Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | BODY & MIND INC. | |
Entity Central Index Key | 1,715,611 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 47,774,817 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false |
CONSOLIDATED INTERIM FINANCIAL
CONSOLIDATED INTERIM FINANCIAL STATEMENTS - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 |
Current | ||
Cash | $ 1,046,940 | $ 366,584 |
Amounts receivable, net of allowance for doubtful accounts of $Nil (2017-$Nil) | 510,414 | 17,798 |
Prepaids | 65,955 | 28,027 |
Inventory (Note 5) | 691,709 | |
Available-for-sale securities | 1 | 1 |
Total current assets | 2,315,019 | 412,410 |
Deposit (Notes 7 and 13) | 250,000 | |
Advances (Note 12) | 103,495 | |
Property and equipment (Note 6) | 2,345,888 | |
Brand and licenses (Note 12) | 11,871,255 | |
TOTAL ASSETS | 16,782,162 | 515,905 |
Current | ||
Accounts payables and accrued liabilities | 666,443 | 188,677 |
Due to related parties (Note 7) | 43,835 | 4,805 |
Promissory notes (Note 8) | 1,947,152 | |
TOTAL LIABILITIES | 2,657,430 | 193,482 |
STOCKHOLDERS' EQUITY | ||
Capital Stock Statement 3 (Note 9) Authorized: 900,000,000 Common Shares Par Value $0.0001 Issued and Outstanding: 47,704,317 (31 July 2017 19,137,783) Common Shares | 7,140 | 5,632 |
Additional Paid-in Capital | 20,544,332 | 4,951,214 |
Shares to be issued (Note 12) | 223,344 | |
Other Comprehensive Income | 339,892 | 356,828 |
Deficit | (6,989,976) | (4,991,251) |
TOTAL STOCKHOLDERS' EQUITY | 14,124,732 | 322,423 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 16,782,162 | $ 515,905 |
CONSOLIDATED INTERIM FINANCIA_2
CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Parenthetical) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 |
Current | ||
Amounts receivable, net of allowance for doubtful accounts | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 47,704,317 | 19,137,783 |
Common stock, shares outstanding | 47,704,317 | 19,137,783 |
Consolidated Interim Statements
Consolidated Interim Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 789,209 | $ 1,618,968 | ||
Cost of sales | (569,653) | (980,919) | ||
Total | 219,556 | 638,049 | ||
General and Administrative Expenses | ||||
Accounting and legal (Note 7) | 33,114 | 167 | 223,320 | 12,139 |
Accretion expense (Note 8) | 64,987 | 119,131 | ||
Consulting fees (Note 7) | 11,189 | 37,259 | 136,295 | 59,392 |
Depreciation | 2,981 | (4) | 6,774 | 1,588 |
Insurance | 6,071 | 11,006 | ||
Listing fees | 471,408 | |||
Management fees (Note 7) | 73,184 | 7,547 | 189,210 | 7,547 |
Office and miscellaneous | 166,702 | 16,643 | 347,594 | 27,459 |
Regulatory, filing and transfer agent fees | 3,280 | 19,187 | ||
Rent | 22,000 | 33,000 | ||
Salaries and wages | 144,830 | 241,171 | ||
Stock-based compensation (Note 9) | 733,679 | |||
Travel | 10,319 | 22,177 | 14,878 | 22,177 |
Total | (538,657) | (83,789) | (2,546,653) | (130,302) |
Loss Before Other Items | (319,101) | (83,789) | (1,908,604) | (130,302) |
Other Items | ||||
Foreign exchange, net | (85,946) | (5,195) | (91,427) | (74,425) |
Interest income | 2,185 | 2,185 | ||
Settlement of liabilities | 51,894 | 51,904 | ||
Write off of amounts receivable | 4 | (879) | ||
Net Loss for the Period | (402,858) | (37,090) | (1,998,725) | (152,823) |
Other Comprehensive Income (Loss) | ||||
Foreign currency translation adjustment | (18,959) | (9,482) | (16,936) | 55,396 |
Comprehensive Loss for the Period | $ (421,817) | $ (46,572) | $ (2,015,661) | $ (97,427) |
Loss per Share Basic and Diluted | $ (0.01) | $ (0.01) | $ (0.06) | $ (0.04) |
Weighted Average Number of Shares Outstanding | 47,704,317 | 3,546,218 | 35,959,031 | 2,626,065 |
Consolidated Interim Statemen_2
Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Shares | Class A Preferred Shares | Additional Paid-In Capital | Shares To Be Issued | Other Comprehensive Income | Deficit | Total |
Beginning Balance, Shares at Jul. 31, 2016 | 2,186,018 | 2,475,500 | |||||
Beginning Balance, Amount at Jul. 31, 2016 | $ 544 | $ 248 | $ 4,009,135 | $ 266,749 | $ (4,624,092) | $ (347,416) | |
Conversion of preferred shares, Shares | 500,000 | (150,000) | |||||
Conversion of preferred shares, Amount | $ 150 | $ (15) | (135) | ||||
Private placements, Shares | 8,700,000 | ||||||
Private placements, Amount | $ 2,610 | 982,333 | 984,943 | ||||
Share issue costs | (48,115) | (48,115) | |||||
Foreign currency translation adjustment | 55,396 | 55,396 | |||||
Loss for the period | (152,823) | (152,823) | |||||
Ending Balance, Shares at Apr. 30, 2017 | 11,386,018 | 2,325,500 | |||||
Ending Balance, Amount at Apr. 30, 2017 | $ 3,304 | $ 233 | 4,943,218 | 322,145 | (4,776,915) | 491,985 | |
Conversion of preferred shares, Shares | 7,751,765 | (2,325,500) | |||||
Conversion of preferred shares, Amount | $ 2,328 | $ (233) | (2,095) | ||||
Foreign currency translation adjustment | 34,683 | 34,683 | |||||
Capital contribution by related parties on forgiveness of debt | 10,091 | 10,091 | |||||
Loss for the period | (214,336) | (214,336) | |||||
Ending Balance, Shares at Jul. 31, 2017 | 19,137,783 | ||||||
Ending Balance, Amount at Jul. 31, 2017 | $ 5,632 | 4,951,214 | 356,828 | (4,991,251) | 322,423 | ||
Private placements, Shares | 9,739,534 | ||||||
Private placements, Amount | $ 514 | 5,141,973 | 5,142,487 | ||||
Share issue costs | (222,196) | (222,196) | |||||
Foreign currency translation adjustment | (16,936) | (16,936) | |||||
Acquisition of Nevada Medical Group LLC (Notes 9 and 12), Shares | 18,827,000 | ||||||
Acquisition of Nevada Medical Group LLC (Notes 9 and 12), Amount | $ 994 | 9,939,662 | 223,344 | 10,164,000 | |||
Stock-based compensation (Note 9) | 733,679 | 733,679 | |||||
Loss for the period | (1,998,725) | (1,998,725) | |||||
Ending Balance, Shares at Apr. 30, 2018 | 47,704,317 | ||||||
Ending Balance, Amount at Apr. 30, 2018 | $ 7,140 | $ 20,544,332 | $ 223,344 | $ 339,892 | $ (6,989,976) | $ 14,124,732 |
Consolidated Interim Statemen_3
Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Operating Activities | ||
Loss for the period | $ (1,998,725) | $ (152,823) |
Items not affecting cash: | ||
Accrued interest | 1,343 | |
Accretion expense | 119,131 | |
Depreciation | 99,949 | 1,588 |
Settlement of liabilities | (51,904) | |
Stock-based compensation | 733,679 | |
Write off of amounts receivable | 879 | |
Foreign exchange | 1,484 | 3,442 |
Amounts receivable | (195,246) | (1,667) |
Prepaids | (37,928) | |
Inventory | (156,829) | |
Trade payables and accrued liabilities | (132,470) | (26,690) |
Due to related parties | 31,881 | (41,714) |
Net Cash Used In Operating Activities | (1,534,195) | (268,425) |
Investing Activities | ||
Business combination, net of cash acquired | (1,948,158) | |
Pepper Lane North LLC deposits | (250,000) | |
Purchase of property and equipment | (494,141) | |
Net Cash Used In Investing Activities | (2,692,299) | |
Financing Activities | ||
Issuance of shares, net of share issue costs (Note 9) | 4,920,291 | 936,828 |
Short term loans | 19,276 | |
Loans repaid | (51,552) | |
Net Cash Provided by Financing Activities | 4,920,291 | 904,552 |
Effect of exchange rate changes on cash | (13,441) | 55,396 |
Net Increase in Cash | 680,356 | 691,523 |
Cash Beginning of period | 366,584 | |
Cash End of Period | $ 1,046,940 | $ 691,523 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
