Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2018 | Nov. 09, 2018 | Jan. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | BODY & MIND INC. | ||
Entity Central Index Key | 1,715,611 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 64,097,398 | ||
Entity Public Float | $ 35,484,036 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Ex Transition Period | false | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2018 | Jul. 31, 2017 |
Current | ||
Cash and cash equivalents | $ 324,837 | $ 366,584 |
Amounts receivable | 632,477 | 17,798 |
Prepaids | 99,014 | 28,028 |
Inventory (Note 5) | 953,417 | |
Total current assets | 2,009,746 | 412,410 |
Advance (Note 11) | 103,495 | |
Investment in NMG Ohio LLC (Note 14) | 77,600 | |
Property and Equipment (Note 6) | 2,615,898 | |
Brand and Licenses (Note 11) | 8,172,000 | |
Goodwill (Note 11) | 2,635,721 | |
TOTAL ASSETS | 15,510,964 | 515,905 |
Current | ||
Accounts payable | 447,703 | 106,665 |
Accrued liabilities | 95,481 | 82,012 |
Income taxes | 239,358 | |
Due to related parties (Note 7) | 51,081 | 4,805 |
Promissory notes (Note 8) | 2,175,000 | |
Total current liabilities | 3,008,623 | 193,482 |
Deferred tax liability (Note 13) | 1,716,120 | |
TOTAL LIABILITIES | 4,724,743 | 193,482 |
STOCKHOLDERS' EQUITY | ||
Capital Stock Statement 3 (Note 9) Authorized: 900,000,000 Common Shares Par Value $0.0001 Issued and Outstanding: 47,774,817 (31 July 2017 19,137,783) Common Shares | 4,778 | 1,914 |
Additional Paid-in Capital | 16,918,082 | 4,954,932 |
Shares To Be Issued (Note 11) | 103,267 | |
Other Comprehensive Income | 532,405 | 356,828 |
Deficit | (6,772,311) | (4,991,251) |
TOTAL STOCKHOLDERS' EQUITY | 10,786,221 | 322,423 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,510,964 | $ 515,905 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2018 | Jul. 31, 2017 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 47,774,817 | 19,137,783 |
Common stock, shares outstanding | 47,774,817 | 19,137,783 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Income Statement [Abstract] | ||
Sales | $ 2,692,979 | |
Sales tax | (279,931) | |
Cost of sales | (1,216,851) | |
Total | 1,196,197 | |
General and Administrative Expenses | ||
Accounting and legal (Note 7) | 350,502 | 44,929 |
Accretion expense (Note 8) | 277,219 | |
Consulting fees (Note 7) | 206,913 | 187,158 |
Depreciation | 8,811 | 1,590 |
Insurance | 29,793 | |
Listing fees | 465,481 | |
Management fees (Note 7) | 219,120 | 30,224 |
Office and miscellaneous | 281,671 | 26,210 |
Regulatory, filing and transfer agent fees | 23,641 | 13,906 |
Rent | 51,000 | |
Salaries and wages | 380,371 | |
Stock-based compensation (Note 9) | 789,679 | |
Transaction costs (Note 11) | 330,324 | |
Travel | 28,237 | 48,267 |
Total | (3,442,762) | (352,284) |
Loss Before Other Items | (2,246,565) | (352,284) |
Other Items | ||
Write off of deposit | (250,000) | |
Foreign exchange, net | (193,959) | (65,999) |
Interest income | 5,615 | |
Settlement of liabilities | 51,963 | |
Write off of amounts receivable | (873) | (839) |
Net Loss for the Year before Income Tax | (2,685,782) | (367,159) |
Deferred income tax recovery | 1,144,080 | |
Income tax expense | (239,358) | |
Total | (904,722) | |
Net Loss for the Year | (1,781,060) | (367,159) |
Other Comprehensive Income | ||
Foreign currency translation adjustment | 175,577 | 90,079 |
Comprehensive Loss for the Year | $ (1,605,483) | $ (277,080) |
Loss per Share - Basic and Diluted | $ (0.05) | $ (0.06) |
Weighted Average Number of Shares Outstanding | 38,934,166 | 6,628,958 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Class A Preferred Shares | Additional Paid-in Capital | Shares To Be Issued | AOCI | Deficit | Total |
Beginning Balance, Shares at Jul. 31, 2016 | 2,186,018 | 2,475,500 | |||||
Beginning Balance, Amount at Jul. 31, 2016 | $ 219 | $ 248 | $ 4,009,460 | $ 266,749 | $ (4,624,092) | $ (347,416) | |
Conversion of preferred shares (Note 9), Shares | 8,251,765 | (2,475,500) | |||||
Conversion of preferred shares (Note 9), Amount | $ 825 | $ (248) | (577) | ||||
Private placements (Note 9), Shares | 8,700,000 | ||||||
Private placements (Note 9), Amount | $ 870 | 984,073 | 984,943 | ||||
Share issue costs (Note 9) | (48,115) | (48,115) | |||||
Capital contribution by related parties on forgiveness of debt | 10,091 | 10,091 | |||||
Foreign currency translation adjustment | 90,079 | 90,079 | |||||
Loss for the year | (367,159) | (367,159) | |||||
Ending Balance, Shares at Jul. 31, 2017 | 19,137,783 | ||||||
Ending Balance, Amount at Jul. 31, 2017 | $ 1,914 | 4,954,932 | 356,828 | (4,991,251) | 322,423 | ||
Private placements (Note 9), Shares | 9,739,534 | ||||||
Private placements (Note 9), Amount | $ 974 | 5,025,520 | 5,026,494 | ||||
Share issue costs (Note 9) | (219,459) | (219,459) | |||||
Foreign currency translation adjustment | 175,577 | 175,577 | |||||
Acquisition of Nevada Medical Group LLC (Notes 9 and 11), Shares | 18,827,000 | ||||||
Acquisition of Nevada Medical Group LLC (Notes 9 and 11), Amount | $ 1,883 | 6,335,482 | 135,202 | 6,472,567 | |||
Issuance of escrowed shares (Notes 9 and 11), Shares | 70,500 | ||||||
Issuance of escrowed shares (Notes 9 and 11), Amount | $ 7 | 31,928 | (31,935) | ||||
Stock-based compensation (Note 9) | 789,679 | 789,679 | |||||
Loss for the year | (1,781,060) | (1,781,060) | |||||
Ending Balance, Shares at Jul. 31, 2018 | 47,774,817 | ||||||
Ending Balance, Amount at Jul. 31, 2018 | $ 4,778 | $ 16,918,082 | $ 103,267 | $ 532,405 | $ (6,772,311) | $ 10,786,221 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Cash Resources Provided By (Used In) Operating Activities | ||
Net Loss for the Year | $ (1,781,060) | $ (367,159) |
Items not affecting cash: | ||
Accrued interest | 1,345 | |
Accretion expense | 277,219 | |
Depreciation | 8,811 | 1,590 |
Settlement of liabilities | (51,963) | |
Stock-based compensation | 789,679 | |
Write off of amounts receivable | 873 | 839 |
Foreign exchange | 193,959 | 65,999 |
Deferred tax recovery | (1,144,080) | |
Transaction cost | 330,324 | |
Net change in non-cash working capital items | ||
Amounts receivable | (615,551) | (15,267) |
Advance | 103,495 | |
Prepaids | (70,986) | (24,042) |
Inventory | (953,417) | |
Trade payables and accrued liabilities | 245,799 | (33,765) |
Due to related parties | 46,276 | (36,909) |
Income taxes | 239,358 | |
Net Cash Used In Operating Activities | (1,619,041) | (459,332) |
Investing Activities | ||
