| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: DESCRIPTION OF BUSINESS
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Corporate Structure Groove Botanicals,
Inc. (the "Company") (formerly known as Avalon Oil & Gas, Inc.), and its predessors was originally incorporated in
Colorado in April 1991 under the name Snow Runner (USA), Inc. The Company was the general partner of Snow Runner (USA) Ltd.; a
Colorado limited partnership to sell proprietary snow skates under the name "Sled Dogs" which was dissolved in August
1992. In late 1993, the Company relocated its operations to Minnesota and in January 1994 changed our name to Snow Runner, Inc.
In November 1994 we changed our name to the Sled Dogs Company. On November 5, 1997, we filed for protection under Chapter 11 of
the U.S. Bankruptcy Code. In September 1998, we emerged from protection of Chapter 11 of the U.S. Bankruptcy Code. In May, 1999,
we changed our state of domicile to Nevada and our name to XDOGS.COM, Inc. On July 22, 2005, the Board of Directors and a majority
of the Company's shareholders approved an amendment to our Articles of Incorporation to change the Company's name to Avalon Oil
& Gas, Inc., and to increase the authorized number of shares of our common stock from 200,000,000 shares to 1,000,000,000
shares par value of $0.001, and engage in the acquisition of producing oil and gas properties. On November 16, 2011, a majority
of the Company's shareholders approved an amendment to our Articles of Incorporation to increase the authorized number of shares
of our common stock from 1,000,000,000 shares to 3,000,000,000 shares par value of $0.001. This amendment was
not filed with the Nevada Secretary of State. On June 4, 2012
the Board of Directors approved an amendment to our Articles of Incorporation to a reverse split of the issued and outstanding
shares of Common Stock of the Corporation (“Shares”) such that each holder of Shares as of the record date of June
4, 2012 shall receive one (1) post-split Share on the effective date of June 4, 2012 for each three hundred (300) Shares owned. The
reverse split was effective on July 23, 2012. On September 28, 2012, we held a special meeting of Avalon’s
shareholders and approved an amendment to the Company’s Articles of Incorporation such that the Company would be authorized
to issue up to 200,000,000 shares of common stock. We filed an amendment with the Nevada Secretary of State on April
10, 2013, to increase our authorized shares to 200,000,000. On March 21,
2018 the Board of Directors and a majority of the Company's shareholders approved an amendment to our Articles of Incorporation
to change the Company's name to Groove Botanicals, Inc. We filed an amendment to our Articles of Incorporation with the State
of Nevada on May 18, 2018. Principles of consolidation The condensed
consolidated financial statements include the accounts of the Company and the Company’s subsidiary’s Oiltek, Inc.,
AFS Holdings, Inc., and Weyer Partners, LLC. All significant inter-company items have been eliminated in consolidation. Basis of Preparation of Financial
Statements The accompanying
unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form 10-Q. They do not include all of the
information and footnotes required by Accounting Principles generally accepted accounting principles in United States America
(“US GAAP”) for complete financial statements and related notes. The accompanying unaudited condensed consolidated
financial statements and related notes should be read in conjunction with the audited consolidated financial statements of the
Company and notes thereto for the year ended March 31, 2017. In the opinion
of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which include only
normal recurring adjustments) necessary to present fairly the balance sheets of Groove Botanicals, Inc.. and subsidiaries as of
September 30, 2017, the results of their operations for the three and six months ended September 30, 2017 and 2016, and cash flows
for the six months ended September 30, 2017 and 2016, and are not necessarily indicative of the results to be expected for the
entire year. Going Concern The
Company has minimal revenues from our remaining oil and gas assets. We are in need additional cash resources to maintain our operations.
The Company has incurred a loss of $34,253,032 from inception through September 30, 2017. The Company has a working capital deficiency
of $1,092,506 and total deficit of $1,051,536 at September 30, 2017. The Company has not yet received any revenue from the sale
our CBD skincare products. These factors raise substantial doubt about its ability to continue as a going concern. The Company’s
ability to continue as a going concern is dependent on its ability to raise additional capital or obtain necessary debt financing.
