerations and address how an entity should assess whether it is
the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these
amendments are the same as the effective date and transition requirements of ASU 2014-09 (discussed above). ASU 2016-08 has had no impact
on our Financial statements for the periods presented. In
April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and
Licensing, to clarify the following two aspects of Topic 606: 1) identifying performance obligations, and 2) the licensing implementation
guidance. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements
of ASU 2014-09 (discussed above). ASU 2016-10 has had no impact on our financial statements for the periods presented. On
July 13, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2017-11. Among
other things, ASU 2017-11 provides guidance that eliminates the requirement to consider “down round” features when determining
whether certain financial instruments or embedded features are indexed to an entity’s stock and need to be classified as liabilities.
ASU 2017-11 provides for entities to recognize the effect of a down round feature only when it is triggered and then as a dividend and
a reduction to income available to common stockholders in basic earnings per share. The guidance became effective for annual periods
beginning after December 15, 2018. THE
GREATER CANNABIS COMPANY, INC. NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
