0001387131-19-002682.txt : 20190416 0001387131-19-002682.hdr.sgml : 20190416 20190416170514 ACCESSION NUMBER: 0001387131-19-002682 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 59 CONFORMED PERIOD OF REPORT: 20151130 FILED AS OF DATE: 20190416 DATE AS OF CHANGE: 20190416 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Phoenix Life Sciences International Limited. CENTRAL INDEX KEY: 0001493212 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 460525378 STATE OF INCORPORATION: NV FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-167275 FILM NUMBER: 19751561 BUSINESS ADDRESS: STREET 1: 3000 LAWRENCE STREET CITY: DENVER STATE: CO ZIP: 80205 BUSINESS PHONE: 1.720.699.7222 MAIL ADDRESS: STREET 1: 3000 LAWRENCE STREET CITY: DENVER STATE: CO ZIP: 80205 FORMER COMPANY: FORMER CONFORMED NAME: MEDIJANE HOLDINGS INC. DATE OF NAME CHANGE: 20140310 FORMER COMPANY: FORMER CONFORMED NAME: MOKITA, INC. DATE OF NAME CHANGE: 20130604 FORMER COMPANY: FORMER CONFORMED NAME: MOKITA VENTURES, INC. DATE OF NAME CHANGE: 20120521 10-Q 1 plsi-10q_113015.htm QUARTERLY REPORT

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

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

For the Quarterly Period Ended November 30, 2015

 

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: 333-167275

 

Phoenix Life Sciences International Limited

(Exact name of registrant as specified in its charter)

 

 

Nevada   46-0525378

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

   
3000 Lawrence Street, Denver, CO   80205
(Address of principal executive offices)   (Zip Code)

 

(720) 699.7222

(Registrant’s telephone number, including area code)

 

MediJane Holdings, Inc.

2011 Ken Pratt Boulevard, Suite 300, Longmont CO, 80501

(Former name, former address and former fiscal year, if changed since last report)

 

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 ☐ 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 ☐ 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 ☐ (Do not check if a smaller reporting company)   Smaller reporting company ☒
Emerging growth company ☐    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class Outstanding as of January 31, 2019
Common Stock, $0.001 par value per share 32,234,654 common shares

 

 

 

 

 

 

Phoenix Life Sciences International Limited

 

FORM 10-Q

 

For the Quarter Ended November 30, 2015

 

INDEX

 

    Page
PART I. FINANCIAL INFORMATION  
  Item 1. Financial Statements (unaudited) 3
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 30
  Item 4. Controls and Procedures 31
       
PART II. OTHER INFORMATION  
  Item 1. Legal Proceedings 32
  Item 1A. Risk Factors 32
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32
  Item 3. Defaults upon Senior Securities 32
  Item 4. Mine Safety Disclosures 32
  Item 5. Other Information 32
  Item 6. Exhibits 32
       
SIGNATURE 33

 

Forward Looking Statements.

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are stated in United States Dollars ($) and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to “common shares” refer to the common shares in our capital stock.

 

Except as otherwise indicated by the context, references in this report to “we”, “us” “our” and “the Company” are references to Phoenix Life Sciences International Limited as formerly known as MediJane Holdings, Inc.

 

2

 

 

PHOENIX LIFE SCIENCES INTERNATIONAL LIMITED

Consolidated Balance Sheets

 

   November 30, 2015
$
   February 28, 2015
$
 
   Unaudited   Audited 
ASSETS          
           
Cash   2,425    9,400 
Accounts receivable       2,300 
Notes receivable, related party   250,184    258,122 
Inventory   1,194,106    1,211,340 
Prepaid inventory       141,664 
Total Current Assets   1,446,715    1,622,826 
           
Security deposit       1,250 
Total Assets   1,446,715    1,624,076 
           
LIABILITIES          
           
Current Liabilities          
           
Accounts payable and accrued liabilities   562,837    409,701 
Due to related parties   161,250    50,000 
Current Liabilities   724,087    459,701 
           
Convertible notes payable, net   180,113    194,746 
Convertible notes payable, CannaVest   1,280,148    1,222,027 
Derivative liability, Typenex Note   151,529    169,868 
Total Liabilities   2,335,877    2,046,342 
           
STOCKHOLDERS’ DEFICIT          
           
Common Stock          
Authorized: 1,000,000,000 common shares, par value of $0.001 per share          
Issued and outstanding: 50,171 and 361,322,812 common shares, respectively   50    361,323 
           
Additional paid-in capital   17,705,254    17,247,631 
           
Accumulated deficit during the development stage   (18,594,466)   (18,031,220)
Total Stockholders’ Equity (Deficit)   (889,162)   (422,266)
Total Liabilities and Stockholders’ Equity   1,446,715    1,624,076 

 

(The accompanying notes are an integral part of these financial statements)

 

3

 

 

PHOENIX LIFE SCIENCES INTERNATIONAL LIMITED

Consolidated Statements of Operations - Unaudited

 

   Three Months Ended   Nine Months Ended 
   Nov. 30, 2015   Nov. 30, 2014   Nov. 30, 2015   Nov. 30, 2014 
Income Statement                    
Revenues  $   $17,936   $18,410   $20,716 
Cost of Sales       9,144    5,933    10,694 
Gross Profit       8,792    12,477    10,022 
                     
Operating expenses                    
Amortization expense       650,250        650,250 
Product development expense       65,356    100,000    80,356 
Sales and marketing expenses   200    51,788    14,953    199,710 
Operations expense   1,304    46,162    3,049    146,399 
General and administrative   1,147    109,419    31,615    168,450 
Professional fees   93,508    266,216    311,220    437,945 
Lease operating expenses       11,685    7,500    26,685 
Total operating expenses   96,159    1,200,876    468,337    1,709,795 
Loss before other expenses   (96,159)   (1,192,084)   (455,860)   (1,699,773)
                     
Other income (expense)                    
Interest Income   969    1,264    3,062    1,264 
Interest Expense   (45,868)   (4,466)   (132,008)   (7,756)
Debt issue costs           (7,830)    
Discount Amortization   (10,804)   (2,610)   (56,953)   (557,023)
Gain (loss) on derivative liability   (8,194)       86,343     
Gain (loss) on discontinued operations               722 
Total other expense   (63,897)   (5,812)   (107,286)   (562,793)
Net loss   (160,056)   (1,197,896)   (563,246)   (2,262,566)
                     
Basic and diluted loss per common share:                    
Income (loss) from continuing operations   (0.00)   (0.01)   (0.00)   (0.03)
Income (loss) from discontinued operations  $0   $0   $0   $0 
Basic and diluted loss per common share  $(0.00)  $(0.01)  $(0.00)  $(0.03)
Weighted average shares outstanding - basic and diluted   258,030,222    89,410,000    364,290,048    77,650,803 

 

(The accompanying notes are an integral part of these financial statements)

 

4

 

 

PHOENIX LIFE SCIENCES INTERNATIONAL LIMITED

Consolidated Statements of Cash Flows

(Unaudited)

 

   Nine Months Ended
   Nov. 30, 2015  Nov. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:        
         
Net loss$ (563,246)$ (2,262,566)
Loss from discontinued operations     (722)
         
Adjustments to reconcile net loss to net cash used in operating activities:        
Amortization     650,250 
Non-cash amortization of discount on convertible notes payable  54,000   557,022 
Non-cash interest expense on convertible notes payable     7,725 
Non-cash stock option compensation     112,914 
Debt issuance costs  10,828   20,000 
         
Changes in operating assets and liabilities:        
Accounts receivable  2,300   (3,180)
Deposit  1,250    
Inventory     (13,611)
Prepaid expense and deposits  141,664   (209,110)
Accounts payable and accruals  169,538   147,223 
Net changes in operating assets and liabilities - discontinued operations      
Net Cash provided by (used for) operating activities - current operations  (183,666)  (994,055)
Net Cash provided by (used for) operating activities - discontinued operations     302 
Net Cash provided by (used for) operating activities  (183,666)  (993,753)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
         
Related party notes receivable  8,770   (80,244)
Net Cash Used in Investing Activities - continuing operations  8,770   (80,244)
Net Cash Used in Investing Activities - discontinued operations      
         
CASH FLOWS FROM FINANCING ACTIVITIES:   
       
Proceeds from notes payable  42,350   135,000 
Due to related parties  125,571    
Proceeds from issuance of common shares     975,925 
Net changes in financing activities - discontinued operations      
Net Cash Provided By Financing Activities - continuing operations  167,921   1,110,925 
Net Cash Provided By Financing Activities - discontinued operations      
Increase (Decrease) in Cash - continuing operations  (6,975)  36,928 
Increase (Decrease) in Cash - discontinued operations      
Cash - Beginning of Period - continuing operations  9,400   6,104 
Cash - Beginning of Period - discontinued operations      
Cash - End of Period - continuing operations  2,425   43,032 
Cash - End of Period - discontinued operations$  $  
         
Supplemental disclosures        
Interest paid      
Income tax paid      
Non-cash issuance of stock for consulting agreements     200,000 
Non-cash issuance of stock for license agreement, related party     13,000,000 
Non-cash issuance of stock for distribution agreement     172,000 
Non-cash issuance of stock for conversion of debt  54,000    

 

(The accompanying notes are an integral part of these financial statements)

 

6

 

 

1.Nature of Operations and Continuance of Business

 

The company was incorporated in the State of Nevada on April 21, 2009 under the name Mokita Exploration, Ltd. (the “Company”). On February 27, 2014, there was a change of control of the Company. On February 28, 2014, our board of directors and a majority of holders of the Company’s voting securities approved a change of name of the Company to MediJane Holdings Inc. A Certificate of Amendment to effect the change of name was filed and became effective with the Nevada Secretary of State on March 4, 2014. A Certificate of Correction was subsequently filed with the Nevada Secretary of State on March 6, 2014 to correct a spelling error in the Company’s new name. These amendments have been reviewed by FINRA and were approved for filing with an effective date of March 12, 2014. The name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on March 12, 2014 under our new ticker symbol “MJMD”.

 

On March 8, 2017 the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company changed its name with the State of Nevada from MediJane Holdings, Inc. to Stem Bioscience, Inc.

 

In May 2018 the Company again changed its name to Phoenix Life Sciences International Limited. A Certificate of Amendment to effect the change of name was filed and became effective with the Nevada Secretary of State on May 31, 2018. The name change was accepted by FINRA and became effective with the Over-the- Counter Bulletin Board on November 2, 2018 with the trading symbol “PLSI”.

 

On February 27, 2014, after the change of control, the Company became a sales and distribution company focused on cannabinoid infused products for the treatment of medical conditions.

 

On January 5, 2015, the Company underwent a change in control following the issuance of 276,000,000 common shares to Phoenix Bio Pharmaceuticals Corporation pursuant to a license agreement. On November 4, 2015, these shares were exchanged for 2,000,000 Series B Preferred Shares.

 

The business was then changed to only focus on Cannabidiol (CBD) products. CBD is a non-psychotropic cannabinoid that is not restricted as part of the U.S. Controlled Substances Act (CSA), as defined under the 2014 U.S Farming Bill to be derivatives of the Industrial Hemp plant that contains less than 0.3% tetrahydrocannabinol (THC). The company will contract out the manufacturing of the products. Phoenix Bio Pharmaceuticals Corporation and other groups may manufacture our products under our license agreement.

 

The Company follows the accounting guidance outlines in the Financial Accounting Standards Board Codification guidelines. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted principles for interim financial information and with the items under Regulation S-K required by the instructions to Form 10-Q. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed here in, there have been no material change in the information disclosed in the notes to the financial statements for the year ended February 28, 2015 included in the Company’s annual report on Form 10-K|A filed with the Securities and Exchange Commission on March 4, 2019. The interim unaudited financial statements presented herein should be read in conjunction with those financial statements included in the Form 10-K|A. In the opinion of Management, all adjustments considered necessary for a fair presentation, which unless otherwise disclosed herein, consistent with normal re-occurring adjustments, have been made. Operating results for nine months ended November 30, 2015 are not necessarily indicative results that may be expected for the year ended February 29, 2016.

 

7

 

 

Going Concern

 

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company’s total operating expenditure plan for the following twelve months will require significant cash resources to meet the goals of its business plan. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

2.Summary of Significant Accounting Policies

 

Basis of Presentation – The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is February 28 or 29.

 

Basis of Consolidation – The consolidated financial statements include the accounts of Phoenix Life Sciences International Limited. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Stock Split – on October 21, 2015 the Company’s Board of Directors declared a 1 for 10,000 reverse stock split on its common stock as of a record date of October 22, 2015. The effect of the stock split decreased the number of shares of common stock outstanding from 501,242,594 to 50,125. All common share and per common share data in these financial statements and related notes here to have been retroactively adjusted to account for the effect of the stock split for all periods presented. The total number of authorized common shares on the par value thereof was not changed by the split.

 

Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

A significant item that requires management’s estimates and assumptions is the valuation of intangible assets, valuation allowances for income tax, valuation of derivatives instruments and accrued liabilities, among others. Although management believes these estimates are reasonable, actual results could differ from these estimates.

 

8

 

 

Cash and cash equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At November 30, 2015 and February 28, 2015, the Company did not hold any cash equivalents.

 

Accounts receivable – Accounts receivable consists of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts receivable are carried at the original invoice amount less a reserve for doubtful receivables based on a review of all outstanding amounts on a monthly basis.

 

Basic and Diluted Net Loss per Share – The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At February 28, 2015 and November 30, 2015, the Company had outstanding stock options outstanding, the Company does not deem these options to be dilutive as the exercise price exceeds the current fair market value of the Company’s common stock. At November 30, 2015 and 2014, the Company had did not have potentially dilutive shares outstanding.

 

Financial Instruments – Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1 – Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2 –Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3 – Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, amounts due to related parties, and convertible debenture.

 

9

 

 

Pursuant to ASC 820, the fair value of our financial instruments are determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

Derivative Financial Instruments – The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

 

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

 

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value.

 

The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.

 

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net cash settlement of the derivative instrument could be required within the 12 months of the balance sheet date.

 

Comprehensive Loss –- ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at November 30, 2014 and 2013, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock-based Compensation – The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505-50 - Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

The fair value of each share based payment is estimated on the measurement date using the Black-Scholes model with the following assumptions, which are determined at the beginning of each year and utilized in all calculations for that year:

 

Risk-Free Interest Rate. We utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards.

 

10

 

 

Expected Volatility. We calculate the expected volatility based on a volatility index of peer companies as we did not have sufficient historical market information to estimate the volatility of our own stock.

 

Dividend Yield. We have not declared a dividend on its common stock since its inception and have no intentions of declaring a dividend in the foreseeable future and therefore used a dividend yield of zero.

 

Expected Term. The expected term of options granted represents the period of time that options are expected to be outstanding. We estimated the expected term of stock options by using the simplified method. For warrants, the expected term represents the actual term of the warrant.

 

Forfeitures. Estimates of option forfeitures are based on our experience. We will adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

 

Revenue Recognition – The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidence of an arrangement exists and delivery has occurred, provided the sale is fixed or determinable and collection is probable. The Company assesses whether the sale is fixed and determinable based on the payment terms associated with the transaction. If a sale is based upon a variable such as acceptance by the customer, the Company accounts for the sale as not being fixed and determinable. In these cases, the Company defers revenue and recognizes it when it becomes due and payable.

 

The Company assesses the probability of collection based on a number of factors, including past transaction history with the customer and the current financial condition of the customer. If the Company determines that collection of a fee is not reasonably assured, revenue is deferred until the time collection becomes reasonably assured. Significant management judgment and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

 

Shipping and Handling costs – shipping and handling costs are included in cost of sales in the Statements of Operations.

 

Recent Accounting Pronouncements – The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Reclassifications – Certain amounts in the prior period financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on previously reported losses, total assets or stockholders equity.

 

11

 

 

3.Variable Interest Entity

 

The Company follows the guidelines in FASB Codification of ASC 810 “Consolidation” which indicates “a legal entity that is deemed to be a business need not be evaluated by a reporting entity to determine if the legal entity is a Variable Interest Entity (“VIE”)” unless any one of four conditions exist:

 

The reporting entity, its related parties, or both participated significantly in the design or redesign of the legal entity;
The legal entity is designed so that substantially all of its activities involve or are conducted on behalf of the reporting entity and its related parties;
The reporting entity and its related parties provide more than half of the total of the equity, subordinated debt, and other forms of subordinated financial support to the legal entity; or
The activities of the legal entity are primarily related to the securitizations or other forms of asset-backed financings or single-lessee leasing arrangements.

 

A VIE is an entity that either (a) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (b) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. If we determine that we have operating power and the obligation to absorb losses or receive benefits, we consolidate the VIE as the primary beneficiary, and if not, we do not consolidate. The Company has not identified any VIEs as of November 30, 2015.

 

4.Intangible Assets

 

Effective September 1, 2014, the Company changed its method of computing amortization from a sales percentage method to the straight-line method for the intangible assets. An assessment of useful life and / or discounted cash flow of the intangible asset is made and where the value is overstated the value is impaired.

 

5.Income Taxes

 

The deferred tax assets or liabilities represent the future tax benefits or cost of those differences. The Company’s principal deferred tax items arise from net operating losses. Net operating losses approximate $18,600,000 which expire in the years 2030 through 2036. The net operating loss results in a deferred tax asset of $2,790,000. As future earnings are uncertain, the Company has provided a valuation allowance for the entire amount of the deferred tax asset.

 

The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more likely than not” of being sustained by the applicable tax authority “More likely than not” is defined as greater than a 50% chance. The Company is delinquent on nearly all of its tax filings. As a result, there are presently no uncertain tax position and no reserves for uncertain tax positions.

 

The Company has no unrecognized tax benefits at February 28, 2015. The Company’s income tax returns are subject to examination by federal and state tax authorities. Due to the failure to file its tax returns, all prior tax years are open to examination. The Company recognizes interest and penalties associated with uncertain tax positions as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the balance sheet. There were no interest and penalties paid or accrued during the years ended February 28, 2015.

 

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6.License Agreement - Phoenix Bio Pharmaceuticals, Inc.

 

On March 14, 2014, the Company entered into a License Agreement with Phoenix Bio Pharmaceuticals Corporation (“Phoenix Bio Pharm”) where Phoenix Bio Pharm has granted exclusive rights to the Company for North America to exploit all presently owned and after-acquired intellectual property rights and know-how of Phoenix Bio Pharm for certain medical cannabinoid products and delivery systems for the treatment and management of illnesses. The term of the License Agreement is Ten (10) years. In consideration of the acquired license, the Company issued 26,000,000 shares of common stock to Phoenix Bio Pharm, valued at $13,000,000 based on the fair value of the assets acquired in the license agreement.

 

On January 5, 2015, the Company entered into an additional license agreement with Phoenix Bio Pharmaceuticals Corporation to expand the territories covered under its original license agreement dated March 14, 2014. Under the terms of the additional license agreement, the Company acquired the marketing rights to distribute products developed by Phoenix Bio Pharmaceuticals Corporation in Australia and New Zealand for ten years. In exchange for the license, the Company has issued 250,000,000 restricted common shares at $0.016 per common share, for an aggregate value of $4,000,000. This amount represents 33% over the market value on the date of execution of the license agreement being $3,000,000.

