10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2019

[  ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________ to ___________

Commission File Number 000-55557 

CEN BIOTECH, INC.

(Exact name of registrant as specified in its charter)

Ontario, Canada	-
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
7405 Tecumseh Road East Suite 300 Windsor, Ontario Canada	N8T 1G2
(Address of principal executive offices)	(Zip code)

(519) 419-4958

(Registrant’s telephone number, including area code)

N/A

(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 [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 [X]	Smaller reporting company [X]
Emerging growth company [X]

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 Exchange Act Rule 12b-2 of the Exchange Act): Yes [  ] No [X]

Securities registered pursuant to Section 12(b) of the Act: 

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

As of August 19, 2019, there were 26,843,363, shares of common stock, no par value per share (“common stock”), of the registrant outstanding.

TABLE OF CONTENTS

PART I
ITEM 1	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	3
ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11
ITEM 4	CONTROLS AND PROCEDURES	11
PART II
ITEM 1	LEGAL PROCEEDINGS	12
ITEM 1A	RISK FACTORS	12
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	12
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	13
ITEM 4	MINE SAFETY DISCLOSURE	13
ITEM 5	OTHER INFORMATION	13
ITEM 6	EXHIBITS	14

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report includes “forward-looking statements” that represent our beliefs, projections and predictions about future events. There are statements in this quarterly report that are not historical facts. All statements other than statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. These “forward-looking statements” can be identified by use of terminology such as “anticipate,” “believe,” “estimate,” “expect,” “hope,” “intend,” “may,” “plan,” “positioned,” “project,” “propose,” “should,” “strategy,” “will,” or any similar expressions, as well as statements in the future tense. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements.

Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Although we believe that our assumptions underlying such forward-looking statements are reasonable, we do not guarantee our future performance, and our actual results may differ materially from those contemplated by these forward-looking statements. Our assumptions used for the purposes of the forward-looking statements made in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances, including the development of our lines of business and any products that we may manufacture or sell and our ability to raise additional funding sufficient to implement our strategy, as well as assumptions regarding Canadian and U.S. laws regarding the consumer or retail sale of marijuana products and accessories and the manufacture and distribution of such products and accessories, including zoning and banking regulations. We also assume that we will be able to raise additional capital to fund our operations while we develop a line of business to generate net revenues. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. In light of these numerous risks and uncertainties, we cannot provide any assurance that the results and events contemplated by our forward-looking statements contained in this quarterly report will in fact transpire. These forward-looking statements are not guarantees of future performance. You are cautioned to not place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements.

PART I
ITEM 1. FINANCIAL STATEMENTS
Contents
	Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Unaudited condensed consolidated balance sheets	F-1
Unaudited condensed consolidated statements of operations	F-2
Unaudited condensed consolidated statements of shareholders’ deficit	F-3
Unaudited condensed consolidated statements of cash flows	F-4
Notes to the unaudited condensed consolidated financial statements	F-5

3

CEN BIOTECH, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2019			December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	15,972		$	3,193
Property, plant and improvements
Property and equipment, net		157,317			166,509
Other assets
Operating lease right-of-use assets		250,484			-
Other receivable		419,958			418,905
Note receivable – related party		44,859			44,859
Advances to CEN Biotech Ukraine LLC – related party		995,328			875,328
Intangible assets, net		5,593,365			5,805,771
Total assets	$	7,477,283		$	7,314,565
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	206,521		$	206,521
Loans payable		10,119,178			10,107,205
Loans payable – related parties		1,362,318			1,360,806
Convertible notes payable		4,318,916			3,597,760
Convertible notes payable – related parties		926,368			926,368
Accrued interest		8,206,898			6,860,494
Accrued interest – related parties		1,119,126			946,227
Operating lease liabilities		42,306			-
Accrued expenses		492,235			402,377
Total current liabilities		26,793,866			24,407,758
Operating lease liabilities, less current portion		205,327			-
Patent acquisition liability		1,010,000			1,010,000
Convertible notes, less current portion		1,386,122			1,545,887
Convertible notes – related parties, less current portion		1,632,313			1,612,313
Total liabilities		31,027,628			28,575,958
Shareholders’ deficit
Common stock; unlimited authorized shares; 26,813,363 and 25,473,363 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. No par value.		-			-
Additional paid-in capital		15,198,110			14,393,660
Accumulated deficit		(38,748,455	)		(35,655,053	)
Total shareholders’ deficit		(23,550,345	)		(21,261,393	)
Total liabilities and shareholders’ deficit	$	7,477,283		$	7,314,565

See accompanying notes to financial statements.

F-1

CEN BIOTECH, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

	For the three months ended June 30,						For the six months ended June 30,
	2019			2018			2019			2018
Operating expenses
Consulting fees	$	178		$	48,500		$	19,120		$	60,485
Consulting fees – related parties		37,759			45,839			68,959			77,039
Stock based compensation		546,150			179,800			713,550			347,200
General and administrative		412,527			694,595			600,212			1,136,434
Total operating expenses		996,614			968,734			1,401,841			1,621,158
Loss from operations		(996,614	)		(968,734	)		(1,401,841	)		(1,621,158	)
Other income (expense)
Interest expense		(714,791	)		(608,670	)		(1,416,679	)		(1,203,173	)
Interest expense – related parties		(114,226	)		(105,292	)		(227,439	)		(209,578	)
Interest income		2,052			-			4,097			-
Foreign exchange gain (loss)		(27,046	)		23,155			(51,540	)		53,598
Other expense, net		(854,011	)		(690,807	)		(1,691,561	)		(1,359,153	)
Net loss	$	(1,850,625	)	$	(1,659,541	)	$	(3,093,402	)	$	(2,980,311	)
Net loss per share:
Basic and diluted	$	(0.07	)	$	(0.07	)	$	(0.12	)	$	(0.12	)
Weighted average number of shares outstanding
Basic and diluted		26,173,473			25,222,721			25,836,540			25,188,132

See accompanying notes to financial statements.

F-2

CEN BIOTECH, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Shareholders’ Deficit

(Unaudited)

			Common		Additional					Total
	Common		Shares		Paid-in		Accumulated			Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balances, January 1, 2018		25,131,843	$	-	$	9,110,041	$	(28,124,692	)	$	(19,014,651	)
Patent acquisition liability modification		-		-		4,380,000		-			4,380,000
Stock-based compensation		20,000		-		347,200		-			347,200
Issuance of common stock – interest shares		96,400		-		59,768		-			59,768
Issuance of common stock – legal consulting		125,000		-		77,500		-			77,500
Net loss		-		-		-		(2,980,311	)		(2,980,311	)
Balances, June 30, 2018		25,373,243	$	-	$	13,974,509	$	(31,105,003	)	$	(17,130,494	)
Balances, January 1, 2019		25,473,363	$	-	$	14,393,660	$	(35,655,053	)	$	(21,261,393	)
Stock-based compensation		1,250,000		-		713,550		-			713,550
Issuance of common stock – interest shares		90,000		-		90,900		-			90,900
Net loss		-		-		-		(3,093,402	)		(3,093,402	)
Balances, June 30, 2019		26,813,363	$	-	$	15,198,110	$	(38,748,455	)	$	(23,550,345	)

See accompanying notes to financial statements.

F-3

CEN BIOTECH, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the six months ended June 30,
	2019			2018
Cash flows from operating activities
Net loss	$	(3,093,402	)	$	(2,980,311	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		9,192			5,038
Amortization		212,406			212,406
Stock-based compensation – employees		713,550			347,200
Stock-based compensation – others		-			77,500
Non-cash interest expense		1,382,764			1,170,577
Non-cash interest expense – related parties		227,439			209,576
Deferred lease expense		-			27,152
Foreign exchange loss (gain)		51,540			(53,598	)
Changes in operating assets and liabilities which provided (used) cash
Lease right-of-use assets		5,842			-
Other receivable		(1,053	)		(242,558	)
Accounts payable		(3,698	)		62,580
Operating lease liabilities		(8,693	)		-
Accrued expenses		89,858			44,103
Net cash used in operating activities		(414,255	)		(1,120,335	)
Cash flows from investing activities
Advance on business acquisition		(120,000	)		-
Leasehold improvements in progress		-			(5,439	)
Net cash used in investing activities		(120,000	)		(5,439	)
Cash flows from financing activities
Issuance of loans payable		-			380,000
Repayment of loans payable		-			(230,000	)
Issuance of loans payable – related parties		-			225,000
Issuance of convertible notes		533,034			707,800
Repayment of convertible notes		(6,000	)		(20,000	)
Issuance of convertible notes – related parties		20,000			-
Net cash provided by financing activities		547,034			1,062,800
Net increase (decrease) in cash and cash equivalents		12,779			(62,974	)
Cash and cash equivalents, beginning of period		3,193			84,978
Cash and cash equivalents, end of period	$	15,972		$	22,004
Supplemental cash flows disclosures
Cash paid for interest	$	33,913		$	32,598
Non-cash transactions - investing and financing activities
Patent acquisition liability modification	$	-		$	4,380,000

See accompanying notes to financial statements.

F-4

CEN BIOTECH, INC. AND SUBSIDIARY

Notes to the Condensed Consolidated Financial Statements (Unaudited)

(All amounts are in US dollars unless otherwise stated.)

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the condensed consolidated financial statements of the Company for the year ended December 31, 2018 and notes thereto.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s annual report on Form 10-K for the year ended December 31, 2018.

Loss per Share

Net loss per common share is computed pursuant to ASC 260-10-45. Basic loss per share is computed based on the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the diluted weighted average common shares outstanding, which includes the effect of potentially dilutive securities. During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of net loss per share. Diluted earnings per share is similarly computed except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock and convertible notes, if including such potential shares of common stock is dilutive. For the three-months ended June 30, 2019 and 2018, the common stock equivalents of the convertible note agreements were not included in diluted earnings per share computations because their effect was antidilutive.

Share Purchase Agreement

On July 31, 2018, the Company entered into a Share Purchase Agreement with AstralENERGY Solar Manufacturing Corporation, LTD. (“AstralENERGY”) to acquire 70% of the outstanding common stock of AstralENERGY. The Company will issue an aggregate 2,500,000 shares of common stock of the Company as consideration for the acquisition. AstralENERGY is a manufacturer of architecturally designed solar panels for residential and commercial solar production and has also developed integrated multi-function LED street lighting systems. Consummation of the acquisition is subject to the completion of certain conditions specified in the agreement. As of August 19, 2019, this transaction has not closed.

Merger Agreement

On June 21, 2019, Company entered into a Merger Agreement (the “Merger Agreement”) with Caduceus Software Systems Corp. (“CSOC”), Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”).  Pursuant to the Merger Agreement, the Company, the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to which the Company will merge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”).

F-5

Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same may be amended from time to time (the “WBCA”) in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the WBCA. The Merger will become effective when Articles of Merger are filed with the Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”).

Upon the Effective Time, each share of the Company’s issued and outstanding common stock, no par value per share, (the “CEN Common Stock”) shall be converted into and shall become one (1) fully paid and nonassessable share of common stock, par value $0.001 per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and no payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and no cash or other consideration shall be delivered or deliverable in exchange therefor.

Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least four (4) persons total, and thereafter to add three (3) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC.

The Merger Agreement includes customary representations, warranties and covenants by the respective parties. For example, in the Merger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be complete and will be based on the books and records of CSOC, and fairly present the financial condition of CSOC as of the respective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects.

The Company and CSOC have each agreed, that from the Effective Time, until the first to occur of the Closing or the termination of the Merger Agreement, not to solicit or initiate discussions with third parties regarding other acquisition proposals.

Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing:

● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

● complete a 1 for 5,000 reverse split of the CSOC Common Stock;

● redeem or terminate any derivatives of CSOC;

● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws;

● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and

● file a Form 14f-1 with the SEC at least 10 days prior to the Closing.

F-6

Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing:

● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and

● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock.

Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon:

● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing;

● CSOC having no liabilities as of the Closing;

● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and

● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders.

Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is not cured within five (5) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (1) bring an action for specific performance of the Merger Agreement or (2) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement.

The Merger Agreement can be terminated any time prior to the Closing pursuant to the following:

● mutual written consent of the Company and CSOC;

● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger;

● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement;

● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement;

● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or

● by either the Company or CSOC if the Closing has not occurred by August 30, 2019.

F-7

If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC may then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000. If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company may then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000 and an additional sum of $50,000. If the Merger Agreement is terminated because the Closing does not occur for any reason, other than the default thereunder of any of the parties, the parties shall not owe each other any payment amounts.

The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any such person with the other party in connection with transactions contemplated by the Merger Agreement.

There can be no assurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all.

As of August 19, 2019, the Merger Agreement has not closed. The Company has not determined how to account for this transaction as of August 19, 2019.

NOTE 2 – NEW ACCOUNTING STANDARD

Adoption of New Accounting Standard

The Company adopted Accounting Standards Codification (ASC) 842, “Leases” using the modified retrospective approach, effective January 1, 2019, on its condensed consolidated financial statements. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods.

The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard.

NOTE 3 – GOING CONCERN UNCERTAINTY / MANAGEMENT PLANS

The accompanying condensed consolidated financial statements have been prepared in contemplating continuation of the Company as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. The Company had an accumulated deficit of $38,748,455 at June 30, 2019 and had no committed source of additional debt or equity financing. The Company has not had any operating revenue and does not foresee any operating revenue in the near term. The Company has relied on the issuance of loans payable and convertible debt instruments to finance its expenses, including notes that are in default, as described in Notes 7, 8, 9, and 10. The Company will be dependent upon raising additional capital through placement of our common stock, notes or other securities in order to implement its business plan or additional borrowings, including from related parties. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

F-8

The Company’s cash position may not be sufficient to support the Company’s daily operations or its ability to undertake any business activity that will generate net revenue.

NOTE 4 – PROPERTY, PLANT AND IMPROVEMENTS, NET

Property and equipment, net consists of the following as of:

	June 30, 2019			December 31, 2018
Leasehold improvements	$	166,163		$	166,163
Furniture and equipment		17,668			17,668
Accumulated depreciation		(26,514	)		(17,322	)
Net property, plant and improvements	$	157,317		$	166,509

Depreciation expense was $4,596 for each of the three-months ended June 30, 2019 and 2018, respectively, and $9,192 and $5,038 for the six months ended June 30, 2019 and 2018, respectively.

NOTE 5 – ADVANCES TO CEN BIOTECH UKRAINE

At June 30, 2019 and December 31, 2018, the Company had advances of $995,328 and $875,328, respectively, to CEN Biotech Ukraine, LLC, a related party, (see Note 13). The advances were for the purpose of funding the operations of CEN Biotech Ukraine, LLC and are unsecured, non-interest bearing, and are due on demand.

NOTE 6 – INTANGIBLE ASSETS

On September 12, 2016, the Company executed an agreement dated August 31, 2016, to acquire assets, including a patent related to LED Lighting, from Tesla Digital, Inc., a Canadian Corporation, and Stevan (Steve) Pokrajac (the “Sellers”).

Material consideration given by Company was: (a) Shares of CEN common stock equal to $5 million upon commencement of public trading (b) The transfer of real properties located at 135 North Rear Road, Lakeshore, Ontario, Canada having a fair value of $2,161,467 and 1517-1525 Ridge Road having a purchase cost (including other related disbursements) to the Company of $202,666.

The patent remains in the name of Tesla Digital, Inc. until full settlement of the terms of the agreement. In the interim, pursuant to an updated agreement executed on April 15, 2019 between the Company and the Sellers, CEN has reaffirmed the rights to use the patented technology.

In addition, the Company agreed to employ Stevan Pokrajac, by an LED subsidiary that the Company plans to form, but which has not yet been formed, in connection with the development of the acquired technology with compensation equal to $200,000 per year, commencing with the start of operations.

F-9

In March 2018, the Tesla agreement was amended to replace the $5 million stock consideration commitment with a commitment to issue one million registered shares of CEN common stock with a closing date of September 30, 2018. On October 4, 2018, this agreement was amended to extend the closing date to December 15, 2018. On April 3, 2019, the Company entered into an amendment which extended the closing date of the agreement to December 31, 2019. The modification of the agreement converted a fixed value of shares to a fixed number of shares. Accordingly, the liability was reduced and additional paid in capital was increased by $4,380,000 to reflect the fair value of the shares committed at the date of the amendment. As of June 30, 2019 and December 31, 2018, the fair value of this liability was $1,010,000. This liability will be remeasured at each reporting date using the current fair value of CEN’s common shares.

The Company intends to explore using the patented LED Lighting Technology across manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired, other than the patent, included certain machinery and raw materials, which were old and non-functioning and accordingly, had no fair value.

The intangible assets consists of the following:

	June 30, 2019			December 31, 2018
Lighting patent	$	6,797,000		$	6,797,000
Accumulated amortization		(1,203,635	)		(991,229	)
Net	$	5,593,365		$	5,805,771

As of June 30, 2019 and December 31, 2018, there is no impairment expense recognized based on the Company’s expectations that it will be able to monetize the patent.

The lighting patent is being amortized straight-line over 16 years. Expected amortization expense is $424,812 per year through 2031, with the remaining $283,215 to be amortized in 2032.

