Cannabis Strategic Ventures For the quarterly report ended September 30, 2018 (Unaudited)

Transcription

1 Cannabis Strategic Ventures For the quarterly report ended September 30, 2018 (Unaudited) Information required for compliance with the provisions of the OTC Markets, Inc., OTC Pink Disclosure Guidelines Because we want to provide more meaningful and useful information, this Quarterly Report may contain certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act ). These statements reflect our current expectations regarding our possible future results of operations, performance, and achievements. Wherever possible, we have tried to identify these forward-looking statements by using words such as anticipate, believe, estimate, expect, plan, intend, and similar expressions. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these statements are subject to certain risks, uncertainties, and contingencies, which could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, such statements. Further, the safe harbor provisions of said Act may not apply to an issuer that issues penny stock. Actual results may differ materially from those indicated by such forward-looking statements. We do not assume any obligation to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report except as required by applicable law.

2 CANNABIS STRATEGIC VENTURES. Item 1. The exact name of the issuer and its predecessor (if any). 1 Cannabis Strategic Ventures Prior name was Pro-Tech Holdings Ltd. from December 23, 2003 until May 5, Prior name was Cascade Energy, Inc. from May 5, 2005 until December 5, 2017 Item 2. The address of the issuer s principal executive offices. Cannabis Strategic Ventures 9350 Wilshire Blvd, Suite 203 Beverly Hills, CA Phone: (310) Item 3. Security Information. Trading Symbol: CUSIP Number: NUGS [Common Stock Only] 13765M109 Exact Title and Class of Securities Outstanding: As of September 30, 2018 Common Stock: Total authorized: 988,000,000 Issued and outstanding: 307,194,240 Par Value $ On June 8, 2017, Cannabis Strategic Ventures. (the Company ) filed a Certificate of Amendment to the Articles of Incorporation (the Original Certificate of Amendment ) with the Secretary of State of Nevada to change the name of the issuer from Cannabis Strategic Ventures. to Cannabis Strategic Ventures.

3 Preferred A Stock: Total authorized: 10,000,000 Issued and outstanding 1,000,000 Par Value $.001 Preferred B Stock: Total authorized: 1 Issued and outstanding 1 Par Value $.001 Transfer Agent: Empire Stock Transfer, Inc Whitney Mesa Drive Henderson, Nevada, Phone: (702) Is Transfer Agent registered under the Exchange Act: Yes [X] No [ ] List any restrictions on the transfer of securities: Other than 3,839,964 shares of our Common Stock that are free-trading, all other shares are restricted and subject to Rule 144 or such other exemption from registration under the Securities Act of 1933, as amended ( Securities Act ). The shares of Preferred Stock are restricted and the underlying shares of Common Stock upon conversion of the shares of Preferred Stock have not been registered under the Securities Act; accordingly, they are restricted securities (and control securities while held by Simon Yu). Describe any trading suspension orders issued by the Securities and Exchange Commission ( SEC ) in the past 12 months: None Item 4. Issuance History. 3 A. The nature of each offering: During the quarter ended September 30, 2015, we issued 58,885,924 shares of Common Stock for the acquisition of Nano Tech West, Inc. During the quarter ended December 31, 2015, this acquisition was rescinded and the 58,885,924 shares of Common Stock were cancelled. During the quarter ended September 30, 2015, we issued 15,600,000 shares of Common Stock pursuant to the terms and conditions of a $39,000 convertible note. 3 On May 27, 2017, in a non-issuer transaction, Simon Yu entered in to a Stock Purchase Agreement with Blue and Gold Ventures LLC wherein he purchased an aggregate of 1,000,000 shares of our Series A Convertible Preferred Stock at a purchase price of $10,000. Each share of Series A Convertible Preferred Stock has the

4 voting power of 100 common shares. Subject to the terms and conditions of the Statement of Designation filed with the Secretary of State of Nevada, as may be amended or supplemented, the Series A Convertible Preferred Stock shall, with respect to rights on liquidation, winding up and dissolution, rank pari passu with the Common Stock, par value $.001 per share (the Common Stock ). See Amended Quarterly Report for the period ended June 30, 2017.