1. Nature and Continuance of Operations | Body and Mind Inc. (the “Company”) was incorporated on 5 November 1998 in the State of Delaware, USA, under the name Concept Development Group, Inc. In May 2004, the Company acquired 100% of Kaleidoscope Venture Capital, Inc. (formerly Vocalscape Networks, Inc.) (“Kaleidoscope”) and changed its name to Vocalscape, Inc. In November 2005, the Company changed its name to Nevstar Precious Metals Inc. and in September 2008, the Company changed its name to Deploy Technologies Inc. On 14 November 2017, the Company acquired Nevada Medical Group, LLC (“NMG”) and changed its name to Body and Mind Inc. The Company is now a supplier and grower of medical and recreational marijuana in the state of Nevada. These unaudited consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited consolidated interim financial statements do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended 31 July 2017. The unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended 31 July 2017. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended 30 April 2018 are not necessarily indicative of the results that may be expected for the year ending 31 July 2018. These unaudited consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. At 30 April 2018, the Company had cash of $1,046,940 (31 July 2017 – $366,584) and a working capital deficit of $342,411 (31 July 2017 – working capital of $218,928). Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources will not be adequate to continue operating and maintaining its business strategy for the next 12 months. If the Company is unable to raise additional capital in the near future, management expects that the Company will need to curtail operations, seek additional capital on less favourable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At 30 April 2018, the Company had suffered losses from activities to date. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, DEP Nevada Inc. (“Dep Nevada”), incorporated in the State of Nevada on 10 August 2017, and newly acquired Nevada Medical Group LLC (“NMG”) from the date of acquisition on 14 November 2017. The results of operations from NMG are included in these consolidated financial statements from the date of the Company acquired control over NMG on 14 November 2017. All inter-company transactions are eliminated upon consolidation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
2. Recent Accounting Pronouncements | In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for annual reporting periods and interim periods within those years beginning after 15 December 2017. The Company does not anticipate this amendment to have a significant impact on the financial statements. In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840 "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after 15 December 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. The Company is currently evaluating the impact that this new standard will have on its financial statements. In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after 15 December 2019. The Company does not anticipate this amendment to have a significant impact on the financial statements. In May 2014, the FASB issued ASU No. 2015-14 (Topic 606) “Revenue from Contracts with Customers”, which provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. The ASU is effective for annual reporting periods beginning after 15 December 2017, including interim periods and is to be retrospectively applied. Early adoption is not permitted. The Company does not anticipate this amendment to have a significant impact on the financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
3. Significant Accounting Policies | The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements. Basis of presentation The financial statements of the Company have been prepared in accordance with GAAP and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Derivative financial instruments The Company has not, to the date of these financial statements, entered into derivative instruments. Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical marijuana and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probably credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a regular basis. As at 30 April 2018 and 31 July 2017, the Company has no allowance for doubtful accounts. Revenue recognition The Company derives revenue primarily from the sale of medical marijuana. In accordance with ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet our high quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and record them in cost of goods sold as required. Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Segments of an enterprise and related information ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. Start-up expenses The Company has adopted ASC 720-15, “Start-Up Costs”, which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s expenses for the period from the date of inception. Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 30 April 2018, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. Foreign currency translation The Company’s functional currency is Canadian dollars and reporting currency is U.S. dollars. The Company’s subsidiary, NMG, has a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
4. Financial Instruments | The following table represents the Company’s assets that are measured at fair value as of 30 April 2018 and 31 July 2017: As at 30 April 2018 As at 31 July 2017 Financial assets at fair value Cash $ 1,046,940 $ 366,584 Available-for-sale 1 1 Total financial assets at fair value $ 1,046,941 $ 366,585 Management of financial risks The financial risk arising from the Company’s operations are credit risk, liquidity risk, interest rate risk and currency risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is not exposed to credit risk as it does not hold cash in excess of federally insured limits, with major financial institutions. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company had a working capital deficit of $342,411 as at 30 April 2018. However, the Company has incurred losses from operations to date and is currently attempting to implement its business plan; therefore, the Company is exposed to liquidity risk. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not hold financial instruments that will fluctuate in value due to changes in interest rates. Currency risk Currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk by incurring expenditures and holding assets denominated in currencies other than its functional currency. Assuming all other variables remain constant, a 1% change in the Canadian dollar against the US dollar would not result in a significant change to the Company’s operations. Other risks The Company is not exposed to other risks unless otherwise noted. |
Inventory
Inventory | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
5. Inventory | 30 April 2018 31 July 2017 Raw materials $ 26,708 $ - Work in progress 259,888 - Finished goods 181,643 - Consumables 223,470 - Total $ 691,709 $ - Inventory at January 31, 2018 was measured at cost. On the acquisition of Nevada Medical Group LLC effective 14 November 2017, the Company acquired inventory in the amount of $534,880, which was measured at cost (Note 12). |
Property and Equipment
Property and Equipment | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
6. Property and Equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Improvements Total Cost: Balance, 31 July 2017 $ - $ - $ - $ - $ - $ - $ - $ - Acquired assets 23,105 245,659 176,354 15,809 38,717 1,644 1,450,408 1,951,696 Additions 1,481 77,315 79,473 3,664 - - 332,208 494,141 Balance, 30 April 2018 24,586 322,974 255,827 19,473 38,717 1,644 1,782,616 2,445,837 Accumulated Depreciation: Balance, 31 July 2017 - - - - - - - - Depreciation 2,049 22,881 16,207 1,378 3,546 147 53,741 99,949 Balance, 30 April 2018 2,049 22,881 16,207 1,378 3,546 147 53,741 99,949 Net Book Value: As at 31 July 2017 - - - - - - - - As at 30 April 2018 $ 22,537 $ 300,093 $ 239,620 $ 18,095 $ 35,171 $ 1,497 $ 1,728,875 $ 2,345,888 |
Related Party Balances and Tran
Related Party Balances and Transactions | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