 

On July 8, 2015, the Company agreed to enter into a new licensing agreement with Phoenix Bio Pharmaceuticals Corporation. This new agreement shall replace the previous licensing agreements. The new licensing agreement shall be non-exclusive, CBD only licensing agreement with Phoenix Bio Pharmaceuticals Corporation. This license agreement operates for a twenty (20) year period. Phoenix Bio Pharm has granted to the Company a license for the territory of North America, Australia and New Zealand to exploit all presently owned and after-acquired intellectual property rights and know-how of Phoenix Bio Pharm related to CBD based cannabinoid products and delivery systems for the treatment and management of illnesses. Products falling under the license will include the following CBD products: transdermal patches, orally administered extracts, concentrated extracts of vaporizers and inhalers, sublingual and buccal dispensing products and extraction technology, suppository delivery systems, salves, creams, gels, lotions, and liquid extracts, and any product or active ingredients sourced through Phoenix Bio Pharm or third party suppliers or licensors. The Company will also have the right to sublicense the rights acquired pursuant to the license agreement and to use and develop copyrighted materials of Phoenix Bio Pharm for marketing and distribution purposes.

 

In addition to the new licensing agreement, on July 8, 2015 the Company has entered into an exchange agreement with Phoenix Bio Pharm where all existing common shares held by Phoenix Bio Pharm (276,000,000) are exchanged for 2,000,000 Series B Preferred Shares, par value $0.0001. These preferred shares are entitled to 100 votes for each share held, and convertible into 100 common shares per preferred share at any time at the discretion of the holder.

 

As the Company has failed to meet projected cash flows which underpin the valuation model of the License Agreement, the Company determined that the balance of License Agreement should be impaired at February 29, 2015, and accordingly a total of $14,014,1899 was expensed as an impairment to the License Agreement and paid in capital was reduced by $2,282,132 at year ended February 28, 2015.

 

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7.CannaVest, Inc.

 

On December 23, 2014, the Company entered into a convertible promissory note for $1,200,000 with CannaVest Corp. The note represents $1,200,000 worth of raw material inventory to be obtained from CannaVest Corp. to use in the Company’s cannabidiol product formulations. The note accrues simple interest at a rate of 10% per annum and is due and payable in six months from the date of issue. The note cannot be prepaid. At any time, the outstanding principal amount of this note and all accrued but unpaid interest under this note can be converted into common shares at a price equal to the lesser of $0.02 per common share, the closing sale price, or the average of the lowest closing sale prices of the Company’s common shares during the five trading day period immediately preceding the date of such determination.

 

Should the Company default on this convertible promissory note, all outstanding obligations payable by the Company are immediately due and payable. In addition, CannaVest Corp. may exercise any other right, power or remedy permitted by law. Further, upon even of default, all unpaid obligations under this note shall bear interest at the rate of 12% per annum.

 

Warrant Agreement

 

In connection with the convertible promissory note dated December 23, 2014, the Company subsequently issued warrants to purchase 20,000,000 common shares at an exercise price of $0.02 per common share to Kisha Spendthrift Trust, an affiliate of CannaVest Corp. These warrants were issued on January 6, 2015. In exchange for these warrants, the Company shall have access to the technical and management staff of CannaVest Corp. for the development of products to be manufactured from cannabidiol sourced from CannaVest Corp.

 

8.Subsidiary Companies

 

On March 17, 2014, MediHoldings, Inc. (“MediHoldings”), a Colorado corporation, was formed as a wholly-owned subsidiary of the Company.

 

On June 27, 2014, MediSales (CA), Inc. (“MediSales”), a California corporation, was formed as a wholly-owned subsidiary of the Company.

 

Both these subsidiaries as at November 30, 2015 had not traded and were inactive.

 

9.Related Party Transactions

 

Martin Tindall

 

Mr. Martin Tindall, assists the Company with business development activities through the Advisory Services Agreement with Kronos as discussed below. Mr. Tindal serves as the CEO of Kronos. Additionally, Mr. Tindal has provided new product development services through a New Product Development Agreement with Phoenix Pharms Capital Corporation, as discussed below. Mr. Tindall services as CFO and a Director of Phoenix Pharms Capital Corporation. Mr. Tindall also serves as a director of Phoenix Bio Pharmaceuticals Inc.

 

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Kronos International Investments Ltd. (“Kronos”)

 

Sublease Agreement: Effective March 1, 2014, the Company entered into a Sublease Agreement with Kronos for a four (4) year term. Kronos’s CEO, Martin Tindall also provides advisory services to the Company. The monthly sublease rent is $2,500 per month. During the year ended February 29, 2016, the Company paid Kronos $7,500 in rent expense, and had previously paid security deposit of $1,250. In June 2015, the sublease was cancelled and the security deposit of $1,250 was offset against amounts owed to Kronos for advisory service fees.

 

Advisory Services: Effective March 1, 2014, the Company engaged Kronos to provide Advisory Services for a monthly retainer fee of $10,000 per month. The advisory services include and are not limited to accounting and corporate compliance, business development and strategic planning services, corporate advisory and operational oversight. Between March 1, 2014 and February 28, 2015, expenses related to the Advisory Services totaled $120,000. For the year March 1, 2015 and November 30, 2015, expenses related to the Advisory Services, provided by the CEO of Kronos, Martin Tindall with respect to business development of cannabidiol products that the Company intends to market, were $62,500.

 

Phoenix Pharms Capital Corporation (“Phoenix Pharms”)

 

Related Party Loan: On September 18, 2014, the Company advanced Phoenix Pharms a total of $85,000 as a short term loan. As of November 30, 2015, the outstanding balance due the Company on this related party loan is $54,324

 

Russell Stone: Mr. Russell Stone, the Company’s Chief Executive Officer, holds approximately 14% of the outstanding common shares of Phoenix Pharms Capital Corporation indirectly through a trust.

 

Lewis “Spike” Humer:

 

Mr. Humer, a director of the Company, serves as CEO and a director of Phoenix Bio Pharmaceuticals and CEO and a director of Phoenix Pharms Capital Corporation. As of August 2014, the Company began paying Mr. Humer a consulting fee of $1,500 per week. As of November 30, 2015, the Company has accrued a related party payable to Mr. Humer of $75,260.

 

10.Preferred Stock

 

On September 22, 2015, the Company amended and restated its Articles of Incorporation to create and authorize four (4) classes of preferred stock. The Company has authorized Series A, Series B, Series C and Series D Preferred Stock (the “Preferred Stock”).

 

Series A Preferred Stock:

Series A preferred shares have a par value of $0.0001, and are convertible into common shares at $1.00 per common share. Series A preferred shares rank senior to common stock with respect to the right to participate in distributions or payments in the event of liquidation, dissolution, or winding up of the Company. Holders of Series A preferred shares are entitled to a preferred return equal to the purchase price paid for such Series A preferred shares. Series A preferred shares do not have any voting rights.

 

Holders of Series A preferred shares are not entitled to preemptive rights to purchase stock in future stock offerings of the Company. Holders of Series A preferred shares have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities, and they have the right of co-sale. Holders of Series A preferred shareholders are not required to sell all of their Series A preferred shares on the same terms or conditions of a co-sale by a majority shareholder. There is no right of first refusal for Series A preferred shares.

 

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Series B Preferred Stock:

Series B preferred shares have a par value of $0.0001, and are convertible into common shares at a rate of 100 common shares per preferred share. Series B preferred shares are entitled to cast 500 votes for each preferred share owned. Series B preferred shares are senior to common shares with respect to the right to participate in distributions or payments in the event of any liquidation, dissolution, or winding up of the Company, and holders of Series B preferred shares are entitled to receive a preferred return equal to the purchase price paid for such Series B preferred stock.

 

Holders of Series B preferred shares are entitled to preemptive rights to purchase stock in future offerings, and have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities. Holders do not have the right of co-sale, and are not required to sell all of their Series B preferred shares on the same terms or conditions of a co-sale by a majority shareholder. If any Series B preferred shareholder wishes to sell, transfer or otherwise dispose of any or all of their Series B preferred shares, the other Series B preferred shareholders shall not have a prior right to buy such Series B preferred shares.

 

Series C Preferred Stock:

Series C preferred shares have a par value of $0.0001, and are convertible into common shares at a rate of $1.00 per common share. Series C preferred shares are not entitled to any voting rights, unless such vote is to modify rights, preferences, privileges and restrictions granted to and imposed on Series C preferred shares. Series C preferred shares are senior to common shares and Series B preferred shares with respect to the right to participate in distributions or payments in the event of any liquidation, dissolution, or winding up of the Company, and holders of Series C preferred shares are entitled to receive a preferred return equal to the purchase price paid for such Series C preferred, which is deemed to be $600,000. If the closing price per share of the Company’s common shares is less than $1.00 for a period of five consecutive trading days, the YP Holdings will have the one-time right, exercisable at its discretion, to require that the conversion price of the shares become equal to 75% of the average closing bid price per shares for the five consecutive trading days immediately preceding the date that YP Holdings notifies the Company that it wishes to convert some or all of its Series C preferred shares into common shares. The reset shall not be available if the proceeds of the sale of converted common shares equals or exceeds $750,000. Should proceeds of the sale of converted common shares equal or exceed $1,000,000, any unconverted Series C preferred shares shall be returned to the Company for retirement. Converted common shares are subject to a leak-out agreement, and no more than 50,000 common shares may be sold by YP Holdings in any one month.

 

Holders of Series C preferred shares are entitled to receive a preferred return equal to 10% of the gross cash sales income received in the ordinary course of business. Holders are not entitled to preemptive rights to purchase shares in future offerings of the Company.

 

Holders of Series C preferred shares have the right to register their unregistered shares when either the Company or another investor initiates a registration of the Company’s securities. Holders have the rights of co-sale, and are not required to sell all of their Series C preferred shares on the same terms or conditions of a co-sale by a majority shareholder. If any Series C preferred shareholder wishes to sell, transfer, or otherwise dispose of any or all of their Series C preferred shares, other Series C preferred shareholders shall not have a prior right to buy such shares.

 

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Series D Preferred Stock

Series D preferred shares have a par value of $0.0001, and are convertible into common shares at a conversion rate of $1.00 per common share. Series D preferred shares rank senior to common shares and the Series B preferred shares. In the event of any liquidation, dissolution, or winding up of the Company, holders of Series D preferred shares shall be entitled to receive a preferred return equal to the purchase price paid for such Series D preferred shares after payment of the preferred returns relating to the Series A and C preferred shares. Series D preferred shares are not entitled to voting rights.

 

Holders of Series D preferred shares shall be entitled to receive a preferred return equal to 10% of the Gross Cash Sales Income received in the ordinary course of business. Upon issue of the dividend, the value of such shares shall be deemed to be retired. Holders of Series D preferred shares are not entitled to preemptive rights to purchase stock in future offerings of the Company. Holders of Series D preferred shares have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities. Holders of Series D preferred shares have the right of co-sale, but they are not required to sell all of their Series D preferred shares on the same terms or conditions of a co-sale by a majority shareholder.

 

11.Common Stock

 

The Company has authorized 990,000,000 shares of its common stock, $0.001 par value. On November 30, 2015, following the reverse share split, there were 24,512 shares of common stock issued and outstanding and 31,154 (311,540,534 pre-split) shares of common stock reserved for issuance.

 

Effective August 23, 2013, the Company filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized, issued and outstanding shares of common stock on a 10 new for 1 old basis and, consequently, an increase to our authorized share capital from 99,000,000 to 990,000,000 common shares, with a par value of $0.001 per share.

 

On October 21, 2015, the Company effectuated a 1 for 10,000 reverse split on its common stock as of a record date of October 22, 2015. As a result, the 458,892,294 outstanding shares as of the record date were reversed to 45,935 shares. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented. The total number of authorized common shares and par value was not changed for the split.

 

On February 27, 2014, the Company issued 500 (5,000,000 pre-split) shares to its Chief Executive Officer, who agreed to retire the 500 common shares and return them to the unissued, authorized common shares of the Company in exchange for a stock option.

 

On March 13, 2014, the Company issued 20 (200,000 pre-split) shares of its restricted common stock to GoKush, Inc. as described above. On July 1, 2014, these restricted shares were issued.

 

On March 14, 2014, the Company issued 2,600 (26,000,000 pre-split) shares of its restricted common stock to Phoenix Bio Pharm as described above. On July 1, 2014, these restricted shares were issued.

 

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On January 23, 2015, the Company issued 25,000 (250,000,000 pre-split) shares of its restricted common stock to Phoenix Bio Pharm as described in above.

 

On December 9, 2014, the Company issued 500 (5,000,000 pre-split) shares of its common stock as compensation under two consulting agreements, each for one-year of marketing services. The Company values the issuance of shares at $119,666, which will be amortized over the twelve months beginning November 2014 to October 2015.

 

On December 16, 2014, the Company issued 667 (6,666,667 pre-split) shares of its common stock to YP Holdings for $600,000 under a Securities Purchase Agreement as discussed below.

 

During the year ended February 28, 2015, the Company issued 1,002 (10,020,000 pre-split) shares of common stock to Typenex from the conversion of a total principal amount of $38,500 under a Convertible Notes Agreement as discussed in Note 13 below.

 

Between March 1, 2015 and August 31, 2015, the Company issued 9,756 (97,560,000 pre-split) shares of common stock to Typenex from the conversion of a total principal amount of $54,000 under a Convertible Notes Agreement and 3,157 (31,575,175 pre-split) shares of Common Stock to Typenex related to true-up notices received from the noteholder, as discussed in Note 13 below.

 

On August 14, 2015, Phoenix Bio Pharm returned 27,600 (276,000,000 pre-split) shares of common stock to the Company to hold in safe keeping for an exchange into 2,000,000 shares of preferred stock.

 

As at November 30, 2015 there were 50,171 common shares on issue.

 

12.Common Stock Options

 

2014 Stock Awards Plan: Effective June 4, 2014, the Board of Directors adopted the 2014 Stock Awards Plan (the “Plan”) under which the Company is authorized to grant employees, directors, and consultants (“Participant”) incentive and non-qualified stock options. Pursuant to the Plan, the Company is authorized to grant an aggregate of 1,000 (10,000,000 pre-split) stock options to purchase common stock of the Company. The stock option price and vesting terms are determined by the Board of Directors or Compensation Committee (the “Committee”), and evidenced by a stock option agreement extended to the Participant. The options granted generally terminate five years from the date of issuance.

 

Effective February 27, 2014, the Company’s former CEO and Director was granted incentive stock options to purchase 500 (5,000,000 pre-split) common shares of the Company at $3,400 ($0.34 pre-split) per common share valued at $551,363. Immediately upon the grant of the option, options to purchase 250 (2,500,000 pre-split) common shares vested. The option to purchase the remaining 2,500,000 common shares shall vest in equal amounts over the next three years ending February 27, 2017. As of February 18, 2015, the unvested options totaling 2,500,000 were cancelled upon resignation by the holder. The remaining 250 (2,500,000 pre-split) vested options are exercisable until February 17, 2016.

 

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The following table describes stock options outstanding and exercisable at November 30, 2015:

 

Options Outstanding and Exercisable

 

    Options Outstanding           Options Exercisable 
Range of Exercise Prices   Number   Price   Life   Number   Price   Life 
                          
$3,400    250   $3,400    .25    250   $3,400    .25 
      250              250           

 

13.Convertible Promissory Note

 

On June 24, 2014, the Company entered into a securities purchase agreement with Typenex Co-Investment, LLC, a Utah limited liability company. Under this agreement, the Company has issued a secured convertible promissory note in the original principal amount of $1,105,000, deliverable in eleven tranches (the “Typenex Note”). On the closing date, Typenex delivered the initial cash purchase price of $150,000, plus any interest, costs, fees or charges accrued under the Typenex Note, including the original issue discount of $20,000. The outstanding principal and accrued and unpaid interest on the Typenex Note is convertible at any time into shares of common stock at a conversion price of $1.00, subject to adjustment as described below (the “Lender Conversion Price”). As of June 24, 2014, the Company evaluated the Beneficial Conversion Feature under this note and determined as of June 24, 2014, there was no beneficial conversion feature as the Lender Conversion Price exceeded the fair market value of the Company’s common stock.

 

As of November 30, 2014, the company has received net proceeds of $135,000 related to this convertible promissory note, representing $150,000 less financing costs of $15,000.

 

Each subsequent tranche will be in the amount of $85,000, plus any interest, costs, fees or charges accrued thereon under the terms of the Typenex Note, including the original issuer discount of $8,500. Each tranche will be accompanied by its own secured investor note (the “Investor Notes”). The Company has agreed to pay $5,000 to cover Typenex’s legal fees, accounting costs, due diligence, monitoring and other transaction costs in connection with the purchase and sale of the Typenex Note. All loans received bear an interest rate of 10% per annum. The loan is due 23 months after the initial cash purchase price is delivered to the Company. Typenex has pledged a 40% membership interest in Typenex Medical, LLC to secure its obligations under all of the Typenex Notes.

 

A warrant to purchase shares of the Company has been issued to Typenex as of June 24, 2014. This warrant grants Typenex the ability to purchase a number of fully paid and non-assessable shares of the Company’s stock, par value $0.001, equal to $552,500 divided by the market price. This warrant is issued pursuant to the terms of the securities purchase agreement as described above.

 

Provided there is an outstanding balance, the Company will pay an installment amount equal to $61,388.89 plus any accrued and unpaid interest on the installment due date, which is six months after the initial loan disbursement. This installment amount is the maximum that must be paid on any given installment due date, and is limited by the amounts owed. This amount can be converted at the lesser of either the lender conversion price or at 70% of the average of the three lowest closing bid prices in the 20 trading days immediately preceding the applicable conversion. Should the average trading price be less than $0.35 during any such period, then the conversion factor will be reduced to 65% for all future conversion, additionally the conversion price will be reduced by 5% if the Company’s common stock is not available for DWAC. Should the Company decide to prepay this amount, there is a prepayment premium equal to 125% of the outstanding balance of the Typenex Note. Should the prepayment premium not be paid within 2 days of the prepayment notice, the Company forfeits its right to prepay the Typenex Note.

 

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Under this agreement, Typenex has the right at any time after the purchase price date until the outstanding balance has been paid in full to convert any or all of the outstanding balance into shares of the Company’s common stock under the following formula: the number of shares issued equals the amount being converted divided by $1. These shares must be delivered to Typenex within three trading days of the conversion notice being given to the Company. Should any shares be sold to Typenex or any third party at a value that is less than the effective lender conversion price, then the lender conversion price will be reduced to equal such lower issuance price. The effective lender conversion price will also be adjusted as needed upon any forward or reverse split of the Company’s shares. Should the Company fail to deliver the shares in a timely manner, a late fee of the greater of $500 per day and 2% of the applicable lender conversion share value rounded to the nearest multiple of $100 will be assed for each day after the third that the Company is late (though not exceeding 200% of the applicable lender conversion share value.

 

In the event of a default, the Typenex Note may be accelerated by Typenex by providing written notice to the Company. The outstanding balance is immediately due and payable at the greater of the outstanding balance divided by the installment conversion price, or the default effect, which is calculated by multiplying the conversion eligible outstanding balance by 15% for each major default or 5% for each minor default and then adding the resulting product to the outstanding balance as of the date of default. In addition, an interest rate of the lesser of 22% per annum (or the maximum rate permitted under law) will be applied to the outstanding balance. Typenex is prohibited from owning more than 4.99% of the Company’s outstanding shares, unless the market capitalization of the Company’s common stock is less than $10,000,000, in which case Typenex is prohibited from owning more than 9.99% of the Company’s outstanding shares.