5 On or about June 2, 2017, we entered into consulting agreements with several consultants 4 to render services to us with terms of up to two (2) years. We also entered into an employment agreement with Simon Yu. We agreed to issue an aggregate of 211,750,000 shares of Common Stock to employees and consultants pursuant to an option plan that provides for the performance of services to us and a vesting schedule. During the nine months ended December 31, 2017, we issued 44,359,483 Common Shares for cash of $746,500 pursuant to a private placement agreement. On October 1, 2017, we entered a consulting agreement with a consulting company 5 for a service term of one year, we agreed to pay the consulting company 18,000,000 common shares of the Company and these shares shall be fully earned on the agreement date but is subject to Clawback provision. On December 7, 2017, we entered two consulting agreements with two consultants 5. Each consultant is granted for 100,000 of the Company s common shares and shall be fully earned on the agreement date. In December 2017, we entered a series of private placement agreements with investors for the issuance of 2,975,000 common share of the Company for total proceeds of $198,000. On January 2, 2018, we entered two consulting agreements with two consultants 5 for the issuance of 15,000 common shares and 20,000 common shares of the Company, respectively. The service term is one year, and the Company s common stock are to be issued in equal installments deemed fully-earned and vested at the first day of every quarter. On February 15, 2018, we entered into agreement to acquire Pure Applied Sciences for 1,400,000 common shares of the Company. We received Pure Sciences intellectual property, future supply and distribution agreements with vendors and added Pure s management team to the Company s staff. In February 2018, the Company entered into a series of private placement agreements with the investors for proceeds of $335,000 and issued 1,340,000 shares for these proceeds on April 25, On May 20, 2018, the Company entered into a series of private placement agreements with the investors, the Company received proceeds of $30,000 and issued 60,000 shares for these proceeds on June 29, On April 20, 2018, the Company entered a Stock Purchase Agreement to acquire 100% of Worldwide Staffing, the aggregate purchase price is $2,482,115 and shall be payable as follows: 1) Buyer s cash payment of $59,819 paid by wire transfer, 2) Buyer s payment of $184,669 through a convertible promissory note in favor of Seller; and 3) Buyer s issuance of 2,237,626 fully paid and non-assessable common shares in Cannabis Strategic Ventures, Inc. The 100% shareholder of Worldwide Staffing is the CEO of Cannabis Strategic Ventures, Inc. As part of closing deliverables,

6 the Seller must provide the Company two years audited financial statements of Worldwide Staffing. As of September 30, 2018, the audit has not been completed. On May 2, 2018, the Company entered an independent consulting agreement with an individual 5, the Company shall issue eighteen thousand dollars ($18,000) worth of the Company s common shares for the Services in lieu of cash, fully earn and vested at the beginning of every 3-month period starting the Effective Date. On May 2, 2018, the Company entered an independent consulting agreement with an individual 5, the Company shall issue thirty-six thousand dollars ($36,000) worth of the Company s common shares for the Services in lieu of cash, fully earn and vested at the beginning of every 3-month period starting the Effective Date. From August through September 2018, the Company entered into a series of private placement agreements with the investors for proceeds of $1,155,001. As of September 30, 2018, 2,310,002 shares for these proceeds have not been issued. In August 2018, the Company entered into consulting agreements with four consultants. The first consultant was granted 50,000 of the Company s common shares and shall be fully vested over a 12-month period. The fair value of the 50,000 shares was $84,500 at grant date. The Company issued an aggregate of $64,500 worth of shares each quarter for the remaining three consultants. B. Any jurisdictions where the offering was registered or qualified: Exemption for the sale and issuance of all securities in all jurisdictions. C. The number of shares offered: See A. above. D. The number of shares sold: See A above E. The price at which the shares were offered, and the amount actually paid to the issuer: See A above F. The trading status of the shares: Other than 3,839,964 shares of our Common Stock that are free-trading, all other shares are restricted and subject to Rule 144 or such other exemption from registration under the Securities Act of 1933, as amended ( Securities Act ). The shares of Preferred Stock are restricted and the underlying shares of Common Stock upon conversion of the shares of Preferred Stock have not been registered under the Securities Act; accordingly, they are restricted securities (and control securities while held by Simon Yu). Restricted securities are securities acquired in an unregistered private sale from the company or from