Business combination, net of cash acquired | (2,865,028) | |
Advance to Nevada Medical Group, LLC | (95,622) | |
Purchase of property and equipment | (564,305) | |
Investment in NMG Ohio LLC | (77,600) | |
Net Cash Used In Investing Activities | (3,506,933) | (95,622) |
Financing Activities | ||
Issuance of shares, net of share issue costs | 5,102,609 | 936,828 |
Short term loans | 19,903 | |
Loans repaid | (53,799) | |
Net Cash Provided by Financing Activities | 5,102,609 | 902,932 |
Effect of exchange rate changes on cash and cash equivalents | (18,382) | 18,606 |
Net Increase (Decrease) in Cash | (41,747) | 366,584 |
Cash and cash equivalents - Beginning of year | 366,584 | |
Cash and cash equivalents - End of Year | $ 324,837 | $ 366,584 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 12 Months Ended |
Jul. 31, 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 consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 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 31 July 2018, the Company had cash and cash equivalents of $324,837 (31 July 2017 – $366,584) and a working capital deficit of $998,877 (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 31 July 2018, the Company had incurred 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 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 and balances are eliminated upon consolidation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Jul. 31, 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 | 12 Months Ended |
Jul. 31, 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 31 July 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 based on historical return experience and adjusts 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. Investments The Company has certain investments in non-marketable equity instruments of private companies. The Company accounts for these investments using the equity method if they provide the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. The Company records equity method investments initially at cost, and adjusts the carrying amount to reflect the Company’s share of the earnings or losses of the investee. 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 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 31 July 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. Stock-based compensation The Company accounts for stock-based compensation issued to those other than employees in accordance with ASC 505-50. Equity instruments issued to those other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of share-based payments using the Black-Scholes Option Pricing Model for common stock options and the closing price of the Company’s common stock for common share issuances. 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 | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
4. Financial Instruments | The following table represents the Company’s assets that are measured at fair value as of 31 July 2018 and 2017: As at 31 July 2018 As at 31 July 2017 Financial assets at fair value Cash and cash equivalents $ 324,837 $ 366,584 Total financial assets at fair value $ 324,837 $ 366,584 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 $998,877 as at 31 July 2018. 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. |
Inventory
Inventory | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
5. Inventory | 31 July 2018 31 July 2017 Raw materials $ 9,705 $ - Work in progress 151,039 - Finished goods 567,563 - Consumables 225,110 - Total $ 953,417 $ - |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jul. 31, 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 (Note 11) 23,105 245,659 176,354 15,809 38,717 1,644 1,455,649 1,956,937 Additions 1,481 189,450 85,603 11,885 - - 538,279 826,698 Balance, 31 July 2018 24,586 435,109 261,957 27,694 38,717 1,644 1,993,928 2,783,635 Accumulated Depreciation: Balance, 31 July 2017 - - - - - - - - Depreciation 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Net Book Value: As at 31 July 2017 - - - - - - - - As at 31 July 2018 $ 21,409 $ 393,940 $ 236,511 $ 25,140 $ 33,217 $ 1,416 $ 1,904,265 $ 2,615,898 During the year ended July 31, 2018, the Company allocated $158,926 (2017: $nil) of depreciation to cost of sales, of which $97,556 was included in the cost of inventory. |
Related Party Balances and Tran
Related Party Balances and Transactions | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
7. Related Party Balances and Transactions | In addition to those disclosed elsewhere in these consolidated financial statements, related party transactions for the year ended 31 July 2018 and 2017 are as follows: a) During the year ended 31 July 2018, accounting fees of $29,531 (2017 - $16,321) were paid/accrued to a company controlled by the former Chief Financial Officer and a director of the Company. b) During the year ended 31 July 2018, consulting fees of $144,528 (2017 - $Nil) were paid/accrued to companies related to the president of the Company. c) During the year ended 31 July 2018, management fees of $66,759 (2017 - $Nil) were paid/accrued to a company controlled by the Chief Executive Officer of the Company. d) During the year ended 31 July 2018, management fees of $27,489 (2017 - $18,890) were paid/accrued to a company controlled by the Chief Financial Officer of the Company. e) During the year ended 31 July 2018, management fees of $Nil (2017 - $11,334) were paid/accrued to a former Chief Executive Officer of the Company. f) During the year ended 31 July 2018, management fees of $9,425 (2017 - $Nil) were paid/accrued to a company controlled by a director of the Company. g) During the year ended 31 July 2018, management fees of $Nil (2017 - $36,794) were paid/accrued to a former Chief Executive Officer of the Company. h) As at 31 July 2018, the Company owed $Nil (31 July 2017 - $4,805) to the former Chief Executive Officer of the Company. i) As at 31 July 2018, the Company owed $17,028 (31 July 2017 - $Nil) to the Chief Executive Officer of the Company and a company controlled by him. j) As at 31 July 2018, the Company owed $1,210 (31 July 2017 - $Nil) to a director of the Company and a company controlled by him. k) As at 31 July 2018, the Company owed $28,810 (31 July 2017 - $Nil) to a director of the Company and a company controlled by him. l) As at 31 July 2018, the Company owed $4,033 (31 July 2017 - $Nil) to the Chief Financial Officer of the Company. The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. In addition, there are amounts owing to related parties resulting from the purchase of NMG (Note 8). |