F-10

NOTE 7 – LOANS PAYABLE

Loans payable consist of the following:

	June 30, 2019		December 31, 2018
Loan payable to Global Holdings International, LLC, which bears interest at 15% per annum after defaulting on the maturity date of June 30, 2016. This note is secured by the Company's equipment.	$	9,675,000	$	9,675,000
Mortgage payable in default to ARG & Pals, Inc., for the original amount of CAD $385,000. The mortgage bears interest at 22% per annum, and matured on November 21, 2018.		294,178		282,205
Loan payable in default to an individual, issued January 17, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		50,000		50,000
Loan payable in default to an individual, issued April 13, 2018, with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		100,000		100,000
Total loans payable (all current)	$	10,119,178	$	10,107,205

We are in default of $9,675,000 of debt that is secured by certain equipment that we value at approximately $9,000. The remainder of our debt that is in default is not secured.

During the three-month periods ended June 30, 2019 and 2018, 18,000 and 26,000 common shares were issued to individuals for loans made to CEN, respectively. Accordingly, during the three-month periods ended June 30, 2019 and 2018, $18,180 and $16,120 in interest expense and additional paid-in capital was recorded, respectively.

During the six-month periods ended June 30, 2019 and 2018, 36,000 and 42,400 common shares were issued to individuals for loans made to CEN, respectively. Accordingly, during the six-month periods ended June 30, 2019 and 2018, $36,360 and $26,288 in interest expense and additional paid-in capital was recorded, respectively.

F-11

NOTE 8 – LOANS PAYABLE- RELATED PARTY

Loans payable - related party consists of the following:

	June 30, 2019		December 31, 2018
Loan payable in default to the spouse of Bill Chaaban, President of CEN, bears an interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.	$	235,818	$	234,306
Loan payable in default to a former director of Creative, former parent company, bears interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.		601,500		601,500
Loan payable to R&D Labs Canada, Inc., whose president is Bill Chaaban, also the President of CEN, bearing interest at 8% per annum. This is an unsecured loan with a maturity date of October 2, 2019. R&D Labs Canada is a company owned by Bill Chaaban’s spouse.		300,000		300,000
Loan payable in default to the spouse of Joseph Byrne, CEO of CEN, issued January 12, 2018 with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		100,000		100,000
Loan payable in default to Alex Tarrabain, a Director of CEN, issued January 17, 2018 with a 30-day maturity, bearing share interest of 3,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		75,000		75,000
Loan payable in default to Joseph Byrne, CEO of CEN, issued January 24, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		50,000		50,000
Total loans payable - related party		1,362,318		1,360,806
Less: current portion		1,362,318		1,360,806
Long-term portion loans payable - related party	$	-	$	-

Attributable related party accrued interest was $411,345 and $357,373 as of June 30, 2019 and December 31, 2018, respectively. Interest expense attributable to related party loans was $54,428 and $43,367 for the three-months ended June 30, 2019 and 2018, respectively, and was $108,512 and $86,409 for the six-months ended June 30, 2019 and 2018, respectively.

During both three-month periods ended June 30, 2019 and 2018, 27,000 common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the three-month periods ended June 30, 2019 and 2018, $27,270 and $16,740 in related party interest expense and additional paid-in capital was recorded, respectively.

During both six-month periods ended June 30, 2019 and 2018, 54,000 common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the six-month periods ended June 30, 2019 and 2018, $54,540 and $33,480 in related party interest expense and additional paid-in capital was recorded, respectively.

F-12

NOTE 9 – CONVERTIBLE NOTES

Convertible notes payable consists of the following:

	June 30, 2019		December 31, 2018
Convertible note payable, due on demand, bearing interest at 7% per annum with conversion rights for 335,833 common shares.	$	844,111	$	809,755
Convertible notes payable to multiple private investors, including certain notes in default, bearing interest at 5% per annum with conversion rights for 3,013,190 common shares, maturing at various dates between May 2018 and May 2021.		4,860,927		4,333,892
Total convertible notes payable		5,705,038		5,143,647
Less current portion		4,318,916		3,597,760
Convertible notes payable, less current portion	$	1,386,122	$	1,545,887

These notes may be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of 3,349,023 common shares.

As of August 19, 2019, we are currently in default of $2,054,707 of convertible notes payable, which are convertible into 1,287,652 shares of common stock.

F-13

NOTE 10 – CONVERTIBLE NOTES - RELATED PARTY

Convertible notes - related party consists of the following at:

	June 30, 2019		December 31, 2018
Convertible note due to the spouse of Bill Chaaban, President of CEN, which bears an interest at 12% per annum. This note is convertible to 867,576 common shares with a maturity date of August 17, 2020.	$	1,388,122	$	1,388,122
Convertible notes in default due to Harold Aubrey de Lavenu, a Director of CEN, bearing interest at 5% per annum. These notes are convertible to 548,980 common shares which matured on March 31, 2019.		878,368		878,368
Convertible note in default due to Alex Tarrabain, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 30,000 common shares and matured on March 31, 2019.		48,000		48,000
Convertible notes due to Joseph Byrne, CEO of CEN, bearing interest at 12% per annum. This note is convertible to 140,120 common shares with a maturity date of August 17, 2020.		224,191		224,191
Convertible note due to Darren Ferris, brother of Ameen Ferris, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 12,500 common shares with a maturity date of June 19, 2021.		20,000		-
Total convertible notes payable - related party		2,558,681		2,538,681
Less current portion		926,368		926,368
Convertible notes payable - related party, less current portion	$	1,632,313	$	1,612,313

Attributable related party accrued interest was $707,781 and $588,854 as of June 30, 2019 and December 31, 2018, respectively. Interest expense attributable to related party convertible notes was $59,798, and $61,925 for the three months ended June 30, 2019 and 2018, respectively, and was $118,927 and $123,169 for the six-months ended June 30, 2019 and 2018, respectively.

These notes may be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of 1,599,176 common shares.

As of August 19, 2019, we are currently in default of $926,368 of convertible notes payable, which are convertible into 578,980 shares of common stock.

F-14

NOTE 11 – INCOME TAXES

A reconciliation of the effective tax rate of the income tax benefit and the statutory income tax rates applied to the loss before income taxes is as follows for the three and six-months ended June 30:

	2019			2018
Income tax benefit at Canadian statutory rate		26.5	%		26.5	%
Valuation allowance		(26.5	%)		(26.5	%)
Effective income tax rate		0	%		0	%

As of June 30, 2019, the Company has net operating loss carry forwards of approximately $23,100,000 that may be available to reduce future years’ taxable income. Such carry forwards typically expire after 20 years. The Company currently has carry forwards that begin to expire in 2034. Future tax benefits which may arise as a result of these losses have not been recognized in these condensed consolidated financial statements, because the Company believes that it is more likely than not that the carryforwards will expire unused and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The deferred tax asset and associated valuation allowance are as follows:

	June 30, 2019			December 31, 2018
Deferred tax asset - net operating losses	$	6,100,000		$	9,700,000
Deferred tax asset valuation allowance		(6,100,000	)		(9,700,000	)
Net deferred tax asset	$	-		$	-

The change in the valuation allowance amounted to ($3,900,000) and $400,000 for the three-months ended June 30, 2019 and 2018, respectively, and ($3,600,000) and $800,000 for the six-months ended June 30, 2019 and 2018, respectively. All other temporary differences are immaterial both individually and in the aggregate to the condensed consolidated financial statements.

Company management analyzes its income tax filing positions in Canadian federal and provincial jurisdictions where it is required to file income tax returns, for all open tax years in these jurisdictions, to identify potential uncertain tax positions. As of June 30, 2019, there are no uncertain income tax positions taken or expected to be taken that would require recognition of a liability or disclosure in the condensed consolidated financial statements. The Company is subject to routing audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Generally, the Company is no longer subject to income tax examinations for years prior to 2015.

NOTE 12 – SHAREHOLDERS’ DEFICIT / STOCK ACTIVITY

The Company is authorized to issue an unlimited number of common shares and an unlimited number of special voting shares. Common shares have no stated par value.

As of June 30, 2019, 4,948,199 shares of common stock are committed to the holders of the convertible notes.

F-15

NOTE 13 – RELATED PARTY TRANSACTIONS

The Company has received loans from several related parties, as described above in Notes 8 and 10.

There are advances of $995,328 and $875,328 to CEN Ukraine as of June 30, 2019 and December 31, 2018, respectively, which such advances were made for the purpose of funding the operations of CEN Ukraine. CEN Ukraine was founded by Bill Chaaban. Prior to December 3, 2017, Bill Chaaban directly owned 51% of CEN Ukraine. Subsequent to December 3, 2017, Mr. Chaaban directly owned 25.5% of CEN Ukraine. CEN Ukraine was founded to seek agricultural and pharmaceutical opportunities in Ukraine. Bill Chaaban personally funded the establishment and initial phases of CEN Ukraine. On December 14, 2017, the Company entered into a controlling interest purchase agreement with Bill Chaaban and another shareholder of CEN Ukraine for 51% of the outstanding equity interests of CEN Ukraine. The consideration will be paid by issuing common shares of the Company. The agreement, which is subject to certain conditions, has not closed as of August 19, 2019, as the Company needs to raise additional funds in order to proceed with the closing.

On July 12, 2017, the Company’s Shareholders elected individuals to serve as Directors on the Board. These individuals hold long-term convertible notes payable issued prior to the election. All notes payable bear interest at 5% per annum and are convertible to common shares with various maturity dates. They became related parties when they were elected.

During the three-months ended June 30, 2019 and 2018, the Company incurred payroll and consulting expenses of $33,800 and $45,839, respectively, and $65,000 and $77,039 during the six-months ended June 30, 2019 and 2018, respectively, with certain Board Members and Officers. As of June 30, 2019 and December 31, 2018, $189,800 and $124,800, respectively, were payable for such services.

During 2017, the Company purchased equipment from R&D Labs Canada, Inc., whose president is Bill Chaaban, in exchange for a $300,000 note payable. This equipment was then sold to CEN Ukraine for a loss of $255,141 in exchange for a $44,859 note receivable, payable in 10 equal installments beginning in 2017 through 2026. No payments have been received as of June 30, 2019, however, management expects this balance to be collectible.

The Company leases 20 North Rear Road, a 10.4 acre site of land in Canada, through a sublease from a relative of the Company’s President. There are two buildings on the site – one of 27,000 square feet and one of 53,000 square feet. There is also a 4,000 square foot vault for security purposes. The Company constructed improvements to this property, including structures and equipment for growing marijuana, security fencing required for licensing as a marijuana producer, and other infrastructure. These improvements were fully impaired during the 4^th quarter of 2018.

The 20 North Rear Road lease agreement began on September 1, 2013 and required annual rent payments of CAD $339,000, including tax. At December 31, 2016, the balance sheet included accrued rent of $552,934, owed to Jamaal Shaban (“Lessor”), cousin of Bill Chaaban. Concurrently, the Lessor had fallen behind on a mortgage payable on the property. Effective January 2017, the Company entered into agreements to terminate the initial lease, enter into a convertible debt note with the Lessor’s creditor, and begin a new lease agreement for the same property. The new lease agreement calls for monthly rental payments of CAD $4,000 plus taxes for a period of five years. In exchange, the Company issued convertible notes payable of $824,446 in satisfaction of the accrued rent and future rent. The lease has been accounted for as an operating lease, and the amount of the note in excess of the accrued rent was treated as a deferred lease asset amortized over the 5-year lease. However, in conjunction with the impairment in the 4^th quarter of 2018, the remaining deferred lease asset was fully expensed. As of June 30, 2019, the operating right of use asset was $83,408 and the associated liability was $80,351, utilizing an 8% discount rate. During the three-months ended June 30, 2019 and 2018, lease expenses of $9,106 and $22,689, respectively, and $15,092 and $45,572 during the six-months ended June 30, 2019 and 2018, respectively, related to this agreement were recognized within general and administrative expenses.

F-16

The Company also leases office space in Windsor, Ontario from R&D Labs Canada, Inc., whose president is Bill Chaaban. Under the lease agreement effective October 1, 2017, monthly rents of CAD $2,608 are due through September 2022, at which point monthly rents of CAD $3,390 are due. As of June 30, 2019, the operating right of use asset was $167,076 and the associated liability was $167,282, utilizing an 8% discount rate. During the three-months ended June 30, 2019 and 2018, lease expenses of $7,060 and $5,942, respectively, and $12,039 and $12,010 during the six-months ended June 30, 2019 and 2018, respectively, related to this agreement were recognized within general and administrative expenses.

As of June 30, 2019, the weighted average remaining lease term was approximately 6.6 years and the weighted average discount rate used to determine operating lease liabilities was 8%.

NOTE 14 – STOCK BASED COMPENSATION

Adoption of Equity Compensation Plan

On November 29, 2017, the Board adopted the 2017 Equity Compensation Plan (the “Plan”) providing for the granting of options to purchase shares of common stock, restricted stock awards and other stock-based awards to directors, officers, employees, advisors and consultants. The Company reserved 20,000,000 shares of common stock for issuance under the Plan. The Plan is intended to provide equity incentives to persons retained by our Company.

Equity Compensation Grants

On November 30, 2017, the Company granted a one-time equity award (“Equity Award”) of 20,000 restricted shares of the Company’s common stock pursuant to a Restricted Stock Agreement, to each of the following executives and directors of the Company: Bahige “Bill” Chaaban, Chairman of the Board and President of the Company; Joseph Byrne, Chief Executive Officer and Director; Richard Boswell, Senior Executive Vice President, Chief Financial Officer and Director; Brian Payne, Vice President and Director; Donald Strilchuck, Director; Harold Aubrey de Lavenu, Director; Alex Tarrabain, Director; and Ameen Ferris, Director. The Equity Awards vested immediately.

In addition, as part of this one-time equity award, Donald Strilchuck, Director, received an additional 1,000,000 restricted shares of the Company's common stock for security consulting services, of which 550,000 vested immediately and the remaining vesting ratably each month over the next 36 months. Other individuals received a total of 1,870,000 restricted shares of the Company's common stock for consulting services performed, of which 1,330,000 vested immediately and the remaining vesting ratably each month over the next 36 months. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date.

On June 7, 2018, the Company elected Dr. Usamakh Saadikh to serve as a director of the Company. As compensation for his role as a Director, the company granted a one-time equity award of 20,000 shares of the Company’s common stock. This award vested immediately.

F-17

On June 19, 2018, the Company entered into an agreement with a law firm for the payment of its services under which the Company issued 125,000 shares of its common stock. This award vested immediately. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date.

On December 31, 2018, the Company issued 12,120 shares of its common stock to individuals for the payment of their services. These awards vested immediately. The expense related to the stock awarded to non-employees for services rendered was recognized on the grant date.

Employment Agreements

On November 30, 2017, employment agreements were entered into with four key members of management:

● Under the Employment Agreement with Bahige (Bill) Chaaban, President of the Company, Mr. Chaaban will receive compensation in the form of a base annual salary of $31,200 and a grant of 8,750,000 shares of restricted stock of the Company, of which 7,400,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Joseph Byrne, Chief Executive Officer of the Company, Mr. Byrne will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 325,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Richard Boswell, former Senior Executive Vice President and Chief Financial Officer of the Company, currently serving as Senior Executive Vice President of the Company, Mr. Boswell will receive compensation in the form of a base annual salary of $31,200 and a grant of 4,500,000 shares of restricted stock of the Company, of which 4,140,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Brian Payne, Vice President of the Company, Mr. Payne will receive compensation in the form of a base annual salary of $31,200 and a grant of 750,000 shares of restricted stock of the Company, of which 300,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

On May 16, 2019, the Board appointed Alex Tarrabain, one of the members of the Company’s Board to serve as the Company’s Chief Financial Officer and as one of the Vice Presidents of the Company effective May 21, 2019 (the “Effective Date”). Richard Boswell, who served as the Company’s Chief Financial Officer since July 2017, resigned from his position as the Company’s Chief Financial Officer as of the Effective Date, and will continue to serve in his position as the Company’s Senior Executive Vice President going forward focusing on the Company’s strategic activities and will also continue to serve as a member of the Company’s Board.

In conjunction with the above, on May 16, 2019, an employment agreement was entered into with Mr. Tarrabain:

● Under the Employment Agreement with Alex Tarrabain, Chief Financial Officer and as one of the Vice Presidents of the Company, Mr. Tarrabain will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 350,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

F-18

Restricted Stock Awards

The total grant-date fair value of the restricted shares noted in the employment agreements and equity compensation grants sections above was $12,698,241 as of June 30, 2019 and $11,435,741 as of December 31, 2018. During the three and six-month periods ended June 30, 2019 and 2018, 1,250,000 restricted shares with a grant date fair value of $1,262,500 and 145,000 restricted shares with a grant date fair value of $89,900, respectively, were awarded. The grant-date fair value is calculated utilizing an enterprise valuation model as of the date the awards are granted. With the exception of immediately vesting portions of awards, shares typically vest pro-rata over the requisite service period, which is generally three years from the grant-date. Non-vested restricted stock awards participate in dividends and recipients are entitled to vote these restricted shares during the vesting period.

During the three-month periods ended June 30, 2019 and 2018, 712,500 and 337,500, respectively, and during the six-month periods ended June 30, 2019 and 2018, 1,050,000 and 675,000 of these shares vested. The fair value of the restricted stock which vested amounted to $588,000 and $209,250 for the three-months ended June 30, 2019 and 2018, respectively, and $797,250 and $418,500 for the six-months ended June 30, 2019 and 2018, respectively.