7 an affiliate of such an issuer. Control securities are those held by an affiliate of the issuing company. An affiliate is a person such as a director or large shareholder in the relationship of control of or with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. See discussion of Rule 144 contained in the Quarterly Report for the three months ended September 30, Jimmy Chan, Dung C. Tran, Giovanni Pierce, Tony Thai, Yang Zuo, Douglas Leung, Brian Chan, Edward Manolos, Katherine Zuniga, Wayne Wong, Kathern Wong, Tracy Luu, and Bella Ruiz. All of the consultants have a preexisting relationship with Simon Yu and these shares vest over up to a two-year period, but are considered to be issued and outstanding as of their grant date. 5 Pinnacle Consulting Services, Inc, Jimmy Lam, Tsz Wong, Anel Flores, Julia Swensen, Alex Toll, and Amir Yaghoobian. All of the consultants have a preexisting relationship with Simon Yu and these shares vest over up to a two-year period, but are considered to be issued and outstanding as of their grant date. Assets Current assets CANNABIS STRATEGIC VENTURES (FKA: CASCADE ENERGY, INC) Consolidated Balance Sheets As of September 30, 2018 As of June 30, 2018 Cash and equivalents $ 885,389 $ 160,682 Accounts receivable 374, ,579 Prepaid expense 8,000 Deposits and other receivables 376,723 95,819 Interest receivable 10,484 9,112 Notes receivable 375, ,720 Total current asset 2,030, ,912 Other assets Investment $ 2,237,626 Total other asset 2,237, ,912 Total assets $ 4,268,378 $ 997,912 Liabilities and stockholders deficit Current liabilities Accounts payables $ 99,160 $ 99,160 Other payables and accrued liabilities 55,019 29,896 Due to related party 35,741 35,741 Total current liabilities 189, ,797

8 Long term liabilities Promissory Note $ (4,000) Total long term liabilities (4,000) Total liabilities $ 185, ,797 Stockholders equity Common stock, par value $0.001, authorized 988,000,000 shares, 307,194,240 and 308,793,451 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively Class "A" preferred stock, par value $0.001, authorized 10,000,000 shares, 1,000,000 shares issued and outstanding at September 30, 2018 and June 30, Class "B" preferred stock, par value $0.001, authorized 1 share, 1 and 0 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively. 307, ,793 1,000 1, Shares to be issued 4,855,001 - Deferred stock compensation (4,565,025) (2,323,550) Additional paid in capital 21,175,266 18,936,041 Accumulated deficit (17,690,976) (16,089,169) Total stockholder s equity 4,082, ,115 Total liabilities and stockholders equity $ 4,268,378 $ 997,912 The accompanying notes are an integral part of these unaudited consolidated financial statements

9 CANNABIS STRATEGIC VENTURES (FKA: CASCADE ENERGY, INC) Consolidated Statements of Operations (Unaudited) For the three months ended September 30, Net revenue $ 49,882 $ 8,283 Operating expenses General and administrative 1,650,793 1,517,151 Total operating expenses (1,650,793) (1,517,151) Loss from operations (1,600,911) (1,508,868) Non-operating income Interest income 1,371 - Interest expense (882) - Financial expense (556) - Other expense (831) - Total nonoperating income, net (898) - Loss before income tax Income tax expense (1,601,808) (1,508,868) - - Net loss $ (1,601,808) $ (1,508,868) Basic and diluted weight average shares outstanding 308,278, ,240,310 Basic and diluted net loss per share $ (0.00) $ (0.01) The accompanying notes are an integral part of these unaudited consolidated financial statements

10 CANNABIS STRATEGIC VENTURES (FKA: CASCADE ENERGY, INC) Consolidated Statements of Cash Flows (Unaudited) Three months ended September 30, Cash flow from operating activities Net loss $ (1,601,808) $ (1,508,868) Adjustments to reconcile net loss to net cash used in operating activities: Stock compensation expense 1,450,525 1,475,625 Changes in assets and liabilities: Accounts receivable (7,858) - Interest receivable (1,371) - Other receivables and deposits (298,904) - Accounts payable - - Other payables and accrued liabilities 21,123 - Net cash used in operating activities (438,293) (33,243) Cash flow from investing activities Notes receivable issued - (269,210) Net cash used in investing activities - (269,210) Cash flow from financing activities Proceeds received from equity financing 1,163,001 Proceeds from issuance of shares - 282,500 Net cash provided by financing activities 1,163, ,500 Net increase in cash and equivalents 724,708 (19,953) Cash and equivalents, beginning of period 160, ,574 Cash and equivalents, end of period $ 885,390 $ 253,621 Supplement cash flow data Income tax paid $ - $ - Interest paid $ - $ - The accompanying notes are an integral part of these unaudited consolidated financial statements