 

On a date that is 23 trading days from each date that the Company delivers conversion shares to Typenex, there is a true-up date in which the Company will deliver additional shares if the installment conversion price on that date is less than the installment conversion price used in the applicable installment notice. These additional shares will be equal to the difference between the number of shares that would be delivered to Typenex at the time of the true-up date and the amount originally delivered.\

 

Notice of Default – on January 9, 2015, the Company received a Notice of Default from Typenex under the Convertible Promissory Note described in Note 12 above. In the letter, the noteholder described two major defaults where the Company failed to meet its obligations under the Typenex Note. The first default was triggered on December 16, 2014 related to a request from the noteholder to increase the number of shares reserved for issuance under the Typenex Note on the books of the Company’s transfer agent. The second default was triggered on December 27, 2014, when the Company failed to make its first installment payment of $61,888.89 according to the terms of the Typenex Note. Each default triggered a penalty of 115% of the then outstanding principal and accrued and unpaid interest and triggers the interest rate to 22%. As of January 9, 2015, the outstanding principal, accrued interest and accrued penalties on the Typenex Note was $239,483.61. On January 23, 2015, the Company satisfied its first default by instructing its transfer agent to reserve a total of 5,092 (50,925,000 pre-split) shares of common stock covering the potential conversion of the original principal value of the Typenex Note ($1,100,000) plus common shares issuable upon the exercise of warrants underlying the Typenex Note. On February 12, 2015, the Company received a notice from Typenex waiving the penalties on the December 16, 2014 default and waived $26,755.16 of penalties imposed on December 16, 2014. Under the terms of the Typenex Note, the Lenders Conversion Price will reset to 60% of the average of the three lowest closing bid prices of the Company’s common stock in the 20 days prior to conversion. During the quarter ended August 31, 2015, the Company re-evaluated the Notice of Default and determined that it had previously recorded a beneficial conversion feature incorrectly. The Company has computed a Derivative liability effective December 2014 and has corrected its statements as of February 28, 2015 to reflect this accounting treatment. As of February 28, 2015 and November 30, 2015, the Derivative Liability on the Typenex Note was $169,868 and $143,335, respectively.

 

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On February 3, 2015, the Company exercised its borrower offset right under the Typenex Note. Through this offset right, the Company is entitled to deduct and offset any amount owing by Typenex under the initial securities purchase agreement dated June 24, 2014 from any amount owed by the Company under the note. The combined balance of the secured investor notes and the investor notes as of the January 28, 2015 offset date was $890,800. In addition, the note balance prior to the offset included $85,000 of unearned original issue discounts.

 

In conjunction with the Company’s exercise of its offset right, the Company and Typenex each hereby acknowledge that the secured investor notes and the investor notes were offset against the Company balances owed under the note as of the offset date, and as a result thereof, each of the secured investor notes and the investor notes is deemed to have been paid in full and are now cancelled and terminated and the Company balance owed under the note has been reduced to $218,028.47 as of the offset date. Additionally, the Company specifically acknowledges that Typenex has no further obligations under any of the secured investor notes and investor notes.

 

Further, the Company acknowledges that the investor pledge agreement, dated June 24, 2014, and all security interests granted thereunder with respect to the collateral (as defined in the investor pledge agreement have terminated and all such security interests shall be deemed released.

 

Notice of Conversion – Between March 1, 2015 and August 31, 2015 the Company has received conversion notices from its noteholder on the Typenex Note to convert principal on the Typenex Note into shares of the Company’s Common Stock at a market price as defined by the Typenex Note. The table below lists the conversion activity and the shares of common stock issued pursuant to each conversion:

 

Date of Notice   Principal   Market Price*   Conversion Shares   True Up Shares   Total Shares Issued 
March 2, 2015   $14,000   $0.071788    1,005        1,005 
March 31, 2015                2,204    2,204 
May 14, 2015   $15,000   $0.203395    2,098    953    3,051 
August 10, 2015   $25,000   $0.139860    3,496        3,496 
Total   $54,000         6,599    3,157    9,756 

 

*Market Price as defined by the Typenex Note.

All shares and Market Price in the above table are stated to reflect the 10,000 to 1 reverse stock split.

 

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At August 31, 2015 and February 28, 2015, convertible notes payable included the following:

 

   November 30, 2015   February 28, 2015 
Outstanding principal balance on Typenex Note:  $77,500   $131,500 
Unamortized original issue discount   (7,650)   (12,870)
Accrued interest   97,687    76,118 
Net Convertible Notes Payable  $167,537   $194,748 

 

14.Promissory Note

 

On August 29, 2014, the company entered into a Promissory Note with YP Holdings, LLC for gross proceeds $100,000 as an advance towards the Securities Purchase Agreement dated September 17, 2014 described in Note 13 (the “YP Note”). The YP Note matures in 60-days and bears interest of 12% per annum. During the nine months ended November 30, 2014, the Company recorded $18,000 in financing fees related to the YP Note. On September 17, 2014, the YP Note converted to equity in connection with the Securities Purchase Agreement dated September 17, 2014 as discussed below. The Company has no further obligation under the YP Note.

 

15.Securities Purchase Agreement

 

On September 17, 2014, the Company entered into a securities purchase agreement with YP Holdings, LLC. YP Holdings, LLC has no material relationship with the Company other than with respect to this agreement.

 

Under this agreement, the purchasers will be purchasing units of one common share and two warrants to purchase common shares for $0.09 per unit, for a total of $600,000. The common shares have a par value of $0.001 per share. The warrants are exercisable for five years from the date of issuance and shall have an initial exercise price equal to $0.20. As a result of this agreement, the Company will issue 667 (6,666,667 pre-split) common shares and 1,333 (13,333,334 pre-split) warrants to the purchasers. On August 29, 2014 and September 17, 2014, the Company received gross proceeds of $100,000 and $500,000, respectively and has recorded financing fees of $18,000 and $52,000, related to this agreement. The Company has valued these warrants using the Black Scholes option pricing model and has recorded expense related to the issuance of these warrants totaling $552,500 during the year ended February 28, 2015.

 

The warrants can be exercised by paying the price for shares as stipulated by the warrant, or through cashless exercise, through which the purchaser will be issued a number of shares equal to the number of warrant shares applied to the subject exercise multiplied by the current market price on the date of conversion minus the exercise price on that date. This total is then divided by the current market price on the date of conversion. The cashless exercise may only be exercised after six months have passed from the original issuance of the warrants.

 

The purchaser has waived the clause prohibiting conversion of warrants into common shares if that would result in the purchaser owning in excess of 4.99% of the outstanding shares. A second clause prohibits the conversion of warrants if the purchaser owns in excess of 9.99% of the outstanding common shares. This clause can be waived by the purchaser providing notice of waiver.

 

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The Company has agreed to pay a flat $20,000 to YP Holdings, LLC to reimburse them for the fees and expenses incurred by it in connection with its due diligence review of the Company and the preparation, negotiation, executive, delivery and performance of the agreement.

 

The two parties also entered into a registration rights agreement. Under this agreement, the Company will prepare and file a registration statement on Form S-1 in order to register all shares issued under the securities purchase agreement. The Company will keep the registration statement continuously effective for a period of two years following the effective date of the registration statement. The Company will pay all reasonable fees and expenses incurred with respect to this agreement. Unless previously agreed to in writing, the Company may not register any shares other than those intended to be sold under this agreement.

 

Should the Company fail to comply with the registration rights agreement, the Company agrees to pay liquidated damages to YP Holdings, LLC equal to 3% of the purchase price of the common shares paid by the purchaser for the first 30 day period, and 2% of such purchase price for each subsequent 30 day period. These payments are payable upon demand in cash.

 

Pursuant to the registration rights agreement, the Company agreed to several lock-up agreements between itself and four shareholders of the Company: Phoenix Bio Pharmaceuticals Corporation, Ronald Lusk, Lewis Humer, and Caduceus Industries LLC. Under these agreements, each shareholder has agreed that they will not offer, pledge, sell, contract to sell, grant any options for sale or transfer, distribute or dispose of, directly or indirectly, any shares of the Company for a 90 day period following the date that the registration statement is declared effective.

 

Additionally, on September 16, 2014, the Company issued warrants to purchase 53 (533,333 pre-split) common shares to consultants for services rendered. The warrants expire five years from the date of issuance and are exercisable for $0.20 per share. The Company has valued these warrants using the Black Scholes option pricing model and has recorded expense related to the issuance of these warrants totaling $104,578 during the quarter ended November 30, 2014.

 

16.Corrections to Prior Financials As Filed

 

Due to a change in auditors and a subsequent review of the accounting treatment surrounding the Typenex Notes, there were corrections of expenses related to the Derivative Liability and Beneficial Conversion Feature recorded on the Typenex Notes for the year ended February 28, 2015 and the three months ended May 31, 2015. The table below for the shows the effects on Net loss, earnings per share, and accumulated deficit for each of the periods.

 

Item Period Net Loss Earnings Per Share Accumulated Deficit
Typenex Note Year Ended February 28, 2015 205,522 (0.00) 205,522
Phoenix Bio Pharma Year Ended February 28, 2015 5,514,189 (0.05) 7,166,667
Go Kush, Inc Year Ended February 28, 2015 141,800 (0.00) 154,800
Accounts Payable Year Ended February 28, 2015 157,167 (0.00) 165,000
Amendment to Amortisation Year Ended February 28, 2015 (642,654)    
Total Year Ended February 28, 2015 5,376,024 (0.06) 7,691,989
         
Change in Derivative value Three months ended May 31, 2015 (66,515) (0.00) (66,515)

 

23

 

 

17.Subsequent Events

 

Common Share Cancellation and Preferred Share Issue: On November 4, 2015, Phoenix Bio Pharmaceuticals Corporation’s offer to exchange 27,600 common shares for 2,000,000 Series B Preferred shares was accepted and 27,600 common shares were cancelled.

 

Common Share Issue: On November 5, 2015 Cede & Co were issued 1,941 common shares to rectify a mistake that had been made when the share split was performed.

 

Common Share Cancellation and Preferred Share Issue: On February 18, 2016, 667 common shares issued to YP Holdings, LLC pursuant to a securities purchase agreement were cancelled in exchange for 1,000,000 Series C Preferred shares. YP Holdings LLC then converted 2,000 of the preferred shares to common shares which were issued by the Company.

 

Convertible Note Agreement: On or about January 25, 2016, the Company entered into an Amendment No. 1 to the Convertible Promissory Note executed by and between the Company and CV Sciences, Inc (FKA Cannavest Corp. and referred to herein as “CVS”) dated December 23, 2014 (the “Note”), whereby the company and CVS agreed to terminate the Note upon the Company’s return of five containers of raw hemp oil to CVS. On or about June 1, 2016, the Company returned the entirety of the raw hemp oil to CVS, and the Note and all rights and obligations thereunder would deemed fully satisfied.

 

Change of Auditor: On September 21, 2016, the registrant dismissed Fruci & Associates II, PLLC as their registered independent public accountant. On September 21, 2016, the Company’s Board of Directors approved the engagement of BMKR, LLP to provide auditing services on a prospective basis, and to perform a full audit of the Company’s books and records for the years ended February 29, 2016, February 28, 2017 and February 28, 2018.

 

Change of Name: On March 8, 2017, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from MediJane Holdings, Inc. to Stem Bioscience, Inc.

 

Change of Name: On May 31, 2018, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from Stem Bioscience, Inc. to Phoenix Life Science International Limited. On November 2, 2018 the symbol changed from MJMD to PLSI.

 

Merger: Pursuant to the Agreement and Plan of Merger, dated as of September 18, 2018 as (The “Merger Plan” by and between Phoenix Life Sciences International Limited, a Nevada Corporation (the “Company”) and Phoenix Life Sciences International Limited, a Canadian Corporation (“PLSI CA”), the Company completed its merger with PLSI CA, with the Company as the surviving entity.

 

24

 

 

Consolidation of Activities: On September 18, 2018, the Company’s Board of Directors announced the finalized consolidation activities of Phoenix Life Sciences International Limited with Stem Biosciences, Inc., Blue Dragon Ventures, and the MediJane Brand, and that the Company’s common stock would trade publicly under the symbol MJMD, subsequently on November 2, 2018 this changed to PLSI.

 

Cancellation of Pref B Shares: On September 21, 2018, the Company announced it had obtained consent from the holder, Phoenix Bio Pharmaceuticals Corporation for the cancellation of 2,000,000 Preferred Series B shares in the Company in connection with the restructure of the Company and merger with Phoenix Life Sciences International Limited, a Canadian Corporation.

 

Resignation of Director: On September 22, 2018, the Company’s Board of Directors accepted the resignation of Russell Stone from his position as a Director.

 

Convertible Note retired: On or about June 24, 2014, the Company entered into a Convertible Promissory Note with a face value of $1,105,000 (the “Note”) by and between the Company and Typenex Co-Investment, LLC (“Typenex”). On or about April 19, 2018, the Phoenix Life Sciences International Ltd, a Canadian Corporation (“PLSI CA”) acquired the entirety of the Notes outstanding principal and interest balance from Typenex. Upon the completion of the merger, that Note was conveyed to the Company.

 

Cancellation of Warrants: On September 22, 2018, the Company’s Board of Directors resolved to deem the acquired Notes principal balance satisfied, and to terminate the Note and any and all rights and obligations arising thereunder, including without limitation the cancellation of all Warrants issued to Typenex under the Note.

 

Issuance of Common Stock: On September 24, 2018, the Company issued 30,502,375 shares of common stock bearing the restricted legend without registration (the “Issued Shares”). Of these, 29,802,375 shares were issued in reliance on Rule 802 under the Securities Act in a 1:1 share exchange related to the merger of PLSI CA and the company as described above, and 700,000 shares were issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act. All of the Issued Shares were issued in private transactions, and the company received no proceeds from the Issued Shares.

 

Appointment of Directors: On October 3, 2018, the following persons were appointed to the Board of the Company, Stephen Cornford, Martin Tindall as Chief Executive Officer, Janelle Marsden as Managing Director and Geoffrey Boynton as Chief Financial Officer. Lewis “Spike” Humer stepped down from his executive role but remains a Director.

 

Issuance of Stock for Services: On October 03, 2018, the Company agreed to issue 48,000 shares of restricted common stock to KHAOS Media Group as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act for services previously rendered and invoiced between March and December 2014.

 

Change of Symbol: On November 2, 2018, FINRA confirmed the name change and change of symbol to “PLSI”

 

Retirement of Preferred Stock: On November 9, 2018, the Company announced that 2,000,000 Series C Preferred Stock had been cancelled and all convertible debt had been retired. There was no outstanding preferred stock on issue as at this day.

 

25

 

 

Issuance of Common Stock: On December 4, 2018, the Company issued 229,600 common shares as part of settlement agreements.

 

Issuance of Common Stock: On December 17, 2018, the Company issued 675,028 common shares which included 191,668 common shares as part of settlement agreements and 483,360 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act.

 

Issuance of Common Stock: On January 11, 2019, the Company issued 500,600 common shares to YP Holding, LLC. as part of a settlement agreement.

 

Issuance of Common Stock: On January 15, 2019 the Company issued 54,580 common shares which included 53,500 common shares as part of settlement agreements and 1,080 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act

 

Appointment of a Director: On February 20, 2019 the Board of the Company appointed Michael Gobel, who has long and distinguished career in corporate finance in Australia, as a non-executive Director.

 

Issuance of Common Stock: On February 26, 2019 the Company issued 315,928 common share which included 5,460 common shares as part of settlement agreements, 126,750 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act and 183,718 for cash consideration.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview    

 

The Company was incorporated in the State of Nevada on April 21, 2009, under the name Mokita Exploration, Ltd. On February 5, 2010, the Company filed a Certificate of Amendment to the Articles of Incorporation changing our name to Mokita, Inc. On February 27, 2014, there was a change of control of the Company. On February 28, 2014, our board of directors and a majority of holders of the Company’s voting securities approved a change of name of the Company to MediJane Holdings Inc. A Certificate of Amendment to effect the change of name was filed and became effective with the Nevada Secretary of State on March 4, 2014. A Certificate of Correction was subsequently filed with the Nevada Secretary of State on March 6, 2014 to correct a spelling error in the Company’s new name. These amendments have been reviewed by FINRA and were approved for filing with an effective date of March 10, 2014. The name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on March 10, 2014 under our new ticker symbol “MJMD”.

 

On March 8, 2017, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from Medijane Holdings, Inc. to Stem Bioscience, Inc.

 

Subsequently, on May 31, 2018, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from Stem Bioscience, Inc. to Phoenix Life Science International Limited. The name change became effective with the Over-the-Counter Bulletin Board on November 2, 2018 with the symbol changing to “PLSI”.

 

26

 

 

After the change of control on February 27, 2014, the Company became a medical delivery systems company with a pharmaceutical approach to cannabinoid treatment of various illnesses with medical marijuana.

 

Recent Developments

 

With the merger by and between Phoenix Life Sciences International Limited, a Nevada Corporation (the “Company”) and Phoenix Life Sciences International Limited, a Canadian Corporation (“PLSI CA”), whereby the Company completed its merger with PLSI CA on September 18, 2018, with the Company as the surviving entity, the Company will continue to pursue a pharmaceutical approach to cannabinoid treatment of various illnesses with medical marijuana.

 

On October 10, 2018, the Company announced it had received approval from the Vanuatu Investment Promotion Authority (VIPA) to establish operations in the Republic of Vanuatu and manufacture botanical pharmaceutical products.

 

Consolidated Results of Operations

 

On March 1, 2014, the Company discontinued its previous operations as an oil and gas enterprise to pursue its new operations as a medical marijuana sales and distribution company. The results of operations for the three and nine months ended November 30, 2014 represent results of the new business. The results of operations for the comparable period have been recorded as discontinued operations.

 

Revenues for the three months ended November 30, 2015 and 2014 were $0 and $17,936, respectively. Cost of sales for the three months ended November 30, 2015 and 2014 were $0 and $9,144, respectively. Revenues for the nine months ended November 30, 2015 and 2014 were $18,410 and $20,716 respectively. Cost of Sales for the nine months ended November 30, 2015 and 2014 were $5,933 and $10,694 respectively. Revenues and related expenses were primarily from sale of CBD products.

 

Amortization expense for the three ended November 30, 2015 and 2014 were $0 and 650,250. Amortization expense for the nine months ended November 30, 2015 and 2014 were $0 and $650,250 respectively. Amortization expenses relates to a license agreement.

 

Product development expense for the three ended November 30, 2015 and 2014 were $0 and 65,365. Product development expenses for the nine months ended November 30, 2015 and 2014 were $100,000 and $80,356 respectively. Product development expenses in the 2014 period represent payments to Phoenix Bio Pharm for the product development of branded products of the Company.

 

Sales and marketing expenses for the three months ended November 30, 2015 and 2014 were $200 and $51,788 respectively. Sales and marketing expenses for the nine months ended November 30, 2015 and 2014 were $14,545 and $199,710, respectively. The decrease in sales and marketing expenses in the 2015 period are due primarily to activity in the 2014 period to grow the Company’s sales organization. During the 2015 period, sales and marketing expenses represent continued efforts to promote the Company’s products.

 

27

 

 

Operations expenses for the three months ended November 30, 2015 and 2014 were $1,304 and $46,162, respectively Operations expenses for the nine months ended November 30, 2015 and 2014 were $3,049 and $146,399, respectively. The decrease in operating expenses during the 2015 period are due to reduced activities due to limited funded. During the 2015 period, operations expenses represent continued efforts to support the Company’s selling organization.

 

General and administrative expenses for the three months ended November 30, 2015 and 2014 were $1,147 and $109,419, respectively. General and administrative expenses for the nine months ended November 30, 2015 and 2014 were $31,615 and $168,450. General and administrative expenses generally include costs for running the Company’s administrative office.