Promissory Notes
Promissory Notes | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
8. Promissory Notes | In connection with the Acquisition of NMG, on 14 November 2017, the Company issued promissory notes totaling $2,175,000 to NMG Members (Note 11). As these promissory notes are non-interest bearing, they were discounted to a present value of $1,887,863 at a rate of 12%. The promissory notes are non-interest bearing, secured by the assets of the Company, and due the earlier of 14 February 2019 or within 30 days from the date the Company completes a financing of at least $500,000. Any unpaid amounts at maturity will bear interest at a rate of 10% per annum. At July 31, 2018, the promissory notes were accreted to their face value as it was estimated that repayment would occur imminently due to the Company’s fund raising initiatives. 31 July 2018 31 July 2017 Balance, beginning $ - $ - Issuance of promissory notes (Note 11) 1,887,277 - Accretion expense 277,219 - Foreign exchange adjustment 10,504 - Balance, ending $ 2,175,000 $ - |
Capital Stock
Capital Stock | 12 Months Ended |
Jul. 31, 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. On 13 March 2017, a total of 150,000 Class A preferred shares were converted into 500,000 common shares of the Company. On 8 May 2017, the remaining 2,325,500 Class A preferred shares were converted into 7,751,765 common shares of the Company. In connection with the Acquisition, on 14 November 2017, the Company eliminated its authorized Class A Preferred share class 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 11). On 19 April 2017, the Company closed a private placement issuing a total of 8,700,000 common shares for gross proceeds of $984,943 (CAD$1,305,000). The Company paid share issue costs of $48,115 (CAD$63,750) related to this private placement. 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 $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $4,270,017 (CAD$5,462,354) (Note 11). 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 $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $390,822 (CAD$500,060) (Note 11). 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 $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $35,169 (CAD$45,000) (Note 11). On 14 November 2017, the Company issued a total of 18,827,000 common shares valued at $6,337,190 in connection with the Acquisition of NMG (Note 11). The Company is obligated to issue 423,000 common shares, which have a fair value of $135,202 (Note 11). 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 11). The Company issued a total of 367,286 brokers’ warrants with a fair value of $62,357 (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 $219,459 (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 $0.52 (CAD$0.66) per unit for aggregate gross proceeds of $330,486 (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. On 16 May 2018, the Company issued 70,500 previously escrowed shares with a fair value of $31,935 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 11). 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 CAD$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 $726,578 (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 % On 6 June 2018, the Company issued 175,000 stock options in accordance with the Company’s stock option plan at an exercise price of CDN$0.47 per share for a five year term expiring 6 June 2023. The options were granted to a consultant of the Company. The fair value of the stock options was calculated to be $63,101 (CAD$81,129) using the Black-Scholes Option Pricing Model using the following assumptions: Expected life of the options 5 years Expected volatility 262 % Expected dividend yield 0 % Risk-free interest rate 2.16 % 31 July 2018 31 July 2017 Number of options Weighted average exercise price Number of options Weighted average exercise price Opening balance - - - - Options granted 4,025,000 CAD$0.65 - - Closing balance 4,025,000 CAD$0.65 - - Share purchase warrants and brokers’ warrants 31 July 2018 31 July 2017 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Opening balance - - - - Warrants issued 10,106,820 CAD$0.89 - - Closing balance 10,106,820 CAD$0.89 - - As at 31 July 2018, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 9,102,141 CAD$0.90 14 November 2019 367,286 CAD$0.66 14 November 2019 637,393 CAD$0.90 1 December 2019 10,106,820 |
Segmented Information and Major
Segmented Information and Major Customers | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
10. Segmented Information and Major Customers | 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. During the year ended July 31, 2018, the Company relied on three major customers for 37% of its revenues (31 July 2017 – Nil). |
Business Acquisition
Business Acquisition | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
11. 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 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. 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 (issued); 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 over the 36 month period included in equity as shares to be issued with a total fair value of $135,202 (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 Company completed a concurrent financing consisting of 9,102,141 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 CAD$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 year ended 31 July, 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”). 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 $5,386,155 as well as a cash payment of $2,309,000 pro rata amongst the NMG members and promissory notes to the NMG members in the aggregate amount of $2,175,000. The Company also issued 2,037,879 common shares to TI Nevada with a fair value of $685,788, 212,121 common shares to Charles Fox with a fair value of $71,383, 47,000 common shares to Toro Pacific Management Inc. with a fair value of $15,816, 60,000 common shares to Chris Hunt with a fair value of $20,192, and 470,000 common shares to Benjamin Rutledge with a fair value of $159,114 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 $135,202 on the date of acquisition. The Company recognized $330,324 in transaction costs in connection with the shares issued to non-NMG members. The promissory notes totalling $2,175,000 were discounted to a present value of $1,887,277 (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 was 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. The allocation of the purchase consideration is as follows: Purchase consideration Share considerations $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL 10,339,603 Assets acquired: Cash 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 Goodwill recognized comprises the assembled workforce and their knowledge with respect to NMG, regulatory affairs and the cannabis industry; and expected revenue growth and future market development with legalization of recreational cannabis in Nevada. At 31 July 2017, the Company advanced NMG $103,495. This amount was unsecured, non-interest bearing and due on demand. At 31 July 2017, the Company advanced NMG $103,495. This amount was unsecured, non-interest bearing and due on demand. |