11 CANNABIS STRATEGIC VENTURES, INC. (FKA: CASCADE ENERGY, INC.) NOTES TO FINANCIAL STATEMENTS September 30, 2018 (Unaudited) and June 30, 2018 NOTE 1 - ORGANIZATION AND OPERATIONS Cascade Energy, Inc. ( Cascade ) was originally incorporated in the State of Nevada on December 23, 2003 as Pro-Tech Holdings, Ltd. In May 2005, the Company changed its name to Cascade Energy, Inc. On June 8, 2017, Cascade Energy, Inc filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Nevada to change the name of the Company from Cascade Energy, Inc. to Cannabis Strategic Ventures, Inc. ( Cannabis Strategic or the Company ). FINRA approved the name and stock ticker change on December 5, The Company was an exploration stage company engaged in the exploration and development of natural gas and oil properties in the province of Alberta, Canada, and in the United States. The primary objective is to acquire, discover, upgrade and expand North American energy reserves towards near-term production and cash flow, together with identifying and participating in exploration opportunities. In 2017, the Company changed its business to focuses on the fast- growing medical and legal recreational cannabis sectors. The company provides temporary and permanent staffing solutions, employee leasing and human resources consulting to the legal cannabis space. In December 2017, the Company incorporated a new subsidiary Cannabis Consulting Group, Inc. ( Cannabis Consulting ) in the state of California for providing staffing solutions and employment consulting to the legal cannabis sector. On February 15, 2018, Cannabis Strategic entered into an Acquisition Agreement to acquire 100% of the outstanding shares of Pure Applied Sciences, Inc. ( Pure Sciences ) in exchange for 1,400,000 shares of the Company s common stock. Pure had no operation, and had no assets and liabilities except of certain intangible assets that were developed internally. The Company acquired Pure Sciences for expanding the network and intellectual properties and creating a separate division to licenses out IP to local manufacturers. On April 20, 2018, the Company entered a Stock Purchase Agreement to acquire 100% of Worldwide Staffing Group ( Worldwide Staffing or Hired On ), The aggregate purchase price is $2,482,115 and shall be payable as follows: (a) (b) (c) Buyer s cash payment of $59,819 paid by wire transfer, Buyer s payment of $184,669 through a convertible promissory note in favor of Seller; and, Buyer s issuance of 2,237,626 fully paid and non-assessable common shares in Cannabis Strategic Ventures, Inc. The fair value of these shares was $4,139,608 on April 20, 2018.

12 As part of closing deliverables, the Seller must provide the Company two years audited financial statements of Worldwide Staffing. As of September 30, 2018, the audit has not been completed. The 100% shareholder of Worldwide Staffing is the CEO of Cannabis Strategic Ventures, Inc.

13 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ( U.S. GAAP ). The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. Use of Estimates In preparing consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, the allowance for bad debt, the valuation of stock-based compensation, income taxes and unrecognized tax benefits, valuation allowance for deferred tax assets, and assumptions used in assessing impairment of long-lived assets. Actual results could differ from those estimates. Business Combination For a business combination, the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree are recognized at the acquisition date, measured at their fair values as of that date. In a business combination achieved in stages, the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, are recognized at the full amounts of their fair values. In a bargain purchase in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree that excess in earnings is recognized as a gain attributable to the acquirer. Deferred tax liability and asset are recognized for the deferred tax consequences of differences between the tax bases and the recognized values of assets acquired and liabilities assumed in a business combination in accordance with Accounting Standards Codification ( ASC ) Topic Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions. Revenue Recognition In May 2014 the FASB issued Accounting Standards Update (ASU) No , Revenue

14 from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB subsequently issued the following amendments to ASU No that have the same effective date and transition date: ASU No , Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations; ASU No , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing; ASU No , Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients; and ASU No , Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The Company adopted these amendments with ASU (collectively, the new revenue standards). The new revenue standards became effective for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product or service is provided. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No : (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Accounts Receivable The Company s accounts receivable arises from providing services. The Company does not adjust its receivables for the effects of a significant financing component at contract inception if it expects to collect the receivables in one year or less from the time of sale. The Company does not expect to collect receivables greater than one year from the time of sale. The Company s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Amounts determined to be uncollectible are charged or written-off against the reserve. As of September 30, 2018 and June 30, 2018, there was no bad debt allowance for accounts receivable. Income Taxes

