Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2017 | Jun. 14, 2017 | Aug. 31, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | GRIPEVINE INC. | ||
Entity Central Index Key | 1,609,988 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 120,000,000 | ||
Entity Public Float | $ 0 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
COMBINED BALANCE SHEETS
COMBINED BALANCE SHEETS - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
CURRENT ASSETS | ||
Cash | $ 32,678 | $ 23,926 |
Prepaid and other receivables | 20,281 | 5,241 |
Total current assets | 52,959 | 29,167 |
Equipment [Note 5] | 41,655 | 11,238 |
TOTAL ASSETS | 94,614 | 40,405 |
CURRENT LIABILITIES | ||
Accounts payable | 22,325 | 341 |
Accrued liabilities | 78,827 | 14,780 |
Loans payable [Note 6] | 1,822,953 | 502,089 |
Due to related party [Note 6] | 178,906 | 212,027 |
Due to a shareholder [Note 6] | 568,547 | 361,325 |
TOTAL LIABILITIES | 2,671,558 | 1,090,562 |
STOCKHOLDERS' DEFICIENCY | ||
Preferred stock: $0.001 par value, 20,000,000 authorized.1,000,000 shares issued and outstanding as at february 28, 2017 and nil on february 29,2016,respectively [Note7] | 1,000 | |
Common stock, $0.001 par value, 300,000,000 authorized, 120,000,000 shares issued and outstanding as at February 28, 2017 and February 29, 2016, respectively [Note 7] | 120,000 | 120,000 |
Common stock to be issued [Note7] | 5,249 | 5,249 |
Additional paid-in capital | 43,698,125 | 2,894,378 |
Accumulated other comprehensive income | 233,651 | 241,265 |
Accumulated Deficit | (46,634,969) | (4,311,049) |
Total stockholders' deficiency | (2,576,944) | (1,050,157) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | $ 94,614 | $ 40,405 |
COMBINED BALANCE SHEETS (Parent
COMBINED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 28, 2017 | Feb. 29, 2016 |
Balance Sheets Parenthetical | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 1,000,000 | 0 |
Preferred stock, shares outstanding | 1,000,000 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 120,000,000 | 120,000,000 |
Common stock, shares outstanding | 120,000,000 | 120,000,000 |
COMBINED STATEMENTS OF OPERATIO
COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Statements Of Operations | ||
Revenue | ||
Expenses | ||
Stock based compensation [Note 8] | 40,804,747 | |
Research and development expenses [Note 8] | 1,069,627 | 917,137 |
General and administrative expenses | 449,546 | 158,720 |
Net loss before income taxes | 42,323,920 | 1,075,857 |
Income tax [Note 9] | ||
NET LOSS | 42,323,920 | 1,075,857 |
Translation adjustment | (7,614) | 74,855 |
COMPREHENSIVE LOSS | $ 42,316,306 | $ 1,150,712 |
LOSS PER SHARE, BASIC AND DILUTED | $ 0.353 | $ 0.009 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 120,000,000 | 120,000,000 |
COMBINED STATEMENTS OF STOCKHOL
COMBINED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) | Preferred Stock | Common Stock | Common stock to be issued | Additional Paid-In Capital | Accumulated Deficit | Accumulated other comprehensive income | Total |
Beginning Balance, Amount at Feb. 28, 2015 | $ 120,000 | $ 5,249 | $ 2,894,378 | $ (3,235,192) | $ 166,410 | $ (49,155) | |
Beginning Balance, Shares at Feb. 28, 2015 | 120,000,000 | 5,248,626 | |||||
Stock based compensation-preferred stock [Note 7] Amount | |||||||
Stock based compensation-preferred stock [Note 7] Shares | |||||||
Translation adjustment | $ 74,855 | $ 74,855 | |||||
Loss for the year | (1,075,857) | (1,075,857) | |||||
Endiing Balance,Amount at Feb. 29, 2016 | $ 120,000 | $ 5,249 | $ 2,894,378 | $ (4,311,049) | $ 241,265 | $ (1,050,157) | |
Ending Balance, Shares at Feb. 29, 2016 | 120,000,000 | 5,248,626 | |||||
Stock based compensation-preferred stock [Note 7] Amount | $ 1,000 | $ 38,693,414 | $ 38,694,414 | ||||
Stock based compensation-preferred stock [Note 7] Shares | 1,000,000 | ||||||
Stock based compensation- warrants [Note 7] | $ 2,110,333 | $ 2,110,333 | |||||
Translation adjustment | (7,614) | (7,614) | |||||
Loss for the year | (42,323,920) | (42,323,920) | |||||
Endiing Balance,Amount at Feb. 28, 2017 | $ 1,000 | $ 120,000 | $ 5,249 | $ 43,698,125 | $ (46,634,969) | $ 233,651 | $ (2,576,944) |
Ending Balance, Shares at Feb. 28, 2017 | 1,000,000 | 120,000,000 | 5,248,626 |
COMBINED STATEMENTS OF CASH FLO
COMBINED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss for the year | $ (42,323,920) | $ (1,075,857) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 40,804,747 | |
Depreciation | 10,587 | 2,460 |
Change in operating assets and liabilities | ||
Prepaid expenses and other receivables | (15,069) | (4,532) |
Accounts payable | 22,163 | (1,325) |
Accrued liabilities | 64,400 | 10,713 |
Net cash used in operating activities | (1,437,092) | (1,068,541) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | (41,080) | (12,636) |
Net cash used in investing activities | (41,080) | (12,636) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Loans payable | 1,323,707 | 786,143 |
Due to related parties | (38,105) | 85,352 |
Due to shareholder | 201,589 | 171,164 |
Net cash provided by financing activities | 1,487,191 | 1,042,659 |
Net increase (decrease) in cash during the year | 9,019 | (38,518) |
Effect of foreign currency translation | (267) | (1,130) |
Cash, beginning of year | 23,926 | 63,574 |
