0001493152-19-017336.txt : 20191114 0001493152-19-017336.hdr.sgml : 20191114 20191114135206 ACCESSION NUMBER: 0001493152-19-017336 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 45 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191114 DATE AS OF CHANGE: 20191114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANNAPOWDER, INC. CENTRAL INDEX KEY: 0001086082 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 870626333 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26027 FILM NUMBER: 191218716 BUSINESS ADDRESS: STREET 1: 20 RAOUL WALLENBERG ST., CITY: TEL AVIV, STATE: L3 ZIP: 6971916 BUSINESS PHONE: 972-3-6130421 MAIL ADDRESS: STREET 1: 20 RAOUL WALLENBERG ST., CITY: TEL AVIV, STATE: L3 ZIP: 6971916 FORMER COMPANY: FORMER CONFORMED NAME: Smart Energy Solutions, Inc. DATE OF NAME CHANGE: 20050919 FORMER COMPANY: FORMER CONFORMED NAME: DATIGEN COM INC DATE OF NAME CHANGE: 20000512 FORMER COMPANY: FORMER CONFORMED NAME: ATOMIC GIANT COM INC DATE OF NAME CHANGE: 19990510 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2019

 

OR

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from               to                 

 

Commission file number: 000-26027

 

CANNA POWDER, INC.

(Exact Name Of Registrant As Specified In Its Charter)

 

Nevada   68-0080601
(State of Incorporation)   (I.R.S. Employer Identification No.)

 

2170 Century Park East #210

Los Angeles CA 90067

  6971916
(Address of Principal Executive Offices)   (ZIP Code)

 

Registrant’s Telephone Number, Including Area Code: +(972) 54-222-9702

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of Each Class   Trading Symbol(s)   Name of each exchange on which registered
None   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] [  ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ] Accelerated filer [  ] Non-Accelerated filer [  ] Smaller reporting company [X]
    Emerging growth company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

On November 14, 2019 the Registrant had 12,403,052 shares of common stock outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

Item   Description   Page
         
    PART I - FINANCIAL INFORMATION    
         
ITEM 1.   FINANCIAL STATEMENTS - UNAUDITED.   3
    Condensed Consolidated Balance Sheets   3
    Condensed Consolidated Statements of Operations   4
    Condensed Consolidated Statements of Comprehensive loss   5
    Condensed Consolidated Statements of Changes in Stockholders’ Equity   6
    Condensed Consolidated Statements of Cash Flows   7
    Notes to Condensed Consolidated Financial Statements   8
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.   17
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   20
ITEM 4.   CONTROLS AND PROCEDURES.   20
         
    PART II - OTHER INFORMATION    
         
ITEM 1.   LEGAL PROCEEDINGS.   21
ITEM 1A.   RISK FACTORS.   21
ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.   21
ITEM 3.   DEFAULT UPON SENIOR SECURITIES.   22
ITEM 4.   MINE SAFETY DISCLOSURE.   22
ITEM 5.   OTHER INFORMATION.   22
ITEM 6.   EXHIBITS.   22

 

2
 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

Canna Powder, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30, 2019   December 31, 2018 
   (unaudited)     
ASSETS          
           
Current assets:          
Cash and cash equivalents  $68,855   $606,245 
Marketable Securities   -    108,164 
Prepaid expenses   17,256    12,847 
Total current assets   86,111    727,256 
           
Total assets  $86,111   $727,256 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities:          
Accounts payable and accrued liabilities  $-   $25,159 
Accounts payable to related party   -    - 
Total current liabilities   -    25,159 
           
Total liabilities  $-   $25,159 
           
Stockholders’ equity          
         
Common stock, par value $0.00001 per share, 495,000,000 common shares authorized, 5,000,000 preferred shares authorized; 12,403,052 and 10,518,226 shares issued and outstanding at September 30, 2019 and December 31, 2018 respectively.  $124   $105 
Accumulated other comprehensive income (loss)   5,338    (173,832)
Non-controlling interest   (96,447)   (37,893)
Stock Payable   -    15,000 
Additional paid in capital   5,944,356    4,472,095 
Accumulated deficit   (5,767,260)   (3,573,378)
           
Total stockholders’ equity   86,111    702,097 
           
Total liabilities and stockholders’ equity  $86,111   $727,256 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3
 

 

Canna Powder, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

   For the three months ended   For the nine months ended 
   September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018 
                 
Revenues  $-   $-   $-   $- 
                     
Expenses:                    
Research and Development expenses   (37,865)   (45,321)   (120,307)   (102,202)
General and Administrative expenses   (447,490)   (57,300)   (2,104,260)   (295,183)
                     
Total operating expenses   (485,355)   (102,621)   (2,224,567)   (397,385)
                     
OTHER EXPENSE:                    
Loss on sale of marketable securities   (251)   -    (27,869)   - 
Total other expense   (485,606)   -    (27,869)   - 
                     
Net (Loss)   (485,606)   (102,621)   (2,252,436)   (397,385)
                     
Provision for income taxes   -    -    -    - 
                     
Net loss   (485,606)   (102,621)   (2,252,436)   (397,385)
Less: loss attributable to non-controlling Interest   21,462    6,685    58,554    21,872 
Net loss attributable to Canna Powder, Inc.   (464,144)   (95,936)  $(2,193,882)  $(375,513)
                     
Loss per share – basic and diluted   (0.04)   (0.01)  $(0.19)  $(0.04)
Weighted average shares outstanding Basic and diluted   12,301,559    9,948,077    11,737,185    9,372,940 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4
 

 

Canna Powder, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

 

   For the three months ended   For the nine months ended 
   September 30, 2019   September 30, 2018   September 30, 2019   September 30, 2018 
                 
Net loss  $(485,606)  $(102,621)  $(2,252,436)  $(397,385)
Less: Non-controlling interest   21,462    6,685    58,554    21,872 
                     
Total (loss) attributable to Canna Powder, Inc. ordinary shareholders.   (464,144)   (95,936)   (2,193,882)   (375,513)
                     
Other comprehensives (loss) income:                    
- Foreign currency translation   5,990    (874)   12,802    (8,023)
- Unrealized holding gains (losses)   -    -    138,499    - 
- Reclassification adjustments for realized losses (gains) on marketable securities.   -    -    27,869    - 
Net comprehensive (loss) attributable to Canna Powder, Inc. ordinary shareholders.   (458,154)   (97,810)   (2,015,712)   (383,536)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5
 

 

Canna Powder, Inc.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

 

    Common stock     Additional Paid-In     Stock     Non-
Controlling
    Accumulated
Other
Comprehensive
    Accumulated        
    Shares     Amount     Capital     Payable     Interest     Income (Loss)     Deficit     Totals  
Balance as of June 30, 2018     9,948,077       99     $ 1,261,051     $       $ (15,187 )   $ (3,794 )   $ (402,741 )   $ 839,428  
Translation adjustments                                     (876 )           (876 )
Net loss for the three months ended September 30, 2018                             (6,685 )           (95,936 )     (375,513 )
Balance as of September 30, 2018     9,948,077       99     $ 1,261,051     $       $ (21,872 )   $ (4,670 )   $ (498,677 )   $ 735,931  
                                                                 
Balance as of June 30, 2019     12,156,177     $ 120     $ 5,832,996     $ -       (74,985 )   $ (650 )   $ (5,303,116 )   $ 454,365  
Cashless exercise of warrants     246,875       3       (3)       -       -       -       -       -  
Warrants issued for services     -       -       111,363                                       111,363  
Translation adjustments     -       -       -       -       -       5,988       -       5,988  
Net loss for the three months ended September 30, 2019     -       -       -       -       (21,462 )     -       (464,144 )     (485,606 )
Balance as of September 30, 2019     12,403,052     $ 124     $ 5,944,356     $ -       (96,447 )   $ 5,338     $ (5,767,260 )   $ 86,111  

 

    Common stock     Additional Paid-In     Stock     Non-
Controlling
    Accumulated
Other
Comprehensive
    Accumulated        
    Shares     Amount     Capital     Payable     Interest     Income (Loss)     Deficit     Totals  
Balance as of December 31, 2017     8,591,577       86     $ 447,164             -     $ 3,353     $ (123,164 )   $ 327,439  
Shares Issued for Cash     1,356,500       13       813,887                   -             813,900  
Translation adjustments     -             -             -       (8,023 )           (8,023 )
Net loss for the nine months ended December 31, 2018     -             -             (21,872 )           (375,513 )     (397,385 )
Balance as of September 30, 2018     9,948,077      $ 99     $ 1,261,051     $       $ (21,872 )   $ (4,670 )   $ (498,677 )   $ 735,931  
                                                                 
Balance as of December 31, 2018     10,518,226     $ 105     $ 4,472,095     $ 15,000       (37,893 )   $ (173,832 )   $ (3,573,378 )   $ 702,097  
Shares Issued for Cash     334,000       3       333,997       -       -       -       -       334,000  
Cashless exercise of warrants     1,538,326       16       (16 )     -       -       -       -       -  
Warrants issued for services     -       -       1,123,280       -       -       -       -       1,123,280  
Stock payable issued     12,500               15,000       (15,000 )     -       -       -       -  
Translation adjustments     -       -       -       -       -       12,802       -       13,852  
Realized loss on marketable securities     -       -       -       -       -       166,368       -       165,318  
Net loss for the nine months ended September 30, 2019     -       -       -       -       (58,554 )     -       (2,193,882 )     (2,252,436 )
Balance as of September 30, 2019     12,403,052     $ 124     $ 5,944,356     $ -       (96,447 )   $ 5,338     $ (5,767,260 )   $ 86,111  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6
 

 

Canna Powder, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   For the
nine months
   For the
nine months
 
   ended   ended 
   September 30, 2019   September 30, 2018 
         
Operating Activities:          
Net (loss) attributable to Canna Powder, Inc.  $(2,193,882)  $(375,513)
Non –controlling interest in loss of consolidated subsidiary   (58,554)   (21,872)
Non-cash compensation   1,123,281    - 
Loss on sale of marketable securities   27,869    - 
Adjustments to reconcile net (loss) to net cash (used in) operating activities:          
Changes in net assets and liabilities:          
Decrease (increase) in prepaid expenses   8,141    (10,321)
(Decrease) increase in Accounts payable and accrued liabilities   (25,159)   (800)
           
Net Cash (used in) operating activities   (1,118,304)   (408,506)
           
Investing Activities:          
Cash received for sale of marketable securities   234,112    - 
Net Cash provided by investing activities   234,112    - 
           
Financing Activities:          
Principal payment on debt   -    (2,687)
Proceeds from sale of common stock (net of issuance expenses)   334,000    813,900 
Net Cash provided by financing activities   334,000    811,213 
Effect of currency on cash   12,802    (8,023)
           
Net increase (decrease) in cash   (537,390)   394,684 
           
Cash and cash equivalents - beginning of period  $606,245   $326,730 
           
Cash and cash equivalents - end of period  $68,855   $721,414 
           
Non Cash items:          
Common shares issued from stock payable  $15,000   $- 
Cashless exercise of warrants  $16   $- 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

7
 

 

CANNA POWDER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

(1) Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

The Company was incorporated in 1999 in the state of Utah under the name Datigen.com, Inc. On August 25, 2005, the Company changed its state of incorporation from Utah to Nevada by the merger of the Company with and into its wholly-owned subsidiary, Canna Powder, Inc., a Nevada corporation. As a result of such merger, the Company’s name was changed to Canna Powder, Inc. in order to better reflect the Company’s business operations.

 

On August 30, 2017, a new wholly-owned subsidiary was registered in Israel under the name of Canna Powder Ltd. (“CannaPowder Israel” or the “Subsidiary”), with 100 common shares outstanding, 0.01 NIS par value (the “Subsidiary Shares”), all of which were held in escrow on behalf of the Company by Israel attorney, Alon Nave. On September 27, 2017, pursuant to board resolution, the 100 Subsidiary Shares held in escrow were transferred to the Company.

 

On December 27, 2017, a board-resolution was adopted to issue an additional: (i) 800 Subsidiary Shares to the Company; and an additional 100 Subsidiary Shares to Rafi Ezra and, as a result, effective December 27, 2017, Canna Powder Ltd became a 90% owned subsidiary of the Company and a minority interest of 10% owned by Rafi Ezra.

 

The Subsidiary’s management consists of Ariel Dor, its General Manger, and Rafi Ezra, its CTO.

 

Research is being conducted at the Hebrew University pursuant to the terms of a Feasibility Study and Option Agreement under the supervision of the inventor of the technology, Professor Shlomo Magdassi (the “Development Program”).