 

Professional fees for the three months ended November 30, 2015 and 2014 were $93,503 and $266,216, respectively. Professional fees for the nine months ended November 30, 2015 and 2014 were $311,220 and $437,945, respectively. Professional fees consist of cost of financing, legal, accounting, consulting and advisory services. Included in professional fees during the nine months ended November 30, 2015 are $100,000 of non-cash expenses related to consulting fees paid in stock.

 

Lease operating expenses for the three months ended November 30, 2015 and 2014 were $0 and $11,685. Lease operating expenses for the nine months ended November 30, 2015 and 2014 were $7,500 and $26,685, respectively.

 

Other income and expenses for the three months ended November 30, 2015 and 2014 were net expense of $63,897 and $5,812, respectively. Other income and expense for the nine ended November 30, 2015 and 2014 were net expense of $107,386 and $562,793, respectively. The decrease in other income and expenses in the 2015 periods from the 2014 periods are due to non-cash expenses related to the issuance of warrants on convertible securities during the 2014 periods totaling $554,413.

 

Net loss for the three months ended November 30, 2015 and 2014 were $160,056 and $1,197,896, respectively. Net loss for the nine ended November 30, 2015 and 2014 were $563,246 and $2,262,566, respectively.

 

Net gain from discontinued operations for the nine months ended November 30, 2014 was $722.

 

Liquidity and Capital Resources

 

At November 30, 2015, the Company had a cash balance of $2,425 compared with $9,400 at February 28, 2015. The decrease in cash was cash used for operating expenses as described above.

 

Cash flow from Operating Activities. During the nine months ended November 30, 2015, the Company used $183,666 in cash for operating activities for its current operations.

 

Cash flow from Investing Activities. During the nine months ended November 30, 2015, the Company received $8,770 for investing activities. Cash Flows from investing activities in the period ended November 30, 2015 represents partial repayment of the Company’s loan to its affiliate Phoenix Pharms Capital Corporation.

 

28

 

 

Cash flow from Financing Activities. During the nine months ended November 30, 2015, the Company received $42,350 from the issuance of convertible promissory notes $125,571 from related parties. During the nine months ended November 30, 2014, the Company received proceeds of $375,925 from the sale of its common stock, $135,000 from the issuance of convertible promissory notes payable, and $600,000 from a securities purchase agreement.

 

Going Concern

 

We have not attained profitable operations and are dependent upon the commencement of the sale of our products and obtaining financing to increase the production and development of our products. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Future Financings

 

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

 

29

 

 

Use of Estimates. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505-50 - Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

Revenue Recognition. The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidence of an arrangement exists and delivery has occurred, provided the fee is fixed or determinable and collection is probable. The Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction. If a fee is based upon a variable such as acceptance by the customer, the Company accounts for the fee as not being fixed and determinable. In these cases, the Company defers revenue and recognizes it when it becomes due and payable. Up-front engagement fees are recorded as deferred revenue and amortized to income on a straight-line basis over the term of the agreement, although the fee is due and payable at the time the agreement is signed or upon annual renewal. Payments related to substantive, performance-based milestones in an agreement are recognized as revenue upon the achievement of the milestones as specified in the underlying agreement when they represent the culmination of the earnings process.

 

The Company assesses the probability of collection based on a number of factors, including past transaction history with the customer and the current financial condition of the customer. If the Company determines that collection of a fee is not reasonably assured, revenue is deferred until the time collection becomes reasonably assured. Significant management judgment and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

 

Recent Accounting Pronouncements

 

The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Contractual Obligations

 

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable for smaller reporting companies.

 

30

 

 

Item 4. Controls and Procedures

 

During the period ended November 30, 2015, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, 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, as of November 30, 2014. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to be not effective as of November 30, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Remediation Plan

 

We will aggressively recruit experienced professionals to ensure that we include all necessary disclosures in our filings with the Securities and Exchange Commission. Although we believe that this corrective step will enable management to conclude that the internal controls over our financial reporting are effective when the staff is trained, we cannot assure you these steps will be sufficient. We may be required to expend additional resources to identify, assess and correct any additional weaknesses in internal control.

 

We are unable to remedy our controls related to the inadequate segregation of duties until we receive financing to hire additional employees.

 

31

 

 

PART II – OTHER INFORMATION

 

Item 1.

Legal proceedings

 

None

   
Item 1A.

Risk Factors

 

Not applicable for smaller reporting companies

   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
   
 

Between March 1, 2015 and November 30, 2015, the Company issued 9,756 (97,560,000 pre-split) shares of common stock to Typenex from the conversion of the total principal amount of $54,000 under a Convertible Notes Agreement and 3,157 (31,575,175 pre-split) shares of common stock to Typenex related to true up notices received from the noteholder.

 

On November 14, 2015 Phoenix Bio Pharm returned 27,600 (276,000,000 pre-split) shares of common stock to the Company to hold in safekeeping for an exchange into 2,000,000 shares of preferred stock. On November 4, 2015 27,600 common shares were cancelled in exchange for 2,000,000 Series B Preferred shares.

 

On September 24, 2015, CannaVest presented a conversion notice (the “Notice”) to the Company whereby they requested conversion of $42,350.30 in principle on the CannaVest Note at a conversion price of $0.001 per share. On October 15, 2015, the Company issued 4,236 (42,350,300 pre-split) shares of common stock to CannaVest pursuant to the Notice.

   

Item 3.

Defaults Upon Senior Securities.
 

 

None

   
Item 4. Mine Safety Disclosures
 

 

Not applicable

   
Item 5. Other Information
 

 

None

 

Item 6.

Exhibit

 

Exhibit 31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

 

*Filed herewith.

**Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

 

32

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

PHOENIX LIFE SCIENCES INTERNATIONAL LIMITED

 

/s/ Martin H. Tindall     Dated April 15, 2019
Martin H. Tindall      
Chief Executive Officer      

 

/s/ Geoffrey K. Boynton     Dated April 15, 2019
Geoffrey K. Boynton      
Chief Financial Officer      

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

 

/s/ Lewis “Spike” Humer     Dated April 15, 2019
Lewis “Spike” Humer      
Director      
       
/s/ Martin H. Tindall     Dated April 15, 2019
Martin H. Tindall      
Director and Chief Executive Officer      

 

33

EX-31.1 2 ex31-1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

Phoenix Life Sciences International Limited 10-Q

EXHIBIT 31.1

 

302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Martin H. Tindall, certify that:

 

         1. I have reviewed this quarterly report on Form 10-Q of Phoenix Life Sciences International Limited;

 

         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 registrant as of, and for, the periods presented in this report;

 

         4. The registrant's other certifying officers 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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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 my 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 registrant'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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

         5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant'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 registrant's ability to record, process, summarize and report financial information; and

 

         b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

 

Date: April 15, 2019

 

/s/ Martin H. Tindall

Martin H. Tindall

Chief Executive Officer

 

 
 

EX-31.2 3 ex31-2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

Phoenix Life Sciences International Limited 10-Q

EXHIBIT 31.2

 

302 CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, Geoffrey K. Boynton, certify that:

 

         1. I have reviewed this quarterly report on Form 10-Q of Phoenix Life Sciences International Limited;

 

         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 registrant as of, and for, the periods presented in this report;

 

         4. The registrant's other certifying officers 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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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 my 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 registrant'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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

         5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant'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 registrant's ability to record, process, summarize and report financial information; and

 

         b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

 

Date: April 15, 2019

 

/s/ Geoffrey K. Boynton

Geoffrey K. Boynton

Chief Financial Officer

 

 

 
 

EX-32.1 4 ex32-1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

Phoenix Life Sciences International Limited 10-Q

 

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 Phoenix Life Sciences International Limited (the “Company”) on Form 10-Q for the period ended November 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Martin H. Tindall, 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; and

 

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

 

/s/ Martin H. Tindall

Martin H. Tindall

Chief Executive Officer

 

April 15, 2019

 

 

 
 

 

EX-32.2 5 ex32-2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

Phoenix Life Sciences International Limited 10-Q

 

EXHIBIT 32

 

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 Phoenix Life Sciences International Limited (the “Company”) on Form 10-Q for the period ended November 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Geoffrey K. Boynton, Chief Financial 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; and

 

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

 

/s/ Geoffrey K. Boynton

Geoffrey K. Boynton

Chief Financial Officer

 

April 15, 2019

 

 

 
 

 

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loan Ownership interest of Company Consulting fee Due to related party Conversion price per common share Conversion amount (shares) Number of votes to cast for each preferred share owned (votes) Share price Number of consecutive trading days Conversion price equals average closing bid price (percent) Proceeds from sale of converted common shares in excess than no reset Proceeds from sale of converted common shares in excess than return unconverted shares Limitation of number shares sold per month (shares) Preferred return of gross cash sales (percent) AgreementAxis [Axis] Common stock reserved for issuance Issuance of shares Shares issued for consulting services (shares) Shares issued for consulting services Shares issued upon conversion of convertible debt (shares) Prinicpal amount of debt converted Shares issued upon true-up of convertible debt (shares) Shares of common returned to the Company (shares) Shares issued in an exchange of securities (shares) Stock options Outstanding, end Stock options Outstanding, exercise price Life of stock options, outstanding Stock options Exercisable, end Stock options Exercisable, exercise price Life of stock options, exercisable Authorized common shares to grant under plan Stock options granted Exercise price of options granted Value of stock options granted Number of options vested Vesting term of options Number of options unvested, end period Stock options cancelled Number of options vested and exerciseable options Date of Notice Debt principal amount Market Price Conversion shares True up shares Total shares issued Outstanding principal balance Unamortized beneficial conversion feature Accrued interest Net Convertible Notes Payable Original issue discount Number of tranches Debt term Membership interest pledged Warrant issued fair value Debt installment amount Conversion price reduction due to closing bid price (percent) Conversion price reduction due to availability of common stock (percent) Prepayment premium (percent) Late fee for failure to deliver shares Late fee applicable lender conversion share value (percent) Maximum late fee applicable lender conversion share value (percent) Major default rate of conversion eligible balance (percent) Minor default rate of conversion eligible balance (percent) Ownership interest Market capitalization under agreement Number of trading days from coversion date Default penalty of outstanding balance (percent) Outstanding debt amount Common stock reserved for conversion of debt Amount of penalty waived Derivative liability Financing fees Unit price (per unit) Number of common shares per unit Number of warrants per unit Warrant term Proceeds from issuance of purchasing units Issuance of warrants Reimbursed costs for due diligence review Liquidated damages first 30 days (percent) Liquidated damages subsequent 30 days (percent) Earnings per share Accumulated deficit Shares issued new issues during the period (shares) Shares issued for settlements during the period (shares) Shares issued with rule 802 (shares) Stockholder's equity, exchange ratio Stock issued for services (shares) Number of shares issued in the exchange (shares) Number of common shares exchanged for preferred stock (shares) Number of common shares cancelled (shares) Number of preferred shares cancelled (shares) Number of preferred shares converted to common stock (shares) Number of shares issued to rectify mistake for stock split (shares) The entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to common stock. Convertible notes payable, Cannavest The entire disclosure for convertible promissory note. The entire disclosure for Promissory Note. The entire disclosure for Securities Purchase Agreement. The fair value of stock issued in noncash license agreement. The fair value of stock issued in noncashdistribution agreement. Rights, generally of limited duration, under a license arrangement (for example, to sell or otherwise utilize specified products or processes in a specified territory). Percent that value of restricted common stock issued over the market value of license agreement on date of executuon of the agreement. Number of shares issued during the period as a result of the exchange of common to preferred stock. The amount of raw materials to be acquired from borrowed funds. Name of the class or type of warrant or right outstanding. Warrants and rights represent derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Amount of advisory service fees incurred during the period. Term of the agreement. Amount of consulting fees incurred during the period. Number of votes to cast for each preferred share outstanding. The conversion price per common share of convertibel preferred stock. Number of consecutive trading days. One time right per agreement where percent of the average closing bid price equals conversion price. Proceeds from sale of converted common shares be equal to or exceed amount where reset shall be unavailable to shareholder. Proceeds from sale of converted common shares be equal to or exceed amount where unconverted preferred shares shall be returned to the Company. The number of shares limited the may be sold during a month per agreement. Percent of gross cash sales representing preferred stock return. Consulting agreement entered between parties. Agreement entered between parties. Securities agreement entered by the Company. Issuance of shares upon the true-up debt conversion. The number of shares of stock returned to the Company by shareholder. The number of shares issued in a stock exchange. The former highest ranking executive officer, who has ultimate managerial responsibility for the entity and who reports to the board of directors. The fair vale amount of the granted stock options. The amount of the benefical conversion feature of convertible debt. Number of shares of debt conversion. Number of shares in the true-up of debt conversion. The date of the notice of default of convertible promissory note. The name of the original debt issue that has been converted in a noncash (or part noncash) transaction during the accounting period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. The name of the original debt issue that has been converted in a noncash (or part noncash) transaction during the accounting period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. The name of the original debt issue that has been converted in a noncash (or part noncash) transaction during the accounting period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. The name of the original debt issue that has been converted in a noncash (or part noncash) transaction during the accounting period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. The market price of the Company's common stock. Number of tranches in securities purchase agreement. The debt intsrument maturity date. The membership interest pledged under note agreement. Percent conversion price reduction due to closing bid price of Company's stock. Percent conversion price reduction due to availabilty of Company's stock. Percent prepayment penalty applied to outstanding balance per agreement. The amount of late fees for failure to deliver shares in conversion of debt per agreement. Percent late fees for failure to deliver shares in conversion of debt per agreement. The maximum percentage of late fees for failure to deliver shares in conversion of debt per agreement. The major default rate applied to debt upon default under agreement. The minor default rate applied to debt upon default under agreement. The market capitalization amount of the Company as defined under agreement. Number of trading days from conversion date. Percent default penalty rate as defined in the agreement. The pre-stock split number of shares. The amount of debt penalities waived by the lender during the period. The entire disclosure for License Agreement. Number of common shares per purchase unit per agreement. Number of warrants per purchase unit per agreement. The amount of costs reimbursed to counterparty under agreement for due diligence review of the Company. Percent of the purchase price of common shares paid by the purchaser for first 30 day period as liquidated damages. Percent of the purchase price of common shares paid by the purchaser foreach subsequent 30 day period as liquidated damages. Represents the types error corrections made to the financial statements. Number of shares held by licensee. Number of shares to be received in exchange of common shares for preferred per agreement. The entire presentation represents subsidiary companies textblock Party to an agreement. Location in the income statement. Represent agreement domain. The membe represent settlement agreement ration. The member represent related parties. The member represent related parties. The member represent related parties. Number of new stock issued during the period. Represent stock exchange ratio. The number of shares issued in the exchange of stock. Number of common shares exchanged for preferred stock. The number of common shares cancelled during the period. Number of shares issued during the period to rectify mistake in stock split. The number of preferred shares cancelled during the period. Assets, Current Assets Liabilities, Current Liabilities Stockholders' Equity Attributable to Parent Liabilities and Equity Gross Profit Operating Expenses Operating Income (Loss) Interest Expense Debt Related Commitment Fees and Debt Issuance Costs Amortization of Other Deferred Charges Other Expenses Increase (Decrease) in Accounts Receivable Increase (Decrease) in Inventories Increase (Decrease) in Prepaid Expense Net Cash Provided by (Used in) Operating Activities, Continuing Operations Net Cash Provided by (Used in) Operating Activities Net Cash Provided by (Used in) Investing Activities, Continuing Operations Proceeds from Related Party Debt Net Cash Provided by (Used in) Financing Activities, Continuing Operations Net Cash Provided by (Used in) Continuing Operations Variable Interest Entity Disclosure [Text Block] Subsidiary Companies [Default Label] Preferred Stock [Text Block] Common Stock [Default Label] Convertible Promissory Note [Default Label] Promissory Note [Default Label] Securities Purchase Agreement [Default Label] Increase (Decrease) in Deposit Assets ConversionPricePerCommonShare Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Exercise Price DebtInstrumentConvertibleBeneficialConversion Long-term Debt EX-101.PRE 11 plsi-20151130_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT XML 12 R1.htm IDEA: XBRL DOCUMENT v3.19.1
Document and Entity Information - shares
9 Months Ended
Nov. 30, 2015
Jan. 31, 2019
Document and Entity Information:    
Entity Registrant Name Phoenix Life Sciences International Limited.  
Document Type 10-Q  
Document Period End Date Nov. 30, 2015  
Amendment Flag false  
Entity Central Index Key 0001493212  
Current Fiscal Year End Date --02-29  
Entity Common Stock, Shares Outstanding   32,234,654
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status No  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q3  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.19.1
Consolidated Balance Sheets (Unaudited) - USD ($)
Nov. 30, 2015
Feb. 28, 2015
ASSETS    
Cash $ 2,425 $ 9,400
Accounts receivable 2,300
Notes receivable, related party 250,184 258,122
Inventory 1,194,106 1,211,340
Prepaid inventory 141,664
Total Current Assets 1,446,715 1,622,826
Security deposit 1,250
Total Assets 1,446,715 1,624,076
Current Liabilities    
Accounts payable and accrued liabilities 562,837 409,701
Due to related parties 161,250 50,000
Total current liabilities 724,087 459,701
Convertible notes payable, net 180,113 194,746
Convertible notes payable, Cannavest 1,280,148 1,222,027
Derivative liability, Typenex Note 151,529 169,868
Total Liabilities 2,335,877 2,046,342
STOCKHOLDERS' DEFICIT    
Common stock: Authorized: 1,000,000,000 common shares, par value of $0.001 per share; Issued and outstanding: 50,171 and 361,322,812 common shares, respectively 50 361,323
Additional paid-in capital 17,705,254 17,247,631
Accumulated deficit during the development stage (18,594,466) (18,031,220)
Total Stockholders' Equity (Deficit) (889,162) (422,266)
Total Liabilities and Stockholders' Equity $ 1,446,715 $ 1,624,076
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.19.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
Nov. 30, 2015
Oct. 22, 2015
Feb. 28, 2015
Aug. 23, 2013
Aug. 22, 2013
Statement of Financial Position [Abstract]          
Common stock, par value (in dollars per share) $ 0.001   $ 0.001 $ 0.001  
Common stock, shares authorized 1,000,000,000   1,000,000,000 990,000,000 99,000,000
Common stock, shares issued 50,171   361,322,812    
Common stock, shares outstanding 50,171 45,935 361,322,812    
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.19.1
Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Nov. 30, 2015
Nov. 30, 2014
Nov. 30, 2015
Nov. 30, 2014
Income Statement [Abstract]        
Revenues   $ 17,936 $ 18,410 $ 20,716
Cost of Sales   9,144 5,933 10,694
Gross Profit   8,792 12,477 10,022
Operating expenses        
Amortization expense   650,250 650,250
Product development expense   65,356 100,000 80,356
Sales and marketing expenses $ 200 51,788 14,953 199,710
Operations expense 1,304 46,162 3,049 146,399
General and administrative 1,147 109,419 31,615 168,450
Professional fees 93,508 266,216 311,220 437,945
Lease operating expenses 11,685 7,500 26,685
Total operating expenses 96,159 1,200,876 468,337 1,709,795
Loss before other expenses (96,159) (1,192,084) (455,860) (1,699,773)
Other income (expense)        
Interest Income 969 1,264 3,062 1,264
Interest Expense (45,868) (4,466) (132,008) (7,756)
Debt issue costs     (7,830)  
Discount Amortization (10,804) (2,610) (56,953) (557,023)
Gain (loss) on derivative liability (8,194)   86,343  
Gain (loss) on discontinued operations       722
Total other expense (63,897) (5,812) (107,286) (562,793)
Net loss $ (160,056) $ (1,197,896) $ (563,246) $ (2,262,566)
Basic and diluted loss per common share:        
Income (loss) from continuing operations $ (0.00) $ (0.01) $ (0.00) $ (0.03)
Income (loss) from discontinued operations 0 0 0 0
Basic and diluted loss per common share $ (0.00) $ 0.01 $ 0 $ 0.03
Weighted average shares outstanding - basic and diluted 258,030,222 89,410,000 364,290,048 77,650,803
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.19.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Nov. 30, 2015
Nov. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (563,246) $ (2,262,566)
Loss from discontinued operations   (722)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization 650,250
Non-cash amortization of discount on convertible notes payable 54,000 557,022
Non-cash interest expense on convertible notes payable 7,725
Non-cash stock option compensation 112,914
Debt issuance costs 10,828 20,000
Changes in operating assets and liabilities:    
Accounts receivable 2,300 (3,180)
Deposit 1,250  
Inventory (13,611)
Prepaid expense and deposits 141,664 (209,110)
Accounts payable and accruals 169,538 147,223
Net Cash provided by (used for) operating activities - current operations (183,666) (994,055)
Net Cash provided by (used for) operating activities - discontinued operations   302
Net Cash flow from operating activities (183,666) (993,753)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Related party notes receivable 8,770 (80,244)
Net Cash Used in Investing Activities - continuing operations 8,770 (80,244)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from notes payable 42,350 135,000
Due to related parties 125,571  
Proceeds from issuance of common shares 975,925
Net Cash Provided By Financing Activities - continuing operations 167,921 1,110,925
Increase (Decrease) in Cash - continuing operations (6,975) 36,626
Increase (Decrease) in Cash - discontinued operations 302
Increase (Decrease) in Cash 9,400 36,928
Cash - Beginning of Period - continuing operations 9,400 6,104
Cash - End of Period - continuing operations 2,425 43,032
Supplemental disclosures    
Non-cash issuance of stock for consulting agreements   200,000
Non-cash issuance of stock for license agreement, related party   13,000,000
Non-cash issuance of stock for distribution agreement   $ 172,000
Non-cash issuance of stock for conversion of debt $ 54,000  
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.19.1
Nature of Operations and Continuance of Business
9 Months Ended
Nov. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Operations and Continuance of Business

1.Nature of Operations and Continuance of Business

 

The company was incorporated in the State of Nevada on April 21, 2009 under the name Mokita Exploration, Ltd. (the “Company”). On February 27, 2014, there was a change of control of the Company. On February 28, 2014, our board of directors and a majority of holders of the Company’s voting securities approved a change of name of the Company to MediJane Holdings Inc. A Certificate of Amendment to effect the change of name was filed and became effective with the Nevada Secretary of State on March 4, 2014. A Certificate of Correction was subsequently filed with the Nevada Secretary of State on March 6, 2014 to correct a spelling error in the Company’s new name. These amendments have been reviewed by FINRA and were approved for filing with an effective date of March 12, 2014. The name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on March 12, 2014 under our new ticker symbol “MJMD”.