Commitments
Commitments | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
12. 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. The guaranteed minimum monthly rent is subject to a 3% increase on each anniversary date of the lease. b) On 14 November 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 | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
13. Income Taxes | A reconciliation of income taxes at statutory rates with the reported taxes is as follows: 2018 2017 Net loss $ (2,685,782 ) $ (367,159 ) Federal and state income tax rates 26.45 % 35 % Expected income tax recovery (710,389 ) (128,506 ) Permanent differences 528,510 - Change in estimates and others 225,902 3,325 Change in tax rates (725,324 ) - Change in benefit not recognized (223,420 ) 125,181 Total income tax recovery $ (904,722 ) $ - The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 31 July 2018 As at 31 July 2017 Deferred income tax asset Net income tax operating loss carry forward $ 985,290 $ 1,208,710 Deferred tax allowance (985,290 ) (1,208,710 ) Deferred income tax liability Brand and Licenses 1,716,120 - Net deferred income tax liability $ 1,716,120 $ - The income tax operating losses carried forward expire between 2031 and 2038. |
Investment in NMG Ohio LLC
Investment in NMG Ohio LLC | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
14. Investment in NMG Ohio LLC | On 7 June 2018, the Company acquired a 30% interest in NMG Ohio LLC (“NMG Ohio”). During the period ended July 31, 2018, the Company invested $77,600 in NMG Ohio. The investment is accounted for using the equity method of accounting. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2018 | |
Notes to Financial Statements | |
15. Subsequent Events | On October 30, 2018 the Company entered into a strategic investment agreement (the “Investment Agreement”) with Australis Capital Inc. (“Australis”). Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units (the “Units”) of BaM, each comprised of one common share (a “Common Share”) and one common share purchase warrant (a “Warrant”) of the Company, at a purchase price of CAD$0.40 per Unit for gross proceeds of CAD$6,400,000, and (ii) CAD$1,600,000 principal amount 8% unsecured convertible debentures (the “Debentures”) of the Company maturing two years following the date of issue (collectively, the “Financing”). Each Warrant is exercisable to acquire one Common Share of the Company at an exercise price of CAD$0.50 per share for a period of two years, subject to adjustment and acceleration in certain circumstances. The Debentures will bear interest from the date of issuance (the “Issue Date”) at a rate of 8% per annum, calculated and payable semi-annually, in arrears. Repayment of the then outstanding principal amount of the Debentures, together with any accrued and unpaid interest thereon, is to be made on or prior to the date that is two years from the Issue Date (the “Maturity Date”). The Debentures are convertible at the option of Australis into Common Shares at a conversion price equal to CAD$0.55 per Common Share up to the Maturity Date, subject to adjustment and acceleration in certain circumstances. Under the terms of the Investment Agreement, the parties have agreed to negotiate in good faith a license agreement pursuant to which the Company will grant Australis an exclusive and assignable license to use the BaM brand outside of the United States of America on commercially reasonable terms. In addition, the Company will enter into a commercial advisory agreement with Australis Capital (Nevada) Inc. (“Australis Nevada”), a wholly-owned subsidiary of Australis, pursuant to which Australis Nevada will provide advisory and consulting services to the Company for a term ending on the date that is the earlier of: (i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares. Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares. Subject to applicable laws and the rules of the CSE, for as long as Australis owns at least 10% of the issued and outstanding Common Shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the “Board”). If Australis exercises all of the Warrants and converts all of the Debentures purchased in the Financing, Australis will be entitled to nominate a second director for election to the Board. On November 2, 2018 the Company executed the Investment Agreement and completed the sale of securities pursuant to the Investment Agreement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jul. 31, 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 31 July 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 based on historical return experience and adjusts 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. |
Investments | The Company has certain investments in non-marketable equity instruments of private companies. The Company accounts for these investments using the equity method if they provide the Company the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method is appropriate. The Company records equity method investments initially at cost, and adjusts the carrying amount to reflect the Company’s share of the earnings or losses of the investee. |
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 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 31 July 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. |
Stock-based compensation | The Company accounts for stock-based compensation issued to those other than employees in accordance with ASC 505-50. Equity instruments issued to those other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of share-based payments using the Black-Scholes Option Pricing Model for common stock options and the closing price of the Company’s common stock for common share issuances. |