7. Related Party Balances and Transactions | The key management personnel compensation for the nine months ended 30 April 2018 and 2017 is as follows: 30 April 2018 30 April 2017 Accounting fees $ 22,088 $ 8,680 Management and consulting fees 254,252 44,341 Total $ 276,340 $ 53,021 Except as disclosed elsewhere in these full annual financial statements, related party transactions for the nine month period ended 30 April 2018 and 2017 are as follows: a) During the nine months ended 30 April 2018, accounting fees of $22,088 (2017 - $8,680) were paid/accrued to a company controlled by the former Chief Financial Officer and a director of the Company. b) During the nine months ended 30 April 2018, consulting fees of $69,000 (2017 - $Nil) and management fees of $43,544 (2017 - $Nil) were paid/accrued to companies related to the Chief Executive Officer of the Company. c) During the nine months ended 30 April 2018, management fees of $93,869 (2017 - $Nil) were paid/accrued to a company controlled by a director of the Company. d) During the nine months ended 30 April 2018, management fees of $35,627 (2017 - $7,547) were paid/accrued to a company controlled by the Chief Financial Officer of the Company. e) During the nine months ended 30 April 2018, management fees of $2,712 (2017 - $Nil) were paid/accrued to a former Chief Executive Officer of the Company. f) During the nine months ended 30 April 2018, management fees of $9,500 (2017 - $Nil) were paid/accrued to a company controlled by the former Chief Executive Officer of the Company. g) During the nine months ended 30 April 2018, management fees of $Nil (2017 - $36,794) were paid/accrued to a former Chief Executive Officer of the Company. h) As at 30 April 2018, the Company owed $Nil (31 July 2017 - $4,805) to the former Chief Executive Officer of the Company. i) As at 30 April 2018, the Company owed $39,745 (31 July 2017 - $Nil) to the Chief Executive Officer of the Company and his company. j) As at 30 April 2018, the Company owed $4,090 (31 July 2017 - $Nil) to the Chief Financial Officer of the Company. k) On 18 December 2017, the Company reached an agreement with a real estate investment group, led by the Company’s President, who anticipated purchasing a building adjacent to the Company’s existing facility and lease it back to a newly formed partnership called Pepper Lane North LLC (“PLN” or “Partnership”) on a long-term basis with renewal options. PLN is a strategic partnership between the Company and a dispensary chain in the State of Nevada. The PLN’s partner was to also transfer an active cultivation license to the facility and all expenditures under PLN would be funded on a 50/50 basis. There was a $250,000 payment made by each partner as a non-refundable deposit to secure the lease (Notes 13 and 15). |
Promissory Notes
Promissory Notes | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
8. Promissory Notes | In connection with the Acquisition of NMG, on 14 November 2017, the Company issued a promissory note in the amount of $2,000,000 to NMG Members and another promissory note in the amount of $175,000 to TI Nevada as a repayment of loans made by TI Nevada to NMG (Note 12). As these promissory notes are non-interest bearing, they were discounted to a present value of $1,826,537 at a rate of 15%. Both promissory notes are non-interest bearing, secured by the assets of the Company, and due 14 February 2019. Any unpaid amounts at maturity will bear interest at a rate of 10% per annum. 30 April 2018 31 July 2017 Balance, beginning $ - $ - Issuance of promissory notes (Note 12) 1,826,537 - Accretion expense 119,131 - Foreign exchange adjustment 1,484 - Balance, ending $ 1,947,152 $ - |
Capital Stock
Capital Stock | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
9. Capital Stock | The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. In connection with the Acquisition, on 14 November 2017, the Company eliminated its authorized Class A Preferred shares and completed a consolidation of its common shares on the basis of three (3) pre-consolidation common shares to one (1) post-consolidation common share. Unless otherwise noted, all figures in the financial statements are retroactively adjusted to reflect the consolidation (Note 12). On 15 August 2017 and 16 August 2017, the Company closed the first two of four tranches of a non-brokered private placement and issued 8,276,294 Subscription Receipts (defined below) at a price of $0.53 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $4,372,267 (CAD$5,462,369) (Note 12). On 31 October 2017, the Company closed a third tranche of a non-brokered private placement and issued 757,666 Subscription Receipts at a price of $0.53 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $400,088 (CAD$500,060) (Note 12). On 1 November 2017, the Company closed a fourth and final tranche of a non-brokered private placement and issued 68,181 Subscription Receipts at a price of $0.53 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $35,524 (CAD$45,000) (Note 12). On 14 November 2017, the Company issued a total of 18,827,000 common shares valued at $9,940,656 in connection with the Acquisition of NMG (Note 12). The Company is obligated to issue 423,000 common shares, which have a fair value of $223,344 (Note 12). On 14 November 2017, a total of 9,102,141 Subscription Receipts converted to 9,102,141 common shares and 9,102,141 share purchase warrants exercisable at CAD $0.66 or CAD$0.90 for a period of 24 months pursuant to the closing of the Acquisition of NMG (Note 12). The Company issued a total of 367,286 brokers’ warrants with a fair value of $62,138 (CAD$78,122) in connection with these financings. The brokers’ warrants are exercisable at CAD $0.90 for a period of 24 months. The Company incurred other share issuance costs of $222,196 (CAD $279,352) in relation to this private placement. On 1 December 2017, the Company closed a non-brokered private placement of 637,393 units at a price of $0.53 (CAD$0.66) per unit for aggregate gross proceeds of $334,608 (CAD$420,680). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.90 per warrant for a period of 24 months from the closing. Stock options The Company previously approved an incentive stock option plan (the “Plan”), pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. On 24 November 2017, the Company issued an aggregate of 3,850,000 stock options in accordance with the Company’s stock option plan at an exercise price of CDN$0.66 per share for a five year term expiring 24 November 2022. The options were granted to officers, directors and consultants of the Company. The fair value of the stock options was calculated to be $733,679 (CAD$922,403) using the Black-Scholes Option Pricing Model using the following assumptions: Expected life of the options 5 years Expected volatility 198 % Expected dividend yield 0 % Risk-free interest rate 1.63 % 30 April 2018 31 July 2017 Number of options Exercise Price Number of options Exercise Price Opening balance - - - - Options granted 3,850,000 CAD$0.66 - - Closing balance 3,850,000 CAD$0.66 - - Share purchase warrants and brokers’ warrants 30 April 2018 31 July 2017 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance - - - - Warrants issued 10,106,820 CAD$0.89 - - Closing balance 10,106,820 CAD$0.89 - - As at 30 April 2018, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,102,141 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 10,106,820 |
Segmented Information
Segmented Information | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
10. Segmented Information | The Company’s activities are all in the one industry segment of medical and recreational marijuana. All of the Company’s revenue generating activities and capital assets relate to this segment and are located in the USA. |
Supplemental Disclosures with R
Supplemental Disclosures with Respect to Cash Flows | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
11. Supplemental Disclosures with Respect to Cash Flows | Nine Month Period Ended 30 April 2018 2017 Cash paid during the period for interest $ - $ - Cash paid during the period for income taxes $ - $ - |