 

On March 8, 2017 the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company changed its name with the State of Nevada from MediJane Holdings, Inc. to Stem Bioscience, Inc.

 

In May 2018 the Company again changed its name to Phoenix Life Sciences International Limited. A Certificate of Amendment to effect the change of name was filed and became effective with the Nevada Secretary of State on May 31, 2018. The name change was accepted by FINRA and became effective with the Over-the- Counter Bulletin Board on November 2, 2018 with the trading symbol “PLSI”.

 

On February 27, 2014, after the change of control, the Company became a sales and distribution company focused on cannabinoid infused products for the treatment of medical conditions.

 

On January 5, 2015, the Company underwent a change in control following the issuance of 276,000,000 common shares to Phoenix Bio Pharmaceuticals Corporation pursuant to a license agreement. On November 4, 2015, these shares were exchanged for 2,000,000 Series B Preferred Shares.

 

The business was then changed to only focus on Cannabidiol (CBD) products. CBD is a non-psychotropic cannabinoid that is not restricted as part of the U.S. Controlled Substances Act (CSA), as defined under the 2014 U.S Farming Bill to be derivatives of the Industrial Hemp plant that contains less than 0.3% tetrahydrocannabinol (THC). The company will contract out the manufacturing of the products. Phoenix Bio Pharmaceuticals Corporation and other groups may manufacture our products under our license agreement.

 

The Company follows the accounting guidance outlines in the Financial Accounting Standards Board Codification guidelines. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted principles for interim financial information and with the items under Regulation S-K required by the instructions to Form 10-Q. They may not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed here in, there have been no material change in the information disclosed in the notes to the financial statements for the year ended February 28, 2015 included in the Company’s annual report on Form 10-K|A filed with the Securities and Exchange Commission on March 4, 2019. The interim unaudited financial statements presented herein should be read in conjunction with those financial statements included in the Form 10-K|A. In the opinion of Management, all adjustments considered necessary for a fair presentation, which unless otherwise disclosed herein, consistent with normal re-occurring adjustments, have been made. Operating results for nine months ended November 30, 2015 are not necessarily indicative results that may be expected for the year ended February 29, 2016. 

 

Going Concern

 

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company’s total operating expenditure plan for the following twelve months will require significant cash resources to meet the goals of its business plan. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

XML 18 R7.htm IDEA: XBRL DOCUMENT v3.19.1
Summary of Significant Accounting Policies
9 Months Ended
Nov. 30, 2015
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2.Summary of Significant Accounting Policies

 

Basis of Presentation – The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is February 28 or 29.

 

Basis of Consolidation – The consolidated financial statements include the accounts of Phoenix Life Sciences International Limited. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Stock Split -on October 21, 2015 the Company’s Board of Directors declared a 1 for 10,000 reverse stock split on its common stock as of a record date of October 22, 2015. The effect of the stock split decreased the number of shares of common stock outstanding from 501,242,594 to 50,125. All common share and per common share data in these financial statements and related notes here to have been retroactively adjusted to account for the effect of the stock split for all periods presented. The total number of authorized common shares on the par value thereof was not changed by the split.

 

Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

A significant item that requires management’s estimates and assumptions is the valuation of intangible assets, valuation allowances for income tax, valuation of derivatives instruments and accrued liabilities, among others. Although management believes these estimates are reasonable, actual results could differ from these estimates. 

 

Cash and cash equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At November 30, 2015 and February 28, 2015, the Company did not hold any cash equivalents.

 

Accounts receivable – Accounts receivable consists of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts receivable are carried at the original invoice amount less a reserve for doubtful receivables based on a review of all outstanding amounts on a monthly basis.

 

Basic and Diluted Net Loss per Share – The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At February 28, 2015 and November 30, 2015, the Company had outstanding stock options outstanding, the Company does not deem these options to be dilutive as the exercise price exceeds the current fair market value of the Company’s common stock. At November 30, 2015 and 2014, the Company had did not have potentially dilutive shares outstanding.

 

Financial Instruments - Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, amounts due to related parties, and convertible debenture. 

 

Pursuant to ASC 820, the fair value of our financial instruments are determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

Derivative Financial Instruments – The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

 

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

 

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value.

 

The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.

 

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net cash settlement of the derivative instrument could be required within the 12 months of the balance sheet date.

 

Comprehensive Loss - ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at November 30, 2014 and 2013, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock-based Compensation – The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505-50 - Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

The fair value of each share based payment is estimated on the measurement date using the Black-Scholes model with the following assumptions, which are determined at the beginning of each year and utilized in all calculations for that year:

 

Risk-Free Interest Rate. We utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards. 

 

Expected Volatility. We calculate the expected volatility based on a volatility index of peer companies as we did not have sufficient historical market information to estimate the volatility of our own stock.

 

Dividend Yield. We have not declared a dividend on its common stock since its inception and have no intentions of declaring a dividend in the foreseeable future and therefore used a dividend yield of zero.

 

Expected Term. The expected term of options granted represents the period of time that options are expected to be outstanding. We estimated the expected term of stock options by using the simplified method. For warrants, the expected term represents the actual term of the warrant.

 

Forfeitures. Estimates of option forfeitures are based on our experience. We will adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

 

Revenue Recognition – The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidence of an arrangement exists and delivery has occurred, provided the sale is fixed or determinable and collection is probable. The Company assesses whether the sale is fixed and determinable based on the payment terms associated with the transaction. If a sale is based upon a variable such as acceptance by the customer, the Company accounts for the sale as not being fixed and determinable. In these cases, the Company defers revenue and recognizes it when it becomes due and payable.

 

The Company assesses the probability of collection based on a number of factors, including past transaction history with the customer and the current financial condition of the customer. If the Company determines that collection of a fee is not reasonably assured, revenue is deferred until the time collection becomes reasonably assured. Significant management judgment and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

 

Shipping and Handling costs – shipping and handling costs are included in cost of sales in the Statements of Operations.

 

Recent Accounting Pronouncements – The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Reclassifications – Certain amounts in the prior period financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on previously reported losses, total assets or stockholders equity.

 

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.19.1
Variable Interest Entity
9 Months Ended
Nov. 30, 2015
Variable Interest Entity  
Variable Interest Entity

3.Variable Interest Entity

 

The Company follows the guidelines in FASB Codification of ASC 810 “Consolidation” which indicates “a legal entity that is deemed to be a business need not be evaluated by a reporting entity to determine if the legal entity is a Variable Interest Entity (“VIE”)” unless any one of four conditions exist:

 

- The reporting entity, its related parties, or both participated significantly in the design or redesign of the legal entity;
- The legal entity is designed so that substantially all of its activities involve or are conducted on behalf of the reporting entity and its related parties;
- The reporting entity and its related parties provide more than half of the total of the equity, subordinated debt, and other forms of subordinated financial support to the legal entity; or
- The activities of the legal entity are primarily related to the securitizations or other forms of asset-backed financings or single-lessee leasing arrangements.

 

A VIE is an entity that either (a) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (b) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. If we determine that we have operating power and the obligation to absorb losses or receive benefits, we consolidate the VIE as the primary beneficiary, and if not, we do not consolidate. The Company has not identified any VIEs as of November 30, 2015.

 

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.19.1
Intangible Assets
9 Months Ended
Nov. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

4.Intangible Assets

 

Effective September 1, 2014, the Company changed its method of computing amortization from a sales percentage method to the straight-line method for the intangible assets. An assessment of useful life and / or discounted cash flow of the intangible asset is made and where the value is overstated the value is impaired.

 

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.19.1
Income Taxes
9 Months Ended
Nov. 30, 2015
Income Tax Disclosure [Abstract]  
Income Taxes

5.Income Taxes

 

The deferred tax assets or liabilities represent the future tax benefits or cost of those differences. The Company’s principal deferred tax items arise from net operating losses. Net operating losses approximate $18,600,000 which expire in the years 2030 through 2036. The net operating loss results in a deferred tax asset of $2,790,000. As future earnings are uncertain, the Company has provided a valuation allowance for the entire amount of the deferred tax asset.

 

The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more likely than not” of being sustained by the applicable tax authority “More likely than not” is defined as greater than a 50% chance. The Company is delinquent on nearly all of its tax filings. As a result, there are presently no uncertain tax position and no reserves for uncertain tax positions.

 

The Company has no unrecognized tax benefits at February 28, 2015. The Company’s income tax returns are subject to examination by federal and state tax authorities. Due to the failure to file its tax returns, all prior tax years are open to examination. The Company recognizes interest and penalties associated with uncertain tax positions as part of the income tax provision and would include accrued interest and penalties with the related tax liability in the balance sheet. There were no interest and penalties paid or accrued during the years ended February 28, 2015.

 

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.19.1
License Agreement - Phoenix Bio Pharmaceuticals, Inc.
9 Months Ended
Nov. 30, 2015
License Agreement - Phoenix Bio Pharmaceuticals Inc.  
License Agreement - Phoenix Bio Pharmaceuticals, Inc.

6.License Agreement - Phoenix Bio Pharmaceuticals, Inc.

 

On March 14, 2014, the Company entered into a License Agreement with Phoenix Bio Pharmaceuticals Corporation (“Phoenix Bio Pharm”) where Phoenix Bio Pharm has granted exclusive rights to the Company for North America to exploit all presently owned and after-acquired intellectual property rights and know-how of Phoenix Bio Pharm for certain medical cannabinoid products and delivery systems for the treatment and management of illnesses. The term of the License Agreement is Ten (10) years. In consideration of the acquired license, the Company issued 26,000,000 shares of common stock to Phoenix Bio Pharm, valued at $13,000,000 based on the fair value of the assets acquired in the license agreement.

 

On January 5, 2015, the Company entered into an additional license agreement with Phoenix Bio Pharmaceuticals Corporation to expand the territories covered under its original license agreement dated March 14, 2014. Under the terms of the additional license agreement, the Company acquired the marketing rights to distribute products developed by Phoenix Bio Pharmaceuticals Corporation in Australia and New Zealand for ten years. In exchange for the license, the Company has issued 250,000,000 restricted common shares at $0.016 per common share, for an aggregate value of $4,000,000. This amount represents 33% over the market value on the date of execution of the license agreement being $3,000,000.

 

On July 8, 2015, the Company agreed to enter into a new licensing agreement with Phoenix Bio Pharmaceuticals Corporation. This new agreement shall replace the previous licensing agreements. The new licensing agreement shall be non-exclusive, CBD only licensing agreement with Phoenix Bio Pharmaceuticals Corporation. This license agreement operates for a twenty (20) year period. Phoenix Bio Pharm has granted to the Company a license for the territory of North America, Australia and New Zealand to exploit all presently owned and after-acquired intellectual property rights and know-how of Phoenix Bio Pharm related to CBD based cannabinoid products and delivery systems for the treatment and management of illnesses. Products falling under the license will include the following CBD products: transdermal patches, orally administered extracts, concentrated extracts of vaporizers and inhalers, sublingual and buccal dispensing products and extraction technology, suppository delivery systems, salves, creams, gels, lotions, and liquid extracts, and any product or active ingredients sourced through Phoenix Bio Pharm or third party suppliers or licensors. The Company will also have the right to sublicense the rights acquired pursuant to the license agreement and to use and develop copyrighted materials of Phoenix Bio Pharm for marketing and distribution purposes.

 

In addition to the new licensing agreement, on July 8, 2015 the Company has entered into an exchange agreement with Phoenix Bio Pharm where all existing common shares held by Phoenix Bio Pharm (276,000,000) are exchanged for 2,000,000 Series B Preferred Shares, par value $0.0001. These preferred shares are entitled to 100 votes for each share held, and convertible into 100 common shares per preferred share at any time at the discretion of the holder.

 

As the Company has failed to meet projected cash flows which underpin the valuation model of the License Agreement, the Company determined that the balance of License Agreement should be impaired at February 29, 2015, and accordingly a total of $14,014,1899 was expensed as an impairment to the License Agreement and paid in capital was reduced by $2,282,132 at year ended February 28, 2015.

 

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.19.1
Cannavest, Inc.
9 Months Ended
Nov. 30, 2015
Short-term Debt, Other Disclosures [Abstract]  
Cannavest, Inc.

7.CannaVest, Inc.

 

On December 23, 2014, the Company entered into a convertible promissory note for $1,200,000 with CannaVest Corp. The note represents $1,200,000 worth of raw material inventory to be obtained from CannaVest Corp. to use in the Company’s cannabidiol product formulations. The note accrues simple interest at a rate of 10% per annum and is due and payable in six months from the date of issue. The note cannot be prepaid. At any time, the outstanding principal amount of this note and all accrued but unpaid interest under this note can be converted into common shares at a price equal to the lesser of $0.02 per common share, the closing sale price, or the average of the lowest closing sale prices of the Company’s common shares during the five trading day period immediately preceding the date of such determination.

 

Should the Company default on this convertible promissory note, all outstanding obligations payable by the Company are immediately due and payable. In addition, CannaVest Corp. may exercise any other right, power or remedy permitted by law. Further, upon even of default, all unpaid obligations under this note shall bear interest at the rate of 12% per annum.

 

Warrant Agreement

 

In connection with the convertible promissory note dated December 23, 2014, the Company subsequently issued warrants to purchase 20,000,000 common shares at an exercise price of $0.02 per common share to Kisha Spendthrift Trust, an affiliate of CannaVest Corp. These warrants were issued on January 6, 2015. In exchange for these warrants, the Company shall have access to the technical and management staff of CannaVest Corp. for the development of products to be manufactured from cannabidiol sourced from CannaVest Corp.

 

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.19.1
Subsidiary Companies
9 Months Ended
Nov. 30, 2015
Subsidiary Companies  
Subsidiary Companies

8.Subsidiary Companies

 

On March 17, 2014, MediHoldings, Inc. (“MediHoldings”), a Colorado corporation, was formed as a wholly-owned subsidiary of the Company.

 

On June 27, 2014, MediSales (CA), Inc. (“MediSales”), a California corporation, was formed as a wholly-owned subsidiary of the Company.

 

Both these subsidiaries as at November 30, 2015 had not traded and were inactive.

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions
9 Months Ended
Nov. 30, 2015
Related Party Transactions [Abstract]  
Related Party Transactions

9.Related Party Transactions

 

Martin Tindall

 

Mr. Martin Tindall, assists the Company with business development activities through the Advisory Services Agreement with Kronos as discussed below. Mr. Tindal serves as the CEO of Kronos. Additionally, Mr. Tindal has provided new product development services through a New Product Development Agreement with Phoenix Pharms Capital Corporation, as discussed below. Mr. Tindall services as CFO and a Director of Phoenix Pharms Capital Corporation. Mr. Tindall also serves as a director of Phoenix Bio Pharmaceuticals Inc.

 

 

Kronos International Investments Ltd. (“Kronos”)

 

Sublease Agreement: Effective March 1, 2014, the Company entered into a Sublease Agreement with Kronos for a four (4) year term. Kronos’s CEO, Martin Tindall also provides advisory services to the Company. The monthly sublease rent is $2,500 per month. During the year ended February 29, 2016, the Company paid Kronos $7,500 in rent expense, and had previously paid security deposit of $1,250. In June 2015, the sublease was cancelled and the security deposit of $1,250 was offset against amounts owed to Kronos for advisory service fees.

 

Advisory Services: Effective March 1, 2014, the Company engaged Kronos to provide Advisory Services for a monthly retainer fee of $10,000 per month. The advisory services include and are not limited to accounting and corporate compliance, business development and strategic planning services, corporate advisory and operational oversight. Between March 1, 2014 and February 28, 2015, expenses related to the Advisory Services totaled $120,000. For the year March 1, 2015 and November 30, 2015, expenses related to the Advisory Services, provided by the CEO of Kronos, Martin Tindall with respect to business development of cannabidiol products that the Company intends to market, were $62,500.

 

Phoenix Pharms Capital Corporation (“Phoenix Pharms”)

 

Related Party Loan: On September 18, 2014, the Company advanced Phoenix Pharms a total of $85,000 as a short term loan. As of November 30, 2015, the outstanding balance due the Company on this related party loan is $54,324

 

Russell Stone: Mr. Russell Stone, the Company’s Chief Executive Officer, holds approximately 14% of the outstanding common shares of Phoenix Pharms Capital Corporation indirectly through a trust.

 

Lewis “Spike” Humer:

 

Mr. Humer, a director of the Company, serves as CEO and a director of Phoenix Bio Pharmaceuticals and CEO and a director of Phoenix Pharms Capital Corporation. As of August 2014, the Company began paying Mr. Humer a consulting fee of $1,500 per week. As of November 30, 2015, the Company has accrued a related party payable to Mr. Humer of $75,260.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.19.1
Preferred Stock
9 Months Ended
Nov. 30, 2015
Preferred Stock  
Preferred Stock

10.Preferred Stock

 

On September 22, 2015, the Company amended and restated its Articles of Incorporation to create and authorize four (4) classes of preferred stock. The Company has authorized Series A, Series B, Series C and Series D Preferred Stock (the “Preferred Stock”).