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) | 12 Months Ended |
Jul. 31, 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) | 12 Months Ended |
Jul. 31, 2018 | |
Financial Instruments | |
Schedule of financial assets at fair value | As at 31 July 2018 As at 31 July 2017 Financial assets at fair value Cash and cash equivalents $ 324,837 $ 366,584 Total financial assets at fair value $ 324,837 $ 366,584 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Inventory Tables Abstract | |
Schedule of inventory Table | 31 July 2018 31 July 2017 Raw materials $ 9,705 $ - Work in progress 151,039 - Finished goods 567,563 - Consumables 225,110 - Total $ 953,417 $ - |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jul. 31, 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 (Note 11) 23,105 245,659 176,354 15,809 38,717 1,644 1,455,649 1,956,937 Additions 1,481 189,450 85,603 11,885 - - 538,279 826,698 Balance, 31 July 2018 24,586 435,109 261,957 27,694 38,717 1,644 1,993,928 2,783,635 Accumulated Depreciation: Balance, 31 July 2017 - - - - - - - - Depreciation 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Net Book Value: As at 31 July 2017 - - - - - - - - As at 31 July 2018 $ 21,409 $ 393,940 $ 236,511 $ 25,140 $ 33,217 $ 1,416 $ 1,904,265 $ 2,615,898 |
Promissory Notes (Tables)
Promissory Notes (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Promissory Notes | |
Schedule of promissory notes tables | 31 July 2018 31 July 2017 Balance, beginning $ - $ - Issuance of promissory notes (Note 11) 1,887,277 - Accretion expense 277,219 - Foreign exchange adjustment 10,504 - Balance, ending $ 2,175,000 $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Jul. 31, 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 fair value of stock options | Expected life of the options 5 years Expected volatility 262 % Expected dividend yield 0 % Risk-free interest rate 2.16 % |
Schedule of warrants outstanding | Number of warrants outstanding and exercisable Exercise price Expiry dates 9,102,141 CAD$0.90 14 November 2019 367,286 CAD$0.66 14 November 2019 637,393 CAD$0.90 1 December 2019 10,106,820 |
Warrants [Member] | |
Schedule of fair value of stock options | 31 July 2018 31 July 2017 Number of warrants Weighted average exercise price Number of warrants Weighted average 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 | 31 July 2018 31 July 2017 Number of options Weighted average exercise price Number of options Weighted average exercise price Opening balance - - - - Options granted 4,025,000 CAD$0.65 - - Closing balance 4,025,000 CAD$0.65 - - |
Business Acquisition (Tables)
Business Acquisition (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Business Acquisition | |
Schedule of business acquisitions by acquisition | Purchase consideration Share considerations $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL 10,339,603 Assets acquired: Cash 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2018 | |
Income Taxes | |
Reconciliation of income taxes at statutory rates | A reconciliation of income taxes at statutory rates with the reported taxes is as follows: 2018 2017 Net loss $ (2,685,782 ) $ (367,159 ) Federal and state income tax rates 26.45 % 35 % Expected income tax recovery (710,389 ) (128,506 ) Permanent differences 528,510 - Change in estimates and others 225,902 3,325 Change in tax rates (725,324 ) - Change in benefit not recognized (223,420 ) 125,181 Total income tax recovery $ (904,722 ) $ - |
Schedule of deferred income tax assets and liabilities | The significant components of the Company's deferred income tax assets and liabilities are as follows: As at 31 July 2018 As at 31 July 2017 Deferred income tax asset Net income tax operating loss carry forward $ 985,290 $ 1,208,710 Deferred tax allowance (985,290 ) (1,208,710 ) Deferred income tax liability Brand and Licenses 1,716,120 - Net deferred income tax liability $ 1,716,120 $ - |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Details Narrative) - USD ($) | 12 Months Ended | |||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | May 31, 2004 | |
State of incorporation | Delaware | |||
Date of incorporation | Nov. 5, 1998 | |||
Cash and cash equivalents | $ 324,837 | $ 366,584 | ||
Working capital deficit | $ (998,877) | $ (218,928) | ||
Kaleidoscope Venture Capital [Member] | ||||
Ownership percentage | 100.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 12 Months Ended |
Jul. 31, 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 ($) | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Financial assets at fair value | |||
Cash and cash equivalents | $ 324,837 | $ 366,584 | |
Total financial assets at fair value | $ 324,838 | $ 366,585 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | Jul. 31, 2018 | Jul. 31, 2017 |
Financial Instruments Details Narrative Abstract | ||
Working capital deficit | $ (998,877) | $ (218,928) |
Inventory (Details)
Inventory (Details) - USD ($) | Jul. 31, 2018 | Jul. 31, 2017 |
Inventory Details Abstract | ||
Raw materials | $ 9,705 | |
Work in progress | 151,039 | |
Finished goods | 567,563 | |
Consumables | 225,110 | |
Total | $ 953,417 |
Property and Equipment (Details
Property and Equipment (Details) | 12 Months Ended |
Jul. 31, 2018USD ($) | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 1,956,937 |
Additions | 826,698 |
Balance, 31 July 2018 | 2,783,635 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 167,737 |
Balance, 31 July 2018 | 167,737 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 2,615,898 |
Office Equipment [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 23,105 |
Additions | 1,481 |
Balance, 31 July 2018 | 24,586 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 3,177 |
Balance, 31 July 2018 | 3,177 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 21,409 |
Cultivation equipment [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 245,659 |
Additions | 189,450 |
Balance, 31 July 2018 | 435,109 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 41,169 |
Balance, 31 July 2018 | 41,169 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 393,940 |
Production Equipment [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 176,354 |
Additions | 85,603 |
Balance, 31 July 2018 | 261,957 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 25,446 |
Balance, 31 July 2018 | 25,446 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 236,511 |