Compensation expense recognized in connection with the restricted stock awards was $546,150 and $179,800 for the three-months ended June 30, 2019 and 2018, respectively, and $713,550 and $347,200 for the six-months ended June 30, 2019 and 2018, respectively. Legal expense, included within general and administrative, recognized in connection with the restricted stock awards was $77,500 for the three and six-months ended June 30, 2018.

Non-vested restricted stock award activity for the six-months ended June 30, 2019 and 2018 are as follows:

	Number of Shares			Weighted- Average Grant Date Fair Value per Share		Weighted- Average Remaining Contractual Term (Years)
Non-vested at January 1, 2018		3,962,500		$	0.62		2.92
Granted		145,000			0.62		-
Vested		(820,000	)		0.62		-
Forfeited		-			-		-
Non-vested at June 30, 2018		3,287,500		$	0.62		2.50
Non-vested at December 31, 2018		2,612,500		$	0.62		2.00
Granted		1,250,000			1.01		-
Vested		(1,050,000	)		0.83		-
Forfeited		-			-		-
Non-vested at June 30, 2019		2,812,500		$	0.74		1.97

The fair value of the restricted stock grants was based on the valuation of a third-party specialist. Unrecognized compensation expense related to restricted stock amounted to approximately $1,847,850 as of June 30, 2019. This expense will be recognized over vesting period of the respective awards.

F-19

NOTE 15 – NET LOSS PER SHARE

During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of diluted net loss per share. Based on the Company’s application of the as-converted and treasury stock methods, all common stock equivalents were excluded from the computation of diluted earnings per share due to net losses as of June 30, 2019 and 2018. Common stock equivalents that were excluded for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

	Three-months Ended June 30,				Six-months Ended June 30,
	2019		2018		2019		2018
Convertible debt		4,882,922		4,291,436		4,746,243		3,969,963

NOTE 16 – CONTINGENCY

In connection with the distribution by Creative of CEN’s common stock on February 29, 2016 and the Form 10 registration statement filed by CEN to register its shares of common stock under the Exchange Act, CEN received comments by the Staff of the Securities and Exchange Commission, including a letter dated May 4, 2016 in which the Staff noted that they “…continue to question the absence of Securities Act registration of the spin-off distribution”. In the event that the distribution of shares of CEN’s common stock was a distribution that required registration under the Securities Act, then the Company could be subject to enforcement action by the SEC that claims a violation of Section 5 of the Securities Act and could be subject to a private right of action for rescission or damages. Based on management’s estimate, any potential liability related to this matter would not be material.

NOTE 17 – FAIR VALUE DISCLOSURES

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value of the Company’s financial instruments are as follows:

			Fair Value Measured at Reporting Date Using
	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At June 30, 2019:
Cash and cash equivalents	$	15,972	$	-	$	15,972	$	-	$	15,972
Other receivables	$	419,958	$	-	$	-	$	419,958	$	419,958
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	995,328	$	-	$	-	$	995,328	$	995,328
Loans payable	$	10,119,178	$	-	$	-	$	10,119,178	$	10,119,178
Loans payable - related parties	$	1,362,318	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,705,038	$	-	$	-	$	6,240,408	$	6,240,408
Convertible notes payable - related parties	$	2,558,681	$	-	$	-	$	-	$	-

F-20

	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At December 31, 2018:
Cash and cash equivalents	$	3,193	$	-	$	3,193	$	-	$	3,193
Other receivables	$	418,905	$	-	$	-	$	418,905	$	418,905
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	875,328	$	-	$	-	$	875,328	$	875,328
Loans payable	$	10,107,205	$	-	$	-	$	10,107,205	$	10,107,205
Loans payable - related parties	$	1,360,806	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,143,647	$	-	$	-	$	5,534,810	$	5,534,810
Convertible notes payable - related parties	$	2,538,681	$	-	$	-	$	-	$	-

The fair values of other receivables (including related accrued interest), note receivable - related party, and advances to CEN Biotech Ukraine, LLC approximates carrying value due to the terms of the instruments.

The fair value of the loans payable approximates carrying value due to the terms of such instruments and applicable interest rates.

The fair value of convertible notes payable is based on the par value plus accrued interest through the date of reporting due to the terms of such instruments and interest rates.

It is not practicable to estimate the fair value of loans payable – related parties and convertible notes payable – related parties due to their related party nature.

The fair value of the patent acquisition liability is based upon a valuation report obtained from a 3^rd party valuation specialist. This valuation report utilized a cash-free asset value model to estimate enterprise value based upon similar companies.

F-21

ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Background and Overview

CEN Biotech, Inc. (“CEN” or the “Company”) is a Canadian holding company, incorporated in Canada on August 4, 2013 as a subsidiary of Creative Edge Nutrition, Inc. (“Creative”), a Nevada corporation. Creative separated its planned specialty pharmaceutical business located in Canada by transferring substantially all of the assets and liabilities of the planned specialty pharmaceutical business to CEN and effecting a distribution (the “Spin-Off Distribution”) of CEN common stock to Creative shareholders on February 29, 2016. The Spin-Off Distribution was intended to be tax free for U.S. federal income tax purposes.

Prior to the Spin-Off Distribution, CEN initially pursued the cannabis business in Canada and obtained funding to build the initial phase of its comprehensive seed-to-sale facility and applied to obtain a license in Canada to begin operating its state-of-the-art medical marijuana cultivation, processing, and distribution facility in Lakeshore, Ontario. On March 11, 2015, the Company’s application for a license to produce marijuana for medical purposes was formally rejected by Canadian regulatory authority. On February 1, 2016 the Company commenced legal action against the Attorney General of Canada in the Ontario Superior Court of Justice for damages for detrimental reliance, economic loss, and prejudgment and post judgment interest, costs of the proceeding and other relief that the court may seem just. As of August 19, 2019 the action in the Ontario Superior Court of Justice is still ongoing. After evaluating this action, the Company decided to not pursue the development of its medical marijuana business and instead to seek to develop and pursue other businesses that are related to the cannabis and other industries, including Light Emitting Diode (“LED”) lighting and hemp-based industrial, medical and food products that have a tetrahydrocannabinol (“THC”) that is below 0.3%.

 We are currently focused on the manufacturing, production and development of products within the cannabis industry, including LED lighting technology and hemp-based products. The Company intends to continue to explore the usage of hemp, which it now intends to cultivate for usage in industrial, medical and food products.

At present we are not able to estimate if or when we will be able to generate any revenues. Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern; however, given our recurring losses from operations, management has determined there is substantial doubt about our ability to continue as a going concern.

Near Term Operating Plan

Our near-term operating plans are based on us obtaining financing through debt or equity raises of approximately $50,000,000 USD. Generally, the funds are planned to be invested as follows: $25 million in hemp activities, $20 million in LED lighting manufacturing and $5 million in general operating costs. There can be no assurance that the Company will be able to raise the foregoing funds or proceed as planned.

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 Recent Developments

On June 21, 2019, Company entered into a Merger Agreement (the “Merger Agreement”) with CSOC, Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”). Pursuant to the Merger Agreement, the Company, the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to which the Company will merge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”).

Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same may be amended from time to time (the “WBCA”) in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the WBCA. The Merger will become effective when Articles of Merger are filed with the Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”).

Upon the Effective Time, each share of the Company’s issued and outstanding common stock, no par value per share, (the “CEN Common Stock”) shall be converted into and shall become one (1) fully paid and nonassessable share of common stock, par value $0.001 per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and no payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and no cash or other consideration shall be delivered or deliverable in exchange therefor.

Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least four (4) persons total, and thereafter to add three (3) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC.

The Merger Agreement includes customary representations, warranties and covenants by the respective parties. For example, in the Merger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be complete and will be based on the books and records of CSOC, and fairly present the financial condition of CSOC as of the respective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects.

The Company and CSOC have each agreed, that from the Effective Time, until the first to occur of the Closing or the termination of the Merger Agreement, not to solicit or initiate discussions with third parties regarding other acquisition proposals.

Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing:

● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

● complete a 1 for 5,000 reverse split of the CSOC Common Stock;

● redeem or terminate any derivatives of CSOC;

● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws;

● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and

● file a Form 14f-1 with the SEC at least 10 days prior to the Closing.

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Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing:

● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and

● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock.

Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon:

● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing;

● CSOC having no liabilities as of the Closing;

● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and

● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders.

Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is not cured within five (5) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (1) bring an action for specific performance of the Merger Agreement or (2) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement.

The Merger Agreement can be terminated any time prior to the Closing pursuant to the following:

● mutual written consent of the Company and CSOC;

● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger;

● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement;

● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement;

● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or

● by either the Company or CSOC if the Closing has not occurred by August 30, 2019.

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If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC may then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000. If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company may then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of $150,000 and an additional sum of $50,000. If the Merger Agreement is terminated because the Closing does not occur for any reason, other than the default thereunder of any of the parties, the parties shall not owe each other any payment amounts.

The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any such person with the other party in connection with transactions contemplated by the Merger Agreement.

There can be no assurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all.

As of August 19, 2019, the Merger Agreement has not closed. The Company has not determined how to account for this transaction as of August 19, 2019.

Results of Operations

We have incurred recurring losses and have not commenced revenue generating operations to date. Our expenses to date are primarily our general and administrative expenses and fees, costs and expenses related to acquisitions and operations. Our condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

The accompanying condensed consolidated financial statements have been prepared in contemplating continuation of the Company as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. The Company had an accumulated deficit of $38,748,455 at June 30, 2019 and had no committed source of debt or equity financing. The Company has not had any operating revenue and does not foresee any operating revenue in the near term. The Company has relied on the issuance of loans payable and convertible debt instruments to finance its expenses, including a note that is in default and is secured by the Company’s equipment and certain unsecured convertible notes payable. The Company will be dependent upon raising additional capital through placement of our common stock, notes or other securities in order to implement its business plan or additional borrowings, including from related parties. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company’s cash position may not be sufficient to support the Company’s daily operations or its ability to undertake any business activity that will generate net revenue.

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Results of Operations for the Three and Six-Months Ended June 30, 2019 and 2018:

The following tables reflect our operating results for the three and six-months ended June 30, 2019 and 2018, respectively:

	Three-months ended
Operating Summary	June 30, 2019		June 30, 2018		Change
Revenues, net	$	-	$	-		-
Cost of Goods Sold		-		-		-
Gross Profit		-		-		-
Operating Expenses		996,614		968,734		2.9	%
Loss from Operations		996,614		968,734		2.9	%
Other Expense		854,011		690,807		23.6	%
Net Loss	$	1,850,625	$	1,659,541		11.5	%

	Six-months ended
Operating Summary	June 30, 2019		June 30, 2018		Change
Revenues, net	$	-	$	-		-
Cost of Goods Sold		-		-		-
Gross Profit		-		-		-
Operating Expenses		1,401,841		1,621,158		(13.5	)%
Loss from Operations		1,401,841		1,621,158		(13.5	)%
Other Expense		1,691,561		1,359,153		24.5	%
Net Loss	$	3,093,402	$	2,980,311		3.8	%

Revenue

We have not recognized revenue during the three or six-months ended June 30, 2019 and 2018, as we have not commenced revenue generating operations to date.

Operating Expenses

During the three months ended June 30, 2019, our operating expenses were $996,614 compared to $968,734 during the three months ended June 30, 2018. During the three months ended June 30, 2019, our operating expenses were comprised of salary and consulting fees of $37,937, stock-based compensation expense of $546,150, and general and administrative expenses of $412,527. By comparison, during the three months ended June 30, 2018, our operating expenses were comprised of salary and consulting fees of $94,339, stock-based compensation expense of $179,800, and general and administrative expenses of $694,595. Expenses incurred during the three months ended June 30, 2019 compared to three months ended June 30, 2018 increased primarily due to increases in stock-based compensation related to additional awards.

During the six months ended June 30, 2019, our operating expenses were $1,401,841 compared to $1,621,158 during the six months ended June 30, 2018. During the six months ended June 30, 2019, our operating expenses were comprised of salary and consulting fees of $88,079, stock-based compensation expense of $713,550, and general and administrative expenses of $600,212. By comparison, during the six months ended June 30, 2018, our operating expenses were comprised of salary and consulting fees of $137,524, stock-based compensation expense of $347,200, and general and administrative expenses of $1,136,434. Expenses incurred during the six months ended June 30, 2019 compared to six months ended June 30, 2018 decreased primarily due to decreases in general and administrative expenses related to travel, legal, and other professional fees.

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Other Income and Expense Items

During the three months ended June 30, 2019, our other income and expense, net was $854,011 compared to $690,807 during the three months ended June 30, 2018. During the three months ended June 30, 2019, our other income and expense items were comprised of interest expense of $829,017, interest income of $2,052, and foreign exchange loss of $27,046. By comparison, during the three months ended June 30, 2018, our other income and expense items were comprised of interest expense of $713,962, and foreign exchange gain of $23,155. The increase during the period is due to interest expense on additional notes and loans issued to fund operations.

During the six months ended June 30, 2019, our other income and expense, net was $1,691,561 compared to $1,359,153 during the six months ended June 30, 2018. During the six months ended June 30, 2019, our other income and expense items were comprised of interest expense of $1,644,118, interest income of $4,097, and foreign exchange loss of $51,540. By comparison, during the six months ended June 30, 2018, our other income and expense items were comprised of interest expense of $1,412,751, and foreign exchange gain of $53,598. The increase during the period is due to interest expense on additional notes and loans issued to fund operations.

Income Taxes

As of June 30, 2019, the Company has net operating loss carryforwards of approximately $23,100,000 that may be available to reduce future years’ taxable income. As of June 30, 2019, the Company has a deferred tax asset of approximately $6,100,000 which has been completely offset by a valuation allowance. The Company believes that it is more likely than not that the carryforwards will expire unused as the Company has not been able to commence revenue generating activities to date.

Net Loss

Our net loss during the three months ended June 30, 2019 was $1,850,625 compared to a net loss of $1,659,541 during the three months ended June 30, 2018 due to the factors discussed above.

Our net loss during the six months ended June 30, 2019 was $3,093,402 compared to a net loss of $2,980,311 during the six months ended June 30, 2018 due to the factors discussed above.

 Liquidity and Capital Resources

As of June 30, 2019 and December 31, 2018, our liquid assets consisted of cash of $15,972 and $3,193, respectively.

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As of June 30, 2019, our indebtedness includes a patent acquisition liability of $1,010,000, accrued interest of $8,206,898, accrued interest to related parties of $1,119,126, as well as loans payable, loans payable to related parties, loans payable share interest, loans payable share interest to related parties, convertible notes and convertible notes to related parties totaling $19,745,215, with maturity dates as outlined below. The convertible notes are due 2 years from issuance with notes maturing in 2018 through 2021. We are in default of $9,675,000 of debt that is secured by certain equipment that we value at approximately $9,000. We are also currently in default of $3,606,075 of unsecured debt. We expect our operating and administrative expenses to be at least $2,400,000 annually.

Description	Maturity Date	Amount
Loan Payable	6/30/2016	$	9,675,000
Loan Payable	11/21/2018		294,178
Loan Payable – Related Party	12/31/2018		837,318
Loan Payable – Related Party	10/2/2019		300,000
Loan Payable – Share Interest	7/16/2019		150,000
Loan Payable – Share Interest – Related Party	7/16/2019		225,000
Convertible Notes	On Demand		844,111
Convertible Notes	Q2 2018		14,000
Convertible Notes	Q4 2018		68,000
Convertible Notes	Q1 2019		1,046,287
Convertible Notes	Q2 2019		405,000
Convertible Notes	Q3 2019		791,017
Convertible Notes	Q4 2019		457,701
Convertible Notes	Q1 2020		575,800
Convertible Notes	Q2 2020		117,000
Convertible Notes	Q3 2020		514,264
Convertible Notes	Q4 2020		338,824
Convertible Notes	Q1 2021		201,034
Convertible Notes	Q2 2021		332,000
Convertible Notes Related Party	Q1 2019		926,368
Convertible Notes Related Party	Q3 2020		1,612,313
Convertible Notes Related Party	Q2 2021		20,000
Total		$	19,745,215

We intend to fund our expenses through the issuance and sale of additional securities. We do not have any commitments from any persons to purchase any securities and there can be no assurance that we will be able to raise sufficient funds, or any funds, to pay our liabilities as they become due and payable.

Six months ended June 30, 2019 and 2018

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. During the six months ended June 30, 2019, we used $414,255 in operating activities compared to $1,120,335 used in operating activities during the three months ended June 30, 2018. The decrease in the use of operating cash between the two periods related primarily to a decrease in the extensions of credit under the other receivables category and a larger portion of the current loss relating to non-cash interest and stock-based compensation expense.

 Cash Flows from Investing Activities

Our use of cash flow for investing activities during the six months ended June 30, 2019 was $120,000 compared to use of $5,439 during the six months ended June 30, 2018. During the six months ended June 30, 2019, our use of cash flows for investing activities were comprised solely of advances to CEN Ukraine of $120,000. By comparison, during the six months ended June 30, 2018, our use of cash flows for investing activities was comprised solely of leasehold improvements of $5,439. 