Business Acquisition
Business Acquisition | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
12. Business Acquisition | On 15 May 2017, the Company entered into an assignment and novation agreement (the “Assignment Agreement”) with Toro Pacific Management Inc. (the “Transferor”) pursuant to which the Transferor assigned a letter of intent (the “LOI”) effective 12 May 2017 to the Company in accordance with its terms. The Assignment Agreement and the LOI contemplated a business combination transaction (the “Acquisition”) to acquire all of the issued and outstanding securities of Nevada Medical Group LLC (“NMG”), an arm’s length Nevada-based licensed producer of medical marijuana. As consideration for the Assignment Agreement, the Company will issue to the Transferor 1,000,000 common shares of the Company at a deemed price of CAD$0.66 per share. On November 13, 2017, the Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a) 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b) 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c) 470,000 common shares to the Transferor according to the following schedule: a. 1/10 of the Transferor’s shares upon closing of the Acquisition (issued); b. 1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition; c. 1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition; d. 1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition; e. 1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition; f. 1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and g. of the remaining Transferor’s shares 36 months after closing the Acquisition. The remaining 423,000 shares to be issued to the Transferor are included in equity with a total fair value of $223,344 (Note 9). On 14 September 2017, the Company and Dep Nevada entered into a definitive agreement (the “Share Exchange Agreement”) with NMG. Pursuant to the Share Exchange Agreement, Dep Nevada acquired all of the issued and outstanding securities of NMG in exchange for the issuance of the Company’s common shares and certain cash and other non-cash consideration (the “Acquisition”). The concurrent financing consisted of subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than $1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release. These Subscription Receipts were recognized as liability on initial receipt. During the nine months ended April 30, 2018, the Acquisition closed and the shares were issued; therefore the Subscription Receipts were reclassified from liability to equity on conversion to common shares. On 14 November 2017, the Company closed the Acquisition, and acquired all of the issued and outstanding membership units of NMG (the “Units”) through DEP Nevada. In consideration for the Units, the Company issued to the NMG Members an aggregate of 16,000,000 common shares with a fair value of $8,448,000 as well as a cash payment of $2,084,000 pro rata amongst the NMG Members and a promissory note to the NMG members in the aggregate amount of $2,000,000. The Company also issued 2,037,879 common shares to TI Nevada, LLC with a fair value of $1,076,000, 212,121 common shares to Charles Fox with a fair value of $112,000, 47,000 common shares to Toro Pacific Management Inc. with a fair value of $24,816, 60,000 common shares to Chris Hunt with a fair value of $31,680, and 470,000 common shares to Benjamin Rutledge with a fair value of $248,160 in connection with the Acquisition. The Company has an obligation to issue a further 423,000 common shares to Toro Pacific Management Inc., which had a fair value of $223,344 on the date of acquisition. In addition, the Company paid the amount of $225,000 and issued a promissory note in the amount of $175,000 to TI Nevada as repayment for a loan made by TI Nevada to NMG. The promissory notes were discounted to a present value of $1,826,537 (Note 8). In connection with the closing of the Acquisition, the net proceeds of the Company's private placements of Subscription Receipts in support of the Acquisition, (the "Offering") have been released to the Company from escrow. Immediately prior to closing of the Acquisition, the Company completed a consolidation of its common shares on the basis of three (3) pre-consolidation common shares to one (1) post-consolidation common share, as well a name change, changing the name of the Company from Deploy Technologies, Inc. to Body and Mind Inc. The Company eliminated its authorized Class A Preferred shares (Note 9). As a result of the acquisition of NMG, the Company changed its business focus to growing and supplying medical and recreational marijuana in the state of Nevada. The acquisition of NMG was accounted for as a business combination, in which the assets acquired and the liabilities assumed are recorded at their estimated fair values. These values are based on preliminary management estimates and are subject to final valuation adjustments. The allocation of the purchase consideration is as follows: Purchase consideration Share considerations $ 10,164,000 Cash considerations 2,309,000 Promissory notes issued 1,826,537 TOTAL 14,299,537 Assets acquired: Cash 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 534,880 Property and equipment 1,951,696 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Net assets acquired 2,428,282 Brand and licenses 11,871,255 TOTAL $ 14,299,537 |
Commitments
Commitments | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
13. Commitments | a) On 11 November 2014, NMG entered into a five year lease for its premises. The Company has five options to extend the lease and each option is for five years. The monthly rent was $12,500, increased to $15,000 on 1 January 2018. b) On 18 December 2017, the Company reached an agreement with a real estate investment group, led by the Company’s President, to purchase a building adjacent to the existing facility and lease it back to a newly formed partnership called Pepper Lane North LLC (“PLN” or “Partnership”) on a long-term basis with renewal options. PLN is a strategic partnership between the Company and one of the preeminent dispensary chains in the State of Nevada. The PLN’s partner will also transfer an active cultivation license to the facility and all expenditures under PLN will be funded on a 50/50 basis. The new facility will primarily consist of flowering rooms as production, packaging, distribution, and head office functions will remain at the existing facility. The Company has also earmarked approximately 4,000 square feet of frontage for a dispensary upon receipt of a retail license. It is contemplated that at least half of the sales under PLN will be sold to the PNL partner through their existing dispensary network. In addition, the Company has signed an operating and management agreement with PLN and will receive the greater of $15,000/month or 10% of PLN’s net profits. Prior to entering the Partnership, the Company engaged surveyors to ensure compliance with permitting procedures and received the necessary approvals to move forward. The Company was later notified that a church was located in close proximity of the building and that permitting was unlikely to proceed. The Company has put an insurance claim to recover damages (Note 15). Under the Partnership Agreement, each party has provided an initial capital contribution to PLN (Note 7). c) On November 14, 2017, the Company entered into the following consulting agreements: i. $16,667 per month to TI Nevada for a term of three years; and ii. CAD $10,000 per month to Toro Pacific Management Inc., which is controlled by an officer of the Company. |
Income Taxes
Income Taxes | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