Kitchen equipment [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 15,809 |
Additions | 11,885 |
Balance, 31 July 2018 | 27,694 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 2,554 |
Balance, 31 July 2018 | 2,554 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 25,140 |
Vehicles [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 38,717 |
Additions | |
Balance, 31 July 2018 | 38,717 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 5,500 |
Balance, 31 July 2018 | 5,500 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 33,217 |
Vault equipment [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 1,644 |
Additions | |
Balance, 31 July 2018 | 1,644 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 228 |
Balance, 31 July 2018 | 228 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | 1,416 |
Improvements [Member] | |
Cost | |
Balance, 31 July 2017 | |
Acquired assets (Note 11) | 1,455,649 |
Additions | 538,279 |
Balance, 31 July 2018 | 1,993,928 |
Accumulated Depreciation | |
Balance, 31 July 2017 | |
Depreciation | 89,663 |
Balance, 31 July 2018 | 89,663 |
Net Book Value | |
As at 31 July 2017 | |
As at 31 July 2018 | $ 1,904,265 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2015 | |
Property And Equipment Details Abstract | ||
Depreciation allocated to cost of sales | $ 158,926 | |
Depreciation allocated to cost of sales included in inventory | $ 97,556 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 18, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Consulting fees | $ 206,913 | $ 187,158 | |
Due to related party | 51,081 | 4,805 | |
PLN [Member] | |||
Deposit | $ 250,000 | ||
Description for funding of expenditures under agreement | 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 | ||
Chief Financial Officer [Member] | |||
Due to related party | 4,033 | ||
Director [Member] | |||
Management fees | 9,425 | ||
Due to related party | 1,210 | ||
Former Chief Executive Officer [Member] | |||
Management fees | 11,334 | ||
Due to related party | 4,805 | ||
Chief Financial Officer and director [Member] | |||
Accounting fees | 29,531 | 16,321 | |
Chief Executive Officer [Member] | |||
Management fees | 66,759 | ||
Due to related party | 17,028 | ||
Chief Executive Officer [Member] | |||
Management fees | 27,489 | 18,890 | |
Former Chief Executive Officer One [Member] | |||
Management fees | 36,794 | ||
President [Member] | |||
Management fees | 144,528 | ||
Director one [Member] | |||
Due to related party | $ 28,810 |
Promissory Notes (Details)
Promissory Notes (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Promissory Notes Details Abstract | ||
Balance, beginning | ||
Issuance of promissory notes (Note 11) | 1,887,863 | |
Accretion expense | 287,137 | |
Foreign exchange adjustment | 10,504 | |
Balance, ending | $ 2,175,000 |
Promissory Notes (Details Narra
Promissory Notes (Details Narrative) | Nov. 14, 2017USD ($) |
TI Nevada [Member] | |
Promissory note | $ 500,000 |
Debt maturity date | Feb. 14, 2019 |
NMG [Member] | |
Promissory note | $ 2,175,000 |
Present value factor | 12.00% |
Present value promissory note | $ 1,887,863 |
Debt maturity date | Feb. 14, 2019 |
Debt in default, interest rate description | Any unpaid amounts at maturity will bear interest at a rate of 10% per annum |
Capital Stock (Details)
Capital Stock (Details) | Jun. 06, 2018 | Nov. 24, 2017 |
Capital Stock | ||
Expected life of the options | 5 years | 5 years |
Expected volatility | 262.00% | 198.00% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.16% | 1.63% |
Capital Stock (Details 1)
Capital Stock (Details 1) - Stock Options [Member] - $ / shares | 1 Months Ended | 12 Months Ended | |
Nov. 24, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Opening balance | |||
Options granted | 3,850,000 | 4,025,000 | |
Closing balance | 4,025,000 | ||
Weighted average exercise price, opening balance | |||
Weighted average exercise price, options granted | $ 0.66 | 0.65 | |
Weighted average exercise price, closing balance | $ 0.65 |
Capital Stock (Details 2)
Capital Stock (Details 2) - Warrants [Member] - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Opening balance | ||
Warrants issued | $ 10,106,820 | |
Closing balance | 10,106,820 | |
Weighted average exercise price, opening balance | ||
Weighted average exercise price, options granted | 0.89 | |
Weighted average exercise price, closing balance | $ 0.89 |
Capital Stock (Details 3)
Capital Stock (Details 3) | 12 Months Ended |
Jul. 31, 2018$ / sharesshares | |
Number of warrants outstanding and exercisable | 10,106,820 |
Range One [Member] | |
Number of warrants outstanding and exercisable | 9,102,141 |
Exercise price | $ / shares | $ 0.90 |
Expiry dates | Nov. 14, 2019 |
Range Two [Member] | |
Number of warrants outstanding and exercisable | 367,286 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | Nov. 14, 2019 |
Range Three [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) - USD ($) | Jun. 06, 2018 | Dec. 02, 2017 | Nov. 14, 2017 | Nov. 02, 2017 | Aug. 15, 2017 | May 08, 2017 | Mar. 13, 2017 | Nov. 24, 2017 | Oct. 31, 2017 | Aug. 16, 2017 | Apr. 19, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | May 16, 2018 |
Capital stock, par value | $ 0.0001 | $ 0.0001 | ||||||||||||
Capital stock, shares authorized | 900,000,000 | 900,000,000 | ||||||||||||
Preferred stock converted into common shares | 7,751,765 | 500,000 | ||||||||||||
Fair value of warrant | $ 62,357 | |||||||||||||
Warrants shares issued | 367,286 | |||||||||||||
Warrant exercisable price per share | $ 0.90 | |||||||||||||
Share issuance costs | $ 219,459 | $ 48,115 | ||||||||||||
Warrant exercisable period | 24 months | |||||||||||||
Fair value of stock options | $ 726,578 | |||||||||||||
Stock Options [Member] | ||||||||||||||
Stock options granted | 3,850,000 | 4,025,000 | ||||||||||||
Exercise price | $ 0.66 | $ 0.65 | ||||||||||||
Term of options | 5 years | |||||||||||||
Expiry period | Nov. 24, 2022 | |||||||||||||
Stock Options [Member] | Consultant [Member] | ||||||||||||||
Stock options granted | 175,000 | |||||||||||||
Exercise price | $ 0.47 | |||||||||||||
Term of options | 5 years | |||||||||||||
Expiry period | Jun. 6, 2023 | |||||||||||||
Fair value of stock options | $ 63,101 | |||||||||||||
NMG [Member] | ||||||||||||||
Common stock shares issued | 18,827,000 | |||||||||||||
Common stock value | $ 6,337,190 | |||||||||||||