 

The Company currently expects that the Development Program will be completed within three years from its start, with commercial sales starting in 2021. However, there can be no assurance that the Development Program will, in fact, be successful, nor can there be any assurance that the Company may not require additional capital to fully implement its business plan and complete production of commercially viable products based on its technology which is the subject of the Feasibility Study discussed below under “Planned Research and Development and Current Trends.”

 

In the commercial stage, the Company’s plan is to establish and operate several production facilities, each located in separate territories determined by the Company according to their size and regulatory environment that permits studies applicable to other activities prerequisite to commercial exploitation of medical cannabis generally and the Company’s plan to develop cannabis-based powders for medical uses. While there can be no assurance, at present the Company believes that it will be able to produce cannabis powders for medical uses at a significant cost advantage.

 

The accompanying unaudited condensed consolidated financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for an air presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2019.

 

Cash and Cash Equivalents

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, we had cash and cash equivalents of $68,855 and $606,245 respectively.

 

8
 

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows.

 

Revenue Recognition

 

The Company recognizes revenue ratably over the term of the contract in accordance with ASC 606. In 2018, we implemented new internal controls as part of our efforts to adopt the new revenue recognition standard and perform risk assessment processes related to the new revenue standard. These internal controls include providing global training to our finance team and holding regular meetings with management to address risks associated with applying the five-step model for recognizing revenues. Additionally, we established monitoring controls to identify new sales arrangements and changes in our business environment that could impact risks associated with the new revenue standard and our current accounting assessment process.

 

Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive.

 

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the period of the change in estimate.

 

Fair Value of Financial Instruments

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of September 30, 2019 and December 31 2018, the carrying value of accounts payable and accrued liabilities approximated fair value due to the short-term nature and maturity of these instruments.

 

9
 

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. As of September 30, 2019 and December 31, 2018, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

 

Use of Estimates

 

The financial statements are prepared on the basis of US GAAP. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported expenses during the reporting period. Actual results could differ from those estimates made by management. There are no leases in the Company, thus the financial statements do not include estimates to recognize assets and liabilities related to implementing the new leases standard ASC 842.

 

Impact of Recently Issued Accounting Standards

 

On December 15, 2018 the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) issued on February 25, 2016 became effective. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: Financing leases, similar to capital leases, will require the recognition of an asset and liability, measured at the present value of the lease payments or Interest on the liability will be recognized separately from amortization of the asset. Principal repayments will be classified as financing outflows and payments of interest as operating outflows on the statement of cash flows. Operating leases will also require the recognition of an asset and liability measured at the present value of the lease payments. A single lease cost, consisting of interest on the obligation and amortization of the asset, calculated such that the amortization of the asset will increase as the interest amount decreases resulting in a straight-line recognition of lease expense. All cash outflows have been classified as operating on the statement of cash flows.

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact on its financial statements of the adoption of this new accounting pronouncement.

 

In June 2018, the FASB issued Accounting Standards Update, or ASU 2018-07, Compensation - Stock Compensation (Topic 718), which simplifies the accounting for non-employee share-based payment transactions. The new standard expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 (including interim periods within that fiscal year), with early adoption permitted. The Company adopted the new standard in the second quarter of 2018 and the new standard is applied share-based payment transactions as reflected in the Company’s unaudited condensed consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

10
 

 

In March 2017, the FASB issued Update 2017-08—Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

 

In March 2017, the FASB issued Update 2017-07—Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

 

Note (2) Going Concern

 

The Company has limited operations its current deficit amount is $5,767,260 as of September 30, 2019. The accompanying financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. The Company has not yet generated any revenue to cover its operating costs, and as such, has incurred an operating loss since inception. These negative cash flows from operations, limited business operations and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

Note (3) Prepaid expenses

 

Prepaid expenses of $17,256 at September 30, 2019 and $12,847 at December 31, 2018, consist of tax whithld at asource by VAT paid to be refunded from the Israel VAT authority and income tax withheld related to sale of marketable securities.

 

Note (4) Common Stock

 

Between March 20, 2018 and March 29, 2018, the Company sold a total of 206,000 units for cash consideration of $123,600 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $44,454 for the common stock and $79,146 for the class B Warrants.

 

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Between April 3, 2018 and May 14, 2018, the Company sold a total of 1,150,500 units for cash consideration of $690,300 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $290,996 for the common stock and $399,304 for the class B Warrants.

 

Between October 18, 2018 and October 22, 2018, the Company sold a total of 345,166 units for cash consideration of $207,004 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $64,431 for the common stock and $142,573 for the class B Warrants.

 

Between November 5, 2018 and November 28, 2018, the Company sold a total of 187,483 units for cash consideration of $224,980 at a price of $1.20 per share, each unit was comprised of one share of common stock and one class D warrant exercisable at $2.40 per share with a term of 24 months. Of these shares, 12,500 shares were recorded as subscribed share capital. The relative fair value of the stock with embedded warrants was $70,026 for the common stock and $154,954 for the class B Warrants

 

During the year ended December 31, 2018 50,000 shares were issued to one officer for services provided to the Company. Such shares were valued at $26,000.

 

On May 1, 2018, one consultant was issued a two-year Class B Warrants to acquire an aggregate of 41,000 shares of common stock at an exercise price of $1.20 per share. The fair value of these warrants is $26,731. The warrants were valued using the Black-Scholes model with volatility of 139% and discount rate of 2.50%. The Class B warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On December 10, 2018, three consultants were issued 750,000 Class J Warrants exercisable for a three-year period to acquire one share of common stock at a price of $0.30 per share; The fair value of these warrants is $1,199,643. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.73%. The Class J warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On December 10, 2018, three consultants were issued 450,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants is $719,774. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.72%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, two consultants were issued 200,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $ 249,998. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.94%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 100,000 Class F Warrants exercisable for a five-year period to acquire one share of common stock at a price of $3.00 per share; The fair value of these warrants is $124,997. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class F warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 200,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The fair value of these warrants is $249,994. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class G warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 100,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The fair value of these warrants is $124,999. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class H warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

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On December 12, 2018, one consultant was issued 50,000 Class C Warrants exercisable for a four-year period to acquire one share of common stock at a price of $2.40 per share; The fair value of these warrants is $62,492. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.94%.

 

On December 12, 2018, one consultant was issued 75,000 Class E Warrants exercisable for a five-year period to acquire one share of common stock at a price of $0.01 per share. The warrants are vesting equally over eight quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $9,439 in 2018 plus $24,311 in Q1 and Q2 2019 out of $89,999 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.22%.

 

On January 1, 2019, the Company issued an officer in consideration for services 300,000 Class I Warrants exercisable for a period of two years at an exercise price of $.01 per share. The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020. The fair value of the vested amount recorded as expense as of September 30, 2019 was $159,341 out of $229,957 total value. The warrants were valued using the Black-Scholes model with volatility of 394% and discount rate of 2.47%.

 

On May 7, 2019, due to the resignation of Liron Carmel as Chief Executive Officer and a director, 200,000 Class J Warrants exercisable for a period of three years at an exercise price of $.30 per share were forfeited.

 

On January 24, 2019, the Company sold a total of 334,000 units for cash consideration of $334,000 at price of $1.00, each unit was comprised of one share of common stock, one Class F warrant exercisable at $3.00 per share with a term of 36 months and one Class G warrant exercisable at $5.00 per share with a term of 60 months. The relative fair value of the stock with embedded warrants was $73,513 for the common stock and $260,187 for the class F and class G Warrants.

 

On January 27, 2019, 12,500 shares subscribed for in 2018 and recorded as stock payable were issued to a shareholder who the Company sold common stock to on November 21, 2018 and recorded subscribed share capital for during the period ending December 31, 2018.

 

On January 31, 2019, one consultant was issued 50,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $94,999. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.43%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On February 28, 2019, one officer converted 100,000 Class I Warrants to 99,576 shares of common stock in a cashless exercise.

 

On April 5, 2019, one officer converted 100,000 Class J Warrants to 87,500 shares of common stock in a cashless exercise

 

On April 5, 2019, three consultants converted an aggregate of 750,000 Class J Warrants to 656,250 shares of common stock in a cashless exercise.

 

On April 5, 2019, three consultants converted an aggregate of 750,000 Class I Warrants to 448,125 shares of common stock in a cashless exercise.

 

On May 1, 2019, Shai Cohen, Chairman and CEO, was issued 150,000 Class F Warrants exercisable for a three-year period to acquire one share of common stock at a price of $3.00 per share; The Class F warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,476 out of $329,716 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

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On May 1, 2019, Shai Cohen, Chairman and CEO was issued 100,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The Class G warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $36,661 out of $219,968 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

On May 1, 2019, Shai Cohen, Chairman and CEO was issued 150,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The Class H warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $54,996 out of $329,979 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

On May 1, 2019, Shai Cohen, Chairman and CEO was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The Class I warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $91,658 out of $549,945 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

On May 1, 2019, Ariel Dor, General Manager of the Subsidiary was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The fair value of these warrants is $549,855. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.31%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On June 1, 2019, one consultant was awarded 25,000 Class A Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.50 per share for service provided to the Company. The fair value of the vested amount recorded as expense as of September 30, 2019 was $49,857. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 1.82%.

 

On June 25, 2019 one consultant was awarded 17,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share for services provided to the Company. The fair value of the vested amount recorded as expense as of September 30, 2019 was $23,792. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 1.71%.

 

Following is a table of warrant and options outstanding as of September 30, 2019 and exercisable along with the exercise price and range of remaining term.

 

Type  Quantity   Exercise Price   Expiration Date
Warrants Class A   825,000   $0.50   12 Months
Warrants Class B   1,599,166   $1.20   12-18 Months
Warrants Class C   50,000   $2.4   48 Months
Warrants Class D   330,983   $2.4   8 Months
Warrants Class E   325,000   $0.01   48 Months
Warrants Class F   584,000   $3.00   36 Months
Warrants Class G   634,000   $5.00   60 Months
Warrants Class H   250,000   $1.00   60 Months
Warrants Class I   467,000   $0.01   24 Months
Total   5,065,149         

 

On September 30, 2019 and December 31, 2018 there were approximately 227 and 226 holders of record and 12,403,052 and 10,518,226 shares of the Company’s common stock par value $0.00001 per share, outstanding, respectively. All shares of common stock are entitled to one vote per share in all matters submitted to the shareholders. No preferred shares were issued and outstanding at September 30, 2019 and December 31, 2018.

 

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Dividends

 

The Company has not declared or paid any cash dividends on its common stock nor does it anticipate paying any in the foreseeable future. Furthermore, the Company expects to retain any future earnings to finance its operations and expansion. The payment of cash dividends in the future will be at the discretion of its Board of Directors and will depend upon its earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

 

Securities Authorized for Issuance under Equity Compensation Plans – None.

 

Note (5) Marketable Securities

 

Marketable Securities of $0 at September 30, 2019 and $108,164 at December 31, 2018 consist of 200,000 shares of UNV Medicine Ltd. a public company organized under the laws of Israel (“UNV”). CannaPowder Israel paid $274,531 to UNV for the Marketable Securities for which in return UNV will finance and purchase a line of equipment to be used for the production of certain products, based on CannaPowder Israel’s specifications. On April 24, 2019 CannaPowder Israel sold the 200,000 UNV shares for $234,112 and recorded a realized loss on marketable securities of $27,618. As of December 31, 2018, CannaPowder Israel’s Statements of Operations included a $166,010 unrealized loss from Marketable Securities which as of the date of the sale, April 24, 2019, were reclassified and included in the $27,869 realized loss on marketable securities.

 

Note (6) Income Taxes

 

The provision (benefit) for income taxes for the periods ended September 30, 2019 and December 31, 2018, was as follows (assuming a 21% effective tax rate in 2019 and 21% in 2018):

 

   September 30, 2019   December 31, 2018 
Current tax provision:                                         
Federal-          
Taxable income  $-   $- 
Total current tax provision  $-   $- 

 

The Company had deferred income tax assets as of September 30, 2019 and December 31, 2018 as follows:

 

   September 30, 2019   December 31, 2018 
Loss carryforwards  $1,211,125   $750,409 
Less- Valuation allowance   (1,211,125)   (750,409)
Total net deferred tax assets  $-   $- 

 

The Company provided a valuation allowance equal to the deferred income tax assets for the period ended September 30, 2019 and December 31, 2018, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of September 30, 2019, and December 31, 2018, the Company had approximately $1,729,738 and $123,164, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income and which expire by the year 2030.

 

The Company did not identify any material uncertain tax positions that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the three months ended September 30, 2019 or the year ended December 31, 2018.

 

The Company intends to file income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.