Cash, end of year | $ 32,678 | $ 23,926 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note 1 - NATURE OF OPERATIONS | Gripevine, Inc. (formerly Baixo Relocation Services, Inc. (the "Company") was incorporated in the state of Nevada on January 7, 2014. The Company operated as a relocation service provider for clients moving to the State of Goa, India and ceased this business and engaged in developing and building an online resolution platform after the Share Exchange Agreement as explained in the foregoing paragraph. The Company's fiscal year-end is February end. MBE Holdings Inc. (MBE) was incorporated as a limited liability company on April 13, 2010 under the laws of the State of Delaware. MBE is engaged in research and development activities to offer an online complaint resolution platform for consumers and business, including ratings, reviews and pollings. As such, its efforts to date have been devoted in building technology that enables access to this market through the development of a tangible product. As explained in Note 7 to the combined financial statements, on February 28, 2017, the Company and MBE and the shareholders of MBE who collectively own 100% of MBE entered into and consummated transactions pursuant to a Share Exchange Agreement, whereby the Company agreed to issue to the MBE shareholders an aggregate of approximately 5,248,626 shares of its common stock, par value $0.001, in exchange for 100% of equity interests of MBE held by the MBE shareholders. As a result of the share exchange, MBE became a wholly owned subsidiary of Gripevine. As a result of the Share Exchange Agreement, the acquisition transaction has been accounted for as a common control transaction in accordance with the Financial Accounting Standards Board (ASC 805-50, Business Combinations Common control transactions). The Company has evaluated the guidance contained in ASC 805 with respect to the combinations among entities or businesses under common control and conclude that since the majority shareholder of the Company and MBE are same, therefore, this is a common control transaction and do not result in a change in control at the ultimate parent or the controlling shareholder level. Consequently, common control transactions are not accounted for at fair value. Rather, common control transactions are accounted for at the carrying amount of the net assets or equity interests transferred. Any differences between the proceeds received or transferred and the carrying amounts of the net assets are considered equity transactions that would be eliminated in consolidation, and no gain or loss would be recognized in the financial statements of the ultimate parent. Resultantly, the financial position and the results of operations of Gripevine and MBE are combined together as if they were operating as one entity from the beginning |
BASIS OF PRESENTATION AND COMBI
BASIS OF PRESENTATION AND COMBINATION | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note 2 - BASIS OF PRESENTATION AND COMBINATION | The combined financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and are expressed in United States dollars (USD). As explained above in Note 1 to the combined financial statements, as a result of the Share Exchange Agreement, the acquisition transaction has been accounted for as a common control transaction in accordance with the Financial Accounting Standards Board (ASC 805-50, Business Combinations Common control transactions). Consequently, the combined financial statements have been prepared as if the Company and MBE were a single organization by the aggregation of their financial statements from the beginning of the previous year and the elimination of transactions and balances between them. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note 3 - GOING CONCERN | The combined financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses from operations and as at February 28, 2017 and February 29, 2016 had a working capital deficiency of $2,618,599 and $1,061,395 respectively and an accumulated deficit of $46,634,969 and $4,311,049, respectively. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional debt or equity investment in the Company. The Companys continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the combined financial statements. The combined financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Cash Cash includes cash on hand and balances with banks. Use of Estimates The preparation of combined financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant estimates and assumptions include: deferred income tax assets and related valuation allowance and accruals. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. Loss Per Share The Company has adopted the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 260-10 which provides for calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at February 28, 2017 and February 29, 2016. Foreign Currency Translation The functional currency of the Parent Company is United States dollar and the functional currency of the wholly owned subsidiary is Canadian dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for the year. The translation gains and losses resulting from the changes in exchange rates are reported in accumulated other comprehensive gain (loss). Equipment Equipment is stated at cost less accumulated depreciation and depreciated over their estimated useful lives at the following rate and method. Furniture and fixtures 20% per annum declining balance method Computer equipment 55% per annum declining balance method Routine repairs and maintenance are expensed as incurred. Improvements, that are betterments, are capitalized at cost. The Company applies a half-year rule in the year of acquisition. Impairment of Long-Lived Assets In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset or asset group, discounted at a rate commensurate with the risk involved. Fair Value of Financial Instruments ASC 820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ● Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities. ● Level 2 Valuation based on quoted market prices for similar assets and liabilities in active markets. ● Level 3 Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring managements best estimate of what market participants would use as fair value. