Complete Document

10-Q 1 s9619010q.htm Complete Document

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended JUNE 30, 2019

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

Commission file number: 000-55809

CANNASSIST INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Delaware		82-1873116
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)


1548 Loch Ness Dr., Fallbrook, CA 92028		82834
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (760) 990-3091

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

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

Yes x No ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	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(1) of the Exchange Act. ¨

Indicate by checkmark whether the registrant is a shell company (as defined in 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
Common Stock	N/A	N/A

As of September 9, 2019, the Company had 17,760,000 shares of its common stock, par value $.0001 per share, issued and outstanding.

TABLE OF CONTENTS

PART I

Item 1.	Condensed Unaudited Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	15

PART II		15

Item 1.	Legal Proceedings	16

Item 1A.	Risk Factors	16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3.	Defaults Upon Senior Securities	16

Item 4.	Mining Safety Disclosures	16

Item 5.	Other Information	16

Item 6.	Exhibits	17

	Signatures	18

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CANNASSIST INTERNATIONAL CORP.

INDEX TO FINANCIAL STATEMENTS

Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018	4

Statements of Operations for the three and six months ended June 30, 2019 and 2018 (unaudited)	5

Statements of Changes in Stockholders’ Equity (Deficit) for the six months ended June 30, 2019 and 2018 (unaudited)	6

Statements of Cash Flows for the six months ended June 30, 2019 and 2018 (unaudited)	7

Notes to Condensed Financial Statements (unaudited)	8

CannAssist International Corp.

Balance Sheets

	June 30, 2019			December 31, 2018
		(Unaudited)
ASSETS
Current assets:
Cash	$	25,855		$	67,351
Accounts receivable		2,113			56,160
Prepaid expenses		10,487			62,173
Inventory		37,039			19,764

Total assets	$	75,494		$	205,448

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	144,843		$	89,565
Accounts payable – related party		12,747			4,373
Customer deposits		-			59,671
Due to a related party		18,162			8,666
Loan payable		1,000			1,000
Accrual for income taxes		-			6,748
Total current liabilities		176,752			170,023

Commitments and contingencies					-

Stockholders’ Equity (Deficit):
Preferred stock, $0.0001 par value 20,000,000 shares authorized; none issued and outstanding		-			-
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 17,410,000 and 12,410,000 issued and outstanding, respectively		1,741			1,241
Stock subscription receivable		-			(30	)
Additional paid in capital		163,420			13,920
(Accumulated deficit) retained earnings		(266,419	)		20,294
Total Stockholders’ (deficit) equity		(101,258	)		35,425

Total Liabilities and Stockholders’ Deficit	$	75,494		$	205,448

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

CannAssist International Corp.

Statements of Operations
(Unaudited)

	For the three Months ended June 30,						For the six Months ended June 30,
	2019			2018			2019			2018
Revenue	$	165,865		$	200		$	438,678		$	353
Cost of revenue		118,698			57			328,568			57
Gross margin		47,167			143			110,110			296

Operating expenses:
General and administrative		73,484			808			124,608			856
General and administrative– related party		153,600			-			154,100			-
Commissions – related party		314			-			12,567			-
Professional fees		69,816			6,258			105,032			6,708
Total operating expenses		297,214			7,066			396,307			7,564

Loss from operations		(250,047	)		(6,923	)		(286,197	)		(7,268	)

Other expense:
Interest expense		(516	)		-			(516	)		-
Total other expense		(516	)		-			(516	)		-

Loss before provision for income taxes		(250,563	)		(6,923	)		(286,713	)		(7,268	)
Provision for income taxes		-			-			-

Net loss	$	(250,563	)	$	(6,923	)	$	(286,713	)	$	(7,268	)

Loss per share, basic and diluted	$	(0.02	)	$	(0.00	)	$	(0.02	)	$	(0.00	)
Weighted average shares outstanding, basic and diluted		15,871,538			17,916,484			14,150,331			18,952,486

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

CannAssist International Corp.