15 The Company accounts for income taxes under Section of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. Uncertain Tax Positions The Company follows paragraph of the FASB ASC. Paragraph addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph , the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling, general and administrative expenses in the statements of income. The Company did not take any uncertain tax positions and had no unrecognized tax liabilities

16 or benefits in accordance with the provisions of Section at September 30, 2018 and June 30, The tax years remain open to examination for federal income tax purposes and by the other major taxing jurisdictions to which the Company is subject. Stock-based Compensation The Company follows FASB ASC Subtopic 718, Stock Compensation, for accounting for stock - based compensation. The guidance requires that new, modified and unvested share-based payment transactions with employees, such as grants of stock options and restricted stock, be recognized in the consolidated financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods. The Company also follows the guidance for equity instruments issued to consultants. Basic Income (Loss) Per Share Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. One major customer accounted for 99% of the Company s sales for the three months ended September 30, Accounts receivable from this customer was $369,309 and $366,579 as of September 30, 2018 and June 30, Fair Value of Financial Instruments The carrying value of cash and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also

17 estimated to approximate fair value. The Company utilizes the methods of fair value ( FV ) measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, FV is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in FV measurements, ASC 820 establishes a FV hierarchy that prioritizes observable and unobservable inputs used to measure FV into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The FV hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The FV hierarchy gives the lowest priority to Level 3 inputs. Related Parties The Company follows subtopic of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section related parties include: a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the FV option under the FV Option Subsection of Section , to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the

18 financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Segment Reporting ASC Topic 280, Segment Reporting, requires use of the management approach model for segment reporting. The management approach model is based on the way a company s chief operating decision maker organizes segments within the company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Management determined that the Company s operations constitute a single reportable segment in accordance with ASC 280. The Company operates exclusively in two business and industry segment: providing employment services and consultation to cannabis industry and develop intellectual property to be licensed to the cannabis industry.

19 Commitments and Contingencies The Company follows subtopic of the FASB ASC to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable a material loss was incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company s business, financial position, and results of operations or cash flows. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ( FASB ) issued ASU No , Leases (Topic 842). The new standard establishes a right-of-use ( ROU ) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of adoption of this ASU on the consolidated financial statements. In June 2016, the FASB issued ASU No , Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This

20 guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, The Company is currently evaluating the impact that the standard will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU , Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit s carrying value exceeds its FV, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, The Company is currently evaluating the impact of adopting this standard on its CFS. In June 2018, the FASB issued ASU , Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for sharebased payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU becomes effective for the Company on January 1, Early adoption is permitted. The adoption of this accounting pronouncement is not expected to have an impact on the Company's CFS. NOTE 3 GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company had an accumulated deficit of $17.69 million at September 30, 2018, and net loss of $1.60 million for the three months ended September 30, These factors among others raise substantial doubt about the Company s ability to continue as a going concern. While the Company is attempting to commence operations and generate revenues, the Company s cash position may not be significant enough to support the Company s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company s ability to further implement its business plan and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