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Cash Flows from Financing Activities

During the six months ended June 30, 2019, we received $553,034 through issuance of convertible notes to investors and related parties to fund our working capital requirements. During the six months ended June 30, 2018, we received $1,312,800 through issuance of convertible notes and share interest loans to investors to fund our working capital requirements. During the six months ended June 30, 2019 and 2018, $6,000 and $250,000 of the convertible notes and share interest loans payable were repaid.

CEN has no committed source of debt or equity financing. Our Executive team and Board are seeking additional financing from their business contacts, but no assurances can be given that such financing will be obtained or, if obtained, on what terms.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a reporting company that will increase our operating costs or cash requirements in the future.

Jumpstart Our Business Startups Act of 2012

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) provides that an emerging growth company can take advantage of certain exemptions from various reporting and other requirements that are applicable to public companies that are not emerging growth companies. We currently take advantage of some, but not all, of the reduced regulatory and reporting requirements that are available to us for as long as we qualify as an emerging growth company. Our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting for as long as we qualify as an emerging growth company.

Recent Accounting Pronouncements

Adoption of New Accounting Standard

The Company adopted Accounting Standards Codification (ASC) 842, “Leases” using the modified retrospective approach, effective January 1, 2019, on its condensed consolidated financial statements. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods.

The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide the information called for by this Item.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure and controls and procedures.

As of June 30, 2019, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment and evaluated the effectiveness of the Company's disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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Management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2019. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of June 30, 2019.

Management recognized the need for additional resources in the area of accounting and financial reporting controls and procedures. As a result, we have outsourced the accounting and financial reporting oversight roles to a qualified accounting firm with public company reporting expertise.

(b) Changes in internal control over financial reporting.

On May 16, 2019, Alex Tarrabain, one of the members of the Company’s Board was appointed to serve as the Company’s Chief Financial Officer and as one of the Vice Presidents of the Company effective May 21, 2019 (the “Effective Date”), and Richard Boswell, who served as the Company’s Chief Financial Officer since July 2017, resigned from his position as the Company’s Chief Financial Officer as of the Effective Date, and continues to serve in his position as the Company’s Senior Executive Vice President going forward focusing on the Company’s strategic activities and will also continue to serve as a member of the Company’s Board.

Other than the foregoing, there were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings that we believe to be material or which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operation if determined adversely to us.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide the information called for by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 

During the three and six-months ended June 30, 2019, CEN entered into loans and associated extension agreements with various parties. In consideration for such loans and associated extensions, CEN granted various individuals total aggregate amount of 45,000 and 90,000 unregistered shares of common stock of CEN during the three and six-months ended June 30, 2019, respectively.

The above issuances of shares of common stock were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended and the provisions of Regulation D promulgated thereunder or in reliance on the provisions of Regulation S promulgated thereunder.

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During the three and six-months ended June 30, 2019, we issued $406,000 and $553,034, respectively, of convertible notes to investors and related parties to fund our working capital requirements. These notes bear interest at 5% per year and are convertible at the option of the holder into 253,750 and 345,422, respectively, common shares.

The above issuances of convertible notes were issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended and the provisions of Regulation D promulgated thereunder or in reliance on the provisions of Regulation S promulgated thereunder.

Item 3. Defaults Upon Senior Securities.

              CEN has a payment default with respect to the term loan payable to Global Holdings International, LLC, in the principal amount of $9,675,000 and which bears compound interest at 15% per annum which was due on September 30, 2016. The aggregate amount due under this loan as of August 19, 2019 is approximately $17,600,000. Interest and default interest and related fees currently accrue at approximately $600,000 per quarter. This note is secured by some of the Company's equipment which we value at approximately $9,000.

CEN has a payment default with respect to certain unsecured convertible loans payable to private investors and related parties, in the principal amount of $2,981,075 and which bear interest at 5% per annum which were due prior to August 19, 2019. The aggregate amounts due under these loans as of August 19, 2019, including accrued interest, is approximately $4,200,000. Interest and default interest and related fees currently accrue at approximately $55,000 per quarter.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit No. Description

The financial statement schedules and exhibits filed as part of this Quarterly Report on Form 10-Q are as follows: 

a.     Exhibits

Exhibit No.	Description
2.1	Form of Merger Agreement dated June 21, 2019, between CEN Biotech, Inc. and Caduceus Software Systems Corp. and Caduceus Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC June 21, 2019).
3.1	Articles of Incorporation of Cen Biotech, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement (Commission file number 000-55557) on Form 10 filed with the SEC January 4, 2016.)
3.2	By-Laws of Cen Biotech, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement (Commission file number 000-55557) on Form 10 filed with the SEC January 4, 2016.)
10.1	Amendment dated April 3, 2019, to Share Purchase Agreement dated August 31, 2016, and executed September 12, 2016, as amended, between CEN Biotech, Inc. and Stevan Pokrajac and Tesla Digital Inc. and Tesla Digital Global Group Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC April 8, 2019).
10.2	Term Sheet dated May 15, 2019, between CEN Biotech, Inc. and Caduceus Software Systems Corp. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).
10.3	Executive Employment Agreement dated May 16, 2019, between CEN Biotech, Inc. and Alex Tarrabain. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).
10.4	Restricted Stock Agreement dated May 16, 2019, between CEN Biotech, Inc. and Alex Tarrabain. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC May 16, 2019).
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Chief Financial Officer pursuant to Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance*
101.SCH	XBRL Taxonomy Extension Schema*
101.CAL	XBRL Taxonomy Extension Calculation*
101.DEF	XBRL Taxonomy Extension Definition*
101.LAB	XBRL Taxonomy Extension Labels*
101.PRE	XBRL Taxonomy Extension Presentation*

* Filed herein.

** Furnished herewith. 

b.     Financial Statement Schedules

None

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SIGNATURES

Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 19, 2019

CEN BIOTECH, INC.
By:	/s/ Joseph Byrne
Name:	Joseph Byrne
Title:	Chief Executive Officer (Principal Executive Officer)

Dated: August 19, 2019	/s/ Alex Tarrabain
	Name: Alex Tarrabain
	Title: Chief Financial Officer (Principal Financial and Accounting Officer)

15

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Joseph Byrne, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, of CEN Biotech Inc.;

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

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

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the 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 the 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 officer 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 the 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 control over financial reporting.

Date: August 19, 2019
	/s/Joseph Byrne
	Joseph Byrne Chief Executive Officer (Principal Executive Officer)

EX-31.2

 Exhibit 31.2

CERTIFICATIONS

I, Alex Tarrabain, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, of CEN Biotech Inc.;

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

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

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the 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 the 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 officer 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 the 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 control over financial reporting.

Date: August 19, 2019	/s/Alex Tarrabain
	Alex Tarrabain  Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

Section 1350 Certification

In connection with the Quarterly Report on Form 10-Q of CEN Biotech Inc. (the “Company”) for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I Joseph Byrne, 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 to the best of my knowledge:

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.

Date: August 19, 2019	/s/Joseph Byrne
	Joseph Byrne Chief Executive Officer  (Principal Executive Officer )

EX-32.2

Exhibit 32.2

Section 1350 Certification

In connection with the Quarterly Report on Form 10-Q of CEN Biotech Inc. (the “Company”) for the quarter ended June 30, 2019, as filed with the Securities and Exchange Commission (the “Report”), I Richard Boswell, 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 to the best of my knowledge:

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.

Date: August 19, 2019	/s/Alex Tarrabain
	Alex Tarrabain,  Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 19, 2019
Document Information [Line Items]
Entity Registrant Name	CEN BIOTECH INC
Entity Central Index Key	0001653821
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		26,843,363
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 15,972	$ 3,193
Property, plant and improvements
Property and equipment, net	157,317	166,509
Other assets
Operating lease right-of-use assets	250,484
Other receivable	419,958	418,905
Note receivable – related party	44,859	44,859
Advances to CEN Biotech Ukraine LLC – related party	995,328	875,328
Intangible assets, net	5,593,365	5,805,771
Total assets	7,477,283	7,314,565
Current liabilities
Accounts payable	206,521	206,521
Loans payable	10,119,178	10,107,205
Loans payable – related parties	1,362,318	1,360,806
Convertible notes payable	4,318,916	3,597,760
Convertible notes payable – related parties	926,368	926,368
Accrued interest	8,206,898	6,860,494
Accrued interest – related parties	1,119,126	946,227
Operating lease liabilities	42,306
Accrued expenses	492,235	402,377
Total current liabilities	26,793,866	24,407,758
Operating lease liabilities, less current portion	205,327
Patent acquisition liability	1,010,000	1,010,000
Convertible notes, less current portion	1,386,122	1,545,887
Convertible notes – related parties, less current portion	1,632,313	1,612,313
Total liabilities	31,027,628	28,575,958
Shareholders’ deficit
Common stock; unlimited authorized shares; 26,813,363 and 25,473,363 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. No par value.
Additional paid-in capital	15,198,110	14,393,660
Accumulated deficit	(38,748,455)	(35,655,053)
Total shareholders’ deficit	(23,550,345)	(21,261,393)
Total liabilities and shareholders’ deficit	$ 7,477,283	$ 7,314,565

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares $ / shares in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares issued (in shares)	26,813,363	25,473,363
Common stock, shares outstanding (in shares)	26,813,363	25,473,363
Common stock, shares authorized	Unlimited	Unlimited

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating expenses
Consulting fees	$ 178	$ 48,500	$ 19,120	$ 60,485
Consulting fees – related parties	37,759	45,839	68,959	77,039
Stock based compensation	546,150	179,800	713,550	347,200
General and administrative	412,527	694,595	600,212	1,136,434
Total operating expenses	996,614	968,734	1,401,841	1,621,158
Loss from operations	(996,614)	(968,734)	(1,401,841)	(1,621,158)
Other income (expense)
Interest expense	(714,791)	(608,670)	(1,416,679)	(1,203,173)
Interest expense – related parties	(114,226)	(105,292)	(227,439)	(209,578)
Interest income	2,052	0	4,097
Foreign exchange gain (loss)	(27,046)	23,155	(51,540)	53,598
Other expense, net	(854,011)	(690,807)	(1,691,561)	(1,359,153)
Net loss	$ (1,850,625)	$ (1,659,541)	$ (3,093,402)	$ (2,980,311)
Net loss per share:
Basic and diluted (in dollars per share)	$ (0.07)	$ (0.07)	$ (0.12)	$ (0.12)
Weighted average number of shares outstanding
Basic and diluted (in shares)	26,173,473	25,222,721	25,836,540	25,188,132

XML

Condensed Consolidated Statements of Shareholders' Deficit (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Dec. 31, 2017	25,131,843
Balances at Dec. 31, 2017		$ 9,110,041	$ (28,124,692)	$ (19,014,651)
Patent acquisition liability modification		4,380,000		4,380,000
Stock-based compensation (in shares)	20,000
Stock-based compensation		347,200		347,200
Issuance of common stock – interest shares (in shares)	96,400
Issuance of common stock – interest shares		59,768		59,768
Issuance of common stock – legal consulting (in shares)	125,000
Issuance of common stock – legal consulting		77,500		77,500
Net loss			(2,980,311)	(2,980,311)
Balances (in shares) at Jun. 30, 2018	25,373,243
Balances at Jun. 30, 2018		13,974,509	(31,105,003)	(17,130,494)
Balances (in shares) at Dec. 31, 2018	25,473,363
Balances at Dec. 31, 2018		14,393,660	(35,655,053)	(21,261,393)
Stock-based compensation (in shares)	1,250,000
Stock-based compensation		713,550		713,550
Issuance of common stock – interest shares (in shares)	90,000
Issuance of common stock – interest shares		90,900		90,900
Net loss			(3,093,402)	(3,093,402)
Balances (in shares) at Jun. 30, 2019	26,813,363
Balances at Jun. 30, 2019		$ 15,198,110	$ (38,748,455)	$ (23,550,345)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities
Net loss	$ (3,093,402)	$ (2,980,311)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	9,192	5,038
Amortization	212,406	212,406
Stock-based compensation – employees	713,550	347,200
Stock-based compensation – others		77,500
Non-cash interest expense	1,382,764	1,170,577
Non-cash interest expense – related parties	227,439	209,576
Deferred lease expense		27,152
Foreign exchange loss (gain)	51,540	(53,598)
Changes in operating assets and liabilities which provided (used) cash
Lease right-of-use assets	5,842
Other receivable	(1,053)	(242,558)
Accounts payable	(3,698)	62,580
Operating lease liabilities	8,693
Accrued expenses	89,858	44,103
Net cash used in operating activities	(414,255)	(1,120,335)
Cash flows from investing activities
Advance on business acquisition	(120,000)
Leasehold improvements in progress		(5,439)
Net cash used in investing activities	(120,000)	(5,439)
Cash flows from financing activities
Issuance of loans payable		380,000
Repayment of loans payable		(230,000)
Issuance of loans payable – related parties		225,000
Issuance of convertible notes	533,034	707,800
Repayment of convertible notes	(6,000)	(20,000)
Issuance of convertible notes – related parties	20,000
Net cash provided by financing activities	547,034	1,062,800
Net increase (decrease) in cash and cash equivalents	12,779	(62,974)
Cash and cash equivalents, beginning of period	3,193	84,978
Cash and cash equivalents, end of period	15,972	22,004
Supplemental cash flows disclosures
Cash paid for interest	33,913	32,598
Non-cash transactions - investing and financing activities
Patent acquisition liability modification		$ 4,380,000

XML

Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

NOTE

1

– BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article

8

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are

not

necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the condensed consolidated financial statements of the Company for the year ended

December 31, 2018

and notes thereto.

There have been

no

material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s annual report on Form

10

-K for the year ended

December 31, 2018.

Loss per Share

Net loss per common share is computed pursuant to ASC

260

-

10

-

45.

Basic loss per share is computed based on the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the diluted weighted average common shares outstanding, which includes the effect of potentially dilutive securities. During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of net loss per share. Diluted earnings per share is similarly computed except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock and convertible notes, if including such potential shares of common stock is dilutive. For the

three

-months ended

June 30, 2019

and

2018,

the common stock equivalents of the convertible note agreements were

not

included in diluted earnings per share computations because their effect was antidilutive.

Share Purchase Agreement

On

July 31, 2018,

the Company entered into a Share Purchase Agreement with AstralENERGY Solar Manufacturing Corporation, LTD. (“AstralENERGY”) to acquire

70%

of the outstanding common stock of AstralENERGY. The Company will issue an aggregate

2,500,000

shares of common stock of the Company as consideration for the acquisition. AstralENERGY is a manufacturer of architecturally designed solar panels for residential and commercial solar production and has also developed integrated multi-function LED street lighting systems. Consummation of the acquisition is subject to the completion of certain conditions specified in the agreement. As of

August 19, 2019,

this transaction has

not

closed.

Merger Agreement

On

June 21, 2019,

Company entered into a Merger Agreement (the “Merger Agreement”) with Caduceus Software Systems Corp. (“CSOC”), Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”).  Pursuant to the Merger Agreement, the Company, the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to which the Company will merge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”).

Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same

may

be amended from time to time (the “WBCA”) in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the WBCA. The Merger will become effective when Articles of Merger are filed with the Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”).

Upon the Effective Time, each share of the Company’s issued and outstanding common stock,

no

par value per share, (the “CEN Common Stock”) shall be converted into and shall become

one

(

1

) fully paid and nonassessable share of common stock, par value

$0.001

per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and

no

payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and

no

cash or other consideration shall be delivered or deliverable in exchange therefor.

Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least

four

(

4

) persons total, and thereafter to add

three

(

3

) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC.

The Merger Agreement includes customary representations, warranties and covenants by the respective parties. For example, in the Merger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be complete and will be based on the books and records of CSOC, and fairly present the financial condition of CSOC as of the respective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects.

The Company and CSOC have each agreed, that from the Effective Time, until the

first

to occur of the Closing or the termination of the Merger Agreement,

not

to solicit or initiate discussions with

third

parties regarding other acquisition proposals.

Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing:

● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

● complete a 1 for 5,000 reverse split of the CSOC Common Stock;

● redeem or terminate any derivatives of CSOC;

● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws;

● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and

● file a Form 14f - 1 with the SEC at least 10 days prior to the Closing.

Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing:

● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and

● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock.

Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon:

● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing;

● CSOC having no liabilities as of the Closing;

● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and

● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders.

Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is

not

cured within

five

(

5

) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (

1

) bring an action for specific performance of the Merger Agreement or (

2

) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement.

The Merger Agreement can be terminated any time prior to the Closing pursuant to the following:

● mutual written consent of the Company and CSOC;

● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger;

● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement;

● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement;

● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or

● by either the Company or CSOC if the Closing has not occurred by August 30, 2019.

If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC

may

then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of

$150,000.

If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company

may

then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of

$150,000

and an additional sum of

$50,000.

If the Merger Agreement is terminated because the Closing does

not

occur for any reason, other than the default thereunder of any of the parties, the parties shall

not

owe each other any payment amounts.

The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any such person with the other party in connection with transactions contemplated by the Merger Agreement.

There can be

no

assurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all.

As of

August 19, 2019,

the Merger Agreement has

not

closed. The Company has

not

determined how to account for this transaction as of

August 19, 2019.