Statement of Changes in Stockholders’ Equity

June 30, 2018

(Unaudited)

										Additional						Total
	Common Stock						Common Stock			Paid-in			Retained			Stockholders'
	Shares			Amount			To Be Issued			Capital			Earnings			Deficit
Balance, December 31, 2017		20,000,000		$	2,000		$	-		$	471		$	(5,091	)	$	(2,620	)
Net loss		-			-			-			-			(345	)		(345	)
Balance, March 31, 2018		20,000,000			2,000			-			471			(5,436	)		(2,965	)
Contributed capital		-			-			-			2,400			-			2,400
Common stock cancelled		(20,000,000	)		(2,000	)		-			2,000			-			-
Common stock issued for cash		900,000			90			1			-			-			91
Common stock issued for cash – related party		3,300,000			330			-			-			-			330
Recapitalization of reverse merger		-			-			-			(650	)		-			(650	)
Net loss		-			(6,923	)		(6,923	)
Balance, June 30, 2018		4,200,000		$	420		$	1		$	4,221		$	(12,359	)	$	(7,717	)

CannAssist International Corp.

Statement of Changes in Stockholders’ Equity

June 30, 2019

(Unaudited)

					Additional			Stock						Total
	Common Stock				Paid-in			Subscription			Retained			Stockholders'
	Shares		Amount		Capital			Receivable			Earnings			Deficit
Balance, December 31, 2018		12,410,000	$	1,241	$	13,920		$	(30	)	$	20,294		$	35,425
Cash received on subscription receivable		-		-		-			30			-			30
Net loss		-		-		-			-			(36,150	)		(36,150	)
Balance, March 31, 2019		12,410,000		1,241		13,920			-			(15,856	)		(695	)
Common stock issued for license agreement – related party		5,000,000		500		149,500			-			-			150,000
Net loss		-		-		(250,563	)		(250,563	)
Balance, June 30, 2019		17,410,000	$	1,741	$	163,420		$	-		$	(266,419	)	$	(101,258	)

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

CannAssist International Corp.

Statements of Cash Flows

(Unaudited)

	For the six Months ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(286,713	)	$	(7,268	)
Adjustments to reconcile net loss to net cash used in operating activities:
Expenses paid for by stockholder and contributed as capital		-			1,750
Common stock issued to licensing expense – related party		150,000			-
Changes in Operating Assets and Liabilities:
Accounts receivable		54,047			-
Inventory		(17,275	)		-
Prepaid expenses		51,687			(81,940	)
Accounts payable and accrued liabilities		56,903			25
Customer deposits		(59,671	)		81,940
Net cash (used) provided by operating activities		(51,022	)		(5,493	)

Cash flows from Investing activities:		-			-

Cash flows from Financing activities:
Proceeds from loans - related party		9,496			6,000
Proceeds from sale of common stock		-			421
Proceeds from stock subscription receivable		30			-
Net cash provided by financing activities		9,526			6,421

Net (decrease) increase in cash		(41,496	)		928
Cash, beginning of period		67,351			380
Cash, end of period	$	25,855		$	1,308

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

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

CANNASSIST INTERNATIONAL CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2019

NOTE 1 - DESCRIPTION OF BUSINESS AND HISTORY

Description of business

CannAssist International Corp. (the “Company” or “CannAssist”) was incorporated on May 17, 2017 under the laws of the state of Delaware under the name Iris Grove Acquisition Corporation to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On May 23, 2018 the Company changed its name to CannAssist International Corporation.

On June 18, 2018, the Company cancelled all 20,000,000 shares of its issued and outstanding stock and issued 4,200,000, shares of common stock pursuant to Section 4(a)(2) of the Securities Act of 1933 at par representing 100% of the total outstanding common stock. With the issuance of the stock and the redemption of the 20,000,000 shares of stock, the Company effected a change in its control and the new majority shareholder(s) elected new management of the Company. The Company intends to develop its business plan by acquiring Xceptor, LLC, a Wyoming corporation.