21 NOTE 4 INTEREST RECEIVABLE On July 15, 2017, the Company entered an Equipment Purchase Agreement with a customer to sell certain equipment and agriculture suppliers for the total amount of $104,310. The Company allowed the customer to make the payment by installments at 12% interest rate starting from October The Company recognized interest income of $13,124 from this sale; at June 30, 2018 and March 31, 2018, the Company had interest receivable of $6,866. As of September 30, 2018, the Company had accrued interest income receivable of $997 from a note receivable of $50,000 issued on December 7, In addition, the company had also accrued interest income receivable of $374 from a note receivable of $10,000 issued on June 27, NOTE 5 OTHER RECEIVABLES AND DEPOSITS As of September 30, 2018, other receivables and deposits of $376,723 consisted of $59,819 deposit for the acquisition of Worldwide Staffing, $165,000 advance to Worldwide Staffing, $4,593 advance to Pure Applied Sciences, $11,774 advance to Fitamins, $29,537 advance to TAH II, a deposit of $106,000 for a possible property lease. NOTE 6 NOTES RECEIVABLE On June 26, 2017, the Company entered a Promissory Note agreement with another publicly traded company, borrower ; the company lent $150,820. The Note had a maturity date on December 31, 2017 with interest rate of 12% per annum. Commencing on October 31, 2017, and on the last day of each month thereafter, until this Note is paid in full, the borrower shall make an interest payment to the Company. On March 19, 2018, the Company waived the interest accrued to date under the Note in the amount of $12, In lieu of the cash payment by the borrower to the Company for the principal balance of $150,820, the borrower agreed to issue 1,508,200 shares at the price per share of $0.10. As of September 30, 2018, the shares had not been issued. The Company s CEO was the director of borrower company from February 3, 2017 to May 25, On July 17, 2017, the Company entered a Convertible Promissory Note with the same borrower and lent to the borrower $164,900. The company has the option to convert this note to common shares of the borrower. This Convertible Note had a maturity date on July 17, 2018 with interest rate of 8% per annum. Commencing on October 31, 2017, and on the last day of each month thereafter, until this Note is paid in full, the borrower shall make an interest payment to the Company. The conversion price for this Convertible Note is $0.025 per share. On January 23, 2018, $164,900 was converted into 6,596,000 shares at the price per share of $ No interest was assessed upon conversion as the Company waived all the interest. As of September 30, 2018, the shares had not been issued. On December 7, 2017, the Company entered a Convertible Promissory Note with the same borrower for $50,000. This Convertible Note had a maturity date on December 7, 2018 with an interest rate of 8% per annum, to be paid at maturity along with the principal with the option for the Company to convert to common shares of the borrower. The conversion price

22 for this Convertible Note is $0.05 per share. As of September 30, 2018, the Company had accrued interest income receivable of $3,244 from this note. On June 27, 2018, the Company entered a Promissory Note agreement with another borrower. The company lent $10,000. The Note had a maturity date on July 15, 2018 with interest rate of 15% per annum. Commencing on June 27, 2018, and on the last day of each month thereafter, until this Note is paid in full, the borrower shall make an interest payment to the Company. On September 12, 2018, the Company extended and amended the Promissory note agreement with the borrower. Maturity date is extended to November 15, As of September 30, 2018, the Company had accrued interest income receivable of $374 from this note. NOTE 7 OTHER PAYABLES AND ACCRUED LIABILITIES As of September 30, 2018, other payables and accrued liabilities consisted of 1) payroll tax payable of $1,044, 2) payroll payable of $3,022, 3) credit card payable of $38,157 and 4) accrued payroll of $12,796. As of June 30, 2018, other payables and accrued liabilities consisted of 1) payroll tax payable of $2,240, 2) payroll payable of $3,900, 3) credit card payable of $13,002 and 4) accrued payroll of $10,754. NOTE 8 RELATED PARTY TRANSACTIONS At September 30, 2018 and June 30, 2018, the Company had $35,741 due to a shareholder of the Company, resulting from the payments for the Company s operating expenses made by this shareholder. On April 20, 2018, the Company entered a Stock Purchase Agreement to acquire 100% of Worldwide Staffing as described in Note 1. The 100% shareholder of Worldwide Staffing is the CEO of the Company. NOTE 9 DEFERRED STOCK COMPENSATION As of September 30, 2018 and June 30, 2018, deferred stock compensation of $4,565,025 and $2,323,550, respectively, consisted of prepaid consulting expense through issuance of shares (see Note 10 for detail). NOTE 10 STOCKHOLDERS DEFICIT Shares authorized The Company is authorized to issue 988,000,000 shares of common stock with a par value of $0.001 per share. As of September 30, 2018, 307,194,240 shares were issued and outstanding, including 6,700,000 shares in physical certificate form are still outstanding and pending