14. Income Taxes | A reconciliation of income taxes at statutory rates with the reported taxes is as follows: April 30, 2018 April 30, 2017 Net loss for the period $ (1,998,725 ) $ (152,823 ) Federal and state income tax rates 35 % 35 % Expected income tax expense (recovery) (699,554 ) (53,488 ) Change in estimates and others 264,157 - Change in benefit not recognized 435,397 53,488 Total income tax recovery $ - $ - The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 30 April 2018 As at 31 July 2017 Deferred income tax assets Net income tax operating loss carry forward $ 4,697,448 $ 3,453,457 Statutory federal income tax rate 35 % 35 % Deferred income tax asset 1,644,107 1,208,710 Deferred tax allowance (1,644,707 ) (1,208,710 ) Net deferred income tax assets $ - $ - A roll-forward of the Company’s deferred tax allowance is as follows: As at 30 April 2018 As at 31 July 2017 Deferred tax allowance, beginning $ 1,208,710 $ 1,083,529 Increase (decrease) during the year 435,397 125,181 Deferred tax allowance, ending $ 1,644,107 $ 1,208,710 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Apr. 30, 2018 | |
Notes to Financial Statements | |
15. Subsequent Events | a) In May 2018, the real estate investment group completed the purchase of the building adjacent to the existing NMG facility (“PLN Facility”). The Company made the decision to terminate its lease back agreement regarding the PLN Facility as it was unable to relocate a church that was in close proximity to the PLN Facility. The PLN Facility may still be an opportunity for the Company to lease storage and administrative space and the Company will continue to evaluate this opportunity. The Company initiated a claim with the surveyor’s insurance company stating the surveyor made an error and did not disclose the church location in their report to the Company. The primary claim, amongst other damages, is to recover the non-refundable $250,000 deposits made by each member of the Partnership (Notes 7 and 13). b) On 7 June 2018 the Company announced the Company’s subsidiary, NMG, and its strategic in-state investment partners received notification that the State of Ohio awarded a medical cannabis dispensary licenses to NMG Ohio, LLC (“NMG Ohio”). NMG currently maintains a 30% ownership interest in NMG Ohio. c) On 12 June 2018, the Company granted 175,000 stock options with an exercise price of CAD$0.41 per common share for a period of five years to a consultant of the Company. d) On 19 September 2018, the Company announced the Company, through its subsidiary, NMG, and its strategic in-state investment partners received notification that the State of Ohio awarded a medical cannabis production licenses to NMG Ohio, LLC (“NMG Ohio”). NMG currently maintains a 30% ownership interest in NMG Ohio. e) On 20 September 2018 the Company announced its wholly-owned subsidiary, NMG and an in-state investment group, submitted four cannabis dispensary license applications in the State of Nevada. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Apr. 30, 2018 | |
Significant Accounting Policies | |
Basis of presentation | The financial statements of the Company have been prepared in accordance with GAAP and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. |
Cash and cash equivalents | Cash and cash equivalents include highly liquid investments with original maturities of three months or less. |
Derivative financial instruments | The Company has not, to the date of these financial statements, entered into derivative instruments. |
Amounts receivable | Amounts receivable represents amounts owed from customers for sale of medical marijuana and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probably credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a regular basis. As at 30 April 2018 and 31 July 2017, the Company has no allowance for doubtful accounts. |
Revenue recognition | The Company derives revenue primarily from the sale of medical marijuana. In accordance with ASC 605 “Revenue Recognition”, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet our high quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and record them in cost of goods sold as required. |
Inventory | Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. |
Property and equipment | Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years |
Brands and licenses | Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. |
Income taxes | Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. |
Basic and diluted net loss per share | The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. |
Segments of an enterprise and related information | ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. |
Start-up expenses | The Company has adopted ASC 720-15, “Start-Up Costs”, which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s expenses for the period from the date of inception. |
Comprehensive loss | ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 30 April 2018, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. |
Foreign currency translation | The Company’s functional currency is Canadian dollars and reporting currency is U.S. dollars. The Company’s subsidiary, NMG, has a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. |
Use of estimates and assumptions | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. |
Comparative figures | Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Significant Accounting Policies Tables Abstract | |
Property and equipment estimated useful lives | Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Financial Instruments | |
Schedule of financial assets at fair value | As at 30 April 2018 As at 31 July 2017 Financial assets at fair value Cash $ 1,046,940 $ 366,584 Available-for-sale 1 1 Total financial assets at fair value $ 1,046,941 $ 366,585 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Inventory Tables Abstract | |
Schedule of inventory Table | 30 April 2018 31 July 2017 Raw materials $ 26,708 $ - Work in progress 259,888 - Finished goods 181,643 - Consumables 223,470 - Total $ 691,709 $ - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Property And Equipment | |
Property and Equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Improvements Total Cost: Balance, 31 July 2017 $ - $ - $ - $ - $ - $ - $ - $ - Acquired assets 23,105 245,659 176,354 15,809 38,717 1,644 1,450,408 1,951,696 Additions 1,481 77,315 79,473 3,664 - - 332,208 494,141 Balance, 30 April 2018 24,586 322,974 255,827 19,473 38,717 1,644 1,782,616 2,445,837 Accumulated Depreciation: Balance, 31 July 2017 - - - - - - - - Depreciation 2,049 22,881 16,207 1,378 3,546 147 53,741 99,949 Balance, 30 April 2018 2,049 22,881 16,207 1,378 3,546 147 53,741 99,949 Net Book Value: As at 31 July 2017 - - - - - - - - As at 30 April 2018 $ 22,537 $ 300,093 $ 239,620 $ 18,095 $ 35,171 $ 1,497 $ 1,728,875 $ 2,345,888 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Related Party Balances And Transactions | |
Schedule of Related Party Transactions table | 30 April 2018 30 April 2017 Accounting fees $ 22,088 $ 8,680 Management and consulting fees 254,252 44,341 Total $ 276,340 $ 53,021 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Promissory Notes | |
Schedule of promissory notes tables | 30 April 2018 31 July 2017 Balance, beginning $ - $ - Issuance of promissory notes (Note 12) 1,826,537 - Accretion expense 119,131 - Foreign exchange adjustment 1,484 - Balance, ending $ 1,947,152 $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Schedule of assumptions used | Expected life of the options 5 years Expected volatility 198 % Expected dividend yield 0 % Risk-free interest rate 1.63 % |
Schedule of warrants outstanding | 30 April 2018 31 July 2017 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance - - - - Warrants issued 10,106,820 CAD$0.89 - - Closing balance 10,106,820 CAD$0.89 - - As at 30 April 2018, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,102,141 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 10,106,820 |
Warrants [Member] | |