 

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Note (7) Related Party Transactions

 

On January 31, 2019, One of a kind marketing DUSA LLC, a Texas limited liability company (“Dusa”) was issued 50,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $94,999. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.43%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation. On May 1, 2019, the Subsidiary entered into a service agreement (the “Dusa Service Agreement”) with One of a kind marketing DUSA LLC, to provide international business development and strategic marketing services to the Subsidiary. The term of the Agreement commenced on May 1, 2019 and will continue as long as the Company continues its operations and progress in fulfilling its goals unless sooner terminated in accordance with the Agreement. As compensation therefor, Dusa will be entitled to monthly fee of $15,000. The Subsidiary and Dusa may terminate the Dusa Service Agreement at any time upon 30 days prior written notice.

 

On May 1, 2019, the Company, entered into a service agreement with Shai Cohen Chairman and CEO pursuant to which Mr. Cohen will serve as chief executive officer and chairman of the board of the Company. The term of the Cohen Service Agreement commenced on May 1, 2019 and will continue as long as the Company continues its operations and progress in fulfilling its goals unless sooner terminated in accordance with the Agreement. As compensation therefor, Mr. Cohen received the following warrants:

 

(i) 150,000 Class F Warrants exercisable for a three-year period to acquire one share of common stock at a price of $3.00 per share; The Class F warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,476 out of $329,716 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

(ii) 100,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The Class G warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $18,331 out of $219,968 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

(iii) 150,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The Class H warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,498 out of $329,979 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

(iv) 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The Class I warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $45,829 out of $549,945 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

On May 1, 2019, Ariel Dor, General Manager of the Subsidiary was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The fair value of these warrants is $549,855. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.31%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On May 7, 2019 Liron Carmel resigned as the Company’s Chief Executive Officer and director and Shai Cohen, a more than 10% shareholder was appointed as the Company’s Chief Executive Officer and director.

 

On April 18, 2019, a group of persons and entities owning shares in the Company, sold an aggregate of 500,000 shares of common stock to One of a Kind Kamami LLC, and 5,500,000 shares of common stock to MNSCO LLC, entities which are more than 10% owned by Shai Cohen.

 

On January 1, 2019, the Company issued one officer in consideration for services 300,000 Class I Warrants exercisable for a period of three years at an exercise price of $.01 per share and 300,000 Class J Warrants exercisable for a period of three years at an exercise price of $.30 per share. The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020. The fair value of the vested amount recorded as expense as of September 30, 2019 was $149,966 out of $449,898 total value. The warrants were valued using the Black-Scholes model with volatility of 394% and discount rate of 2.47%. On February 28, 2019, 100,000 Class I warrants were converted to 99,576 common shares in a cashless exercise.

 

On December 10, 2018, three entities were issued an aggregate of 750,000 Class J Warrants exercisable for a three-year period to acquire one share of common stock at a price of $0.30 per share for consulting services provided to the company; The fair value of these warrants is $1,199,643. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.73%. The Class J warrants are fully vested and were accordingly included in expenses as stock based compensation. The entities are considered related parties as they are more than 5% shareholders or are controlled by individuals who are more than 5% shareholders.

 

On December 10, 2018, three entities, were issued an aggregate of 450,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $0.01 per share for consulting services provided to the company; The fair value of these warrants is $719,774. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.72%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation. The entities are considered related parties as they are more than 5% or are controlled by individuals who are more than 5% shareholders.

 

On October 17, 2017, Amir Uziel, Attribute Ltd, Lavi Krasney and Kfir Silberman (controlling shareholder of L.I.A. Pure Capital Ltd.) each purchased 650,000 shares of common stock at $0.01 per share for a total cash consideration of $26,000.

 

Note (8) Subsequent Events

 

As defined in FASB ASC 855-10, “Subsequent Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued.

 

The Company evaluated all transactions and events that occurred subsequent to the balance sheet date and prior to the date on which the financial statements contained in this report were issued and determined that no such events or transactions necessitated disclosure.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION Back to Table of Contents

 

FORWARD-LOOKING STATEMENTS

 

Certain statements that the Company may make from time to time, including all statements contained in this report that are not statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the safe harbor provisions set forth in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, market position and expenditures. The Company assumes no obligation to update any forward-looking statements. Additional information concerning factors which could cause differences between forward-looking statements and future actual results is discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K, as filed with the SEC on April 1, 2019.

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our historical results of operations during the periods presented and our financial condition. This MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes to consolidated financial statements and contains forward-looking statements that involve risks and uncertainties. See section entitled “Forward-Looking Statements” above.

 

Plan of Operations

 

On August 30, 2017, the Company formed Canna Powder Ltd. (the “Subsidiary”) which is 90% owned by the Company and 10% owned by Rafi Ezra, co-founder and chief technology officer of the Subsidiary.

 

On September 14, 2017, the Subsidiary entered into a Feasibility Study and Option Agreement (the “Feasibility Study”) with Yissum Research Development Company of the Hebrew University of Jerusalem (“Yissum”), under the supervision of the inventor of the technology, Professor Shlomo Magdassi. The Subsidiary commenced efforts to develop the formulation and process to produce medical products using new technology involving nano-powder derived from cannabis oil.

 

On May 2, 2018, the Subsidiary entered into a Research Agreement with Yissumto develop nano-cannabis powder, standardized from cannabis oil in a known cannabinoid composition, with the view to applying it to enable the commercial production of cannabis powder to treat a myriad of medical conditions (the “Cannabis Powder Products”).

 

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The Company currently expects that the research and development program under the Research Agreement will be completed within three years, with commercial sales of Cannabis Powder Products expected to commence in 2021. However, there can be no assurance that the development of the technology will be successful, that research will be completed by 2021 or that commercially viable Cannabis Powder Products will be developed and be accepted by the market in a timely manner, if at all. Additionally, there can be no assurance that the Company may not require additional capital to fully implement its business plan and complete production of commercially viable products based on the technology being developed.

 

In addition, on May 2, 2018, the Company entered into a separate License Agreement with Yissum under which the Subsidiary was granted the exclusive license to commercially exploit any technology related to the Cannabis Powder Products resulting from the efforts under the Research Agreement (the “License”). The License shall expire on the latter of: (i) the date of expiration in such country of the last to expire Licensed Patent included in the Licensed Technology; (ii) the date of expiration of any exclusivity on the Product granted by a regulatory or government body in such country; or (iii) twenty years from the date of the first commercial sale in such country. Should the periods referred to in Subsections (i) or (ii) expire in a particular country prior to the period referred to in Subsection (iii), above, the license in that country or those countries shall be deemed a license to the Know-How during such post-expiration period. The License Agreement also provides that the Subsidiary pay Yissum (i) a royalty equal to 4% of net sales of the Cannabis Powder Products; and (ii) a sublicense fee equal to 20% of any sublicense consideration received by the Subsidiary.

 

On October 8, 2018, the Company signed a binding memorandum of understating with UNV Medicine Ltd., a company organized under the laws of Israel (“UNV”)), under which the Subsidiary paid $274,531 to UNV and in return UNV will finance and purchase a line of production equipment to be used for the production of the Canna Products, based on the Subsidiary’s specifications. In addition, Canna Ltd received 200,000 UNV shares.

 

Recent Developments

 

On April 18, 2019, as previously reported by the Company on a Current Report on Form 8-K, as filed with the SEC on May 20, 2019, on April 18, 2019, Shai Cohen and affiliated entities acquired 5,500,000 shares of common stock of the Company, resulting in a change of control and Shai Cohen together with his affiliates owning an aggregate of 54.4 % of the issued and outstanding shares of the Company on a fully-diluted basis at such time.

 

Results of Operations

 

Three months ended September 30, 2019 and September 30, 2018

 

Revenues

 

We have not generated any revenues in the three months ended September 30, 2019 and September 30, 2018.

 

Operating Expenses

 

Total operating expenses for the three months ended September 30, 2019 were $485,355 compared to total operating expenses of $102,621 for the three months ended September 30, 2018 mostly due to non-cash compensation and increase in operating subsidiary expenses.

 

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Research and development expenses during the three months ended September 30, 2019 were $37,865 as compared to $45,321 during the three months ended September 30, 2018. The slight decrease was due to decrease in research and development activities of the Subsidiary.

 

General and administrative expenses during the three months ended September 30, 2019 were $447,490 as compared to $57,300 during the three months ended September 30, 2018 and were comprised primarily of non-cash compensation and other general and administrative expenses. The increase was primarily due to non-cash compensation and an increase in general and administrative expenses incurred in the Subsidiary.

 

Other expenses during the three months ended September 30, 2019 were $251 as compared to $0 during the three months ended September 30, 2018.

 

Net Loss

 

We incurred a net loss attributable to the Company of $464,144 during the three months ended September 30, 2019 compared to $95,936 during the three months ended September 30, 2018 and a loss attributable to non-controlling interest for the three months ended September 30, 2019 of $21,462 compared to $6,685 during the three months ended September 30, 2018.

 

Nine months ended September 30, 2019 and September 30, 2018

 

Revenues

 

We have not generated any revenues in the nine months ended September 30, 2019 and September 30, 2018.

 

Operating Expenses

 

Total operating expenses for the nine months ended September 30, 2019 were $2,224,567 compared to total operating expenses of $397,385 for the nine months ended September 30, 2018.

 

Our research and development expenses during the nine months ended September 30, 2019 were $120,307 compared to $102,202 for the nine months ended September 30, 2018. The increase was due to research and development activities of the Subsidiary.

 

Our general and administrative expenses during the nine months ended September 30, 2019 were $2,104,260 compared to the general and administrative expense of $295,183 for the nine months ended September 30, 2018. The increase was mostly due to non-cash compensation and increase in general and administrative expenses incurred in the Subsidiary.

 

Other expenses during the nine months ended September 30, 2019 were $27,869 as compared to $0 during the nine months ended September 30, 2018. The increase was due to loss on sale of marketable securities in the Subsidiary.

 

Net Loss

 

We incurred a net loss attributable to the Company of $2,193,882, during the nine months ended September 30, 2019, compared to $375,513 during the nine months ended September 30, 2018. The loss attributable to non-controlling interest for the nine months ended September 30, 2019 was and $58,554, compared to $21,872 during the same period in the prior year.

 

Liquidity and Capital Resources

 

As of September 30, 2019 we had $86,111 in total assets consisting of cash and cash equivalents of $68,855, and prepaid assets of $17,256.

 

We had positive working capital of $86,611 as of September 30, 2019 compared to $702,097 at December 31, 2018. Such working capital has been sufficient to sustain our operations to date. Our total liabilities as of September 30, 2019 were $0 compared to $25,159 at December 31, 2018.

 

Net Cash Used in Operating Activities

 

During the nine months ended September 30, 2019, we used $1,118,304 in our operating activities. This resulted from a net loss of $2,193,882 attributable to the Company, $58,554 loss attributable to non-controlling interest, a decrease of $25,159 in accounts payable and accrued liabilities, offset by a decrease in prepaid expenses of $8,141, loss on sale of marketable securities of $27,869 and non-cash compensation of $1,123,281 which represented non-cash compensation for services provided by the Company’s Chairman and CEO as well as the Subsidiary’s general manager and consultants.

 

During the nine months ended September 30, 2018, we used $408,506 in our operating activities. This resulted from a net loss of $375,513 attributable to the Company, $21,872 loss attributable to non-controlling interest and increase in prepaid expenses of $10,321 and a decrease of $800 in accounts payable and accrued liabilities.

 

19
 

 

Net Cash Used provided by Investing Activities

 

During the nine months ended September 30, 2019, we financed our negative cash flow through the sale of marketable securities in the amount of $234,112.

 

During the nine months ended September 30, 2018 there were no investment activities.

 

Net Cash Provided by Financing Activities

 

During the nine months ended September 30, 2019, we financed our negative cash flow by financing activities through the sale of common stock in the amount of $334,000.

 

During the nine months ended September 30, 2018, we financed our negative cash flow through the sale of common stock in the amount of $813,900 offset by payments to notes payable of $2,687.

 

While management believes that the Company will be successful in its current and planned operating activities, there can be no assurance that the Company will be successful in developing and commercializing its planned products. The Company intends to finance its operations by the sale of equity or debt securities unless and until we begin to generate revenues from licensing our products which are in development.

 

Our ability to create sufficient working capital to sustain us over the next twelve-month period, and beyond, is dependent on our entering into additional licensing agreements and on our success in issuing additional debt or equity or entering into strategic arrangements with a third party. There can be no assurance that we will be successful in obtaining financing or that sufficient capital will be available to us, and if available on favorable terms. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

 

We are a smaller reporting company and are not required to provide this information.