 

Series A Preferred Stock:

Series A preferred shares have a par value of $0.0001, and are convertible into common shares at $1.00 per common share. Series A preferred shares rank senior to common stock with respect to the right to participate in distributions or payments in the event of liquidation, dissolution, or winding up of the Company. Holders of Series A preferred shares are entitled to a preferred return equal to the purchase price paid for such Series A preferred shares. Series A preferred shares do not have any voting rights.

 

Holders of Series A preferred shares are not entitled to preemptive rights to purchase stock in future stock offerings of the Company. Holders of Series A preferred shares have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities, and they have the right of co-sale. Holders of Series A preferred shareholders are not required to sell all of their Series A preferred shares on the same terms or conditions of a co-sale by a majority shareholder. There is no right of first refusal for Series A preferred shares. 

 

Series B Preferred Stock:

Series B preferred shares have a par value of $0.0001, and are convertible into common shares at a rate of 100 common shares per preferred share. Series B preferred shares are entitled to cast 500 votes for each preferred share owned. Series B preferred shares are senior to common shares with respect to the right to participate in distributions or payments in the event of any liquidation, dissolution, or winding up of the Company, and holders of Series B preferred shares are entitled to receive a preferred return equal to the purchase price paid for such Series B preferred stock.

 

Holders of Series B preferred shares are entitled to preemptive rights to purchase stock in future offerings, and have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities. Holders do not have the right of co-sale, and are not required to sell all of their Series B preferred shares on the same terms or conditions of a co-sale by a majority shareholder. If any Series B preferred shareholder wishes to sell, transfer or otherwise dispose of any or all of their Series B preferred shares, the other Series B preferred shareholders shall not have a prior right to buy such Series B preferred shares.

 

Series C Preferred Stock:

Series C preferred shares have a par value of $0.0001, and are convertible into common shares at a rate of $1.00 per common share. Series C preferred shares are not entitled to any voting rights, unless such vote is to modify rights, preferences, privileges and restrictions granted to and imposed on Series C preferred shares. Series C preferred shares are senior to common shares and Series B preferred shares with respect to the right to participate in distributions or payments in the event of any liquidation, dissolution, or winding up of the Company, and holders of Series C preferred shares are entitled to receive a preferred return equal to the purchase price paid for such Series C preferred, which is deemed to be $600,000. If the closing price per share of the Company’s common shares is less than $1.00 for a period of five consecutive trading days, the YP Holdings will have the one-time right, exercisable at its discretion, to require that the conversion price of the shares become equal to 75% of the average closing bid price per shares for the five consecutive trading days immediately preceding the date that YP Holdings notifies the Company that it wishes to convert some or all of its Series C preferred shares into common shares. The reset shall not be available if the proceeds of the sale of converted common shares equals or exceeds $750,000. Should proceeds of the sale of converted common shares equal or exceed $1,000,000, any unconverted Series C preferred shares shall be returned to the Company for retirement. Converted common shares are subject to a leak-out agreement, and no more than 50,000 common shares may be sold by YP Holdings in any one month.

 

Holders of Series C preferred shares are entitled to receive a preferred return equal to 10% of the gross cash sales income received in the ordinary course of business. Holders are not entitled to preemptive rights to purchase shares in future offerings of the Company.

 

Holders of Series C preferred shares have the right to register their unregistered shares when either the Company or another investor initiates a registration of the Company’s securities. Holders have the rights of co-sale, and are not required to sell all of their Series C preferred shares on the same terms or conditions of a co-sale by a majority shareholder. If any Series C preferred shareholder wishes to sell, transfer, or otherwise dispose of any or all of their Series C preferred shares, other Series C preferred shareholders shall not have a prior right to buy such shares. 

 

Series D Preferred Stock

Series D preferred shares have a par value of $0.0001, and are convertible into common shares at a conversion rate of $1.00 per common share. Series D preferred shares rank senior to common shares and the Series B preferred shares. In the event of any liquidation, dissolution, or winding up of the Company, holders of Series D preferred shares shall be entitled to receive a preferred return equal to the purchase price paid for such Series D preferred shares after payment of the preferred returns relating to the Series A and C preferred shares. Series D preferred shares are not entitled to voting rights.

 

Holders of Series D preferred shares shall be entitled to receive a preferred return equal to 10% of the Gross Cash Sales Income received in the ordinary course of business. Upon issue of the dividend, the value of such shares shall be deemed to be retired. Holders of Series D preferred shares are not entitled to preemptive rights to purchase stock in future offerings of the Company. Holders of Series D preferred shares have the right to register their unregistered stock when either the Company or another investor initiates a registration of the Company’s securities. Holders of Series D preferred shares have the right of co-sale, but they are not required to sell all of their Series D preferred shares on the same terms or conditions of a co-sale by a majority shareholder.

 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock
9 Months Ended
Nov. 30, 2015
Common Stock  
Common Stock

11.Common Stock

 

The Company has authorized 990,000,000 shares of its common stock, $0.001 par value. On November 30, 2015, following the reverse share split, there were 24,512 shares of common stock issued and outstanding and 31,154 (311,540,534 pre-split) shares of common stock reserved for issuance.

 

Effective August 23, 2013, the Company filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized, issued and outstanding shares of common stock on a 10 new for 1 old basis and, consequently, an increase to our authorized share capital from 99,000,000 to 990,000,000 common shares, with a par value of $0.001 per share.

 

On October 21, 2015, the Company effectuated a 1 for 10,000 reverse split on its common stock as of a record date of October 22, 2015. As a result, the 458,892,294 outstanding shares as of the record date were reversed to 45,935 shares. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented. The total number of authorized common shares and par value was not changed for the split.

 

On February 27, 2014, the Company issued 500 (5,000,000 pre-split) shares to its Chief Executive Officer, who agreed to retire the 500 common shares and return them to the unissued, authorized common shares of the Company in exchange for a stock option.

 

On March 13, 2014, the Company issued 20 (200,000 pre-split) shares of its restricted common stock to GoKush, Inc. as described above. On July 1, 2014, these restricted shares were issued.

 

On March 14, 2014, the Company issued 2,600 (26,000,000 pre-split) shares of its restricted common stock to Phoenix Bio Pharm as described above. On July 1, 2014, these restricted shares were issued. 

 

On January 23, 2015, the Company issued 25,000 (250,000,000 pre-split) shares of its restricted common stock to Phoenix Bio Pharm as described in above.

 

On December 9, 2014, the Company issued 500 (5,000,000 pre-split) shares of its common stock as compensation under two consulting agreements, each for one-year of marketing services. The Company values the issuance of shares at $119,666, which will be amortized over the twelve months beginning November 2014 to October 2015.

 

On December 16, 2014, the Company issued 667 (6,666,667 pre-split) shares of its common stock to YP Holdings for $600,000 under a Securities Purchase Agreement as discussed below.

 

During the year ended February 28, 2015, the Company issued 1,002 (10,020,000 pre-split) shares of common stock to Typenex from the conversion of a total principal amount of $38,500 under a Convertible Notes Agreement as discussed in Note 13 below.

 

Between March 1, 2015 and August 31, 2015, the Company issued 9,756 (97,560,000 pre-split) shares of common stock to Typenex from the conversion of a total principal amount of $54,000 under a Convertible Notes Agreement and 3,157 (31,575,175 pre-split) shares of Common Stock to Typenex related to true-up notices received from the noteholder, as discussed in Note 13 below.

 

On August 14, 2015, Phoenix Bio Pharm returned 27,600 (276,000,000 pre-split) shares of common stock to the Company to hold in safe keeping for an exchange into 2,000,000 shares of preferred stock.

 

As at November 30, 2015 there were 50,171 common shares on issue.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock Options
9 Months Ended
Nov. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Common Stock Options

12.Common Stock Options

 

2014 Stock Awards Plan: Effective June 4, 2014, the Board of Directors adopted the 2014 Stock Awards Plan (the “Plan”) under which the Company is authorized to grant employees, directors, and consultants (“Participant”) incentive and non-qualified stock options. Pursuant to the Plan, the Company is authorized to grant an aggregate of 1,000 (10,000,000 pre-split) stock options to purchase common stock of the Company. The stock option price and vesting terms are determined by the Board of Directors or Compensation Committee (the “Committee”), and evidenced by a stock option agreement extended to the Participant. The options granted generally terminate five years from the date of issuance.

 

Effective February 27, 2014, the Company’s former CEO and Director was granted incentive stock options to purchase 500 (5,000,000 pre-split) common shares of the Company at $3,400 ($0.34 pre-split) per common share valued at $551,363. Immediately upon the grant of the option, options to purchase 250 (2,500,000 pre-split) common shares vested. The option to purchase the remaining 2,500,000 common shares shall vest in equal amounts over the next three years ending February 27, 2017. As of February 18, 2015, the unvested options totaling 2,500,000 were cancelled upon resignation by the holder. The remaining 250 (2,500,000 pre-split) vested options are exercisable until February 17, 2016. 

 

The following table describes stock options outstanding and exercisable at November 30, 2015:

 

Options Outstanding and Exercisable

    Options Outstanding           Options Exercisable 
Range of Exercise Prices   Number   Price   Life   Number   Price   Life 
                          
$3,400    250   $3,400    .25    250   $3,400    .25 
      250              250           

 

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Promissory Note
9 Months Ended
Nov. 30, 2015
Convertible Promissory Note  
Convertible Promissory Note

13.Convertible Promissory Note

 

On June 24, 2014, the Company entered into a securities purchase agreement with Typenex Co-Investment, LLC, a Utah limited liability company. Under this agreement, the Company has issued a secured convertible promissory note in the original principal amount of $1,105,000, deliverable in eleven tranches (the “Typenex Note”). On the closing date, Typenex delivered the initial cash purchase price of $150,000, plus any interest, costs, fees or charges accrued under the Typenex Note, including the original issue discount of $20,000. The outstanding principal and accrued and unpaid interest on the Typenex Note is convertible at any time into shares of common stock at a conversion price of $1.00, subject to adjustment as described below (the “Lender Conversion Price”). As of June 24, 2014, the Company evaluated the Beneficial Conversion Feature under this note and determined as of June 24, 2014, there was no beneficial conversion feature as the Lender Conversion Price exceeded the fair market value of the Company’s common stock.

 

As of November 30, 2014, the company has received net proceeds of $135,000 related to this convertible promissory note, representing $150,000 less financing costs of $15,000.

 

Each subsequent tranche will be in the amount of $85,000, plus any interest, costs, fees or charges accrued thereon under the terms of the Typenex Note, including the original issuer discount of $8,500. Each tranche will be accompanied by its own secured investor note (the “Investor Notes”). The Company has agreed to pay $5,000 to cover Typenex’s legal fees, accounting costs, due diligence, monitoring and other transaction costs in connection with the purchase and sale of the Typenex Note. All loans received bear an interest rate of 10% per annum. The loan is due 23 months after the initial cash purchase price is delivered to the Company. Typenex has pledged a 40% membership interest in Typenex Medical, LLC to secure its obligations under all of the Typenex Notes.

 

A warrant to purchase shares of the Company has been issued to Typenex as of June 24, 2014. This warrant grants Typenex the ability to purchase a number of fully paid and non-assessable shares of the Company’s stock, par value $0.001, equal to $552,500 divided by the market price. This warrant is issued pursuant to the terms of the securities purchase agreement as described above.

 

Provided there is an outstanding balance, the Company will pay an installment amount equal to $61,388.89 plus any accrued and unpaid interest on the installment due date, which is six months after the initial loan disbursement. This installment amount is the maximum that must be paid on any given installment due date, and is limited by the amounts owed. This amount can be converted at the lesser of either the lender conversion price or at 70% of the average of the three lowest closing bid prices in the 20 trading days immediately preceding the applicable conversion. Should the average trading price be less than $0.35 during any such period, then the conversion factor will be reduced to 65% for all future conversion, additionally the conversion price will be reduced by 5% if the Company’s common stock is not available for DWAC. Should the Company decide to prepay this amount, there is a prepayment premium equal to 125% of the outstanding balance of the Typenex Note. Should the prepayment premium not be paid within 2 days of the prepayment notice, the Company forfeits its right to prepay the Typenex Note. 

 

Under this agreement, Typenex has the right at any time after the purchase price date until the outstanding balance has been paid in full to convert any or all of the outstanding balance into shares of the Company’s common stock under the following formula: the number of shares issued equals the amount being converted divided by $1. These shares must be delivered to Typenex within three trading days of the conversion notice being given to the Company. Should any shares be sold to Typenex or any third party at a value that is less than the effective lender conversion price, then the lender conversion price will be reduced to equal such lower issuance price. The effective lender conversion price will also be adjusted as needed upon any forward or reverse split of the Company’s shares. Should the Company fail to deliver the shares in a timely manner, a late fee of the greater of $500 per day and 2% of the applicable lender conversion share value rounded to the nearest multiple of $100 will be assed for each day after the third that the Company is late (though not exceeding 200% of the applicable lender conversion share value.

 

In the event of a default, the Typenex Note may be accelerated by Typenex by providing written notice to the Company. The outstanding balance is immediately due and payable at the greater of the outstanding balance divided by the installment conversion price, or the default effect, which is calculated by multiplying the conversion eligible outstanding balance by 15% for each major default or 5% for each minor default and then adding the resulting product to the outstanding balance as of the date of default. In addition, an interest rate of the lesser of 22% per annum (or the maximum rate permitted under law) will be applied to the outstanding balance. Typenex is prohibited from owning more than 4.99% of the Company’s outstanding shares, unless the market capitalization of the Company’s common stock is less than $10,000,000, in which case Typenex is prohibited from owning more than 9.99% of the Company’s outstanding shares.

 

On a date that is 23 trading days from each date that the Company delivers conversion shares to Typenex, there is a true-up date in which the Company will deliver additional shares if the installment conversion price on that date is less than the installment conversion price used in the applicable installment notice. These additional shares will be equal to the difference between the number of shares that would be delivered to Typenex at the time of the true-up date and the amount originally delivered.\

 

Notice of Default – on January 9, 2015, the Company received a Notice of Default from Typenex under the Convertible Promissory Note described in Note 12 above. In the letter, the noteholder described two major defaults where the Company failed to meet its obligations under the Typenex Note. The first default was triggered on December 16, 2014 related to a request from the noteholder to increase the number of shares reserved for issuance under the Typenex Note on the books of the Company’s transfer agent. The second default was triggered on December 27, 2014, when the Company failed to make its first installment payment of $61,888.89 according to the terms of the Typenex Note. Each default triggered a penalty of 115% of the then outstanding principal and accrued and unpaid interest and triggers the interest rate to 22%. As of January 9, 2015, the outstanding principal, accrued interest and accrued penalties on the Typenex Note was $239,483.61. On January 23, 2015, the Company satisfied its first default by instructing its transfer agent to reserve a total of 5,092 (50,925,000 pre-split) shares of common stock covering the potential conversion of the original principal value of the Typenex Note ($1,100,000) plus common shares issuable upon the exercise of warrants underlying the Typenex Note. On February 12, 2015, the Company received a notice from Typenex waiving the penalties on the December 16, 2014 default and waived $26,755.16 of penalties imposed on December 16, 2014. Under the terms of the Typenex Note, the Lenders Conversion Price will reset to 60% of the average of the three lowest closing bid prices of the Company’s common stock in the 20 days prior to conversion. During the quarter ended August 31, 2015, the Company re-evaluated the Notice of Default and determined that it had previously recorded a beneficial conversion feature incorrectly. The Company has computed a Derivative liability effective December 2014 and has corrected its statements as of February 28, 2015 to reflect this accounting treatment. As of February 28, 2015 and November 30, 2015, the Derivative Liability on the Typenex Note was $169,868 and $143,335, respectively. 

 

On February 3, 2015, the Company exercised its borrower offset right under the Typenex Note. Through this offset right, the Company is entitled to deduct and offset any amount owing by Typenex under the initial securities purchase agreement dated June 24, 2014 from any amount owed by the Company under the note. The combined balance of the secured investor notes and the investor notes as of the January 28, 2015 offset date was $890,800. In addition, the note balance prior to the offset included $85,000 of unearned original issue discounts.

 

In conjunction with the Company’s exercise of its offset right, the Company and Typenex each hereby acknowledge that the secured investor notes and the investor notes were offset against the Company balances owed under the note as of the offset date, and as a result thereof, each of the secured investor notes and the investor notes is deemed to have been paid in full and are now cancelled and terminated and the Company balance owed under the note has been reduced to $218,028.47 as of the offset date. Additionally, the Company specifically acknowledges that Typenex has no further obligations under any of the secured investor notes and investor notes.

 

Further, the Company acknowledges that the investor pledge agreement, dated June 24, 2014, and all security interests granted thereunder with respect to the collateral (as defined in the investor pledge agreement have terminated and all such security interests shall be deemed released.

 

Notice of Conversion – Between March 1, 2015 and August 31, 2015 the Company has received conversion notices from its noteholder on the Typenex Note to convert principal on the Typenex Note into shares of the Company’s Common Stock at a market price as defined by the Typenex Note. The table below lists the conversion activity and the shares of common stock issued pursuant to each conversion:

 

Date of Notice   Principal   Market Price*   Conversion Shares   True Up Shares   Total Shares Issued 
March 2, 2015   $14,000   $0.071788    1,005        1,005 
March 31, 2015                2,204    2,204 
May 14, 2015   $15,000   $0.203395    2,098    953    3,051 
August 10, 2015   $25,000   $0.139860    3,496        3,496 
Total   $54,000         6,599    3,157    9,756 

 

*Market Price as defined by the Typenex Note

All shares and Market Price in the above table are stated to reflect the 10,000 to 1 reverse stock split. 

 

At August 31, 2015 and February 28, 2015, convertible notes payable included the following:

 

   November 30, 2015   February 28, 2015 
Outstanding principal balance on Typenex Note:  $77,500   $131,500 
Unamortized original issue discount   (7,650)   (12,870)
Accrued interest   97,687    76,118 
Net Convertible Notes Payable  $167,537   $194,748 

 

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.19.1
Promissory Note
9 Months Ended
Nov. 30, 2015
Promissory Note  
Promissory Note

14.Promissory Note

 

On August 29, 2014, the company entered into a Promissory Note with YP Holdings, LLC for gross proceeds $100,000 as an advance towards the Securities Purchase Agreement dated September 17, 2014 described in Note 13 (the “YP Note”). The YP Note matures in 60-days and bears interest of 12% per annum. During the nine months ended November 30, 2014, the Company recorded $18,000 in financing fees related to the YP Note. On September 17, 2014, the YP Note converted to equity in connection with the Securities Purchase Agreement dated September 17, 2014 as discussed below. The Company has no further obligation under the YP Note.

 

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.19.1
Securities Purchase Agreement
9 Months Ended
Nov. 30, 2015
Securities Purchase Agreement  
Securities Purchase Agreement

15.Securities Purchase Agreement

 

On September 17, 2014, the Company entered into a securities purchase agreement with YP Holdings, LLC. YP Holdings, LLC has no material relationship with the Company other than with respect to this agreement.