XML

Note 2 - New Accounting Standard

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

NOTE

2

– NEW ACCOUNTING STANDARD

Adoption of New Accounting Standard

The Company adopted Accounting Standards Codification (ASC)

842,

“

Leases

” using the modified retrospective approach, effective

January 1, 2019,

on its condensed consolidated financial statements. The comparative information has

not

been restated and continues to be reported under the lease accounting standard in effect for those periods.

The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard.

XML

Note 3 - Going Concern Uncertainty / Management Plans

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

NOTE

3

– GOING CONCERN UNCERTAINTY / MANAGEMENT PLANS

The accompanying condensed consolidated financial statements have been prepared in contemplating continuation of the Company as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. The Company had an accumulated deficit of

$38,748,455

at

June 30, 2019

and had

no

committed source of additional debt or equity financing. The Company has

not

had any operating revenue and does

not

foresee any operating revenue in the near term. The Company has relied on the issuance of loans payable and convertible debt instruments to finance its expenses, including notes that are in default, as described in Notes

7,

8,

9,

and

10.

The Company will be dependent upon raising additional capital through placement of our common stock, notes or other securities in order to implement its business plan or additional borrowings, including from related parties. There can be

no

assurance that the Company will be successful in either situation in order to continue as a going concern. The condensed consolidated financial statements do

not

include any adjustments that might result from the outcome of these uncertainties.

The Company’s cash position

may

not

be sufficient to support the Company’s daily operations or its ability to undertake any business activity that will generate net revenue.

XML

Note 4 - Property, Plant and Improvements, Net

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

NOTE

4

– PROPERTY, PLANT AND IMPROVEMENTS, NET

Property and equipment, net consists of the following as of:

	June 30, 2019			December 31, 2018
Leasehold improvements	$	166,163		$	166,163
Furniture and equipment		17,668			17,668
Accumulated depreciation		(26,514	)		(17,322	)
Net property, plant and improvements	$	157,317		$	166,509

Depreciation expense was

$4,596

for each of the

three

-months ended

June 30, 2019

and

2018,

respectively, and

$9,192

and

$5,038

for the

six

months ended

June 30, 2019

and

2018,

respectively.

XML

Note 5 - Advances to CEN Biotech Ukraine

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Advances to Related Party [Text Block]

NOTE

5

– ADVANCES TO CEN BIOTECH UKRAINE

At

June 30, 2019

and

December 31, 2018,

the Company had advances of

$995,328

and

$875,328,

respectively, to CEN Biotech Ukraine, LLC, a related party, (see Note

13

). The advances were for the purpose of funding the operations of CEN Biotech Ukraine, LLC and are unsecured, non-interest bearing, and are due on demand.

XML

Note 6 - Intangible Assets

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE

6

– INTANGIBLE ASSETS

On

September 12, 2016,

the Company executed an agreement dated

August 31, 2016,

to acquire assets, including a patent related to LED Lighting, from Tesla Digital, Inc., a Canadian Corporation, and Stevan (Steve) Pokrajac (the “Sellers”).

Material consideration given by Company was: (a) Shares of CEN common stock equal to

$5

million upon commencement of public trading (b) The transfer of real properties located at

135

North Rear Road, Lakeshore, Ontario, Canada having a fair value of

$2,161,467

and

1517

-

1525

Ridge Road having a purchase cost (including other related disbursements) to the Company of

$202,666.

The patent remains in the name of Tesla Digital, Inc. until full settlement of the terms of the agreement. In the interim, pursuant to an updated agreement executed on

April 15, 2019

between the Company and the Sellers, CEN has reaffirmed the rights to use the patented technology.

In addition, the Company agreed to employ Stevan Pokrajac, by an LED subsidiary that the Company plans to form, but which has

not

yet been formed, in connection with the development of the acquired technology with compensation equal to

$200,000

per year, commencing with the start of operations.

In

March 2018,

the Tesla agreement was amended to replace the

$5

million stock consideration commitment with a commitment to issue

one million

registered shares of CEN common stock with a closing date of

September 30, 2018.

On

October 4, 2018,

this agreement was amended to extend the closing date to

December 15, 2018.

On

April 3, 2019,

the Company entered into an amendment which extended the closing date of the agreement to

December 31, 2019.

The modification of the agreement converted a fixed value of shares to a fixed number of shares. Accordingly, the liability was reduced and additional paid in capital was increased by

$4,380,000

to reflect the fair value of the shares committed at the date of the amendment. As of

June 30, 2019

and

December 31, 2018,

the fair value of this liability was

$1,010,000

.

This liability will be remeasured at each reporting date using the current fair value of CEN’s common shares.

The Company intends to explore using the patented LED Lighting Technology across manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired, other than the patent, included certain machinery and raw materials, which were old and non-functioning and accordingly, had

no

fair value.

The intangible assets consists of the following:

	June 30, 2019			December 31, 2018
Lighting patent	$	6,797,000		$	6,797,000
Accumulated amortization		(1,203,635	)		(991,229	)
Net	$	5,593,365		$	5,805,771

As of

June 30, 2019

and

December 31, 2018,

there is

no

impairment expense recognized based on the Company’s expectations that it will be able to monetize the patent.

The lighting patent is being amortized straight-line over

16

years. Expected amortization expense is

$424,812

per year through

2031,

with the remaining

$283,215

to be amortized in

2032.

XML

Note 7 - Loans Payable

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Short-term Debt [Text Block]

NOTE

7

– LOANS PAYABLE

Loans payable consist of the following:

	June 30, 2019		December 31, 2018
Loan payable to Global Holdings International, LLC, which bears interest at 15% per annum after defaulting on the maturity date of June 30, 2016. This note is secured by the Company's equipment.	$	9,675,000	$	9,675,000
Mortgage payable in default to ARG & Pals, Inc., for the original amount of CAD $385,000. The mortgage bears interest at 22% per annum, and matured on November 21, 2018.		294,178		282,205
Loan payable in default to an individual, issued January 17, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		50,000		50,000
Loan payable in default to an individual, issued April 13, 2018, with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		100,000		100,000
Total loans payable (all current)	$	10,119,178	$	10,107,205

We are in default of

$9,675,000

of debt that is secured by certain equipment that we value at approximately

$9,000.

The remainder of our debt that is in default is

not

secured.

During the

three

-month periods ended

June 30, 2019

and

2018,

18,000

and

26,000

common shares were issued to individuals for loans made to CEN, respectively. Accordingly, during the

three

-month periods ended

June 30, 2019

and

2018,

$18,180

and

$16,120

in interest expense and additional paid-in capital was recorded, respectively.

During the

six

-month periods ended

June 30, 2019

and

2018,

36,000

and

42,400

common shares were issued to individuals for loans made to CEN, respectively. Accordingly, during the

six

-month periods ended

June 30, 2019

and

2018,

$36,360

and

$26,288

in interest expense and additional paid-in capital was recorded, respectively.

XML

Note 8 - Loans Payable - Related Party

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Loans Payable to Related Party [Text Block]

NOTE

8

– LOANS PAYABLE- RELATED PARTY

Loans payable - related party consists of the following:

	June 30, 2019		December 31, 2018
Loan payable in default to the spouse of Bill Chaaban, President of CEN, bears an interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.	$	235,818	$	234,306
Loan payable in default to a former director of Creative, former parent company, bears interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.		601,500		601,500
Loan payable to R&D Labs Canada, Inc., whose president is Bill Chaaban, also the President of CEN, bearing interest at 8% per annum. This is an unsecured loan with a maturity date of October 2, 2019. R&D Labs Canada is a company owned by Bill Chaaban’s spouse.		300,000		300,000
Loan payable in default to the spouse of Joseph Byrne, CEO of CEN, issued January 12, 2018 with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		100,000		100,000
Loan payable in default to Alex Tarrabain, a Director of CEN, issued January 17, 2018 with a 30-day maturity, bearing share interest of 3,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		75,000		75,000
Loan payable in default to Joseph Byrne, CEO of CEN, issued January 24, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		50,000		50,000
Total loans payable - related party		1,362,318		1,360,806
Less: current portion		1,362,318		1,360,806
Long-term portion loans payable - related party	$	-	$	-

Attributable related party accrued interest was

$411,345

and

$357,373

as of

June 30, 2019

and

December 31, 2018,

respectively. Interest expense attributable to related party loans was

$54,428

and

$43,367

for the

three

-months ended

June 30, 2019

and

2018,

respectively, and was

$108,512

and

$86,409

for the

six

-months ended

June 30, 2019

and

2018,

respectively.

During both

three

-month periods ended

June 30, 2019

and

2018,

27,000

common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the

three

-month periods ended

June 30, 2019

and

2018,

$27,270

and

$16,740

in related party interest expense and additional paid-in capital was recorded, respectively.

During both

six

-month periods ended

June 30, 2019

and

2018,

54,000

common shares were issued to related parties in connection with interest terms of the above loans made to CEN. Accordingly, during the

six

-month periods ended

June 30, 2019

and

2018,

$54,540

and

$33,480

in related party interest expense and additional paid-in capital was recorded, respectively.

XML

Note 9 - Convertible Notes

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

NOTE

9

– CONVERTIBLE NOTES

Convertible notes payable consists of the following:

	June 30, 2019		December 31, 2018
Convertible note payable, due on demand, bearing interest at 7% per annum with conversion rights for 335,833 common shares.	$	844,111	$	809,755
Convertible notes payable to multiple private investors, including certain notes in default, bearing interest at 5% per annum with conversion rights for 3,013,190 common shares, maturing at various dates between May 2018 and May 2021.		4,860,927		4,333,892
Total convertible notes payable		5,705,038		5,143,647
Less current portion		4,318,916		3,597,760
Convertible notes payable, less current portion	$	1,386,122	$	1,545,887

These notes

may

be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of

3,349,023

common shares.

As of

August 19, 2019,

we are currently in default of

$2,054,707

of convertible notes payable, which are convertible into

1,287,652

shares of common stock.

XML

Note 10 - Convertible Notes - Related Party

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Long-term Convertible Notes Related Party [Text Block]

NOTE

1

0

– CONVERTIBLE NOTES - RELATED PARTY

Convertible notes - related party consists of the following at:

	June 30, 2019		December 31, 2018
Convertible note due to the spouse of Bill Chaaban, President of CEN, which bears an interest at 12% per annum. This note is convertible to 867,576 common shares with a maturity date of August 17, 2020.	$	1,388,122	$	1,388,122
Convertible notes in default due to Harold Aubrey de Lavenu, a Director of CEN, bearing interest at 5% per annum. These notes are convertible to 548,980 common shares which matured on March 31, 2019.		878,368		878,368
Convertible note in default due to Alex Tarrabain, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 30,000 common shares and matured on March 31, 2019.		48,000		48,000
Convertible notes due to Joseph Byrne, CEO of CEN, bearing interest at 12% per annum. This note is convertible to 140,120 common shares with a maturity date of August 17, 2020.		224,191		224,191
Convertible note due to Darren Ferris, brother of Ameen Ferris, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 12,500 common shares with a maturity date of June 19, 2021.		20,000		-
Total convertible notes payable - related party		2,558,681		2,538,681
Less current portion		926,368		926,368
Convertible notes payable - related party, less current portion	$	1,632,313	$	1,612,313

Attributable related party accrued interest was

$707,781

and

$588,854

as of

June 30, 2019

and

December 31, 2018,

respectively. Interest expense attributable to related party convertible notes was

$59,798,

and

$61,925

for the

three

months ended

June 30, 2019

and

2018,

respectively, and was

$118,927

and

$123,169

for the

six

-months ended

June 30, 2019

and

2018,

respectively.

These notes

may

be converted at the option of the note holder at any time after registration of CEN’s common stock upon written notice by the note holder. These notes are convertible into a total of

1,599,176

common shares.

As of

August 19, 2019,

we are currently in default of

$926,368

of convertible notes payable, which are convertible into

578,980

shares of common stock.

XML

Note 11 - Income Taxes

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

11

– INCOME TAXES

A reconciliation of the effective tax rate of the income tax benefit and the statutory income tax rates applied to the loss before income taxes is as follows for the

three

and

six

-months ended

June 30:

	2019			2018
Income tax benefit at Canadian statutory rate		26.5	%		26.5	%
Valuation allowance		(26.5	%)		(26.5	%)
Effective income tax rate		0	%		0	%

As of

June 30, 2019,

the Company has net operating loss carry forwards of approximately

$23,100,000

that

may

be available to reduce future years’ taxable income. Such carry forwards typically expire after

20

years. The Company currently has carry forwards that begin to expire in

2034.

Future tax benefits which

may

arise as a result of these losses have

not

been recognized in these condensed consolidated financial statements, because the Company believes that it is more likely than

not

that the carryforwards will expire unused and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The deferred tax asset and associated valuation allowance are as follows:

	June 30, 2019			December 31, 2018
Deferred tax asset - net operating losses	$	6,100,000		$	9,700,000
Deferred tax asset valuation allowance		(6,100,000	)		(9,700,000	)
Net deferred tax asset	$	-		$	-

The change in the valuation allowance amounted to (

$3,900,000

) and

$400,000

for the

three

-months ended

June 30, 2019

and

2018,

respectively, and (

$3,600,000

) and

$800,000

for the

six

-months ended

June 30, 2019

and

2018,

respectively. All other temporary differences are immaterial both individually and in the aggregate to the condensed consolidated financial statements.

Company management analyzes its income tax filing positions in Canadian federal and provincial jurisdictions where it is required to file income tax returns, for all open tax years in these jurisdictions, to identify potential uncertain tax positions. As of

June 30, 2019,

there are

no

uncertain income tax positions taken or expected to be taken that would require recognition of a liability or disclosure in the condensed consolidated financial statements. The Company is subject to routing audits by taxing jurisdictions; however, there are currently

no

audits for any tax periods in progress. Generally, the Company is

no

longer subject to income tax examinations for years prior to

2015.

XML

Note 12 - Shareholders' Deficit / Stock Activity

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

12

– SHAREHOLDERS’ DEFICIT / STOCK ACTIVITY

The Company is authorized to issue an unlimited number of common shares and an unlimited number of special voting shares. Common shares have

no

stated par value.

As of

June 30, 2019,

4,948,199

shares of common stock are committed to the holders of the convertible notes.

XML

Note 13 - Related Party Transactions

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE

13

– RELATED PARTY TRANSACTIONS

The Company has received loans from several related parties, as described above in Notes

8

and

10.

There are advances of

$995,328

and

$875,328

to CEN Ukraine as of

June 30, 2019

and

December 31, 2018,

respectively, which such advances were made for the purpose of funding the operations of CEN Ukraine. CEN Ukraine was founded by Bill Chaaban. Prior to

December 3, 2017,

Bill Chaaban directly owned

51%

of CEN Ukraine. Subsequent to

December 3, 2017,

Mr. Chaaban directly owned

25.5%

of CEN Ukraine. CEN Ukraine was founded to seek agricultural and pharmaceutical opportunities in Ukraine. Bill Chaaban personally funded the establishment and initial phases of CEN Ukraine. On

December 14, 2017,

the Company entered into a controlling interest purchase agreement with Bill Chaaban and another shareholder of CEN Ukraine for

51%

of the outstanding equity interests of CEN Ukraine. The consideration will be paid by issuing common shares of the Company. The agreement, which is subject to certain conditions, has

not

closed as of

August 19, 2019,

as the Company needs to raise additional funds in order to proceed with the closing.

On

July 12, 2017,

the Company’s Shareholders elected individuals to serve as Directors on the Board. These individuals hold long-term convertible notes payable issued prior to the election. All notes payable bear interest at

5%

per annum and are convertible to common shares with various maturity dates. They became related parties when they were elected.

During the

three

-months ended

June 30, 2019

and

2018,

the Company incurred payroll and consulting expenses of

$33,800

and

$45,839,

respectively, and

$65,000

and

$77,039

during the

six

-months ended

June 30, 2019

and

2018,

respectively, with certain Board Members and Officers. As of

June 30, 2019

and

December 31, 2018,

$189,800

and

$124,800,

respectively, were payable for such services.

During

2017,

the Company purchased equipment from R&D Labs Canada, Inc., whose president is Bill Chaaban, in exchange for a

$300,000

note payable. This equipment was then sold to CEN Ukraine for a loss of

$255,141

in exchange for a

$44,859

note receivable, payable in

10

equal installments beginning in

2017

through

2026.

No

payments have been received as of

June 30, 2019,

however, management expects this balance to be collectible.

The Company leases

20

North Rear Road, a

10.4

acre site of land in Canada, through a sublease from a relative of the Company’s President. There are

two

buildings on the site –

one

of

27,000

square feet and

one

of

53,000

square feet. There is also a

4,000

square foot vault for security purposes. The Company constructed improvements to this property, including structures and equipment for growing marijuana, security fencing required for licensing as a marijuana producer, and other infrastructure. These improvements were fully impaired during the

4

th

quarter of

2018.