 

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

 

Evaluation of disclosure controls and procedures.

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, as of September 30, 2019, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, based on the material weaknesses discussed below, our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Act Commission’s rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our internal controls are not effective for the following reasons: (i) there is an inadequate segregation of duties consistent with control objectives as management is comprised of only two persons, one of which is the Company’s principal executive officer and principal financial officer and, (ii) the Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.

 

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

20
 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

 

To our knowledge, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

 

ITEM 1A. RISK FACTORS Back to Table of Contents

 

The Company is a smaller reporting company and is not required to provide this information.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

 

Except as set forth below, there were no sales of equity securities sold during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.

 

On May 1, 2019, Shai Cohen, our Chairman and Chief Executive Officer, was issued (i) a five-year Class F Warrant to purchase 150,000 shares of common stock at an exercise price of $3.00 per share.; (ii) a three-year Class G Warrants to purchase 100,000 shares of common stock at an exercise price of $5.00 per share; (iii) a five-year Class H Warrant to purchase 150,000 shares of common stock at an exercise price of $1.00 per share; and (iv) a two-year Class I Warrant to purchase 250,000 shares of common stock at an exercise price of $.01 per share.

 

21
 

 

On May 1, 2019, Ariel Dor, General Manager of the Subsidiary was issued a two-year Class I Warrant to purchase 250,000 shares of common stock at an exercise price of $.01 per share.

 

On June 1, 2019, we issued a two-year Class A Warrant to purchase 25,000 shares of common stock at an exercise price of $.50 per share to a consultant for marketing consulting services provided to the Company.

 

On June 25, 2019, we issued a two-year Class I Warrant to purchase 17,000 shares of common stock at an exercise price of $.01 per share to a consultant for strategic consulting services provided to the Company.

 

The above issuances did not involve any underwriters, underwriting discounts or commissions, or any public offering and we believe is exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof and/or Regulation D promulgated thereunder.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

 

None.

 

ITEM 4. MINE SAFTY DISCLOSURE. Back to Table of Contents

 

Not applicable.

 

ITEM 5. OTHER INFORMATION Back to Table of Contents

 

Not applicable.

 

ITEM 6. EXHIBITS Back to Table of Contents

 

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

 

Exhibit No.   Description
     
31.1   Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer
31.2   Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer
32.1   Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer
32.2   Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer

 

22
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Canna Powder, Inc.  
   
/s/ Shai Cohen  
Shai Cohen  
Chief Executive Officer (Principal Executive Officer)  
   
/s/ Oded Gilboa  
Oded Gilboa  
Chief Financial Officer (Principal Financial and Accounting Officer)  
   
November 14, 2019  

 

23
 

 

EX-31.1 2 ex31-1.htm

 

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OR 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Shai Cohen, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of CannaPowder, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

 

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

 

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

 

Date: November 14, 2019  
   
/s/ Shai Cohen  

Shai Cohen,

Chief Executive Officer (Principal Executive Officer)

 

 

 
 

 

EX-31.2 3 ex31-2.htm

 

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OR 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

 

I, Oded Gilboa, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of CannaPowder, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

 

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

 

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

 

Date: November 14, 2019  
   
/s/ Oded Gilboa  

Oded Gilboa,

Chief Financial Officer (Principal Financial and Accounting Officer)

 

 

 
 

 

EX-32.1 4 ex32-1.htm

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of CannaPowder, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2019 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Shai Cohen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Shai Cohen  
Shai Cohen  
Chief Executive Officer (Principal Executive Officer)  

 

Dated: November 14, 2019

 

A signed original of this written statement required by Section 906 has been provided to CannaPowder, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
 

 

EX-32.2 5 ex32-2.htm

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of CannaPowder, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2019 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Oded Gilboa, CFO of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Oded Gilboa  

Oded Gilboa,

Chief Financial Officer (Principal Financial and Accounting Officer)

 

 

Dated: November 14, 2019

 

A signed original of this written statement required by Section 906 has been provided to CannaPowder, Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
 

 

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Common Stock
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Common Stock

Note (4) Common Stock

 

Between March 20, 2018 and March 29, 2018, the Company sold a total of 206,000 units for cash consideration of $123,600 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $44,454 for the common stock and $79,146 for the class B Warrants.

 

Between April 3, 2018 and May 14, 2018, the Company sold a total of 1,150,500 units for cash consideration of $690,300 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $290,996 for the common stock and $399,304 for the class B Warrants.

 

Between October 18, 2018 and October 22, 2018, the Company sold a total of 345,166 units for cash consideration of $207,004 at a price of $.60 per share, each unit was comprised of one share of common stock and one class B warrant exercisable at $1.20 per share with a term of 24 months. The relative fair value of the stock with embedded warrants was $64,431 for the common stock and $142,573 for the class B Warrants.

 

Between November 5, 2018 and November 28, 2018, the Company sold a total of 187,483 units for cash consideration of $224,980 at a price of $1.20 per share, each unit was comprised of one share of common stock and one class D warrant exercisable at $2.40 per share with a term of 24 months. Of these shares, 12,500 shares were recorded as subscribed share capital. The relative fair value of the stock with embedded warrants was $70,026 for the common stock and $154,954 for the class B Warrants

 

During the year ended December 31, 2018 50,000 shares were issued to one officer for services provided to the Company. Such shares were valued at $26,000.

 

On May 1, 2018, one consultant was issued a two-year Class B Warrants to acquire an aggregate of 41,000 shares of common stock at an exercise price of $1.20 per share. The fair value of these warrants is $26,731. The warrants were valued using the Black-Scholes model with volatility of 139% and discount rate of 2.50%. The Class B warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On December 10, 2018, three consultants were issued 750,000 Class J Warrants exercisable for a three-year period to acquire one share of common stock at a price of $0.30 per share; The fair value of these warrants is $1,199,643. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.73%. The Class J warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On December 10, 2018, three consultants were issued 450,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants is $719,774. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.72%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, two consultants were issued 200,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $ 249,998. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.94%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 100,000 Class F Warrants exercisable for a five-year period to acquire one share of common stock at a price of $3.00 per share; The fair value of these warrants is $124,997. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class F warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 200,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The fair value of these warrants is $249,994. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class G warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On November 1, 2018, one consultant was issued 100,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The fair value of these warrants is $124,999. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.96%. The Class H warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On December 12, 2018, one consultant was issued 50,000 Class C Warrants exercisable for a four-year period to acquire one share of common stock at a price of $2.40 per share; The fair value of these warrants is $62,492. The warrants were valued using the Black-Scholes model with volatility of 388% and discount rate of 2.94%.

 

On December 12, 2018, one consultant was issued 75,000 Class E Warrants exercisable for a five-year period to acquire one share of common stock at a price of $0.01 per share. The warrants are vesting equally over eight quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $9,439 in 2018 plus $24,311 in Q1 and Q2 2019 out of $89,999 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.22%.

 

On January 1, 2019, the Company issued an officer in consideration for services 300,000 Class I Warrants exercisable for a period of two years at an exercise price of $.01 per share. The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020. The fair value of the vested amount recorded as expense as of September 30, 2019 was $159,341 out of $229,957 total value. The warrants were valued using the Black-Scholes model with volatility of 394% and discount rate of 2.47%.

 

On May 7, 2019, due to the resignation of Liron Carmel as Chief Executive Officer and a director, 200,000 Class J Warrants exercisable for a period of three years at an exercise price of $.30 per share were forfeited.

 

On January 24, 2019, the Company sold a total of 334,000 units for cash consideration of $334,000 at price of $1.00, each unit was comprised of one share of common stock, one Class F warrant exercisable at $3.00 per share with a term of 36 months and one Class G warrant exercisable at $5.00 per share with a term of 60 months. The relative fair value of the stock with embedded warrants was $73,513 for the common stock and $260,187 for the class F and class G Warrants.

 

On January 27, 2019, 12,500 shares subscribed for in 2018 and recorded as stock payable were issued to a shareholder who the Company sold common stock to on November 21, 2018 and recorded subscribed share capital for during the period ending December 31, 2018.

 

On January 31, 2019, one consultant was issued 50,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $94,999. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.43%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On February 28, 2019, one officer converted 100,000 Class I Warrants to 99,576 shares of common stock in a cashless exercise.

 

On April 5, 2019, one officer converted 100,000 Class J Warrants to 87,500 shares of common stock in a cashless exercise

 

On April 5, 2019, three consultants converted an aggregate of 750,000 Class J Warrants to 656,250 shares of common stock in a cashless exercise.

 

On April 5, 2019, three consultants converted an aggregate of 750,000 Class I Warrants to 448,125 shares of common stock in a cashless exercise.

 

On May 1, 2019, Shai Cohen, Chairman and CEO, was issued 150,000 Class F Warrants exercisable for a three-year period to acquire one share of common stock at a price of $3.00 per share; The Class F warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,476 out of $329,716 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

On May 1, 2019, Shai Cohen, Chairman and CEO was issued 100,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The Class G warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $36,661 out of $219,968 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

On May 1, 2019, Shai Cohen, Chairman and CEO was issued 150,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The Class H warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $54,996 out of $329,979 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

On May 1, 2019, Shai Cohen, Chairman and CEO was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The Class I warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $91,658 out of $549,945 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

On May 1, 2019, Ariel Dor, General Manager of the Subsidiary was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The fair value of these warrants is $549,855. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.31%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On June 1, 2019, one consultant was awarded 25,000 Class A Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.50 per share for service provided to the Company. The fair value of the vested amount recorded as expense as of September 30, 2019 was $49,857. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 1.82%.

 

On June 25, 2019 one consultant was awarded 17,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share for services provided to the Company. The fair value of the vested amount recorded as expense as of September 30, 2019 was $23,792. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 1.71%.

 

Following is a table of warrant and options outstanding as of September 30, 2019 and exercisable along with the exercise price and range of remaining term.

 

Type   Quantity     Exercise Price     Expiration Date
Warrants Class A     825,000     $ 0.50     12 Months
Warrants Class B     1,599,166     $ 1.20     12-18 Months
Warrants Class C     50,000     $ 2.4     48 Months
Warrants Class D     330,983     $ 2.4     8 Months
Warrants Class E     325,000     $ 0.01     48 Months
Warrants Class F     584,000     $ 3.00     36 Months
Warrants Class G     634,000     $ 5.00     60 Months
Warrants Class H     250,000     $ 1.00     60 Months
Warrants Class I     467,000     $ 0.01     24 Months
Total     5,065,149              

 

On September 30, 2019 and December 31, 2018 there were approximately 227 and 226 holders of record and 12,403,052 and 10,518,226 shares of the Company’s common stock par value $0.00001 per share, outstanding, respectively. All shares of common stock are entitled to one vote per share in all matters submitted to the shareholders. No preferred shares were issued and outstanding at September 30, 2019 and December 31, 2018.

 

Dividends

 

The Company has not declared or paid any cash dividends on its common stock nor does it anticipate paying any in the foreseeable future. Furthermore, the Company expects to retain any future earnings to finance its operations and expansion. The payment of cash dividends in the future will be at the discretion of its Board of Directors and will depend upon its earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.

 

Securities Authorized for Issuance under Equity Compensation Plans – None.

XML 14 R15.htm IDEA: XBRL DOCUMENT v3.19.3
Subsequent Events
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

Note (8) Subsequent Events

 

As defined in FASB ASC 855-10, “Subsequent Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued.

 

The Company evaluated all transactions and events that occurred subsequent to the balance sheet date and prior to the date on which the financial statements contained in this report were issued and determined that no such events or transactions necessitated disclosure.