On July 12, 2018, the “Company, entered into a share exchange acquisition agreement with Xceptor LLC, a private company organized under the laws of Wyoming (“Xceptor”). The Acquisition was effected by the Company through the exchange of all the outstanding membership interests of Xceptor for 3,000,000 shares of common stock of the Company, valued at $0.0001 per share. At the time of the Acquisition, there was one shareholder of the Company who is also a shareholder and manager of Xceptor. Xceptor has become a wholly owned subsidiary of the Company and the Company has taken over its operations and business plan. Prior to the Acquisition, the Company had no ongoing business or operations. Since the Company and Xceptor were entities under common control prior to the Acquisition, the transaction is accounted for as a restructuring transaction. The Company has recast prior period financial statements to reflect the conveyance of Xceptor’s common shares as if the restructuring transaction had occurred as of the earliest date of the financial statements.

CannAssist produces and sells its cannabidiol ("CBD") product, “Cibidinol,” which is formulated based on a process developed by its founder Mark Palumbo. CBD is a non-psychoactive compound found in hemp and cannabis. CannAssist’s initial research and development work, aimed at enhancing the bioavailability of desired molecular structures, resulted in the creation of a line of CBD products, most notably its CBD product, Cibidinol. Cibidinol will be available in a line of consumable and topical products that the Company believes will make enhanced CBD products more available and accessible to consumers.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2018 included on the Company’s Form 10-K. The results of the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.

In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2019 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CANNASSIST INTERNATIONAL CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2019

Accounts Receivable

Revenues that have been recognized but not yet received are recorded as accounts receivable. Losses on receivables will be recognized when it is more likely than not that a receivable will not be collected. An allowance for estimated uncollectible amounts will be recognized to reduce the amount of receivables to its net realizable value when needed. The allowance for uncollectible amounts is evaluated quarterly.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery.

The Company recognizes revenue when product is shipped. The Company will often receive payment and/or pay for the cost of goods prior to shipping. When this occurs, the result is both a prepaid for the supplies to be used in their product and a customer deposit. As of June 30, 2019, the Company has neither a prepaid or customer deposits for orders. As of December 31, 2018, the Company has a prepaid expense of $62,173 and customer deposits of $59,671, for orders to be shipped in Q1, 2019.

Cost of Sales

Cost of sales is determined on the basis of the cost of production or the purchase of goods, adjusted for the variation of inventory Cost of sale is recognized as the direct cost of products or services sold during the period.

Recent Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. This new guidance will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The adoption of this standard has had no impact on the financial statements as the Company does not currently have any long-term lease obligations.

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

CANNASSIST INTERNATIONAL CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2019

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated revenues of $438,678 during the six months ended June 30, 2019 and had a net loss of $286,713 for the six months ended June 30, 2019. The Company has an accumulated deficit of $266,419 as of June 30, 2019. The Company requires capital for its contemplated operational and marketing activities. The obtainment of additional financing, through an initial capital raise, the successful development of the Company’s contemplated plan of operations, and its transition to the attainment of continued profitable operations are necessary for the Company to continue operations. There is no guarantee that the Company will be able to obtain the necessary financing or profitable operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

NOTE 4 – LOAN PAYABLE

On October 11, 2017, the Company received a $1,000 loan from a third party. The loan is unsecured, due on demand and non-interest bearing.

NOTE 5 – RELATED PARTY TRANSACTIONS

Marla Palumbo has advanced the Company a limited amount of funds to cover some general operating expenses and travel costs. These advances are unsecured, due on demand and non-interest bearing. As of June 30, 2019, and December 31, 2018, the balance due to Ms. Palumbo for cash advances is $9,796 and $300, respectively. Ms. Palumbo is the President of the Company and wife of the CEO, Mark Palumbo.

On June 29, 2018, Ms. Palumbo advanced the Company $6,000 for general operating expenses. The advance is unsecured, due on demand and non-interest bearing.