 

Under this agreement, the purchasers will be purchasing units of one common share and two warrants to purchase common shares for $0.09 per unit, for a total of $600,000. The common shares have a par value of $0.001 per share. The warrants are exercisable for five years from the date of issuance and shall have an initial exercise price equal to $0.20. As a result of this agreement, the Company will issue 667 (6,666,667 pre-split) common shares and 1,333 (13,333,334 pre-split) warrants to the purchasers. On August 29, 2014 and September 17, 2014, the Company received gross proceeds of $100,000 and $500,000, respectively and has recorded financing fees of $18,000 and $52,000, related to this agreement. The Company has valued these warrants using the Black Scholes option pricing model and has recorded expense related to the issuance of these warrants totaling $552,500 during the year ended February 28, 2015.

 

The warrants can be exercised by paying the price for shares as stipulated by the warrant, or through cashless exercise, through which the purchaser will be issued a number of shares equal to the number of warrant shares applied to the subject exercise multiplied by the current market price on the date of conversion minus the exercise price on that date. This total is then divided by the current market price on the date of conversion. The cashless exercise may only be exercised after six months have passed from the original issuance of the warrants.

 

The purchaser has waived the clause prohibiting conversion of warrants into common shares if that would result in the purchaser owning in excess of 4.99% of the outstanding shares. A second clause prohibits the conversion of warrants if the purchaser owns in excess of 9.99% of the outstanding common shares. This clause can be waived by the purchaser providing notice of waiver.

 

 

The Company has agreed to pay a flat $20,000 to YP Holdings, LLC to reimburse them for the fees and expenses incurred by it in connection with its due diligence review of the Company and the preparation, negotiation, executive, delivery and performance of the agreement.

 

The two parties also entered into a registration rights agreement. Under this agreement, the Company will prepare and file a registration statement on Form S-1 in order to register all shares issued under the securities purchase agreement. The Company will keep the registration statement continuously effective for a period of two years following the effective date of the registration statement. The Company will pay all reasonable fees and expenses incurred with respect to this agreement. Unless previously agreed to in writing, the Company may not register any shares other than those intended to be sold under this agreement.

 

Should the Company fail to comply with the registration rights agreement, the Company agrees to pay liquidated damages to YP Holdings, LLC equal to 3% of the purchase price of the common shares paid by the purchaser for the first 30 day period, and 2% of such purchase price for each subsequent 30 day period. These payments are payable upon demand in cash.

 

Pursuant to the registration rights agreement, the Company agreed to several lock-up agreements between itself and four shareholders of the Company: Phoenix Bio Pharmaceuticals Corporation, Ronald Lusk, Lewis Humer, and Caduceus Industries LLC. Under these agreements, each shareholder has agreed that they will not offer, pledge, sell, contract to sell, grant any options for sale or transfer, distribute or dispose of, directly or indirectly, any shares of the Company for a 90 day period following the date that the registration statement is declared effective.

 

Additionally, on September 16, 2014, the Company issued warrants to purchase 53 (533,333 pre-split) common shares to consultants for services rendered. The warrants expire five years from the date of issuance and are exercisable for $0.20 per share. The Company has valued these warrants using the Black Scholes option pricing model and has recorded expense related to the issuance of these warrants totaling $104,578 during the quarter ended November 30, 2014.

 

XML 32 R21.htm IDEA: XBRL DOCUMENT v3.19.1
Corrections To Prior Financials As Filed
9 Months Ended
Nov. 30, 2015
Prior Period Adjustment [Abstract]  
Corrections To Prior Financials As Filed

16.Corrections to Prior Financials As Filed

 

Due to a change in auditors and a subsequent review of the accounting treatment surrounding the Typenex Notes, there were corrections of expenses related to the Derivative Liability and Beneficial Conversion Feature recorded on the Typenex Notes for the year ended February 28, 2015 and the three months ended May 31, 2015. The table below for the shows the effects on Net loss, earnings per share, and accumulated deficit for each of the periods.

 

Item Period Net Loss Earnings Per Share Accumulated Deficit
Typenex Note Year Ended February 28, 2015 205,522 (0.00) 205,522
Phoenix Bio Pharma Year Ended February 28, 2015 5,514,189 (0.05) 7,166,667
Go Kush, Inc Year Ended February 28, 2015 141,800 (0.00) 154,800
Accounts Payable Year Ended February 28, 2015 157,167 (0.00) 165,000
Amendment to Amortisation Year Ended February 28, 2015 (642,654)    
Total Year Ended February 28, 2015 5,376,024 (0.06) 7,691,989
         
Change in Derivative value Three months ended May 31, 2015 (66,515) (0.00) (66,515)

 

XML 33 R22.htm IDEA: XBRL DOCUMENT v3.19.1
Subsequent Events
9 Months Ended
Nov. 30, 2015
Subsequent Events [Abstract]  
Subsequent Events

17.Subsequent Events

 

Common Share Cancellation and Preferred Share Issue: On November 4, 2015, Phoenix Bio Pharmaceuticals Corporation’s offer to exchange 27,600 common shares for 2,000,000 Series B Preferred shares was accepted and 27,600 common shares were cancelled.

 

Common Share Issue: On November 5, 2015 Cede & Co were issued 1,941 common shares to rectify a mistake that had been made when the share split was performed.

 

Common Share Cancellation and Preferred Share Issue: On February 18, 2016, 667 common shares issued to YP Holdings, LLC pursuant to a securities purchase agreement were cancelled in exchange for 1,000,000 Series C Preferred shares. YP Holdings LLC then converted 2,000 of the preferred shares to common shares which were issued by the Company.

 

Convertible Note Agreement: On or about January 25, 2016, the Company entered into an Amendment No. 1 to the Convertible Promissory Note executed by and between the Company and CV Sciences, Inc (FKA Cannavest Corp. and referred to herein as “CVS”) dated December 23, 2014 (the “Note”), whereby the company and CVS agreed to terminate the Note upon the Company’s return of five containers of raw hemp oil to CVS. On or about June 1, 2016, the Company returned the entirety of the raw hemp oil to CVS, and the Note and all rights and obligations thereunder would deemed fully satisfied.

 

Change of Auditor: On September 21, 2016, the registrant dismissed Fruci & Associates II, PLLC as their registered independent public accountant. On September 21, 2016, the Company’s Board of Directors approved the engagement of BMKR, LLP to provide auditing services on a prospective basis, and to perform a full audit of the Company’s books and records for the years ended February 29, 2016, February 28, 2017 and February 28, 2018.

 

Change of Name: On March 8, 2017, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from MediJane Holdings, Inc. to Stem Bioscience, Inc.

 

Change of Name On May 31, 2018, the Company filed an Amendment to its Articles of Incorporation (the “Amendment”) with the Secretary of State of Nevada. As a result of the Amendment, the Company has changed its name with the State of Nevada from Stem Bioscience, Inc. to Phoenix Life Science International Limited. On November 2, 2018 the symbol changed from MJMD to PLSI.

 

Merger: Pursuant to the Agreement and Plan of Merger, dated as of September 18, 2018 as (The “Merger Plan” by and between Phoenix Life Sciences International Limited, a Nevada Corporation (the “Company”) and Phoenix Life Sciences International Limited, a Canadian Corporation (“PLSI CA”), the Company completed its merger with PLSI CA, with the Company as the surviving entity. 

 

Consolidation of Activities: On September 18, 2018, the Company’s Board of Directors announced the finalized consolidation activities of Phoenix Life Sciences International Limited with Stem Biosciences, Inc., Blue Dragon Ventures, and the MediJane Brand, and that the Company’s common stock would trade publicly under the symbol MJMD, subsequently on November 2, 2018 this changed to PLSI.

 

Cancellation of Pref B Shares: On September 21, 2018, the Company announced it had obtained consent from the holder, Phoenix Bio Pharmaceuticals Corporation for the cancellation of 2,000,000 Preferred Series B shares in the Company in connection with the restructure of the Company and merger with Phoenix Life Sciences International Limited, a Canadian Corporation.

 

Resignation of Director: On September 22, 2018, the Company’s Board of Directors accepted the resignation of Russell Stone from his position as a Director.

 

Convertible Note retired: On or about June 24, 2014, the Company entered into a Convertible Promissory Note with a face value of $1,105,000 (the “Note”) by and between the Company and Typenex Co-Investment, LLC (“Typenex”). On or about April 19, 2018, the Phoenix Life Sciences International Ltd, a Canadian Corporation (“PLSI CA”) acquired the entirety of the Notes outstanding principal and interest balance from Typenex. Upon the completion of the merger, that Note was conveyed to the Company.

 

Cancellation of Warrants: On September 22, 2018, the Company’s Board of Directors resolved to deem the acquired Notes principal balance satisfied, and to terminate the Note and any and all rights and obligations arising thereunder, including without limitation the cancellation of all Warrants issued to Typenex under the Note.

 

Issuance of Common Stock: On September 24, 2018, the Company issued 30,502,375 shares of common stock bearing the restricted legend without registration (the “Issued Shares”). Of these, 29,802,375 shares were issued in reliance on Rule 802 under the Securities Act in a 1:1 share exchange related to the merger of PLSI CA and the company as described above, and 700,000 shares were issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act. All of the Issued Shares were issued in private transactions, and the company received no proceeds from the Issued Shares.

 

Appointment of Directors: On October 3, 2018, the following persons were appointed to the Board of the Company, Stephen Cornford, Martin Tindall as Chief Executive Officer, Janelle Marsden as Managing Director and Geoffrey Boynton as Chief Financial Officer. Lewis “Spike” Humer stepped down from his executive role but remains a Director.

 

Issuance of Stock for Services: On October 03, 2018, the Company agreed to issue 48,000 shares of restricted common stock to KHAOS Media Group as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act for services previously rendered and invoiced between March and December 2014.

 

Change of Symbol: On November 2, 2018, FINRA confirmed the name change and change of symbol to “PLSI”

 

Retirement of Preferred Stock: On November 9, 2018, the Company announced that 2,000,000 Series C Preferred Stock had been cancelled and all convertible debt had been retired. There was no outstanding preferred stock on issue as at this day. 

 

Issuance of Common Stock: On December 4, 2018, the Company issued 229,600 common shares as part of settlement agreements.

 

Issuance of Common Stock: On December 17, 2018, the Company issued 675,028 common shares which included 191,668 common shares as part of settlement agreements and 483,360 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act

 

Issuance of Common Stock: On January 11, 2019, the Company issued 500,600 common shares to YP Holding, LLC. as part of a settlement agreement.

 

Issuance of Common Stock: On January 15, 2019 the Company issued 54,580 common shares which included 53,500 common shares as part of settlement agreements and 1,080 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act

 

Appointment of a Director: On February 20, 2019 the Board of the Company appointed Michael Gobel, who has long and distinguished career in corporate finance in Australia, as a non-executive Director

 

Issuance of Common Stock: On February 26, 2019 the Company issued 315,928 common share which included 5,460 common shares as part of settlement agreements, 126,750 common shares issued as compensation for services rendered in reliance of Section 4(a)(2) of the Securities Act and 183,718 for cash consideration.

 

XML 34 R23.htm IDEA: XBRL DOCUMENT v3.19.1
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Nov. 30, 2015
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation – The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is February 28 or 29.

Basis of Consolidation

Basis of Consolidation – The consolidated financial statements include the accounts of Phoenix Life Sciences International Limited. All significant intercompany balances and transactions have been eliminated in consolidation.

Stock Split

Stock Split -on October 21, 2015 the Company’s Board of Directors declared a 1 for 10,000 reverse stock split on its common stock as of a record date of October 22, 2015. The effect of the stock split decreased the number of shares of common stock outstanding from 501,242,594 to 50,125. All common share and per common share data in these financial statements and related notes here to have been retroactively adjusted to account for the effect of the stock split for all periods presented. The total number of authorized common shares on the par value thereof was not changed by the split.

 

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

A significant item that requires management’s estimates and assumptions is the valuation of intangible assets, valuation allowances for income tax, valuation of derivatives instruments and accrued liabilities, among others. Although management believes these estimates are reasonable, actual results could differ from these estimates.

 

Cash and cash equivalents

Cash and cash equivalents – The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. At November 30, 2015 and February 28, 2015, the Company did not hold any cash equivalents.

Accounts Receivable

Accounts receivable – Accounts receivable consists of trade accounts arising in the normal course of business. No interest is charged on past due accounts. Accounts receivable are carried at the original invoice amount less a reserve for doubtful receivables based on a review of all outstanding amounts on a monthly basis.

Basic and Diluted Net Loss per Share

Basic and Diluted Net Loss per Share – The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At February 28, 2015 and November 30, 2015, the Company had outstanding stock options outstanding, the Company does not deem these options to be dilutive as the exercise price exceeds the current fair market value of the Company’s common stock. At November 30, 2015 and 2014, the Company had did not have potentially dilutive shares outstanding.

Financial Instruments

Financial Instruments - Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, amounts due to related parties, and convertible debenture. 

 

Pursuant to ASC 820, the fair value of our financial instruments are determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

Derivative Financial Instruments

Derivative Financial Instruments – The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

 

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

 

Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. The Company uses a Black-Scholes model for valuation of the derivative. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value.

 

The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.

 

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net cash settlement of the derivative instrument could be required within the 12 months of the balance sheet date.

Comprehensive Income

Comprehensive Loss - ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at November 30, 2014 and 2013, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock-based Compensation

Stock-based Compensation – The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505-50 - Equity-Based Payments to Non-Employees. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

The fair value of each share based payment is estimated on the measurement date using the Black-Scholes model with the following assumptions, which are determined at the beginning of each year and utilized in all calculations for that year:

 

Risk-Free Interest Rate. We utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards. 

 

Expected Volatility. We calculate the expected volatility based on a volatility index of peer companies as we did not have sufficient historical market information to estimate the volatility of our own stock.

 

Dividend Yield. We have not declared a dividend on its common stock since its inception and have no intentions of declaring a dividend in the foreseeable future and therefore used a dividend yield of zero.

 

Expected Term. The expected term of options granted represents the period of time that options are expected to be outstanding. We estimated the expected term of stock options by using the simplified method. For warrants, the expected term represents the actual term of the warrant.

 

Forfeitures. Estimates of option forfeitures are based on our experience. We will adjust our estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

Revenue Recognition

Revenue Recognition – The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidence of an arrangement exists and delivery has occurred, provided the sale is fixed or determinable and collection is probable. The Company assesses whether the sale is fixed and determinable based on the payment terms associated with the transaction. If a sale is based upon a variable such as acceptance by the customer, the Company accounts for the sale as not being fixed and determinable. In these cases, the Company defers revenue and recognizes it when it becomes due and payable.

 

The Company assesses the probability of collection based on a number of factors, including past transaction history with the customer and the current financial condition of the customer. If the Company determines that collection of a fee is not reasonably assured, revenue is deferred until the time collection becomes reasonably assured. Significant management judgment and estimates must be made and used in connection with the revenue recognized in any accounting period. Material differences may result in the amount and timing of our revenue for any period if our management made different judgments or utilized different estimates.

 

Shipping and Handling Costs

Shipping and Handling costs – shipping and handling costs are included in cost of sales in the Statements of Operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements – The recent accounting pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Reclassifications

Reclassifications – Certain amounts in the prior period financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on previously reported losses, total assets or stockholders equity.

XML 35 R24.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock Options (Tables)
9 Months Ended
Nov. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of stock options outstanding and exercisable

The following table describes stock options outstanding and exercisable at November 30, 2015:

 

Options Outstanding and Exercisable

    Options Outstanding           Options Exercisable 
Range of Exercise Prices   Number   Price   Life   Number   Price   Life 
                          
$3,400    250   $3,400    .25    250   $3,400    .25 
      250              250           

 

XML 36 R25.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Promissory Note (Tables)
9 Months Ended
Nov. 30, 2015
Convertible Promissory Note Tables Abstract  
Schedule of conversion activity of debt

The table below lists the conversion activity and the shares of common stock issued pursuant to each conversion:

 

Date of Notice   Principal   Market Price*   Conversion Shares   True Up Shares   Total Shares Issued 
March 2, 2015   $14,000   $0.071788    1,005        1,005 
March 31, 2015                2,204    2,204 
May 14, 2015   $15,000   $0.203395    2,098    953    3,051 
August 10, 2015   $25,000   $0.139860    3,496        3,496 
Total   $54,000         6,599    3,157    9,756 

 

*Market Price as defined by the Typenex Note

Schedule of convertible notes payable

At August 31, 2015 and February 28, 2015, convertible notes payable included the following:

 

   November 30, 2015   February 28, 2015 
Outstanding principal balance on Typenex Note:  $77,500   $131,500 
Unamortized original issue discount   (7,650)   (12,870)
Accrued interest   97,687    76,118 
Net Convertible Notes Payable  $167,537   $194,748 

 

XML 37 R26.htm IDEA: XBRL DOCUMENT v3.19.1
Corrections To Prior Financials As Filed (Tables)
9 Months Ended
Nov. 30, 2015
Prior Period Adjustment [Abstract]  
Schedule of effects on Net loss, earnings per share, and accumulated deficit for each of the periods

16.Corrections to Prior Financials As Filed

 

Due to a change in auditors and a subsequent review of the accounting treatment surrounding the Typenex Notes, there were corrections of expenses related to the Derivative Liability and Beneficial Conversion Feature recorded on the Typenex Notes for the year ended February 28, 2015 and the three months ended May 31, 2015. The table below for the shows the effects on Net loss, earnings per share, and accumulated deficit for each of the periods.