XML 15 R19.htm IDEA: XBRL DOCUMENT v3.19.3
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
9 Months Ended
Dec. 27, 2017
Sep. 27, 2017
Sep. 30, 2019
Dec. 31, 2018
Aug. 30, 2017
Common stock, shares outstanding     12,403,052 10,518,226  
Common stock, par value     $ 0.00001 $ 0.00001  
Subsidiary shares 800        
Owned subsidiary percentage 90.00%        
Cash and cash equivalents     $ 68,855 $ 606,245  
Minimum [Member]          
Intangible assets estimated useful lives     2 years    
Maximum [Member]          
Intangible assets estimated useful lives     20 years    
Rafi Ezra [Member]          
Subsidiary shares 100        
Owned subsidiary percentage 10.00%        
CannaPowder Israel [Member]          
Common stock, shares outstanding         100
Common stock, par value         $ 0.01
Subsidiary shares   100      
XML 16 R23.htm IDEA: XBRL DOCUMENT v3.19.3
Common Stock - Schedule of Warrant and Options Outstanding and Exercisable (Details) - $ / shares
9 Months Ended
Sep. 30, 2019
Jan. 24, 2019
Nov. 28, 2018
Oct. 22, 2018
May 14, 2018
Mar. 29, 2018
Warrant Outstanding 5,065,149          
Class A Warrant [Member]            
Warrant Outstanding 825,000          
Warrant Exercise Price $ 0.50          
Expiration Date 12 months          
Class B Warrant [Member]            
Warrant Outstanding 1,599,166          
Warrant Exercise Price $ 1.20     $ 1.20 $ 1.20 $ 1.20
Class B Warrant [Member] | Minimum [Member]            
Expiration Date 12 months          
Class B Warrant [Member] | Maximum [Member]            
Expiration Date 18 months          
Class C Warrant [Member]            
Warrant Outstanding 50,000          
Warrant Exercise Price $ 2.4          
Expiration Date 48 months          
Class D Warrant [Member]            
Warrant Outstanding 330,983          
Warrant Exercise Price $ 2.4   $ 2.40      
Expiration Date 8 months          
Class E Warrant [Member]            
Warrant Outstanding 325,000          
Warrant Exercise Price $ 0.01          
Expiration Date 48 months          
Class F Warrant [Member]            
Warrant Outstanding 584,000          
Warrant Exercise Price $ 3.00 $ 3.00        
Expiration Date 36 months          
Class G Warrant [Member]            
Warrant Outstanding 634,000          
Warrant Exercise Price $ 5.00 $ 5.00        
Expiration Date 60 months          
Class H Warrant [Member]            
Warrant Outstanding 250,000          
Warrant Exercise Price $ 1.00          
Expiration Date 60 months          
Class I Warrant [Member]            
Warrant Outstanding 467,000          
Warrant Exercise Price $ 0.01          
Expiration Date 24 months          
XML 17 R27.htm IDEA: XBRL DOCUMENT v3.19.3
Income Taxes - Schedule of Provision (Benefit) for Income Taxes (Details) (Parenthetical)
9 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
Effective tax rate 21.00% 21.00%
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Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 68,855 $ 606,245
Marketable Securities 108,164
Prepaid expenses 17,256 12,847
Total current assets 86,111 727,256
Total assets 86,111 727,256
Current liabilities:    
Accounts payable and accrued liabilities 25,159
Accounts payable to related party
Total current liabilities 25,159
Total liabilities 25,159
Stockholders' equity    
Common stock, par value $0.00001 per share, 495,000,000 common shares authorized, 5,000,000 preferred shares authorized; 12,403,052 and 10,518,226 shares issued and outstanding at September 30, 2019 and December 31, 2018 respectively. 124 105
Accumulated other comprehensive income (loss) 5,338 (173,832)
Non-controlling interest (96,447) (37,893)
Stock Payable 15,000
Additional paid in capital 5,944,356 4,472,095
Accumulated deficit (5,767,260) (3,573,378)
Total stockholders' equity 86,111 702,097
Total liabilities and stockholders' equity $ 86,111 $ 727,256
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Condensed Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-In Capital [Member]
Stock Payable [Member]
Non-Controlling Interest [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2017 $ 86 $ 447,164 $ 3,353 $ (123,164) $ 327,439
Balance, shares at Dec. 31, 2017 8,591,577            
Shares Issued for Cash $ 13 813,887 813,900
Shares Issued for Cash, shares 1,356,500            
Translation adjustments (8,023) (8,023)
Net loss (21,872) (375,513) (397,385)
Balance at Sep. 30, 2018 $ 99 1,261,051 (21,872) (4,670) (498,677) 735,931
Balance, shares at Sep. 30, 2018 9,948,077            
Balance at Jun. 30, 2018 $ 99 1,261,051 (15,187) (3,794) (402,741) 839,428
Balance, shares at Jun. 30, 2018 9,948,077            
Translation adjustments (876) (876)
Net loss (6,685) (95,936) (102,621)
Balance at Sep. 30, 2018 $ 99 1,261,051 (21,872) (4,670) (498,677) 735,931
Balance, shares at Sep. 30, 2018 9,948,077            
Balance at Dec. 31, 2018 $ 105 4,472,095 15,000 (37,893) (173,832) (3,573,378) 702,097
Balance, shares at Dec. 31, 2018 10,518,226            
Shares Issued for Cash $ 3 333,997 334,000
Shares Issued for Cash, shares 334,000            
Cashless exercise of warrants $ 16 (16)
Cashless exercise of warrants, shares 1,538,326            
Warrants issued for services 1,123,280 1,123,280
Stock payable issued 15,000 (15,000)
Stock payable issued, shares 12,500            
Translation adjustments 12,802 13,852
Realized loss on marketable securities 166,368 165,318
Net loss (58,554) (2,193,882) (2,252,436)
Balance at Sep. 30, 2019 $ 124 5,944,356 (96,447) 5,338 (5,767,260) 86,111
Balance, shares at Sep. 30, 2019 12,403,052            
Balance at Jun. 30, 2019 $ 120 5,832,996 (74,985) (650) (5,303,116) 454,365
Balance, shares at Jun. 30, 2019 12,156,177            
Cashless exercise of warrants $ 3 (3)
Cashless exercise of warrants, shares 246,875            
Warrants issued for services   111,363         111,363
Translation adjustments 5,988 5,988
Net loss (21,462) (464,144) (485,606)
Balance at Sep. 30, 2019 $ 124 $ 5,944,356 $ (96,447) $ 5,338 $ (5,767,260) $ 86,111
Balance, shares at Sep. 30, 2019 12,403,052            
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Common Stock (Details Narrative)
1 Months Ended 9 Months Ended 12 Months Ended
May 01, 2019
USD ($)
$ / shares
shares
Apr. 05, 2019
shares
Feb. 28, 2019
shares
Jan. 31, 2019
USD ($)
$ / shares
shares
Jan. 27, 2019
shares
Jan. 24, 2019
USD ($)
$ / shares
shares
Dec. 12, 2018
USD ($)
$ / shares
shares
Dec. 10, 2018
USD ($)
$ / shares
shares
Nov. 01, 2018
USD ($)
$ / shares
shares
Oct. 22, 2018
USD ($)
$ / shares
shares
Mar. 29, 2018
USD ($)
$ / shares
shares
Nov. 28, 2018
USD ($)
$ / shares
shares
May 14, 2018
USD ($)
$ / shares
shares
Sep. 30, 2019
USD ($)
$ / shares
shares
Sep. 30, 2018
shares
Dec. 31, 2018
USD ($)
$ / shares
shares
Jun. 30, 2019
USD ($)
Jun. 25, 2019
$ / shares
shares
Jun. 01, 2019
$ / shares
shares
May 07, 2019
$ / shares
shares
Mar. 31, 2019
USD ($)
Jan. 02, 2019
USD ($)
$ / shares
shares
May 01, 2018
$ / shares
shares
Number of shares sold           334,000       345,166 206,000 187,483 1,150,500                    
Total cash consideration | $           $ 334,000       $ 207,004 $ 123,600 $ 224,980 $ 690,300                    
Sale of stock price per share | $ / shares           $ 1.00       $ 0.60 $ 0.60 $ 1.20 $ 0.60                    
Number of shares called by each warrants           1       1 1 1 1                    
Fair value of warrants | $                   $ 64,431 $ 44,454 $ 70,026 $ 290,996                    
Subscribed share capital                       12,500                      
Common stock shares outstanding                           12,403,052   10,518,226              
Common stock par value | $ / shares                           $ 0.00001   $ 0.00001              
Common stock voting rights                           All common shares are entitled to one vote per share in all matters submitted to the shareholders.                  
227 Holders [Member]                                              
Common stock shares outstanding                           12,403,052                  
Common stock par value | $ / shares                           $ 0.00001                  
Preferred stock shares issued                                            
Preferred stock shares outstanding                                            
226 Holders [Member]                                              
Common stock shares outstanding                               10,518,226              
Common stock par value | $ / shares                               $ 0.00001              
Preferred stock shares issued                                            
Preferred stock shares outstanding                                            
One Officer [Member]                                              
Stock issued during period for services, shares                               50,000              
Stock issued during period for services, value | $                               $ 26,000              
Shareholder [Member]                                              
Stock issued during period, shares         12,500                                    
Class B Warrant [Member]                                              
Number of shares called by each warrants                   1 1   1                    
Warrants exercise price per share | $ / shares                   $ 1.20 $ 1.20   $ 1.20 $ 1.20                  
Warrants term                   24 months 24 months   24 months                    
Fair value of warrants | $                   $ 142,573 $ 79,146 $ 154,954 $ 399,304                    
Class B Warrant [Member] | One Consultant [Member]                                              
Warrants term                                             2 years
Fair value of warrants | $ $ 26,731                                            
Number of warrants, exercisable                                             41,000
Share price | $ / shares                                             $ 1.20
Class B Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                                             139
Class B Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                                             2.50
Class D Warrant [Member]                                              
Number of shares called by each warrants                       1                      
Warrants exercise price per share | $ / shares                       $ 2.40   2.4                  
Warrants term                       24 months                      
Class J Warrant [Member] | One Officer [Member]                                              
Warrants term                                           3 years  
Number of warrants, exercisable                                           300,000  
Share price | $ / shares                                           $ .30  
Number of warrants converted   100,000                                          
Number of converted stock   87,500                                          
Class J Warrant [Member] | Three Consultants [Member]                                              
Number of shares called by each warrants               1                              
Warrants term               3 years                              
Fair value of warrants | $               $ 1,199,643                              
Number of warrants, exercisable               750,000                              
Share price | $ / shares               $ 0.30                              
Class J Warrant [Member] | Three Consultants [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage               390                              
Class J Warrant [Member] | Three Consultants [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage               2.73                              
Class J Warrant [Member] | Chief Executive Officer and Director [Member]                                              
Number of warrants, exercisable                                       200,000      
Share price | $ / shares                                       $ .30      
Class J Warrant [Member] | Three Consultants [Member]                                              
Number of warrants converted   750,000                                          
Number of converted stock   656,250                                          
Class I Warrant [Member]                                              
Warrants exercise price per share | $ / shares                           $ 0.01                  
Number of converted stock     99,576                                        
Class I Warrant [Member] | One Officer [Member]                                              
Number of shares called by each warrants     100,000                                        
Warrants term                                           3 years  
Number of warrants, exercisable                                           300,000  
Share price | $ / shares                                           $ 0.01  
Number of warrants converted     100,000                                        
Class I Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants                                   1          
Warrants term                                   2 years          
Share price | $ / shares                                   $ .01          
Number of warrants exercisable for services                                   17,000          
Share-based payment award, options, vested in period, fair value | $                           $ 23,792                  
Class I Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                                   389          
Class I Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                                   1.71          
Class I Warrant [Member] | Three Consultants [Member]                                              
Number of shares called by each warrants               1                              
Warrants term               2 years                              
Fair value of warrants | $               $ 719,774                              
Number of warrants, exercisable               450,000                              
Share price | $ / shares               $ 0.01                              
Class I Warrant [Member] | Three Consultants [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage               390                              
Class I Warrant [Member] | Three Consultants [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage               2.72                              
Class I Warrant [Member] | Officer [Member]                                              
Warrants term                                           2 years  
Number of warrants, exercisable                                           300,000  
Share price | $ / shares                                           $ 0.01  
Fair value of warrants, vested | $                           159,341               $ 229,957  
Class I Warrant [Member] | Officer [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                                           394  
Class I Warrant [Member] | Officer [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                                           2.47  
Class I Warrant [Member] | Three Consultants [Member]                                              
Number of warrants converted   750,000                                          
Number of converted stock   448,125                                          
Class I Warrant [Member] | Chairman and CEO [Member]                                              
Number of shares called by each warrants 1                                            
Warrants term 2 years                                            
Number of warrants, exercisable 250,000                                            
Share price | $ / shares $ 0.01                                            
Fair value of warrants, vested | $ $ 549,945                         $ 91,658                  
Class I Warrant [Member] | Chairman and CEO [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage 389                                            
Class I Warrant [Member] | Chairman and CEO [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage 2.28                                            
Class I Warrant [Member] | General Manager [Member]                                              
Number of shares called by each warrants 1                                            
Warrants term 2 years                                            
Fair value of warrants | $ $ 549,855                                            
Number of warrants, exercisable 250,000                                            
Share price | $ / shares $ 0.01                                            
Class I Warrant [Member] | General Manager [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage 389                                            
Class I Warrant [Member] | General Manager [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage 2.31                                            
Class E Warrant [Member]                                              
Warrants exercise price per share | $ / shares                           $ 0.01                  
Class E Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants       1     1                                
Warrants term       4 years     5 years                                
Fair value of warrants | $       $ 94,999                                      
Number of warrants, exercisable       50,000     75,000                                
Share price | $ / shares       $ 0.01     $ 0.01                                
Fair value of warrants, vested | $                           $ 89,999     $ 24,311       $ 24,311    
Class E Warrant [Member] | One Consultant [Member] | Eight Quarters [Member]                                              
Fair value of warrants, vested | $             $ 9,439                                
Class E Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage       390     389                                
Class E Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage       2.43     2.22                                
Class E Warrant [Member] | Two Consultants [Member]                                              
Number of shares called by each warrants                 1                            
Warrants term                 4 years                            
Fair value of warrants | $                 $ 249,998                            
Number of warrants, exercisable                 200,000                            
Share price | $ / shares                 $ 0.01                            
Class E Warrant [Member] | Two Consultants [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                 388                            
Class E Warrant [Member] | Two Consultants [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                 2.94                            
Class F Warrant [Member]                                              
Number of shares called by each warrants           1                                  
Warrants exercise price per share | $ / shares           $ 3.00               $ 3.00                  
Warrants term           36 months                                  
Class F Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants                 1                            
Warrants term                 5 years                            
Fair value of warrants | $                 $ 124,997                            
Number of warrants, exercisable                 100,000                            
Share price | $ / shares                 $ 3.00                            
Class F Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                 388                            
Class F Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                 2.96                            
Class F Warrant [Member] | Chairman and CEO [Member]                                              
Number of shares called by each warrants 1                                            
Warrants term 3 years                                            
Number of warrants, exercisable 150,000                                            
Share price | $ / shares $ 3.00                                            
Fair value of warrants, vested | $ $ 329,716                         $ 27,476                  
Class F Warrant [Member] | Chairman and CEO [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage 389                                            
Class F Warrant [Member] | Chairman and CEO [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage 2.28                                            
Class G Warrant [Member]                                              
Number of shares called by each warrants           1                                  
Warrants exercise price per share | $ / shares           $ 5.00               $ 5.00                  
Warrants term           60 months                                  
Class G Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants                 1                            
Warrants term                 5 years                            
Fair value of warrants | $                 $ 249,994                            
Number of warrants, exercisable                 200,000                            
Share price | $ / shares                 $ 5.00                            
Class G Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                 388                            
Class G Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                 2.96                            
Class G Warrant [Member] | Chairman and CEO [Member]                                              
Number of shares called by each warrants 1                                            
Warrants term 5 years                                            
Number of warrants, exercisable 100,000                                            
Share price | $ / shares $ 5.00                                            
Fair value of warrants, vested | $ $ 219,968                         $ 36,661                  
Class G Warrant [Member] | Chairman and CEO [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage 389                                            
Class G Warrant [Member] | Chairman and CEO [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage 2.30                                            
Class H Warrant [Member]                                              
Warrants exercise price per share | $ / shares                           $ 1.00                  
Class H Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants                 1                            
Warrants term                 5 years                            
Fair value of warrants | $                 $ 124,999                            
Number of warrants, exercisable                 100,000                            
Share price | $ / shares                 $ 1.00                            
Class H Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                 388                            
Class H Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                 2.96                            
Class H Warrant [Member] | Chairman and CEO [Member]                                              
Number of shares called by each warrants 1                                            
Warrants term 5 years                                            
Number of warrants, exercisable 150,000                                            
Share price | $ / shares $ 1.00                                            
Fair value of warrants, vested | $ $ 329,979                         $ 54,996                  
Class H Warrant [Member] | Chairman and CEO [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage 389                                            
Class H Warrant [Member] | Chairman and CEO [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage 2.30                                            
Class C Warrant [Member]                                              
Warrants exercise price per share | $ / shares                           $ 2.4                  
Class C Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants             1                                
Warrants term             4 years                                
Fair value of warrants | $             $ 62,492                                
Number of warrants, exercisable             50,000                                
Share price | $ / shares             $ 2.40                                
Class C Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage             388                                
Class C Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage             2.94                                
Common Stock [Member]                                              
Fair value of embedded warrants | $           $ 73,513                                  
Stock issued during period, shares                           334,000 1,356,500                
Class F and G Warrant [Member]                                              
Fair value of embedded warrants | $           $ 260,187                                  
Class A Warrant [Member]                                              
Warrants exercise price per share | $ / shares                           $ 0.50                  
Class A Warrant [Member] | One Consultant [Member]                                              
Number of shares called by each warrants                                     1        
Warrants term                                     2 years        
Share price | $ / shares                                     $ 0.50        
Number of warrants exercisable for services                                     25,000        
Share-based payment award, options, vested in period, fair value | $                           $ 49,857                  
Class A Warrant [Member] | One Consultant [Member] | Volatility [Member]                                              
Warrant fair value measurement input, percentage                                     389        
Class A Warrant [Member] | One Consultant [Member] | Discount Rate [Member]                                              
Warrant fair value measurement input, percentage                                     1.82        
XML 22 R26.htm IDEA: XBRL DOCUMENT v3.19.3
Income Taxes - Schedule of Provision (Benefit) for Income Taxes (Details) - USD ($)
9 Months Ended 12 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
Current tax provision: Federal - Taxable income
Total current tax provision
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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.00001 $ 0.00001
Common stock, shares authorized 495,000,000 495,000,000
Preferred stock, shares authorized 5,000,000 5,000,000
Common stock, shares issued 12,403,052 10,518,226
Common stock, shares outstanding 12,403,052 10,518,226
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Operating Activities:        
Net (loss) attributable to Canna Powder, Inc. $ (464,144) $ (95,936) $ (2,193,882) $ (375,513)
Non -controlling interest in loss of consolidated subsidiary (21,462) (6,685) (58,554) (21,872)
Non-cash compensation     1,123,281
Loss on sale of marketable securities 251 27,869
Changes in net assets and liabilities:        
Decrease (increase) in prepaid expenses     8,141 (10,321)
(Decrease) increase in Accounts payable and accrued liabilities     (25,159) (800)
Net Cash (used in) operating activities     (1,118,304) (408,506)
Investing Activities:        
Cash received for sale of marketable securities     234,112
Net Cash provided by investing activities     234,112
Financing Activities:        
Principal payment on debt     (2,687)
Proceeds from sale of common stock (net of issuance expenses)     334,000 813,900
Net Cash provided by financing activities     334,000 811,213
Effect of currency on cash     12,802 (8,023)
Net increase (decrease) in cash     (537,390) 394,684
Cash and cash equivalents - beginning of period     606,245 326,730
Cash and cash equivalents - end of period $ 68,855 $ 721,414 68,855 721,414
Non Cash items:        
Common shares issued from stock payable     15,000
Cashless exercise of warrants     $ 16
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Income Taxes (Tables)
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Schedule of Provision (Benefit) for Income Taxes