The Company is presently dependent on its controlling shareholder to provide us funding for its daily operation and expenses,
including professional fee and fees charged by regulators, although he is under no obligation to do so. The
Company intends to meet the cash requirements for the next 12 months from the issuance date of this report through a combination
of debt and equity financing by way of private placements, friends, family and business associates. The Company currently
did not have any arrangements in place to complete any private placement financings and there is no assurance that the Company
will be successful in completing any such financings on terms that will be acceptable to it. If
we do not have sufficient working capital to pay our operating costs for the next 12 months, we will require additional funds
to pay our legal, accounting and other fees associated with our Company and our filing obligations under United States federal
securities laws, as well as to pay our other accounts payable generated in the ordinary course of our business. Once these costs
are accounted for, we will focus on the manufacture and sale of our CBD skincare products. Any failure
to raise money will have the effect of delaying the timeframes in the business plan as set forth above, and the Company may have
to push back the dates of such activities. The financial
statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses and further
losses are anticipated as a result of the development of business which raises substantial doubt about the Company’s ability
to continue as a going concern within the next twelve months from the issuance date of this report. The ability to
continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining financing
necessary to meet the Company’s obligations and repay its liabilities arising from normal business operations when they
come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from
directors and/or private placement of the Company’s common stock. Use of Estimates The preparation
of financial statements in conformity with generally accepted accounting principles generally accepted in the United States of
America requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial
statements and accompanying notes. Actual results could differ from those estimates and assumptions. Cash and Cash Equivalents Cash and cash
equivalents consist of cash on deposit. The Company maintains its cash balances at several financial institutions. Accounts at
the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000. Fair Value of Financial Instruments The Company's
financial instruments are cash and cash equivalents accounts payable, notes payable, and long-term debt. The recorded values of
cash and cash equivalents and accounts payable approximate their fair values based on their short-term nature. The recorded values
of notes payable and long-term debt approximate their fair values, as interest approximates market rates. Oil and Natural Gas Properties The Company
follows the full cost method of accounting for natural gas and oil properties. Under the full cost concept, all costs
incurred in acquiring, exploring, and developing properties cost center are capitalized when incurred and are amortized as mineral
reserves in the cost center are produced, subject to a limitation that the capitalized costs not exceed the value of those reserves. The
unamortized costs relating to a property that is surrendered, abandoned, or otherwise disposed of are accounted for as an adjustment
of accumulated amortization, rather than as a gain or loss that enters into the determination of net income, until all During the three
and six month periods ended September 30, 2017, no acquisition costs were capitalized. Oil and natural gas properties are
reviewed for recoverability at least annually or when events or changes in circumstances indicate that its carrying value may
exceed future undiscounted cash inflows. For the three and six months ended September 30, 2017 and 2016, the Company impaired
$0 and $0 in Oil and Gas Properties. Property and
Equipment, net Property and
equipment is reviewed for recoverability when events or changes in circumstances indicate that its carrying value may exceed future
undiscounted cash inflows. As of September 30, 2017 and March 31, 2017, the Company had not identified any such impairment. Repairs
and maintenance are charged to operations when incurred and improvements and renewals are capitalized. Property and
equipment are stated at cost. Depreciation is calculated using the straight-line method for financial reporting purposes and accelerated
methods for tax purposes. Their estimated useful lives are
as follows:
Office Equipment: 5-7 Years
Vehicles 5 Years Asset Retirement Obligations In accordance
with the provisions of Financial Accounting Standards Board “FASB” Accounting Standard Codification “ASC”
410-20-15, “Accounting for Asset Retirement Obligations”, the Company records the fair value of its liability for
asset retirement obligations in the period in which it is incurred and a corresponding increase in the carrying amount of the
related long live assets. Over time, the liability is accreted to its present value at the end of each reporting period, and the
capitalized cost is depreciated over the useful life of the related assets. Upon settlement of the liability, the Company will
either settle the obligation for its recorded amount or incur a gain or loss upon settlement. The Company's asset retirement obligations
relate to the plugging and abandonment of its oil properties. Stock Based Compensation Share awards