23 receipt by the Company to be returned to treasury, as a result of rescission of the merger with Nano Tech West, Inc. The Company is authorized to issue 10,000,000 shares of Series A preferred stock with a par value $.001 per share. As of September 30, 2018, 1,000,000 Series A preferred shares were issued and outstanding. The Company is authorized to issue 1 share of Series B preferred stock with a par value $.001 per share. As of September 30, 2018, 1 Series B preferred shares were issued and outstanding. Common Stock Issued and cancelled During the quarter ended September 30, 2015, the Company issued 58,885,924 shares of common stock for acquisition of Nano Tech West, Inc. These shares were issued under Rule 144. During the quarter ended December 31, 2015, this acquisition was rescinded and the 57,485,924 shares were cancelled. As of March 31, 2017, 47,185,924 shares have been returned to the Company, and 6,700,000 shares in physical certificate form are pending receipt by the Company to be returned to treasury, and remaining 5,000,000 shares was in the process of locating them. In addition, the Company had pending receipts of 1,400,000 collateral common shares which was held to support a convertible debenture transaction proposed. The transaction was not completed, and the shares therefore was cancelled and returned to the Company. As of March 31, 2018, the Company concluded that it has not pursued the return of the 6.7 million shares stock certificates nor do the Company has any action to, and it is unlikely that the company is able to at this point; accordingly, the Company decided to expense these shares at fair market value of $1,072,000 by using the stock price at the grant date and reclassify these shares to outstanding common shares. On June 1, 2017 and June 2, 2017, the Company entered service agreements with several employees and consultants for service term from a range of 6 months to 2 years, the Company issued aggregate 211,750,000 shares to employees and consultants and was recorded as deferred stock compensation. The fair value of the 211,750,000 shares were $6,352,500 on the grant date and was amortized over the service term. The Company recorded $562,500 stock compensation expense for the three months ended September 30, 2018, and had $1,500,000 deferred stock compensation expense at September 30, In August and December 2017, the Company issued 44,359,483 common shared for proceeds of $746,500 under a private placement agreement including $5,000 of the total proceeds went to the lawyer s trust account directly. On October 1, 2017, the Company entered a consulting agreement with a consulting company for a service term of one year, the Company paid the consulting company 18,000,000 common shares of the Company and these shares was fully earned on the agreement date and was recorded as deferred stock compensation but was subject to Clawback provision. The fair value of the 18,000,000 shares was $900,000 on the grant date and to be amortized over the service term, the Company recorded $225,000 stock compensation expense for the three months ended September 30, 2018, and had $0 deferred stock compensation at September 30, ,000,000 shares were cancelled on August 27, 2018.

24 On December 7, 2017, the Company entered two consulting agreements with two consultants. Each consultant is granted for 100,000 of the Company s common shares and shall be fully earned on the agreement date. The fair value of the 200,000 shares was $16,000 at grant date and was recorded as stock compensation expense. In December 2017, the Company entered a series of private placement agreements with investors for the issuance of 2,975,000 common share of the Company for total proceeds of $198,000. On January 2, 2018, the Company entered two consulting agreements with two consultants for the issuance of 15,000 common shares and 20,000 common shares of the Company, respectively. The service term is one year, and the Company s common stock are to be issued in equal installments deemed fully-earned and vested at the first day of every quarter. The stock price was $2.06 on the agreement effective date. The Company recorded $72,100 deferred stock compensation as a result of the fully issuance of the shares. The Company recognized $18,025 stock compensation expense for the three months ended September 30, 2018, and had $18,025 deferred stock compensation at September 30, On February 15, 2018, the company entered into agreement to acquire Pure Applied Sciences for 1,400,000 common shares of the Company. The company received Pure Sciences intellectual property, future supply and distribution agreements with vendors and added Pure s management team to the Company s staff. The fair value of 1,400,0000 shares was $2,842,000. In February 2018, the Company entered a series private place agreements with the investors for proceeds of $335,000 and issued 1,340,000 shares for these proceeds on April 25, On May 20, 2018, the Company entered a series of private place agreements with the investors, the Company received proceeds of $30,000 and issued 60,000 shares for these proceeds on June 29, On April 20, 2018, the Company entered a Stock Purchase Agreement to acquire 100% of Worldwide Staffing, the aggregate purchase price is $2,482,115 and shall be payable as follows: 1) Buyer s cash payment of $59,819 paid by wire transfer, 2) Buyer s payment of $184,669 through a convertible promissory note in favor of Seller; and 3) Buyer s issuance of 2,237,626 fully paid and non-assessable common shares in Cannabis Strategic Ventures, Inc. The fair value of these shares was $4,139,608 on April 20, As of June 30, 2018, the Company paid $59,819 to the Seller as deposit for Worldwide Staffing acquisition. The promissory note of $184,669 has not yet been executed due to the acquisition was not completed, and the 2,237,626 shares was not yet issued. As part of closing deliverables, the Seller must provide the Company two years audited financial statements of Worldwide Staffing. As of September 30, 2018, the audit has not been completed. The 100% shareholder of Worldwide Staffing is the CEO of Cannabis Strategic Ventures, Inc.