The provision (benefit) for income taxes for the periods ended September 30, 2019 and December 31, 2018, was as follows (assuming a 21% effective tax rate in 2019 and 21% in 2018):

 

    September 30, 2019     December 31, 2018  
Current tax provision:                
Federal-                
Taxable income   $ -     $ -  
Total current tax provision   $ -     $ -  

Schedule of Deferred Income Tax Assets

The Company had deferred income tax assets as of September 30, 2019 and December 31, 2018 as follows:

 

    September 30, 2019     December 31, 2018  
Loss carryforwards   $ 1,211,125     $ 750,409  
Less- Valuation allowance     (1,211,125 )     (750,409 )
Total net deferred tax assets   $ -     $ -  

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Prepaid Expenses
9 Months Ended
Sep. 30, 2019
Prepaid Expenses  
Prepaid Expenses

Note (3) Prepaid expenses

 

Prepaid expenses of $17,256 at September 30, 2019 and $12,847 at December 31, 2018, consist of tax whithld at asource by VAT paid to be refunded from the Israel VAT authority and income tax withheld related to sale of marketable securities.

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Related Party Transactions
9 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
Related Party Transactions

Note (7) Related Party Transactions

 

On January 31, 2019, One of a kind marketing DUSA LLC, a Texas limited liability company (“Dusa”) was issued 50,000 Class E Warrants exercisable for a four-year period to acquire one share of common stock at a price of $0.01 per share; The fair value of these warrants are $94,999. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.43%. The Class E warrants are fully vested and were accordingly included in expenses as stock based compensation. On May 1, 2019, the Subsidiary entered into a service agreement (the “Dusa Service Agreement”) with One of a kind marketing DUSA LLC, to provide international business development and strategic marketing services to the Subsidiary. The term of the Agreement commenced on May 1, 2019 and will continue as long as the Company continues its operations and progress in fulfilling its goals unless sooner terminated in accordance with the Agreement. As compensation therefor, Dusa will be entitled to monthly fee of $15,000. The Subsidiary and Dusa may terminate the Dusa Service Agreement at any time upon 30 days prior written notice.

 

On May 1, 2019, the Company, entered into a service agreement with Shai Cohen Chairman and CEO pursuant to which Mr. Cohen will serve as chief executive officer and chairman of the board of the Company. The term of the Cohen Service Agreement commenced on May 1, 2019 and will continue as long as the Company continues its operations and progress in fulfilling its goals unless sooner terminated in accordance with the Agreement. As compensation therefor, Mr. Cohen received the following warrants:

 

(i) 150,000 Class F Warrants exercisable for a three-year period to acquire one share of common stock at a price of $3.00 per share; The Class F warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,476 out of $329,716 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

(ii) 100,000 Class G Warrants exercisable for a five-year period to acquire one share of common stock at a price of $5.00 per share; The Class G warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $18,331 out of $219,968 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

(iii) 150,000 Class H Warrants exercisable for a five-year period to acquire one share of common stock at a price of $1.00 per share; The Class H warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $27,498 out of $329,979 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.30%.

 

(iv) 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The Class I warrants are vesting equally over twelve quarters, thus the fair value of the vested amount recorded as expense as of September 30, 2019 was $45,829 out of $549,945 total value. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.28%.

 

On May 1, 2019, Ariel Dor, General Manager of the Subsidiary was issued 250,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $.01 per share; The fair value of these warrants is $549,855. The warrants were valued using the Black-Scholes model with volatility of 389% and discount rate of 2.31%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation.

 

On May 7, 2019 Liron Carmel resigned as the Company’s Chief Executive Officer and director and Shai Cohen, a more than 10% shareholder was appointed as the Company’s Chief Executive Officer and director.

 

On April 18, 2019, a group of persons and entities owning shares in the Company, sold an aggregate of 500,000 shares of common stock to One of a Kind Kamami LLC, and 5,500,000 shares of common stock to MNSCO LLC, entities which are more than 10% owned by Shai Cohen.

 

On January 1, 2019, the Company issued one officer in consideration for services 300,000 Class I Warrants exercisable for a period of three years at an exercise price of $.01 per share and 300,000 Class J Warrants exercisable for a period of three years at an exercise price of $.30 per share. The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020. The fair value of the vested amount recorded as expense as of September 30, 2019 was $149,966 out of $449,898 total value. The warrants were valued using the Black-Scholes model with volatility of 394% and discount rate of 2.47%. On February 28, 2019, 100,000 Class I warrants were converted to 99,576 common shares in a cashless exercise.

 

On December 10, 2018, three entities were issued an aggregate of 750,000 Class J Warrants exercisable for a three-year period to acquire one share of common stock at a price of $0.30 per share for consulting services provided to the company; The fair value of these warrants is $1,199,643. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.73%. The Class J warrants are fully vested and were accordingly included in expenses as stock based compensation. The entities are considered related parties as they are more than 5% shareholders or are controlled by individuals who are more than 5% shareholders.

 

On December 10, 2018, three entities, were issued an aggregate of 450,000 Class I Warrants exercisable for a two-year period to acquire one share of common stock at a price of $0.01 per share for consulting services provided to the company; The fair value of these warrants is $719,774. The warrants were valued using the Black-Scholes model with volatility of 390% and discount rate of 2.72%. The Class I warrants are fully vested and were accordingly included in expenses as stock based compensation. The entities are considered related parties as they are more than 5% or are controlled by individuals who are more than 5% shareholders.

 

On October 17, 2017, Amir Uziel, Attribute Ltd, Lavi Krasney and Kfir Silberman (controlling shareholder of L.I.A. Pure Capital Ltd.) each purchased 650,000 shares of common stock at $0.01 per share for a total cash consideration of $26,000.