Schedule of fair value of stock options | 30 April 2018 31 July 2017 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance - - - - Warrants issued 10,106,820 CAD$0.89 - - Closing balance 10,106,820 CAD$0.89 - - |
Stock Options [Member] | |
Schedule of fair value of stock options | 30 April 2018 31 July 2017 Number of options Exercise Price Number of options Exercise Price Opening balance - - - - Options granted 3,850,000 CAD$0.66 - - Closing balance 3,850,000 CAD$0.66 - - |
Supplemental Disclosures with_2
Supplemental Disclosures with Respect to Cash Flows (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Supplemental Disclosures With Respect To Cash Flows | |
Schedule of cash flow supplemental disclosures | Nine Month Period Ended 30 April 2018 2017 Cash paid during the period for interest $ - $ - Cash paid during the period for income taxes $ - $ - |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Business Acquisition | |
Schedule of business acquisitions by acquisition | Purchase consideration Share considerations $ 10,164,000 Cash considerations 2,309,000 Promissory notes issued 1,826,537 TOTAL 14,299,537 Assets acquired: Cash 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 534,880 Property and equipment 1,951,696 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Net assets acquired 2,428,282 Brand and licenses 11,871,255 TOTAL $ 14,299,537 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Income Taxes | |
Reconciliation of income taxes at statutory rates | April 30, 2018 April 30, 2017 Net loss for the period $ (1,998,725 ) $ (152,823 ) Federal and state income tax rates 35 % 35 % Expected income tax expense (recovery) (699,554 ) (53,488 ) Change in estimates and others 264,157 - Change in benefit not recognized 435,397 53,488 Total income tax recovery $ - $ - |
Schedule of deferred tax assets and liabilities | As at 30 April 2018 As at 31 July 2017 Deferred income tax assets Net income tax operating loss carry forward $ 4,697,448 $ 3,453,457 Statutory federal income tax rate 35 % 35 % Deferred income tax asset 1,644,107 1,208,710 Deferred tax allowance (1,644,707 ) (1,208,710 ) Net deferred income tax assets $ - $ - |
Schedule of deferred tax allowance | As at 30 April 2018 As at 31 July 2017 Deferred tax allowance, beginning $ 1,208,710 $ 1,083,529 Increase (decrease) during the year 435,397 125,181 Deferred tax allowance, ending $ 1,644,107 $ 1,208,710 |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Details Narrative) - USD ($) | 9 Months Ended | ||||
Apr. 30, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Jul. 31, 2016 | May 31, 2004 | |
State of incorporation | Delaware | ||||
Date of incorporation | Nov. 5, 1998 | ||||
Cash | $ 1,046,940 | $ 366,584 | $ 691,523 | ||
Working capital deficit | $ (342,411) | $ (218,928) | |||
Kaleidoscope Venture Capital [Member] | |||||
Ownership percentage | 100.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 9 Months Ended |
Apr. 30, 2018 | |
Office Equipment [Member] | |
Estimated useful lives | 7 years |
Cultivation equipment [Member] | |
Estimated useful lives | 7 years |
Production Equipment [Member] | |
Estimated useful lives | 7 years |
Kitchen equipment [Member] | |
Estimated useful lives | 7 years |
Vehicles [Member] | |
Estimated useful lives | 7 years |
Vault equipment [Member] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | |
Estimated useful lives | 15 years |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Jul. 31, 2016 |
Financial assets at fair value | ||||
Cash | $ 1,046,940 | $ 366,584 | $ 691,523 | |
Available-for-sale | 1 | 1 | ||
Total financial assets at fair value | $ 1,046,941 | $ 366,585 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 |
Financial Instruments Details Narrative Abstract | ||
Working capital deficit | $ (342,411) | $ (218,928) |
Inventory (Details)
Inventory (Details) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 |
Inventory Details Abstract | ||
Raw materials | $ 26,708 | |
Work in progress | 259,888 | |
Finished goods | 181,643 | |
Consumables | 223,470 | |
Total | $ 691,709 |
Inventory (Details Narrative)
Inventory (Details Narrative) | Nov. 14, 2017USD ($) |
NMG [Member] | |
Inventory acquired | $ 534,880 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 1,951,696 | |
Additions | 494,141 | |
Balance, 30 April 2018 | 2,445,837 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 99,949 | $ 1,588 |
Balance, 30 April 2018 | 99,949 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 2,345,888 | |
Office Equipment [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 23,105 | |
Additions | 1,481 | |
Balance, 30 April 2018 | 24,586 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 2,049 | |
Balance, 30 April 2018 | 2,049 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 22,537 | |
Cultivation equipment [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 245,659 | |
Additions | 77,315 | |
Balance, 30 April 2018 | 322,974 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 22,881 | |
Balance, 30 April 2018 | 22,881 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 300,093 | |
Production Equipment [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 176,354 | |
Additions | 79,473 | |
Balance, 30 April 2018 | 255,827 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 16,207 | |
Balance, 30 April 2018 | 16,207 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 239,620 | |
Kitchen equipment [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 15,809 | |
Additions | 3,664 | |
Balance, 30 April 2018 | 19,473 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 1,378 | |
Balance, 30 April 2018 | 1,378 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 18,095 | |
Vehicles [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 38,717 | |
Additions | ||
Balance, 30 April 2018 | 38,717 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 3,546 | |
Balance, 30 April 2018 | 3,546 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 35,171 | |
Vault equipment [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 1,644 | |
Additions | ||
Balance, 30 April 2018 | 1,644 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 147 | |
Balance, 30 April 2018 | 147 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | 1,497 | |
Leasehold Improvements [Member] | ||
Cost | ||
Balance, 31 July 2017 | ||
Acquired assets | 1,450,408 | |
Additions | 332,208 | |
Balance, 30 April 2018 | 1,782,616 | |
Accumulated Depreciation | ||
Balance, 31 July 2017 | ||
Depreciation | 53,741 | |
Balance, 30 April 2018 | 53,741 | |
Net Book Value | ||
As at 31 July 2017 | ||
As at 30 April 2018 | $ 1,728,875 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Related Party Balances And Transactions Details Abstract | ||
Accounting fees | $ 22,088 | $ 8,680 |
Management and consulting fees | 254,252 | 44,341 |
Total | $ 276,340 | $ 53,021 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 31, 2017 | |
Accounting fees | $ 22,088 | $ 8,680 | |||
Consulting fees | $ 11,189 | $ 37,259 | 136,295 | 59,392 | |
Due to related party | 43,835 | 43,835 | $ 4,805 | ||
Deposit | 250,000 | 250,000 | |||
Chief Financial Officer [Member] | |||||
Due to related party | 4,090 | 4,090 | |||
Director [Member] | |||||
Management fees | 93,869 | ||||
Chief Executive Officer [Member] | |||||
Management fees | 35,627 | 7,547 | |||
Due to related party | 39,745 | 39,745 | |||
Former Chief Executive Officer [Member] | |||||
Management fees | 2,712 | ||||
Due to related party | $ 4,805 | ||||
Chief Financial Officer and director [Member] | |||||
Accounting fees | 22,088 | 8,680 | |||
Chief Executive Officer [Member] | |||||
Consulting fees | 69,000 | ||||
Management fees | 43,544 | ||||
Former Chief Executive Officer One [Member] | |||||
Management fees | 9,500 | ||||
Former Chief Executive Officer Two [Member] | |||||
Management fees | $ 36,794 |
Promissory Notes (Details)
Promissory Notes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 31, 2017 | |
Promissory Notes Details Abstract | |||||