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash and accounts payable. The Company's cash, which is carried at fair value, is classified as a Level 1 financial instrument. The Companys bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk. Income Taxes The Company accounts for income taxes in accordance with ASC 740. The Company provides for federal and provincial income taxes payable, as well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is more likely than not to be realized. Research and Development Research and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments made to third parties are expensed when the milestone is achieved . Operating Leases The Company leases office space under operating lease agreements. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. Stock Based Compensation The Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period. The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. Recently Issued Accounting Pronouncements In January 2017, an accounting pronouncement was issued by the Financial Accounting Standards Board (FASB) to simplify the accounting for goodwill impairment. This guidance eliminates the requirement that an entity calculates the implied fair value of goodwill when measuring an impairment charge. Instead, an entity would record an impairment charge based on the excess of a reporting units carrying amount over its fair value. This pronouncement is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The adoption is required to be applied on a prospective basis. The Company does not believe this guidance will have a material impact on its combined financial position and/or results of operations. In March 2016, the Company adopted the accounting pronouncement issued by the FASB to update guidance on how companies account for certain aspects of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits on the statement of cash flows. We adopted these provisions on a prospective basis. In addition, this pronouncement changes guidance on: (a) accounting for forfeitures of share-based awards and (b) employers accounting for an employees use of shares to satisfy the employers statutory income tax withholding obligation. The adoption of this pronouncement did not have any impact on the Companys combined financial position and/or results of operations. In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its combined financial position and/or results of operations. On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of this pronouncement did not have a material impact on the Companys combined financial position and/or results of operations. On January 1, 2016, we adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on the Companys combined financial position and/or results of operations. In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company intend to adopt this pronouncement on March 1, 2017, and the adoption will not have a material impact on the Companys combined financial position and/or results of operations. |
EQUIPMENT
EQUIPMENT | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note 5 - EQUIPMENT | As at February As at February 28, 2017 29, 2016 $ $ Furniture 31,889 10,035 Computer equipment 24,864 5,727 Total cost 56,753 15,762 Less: Accumulated depreciation (15,098 ) (4,524 ) 41,655 11,238 |
LOANS PAYABLE_DUE TO RELATED PA
LOANS PAYABLE/DUE TO RELATED PARTIES / DUE TO A SHAREHOLDER | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note-6 LOANS PAYABLE/DUE TO RELATED PARTIES / DUE TO A SHAREHOLDER | Loans payable Loans payable represents advances from a related corporation to meet the working capital requirements of the Company. These advances are interest free, unsecured and are repayable on demand. Due to related parties and due to a shareholder The balances due to related parties and a shareholder are mainly in connection with the consulting services and financing provided for the development of an online complaint resolution platform as explained in Note 1 to the combined financial statements (Also refer Note 8). These balances are interest free, unsecured and are repayable on demand. |
STOCKHOLDERS DEFICIENCY
STOCKHOLDERS DEFICIENCY | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note-7 STOCKHOLDERS DEFICIENCY | Share Exchange Agreement On February 28, 2017, the Company, MBE and the shareholders of MBE entered into a Share Exchange Agreement (the Share Exchange Agreement). The Board of Directors of the Company approved the execution and consummation of the transaction under the Share Exchange Agreement on February 28, 2017. In accordance with the terms and provisions of the Share Exchange Agreement, the Company is to issue an aggregate of 5,248,626 shares of its restricted common stock to the MBE Shareholders in exchange for 157,458,778 of the total issued and outstanding shares of MBE (constituting 100%), thus making MBE its wholly-owned subsidiary. The Board of Directors of the Company and MBE deemed it in the best interests of the respective shareholders to enter into the Share Exchange Agreement pursuant to which the Company would acquire all the technology and assets and assume all liabilities of MBE. Authorized stock On October 31, 2016, the Board of Directors of the Company