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Going Concern (Details Narrative) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accumulated deficit $ 5,767,260 $ 3,573,378
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Marketable Securities (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended 12 Months Ended
Apr. 24, 2019
Jan. 24, 2019
Oct. 22, 2018
Mar. 29, 2018
Nov. 28, 2018
May 14, 2018
Sep. 30, 2019
Dec. 31, 2018
Marketable securities             $ 108,164
Number of common stock sold   334,000 345,166 206,000 187,483 1,150,500    
Number of common stock sold, amount   $ 334,000 $ 207,004 $ 123,600 $ 224,980 $ 690,300    
Realized loss on marketable securities             $ 165,318  
Unrealized loss on marketable securities $ 27,618             $ 166,367
UNV Medicine Ltd [Member]                
Marketable equity securities             200,000  
Payments for marketable securities             $ 274,531  
Number of common stock sold 200,000              
Number of common stock sold, amount $ 234,112              
Realized loss on marketable securities $ 27,869              
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Income Taxes - Schedule of Deferred Income Tax Assets (Details) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
Loss carryforwards $ 1,211,125 $ 750,409
Less - Valuation allowance (1,211,125) (750,409)
Total net deferred tax assets
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Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Nov. 14, 2019
Document And Entity Information    
Entity Registrant Name CANNAPOWDER, INC.  
Entity Central Index Key 0001086082  
Document Type 10-Q  
Document Period End Date Sep. 30, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   12,403,052
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2019  
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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Statement of Comprehensive Income [Abstract]        
Net loss $ (485,606) $ (102,621) $ (2,252,436) $ (397,385)
Less: Non-controlling interest 21,462 6,685 58,554 21,872
Total (loss) attributable to Canna Powder, Inc. ordinary shareholders. (464,144) (95,936) (2,193,882) (375,513)
Other comprehensives (loss) income:        
-Foreign currency translation 5,990 (874) 12,802 (8,023)
-Unrealized holding gains (losses) 138,499
-Reclassification adjustments for realized losses (gains) on marketable securities. 27,869
Net loss comprehensive (loss) attributable to Canna Powder, Inc. ordinary shareholders. $ (458,154) $ (97,810) $ (2,015,712) $ (383,536)
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Going Concern
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

Note (2) Going Concern

 

The Company has limited operations its current deficit amount is $5,767,260 as of September 30, 2019. The accompanying financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. The Company has not yet generated any revenue to cover its operating costs, and as such, has incurred an operating loss since inception. These negative cash flows from operations, limited business operations and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

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Marketable Securities
9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities

Note (5) Marketable Securities

 

Marketable Securities of $0 at September 30, 2019 and $108,164 at December 31, 2018 consist of 200,000 shares of UNV Medicine Ltd. a public company organized under the laws of Israel (“UNV”). CannaPowder Israel paid $274,531 to UNV for the Marketable Securities for which in return UNV will finance and purchase a line of equipment to be used for the production of certain products, based on CannaPowder Israel’s specifications. On April 24, 2019 CannaPowder Israel sold the 200,000 UNV shares for $234,112 and recorded a realized loss on marketable securities of $27,618. As of December 31, 2018, CannaPowder Israel’s Statements of Operations included a $166,010 unrealized loss from Marketable Securities which as of the date of the sale, April 24, 2019, were reclassified and included in the $27,869 realized loss on marketable securities.

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Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation and Organization

(1) Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

The Company was incorporated in 1999 in the state of Utah under the name Datigen.com, Inc. On August 25, 2005, the Company changed its state of incorporation from Utah to Nevada by the merger of the Company with and into its wholly-owned subsidiary, Canna Powder, Inc., a Nevada corporation. As a result of such merger, the Company’s name was changed to Canna Powder, Inc. in order to better reflect the Company’s business operations.

 

On August 30, 2017, a new wholly-owned subsidiary was registered in Israel under the name of Canna Powder Ltd. (“CannaPowder Israel” or the “Subsidiary”), with 100 common shares outstanding, 0.01 NIS par value (the “Subsidiary Shares”), all of which were held in escrow on behalf of the Company by Israel attorney, Alon Nave. On September 27, 2017, pursuant to board resolution, the 100 Subsidiary Shares held in escrow were transferred to the Company.

 

On December 27, 2017, a board-resolution was adopted to issue an additional: (i) 800 Subsidiary Shares to the Company; and an additional 100 Subsidiary Shares to Rafi Ezra and, as a result, effective December 27, 2017, Canna Powder Ltd became a 90% owned subsidiary of the Company and a minority interest of 10% owned by Rafi Ezra.

 

The Subsidiary’s management consists of Ariel Dor, its General Manger, and Rafi Ezra, its CTO.

 

Research is being conducted at the Hebrew University pursuant to the terms of a Feasibility Study and Option Agreement under the supervision of the inventor of the technology, Professor Shlomo Magdassi (the “Development Program”).

 

The Company currently expects that the Development Program will be completed within three years from its start, with commercial sales starting in 2021. However, there can be no assurance that the Development Program will, in fact, be successful, nor can there be any assurance that the Company may not require additional capital to fully implement its business plan and complete production of commercially viable products based on its technology which is the subject of the Feasibility Study discussed below under “Planned Research and Development and Current Trends.”

 

In the commercial stage, the Company’s plan is to establish and operate several production facilities, each located in separate territories determined by the Company according to their size and regulatory environment that permits studies applicable to other activities prerequisite to commercial exploitation of medical cannabis generally and the Company’s plan to develop cannabis-based powders for medical uses. While there can be no assurance, at present the Company believes that it will be able to produce cannabis powders for medical uses at a significant cost advantage.

 

The accompanying unaudited condensed consolidated financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for an air presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2019.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, we had cash and cash equivalents of $68,855 and $606,245 respectively.

Reclassifications

Reclassifications

 

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows.

Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue ratably over the term of the contract in accordance with ASC 606. In 2018, we implemented new internal controls as part of our efforts to adopt the new revenue recognition standard and perform risk assessment processes related to the new revenue standard. These internal controls include providing global training to our finance team and holding regular meetings with management to address risks associated with applying the five-step model for recognizing revenues. Additionally, we established monitoring controls to identify new sales arrangements and changes in our business environment that could impact risks associated with the new revenue standard and our current accounting assessment process.

Loss Per Common Share

Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive.

Income Taxes

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the period of the change in estimate.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of September 30, 2019 and December 31 2018, the carrying value of accounts payable and accrued liabilities approximated fair value due to the short-term nature and maturity of these instruments.

Deferred Offering Costs

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. As of September 30, 2019 and December 31, 2018, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

Use of Estimates

Use of Estimates

 

The financial statements are prepared on the basis of US GAAP. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported expenses during the reporting period. Actual results could differ from those estimates made by management. There are no leases in the Company, thus the financial statements do not include estimates to recognize assets and liabilities related to implementing the new leases standard ASC 842.

Impact of Recently Issued Accounting Standards

Impact of Recently Issued Accounting Standards

 

On December 15, 2018 the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) issued on February 25, 2016 became effective. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: Financing leases, similar to capital leases, will require the recognition of an asset and liability, measured at the present value of the lease payments or Interest on the liability will be recognized separately from amortization of the asset. Principal repayments will be classified as financing outflows and payments of interest as operating outflows on the statement of cash flows. Operating leases will also require the recognition of an asset and liability measured at the present value of the lease payments. A single lease cost, consisting of interest on the obligation and amortization of the asset, calculated such that the amortization of the asset will increase as the interest amount decreases resulting in a straight-line recognition of lease expense. All cash outflows have been classified as operating on the statement of cash flows.

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact on its financial statements of the adoption of this new accounting pronouncement.

 

In June 2018, the FASB issued Accounting Standards Update, or ASU 2018-07, Compensation - Stock Compensation (Topic 718), which simplifies the accounting for non-employee share-based payment transactions. The new standard expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 (including interim periods within that fiscal year), with early adoption permitted. The Company adopted the new standard in the second quarter of 2018 and the new standard is applied share-based payment transactions as reflected in the Company’s unaudited condensed consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

In March 2017, the FASB issued Update 2017-08—Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

 

In March 2017, the FASB issued Update 2017-07—Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

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A0#% @ @6YN3Z"7[K,")@ F(" !4 M ( !V>( &-A<&0M,C Q.3 Y,S!?<')E+GAM;%!+!08 !@ & (H! . %"0$ ! end XML 40 R13.htm IDEA: XBRL DOCUMENT v3.19.3
Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

Note (6) Income Taxes

 

The provision (benefit) for income taxes for the periods ended September 30, 2019 and December 31, 2018, was as follows (assuming a 21% effective tax rate in 2019 and 21% in 2018):

 

    September 30, 2019     December 31, 2018  
Current tax provision:                
Federal-                
Taxable income   $ -     $ -  
Total current tax provision   $ -     $ -  

 

The Company had deferred income tax assets as of September 30, 2019 and December 31, 2018 as follows:

 

    September 30, 2019     December 31, 2018  
Loss carryforwards   $ 1,211,125     $ 750,409  
Less- Valuation allowance     (1,211,125 )     (750,409 )
Total net deferred tax assets   $ -     $ -  

 

The Company provided a valuation allowance equal to the deferred income tax assets for the period ended September 30, 2019 and December 31, 2018, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of September 30, 2019, and December 31, 2018, the Company had approximately $1,729,738 and $123,164, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income and which expire by the year 2030.

 

The Company did not identify any material uncertain tax positions that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits during the three months ended September 30, 2019 or the year ended December 31, 2018.

 

The Company intends to file income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.

XML 41 R17.htm IDEA: XBRL DOCUMENT v3.19.3
Common Stock (Tables)
9 Months Ended
Sep. 30, 2019
Equity [Abstract]  
Schedule of Warrant and Options Outstanding and Exercisable

Following is a table of warrant and options outstanding as of September 30, 2019 and exercisable along with the exercise price and range of remaining term.

 

Type   Quantity     Exercise Price     Expiration Date
Warrants Class A     825,000     $ 0.50     12 Months
Warrants Class B     1,599,166     $ 1.20     12-18 Months
Warrants Class C     50,000     $ 2.4     48 Months
Warrants Class D     330,983     $ 2.4     8 Months
Warrants Class E     325,000     $ 0.01     48 Months
Warrants Class F     584,000     $ 3.00     36 Months
Warrants Class G     634,000     $ 5.00     60 Months
Warrants Class H     250,000     $ 1.00     60 Months
Warrants Class I     467,000     $ 0.01     24 Months
Total     5,065,149              