Number of warrants purchase exercisable shares | 9,102,141 | |||||||||||||
Warrant exercisable price per share | $ 0.66 | |||||||||||||
Term of options | 24 months | |||||||||||||
Business acquisition shares issued or issuable | 423,000 | |||||||||||||
Business acquisition, fair value of shares issued or issuable | $ 135,202 | |||||||||||||
Toro Pacific Management Inc. [Member] | ||||||||||||||
Escrowed shares issued | 70,500 | |||||||||||||
Escrowed shares fair value | $ 31,935 | |||||||||||||
Class A Preferred Shares | ||||||||||||||
Converted preferred stock | 2,325,500 | 150,000 | ||||||||||||
Private Placement [Member] | ||||||||||||||
Private placements shares issued | 637,393 | |||||||||||||
Subscription receipts per price | $ 0.52 | |||||||||||||
Proceeds from issuance of private placement | $ 330,486 | $ 984,943 | ||||||||||||
Common stock shares issued | 8,700,000 | |||||||||||||
Share issuance costs | $ 48,115 | |||||||||||||
Private Placement [Member] | Tranches One [Member] | ||||||||||||||
Private placements shares issued | 8,276,294 | |||||||||||||
Subscription receipts per price | $ 0.52 | |||||||||||||
Proceeds from issuance of private placement | $ 4,270,017 | |||||||||||||
Private Placement [Member] | Tranches Two [Member] | ||||||||||||||
Private placements shares issued | 8,276,294 | |||||||||||||
Subscription receipts per price | $ 0.52 | |||||||||||||
Proceeds from issuance of private placement | $ 4,270,017 | |||||||||||||
Private Placement [Member] | Tranches Three [Member] | ||||||||||||||
Private placements shares issued | 757,666 | |||||||||||||
Subscription receipts per price | $ 0.52 | |||||||||||||
Proceeds from issuance of private placement | $ 390,822 | |||||||||||||
Private Placement [Member] | Tranches Four [Member] | ||||||||||||||
Private placements shares issued | 68,181 | |||||||||||||
Subscription receipts per price | $ 0.52 | |||||||||||||
Proceeds from issuance of private placement | $ 35,169 |
Segmented Information and Maj_2
Segmented Information and Major Customers (Details Narrative) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Number of operating segments | 1 | |
Revenue [Member] | Customer Concentration Risk [Member] | ||
Concentration risk percentage | 37.00% | 0.00% |
Number of customers | 1 |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 |
Purchase consideration | |||
Cash considerations | $ 324,837 | $ 366,584 | |
Promissory notes issued | 2,175,000 | ||
Assets acquired: | |||
Amounts receivable | 632,477 | 17,798 | |
Inventory | 953,417 | ||
Property and equipment | 2,615,898 | ||
Liabilities assumed: | |||
Goodwill | 2,635,721 | ||
NMG [Member] | |||
Purchase consideration | |||
Share considerations | 6,143,326 | ||
Cash considerations | 2,309,000 | ||
Promissory notes issued | 1,887,277 | ||
TOTAL | 10,339,603 | ||
Assets acquired: | |||
Cash | 260,842 | ||
Amounts receivable | 253,697 | ||
Prepaid expenses | 44,552 | ||
Inventory | 498,680 | ||
Property and equipment | 1,951,696 | ||
Brand | 247,000 | ||
Licenses | 7,925,000 | ||
Liabilities assumed: | |||
Trade payable and accrued liabilities | (367,385) | ||
Loans payable | (250,000) | ||
Deferred tax liability | (2,860,200) | ||
Net assets acquired | 7,703,882 | ||
Goodwill | 2,635,721 | ||
TOTAL | $ 10,339,603 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 14, 2017 | Nov. 13, 2017 | May 15, 2017 | Jul. 31, 2018 | Jul. 31, 2017 |
Description of subscription receipts under concurrent financing | <font style="font: 10pt Times New Roman, Times, Serif">The concurrent financing consisting of 9,102,141 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 CAD$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: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The concurrent financing consisting of 9,102,141 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 CAD$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> | |||||
Advance (Note 11) | $ 103,495 | |||||
Toro Pacific Management Inc. [Member] | Assignment and Novation Agreement [Member] | ||||||
Business acquisition shares issued or issuable | 423,000 | 1,000,000 | ||||
Deemed share price | $ 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 0 0 33.75pt; 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: 4%; 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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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: 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">1/10 of the Transferor’s shares upon closing of the Acquisition (issued);</font></td></tr> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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 (issued);</font></td></tr> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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="margin: 0pt; text-align: justify"></p>" id="sjs-D7"><p style="margin: 0pt; 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 0 0 33.75pt; 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: 4%; 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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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: 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">1/10 of the Transferor’s shares upon closing of the Acquisition (issued);</font></td></tr> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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 (issued);</font></td></tr> <tr> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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> <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"> </font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </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="margin: 0pt; text-align: justify"></p> | |||||
Business acquisition, fair value of shares issued or issuable | $ 135,202 | |||||
NMG Acquisition [Member] | NMG [Member] | ||||||
Business acquisition shares issued or issuable | 16,000,000 | |||||
Business acquisition, fair value of shares issued or issuable | $ 5,386,155 | $ 5,386,155 | ||||
Business acquisition consideration transferred in cash | 2,309,000 | |||||
Promissory note issued | $ 2,175,000 | 2,175,000 | ||||
NMG Acquisition [Member] | Toro Pacific Management Inc. [Member] | ||||||
Business acquisition shares issued or issuable | 47,000 | |||||
Business acquisition, fair value of shares issued or issuable | $ 15,816 | $ 15,816 | ||||
NMG Acquisition [Member] | TI Nevada [Member] | ||||||
Business acquisition shares issued or issuable | 2,037,879 | |||||