During the year ended December 31, 2018, EME, Ltd. advanced the Company $2,366 to pay for certain operating expenses. EME, Ltd. is owned by Mark Palumbo, CEO. The advances are unsecured, non-interest bearing and due on demand. In addition, there is $9,347 and $4,373 of accounts payable due to EME, Ltd as of June 30, 2019 and December 31, 2018.

During the six months ended June 30, 2019, the Company paid sales commissions of $12,567 to EME Ltd.

During the six months ended June 30, 2019, the Company incurred $4,100 of expense for Matthew Palumbo for product design services. Matthew Palumbo is the son of Mark Palumbo, CEO. In addition, there is $3,400 and $0 of accounts payable due to Matthew Palumbo as of June 30, 2019 and December 31, 2018.

On April 29, 2019, the Company entered into a Technology License Agreement with Mark Palumbo (“Licensor”) whereby the Licensor granted to the Company an exclusive worldwide license (the “License”) to use, market, promote and distribute certain technology related to a provisional patent application for a “Process for creating Carbohydrate Complexes with Cannabinoids and other Hydrophobic Molecules in large scale,” related patent applications, related trade-secrets and associated knowhow, including methods, techniques, specifications, procedures, information, systems, knowledge and business processes required to practice and carry on business in the field of data collection, security and management (the “Technology”). The initial term of the License is 5-years (the “Initial Term”) and shall automatically be renewed for successive 1-year terms (each, a “Renewal Term”) unless the Company elects to terminate the License by giving 30 days’ written notice prior to commencement of a Renewal Term. In exchange for the License of the Technology, the Company shall issue to the Licensor 5,000,000 restricted shares of its common stock, valued at par value per share, at the effective date of the agreement, and shall issue to the Licensor an additional 1,000,000 restricted shares of its common stock, valued at par value per share, at the commencement of each Renewal Term.

CANNASSIST INTERNATIONAL CORP.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2019

NOTE 6 – COMMON STOCK

During the year ended December 31, 2018, the Company sold 5,005,000 shares of common stock to third parties for total cash proceeds of $10,500. As of December 31, 2018, $30 has not been collected and has been debited to stock subscription receivable. The $30 was collected during the six months ended June 30, 2019.

Pursuant to the terms of the licensing agreement with Mark Palumbo (Note 5) the Company issued 5,000,000 shares of common stock. The shares were valued at $0.03, the average price that common stock has recently been sold for, for total non-cash expense of $150,000.

NOTE 7 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the following.

On July 24, 2019, the Company sold 350,000 shares of common stock for total cash proceeds of $25,000.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.

Forward Looking Statements

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:

·our future strategic plans

·our future operating results;

·our business prospects;

·our contractual arrangements and relationships with third parties;

·the dependence of our future success on the general economy;

·our possible future financings; and

·the adequacy of our cash resources and working capital.

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Executive Overview

CannAssist International Corporation (“CannAssist” or the "Company") was incorporated on May 17, 2017 under the laws of the State of Delaware under the name Iris Grove Acquisition Corporation to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

The Company's independent auditors have issued a report raising substantial doubt about the Company's ability to continue as a going concern. At present, the Company has no operations and the continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of that target company with it.

Results of Operation for the Three Months Ended June 30, 2019 and 2018

Revenues

For the three months ended June 30, 2019, the Company had revenues of $165,865, and costs of revenue of $118,698. In comparison, for the three months ended June 30, 2018, the Company had revenue of $200, and cost of revenue of $57. The increase in revenue and cost of revenue is from the operations of Xceptor, a wholly owned subsidiary of the Company that was combined with the Company in July 2018.

General and administrative expenses

General and administrative expenses were $73,484 for the three months ended June 30, 2019 compared to $808 for the three months ended June 30, 2018. General and administrative expenses have increased with the recent increase in business activity.

General and administrative expenses to a related party, were $153,600 for the three months ended June 30, 2019 compared to $0 for the three months ended June 30, 2018. General and administrative expenses to a related party have increased as a result of the issuance of 5,000,000 shares of common stock for a licensing agreement (Note 5), for total non-cash expense of $150,000.