The

20

North Rear Road lease agreement began on

September 1, 2013

and required annual rent payments of CAD

$339,000,

including tax. At

December 31, 2016,

the balance sheet included accrued rent of

$552,934,

owed to Jamaal Shaban (“Lessor”), cousin of Bill Chaaban. Concurrently, the Lessor had fallen behind on a mortgage payable on the property. Effective

January 2017,

the Company entered into agreements to terminate the initial lease, enter into a convertible debt note with the Lessor’s creditor, and begin a new lease agreement for the same property. The new lease agreement calls for monthly rental payments of CAD

$4,000

plus taxes for a period of

five

years. In exchange, the Company issued convertible notes payable of

$824,446

in satisfaction of the accrued rent and future rent. The lease has been accounted for as an operating lease, and the amount of the note in excess of the accrued rent was treated as a deferred lease asset amortized over the

5

-year lease. However, in conjunction with the impairment in the

4

th

quarter of

2018,

the remaining deferred lease asset was fully expensed. As of

June 30, 2019,

the operating right of use asset was

$83,408

and the associated liability was

$80,351,

utilizing an

8%

discount rate. During the

three

-months ended

June 30, 2019

and

2018,

lease expenses of

$9,106

and

$22,689,

respectively, and

$15,092

and

$45,572

during the

six

-months ended

June 30, 2019

and

2018,

respectively, related to this agreement were recognized within general and administrative expenses.

The Company also leases office space in Windsor, Ontario from R&D Labs Canada, Inc., whose president is Bill Chaaban. Under the lease agreement effective

October 1, 2017,

monthly rents of CAD

$2,608

are due through

September 2022,

at which point monthly rents of CAD

$3,390

are due. As of

June 30, 2019,

the operating right of use asset was

$167,076

and the associated liability was

$167,282,

utilizing an

8%

discount rate. During the

three

-months ended

June 30, 2019

and

2018,

lease expenses of

$7,060

and

$5,942,

respectively, and

$12,039

and

$12,010

during the

six

-months ended

June 30, 2019

and

2018,

respectively, related to this agreement were recognized within general and administrative expenses.

As of

June 30, 2019,

the weighted average remaining lease term was approximately

6.6

years and the weighted average discount rate used to determine operating lease liabilities was

8%.

XML

Note 14 - Stock Based Compensation

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE

14

– STOCK BASED COMPENSATION

Adoption of Equity Compensation Plan

On

November 29, 2017,

the Board adopted the

2017

Equity Compensation Plan (the “Plan”) providing for the granting of options to purchase shares of common stock, restricted stock awards and other stock-based awards to directors, officers, employees, advisors and consultants. The Company reserved

20,000,000

shares of common stock for issuance under the Plan. The Plan is intended to provide equity incentives to persons retained by our Company.

Equity Compensation Grants

On

November 30, 2017,

the Company granted a

one

-time equity award (“Equity Award”) of

20,000

restricted shares of the Company’s common stock pursuant to a Restricted Stock Agreement, to each of the following executives and directors of the Company: Bahige “Bill” Chaaban, Chairman of the Board and President of the Company; Joseph Byrne, Chief Executive Officer and Director; Richard Boswell, Senior Executive Vice President, Chief Financial Officer and Director; Brian Payne, Vice President and Director; Donald Strilchuck, Director; Harold Aubrey de Lavenu, Director; Alex Tarrabain, Director; and Ameen Ferris, Director. The Equity Awards vested immediately.

In addition, as part of this

one

-time equity award, Donald Strilchuck, Director, received an additional

1,000,000

restricted shares of the Company's common stock for security consulting services, of which

550,000

vested immediately and the remaining vesting ratably each month over the next

36

months. Other individuals received a total of

1,870,000

restricted shares of the Company's common stock for consulting services performed, of which

1,330,000

vested immediately and the remaining vesting ratably each month over the next

36

months. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date.

On

June 7, 2018,

the Company elected Dr. Usamakh Saadikh to serve as a director of the Company. As compensation for his role as a Director, the company granted a

one

-time equity award of

20,000

shares of the Company’s common stock. This award vested immediately.

On

June 19, 2018,

the Company entered into an agreement with a law firm for the payment of its services under which the Company issued

125,000

shares of its common stock. This award vested immediately. The expense related to the restricted stock awarded to non-employees for services rendered was recognized on the grant date.

On

December 31, 2018,

the Company issued

12,120

shares of its common stock to individuals for the payment of their services. These awards vested immediately. The expense related to the stock awarded to non-employees for services rendered was recognized on the grant date.

Employment Agreements

On

November 30, 2017,

employment agreements were entered into with

four

key members of management:

● Under the Employment Agreement with Bahige (Bill) Chaaban, President of the Company, Mr. Chaaban will receive compensation in the form of a base annual salary of $31,200 and a grant of 8,750,000 shares of restricted stock of the Company, of which 7,400,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Joseph Byrne, Chief Executive Officer of the Company, Mr. Byrne will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 325,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Richard Boswell, former Senior Executive Vice President and Chief Financial Officer of the Company, currently serving as Senior Executive Vice President of the Company, Mr. Boswell will receive compensation in the form of a base annual salary of $31,200 and a grant of 4,500,000 shares of restricted stock of the Company, of which 4,140,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

● Under the Employment Agreement with Brian Payne, Vice President of the Company, Mr. Payne will receive compensation in the form of a base annual salary of $31,200 and a grant of 750,000 shares of restricted stock of the Company, of which 300,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

On

May 16, 2019,

the Board appointed Alex Tarrabain,

one

of the members of the Company’s Board to serve as the Company’s Chief Financial Officer and as

one

of the Vice Presidents of the Company effective

May 21, 2019 (

the “Effective Date”). Richard Boswell, who served as the Company’s Chief Financial Officer since

July 2017,

resigned from his position as the Company’s Chief Financial Officer as of the Effective Date, and will continue to serve in his position as the Company’s Senior Executive Vice President going forward focusing on the Company’s strategic activities and will also continue to serve as a member of the Company’s Board.

In conjunction with the above, on

May 16, 2019,

an employment agreement was entered into with Mr. Tarrabain:

● Under the Employment Agreement with Alex Tarrabain, Chief Financial Officer and as one of the Vice Presidents of the Company, Mr. Tarrabain will receive compensation in the form of a base annual salary of $31,200 and a grant of 1,250,000 shares of restricted stock of the Company, of which 350,000 vested immediately and the remaining vesting ratably each month over the next 36 months.

Restricted Stock Awards

The total grant-date fair value of the restricted shares noted in the employment agreements and equity compensation grants sections above was

$12,698,241

as of

June 30, 2019

and

$11,435,741

as of

December 31, 2018.

During the

three

and

six

-month periods ended

June 30, 2019

and

2018,

1,250,000

restricted shares with a grant date fair value of

$1,262,500

and

145,000

restricted shares with a grant date fair value of

$89,900

,

respectively, were awarded. The grant-date fair value is calculated utilizing an enterprise valuation model as of the date the awards are granted. With the exception of immediately vesting portions of awards, shares typically vest pro-rata over the requisite service period, which is generally

three

years from the grant-date. Non-vested restricted stock awards participate in dividends and recipients are entitled to vote these restricted shares during the vesting period.

During the

three

-month periods ended

June 30, 2019

and

2018,

712,500

and

337,500,

respectively, and during the

six

-month periods ended

June 30, 2019

and

2018,

1,050,000

and

675,000

of these shares vested. The fair value of the restricted stock which vested amounted to

$588,000

and

$209,250

for the

three

-months ended

June 30, 2019

and

2018,

respectively, and

$797,250

and

$418,500

for the

six

-months ended

June 30, 2019

and

2018,

respectively.

Compensation expense recognized in connection with the restricted stock awards was

$546,150

and

$179,800

for the

three

-months ended

June 30, 2019

and

2018,

respectively, and

$713,550

and

$347,200

for the

six

-months ended

June 30, 2019

and

2018,

respectively. Legal expense, included within general and administrative, recognized in connection with the restricted stock awards was

$77,500

for the

three

and

six

-months ended

June 30, 2018.

Non-vested restricted stock award activity for the

six

-months ended

June 30, 2019

and

2018

are as follows:

	Number of Shares			Weighted- Average Grant Date Fair Value per Share		Weighted- Average Remaining Contractual Term (Years)
Non-vested at January 1, 2018		3,962,500		$	0.62		2.92
Granted		145,000			0.62		-
Vested		(820,000	)		0.62		-
Forfeited		-			-		-
Non-vested at June 30, 2018		3,287,500		$	0.62		2.50
Non-vested at December 31, 2018		2,612,500		$	0.62		2.00
Granted		1,250,000			1.01		-
Vested		(1,050,000	)		0.83		-
Forfeited		-			-		-
Non-vested at June 30, 2019		2,812,500		$	0.74		1.97

The fair value of the restricted stock grants was based on the valuation of a

third

-party specialist. Unrecognized compensation expense related to restricted stock amounted to approximately

$1,847,850

as of

June 30, 2019.

This expense will be recognized over vesting period of the respective awards.

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Note 15 - Net Loss Per Share

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

15

– NET LOSS PER SHARE

During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of diluted net loss per share. Based on the Company’s application of the as-converted and treasury stock methods, all common stock equivalents were excluded from the computation of diluted earnings per share due to net losses as of

June 30, 2019

and

2018.

Common stock equivalents that were excluded for the

three

and

six

-month periods ended

June 30, 2019

and

2018

are as follows:

	Three-months Ended June 30,				Six-months Ended June 30,
	2019		2018		2019		2018
Convertible debt		4,882,922		4,291,436		4,746,243		3,969,963

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Note 16 - Contingency

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

16

– CONTINGENCY

In connection with the distribution by Creative of CEN’s common stock on

February

29,

2016

and the Form

10

registration statement filed by CEN to register its shares of common stock under the Exchange Act, CEN received comments by the Staff of the Securities and Exchange Commission, including a letter dated

May 4, 2016

in which the Staff noted that they “…continue to question the absence of Securities Act registration of the spin-off distribution”. In the event that the distribution of shares of CEN’s common stock was a distribution that required registration under the Securities Act, then the Company could be subject to enforcement action by the SEC that claims a violation of Section

5

of the Securities Act and could be subject to a private right of action for rescission or damages. Based on management’s estimate, any potential liability related to this matter would

not

be material.

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Note 17 - Fair Value Disclosures

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

17

– FAIR VALUE DISCLOSURES

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value of the Company’s financial instruments are as follows:

			Fair Value Measured at Reporting Date Using
	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At June 30, 2019:
Cash and cash equivalents	$	15,972	$	-	$	15,972	$	-	$	15,972
Other receivables	$	419,958	$	-	$	-	$	419,958	$	419,958
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	995,328	$	-	$	-	$	995,328	$	995,328
Loans payable	$	10,119,178	$	-	$	-	$	10,119,178	$	10,119,178
Loans payable - related parties	$	1,362,318	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,705,038	$	-	$	-	$	6,240,408	$	6,240,408
Convertible notes payable - related parties	$	2,558,681	$	-	$	-	$	-	$	-

	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At December 31, 2018:
Cash and cash equivalents	$	3,193	$	-	$	3,193	$	-	$	3,193
Other receivables	$	418,905	$	-	$	-	$	418,905	$	418,905
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	875,328	$	-	$	-	$	875,328	$	875,328
Loans payable	$	10,107,205	$	-	$	-	$	10,107,205	$	10,107,205
Loans payable - related parties	$	1,360,806	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,143,647	$	-	$	-	$	5,534,810	$	5,534,810
Convertible notes payable - related parties	$	2,538,681	$	-	$	-	$	-	$	-

The fair values of other receivables (including related accrued interest), note receivable - related party, and advances to CEN Biotech Ukraine, LLC approximates carrying value due to the terms of the instruments.

The fair value of the loans payable approximates carrying value due to the terms of such instruments and applicable interest rates.

The fair value of convertible notes payable is based on the par value plus accrued interest through the date of reporting due to the terms of such instruments and interest rates.

It is

not

practicable to estimate the fair value of loans payable – related parties and convertible notes payable – related parties due to their related party nature.

The fair value of the patent acquisition liability is based upon a valuation report obtained from a

3

rd

party valuation specialist. This valuation report utilized a cash-free asset value model to estimate enterprise value based upon similar companies.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Earnings Per Share, Policy [Policy Text Block]

Loss per Share

Net loss per common share is computed pursuant to ASC

260

-

10

-

45.

Basic loss per share is computed based on the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing net loss by the diluted weighted average common shares outstanding, which includes the effect of potentially dilutive securities. During periods when there is a net loss, all potentially dilutive shares are anti-dilutive and are excluded from the calculation of net loss per share. Diluted earnings per share is similarly computed except that the denominator includes the effect, using the treasury stock method, of unvested restricted stock and convertible notes, if including such potential shares of common stock is dilutive. For the

three

-months ended

June 30, 2019

and

2018,

the common stock equivalents of the convertible note agreements were

not

included in diluted earnings per share computations because their effect was antidilutive.

Business Combinations Policy [Policy Text Block]

Share Purchase Agreement

On

July 31, 2018,

the Company entered into a Share Purchase Agreement with AstralENERGY Solar Manufacturing Corporation, LTD. (“AstralENERGY”) to acquire

70%

of the outstanding common stock of AstralENERGY. The Company will issue an aggregate

2,500,000

shares of common stock of the Company as consideration for the acquisition. AstralENERGY is a manufacturer of architecturally designed solar panels for residential and commercial solar production and has also developed integrated multi-function LED street lighting systems. Consummation of the acquisition is subject to the completion of certain conditions specified in the agreement. As of

August 19, 2019,

this transaction has

not

closed.

Merger Agreement

On

June 21, 2019,

Company entered into a Merger Agreement (the “Merger Agreement”) with Caduceus Software Systems Corp. (“CSOC”), Caduceus Merger Sub, Inc., a Wyoming corporation and a wholly owned subsidiary of CSOC (the “Merger Sub”).  Pursuant to the Merger Agreement, the Company, the Merger Sub and CSOC agreed to effect a merger transaction, pursuant to which the Company will merge with and into the Merger Sub, with the Company surviving and being a wholly owned subsidiary of CSOC (the “Merger”).

Subject to satisfaction or waiver of certain conditions set forth in the Merger Agreement, at the closing, the Merger will be consummated by filing Articles of Merger (the “Articles of Merger”) with the Secretary of State of Wyoming and by making all other filings or recordings required under the Wyoming Business Corporation Act, as in effect and as the same

may

be amended from time to time (the “WBCA”) in connection with the Merger, in such form as is required by, and executed in accordance with the relevant provisions of, the WBCA. The Merger will become effective when Articles of Merger are filed with the Secretary of State of Wyoming, or at such other time as the parties agree, which shall be specified in the Articles of Merger (the “Effective Time”).

Upon the Effective Time, each share of the Company’s issued and outstanding common stock,

no

par value per share, (the “CEN Common Stock”) shall be converted into and shall become

one

(

1

) fully paid and nonassessable share of common stock, par value

$0.001

per share, of CSOC (the “CSOC Common Stock”). Any fractional shares of CEN Common Stock issued and outstanding immediately prior to the Effective Time shall, be converted into and shall become the same fraction of a fully paid and nonassessable share of CSOC Common Stock, such that, for such fraction of a share of CEN Common Stock, the holder thereof will be issued an equal fraction of a share of CSOC Common Stock. Each share of CEN Common Stock issued and outstanding immediately prior to the Effective Time that is owned by CSOC or the Merger Sub and each share of CEN Common Stock that is owned by the Company as treasury stock shall be cancelled and retired and cease to exist, and

no

payment or distribution shall be made with respect thereto. At the Effective Time, any outstanding shares of CSOC Common Stock that are owned by CSOC, the Merger Sub or any other direct or indirect wholly owned subsidiary thereof, shall be cancelled and retired and shall cease to exist and

no

cash or other consideration shall be delivered or deliverable in exchange therefor.

Upon the closing of the Merger Agreement (the “Closing”) the current members of the CSOC Board of Directors (the “CSOC Board”) shall take such actions as required to expand the CSOC Board to be at least

four

(

4

) persons total, and thereafter to add

three

(

3

) persons designated by the Company as new members of the CSOC Board, after which the current members of the CSOC Board shall resign. Additionally, pursuant to the Merger Agreement, at the Closing, all current officers of CSOC shall resign, and the new members of the CSOC Board as reconstituted pursuant to the foregoing, shall elect new officers of CSOC.

The Merger Agreement includes customary representations, warranties and covenants by the respective parties. For example, in the Merger Agreement CSOC represents and warrants to the Company that the financials statements of CSOC to be provided to the Company pursuant to the terms of the Merger Agreement, will be complete and will be based on the books and records of CSOC, and fairly present the financial condition of CSOC as of the respective dates they were prepared and the results of the operations of CSOC for the periods indicated, in all material respects.

The Company and CSOC have each agreed, that from the Effective Time, until the

first

to occur of the Closing or the termination of the Merger Agreement,

not

to solicit or initiate discussions with

third

parties regarding other acquisition proposals.

Pursuant to the Merger Agreement, CSOC agreed to undertake the following actions following the Effective Time and prior to the Closing:

● file a Form 10 Registration Statement with the Securities and Exchange Commission (the “SEC”) and be current in its reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

● complete a 1 for 5,000 reverse split of the CSOC Common Stock;

● redeem or terminate any derivatives of CSOC;

● amend and restate its Articles of Incorporation as to be agreed by the parties, and cause such amendment to be filed with the Wyoming Secretary of State and to become effective under all applicable Laws;

● convert all of its existing debt, whether existing as of the Effective Time or thereafter, into shares of CSOC Common Stock, pursuant to Debt Conversion Agreements, in the form as to be agreed by the parties such that CSOC has no liabilities as of the Effective Time; and

● file a Form 14f - 1 with the SEC at least 10 days prior to the Closing.