 

Item Period Net Loss Earnings Per Share Accumulated Deficit
Typenex Note Year Ended February 28, 2015 205,522 (0.00) 205,522
Phoenix Bio Pharma Year Ended February 28, 2015 5,514,189 (0.05) 7,166,667
Go Kush, Inc Year Ended February 28, 2015 141,800 (0.00) 154,800
Accounts Payable Year Ended February 28, 2015 157,167 (0.00) 165,000
Amendment to Amortisation Year Ended February 28, 2015 (642,654)    
Total Year Ended February 28, 2015 5,376,024 (0.06) 7,691,989
         
Change in Derivative value Three months ended May 31, 2015 (66,515) (0.00) (66,515)

 

XML 38 R27.htm IDEA: XBRL DOCUMENT v3.19.1
Nature of Operations and Continuance of Business (Details Narrative) - Phoenix Bio Pharm [Member]
Jan. 05, 2015
shares
Shares issued for agreement (shares) 276,000,000
Common shares exchanged for Series B preferred shares 2,000,000
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.19.1
Summary of Significant Accounting Policies (Details Narrative)
9 Months Ended
Oct. 21, 2015
Nov. 30, 2015
shares
Oct. 22, 2015
shares
Oct. 20, 2015
shares
Feb. 28, 2015
shares
Reverse stock split .0001        
Common stock, shares outstanding   50,171 45,935   361,322,812
Dividend yield   0.00%      
Pre-Stock Split [Member]          
Common stock, shares outstanding       458,892,294  
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.19.1
Income Taxes (Details Narrative)
9 Months Ended
Nov. 30, 2015
USD ($)
Net operating losses $ 18,600,000
Deferred tax asset net operating loss $ 2,790,000
Less Than [Member]  
Expiration Date Jan. 01, 2030
Greater Than [Member]  
Expiration Date Dec. 31, 2036
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.19.1
License Agreement - Phoenix Bio Pharmaceuticals, Inc. (Details Narrative) - USD ($)
12 Months Ended
Jan. 05, 2015
Mar. 14, 2014
Feb. 28, 2015
Nov. 30, 2015
Jul. 08, 2015
Series B Preferred Stock [Member]          
Preferred stock, par value       $ 0.0001  
Convertible preferred stock, conversion basis       100  
Phoenix Bio Pharm [Member]          
Shares issued for agreement (shares) 276,000,000        
Common stock held by licensee         276,000,000
Phoenix Bio Pharm [Member] | Series B Preferred Stock [Member]          
Number of shares to be received in exchange for common stock held         2,000,000
Preferred stock, par value         $ 0.0001
Convertible preferred stock, conversion basis         100
Preferred return value of preferred shares         $ 100
Phoenix Bio Pharm [Member] | Additional License Agreement [Member]          
Shares issued for agreement (shares) 25,000        
Issuance price per share $ 0.016        
Impairment of license agreement     $ 14,014,189    
Reduction in paid in capital for impairment     $ 2,282,112    
License Agreement $ 3,000,000        
Phoenix Bio Pharm [Member] | Additional License Agreement [Member] | Pre-Stock Split [Member]          
Shares issued for agreement (shares) 250,000,000        
Shares issued for agreement $ 4,000,000        
Term of the agreement 10 years        
Useful life 10 years        
Value of stock issuance over market value of license agreement (percent) 33.00%        
Phoenix Bio Pharm [Member] | License Agreement [Member]          
Shares issued for agreement (shares)   2,600      
Phoenix Bio Pharm [Member] | License Agreement [Member] | Pre-Stock Split [Member]          
Shares issued for agreement (shares)   26,000,000      
Shares issued for agreement   $ 13,000,000      
Term of the agreement   10 years      
Useful life   10 years      
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.19.1
Cannavest, Inc. (Details Narrative) - USD ($)
Jan. 06, 2015
Dec. 23, 2014
Warrant [Member]    
Number of common shares for issued warrants 20,000,000  
Exercise price $ 0.02  
Convertible Promissory Notes [Member]    
Debt amount   $ 1,200,000
Interest rate   10.00%
Conversion price per common share   $ .02
Raw materials inventory to be acquired   $ 1,200,000
Default interest rate   12.00%
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended 12 Months Ended
Sep. 18, 2014
Aug. 31, 2014
Mar. 31, 2014
Nov. 30, 2015
Nov. 30, 2014
Feb. 28, 2015
Due from related party - loan       $ 250,184   $ 258,122
Kronos [Member]            
Lease term         4 years  
Monthly rent expense         $ 2,500  
Rent expenses       7,500    
(Increase) Decrease in security deposit       1,250 $ (1,250)  
Advisory service fees     $ 10,000 62,500   $ 120,000
Phoenix Bio Pharm [Member]            
Advance of related party loan $ 85,000          
Due from related party - loan       $ 54,234    
Russell Stone - CEO [Member]            
Ownership interest of Company       14.00%    
Mr. Humer - Director [Member]            
Consulting fee   $ 1,500        
Due to related party       $ 75,260    
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.19.1
Preferred Stock (Details Narrative)
6 Months Ended 8 Months Ended
Sep. 30, 2015
Nov. 30, 2015
USD ($)
$ / shares
shares
Series A Preferred Stock [Member]    
Preferred stock, par value   $ .0001
Conversion price per common share   1.00
Series B Preferred Stock [Member]    
Preferred stock, par value   $ 0.0001
Conversion amount (shares) | shares   100
Number of votes to cast for each preferred share owned (votes)   500
Series C Preferred Stock [Member]    
Preferred stock, par value   $ 0.0001
Conversion price per common share   $ 1.00
Preferred return value of preferred shares | $   $ 600,000
Limitation of number shares sold per month (shares) | shares   50,000
Preferred return of gross cash sales (percent)   10.00%
Series C Preferred Stock [Member] | Less Than [Member]    
Share price   $ 1.00
Number of consecutive trading days   5 days
Conversion price equals average closing bid price (percent)   75.00%
Series C Preferred Stock [Member] | Greater Than [Member]    
Proceeds from sale of converted common shares in excess than no reset | $   $ 750,000
Proceeds from sale of converted common shares in excess than return unconverted shares | $   $ 1,000,000
Series D Preferred Stock [Member]    
Preferred stock, par value   $ 0.0001
Conversion price per common share   $ 1.00
Preferred return of gross cash sales (percent) 10.00%  
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock (Details Narrative) - USD ($)
6 Months Ended 9 Months Ended 12 Months Ended
Aug. 14, 2015
Mar. 13, 2015
Jan. 05, 2015
Dec. 16, 2014
Dec. 09, 2014
Sep. 17, 2014
Mar. 14, 2014
Feb. 27, 2014
Aug. 31, 2015
Nov. 30, 2015
Feb. 28, 2015
Oct. 22, 2015
Oct. 20, 2015
Aug. 23, 2013
Aug. 22, 2013
Common stock, par value (in dollars per share)                   $ 0.001 $ 0.001     $ 0.001  
Common stock, shares authorized                   1,000,000,000 1,000,000,000     990,000,000 99,000,000
Common stock, shares issued                   50,171 361,322,812        
Common stock, shares outstanding                   50,171 361,322,812 45,935      
Shares issued upon conversion of convertible debt (shares)                 9,756            
Prinicpal amount of debt converted                 $ 54,000 $ 54,000          
Shares issued upon true-up of convertible debt (shares)                 3,157            
Convertible Promissory Notes [Member]                              
Shares issued upon conversion of convertible debt (shares)                     1,002        
Consulting Agreement [Member]                              
Shares issued for consulting services (shares)         500 533,333                  
Securities Agreement [Member]                              
Shares issued for agreement (shares)       667                      
Distribution Agreement [Member]                              
Shares issued for agreement (shares)   200                          
Russell Stone - CEO [Member]                              
Issuance of shares               500              
Phoenix Bio Pharm [Member]                              
Shares issued for agreement (shares)     276,000,000                        
Shares of common returned to the Company (shares) 27,600                            
Phoenix Bio Pharm [Member] | License Agreement [Member]                              
Shares issued for agreement (shares)             2,600                
Phoenix Bio Pharm [Member] | Additional License Agreement [Member]                              
Shares issued for agreement (shares)     25,000                        
Pre-Stock Split [Member]                              
Common stock, shares outstanding                         458,892,294    
Common stock reserved for issuance                         311,540,534    
Pre-Stock Split [Member] | Convertible Promissory Notes [Member]                              
Shares issued upon conversion of convertible debt (shares)                 97,560,000   10,020,000        
Prinicpal amount of debt converted                 $ 54,000   $ 38,500        
Shares issued upon true-up of convertible debt (shares)                 31,575,175            
Pre-Stock Split [Member] | Consulting Agreement [Member]                              
Shares issued for consulting services (shares)         5,000,000 53                  
Shares issued for consulting services         $ 119,666                    
Pre-Stock Split [Member] | Securities Agreement [Member]                              
Shares issued for agreement (shares)       6,666,667                      
Shares issued for agreement       $ 600,000                      
Pre-Stock Split [Member] | Distribution Agreement [Member]                              
Shares issued for agreement (shares)   200,000                          
Pre-Stock Split [Member] | Russell Stone - CEO [Member]                              
Issuance of shares               5,000,000              
Pre-Stock Split [Member] | Phoenix Bio Pharm [Member]                              
Shares of common returned to the Company (shares) 276,000,000                            
Pre-Stock Split [Member] | Phoenix Bio Pharm [Member] | License Agreement [Member]                              
Shares issued for agreement (shares)             26,000,000                
Shares issued for agreement             $ 13,000,000                
Pre-Stock Split [Member] | Phoenix Bio Pharm [Member] | Additional License Agreement [Member]                              
Shares issued for agreement (shares)     250,000,000                        
Shares issued for agreement     $ 4,000,000                        
Preferred Stock [Member]                              
Shares issued in an exchange of securities (shares) 2,000,000                            
Common Stock [Member]                              
Common stock, shares issued                   24,512          
Common stock, shares outstanding                   24,512          
Common stock reserved for issuance                   31,154          
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock Options (Details) - 2014 Stock Awards Plan [Member]
9 Months Ended
Nov. 30, 2015
$ / shares
shares
Stock options Outstanding, end | shares 250
Stock options Outstanding, exercise price | $ / shares $ 3,400
Life of stock options, outstanding 2 months 30 days
Stock options Exercisable, end | shares 250
Stock options Exercisable, exercise price | $ / shares $ 3,400
Life of stock options, exercisable 2 months 30 days
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.19.1
Common Stock Options (Details Narrative) - 2014 Stock Awards Plan [Member] - USD ($)
Feb. 18, 2015
Feb. 27, 2014
Nov. 30, 2015
Feb. 28, 2015
Jun. 04, 2014
Authorized common shares to grant under plan         1,000
Number of options unvested, end period     250    
Former CEO [Member]          
Stock options granted   500      
Exercise price of options granted   $ 3,400      
Number of options vested   250      
Number of options unvested, end period   250      
Stock options cancelled 250        
Number of options vested and exerciseable options       250  
Pre-Stock Split [Member]          
Authorized common shares to grant under plan         10,000,000
Pre-Stock Split [Member] | Former CEO [Member]          
Stock options granted   5,000,000      
Exercise price of options granted   $ 0.34      
Value of stock options granted   $ 551,363      
Number of options vested   2,500,000      
Vesting term of options   3 years      
Number of options unvested, end period   2,500,000      
Stock options cancelled 2,500,000        
Number of options vested and exerciseable options       2,500,000  
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Promissory Note (Details) - USD ($)
6 Months Ended 9 Months Ended
Aug. 31, 2015
Nov. 30, 2015
Debt principal amount $ 54,000 $ 54,000
Conversion shares 6,599  
True up shares 3,157  
Total shares issued 9,756  
Notice #1 [Member]    
Date of Notice Mar. 02, 2015  
Debt principal amount $ 14,000  
Market Price [1] $ 0.071788  
Conversion shares 1,005  
Total shares issued 1,005  
Notice #2 [Member]    
Date of Notice Mar. 31, 2015  
True up shares 2,204  
Total shares issued 2,204  
Notice #3 [Member]    
Date of Notice May 14, 2015  
Debt principal amount $ 15,000  
Market Price [1] $ .203395  
Conversion shares 2,098  
True up shares 953  
Total shares issued 3,051  
Notice #4 [Member]    
Date of Notice Aug. 10, 2015  
Debt principal amount $ 25,000  
Market Price [1] $ .139860  
Conversion shares 3,496  
Total shares issued 3,496  
[1] Market Price as defined by Typenex Note
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Promissory Note (Details 1) - Typenex Note [Member] - USD ($)
Nov. 30, 2015
Feb. 28, 2015
Outstanding principal balance $ 77,500 $ 131,500
Unamortized beneficial conversion feature (7,650) (12,870)
Accrued interest 97,687 76,118
Net Convertible Notes Payable $ 167,537 $ 194,748
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.19.1
Convertible Promissory Note (Details Narrative) - USD ($)
9 Months Ended
Feb. 12, 2015
Jun. 24, 2014
Nov. 30, 2015
Nov. 30, 2014
Oct. 20, 2015
Feb. 28, 2015
Jan. 28, 2015
Jan. 24, 2015
Jan. 09, 2015
Sep. 17, 2014
Proceeds from notes payable     $ 42,350 $ 135,000            
Derivative liability     151,529     $ 169,868        
Pre-Stock Split [Member]                    
Common stock reserved for conversion of debt         311,540,534          
Typenex Note [Member]                    
Outstanding debt amount     77,500     131,500        
Securities Agreement [Member] | Less Than [Member]                    
Ownership interest                   4.99%
Securities Agreement [Member] | Greater Than [Member]                    
Ownership interest                   9.99%
Securities Agreement [Member] | Typenex Note [Member]                    
Debt amount   $ 1,105,000         $ 890,800      
Conversion price per common share   $ 1.00                
Original issue discount   $ 20,000         85,000      
Number of tranches   11                
Proceeds from notes payable   $ 150,000                
Membership interest pledged   40.00%                
Warrant issued fair value   $ 552,500                
Debt installment amount   $ 61,339                
Number of consecutive trading days   20 days                
Conversion price equals average closing bid price (percent)   70.00%                
Share price   $ .35                
Conversion price reduction due to closing bid price (percent)   65.00%                
Conversion price reduction due to availability of common stock (percent)   5.00%                
Prepayment premium (percent)   125.00%                
Late fee for failure to deliver shares   $ 500                
Late fee applicable lender conversion share value (percent)   2.00%                
Maximum late fee applicable lender conversion share value (percent)   200.00%                
Default interest rate   22.00%                
Major default rate of conversion eligible balance (percent)   15.00%                
Minor default rate of conversion eligible balance (percent)   5.00%                
Number of trading days from coversion date   23 days                
Outstanding debt amount             $ 218,028      
Amount of penalty waived $ 26,755                  
Derivative liability     $ 143,335     $ 169,868        
Securities Agreement [Member] | Typenex Note [Member] | Tranche [Member]                    
Debt amount   $ 85,000                
Interest rate   10.00%                
Original issue discount   $ 8,500                
Debt term   23 months                
Securities Agreement [Member] | Typenex Note [Member] | Less Than [Member]                    
Ownership interest   4.99%                
Market capitalization under agreement   $ 10,000,000                
Securities Agreement [Member] | Typenex Note [Member] | Greater Than [Member]                    
Ownership interest   9.99%                
Securities Agreement [Member] | Typenex Note [Member] | Notice #1 [Member]                    
Debt amount               $ 1,100,000    
Default penalty of outstanding balance (percent)                 115.00%  
Outstanding debt amount                 $ 239,484  
Common stock reserved for conversion of debt               5,092    
Securities Agreement [Member] | Typenex Note [Member] | Notice #1 [Member] | Pre-Stock Split [Member]                    
Common stock reserved for conversion of debt               50,925,000    
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.19.1
Promissory Note (Details Narrative) - Promissory Note [Member]
Aug. 29, 2014
USD ($)
Debt amount $ 100,000
Interest rate 12.00%
Debt term 60 days
Financing fees $ 18,000
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.19.1
Securities Purchase Agreement (Details Narrative) - USD ($)
12 Months Ended
Dec. 16, 2014
Dec. 09, 2014
Sep. 17, 2014
Aug. 29, 2014
Feb. 28, 2015
Nov. 30, 2015
Jan. 06, 2015
Aug. 23, 2013
Common stock, par value (in dollars per share)         $ 0.001 $ 0.001   $ 0.001
Issuance of warrants         $ 552,500      
Reimbursed costs for due diligence review         $ 20,000      
Warrant [Member]                
Exercise price             $ 0.02  
Securities Agreement [Member]                
Shares issued for agreement (shares) 667              
Proceeds from issuance of purchasing units     $ 100,000 $ 500,000        
Financing fees     $ 52,000 $ 18,000        
Liquidated damages first 30 days (percent)     3.00%          
Liquidated damages subsequent 30 days (percent)     2.00%          
Securities Agreement [Member] | Less Than [Member]                
Ownership interest     4.99%          
Securities Agreement [Member] | Greater Than [Member]                
Ownership interest     9.99%          
Securities Agreement [Member] | Warrant [Member]                
Shares issued for agreement (shares) 1,333              
Securities Agreement [Member] | Pre-Stock Split [Member]                
Shares issued for agreement (shares) 6,666,667              
Shares issued for agreement $ 600,000              
Securities Agreement [Member] | Pre-Stock Split [Member] | Warrant [Member]                
Shares issued for agreement (shares) 13,333,334              
Securities Agreement [Member] | Purchasing Unit [Member]                
Unit price (per unit)     $ 0.09          
Number of common shares per unit     1          
Number of warrants per unit     2          
Common stock, par value (in dollars per share)     $ .001          
Warrant term     5 years          
Exercise price     $ .20          
Consulting Agreement [Member]                
Warrant term     5 years          
Exercise price     $ .20          
Issuance of warrants     $ 104,578          
Shares issued for consulting services (shares)   500 533,333          
Consulting Agreement [Member] | Pre-Stock Split [Member]                
Shares issued for consulting services (shares)   5,000,000 53          
Shares issued for consulting services   $ 119,666            
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.19.1
Corrections To Prior Financials As Filed (Details) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Nov. 30, 2015
May 31, 2015
Nov. 30, 2014
Nov. 30, 2015
Nov. 30, 2014
Feb. 28, 2015
Net loss $ (160,056)   $ (1,197,896) $ (563,246) $ (2,262,566)  
Earnings per share $ (0.00)   $ 0.01 $ 0 $ 0.03  
Accumulated deficit $ (18,594,466)     $ (18,594,466)   $ (18,031,220)
Adjustments for Corrections [Member]            
Net loss   $ 66,515       $ 5,376,024
Earnings per share   $ 0.00       $ (.06)
Accumulated deficit   $ 66,515       $ 7,691,989
Adjustments for Corrections [Member] | Amortization Expense [Member]            
Net loss           (642,654)
Adjustments for Corrections [Member] | Accounts Payable [Member]            
Net loss           $ 157,167
Earnings per share           $ 0.00
Accumulated deficit           $ 165,000
Adjustments for Corrections [Member] | Go Kush, Inc. [Member]            
Net loss           $ 141,800
Earnings per share           $ 0.00
Accumulated deficit           $ 154,800
Adjustments for Corrections [Member] | Phoenix Bio Pharm [Member]            
Net loss           $ 5,514,189
Earnings per share           $ (.05)
Accumulated deficit           $ 7,166,667
Typenex Note [Member] | Adjustments for Corrections [Member]            
Net loss           $ 205,522
Earnings per share           $ 0.00
Accumulated deficit           $ 205,522
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.19.1
Subsequent Events (Details Narrative) - shares
Feb. 26, 2019
Jan. 15, 2019
Jan. 11, 2019
Dec. 17, 2018
Dec. 04, 2018
Nov. 09, 2018
Oct. 03, 2018
Sep. 24, 2018
Sep. 21, 2018
Feb. 18, 2016
Nov. 05, 2015
Nov. 04, 2015
Jan. 05, 2015
Number of shares issued to rectify mistake for stock split (shares)                     1,941    
Subsequent Event [Member]                          
Shares issued for settlements during the period (shares) 315,928 54,580   675,028                  
Subsequent Event [Member] | Settlement Agreements [Member]                          
Shares issued new issues during the period (shares) 183,718                        
Shares issued for settlements during the period (shares) 5,460 53,500   191,668 229,600                
Stock issued for services (shares) 126,750 1,080   483,360                  
Subsequent Event [Member] | Restricted Common Stock [Member] | Private Placement [Member]                          
Shares issued new issues during the period (shares)               30,502,375          
Subsequent Event [Member] | Restricted Common Stock [Member] | Private Placement [Member] | Phoenix Life Sciences International Limited [Member]                          
Shares issued with rule 802 (shares)               29,802,375          
Stockholder's equity, exchange ratio               1:1          
Stock issued for services (shares)               700,000          
Series C Preferred Stock [Member] | Subsequent Event [Member]                          
Number of preferred shares cancelled (shares)           2,000,000              
YP Holding, LLC [Member] | Subsequent Event [Member] | Settlement Agreements [Member]                          
Shares issued for settlements during the period (shares)     500,600                    
YP Holding, LLC [Member] | Series C Preferred Stock [Member]                          
Number of shares issued in the exchange (shares)                   1,000,000      
Number of common shares exchanged for preferred stock (shares)                   667      
Number of preferred shares converted to common stock (shares)                   2,000      
Phoenix Bio Pharm [Member]                          
Shares issued for settlements during the period (shares)                         276,000,000
Phoenix Bio Pharm [Member] | Series B Preferred Stock [Member]                          
Number of shares issued in the exchange (shares)                       2,000,000  
Number of common shares exchanged for preferred stock (shares)                       27,600  
Number of common shares cancelled (shares)                       27,600  
Number of preferred shares cancelled (shares)                 2,000,000        
KHAOS Media Group [Member] | Subsequent Event [Member] | Restricted Common Stock [Member]                          
Stock issued for services (shares)             48,000            
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