Commissions

Commission expense was $314 for the three months ended June 30, 2019 compared to $0 for the three months ended June 30, 2018. Commission expense was paid to EME, LLC, a related party.

Professional fees

Professional fees were $69,816 for the three months ended June 30, 2019 compared to $6,258 for the three months ended June 30, 2018. Professional fees consist of audit, accounting and legal fees. The fees have increased with the increase in services required to comply with SEC filing requirements.

Net Loss

For the three months ended June 30, 2019, we realized a net loss of $250,563 as compared to a net loss of $6,923 for three months ended June 30, 2018. The increase in net loss in the current period is due to the non-cash expense for stock issuance and an increase in other operating expenses in conjunction with the increase in business activity.

Results of Operation for the Six Months Ended June 30, 2019 and 2018

Revenues

For the six months ended June 30, 2019, the Company had revenues of $438,678, and costs of revenue of $328,568. In comparison, for the six months ended June 30, 2018, the Company had revenue of $353, and cost of revenue of $57. The increase in revenue and cost of revenue is from the operations of Xceptor, a wholly owned subsidiary of the Company that was combined with the Company in July 2018.

General and administrative expenses

General and administrative expenses were $124,608 for the six months ended June 30, 2019 compared to $856 for the six months ended June 30, 2018. General and administrative expenses have increased with the recent increase in business activity.

General and administrative expenses to a related party, were $154,100 for the six months ended June 30, 2019 compared to $0 for the six months ended June 30, 2018. General and administrative expenses to a related party have increased as a result of the issuance of 5,000,000 shares of common stock for a licensing agreement (Note 5), for total non-cash expense of $150,000.

Commissions

Commission expense was $12,567 for the six months ended June 30, 2019 compared to $0 for the six months ended June 30, 2018. Commission expense was paid to EME, LLC, a related party

Professional fees

Professional fees were $105,032 for the six months ended June 30, 2019 compared to $6,708 for the six months ended June 30, 2018. Professional fees consist of audit, accounting and legal fees. The fees have increased with the increase in services required to comply with SEC filing requirements.

Net Loss

For the six months ended June 30, 2019, we realized a net loss of $286,713 as compared to a net loss of $7,268 for six months ended June 30, 2018. The change from a net loss to net income in the current period is due to the recent acquisition of Xceptor.

Liquidity and Capital Resources

The Company used $51,022 of cash from operations for the six months ended June 30, 2019. Net cash provided by financing activities for the six months ended June 30, 2019 was $9,526.

As of June 30, 2019, the Company had $25,855 in cash.

Critical Accounting Estimates and Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Recent Accounting Pronouncements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, they concluded that our disclosure controls and procedures were not effective for the quarterly period ended June 30, 2019.

The following aspects of the Company were noted as potential material weaknesses:

timely and accurate reconciliation of accounts

lack of segregation of duties

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Changes in Internal Controls

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the quarter ended June 30, 2019, that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are not presently any material pending legal proceedings to which the Company is a party or as to which any of our property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

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

On April 29, 2019, the Company issued 5,000,000 restricted shares of its common stock, valued at $0.03 per share, to Mark Palumbo, an officer and director of the Company, in connection with the terms of Technology License Agreement. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933.

On July 24, 2019, the Company sold 350,000 shares of common stock for total cash proceeds of $25,000. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINING SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS

No.	Description

31.1	Chief Executive Officer Section 302 Certification

31.2	Chief Financial Officer Section 302 Certification

32.1	Section 906 Certification

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Label Linkbase Document

101.PRE	XBRL Taxonomy Presentation Linkbase Document

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CANNASSIST INTERNATIONAL CORPORATION

Dated: September 9, 2019

By: /s/ Mark Palumbo

Mark Palumbo

Chief Executive Officer

By: /s/ Mark Palumbo

Mark Palumbo

Chief Financial Officer