Pursuant to the Merger Agreement, the Company agreed to undertake the following actions following the Effective Time and prior to the Closing:

● amend the terms of any promissory notes or other debt instruments or agreement which are convertible into shares of CEN Common Stock such that such instruments or agreements are, following the Effective Time, convertible into shares of CSOC Common Stock; and

● amend the terms of any acquisition agreements in place at the Company, whether currently or at any time prior to the Closing, such that such agreements are freely assignable by the Company to CSOC following the Closing and such that, upon completion of the acquisitions or transactions set forth therein, the counterparties to such agreements shall be entitled to receive shares of CSOC Common Stock instead of shares of CEN Common Stock.

Consummation of the Merger is subject to various customary conditions, each as more fully described in the Merger Agreement. In addition to customary closing conditions and other closing conditions further described in the Merger Agreement, the Closing is conditioned upon:

● CSOC having no more than 731,680 shares of CSOC Common Stock issued and outstanding as of immediately prior to the Closing;

● CSOC having no liabilities as of the Closing;

● CSOC being current in all of its reporting requirements pursuant to the Exchange Act and the Securities Act of 1933, as amended; and

● delivery by CSOC to the Company all of the Merger deliverables as set forth in the Merger Agreement, including, but not limited to resignations of the directors and officers of CSOC and written evidence of the termination of any and all stockholder, voting, buy-sell or similar agreements by and among CSOC and any of its shareholders.

Pursuant to the terms of the Merger Agreement, if CSOC or the Merger Sub or the Company fails to perform any of their respective material obligations under the Merger Agreement, or are in breach in any material respect of any representation, warranty, covenant or agreement on the part of such party, and such failure or breach is

not

cured within

five

(

5

) business days, then the party who is in such failure or makes such breach shall be in default under the Merger Agreement. In the event of a default, the non-defaulting party will be entitled to either (

1

) bring an action for specific performance of the Merger Agreement or (

2

) terminate the Merger Agreement and to proceed against the defaulting party for payment of expenses as further detailed in the Merger Agreement.

The Merger Agreement can be terminated any time prior to the Closing pursuant to the following:

● mutual written consent of the Company and CSOC;

● by CSOC or the Company, upon written notice to the other parties, if there shall be in effect a final non-appealable order, judgment, injunction or decree entered by or with any governmental authority restraining, enjoining or otherwise prohibiting the consummation of the Merger;

● by CSOC, upon written notice to the Company if there shall have been a default by the Company under the Merger Agreement;

● by the Company, upon written notice to CSOC, if there shall have been a default by CSOC under the Merger Agreement;

● by CSOC, upon written notice to the Company, in the event that a material adverse effect with respect to the Company has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, in the event that a material adverse effect with respect to CSOC or the Merger Sub has occurred prior to the Closing;

● by the Company, upon written notice to CSOC, at any time prior to the Closing if the results of the Company’s due diligence review of CSOC and/or the Merger Sub are unsatisfactory to the Company in its sole discretion; or

● by either the Company or CSOC if the Closing has not occurred by August 30, 2019.

If the Merger Agreement is terminated pursuant to a default on the part of the Company, CSOC

may

then seek from the Company cash equal to CSOC’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of

$150,000.

If the Merger Agreement is terminated pursuant to a default on the part of the CSOC, the Company

may

then seek from CSOC cash equal to the Company’s reasonable out of pocket costs incurred in connection with the Merger Agreement, subject to a maximum payment of

$150,000

and an additional sum of

$50,000.

If the Merger Agreement is terminated because the Closing does

not

occur for any reason, other than the default thereunder of any of the parties, the parties shall

not

owe each other any payment amounts.

The Merger Agreement also includes indemnification by CSOC of the Company, and by the Company of CSOC, as further described therein, for any losses incurred due to (i) any inaccuracy in or breach of any representations or warranties by the other party as set forth in the Merger Agreement, (ii) any breach or non-fulfillment of any covenant, agreement or obligation of such party as set forth in the Merger Agreement, or (iii) any claim by any person for brokerage or finder’s fees or commissions or similar payments based upon any agreement or understanding made, or alleged to have been made, by any such person with the other party in connection with transactions contemplated by the Merger Agreement.

There can be

no

assurance that Merger Agreement will close, or that the transactions contemplated thereby can be completed as planned, or at all.

As of

August 19, 2019,

the Merger Agreement has

not

closed. The Company has

not

determined how to account for this transaction as of

August 19, 2019.

XML

Note 4 - Property, Plant and Improvements, Net (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 30, 2019			December 31, 2018
Leasehold improvements	$	166,163		$	166,163
Furniture and equipment		17,668			17,668
Accumulated depreciation		(26,514	)		(17,322	)
Net property, plant and improvements	$	157,317		$	166,509

XML

Note 6 - Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	June 30, 2019			December 31, 2018
Lighting patent	$	6,797,000		$	6,797,000
Accumulated amortization		(1,203,635	)		(991,229	)
Net	$	5,593,365		$	5,805,771

XML

Note 7 - Loans Payable (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Short-term Debt [Table Text Block]

	June 30, 2019		December 31, 2018
Loan payable to Global Holdings International, LLC, which bears interest at 15% per annum after defaulting on the maturity date of June 30, 2016. This note is secured by the Company's equipment.	$	9,675,000	$	9,675,000
Mortgage payable in default to ARG & Pals, Inc., for the original amount of CAD $385,000. The mortgage bears interest at 22% per annum, and matured on November 21, 2018.		294,178		282,205
Loan payable in default to an individual, issued January 17, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		50,000		50,000
Loan payable in default to an individual, issued April 13, 2018, with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan which matured on July 16, 2019.		100,000		100,000
Total loans payable (all current)	$	10,119,178	$	10,107,205

XML

Note 8 - Loans Payable - Related Party (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Loans Payable to Related Party [Table Text Block]

	June 30, 2019		December 31, 2018
Loan payable in default to the spouse of Bill Chaaban, President of CEN, bears an interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.	$	235,818	$	234,306
Loan payable in default to a former director of Creative, former parent company, bears interest at 10% per annum. This is an unsecured loan that matured on December 31, 2018.		601,500		601,500
Loan payable to R&D Labs Canada, Inc., whose president is Bill Chaaban, also the President of CEN, bearing interest at 8% per annum. This is an unsecured loan with a maturity date of October 2, 2019. R&D Labs Canada is a company owned by Bill Chaaban’s spouse.		300,000		300,000
Loan payable in default to the spouse of Joseph Byrne, CEO of CEN, issued January 12, 2018 with a 30-day maturity, bearing share interest of 4,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		100,000		100,000
Loan payable in default to Alex Tarrabain, a Director of CEN, issued January 17, 2018 with a 30-day maturity, bearing share interest of 3,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		75,000		75,000
Loan payable in default to Joseph Byrne, CEO of CEN, issued January 24, 2018 with a 30-day maturity, bearing share interest of 2,000 common shares per 30-day period. This is an unsecured loan that matured on July 16, 2019.		50,000		50,000
Total loans payable - related party		1,362,318		1,360,806
Less: current portion		1,362,318		1,360,806
Long-term portion loans payable - related party	$	-	$	-

XML

Note 9 - Convertible Notes (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	June 30, 2019		December 31, 2018
Convertible note payable, due on demand, bearing interest at 7% per annum with conversion rights for 335,833 common shares.	$	844,111	$	809,755
Convertible notes payable to multiple private investors, including certain notes in default, bearing interest at 5% per annum with conversion rights for 3,013,190 common shares, maturing at various dates between May 2018 and May 2021.		4,860,927		4,333,892
Total convertible notes payable		5,705,038		5,143,647
Less current portion		4,318,916		3,597,760
Convertible notes payable, less current portion	$	1,386,122	$	1,545,887

XML

Note 10 - Convertible Notes - Related Party (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Convertible Notes Payable to Related Party [Table Text Block]

	June 30, 2019		December 31, 2018
Convertible note due to the spouse of Bill Chaaban, President of CEN, which bears an interest at 12% per annum. This note is convertible to 867,576 common shares with a maturity date of August 17, 2020.	$	1,388,122	$	1,388,122
Convertible notes in default due to Harold Aubrey de Lavenu, a Director of CEN, bearing interest at 5% per annum. These notes are convertible to 548,980 common shares which matured on March 31, 2019.		878,368		878,368
Convertible note in default due to Alex Tarrabain, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 30,000 common shares and matured on March 31, 2019.		48,000		48,000
Convertible notes due to Joseph Byrne, CEO of CEN, bearing interest at 12% per annum. This note is convertible to 140,120 common shares with a maturity date of August 17, 2020.		224,191		224,191
Convertible note due to Darren Ferris, brother of Ameen Ferris, a Director of CEN, bearing interest at 5% per annum. This note is convertible to 12,500 common shares with a maturity date of June 19, 2021.		20,000		-
Total convertible notes payable - related party		2,558,681		2,538,681
Less current portion		926,368		926,368
Convertible notes payable - related party, less current portion	$	1,632,313	$	1,612,313

XML

Note 11 - Income Taxes (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	2019			2018
Income tax benefit at Canadian statutory rate		26.5	%		26.5	%
Valuation allowance		(26.5	%)		(26.5	%)
Effective income tax rate		0	%		0	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	June 30, 2019			December 31, 2018
Deferred tax asset - net operating losses	$	6,100,000		$	9,700,000
Deferred tax asset valuation allowance		(6,100,000	)		(9,700,000	)
Net deferred tax asset	$	-		$	-

XML

Note 14 - Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Nonvested Restricted Stock Shares Activity [Table Text Block]

	Number of Shares			Weighted- Average Grant Date Fair Value per Share		Weighted- Average Remaining Contractual Term (Years)
Non-vested at January 1, 2018		3,962,500		$	0.62		2.92
Granted		145,000			0.62		-
Vested		(820,000	)		0.62		-
Forfeited		-			-		-
Non-vested at June 30, 2018		3,287,500		$	0.62		2.50
Non-vested at December 31, 2018		2,612,500		$	0.62		2.00
Granted		1,250,000			1.01		-
Vested		(1,050,000	)		0.83		-
Forfeited		-			-		-
Non-vested at June 30, 2019		2,812,500		$	0.74		1.97

XML

Note 15 - Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three-months Ended June 30,				Six-months Ended June 30,
	2019		2018		2019		2018
Convertible debt		4,882,922		4,291,436		4,746,243		3,969,963

XML

Note 17 - Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2019

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

			Fair Value Measured at Reporting Date Using
	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At June 30, 2019:
Cash and cash equivalents	$	15,972	$	-	$	15,972	$	-	$	15,972
Other receivables	$	419,958	$	-	$	-	$	419,958	$	419,958
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	995,328	$	-	$	-	$	995,328	$	995,328
Loans payable	$	10,119,178	$	-	$	-	$	10,119,178	$	10,119,178
Loans payable - related parties	$	1,362,318	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,705,038	$	-	$	-	$	6,240,408	$	6,240,408
Convertible notes payable - related parties	$	2,558,681	$	-	$	-	$	-	$	-

	Carrying Amount		Level 1		Level 2		Level 3		Fair Value
At December 31, 2018:
Cash and cash equivalents	$	3,193	$	-	$	3,193	$	-	$	3,193
Other receivables	$	418,905	$	-	$	-	$	418,905	$	418,905
Note receivable - related party	$	44,859	$	-	$	-	$	44,859	$	44,859
Advances to CEN Biotech
Ukraine, LLC - related party	$	875,328	$	-	$	-	$	875,328	$	875,328
Loans payable	$	10,107,205	$	-	$	-	$	10,107,205	$	10,107,205
Loans payable - related parties	$	1,360,806	$	-	$	-	$	-	$	-
Patent acquisition liability	$	1,010,000	$	-	$	-	$	1,010,000	$	1,010,000
Convertible notes payable	$	5,143,647	$	-	$	-	$	5,534,810	$	5,534,810
Convertible notes payable - related parties	$	2,538,681	$	-	$	-	$	-	$	-

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)		3 Months Ended
	Jul. 31, 2018 shares	Sep. 30, 2019 USD ($) $ / shares shares
CSOC [Member] | Forecast [Member]
Merger, Share Conversion, Per Each Share | shares		1
Common Stock, Par or Stated Value Per Share | $ / shares		$ 0.001
Number of Board Members		4
Number of New Board Members		3
Business Combination, Maximum Payment Upon Termination | $		$ 150,000
Business Combination, Amount Received Upon Termination | $		150,000
Business Combination, Additional Amount Received Upon Termination | $		$ 50,000
CSOC [Member] | Forecast [Member] | Maximum [Member]
Merger, Closing Conditions, Maximum Number of Common Stock Shares Issued and Outstanding | shares		731,680
CSOC [Member] | Forecast [Member] | Reverse Stock Split [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio		5,000
AstralENERGY [Member]
Sale of Stock, Percentage of Ownership after Transaction	70.00%
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares	2,500,000

XML

Note 3 - Going Concern Uncertainty / Management Plans (Details Textual) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Retained Earnings (Accumulated Deficit), Ending Balance	$ (38,748,455)	$ (35,655,053)

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Note 4 - Property, Plant and Improvements, Net (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Depreciation, Total	$ 4,596	$ 4,596	$ 9,192	$ 5,038

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Note 4 - Property, Plant and Improvements, Net - Property, Plant and Improvement Placed in Service (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Accumulated depreciation	$ (26,514)	$ (17,322)
Net property, plant and improvements	157,317	166,509
Leasehold Improvements [Member]
Property, plant and equipment, gross	166,163	166,163
Furniture and Equipment [Member]
Property, plant and equipment, gross	$ 17,668	$ 17,668

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Note 5 - Advances to CEN Biotech Ukraine (Details Textual) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
CEN Biotech Ukraine [Member]
Payments to Fund Long-term Loans to Related Parties	$ 995,328	$ 875,328

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Note 6 - Intangible Assets (Details Textual) - USD ($)		1 Months Ended	6 Months Ended		7 Months Ended	12 Months Ended
	Sep. 12, 2016	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018
Stock Issued During Period, Value, Purchase of Assets		$ 5,000,000
Development of Acquired Technology, Annual Compensation for Specialist	$ 200,000
Noncash or Part Noncash Acquisition, Noncash Consideration, Liability Incurred		4,380,000		$ 4,380,000
Contingent Consideration Classified as Equity, Fair Value Disclosure			1,010,000			$ 1,010,000
Impairment of Real Estate			$ 0			$ 0
Finite-Lived Intangible Asset, Useful Life			16 years
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months			$ 424,812
Finite-Lived Intangible Assets, Amortization Expense, After Year Thirteen			$ 283,215
Adjustments to Additional Paid in Capital, Patent Acquisition Liability Modification		$ 4,380,000		$ 4,380,000
Tesla Digital [Member]
Stock Issued During Period, Shares, Purchase of Assets					1,000,000
Patented Technology [Member]
Stock Issued During Period, Value, Purchase of Assets	5,000,000
Noncash or Part Noncash Acquisition, Noncash Consideration, Carrying Value of Properties to be Transferred	2,161,467
Noncash or Part Noncash Acquisition, Noncash Consideration, Original Cost of Property Transferred	$ 202,666

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Note 6 - Intangible Assets - Intangible Assets (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Lighting patent	$ 6,797,000	$ 6,797,000
Accumulated amortization	(1,203,635)	(991,229)
Net	$ 5,593,365	$ 5,805,771

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Note 7 - Loans Payable (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Instrument, Debt Default, Amount	$ 9,675,000		$ 9,675,000
Equipment Pledged as Collateral	$ 9,000		9,000
Stock Issued During Period, Value, New Issues			$ 90,900	$ 59,768
Individual Lenders [Member]
Stock Issued During Period, Shares, New Issues	18,000	26,000	36,000	42,400
Stock Issued During Period, Value, New Issues	$ 18,180	$ 16,120	$ 36,360	$ 26,288

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Note 7 - Loans Payable - Loans Payable (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Loans payable	$ 10,119,178	$ 10,107,205
Short-term Loan Payable to Global Holdings International, LLC [Member]
Loans payable	9,675,000	9,675,000
Short-term Mortgage Payable to ARG & Pals, Inc. [Member]
Loans payable	294,178	282,205
Short-term Loan Payable to an Individual [Member]
Loans payable	50,000	50,000
Second Short-term Loan Payable to an Individual [Member]
Loans payable	$ 100,000	$ 100,000

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Note 7 - Loans Payable - Loans Payable (Details) (Parentheticals) - CAD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Short-term Loan Payable to Global Holdings International, LLC [Member]
Interest Rate	15.00%	15.00%
Maturity Date	Jun. 30, 2016	Jun. 30, 2016
Short-term Mortgage Payable to ARG & Pals, Inc. [Member]
Interest Rate	22.00%	22.00%
Maturity Date	Nov. 21, 2018	Nov. 21, 2018
Original Amount	$ 385,000	$ 385,000
Short-term Loan Payable to an Individual [Member]
Maturity Date	Jul. 16, 2019	Jul. 16, 2019
Share Interest (in shares)	2,000	2,000
Second Short-term Loan Payable to an Individual [Member]
Maturity Date	Jul. 16, 2019	Jul. 16, 2019
Share Interest (in shares)	4,000	4,000