Business acquisition, fair value of shares issued or issuable | 685,788 | $ 685,788 | ||||
Promissory note issued | 2,175,000 | 2,175,000 | ||||
Repayment of loan | 330,324 | |||||
Present value of promissory note | 1,887,277 | $ 1,887,277 | ||||
NMG Acquisition [Member] | Charles Fox [Member] | ||||||
Business acquisition shares issued or issuable | 212,121 | |||||
Business acquisition, fair value of shares issued or issuable | $ 71,383 | $ 71,383 | ||||
NMG Acquisition [Member] | Chris Hunt [Member] | ||||||
Business acquisition shares issued or issuable | 60,000 | |||||
Business acquisition, fair value of shares issued or issuable | $ 20,192 | 20,192 | ||||
NMG Acquisition [Member] | Benjamin Rutledge [Member] | ||||||
Business acquisition shares issued or issuable | 470,000 | |||||
Business acquisition, fair value of shares issued or issuable | $ 159,114 | $ 159,114 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 11, 2014 | Jul. 31, 2018 |
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] | |||
Description for lease option to extend | <font style="font: 10pt Times New Roman, Times, Serif">The guaranteed minimum monthly rent is subject to a 3% increase on each anniversary date of the lease.</font></p>" id="sjs-D8"><p style="margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The guaranteed minimum monthly rent is subject to a 3% increase on each anniversary date of the lease.</font></p> | ||
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 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Income Taxes Details Abstract | ||
Net loss for the period | $ (2,685,782) | $ (367,159) |
Federal and state income tax rates | 26.45% | 35.00% |
Expected income tax recovery | $ (710,389) | $ (128,506) |
Permanent differences | 528,510 | |
Change in estimates and others | 225,902 | 3,325 |
Change in tax rates | (725,324) | |
Change in benefit not recognized | (223,420) | 125,181 |
Total income tax recovery | $ (904,722) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Jul. 31, 2018 | Jul. 31, 2017 |
Deferred income tax assets | ||
Net income tax operating loss carry forward | $ 985,290 | $ 1,208,710 |
Deferred tax allowance | (985,290) | (1,208,710) |
Deferred income tax liability | ||
Brand and License | 1,716,120 | |
Net deferred income tax liability | $ 1,716,120 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Jul. 31, 2018 | |
Income Taxes Details Narrative Abstract | |
Operating losses carried forward expire | expire between 2031 and 2038 |
Investment in NMG Ohio LLC (Det
Investment in NMG Ohio LLC (Details Narrative) - USD ($) | Jul. 31, 2018 | Jun. 07, 2018 | Jul. 31, 2017 |
Investment in NMG Ohio LLC (Note 14) | $ 77,600 | ||
NMG Ohio LLC [Member] | |||
Ownership percentage | 30.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | 12 Months Ended |
Oct. 30, 2018 | Jul. 31, 2018 | |
Investment agreement [Member] | ||
Description of units to be acquired under agreement | <font style="font: 10pt Times New Roman, Times, Serif">Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units (the “Units”) of BaM, each comprised of one common share (a “Common Share”) and one common share purchase warrant (a “Warrant”) of the Company, at a purchase price of CAD$0.40 per Unit for gross proceeds of CAD$6,400,000</font></p>" id="sjs-B4"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units (the “Units”) of BaM, each comprised of one common share (a “Common Share”) and one common share purchase warrant (a “Warrant”) of the Company, at a purchase price of CAD$0.40 per Unit for gross proceeds of CAD$6,400,000</font></p> | |
Proceeds receivable from units to be acquired under agreement | $ 6,400,000 | |
Investment agreement [Member] | Warrant [Member] | ||
Class of warrants or rights exercisable, description | <font style="font: 10pt Times New Roman, Times, Serif">Each Warrant is exercisable to acquire one Common Share of the Company at an exercise price of CAD$0.50 per share for a period of two years, subject to adjustment and acceleration in certain circumstances</font></p>" id="sjs-B7"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Each Warrant is exercisable to acquire one Common Share of the Company at an exercise price of CAD$0.50 per share for a period of two years, subject to adjustment and acceleration in certain circumstances</font></p> | |
Investment agreement [Member] | Convertible debenture [Member] | ||
Maturity period | 2 years | |
Unsecured debt | $ 1,600,000 | |
Interest rate | 8.00% | |
Description for the terms of repayment | <font style="font: 10pt Times New Roman, Times, Serif">The Debentures will bear interest from the date of issuance (the “Issue Date”) at a rate of 8% per annum, calculated and payable semi-annually, in arrears. Repayment of the then outstanding principal amount of the Debentures, together with any accrued and unpaid interest thereon, is to be made on or prior to the date that is two years from the Issue Date (the “Maturity Date”)</font></p>" id="sjs-B12"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Debentures will bear interest from the date of issuance (the “Issue Date”) at a rate of 8% per annum, calculated and payable semi-annually, in arrears. Repayment of the then outstanding principal amount of the Debentures, together with any accrued and unpaid interest thereon, is to be made on or prior to the date that is two years from the Issue Date (the “Maturity Date”)</font></p> | |
Terms of conversion feature | <font style="font: 10pt Times New Roman, Times, Serif">The Debentures are convertible at the option of Australis into Common Shares at a conversion price equal to CAD$0.55 per Common Share up to the Maturity Date, subject to adjustment and acceleration in certain circumstances</font></p>" id="sjs-B13"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Debentures are convertible at the option of Australis into Common Shares at a conversion price equal to CAD$0.55 per Common Share up to the Maturity Date, subject to adjustment and acceleration in certain circumstances</font></p> | |
Commercial advisory agreement [Member] | ||
Terms of agreement | <font style="font: 10pt Times New Roman, Times, Serif">(i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares. Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares</font></p>" id="sjs-C15"><p style="margin: 0pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares. Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares</font></p> |