XML 42 R29.htm IDEA: XBRL DOCUMENT v3.19.3
Related Party Transactions (Details Narrative)
1 Months Ended
May 01, 2019
USD ($)
$ / shares
shares
Apr. 18, 2019
shares
Apr. 05, 2019
shares
Feb. 28, 2019
shares
Jan. 31, 2019
USD ($)
$ / shares
shares
Jan. 24, 2019
USD ($)
$ / shares
shares
Jan. 02, 2019
USD ($)
$ / shares
shares
Dec. 10, 2018
USD ($)
$ / shares
shares
Dec. 10, 2018
USD ($)
$ / shares
shares
Oct. 22, 2018
USD ($)
$ / shares
shares
Mar. 29, 2018
USD ($)
$ / shares
shares
Oct. 17, 2017
USD ($)
$ / shares
shares
Nov. 28, 2018
USD ($)
$ / shares
shares
May 14, 2018
USD ($)
$ / shares
shares
Sep. 30, 2019
USD ($)
May 07, 2019
Number of shares called by each warrants           1       1 1   1 1    
Fair value of warrants | $                   $ 64,431 $ 44,454   $ 70,026 $ 290,996    
Number of common stock sold           334,000       345,166 206,000   187,483 1,150,500    
Sales of stock price per share | $ / shares           $ 1.00       $ 0.60 $ 0.60   $ 1.20 $ 0.60    
Cash consideration | $           $ 334,000       $ 207,004 $ 123,600   $ 224,980 $ 690,300    
DUSA LLC [Member]                                
Number of warrants, exercisable         50,000                      
Warrants term         4 years                      
Number of shares called by each warrants         1                      
Exercise price | $ / shares         $ 0.01                      
Fair value of warrants | $         $ 94,999                      
Monthly fee | $         $ 15,000                      
Amir Uziel [Member]                                
Number of common stock sold                       650,000        
Sales of stock price per share | $ / shares                       $ 0.01        
Cash consideration | $                       $ 26,000        
One of Kind Kamami LLC [Member]                                
Number of common stock sold   500,000                            
MNSCO LLC [Member]                                
Number of common stock sold   5,500,000                            
Volatility [Member] | DUSA LLC [Member]                                
Warrant fair value measurement input, percentage         390                      
Discount Rate [Member] | DUSA LLC [Member]                                
Warrant fair value measurement input, percentage         2.43                      
Class F Warrant [Member]                                
Warrants term           36 months                    
Number of shares called by each warrants           1                    
Class G Warrant [Member]                                
Warrants term           60 months                    
Number of shares called by each warrants           1                    
Class I Warrant [Member]                                
Warrants converted into shares       99,576                        
Chairman and CEO [Member] | Class F Warrant [Member]                                
Number of warrants, exercisable 150,000                              
Warrants term 3 years                              
Number of shares called by each warrants 1                              
Exercise price | $ / shares $ 3.00                              
Fair value of warrants, vested | $ $ 329,716                           $ 27,476  
Chairman and CEO [Member] | Class F Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage 389                              
Chairman and CEO [Member] | Class F Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage 2.28                              
Chairman and CEO [Member] | Class G Warrant [Member]                                
Number of warrants, exercisable 100,000                              
Warrants term 5 years                              
Number of shares called by each warrants 1                              
Exercise price | $ / shares $ 5.00                              
Fair value of warrants, vested | $ $ 219,968                           36,661  
Chairman and CEO [Member] | Class G Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage 389                              
Chairman and CEO [Member] | Class G Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage 2.30                              
Chairman and CEO [Member] | Class H Warrant [Member]                                
Number of warrants, exercisable 150,000                              
Warrants term 5 years                              
Number of shares called by each warrants 1                              
Exercise price | $ / shares $ 1.00                              
Fair value of warrants, vested | $ $ 329,979                           54,996  
Chairman and CEO [Member] | Class H Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage 389                              
Chairman and CEO [Member] | Class H Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage 2.30                              
Chairman and CEO [Member] | Class I Warrant [Member]                                
Number of warrants, exercisable 250,000                              
Warrants term 2 years                              
Number of shares called by each warrants 1                              
Exercise price | $ / shares $ 0.01                              
Fair value of warrants, vested | $ $ 549,945                           91,658  
Chairman and CEO [Member] | Class I Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage 389                              
Chairman and CEO [Member] | Class I Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage 2.28                              
General Manager [Member] | Class I Warrant [Member]                                
Number of warrants, exercisable 250,000                              
Warrants term 2 years                              
Number of shares called by each warrants 1                              
Exercise price | $ / shares $ 0.01                              
Fair value of warrants | $ $ 549,855                              
General Manager [Member] | Class I Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage 389                              
General Manager [Member] | Class I Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage 2.31                              
Chief Executive Officer and Sole Director [Member] | Maximum [Member]                                
Ownership percentage   10.00%                           10.00%
One Officer [Member] | Class I Warrant [Member]                                
Number of warrants, exercisable             300,000                  
Warrants term             3 years                  
Number of shares called by each warrants       100,000                        
Exercise price | $ / shares             $ 0.01                  
Warrants vested description             The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020                  
One Officer [Member] | Class J Warrant [Member]                                
Number of warrants, exercisable             300,000                  
Warrants term             3 years                  
Exercise price | $ / shares             $ .30                  
Warrants vested description             The warrants vest one third immediately, one third on December 31, 2019 and one third on December 31, 2020                  
Warrants converted into shares     87,500                          
One Officer [Member] | Class I and J Warrant [Member]                                
Fair value of warrants, vested | $             $ 449,898               $ 149,966  
One Officer [Member] | Class I and J Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage             394                  
One Officer [Member] | Class I and J Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage             2.47                  
Three Consultants [Member] | Class I Warrant [Member]                                
Number of warrants, exercisable               450,000 450,000              
Warrants term               2 years 2 years              
Number of shares called by each warrants               1 1              
Exercise price | $ / shares               $ 0.01 $ 0.01              
Fair value of warrants | $                 $ 719,774              
Three Consultants [Member] | Class I Warrant [Member] | Separate Service Agreements [Member]                                
Number of warrants, exercisable               450,000 450,000              
Warrants term               2 years 2 years              
Number of shares called by each warrants               1 1              
Exercise price | $ / shares               $ 0.01 $ 0.01              
Fair value of warrants | $               $ 719,774                
Related party description               The entities are considered related parties as they are more than 5% shareholders or are controlled by individuals who are more than 5% shareholders.                
Three Consultants [Member] | Class I Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage               390 390              
Three Consultants [Member] | Class I Warrant [Member] | Volatility [Member] | Separate Service Agreements [Member]                                
Warrant fair value measurement input, percentage               390 390              
Three Consultants [Member] | Class I Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage               2.72 2.72              
Three Consultants [Member] | Class I Warrant [Member] | Discount Rate [Member] | Separate Service Agreements [Member]                                
Warrant fair value measurement input, percentage               2.72 2.72              
Three Consultants [Member] | Class J Warrant [Member]                                
Number of warrants, exercisable               750,000 750,000              
Warrants term               3 years 3 years              
Number of shares called by each warrants               1 1              
Exercise price | $ / shares               $ 0.30 $ 0.30              
Fair value of warrants | $                 $ 1,199,643              
Three Consultants [Member] | Class J Warrant [Member] | Separate Service Agreements [Member]                                
Number of warrants, exercisable               750,000 750,000              
Warrants term               3 years 3 years              
Number of shares called by each warrants               1 1              
Exercise price | $ / shares               $ 0.30 $ 0.30              
Fair value of warrants | $               $ 1,199,643                
Related party description               The entities are considered related parties as they are more than 5% shareholders or are controlled by individuals who are more than 5% shareholders.                
Three Consultants [Member] | Class J Warrant [Member] | Volatility [Member]                                
Warrant fair value measurement input, percentage               390 390              
Three Consultants [Member] | Class J Warrant [Member] | Volatility [Member] | Separate Service Agreements [Member]                                
Warrant fair value measurement input, percentage               390 390              
Three Consultants [Member] | Class J Warrant [Member] | Discount Rate [Member]                                
Warrant fair value measurement input, percentage               2.73 2.73              
Three Consultants [Member] | Class J Warrant [Member] | Discount Rate [Member] | Separate Service Agreements [Member]                                
Warrant fair value measurement input, percentage               2.73 2.73              
XML 43 R21.htm IDEA: XBRL DOCUMENT v3.19.3
Prepaid Expenses (Details Narrative) - USD ($)
Sep. 30, 2019
Dec. 31, 2018
Prepaid Expenses    
Prepaid expenses $ 17,256 $ 12,847
XML 44 R25.htm IDEA: XBRL DOCUMENT v3.19.3
Income Taxes (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]    
Operating loss carryforwards $ 1,729,738 $ 123,164
Operating loss carryforwards expiration year 2030  
Interest or penalties for unrecognized tax benefits
XML 45 R8.htm IDEA: XBRL DOCUMENT v3.19.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

(1) Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

The Company was incorporated in 1999 in the state of Utah under the name Datigen.com, Inc. On August 25, 2005, the Company changed its state of incorporation from Utah to Nevada by the merger of the Company with and into its wholly-owned subsidiary, Canna Powder, Inc., a Nevada corporation. As a result of such merger, the Company’s name was changed to Canna Powder, Inc. in order to better reflect the Company’s business operations.

 

On August 30, 2017, a new wholly-owned subsidiary was registered in Israel under the name of Canna Powder Ltd. (“CannaPowder Israel” or the “Subsidiary”), with 100 common shares outstanding, 0.01 NIS par value (the “Subsidiary Shares”), all of which were held in escrow on behalf of the Company by Israel attorney, Alon Nave. On September 27, 2017, pursuant to board resolution, the 100 Subsidiary Shares held in escrow were transferred to the Company.

 

On December 27, 2017, a board-resolution was adopted to issue an additional: (i) 800 Subsidiary Shares to the Company; and an additional 100 Subsidiary Shares to Rafi Ezra and, as a result, effective December 27, 2017, Canna Powder Ltd became a 90% owned subsidiary of the Company and a minority interest of 10% owned by Rafi Ezra.

 

The Subsidiary’s management consists of Ariel Dor, its General Manger, and Rafi Ezra, its CTO.

 

Research is being conducted at the Hebrew University pursuant to the terms of a Feasibility Study and Option Agreement under the supervision of the inventor of the technology, Professor Shlomo Magdassi (the “Development Program”).

 

The Company currently expects that the Development Program will be completed within three years from its start, with commercial sales starting in 2021. However, there can be no assurance that the Development Program will, in fact, be successful, nor can there be any assurance that the Company may not require additional capital to fully implement its business plan and complete production of commercially viable products based on its technology which is the subject of the Feasibility Study discussed below under “Planned Research and Development and Current Trends.”

 

In the commercial stage, the Company’s plan is to establish and operate several production facilities, each located in separate territories determined by the Company according to their size and regulatory environment that permits studies applicable to other activities prerequisite to commercial exploitation of medical cannabis generally and the Company’s plan to develop cannabis-based powders for medical uses. While there can be no assurance, at present the Company believes that it will be able to produce cannabis powders for medical uses at a significant cost advantage.

 

The accompanying unaudited condensed consolidated financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for an air presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2018 and the notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2019.

 

Cash and Cash Equivalents

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2019, and December 31, 2018, we had cash and cash equivalents of $68,855 and $606,245 respectively.

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows.

 

Revenue Recognition

 

The Company recognizes revenue ratably over the term of the contract in accordance with ASC 606. In 2018, we implemented new internal controls as part of our efforts to adopt the new revenue recognition standard and perform risk assessment processes related to the new revenue standard. These internal controls include providing global training to our finance team and holding regular meetings with management to address risks associated with applying the five-step model for recognizing revenues. Additionally, we established monitoring controls to identify new sales arrangements and changes in our business environment that could impact risks associated with the new revenue standard and our current accounting assessment process.

 

Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive.

 

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the period of the change in estimate.

 

Fair Value of Financial Instruments

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of September 30, 2019 and December 31 2018, the carrying value of accounts payable and accrued liabilities approximated fair value due to the short-term nature and maturity of these instruments.

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. As of September 30, 2019 and December 31, 2018, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

 

Use of Estimates

 

The financial statements are prepared on the basis of US GAAP. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported expenses during the reporting period. Actual results could differ from those estimates made by management. There are no leases in the Company, thus the financial statements do not include estimates to recognize assets and liabilities related to implementing the new leases standard ASC 842.

 

Impact of Recently Issued Accounting Standards

 

On December 15, 2018 the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) issued on February 25, 2016 became effective. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: Financing leases, similar to capital leases, will require the recognition of an asset and liability, measured at the present value of the lease payments or Interest on the liability will be recognized separately from amortization of the asset. Principal repayments will be classified as financing outflows and payments of interest as operating outflows on the statement of cash flows. Operating leases will also require the recognition of an asset and liability measured at the present value of the lease payments. A single lease cost, consisting of interest on the obligation and amortization of the asset, calculated such that the amortization of the asset will increase as the interest amount decreases resulting in a straight-line recognition of lease expense. All cash outflows have been classified as operating on the statement of cash flows.

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify certain disclosure requirements of fair value measurements and are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact on its financial statements of the adoption of this new accounting pronouncement.

 

In June 2018, the FASB issued Accounting Standards Update, or ASU 2018-07, Compensation - Stock Compensation (Topic 718), which simplifies the accounting for non-employee share-based payment transactions. The new standard expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 (including interim periods within that fiscal year), with early adoption permitted. The Company adopted the new standard in the second quarter of 2018 and the new standard is applied share-based payment transactions as reflected in the Company’s unaudited condensed consolidated financial statements.

 

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.

 

In March 2017, the FASB issued Update 2017-08—Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

 

In March 2017, the FASB issued Update 2017-07—Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company adopted the new standard and the new standard is reflected in the Company’s unaudited condensed consolidated financial statements.

XML 46 R4.htm IDEA: XBRL DOCUMENT v3.19.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Income Statement [Abstract]        
Revenues
Expenses:        
Research and Development expenses (37,865) (45,321) (120,307) (102,202)
General and Administrative expenses (447,490) (57,300) (2,104,260) (295,183)
Total operating expenses (485,355) (102,621) (2,224,567) (397,385)
OTHER EXPENSE:        
Loss on sale of marketable securities (251) (27,869)
Total other expense (485,606) (27,869)
Net (Loss) (485,606) (102,621) (2,252,436) (397,385)
Provision for income taxes
Net loss (485,606) (102,621) (2,252,436) (397,385)
Less: loss attributable to non-controlling Interest 21,462 6,685 58,554 21,872
Net loss attributable to Canna Powder, Inc. $ (464,144) $ (95,936) $ (2,193,882) $ (375,513)
Loss per share - basic and diluted $ (0.04) $ (0.01) $ (0.19) $ (0.04)
Weighted average shares outstanding Basic and diluted 12,301,559 9,948,077 11,737,185 9,372,940