Balance, beginning | |||||
Issuance of promissory notes (Note 12) | 1,826,537 | ||||
Accretion expense | $ 64,987 | 119,131 | |||
Foreign exchange adjustment | 1,484 | $ 3,442 | |||
Balance, ending | $ 1,947,152 | $ 1,947,152 |
Promissory Notes (Details Narra
Promissory Notes (Details Narrative) | Nov. 14, 2017USD ($) |
TI Nevada [Member] | |
Promissory note | $ 175,000 |
Debt maturity date | Feb. 14, 2019 |
NMG [Member] | |
Promissory note | $ 2,000,000 |
Present value factor | 15.00% |
Present value promissory note | $ 1,826,537 |
Debt maturity date | Feb. 14, 2019 |
Capital Stock (Details)
Capital Stock (Details) | 9 Months Ended |
Apr. 30, 2018 | |
Capital Stock | |
Expected life of the options | 5 years |
Expected volatility | 198.00% |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.63% |
Capital Stock (Details 1)
Capital Stock (Details 1) - Stock Options [Member] | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Nov. 24, 2017$ / sharesshares | Apr. 30, 2018$ / sharesshares | Apr. 30, 2018$ / sharesshares | Jul. 31, 2017$ / sharesshares | |
Opening balance | ||||
Options granted | 3,850,000 | 3,850,000 | 3,850,000 | |
Closing balance | 3,850,000 | 3,850,000 | ||
Exercise Price, opening balance | $ / shares | ||||
Exercise Price, options granted | (per share) | $ 0.66 | $ 0.66 | ||
Exercise Price, closing balance | (per share) | $ 0.66 |
Capital Stock (Details 2)
Capital Stock (Details 2) - Warrants [Member] | 9 Months Ended | 12 Months Ended | |
Apr. 30, 2018USD ($)$ / sharesshares | Apr. 30, 2018$ / shares | Jul. 31, 2017USD ($)$ / sharesshares | |
Opening balance | |||
Warrants issued | $ | $ 10,106,820 | ||
Closing balance | 10,106,820 | ||
Exercise Price, opening balance | $ / shares | |||
Exercise Price, options granted | (per share) | $ 0.89 | ||
Exercise Price, closing balance | (per share) | $ 0.89 |
Capital Stock (Details 3)
Capital Stock (Details 3) | 9 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Number of warrants outstanding and exercisable | 10,106,820 |
Range One [Member] | |
Number of warrants outstanding and exercisable | 248,350 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | Aug. 15, 2019 |
Range Two [Member] | |
Number of warrants outstanding and exercisable | 58,324 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | Aug. 16, 2019 |
Range Three [Member] | |
Number of warrants outstanding and exercisable | 60,612 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | Nov. 3, 2019 |
Range Four [Member] | |
Number of warrants outstanding and exercisable | 9,102,141 |
Exercise price | $ / shares | $ 0.90 |
Expiry dates | Nov. 14, 2019 |
Range Five [Member] | |
Number of warrants outstanding and exercisable | 637,393 |
Exercise price | $ / shares | $ 0.90 |
Expiry dates | Dec. 1, 2019 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) | Dec. 02, 2017USD ($)$ / sharesshares | Nov. 14, 2017USD ($)shares | Nov. 14, 2017USD ($)$ / sharesshares | Nov. 02, 2017USD ($)$ / sharesshares | Aug. 15, 2017USD ($)$ / sharesshares | Nov. 24, 2017$ / sharesshares | Oct. 31, 2017USD ($)$ / sharesshares | Aug. 16, 2017USD ($)$ / sharesshares | Apr. 30, 2018USD ($)$ / sharesshares | Apr. 30, 2018$ / shares$ / sharesshares | Apr. 30, 2017USD ($) | Jul. 31, 2017$ / sharesshares |
Capital stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Capital stock, shares authorized | 900,000,000 | 900,000,000 | 900,000,000 | |||||||||
Fair value of warrant | $ | $ 62,138 | |||||||||||
Warrants shares issued | 367,286 | 367,286 | ||||||||||
Warrant exercisable price per share | $ / shares | $ 0.90 | |||||||||||
Share issuance costs | $ | $ 222,196 | $ 48,115 | ||||||||||
Warrant exercisable period | 24 months | |||||||||||
Fair value of stock options | $ | $ 733,679 | |||||||||||
NMG [Member] | ||||||||||||
Common stock shares issued | 18,827,000 | |||||||||||
Common stock value | $ | $ 9,940,656 | |||||||||||
Number of warrants purchase exercisable shares | 9,102,141 | 9,102,141 | ||||||||||
Warrant exercisable price per share | $ / shares | $ 0.66 | |||||||||||
Term of options | 24 months | |||||||||||
Business acquisition shares issued or issuable | 423,000 | |||||||||||
Business acquisition, fair value of shares issued or issuable | $ | $ 223,344 | $ 223,344 | ||||||||||
Private Placement [Member] | ||||||||||||
Private placements shares issued | 637,393 | |||||||||||
Subscription receipts per price | $ / shares | $ 0.53 | |||||||||||
Proceeds from issuance of private placement | $ | $ 334,608 | |||||||||||
Private Placement [Member] | Tranches One [Member] | ||||||||||||
Private placements shares issued | 8,276,294 | |||||||||||
Subscription receipts per price | $ / shares | $ 0.53 | |||||||||||
Proceeds from issuance of private placement | $ | $ 4,372,267 | |||||||||||
Private Placement [Member] | Tranches Two [Member] | ||||||||||||
Private placements shares issued | 8,276,294 | |||||||||||
Subscription receipts per price | $ / shares | $ 0.53 | |||||||||||
Proceeds from issuance of private placement | $ | $ 4,372,267 | |||||||||||
Private Placement [Member] | Tranches Three [Member] | ||||||||||||
Private placements shares issued | 757,666 | |||||||||||
Subscription receipts per price | $ / shares | $ 0.53 | |||||||||||
Proceeds from issuance of private placement | $ | $ 400,088 | |||||||||||
Private Placement [Member] | Tranches Four [Member] | ||||||||||||
Private placements shares issued | 68,181 | |||||||||||
Subscription receipts per price | $ / shares | $ 0.53 | |||||||||||
Proceeds from issuance of private placement | $ | $ 35,524 | |||||||||||
Stock Options [Member] | ||||||||||||
Stock options granted | 3,850,000 | 3,850,000 | ||||||||||
Exercise price | (per share) | $ 0.66 | $ 0.66 | ||||||||||
Term of options | 5 years | |||||||||||
Expiry period | Nov. 24, 2022 |
Supplemental Disclosures with_3
Supplemental Disclosures with Respect to Cash Flows (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Supplemental Disclosures With Respect To Cash Flows Details Abstract | ||
Cash paid during the period for interest | ||
Cash paid during the period for income taxes |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Jul. 31, 2016 |
Purchase consideration | ||||
Cash considerations | $ 1,046,940 | $ 366,584 | $ 691,523 | |
Promissory notes issued | 1,947,152 | |||
Assets acquired: | ||||
Amounts receivable | 510,414 | 17,798 | ||
Inventory | 691,709 | |||
Property and equipment | 2,345,888 | |||
Liabilities assumed: | ||||
Brand and licenses | 11,871,255 | |||
NMG [Member] | ||||
Purchase consideration | ||||
Share considerations | 10,164,000 | |||
Cash considerations | 2,309,000 | |||
Promissory notes issued | 1,826,537 | |||
Assets acquired: | ||||
Cash | 260,842 | |||
Amounts receivable | 253,697 | |||
Prepaid expenses | 44,552 | |||
Inventory | 534,880 | |||
Property and equipment | 1,951,696 | |||
Liabilities assumed: | ||||
Trade payable and accrued liabilities | (367,385) | |||
Loans payable | (250,000) | |||
Net assets acquired | 2,428,282 | |||
Brand and licenses | 11,871,255 | |||
TOTAL | $ 14,299,537 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) | Nov. 14, 2017USD ($)shares | Nov. 14, 2017USD ($)shares | Nov. 13, 2017USD ($)shares | May 15, 2017$ / sharesshares | Apr. 30, 2018 |
Description of subscription receipts under concurrent financing | <font style="font: 10pt Times New Roman, Times, Serif">The concurrent financing consisted of subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than $1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release</font></p>" id="sjs-F2"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The concurrent financing consisted of subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than $1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release</font></p> | ||||
Toro Pacific Management Inc. [Member] | Assignment and Novation Agreement [Member] | |||||