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Note 8 - Loans Payable - Related Party (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Interest Expense, Related Party	$ 114,226	$ 105,292	$ 227,439	$ 209,578
Stock Issued During Period, Value, New Issues			$ 90,900	$ 59,768
Related Parties Lenders [Member]
Stock Issued During Period, Shares, New Issues	27,000	27,000	54,000	54,000
Stock Issued During Period, Value, New Issues	$ 27,270	$ 16,740	$ 54,540	$ 33,480
Loans Payable to Related Party [Member]
Interest Payable, Related Party	411,345		411,345		$ 357,373
Interest Expense, Related Party	$ 54,428	$ 43,367	$ 108,512	$ 86,409

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Note 8 - Loans Payable - Related Party - Loans Payable to Related Parties (Details) - Loans Payable to Related Party [Member] - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Long-term Debt	$ 1,362,318	$ 1,360,806
Less: current portion	1,362,318	1,360,806
Long-term portion loans payable - related party
Bill Chaaban, President of Cen Biotech [Member]
Long-term Debt	235,818	234,306
Creative Edge [Member]
Long-term Debt	601,500	601,500
R&D Labs Canada, Inc [Member]
Long-term Debt	300,000	300,000
Spouse of Joseph Byrne, CEO of CEN Biotech [Member]
Long-term Debt	100,000	100,000
Director, Alex Tarrabain [Member]
Long-term Debt	75,000	75,000
Joseph Byrne [Member]
Long-term Debt	$ 50,000	$ 50,000

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Note 8 - Loans Payable - Related Party - Loans Payable to Related Parties (Details) (Parentheticals) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Bill Chaaban, President of Cen Biotech [Member] | Loans Payable to Related Party [Member]
Interest Rate	10.00%	10.00%
Maturity Date	Dec. 31, 2018	Dec. 31, 2018
Creative Edge [Member] | Loans Payable to Related Party [Member]
Interest Rate	10.00%	10.00%
Maturity Date	Dec. 31, 2018	Dec. 31, 2018
R&D Labs Canada, Inc [Member] | Loans Payable to Related Party [Member]
Interest Rate	8.00%	8.00%
Maturity Date	Oct. 02, 2019	Oct. 02, 2019
Spouse of Joseph Byrne, CEO of CEN Biotech [Member] | Loans Payable to Related Party [Member]
Maturity Date	Jul. 16, 2019	Jul. 16, 2019
Share Interest (in shares)	4,000	4,000
Director, Alex Tarrabain [Member]
Interest Rate		5.00%
Maturity Date		Mar. 31, 2019
Director, Alex Tarrabain [Member] | Loans Payable to Related Party [Member]
Maturity Date	Jul. 16, 2019	Jul. 16, 2019
Share Interest (in shares)	3,000	3,000
Joseph Byrne [Member] | Loans Payable to Related Party [Member]
Maturity Date	Jul. 16, 2019	Jul. 16, 2019
Share Interest (in shares)	2,000	2,000

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Note 9 - Convertible Notes (Details Textual) - Convertible Debt [Member]		6 Months Ended
	Aug. 19, 2019 USD ($)	Jun. 30, 2019
Debt Instrument, Convertible, Number of Equity Instruments		3,349,023
Subsequent Event [Member]
Debt Instrument, Convertible, Number of Equity Instruments	1,287,652
Convertible Debt, Total	$ 2,054,707

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Note 9 - Convertible Notes - Convertible Notes (Details) - Convertible Debt [Member] - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Long-term Debt	$ 5,705,038	$ 5,143,647
Less: current portion	4,318,916	3,597,760
Long-term portion loans payable - related party	1,386,122	1,545,887
Convertible Notes 1[Member]
Long-term Debt	844,111	809,755
Convertible Notes 2 [Member]
Long-term Debt	$ 4,860,927	$ 4,333,892

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Note 9 - Convertible Notes - Convertible Notes (Details) (Parentheticals)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Convertible Notes 1[Member]
Interest Rate	7.00%	7.00%
Conversion Rights	335,833	335,833
Convertible Notes 2 [Member]
Interest Rate	5.00%	5.00%
Conversion Rights	3,013,190	3,013,190
Maturing Dates Range Start	May 01, 2018	May 01, 2018
Maturing Dates Range End	May 31, 2021	May 31, 2021

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Note 10 - Convertible Notes - Related Party (Details Textual)		3 Months Ended		6 Months Ended
	Aug. 19, 2019 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Interest Expense, Related Party		$ 114,226	$ 105,292	$ 227,439	$ 209,578
Convertible Debt Payable to Related Party [Member]
Interest Payable, Related Party		707,781		707,781		$ 588,854
Interest Expense, Related Party		$ 59,798	$ 61,925	$ 118,927	$ 123,169
Debt Instrument, Convertible, Number of Equity Instruments				1,599,176
Convertible Debt Payable to Related Party [Member] | Subsequent Event [Member]
Convertible Debt, Total	$ 926,368
Convertible Debt to Related Party in Default [Member] | Subsequent Event [Member]
Debt Instrument, Convertible, Number of Equity Instruments	578,980

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Note 10 - Convertible Notes - Related Party - Convertible Notes Payable to Related Parties (Details) - Convertible Debt Payable to Related Party [Member] - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Long-term Debt	$ 2,558,681	$ 2,538,681
Less: current portion	926,368	926,368
Long-term portion loans payable - related party	1,632,313	1,612,313
Bill Chaaban, President of Cen Biotech [Member]
Long-term Debt	1,388,122	1,388,122
Director, Harold Aubrey de Lavenu [Member]
Long-term Debt	878,368	878,368
Director, Alex Tarrabain [Member]
Long-term Debt	48,000	48,000
Joseph Byrne [Member]
Long-term Debt	224,191	224,191
Brother of Director Ameen Ferris [Member]
Long-term Debt	$ 20,000

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Note 10 - Convertible Notes - Related Party - Convertible Notes Payable to Related Parties (Details) (Parentheticals)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Director, Harold Aubrey de Lavenu [Member]
Interest Rate		5.00%
Conversion Rights		548,980
Maturing Dates		Mar. 31, 2019
Director, Alex Tarrabain [Member]
Interest Rate		5.00%
Conversion Rights		30,000
Maturing Dates		Mar. 31, 2019
Brother of Director Ameen Ferris [Member]
Interest Rate		5.00%
Conversion Rights		12,500
Maturing Dates		Jun. 19, 2021
Convertible Debt Payable to Related Party [Member]
Conversion Rights	1,599,176
Convertible Debt Payable to Related Party [Member] | Bill Chaaban, President of Cen Biotech [Member]
Interest Rate	12.00%	12.00%
Conversion Rights	867,576	867,576
Maturing Dates	Aug. 17, 2020	Aug. 17, 2020
Convertible Debt Payable to Related Party [Member] | Joseph Byrne [Member]
Interest Rate	12.00%	12.00%
Conversion Rights	140,120	140,120
Maturing Dates	Aug. 17, 2020	Aug. 17, 2020

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Note 11 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operating Loss Carryforwards, Total	$ 23,100,000		$ 23,100,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (3,900,000)	$ 400,000	$ (3,600,000)	$ 800,000
Domestic Tax Authority [Member] | Canada Revenue Agency [Member]
Open Tax Year			2015 2016 2017 2018

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Note 11 - Income Taxes - Reconciliation of Effective Tax Rate (Details)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income tax benefit at Canadian statutory rate	26.50%	26.50%
Valuation allowance	(26.50%)	(26.50%)
Effective income tax rate	0.00%	0.00%

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Note 11 - Income Taxes - Deferred Tax Assets (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Deferred tax asset - net operating losses	$ 6,100,000	$ 9,700,000
Deferred tax asset valuation allowance	(6,100,000)	(9,700,000)
Net deferred tax asset

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Note 12 - Shareholders' Deficit / Stock Activity (Details Textual) - $ / shares $ / shares in Thousands	Jun. 30, 2019	Dec. 31, 2018
Common Stock, No Par Value	$ 0	$ 0
Convertible Debt [Member]
Common Stock, Capital Shares Reserved for Future Issuance	4,948,199

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Note 13 - Related Party Transactions (Details Textual)				1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Sep. 01, 2022 CAD ($)	Oct. 01, 2017 CAD ($)	Sep. 01, 2013 CAD ($)	Jan. 31, 2017 CAD ($)	Jun. 30, 2019 USD ($) a	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) a	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jun. 03, 2019 USD ($)	May 20, 2019	Dec. 31, 2018 USD ($)	Dec. 03, 2017	Dec. 02, 2017	Jul. 12, 2017	Jan. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Operating Lease, Right-of-Use Asset					$ 250,484		$ 250,484
Operating Lease, Weighted Average Remaining Lease Term					6 years 219 days		6 years 219 days
Operating Lease, Weighted Average Discount Rate, Percent					8.00%		8.00%
Lease Arrangement, 20 North Rear Road [Member]
Area of Land | a					10.4		10.4
Operating Lease Annual Rent			$ 339,000
Accrued Rent																	$ 552,934
Operating Lease, Monthly Rent				$ 4,000
Lessee, Operating Lease, Term of Contract																5 years
Operating Lease, Right-of-Use Asset					$ 83,408		$ 83,408
Operating Lease, Liability, Total					$ 80,351		$ 80,351
Lessee, Operating Lease, Discount Rate					8.00%		8.00%
Lease Arrangement, 20 North Rear Road [Member] | General and Administrative Expense [Member]
Operating Lease, Expense					$ 9,106	$ 22,689	$ 15,092	$ 45,572
Leases Office Space from R&D Labs Canada, Inc [Member]
Operating Lease, Monthly Rent	$ 3,390	$ 2,608
Operating Lease, Right-of-Use Asset										$ 167,076
Operating Lease, Liability, Total										$ 167,282
Lessee, Operating Lease, Discount Rate										8.00%
Leases Office Space from R&D Labs Canada, Inc [Member] | General and Administrative Expense [Member]
Operating Lease, Expense					7,060	5,942	12,039	12,010
Long-term Convertible Notes Payable to Multiple Private Investors [Member]
Debt Instrument, Interest Rate, Stated Percentage															5.00%
Convertible Debt Issued to Lessor's Creditor [Member]
Convertible Debt, Total																$ 824,446
CEN Biotech Ukraine [Member]
Business Acquisition, Percentage of Voting Interests Acquired											51.00%
CEN Biotech Ukraine [Member]
Due from Related Parties, Total					995,328		995,328					875,328
Percentage of Related Party's Equity Interest Owned by Director													25.50%	51.00%
CEN Biotech Ukraine [Member] | Equipment Sold to Related Party in Exchange for Note Receivable [Member]
Adjustments to Additional Paid in Capital, Dividends in Excess of Retained Earnings									$ 255,141
Notes Receivable, Related Parties									44,859
Board Members and Officers [Member] | Consulting Fees [Member]
Related Party Transaction, Amounts of Transaction					33,800	$ 45,839	65,000	$ 77,039
Due to Related Parties, Total					$ 189,800		$ 189,800					$ 124,800
R&D Labs Canada, Inc [Member] | Purchased Equipment in Exchange for Note Payable [Member]
Notes Payable, Related Parties									$ 300,000

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Note 14 - Stock Based Compensation (Details Textual) - USD ($)						3 Months Ended		6 Months Ended		24 Months Ended
	May 16, 2019	Dec. 31, 2018	Jun. 19, 2018	Jun. 07, 2018	Nov. 30, 2017	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Nov. 29, 2017
Stock Issued During Period, Shares, Issued for Services		12,120	125,000
President [Member]
Employment Agreement, Base Annual Salary					$ 31,200
Employment Agreement, Compensation, Shares of Restricted Stock					8,750,000
President [Member] | Vested Immediately [Member]
Employment Agreement, Compensation, Shares of Restricted Stock					7,400,000
Chief Executive Officer [Member]
Employment Agreement, Base Annual Salary					$ 31,200
Employment Agreement, Compensation, Shares of Restricted Stock					1,250,000
Chief Executive Officer [Member] | Vested Immediately [Member]
Employment Agreement, Compensation, Shares of Restricted Stock					325,000
Senior Executive Vice President and Chief Financial Officer [Member]
Employment Agreement, Base Annual Salary					$ 31,200
Employment Agreement, Compensation, Shares of Restricted Stock					4,500,000
Senior Executive Vice President and Chief Financial Officer [Member] | Vested Immediately [Member]
Employment Agreement, Compensation, Shares of Restricted Stock					4,140,000
Vice President [Member]
Employment Agreement, Base Annual Salary					$ 31,200
Employment Agreement, Compensation, Shares of Restricted Stock					750,000
Vice President [Member] | Vested Immediately [Member]
Employment Agreement, Compensation, Shares of Restricted Stock					300,000
Chief Financial Officer [Member]
Employment Agreement, Base Annual Salary	$ 31,200
Employment Agreement, Compensation, Shares of Restricted Stock	1,250,000
Chief Financial Officer [Member] | Vested Immediately [Member]
Employment Agreement, Compensation, Shares of Restricted Stock	350,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period						1,250,000	145,000	1,250,000	145,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period						712,500	337,500	1,050,000	675,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grant DateFair Value								$ 12,698,241		$ 11,435,741
Share-based Compensation Arrangement by SShare-based Payment Award, Equity Instruments Other than Options, Grants in Period, Grant Date Fair Value						$ 1,262,500	$ 89,900	$ 1,262,500	$ 89,900
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period								3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value						588,000	209,250	$ 797,250	418,500
Share-based Payment Arrangement, Expense						546,150	179,800	713,550	347,200
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount						$ 1,847,850		$ 1,847,850
Restricted Stock [Member] | General and Administrative Expense [Member]
Legal Fees							$ 77,500		$ 77,500
Restricted Stock [Member] | President [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Director,Donald Strilchuck [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Director Usamakh Saadikh [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				20,000
Restricted Stock [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Senior Executive Vice President and Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Vice President [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Director, Ameen Ferris [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Director, Alex Tarrabain [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Stock [Member] | Director, Harold Aubrey de Lavenu [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					20,000
Restricted Shares Issued for Security Consulting Services [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					1,870,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period					1,330,000
Restricted Shares Issued for Security Consulting Services [Member] | Director,Donald Strilchuck [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period					550,000
2017 Equity Compensation Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance											20,000,000

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Note 14 - Stock Based Compensation - Restricted Stock Award Activity (Details) - Restricted Stock [Member] - $ / shares	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Non-vested, number of share (in shares)			2,612,500	3,962,500	3,962,500
Non-vested, weighted average grant date fair value (in dollars per share)			$ 0.62	$ 0.62	$ 0.62
Non-vested, weighted average remaining contractual term (Year)			1 year 354 days	2 years 182 days	2 years	2 years 335 days
Granted, number of share (in shares)	1,250,000	145,000	1,250,000	145,000
Granted, weighted average grant date fair value (in dollars per share)			$ 1.01	$ 0.62
Vested, number of share (in shares)	(712,500)	(337,500)	(1,050,000)	(675,000)
Vested, weighted average grant date fair value (in dollars per share)			$ 0.83	$ 0.62
Forfeited, number of share (in shares)
Forfeited, weighted average grant date fair value (in dollars per share)
Non-vested, number of share (in shares)	2,812,500	3,287,500	2,812,500	3,287,500	2,612,500	3,962,500
Non-vested, weighted average grant date fair value (in dollars per share)	$ 0.74	$ 0.62	$ 0.74	$ 0.62	$ 0.62	$ 0.62

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Note 15 - Net Loss Per Share - Antidilutive Securities (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Convertible Debt Securities [Member]
Antidilutive Securities (in shares)	4,882,922	4,291,436	4,746,243	3,969,963

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Note 17 - Fair Value Disclosures - Fair Value of Financial Instruments (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Reported Value Measurement [Member]
Cash and cash equivalents	$ 15,972	$ 3,193
Other receivables	419,958	418,905
Note receivable - related party	44,859	44,859
Advances to CEN Biotech Ukraine, LLC - related party	995,328	875,328
Loans payable	10,119,178	10,107,205
Loans payable - related parties	1,362,318	1,360,806
Patent acquisition liability	1,010,000	1,010,000
Convertible notes payable	5,705,038	5,143,647
Convertible notes payable - related parties	2,558,681	2,538,681
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	15,972	3,193
Other receivables	419,958	418,905
Note receivable - related party	44,859	44,859
Advances to CEN Biotech Ukraine, LLC - related party	995,328	875,328
Loans payable	10,119,178	10,107,205
Loans payable - related parties
Patent acquisition liability	1,010,000	1,010,000
Convertible notes payable	6,240,408	5,534,810
Convertible notes payable - related parties
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents
Other receivables
Note receivable - related party
Advances to CEN Biotech Ukraine, LLC - related party
Loans payable
Loans payable - related parties
Patent acquisition liability
Convertible notes payable
Convertible notes payable - related parties
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents	15,972	3,193
Other receivables
Note receivable - related party
Advances to CEN Biotech Ukraine, LLC - related party
Loans payable
Loans payable - related parties
Patent acquisition liability
Convertible notes payable
Convertible notes payable - related parties
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents
Other receivables	419,958	418,905
Note receivable - related party	44,859	44,859
Advances to CEN Biotech Ukraine, LLC - related party	995,328	875,328
Loans payable	10,119,178	10,107,205
Loans payable - related parties
Patent acquisition liability	1,010,000	1,010,000
Convertible notes payable	6,240,408	5,534,810
Convertible notes payable - related parties