granted to employees and independent directors are accounted for under ASC 718, "Share-Based Payment". ASC 718-10 eliminates
accounting for share-based compensation transaction using the intrinsic value method and requires instead that such transactions
be accounted for using a fair-value-based method. The Company has elected to adopt the provisions of ASC 718-10 effective January
1, 2006, under the modified prospective transition method, in which compensation cost was recognized beginning with the effective
date (a) based on the requirements of ASC 718-10 for all share-based payments granted after the effective date and (b) based on
the requirements of ASC 718-10 for all awards granted to employees prior to the effective date of ASC 718-10 that remain unvested
on the effective date. The Company
records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance
with the provisions of ASC 505-50, "Equity Based" payment to non-employees. For the awards granted to non-employees, the
Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined
to be the earlier of the performance commitment date or the service completion date. Earnings (loss) per Common Share ASC 260-10-45,
“Earnings Per Share”, requires presentation of "basic" and "diluted" earnings per share on the face
of the statements of operations for all entities with complex capital structures. Basic earnings per share are computed by dividing
net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the
potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted during
the period. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.
When the Company is in loss position, no dilutive effect is considered. Income Taxes Deferred tax
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and
credit carry forwards, 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 effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents
the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets
and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. ASC 740-10-25,
“Accounting for Uncertainty in Income Taxes”, is intended to clarify the accounting for uncertainty in income taxes
recognized in a company's financial statements and prescribes the recognition and measurement of a tax position taken or expected
to be taken in a tax return. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. Under ASC 740-10-25,
evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax
position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical
merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine
the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions
that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period
in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should
be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Revenue Recognition In accordance
with the requirements ASC topic 605 "Revenue Recognition", revenues are recognized at such time as (1) persuasive evidence
of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller's price to the buyer is fixed
or determinable and (4) collectability is reasonably assured. Specifically, oil and gas sales are recognized as income at such
time as the oil and gas are delivered to a viable third party purchaser at an agreed price. Interest income is recognized as it
is earned. Recently Issued
Accounting Policies In May 2014,
the FASB issued ASU 2014-9, "Revenue from Contracts with Customers (Topic 606)," which supersedes the revenue recognition
requirements in ASC Topic 605, "Revenue Recognition," and most industry-specific guidance. ASU 2014-9 is based on the
principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-9 also requires additional disclosure
about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-9 applies
to all contracts with customers except those that are within the scope of other topics in the FASB ASC. The new guidance is effective
for interim and annual reporting periods beginning after December 15, 2017 for public companies. Early adoption is not permitted.
Entities have the option of using either a full retrospective or modified retrospective approach to adopt ASU 2014-9. Additionally,
in March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus agent considerations
(reporting revenue gross versus net), which clarifies the implementation guidance on principal versus agent considerations on
such matters. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying performance
obligations and licensing, which clarifies guidance related to identifying performance obligations and licensing implementation
guidance contained in the new revenue recognition standard. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts
with Customers (Topic 606): Narrow-scope improvements and practical expedients, which addresses narrow-scope improvements to the
guidance on collectability, non-cash consideration, and completed contracts at transition. Additionally, the amendments in this
update provide a practical expedient for contract modifications at transition and an accounting policy election related to the
presentation of sales taxes and other similar taxes collected from customers. In December 2016, the FASB issued ASU No. 2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which clarifies the guidance or corrects
unintended application of guidance. The Company completed its assessment of the new accounting standard and does
not expect the adoption of this standard to have a material impact to our revenue recognition based on our existing contracts
with customers. We adopted the new standard during the first quarter of 2018 using the modified retrospective approach and there
will be no material impact to our previously recorded revenue under the new standard. |