Business acquisition shares issued or issuable | shares | 423,000 | 1,000,000 | |||
Deemed share price | $ / shares | $ 0.66 | ||||
Description for modification of agreement | <font style="font: 10pt Times New Roman, Times, Serif">The Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: top"> <td style="width: 8%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">a)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">b)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">60,000 common shares to Chris Hunt upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">c)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">470,000 common shares to the Transferor according to the following schedule:</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: top"> <td style="width: 12%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">a.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/10 of the Transferor’s shares upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">b.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">c.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">d.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">e.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">f.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">g.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">of the remaining Transferor’s shares 36 months after closing the Acquisition.</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>" id="sjs-D6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 33.75pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: top"> <td style="width: 8%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">a)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">b)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">60,000 common shares to Chris Hunt upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">c)</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">470,000 common shares to the Transferor according to the following schedule:</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: top"> <td style="width: 12%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 4%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">a.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/10 of the Transferor’s shares upon closing of the Acquisition (issued);</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">b.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">c.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">d.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">e.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition;</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">f.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and</font></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">g.</font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">of the remaining Transferor’s shares 36 months after closing the Acquisition.</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> | ||||
Business acquisition, fair value of shares issued or issuable | $ 223,344 | ||||
NMG Acquisition [Member] | NMG [Member] | |||||
Business acquisition shares issued or issuable | shares | 16,000,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 8,448,000 | $ 8,448,000 | |||
Business acquisition consideration transferred in cash | 2,084,000 | ||||
Promissory note issued | 2,000,000 | $ 2,000,000 | |||
NMG Acquisition [Member] | Toro Pacific Management Inc. [Member] | |||||
Business acquisition shares issued or issuable | shares | 47,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 24,816 | $ 24,816 | |||
NMG Acquisition [Member] | TI Nevada [Member] | |||||
Business acquisition shares issued or issuable | shares | 2,037,879 | ||||
Business acquisition, fair value of shares issued or issuable | $ 1,076,000 | 1,076,000 | |||
Promissory note issued | 175,000 | 175,000 | |||
Repayment of loan | 225,000 | ||||
Present value of promissory note | $ 1,826,537 | 1,826,537 | |||
NMG Acquisition [Member] | Charles Fox [Member] | |||||
Business acquisition shares issued or issuable | shares | 212,121 | ||||
Business acquisition, fair value of shares issued or issuable | $ 112,000 | $ 112,000 | |||
NMG Acquisition [Member] | Chris Hunt [Member] | |||||
Business acquisition shares issued or issuable | shares | 60,000 | ||||
Business acquisition, fair value of shares issued or issuable | 31,680 | $ 31,680 | |||
NMG Acquisition [Member] | Benjamin Rutledge [Member] | |||||
Business acquisition shares issued or issuable | shares | 470,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 248,160 | $ 248,160 |
Commitments (Details Narrative)
Commitments (Details Narrative) | Nov. 14, 2017USD ($) | Nov. 11, 2014USD ($) | Dec. 18, 2017ft² | Apr. 30, 2018USD ($) |
Terms of strategic partnership | PLN is a strategic partnership between the Company and one of the preeminent dispensary chains in the State of Nevada. The PLN's partner will also transfer an active cultivation license to the facility and all expenditures under PLN will be funded on a 50/50 basis. | |||
Area earmarked for dispensary | ft² | 4,000 | |||
Operating and Management agreement [Member] | ||||
Terms of agreement | The Company has signed an operating and management agreement with PLN and will receive the greater of $15,000/month or 10% of PLN's net profits | |||
NMG [Member] | ||||
Term of lease | 5 years | |||
Description for lease option to extend | The Company has five options to extend the lease and each option is for five years | |||
Periodic rent payable, amount | $ 12,500 | |||
Frequency of periodic payment | Monthly | |||
NMG [Member] | On January 1, 2018 [Member] | ||||
Periodic rent payable, amount | $ 15,000 | |||
Frequency of periodic payment | Monthly | |||
TI Nevada [Member] | Consulting agreement [Member] | ||||
Frequency of periodic payment | Monthly | |||
Periodic consulting fees payable | $ 16,667 | |||
Term of contract | 3 years | |||
Toro Pacific Management Inc. [Member] | Consulting agreement [Member] | ||||
Periodic consulting fees payable | $ 10,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2018 | Jul. 31, 2017 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Income Taxes Details Abstract | |||||
Net loss for the period | $ (402,858) | $ (214,336) | $ (37,090) | $ (1,998,725) | $ (152,823) |
Federal and state income tax rates | 35.00% | 35.00% | |||
Expected income tax expense (recovery) | $ (699,554) | $ (53,488) | |||
Change in estimates and others | 264,157 | ||||
Change in benefit not recognized | 435,397 | 53,488 | |||
Total income tax recovery |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Apr. 30, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Deferred income tax assets | |||
Net income tax operating loss carry forward | $ 4,697,448 | $ 3,453,457 | |
Statutory federal income tax rate | 35.00% | 35.00% | |
Deferred income tax asset | $ 1,644,107 | $ 1,208,710 | $ 1,083,529 |
Deferred tax allowance | (1,644,707) | (1,208,710) | |
Net deferred income tax assets |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2018 | Jul. 31, 2017 | |
Income Taxes Details 2Abstract | ||
Deferred tax allowance, beginning | $ 1,208,710 | $ 1,083,529 |
Increase (decrease) during the year | 435,397 | 125,181 |
Deferred tax allowance, ending | $ 1,644,107 | $ 1,208,710 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jun. 12, 2018$ / sharesshares | May 31, 2018USD ($) | Sep. 19, 2018 | Jun. 07, 2018 | Apr. 30, 2018shares |
Class of warrants or rights granted | 10,106,820 | ||||
Subsequent Event [Member] | Stock Options [Member] | |||||
Class of warrants or rights granted | 175,000 | ||||
Exercise price | $ / shares | $ 0.41 | ||||
Maturity period | 5 years | ||||
Subsequent Event [Member] | NMG Ohio [Member] | |||||
Ownership interest held by NMG | 30.00% | 30.00% | |||
Subsequent Event [Member] | PLN Facility [Member] | |||||
Loss contingency damages sought, amount | $ | $ 250,000 |