4. BUSINESS ACQUISITION AND SUBSEQUENT LOSS OF CONTROL

Business Acquisition:

On September 30, 2015 (the “Closing”), the Company entered into a Share Exchange Agreement (the “Agreement”) with and among RM Fresh and its shareholders. Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding shares of RM Fresh in exchange for the issuance of 2,000,000 shares of the Company’s common stock. As a result of this transaction, RM Fresh became a wholly owned subsidiary of the Company and the former shareholders of RM Fresh owned approximately 7% of the Company’s shares of common stock. This acquisition was accounted for using the acquisition method of accounting. The purchase consideration of 2,000,000 shares of the Company’s common stock were fair valued at $2,180,000. Amortization expense of $70,350 on acquired intangible assets were recorded for the year ended June 30, 2016. As at June 30, 2016, the remaining carrying value of intangibles including goodwill amounting in total to $2,101,785 were impaired since the carrying value was less than the fair value.

Loss of Control:

On August 31, 2016, the Company entered into a group of transactions related to RM Fresh. In order to fund the ongoing operation and further development of RM Fresh, the Company consented to new third party investments into RM Fresh in the approximate total amount of $175,000, made in the form of cash and retirement of indebtedness owed by RM Fresh, reducing the Company’s ownership percentage of RM Fresh to twenty percent (20%) and is thus accounted for as an available for sale investment. As a result, the financial statements of the Company as at, December 31, 2016, do not include the assets and liabilities of RM Fresh, which is no longer a wholly-owned subsidiary effective August 31, 2016, while the balance sheet as at June 30, 2016 is and contains the accounts of RM Fresh. The statement of operations of the Company includes the results of the operations of RM Fresh up to August 31, 2016, which is the effective date of change in control, due to loss of control in RM Fresh and consequent de-consolidation. The fair value of the assets and liabilities as at August 31, 2016 and the carrying value of the investments, which resulted in the Company recording a gain of $61,154 in the statement of operations, is as follows:

	Fair value as at August 31, 2016
Cash		12,720
Accounts receivable		250,203
Inventories		78,891
Harmonized sales tax recoverable		24,071
Total assets		365,885

Accounts payable		307,571
Due to stockholders		7,529
Due to related parties		60,145
Notes payable		51,794
Total liabilities		427,039
Net liabilities		61,154

Purchase consideration value of investments in RM Fresh shares on date of acquisition		2,180,000
Impairment recorded until June 30, 2016		(2,180,000	)
Carrying value of investments in RM Fresh shares on date of change in control		-
Gain on date of change in control due to deconsolidation of net liabilities of RM Fresh		61,154

The Company recognized net gain due to loss of control of $84,021 comprising of $61,154 as explained above and $22,867 being translation adjustment. Management has concluded that the entire available for sale investment in RM Fresh is impaired and hence the investment is written off.