authorized an increase in the Company's shares of common stock to three hundred million (300,000,000) shares with par value remaining at $0.001 and creation of twenty million (20,000,000) shares of preferred stock, par value $0.001. On November 4, 2016, the Company filed a Certificate of Amendment with the Nevada Secretary of State increasing its authorized capital to 300,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value $0.001 (the Amendment). The Amendment was effective with the Nevada Secretary of State on November 4, 2016 when the Certificate of Amendment was filed. The Amendment was approved by the Board of Directors pursuant to written consent resolutions dated October 31, 2016 and further approved by the shareholders holding a majority of the total issued and outstanding shares of common stock of the Company pursuant to written consent resolutions dated October 31, 2016. Common stock On May 31, 2016 and effective October 3, 2016, the Companys previous majority shareholder, sole executive officer and member of the Board of Directors, entered into those certain stock purchase agreements (collectively, the Stock Purchase Agreements) with certain individuals and/or entities (collectively, the Investors). In accordance with the terms and provisions of the Stock Purchase Agreements, the then majority shareholder sold and transferred at a per share price of $0.037 the control block of the Company consisting of 5,000,000 shares of restricted common stock and representing approximately 62.5% of the total issued and outstanding shares of common stock. As at February 28, 2017 and February 29, 2016, the Company has 120,000,000 outstanding common stock (comprising of 75,000,000 restricted stock and 45,000,000 unrestricted stock). In addition as at February 28, 2017 and February 29, 2016, 5,248,626 shares of restricted common stock to be issued pursuant to Share Exchange Agreement. Preferred stock On April 20, 2017, the Board of Directors authorized the issuance of the 1,000,000 shares of Series A Preferred Stock to its sole executive officer and member of the Board of Directors in consideration of his services performed during the year ended February 28, 2017. These preferred stock contain certain rights and preference as detailed below: · In the event of acquisition of the Company, the preferred stock holder to receive 20% of the aggregate valuation of such merger; · The holder can convert each share of preferred stock into 100 shares of common stock; and · Each holder of preferred stock shall be entitled to cast 200 votes. The fair value of these 1,000,000 preferred stock amounting to $38,694,414 was determined by an independent valuation using the assumptions i-e conversion value, control premium of 11.15% based on similar publicly trading companies, voting and sale/merger rights of the stock and stock price of $0.69. As the issuance of preferred stock related to past services, therefore, this amount was recorded as stock based compensation in the combined statements of operations during the year ended February 28, 2017. Warrants On December 1, 2016, the Company issued 18,275,000 warrants to certain shareholders of the Company for their services for the year ended February 28, 2017. These warrants have a strike price of $0.40 and will expire on December 1, 2019. The fair value of these warrants were measured at the date of grant using the Black-Scholes option pricing model using the following assumptions: · Forfeiture rate of 0%; · Stock price of $0.12 per share; · Exercise price of $0.4 per share · Volatility at 265.20%; · Risk free interest rate of 1.45%; · Expected life of 3 years; and · Expected dividend rate of 0% At grant date the fair value of these warrants were determined at $2,110,333. As the issuance of warrants related to past services, therefore, this amount was recorded as stock based compensation in the combined statements of operations during the year ended February 28, 2017. As at February 28, 2017, there were 18,275,000 warrants were outstanding, fully vested and with a remaining contractual life term of 2.75 years. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note- 8 RELATED PARTY TRANSACTIONS AND BALANCES | The Companys transactions with related parties were carried out on normal commercial terms and in the course of the Companys business. Other than those disclosed elsewhere in the financial statements, the related party transactions and balances are as follows: Research and development expenses for the years ended February 28, 2017 and February 29, 2016 include consulting charges from shareholders and related parties of $478,736 and $295,000 respectively |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note- 9 INCOME TAXES | Income taxes The provision for income taxes differs from the amounts which would be provided by applying the statutory United States Federal corporate income tax rate of approximately 34% for the years ended February 28, 2017 and February 29, 2016 as follows: Income tax recovery Year ended February 28, 2017 Year ended February 29, 2016 $ $ Net loss before income taxes (42,323,920 ) (1,075,857 ) Expected income tax recovery from net loss (14,390,133 ) (365,791 ) Non-deductible expenses 13,873,614 - Change in valuation allowance 516,519 365,791 - - Deferred tax asset Year ended February 28, 2017 Year ended February 29, 2016 $ $ Non-capital loss carry forwards (1,982,275 ) (1,465,757 ) Change in valuation allowance 1,982,275 1,465,757 - - As of February 28, 2017 and February 29, 2016, the Company determined that a valuation allowance relating to above deferred tax asset of the Company was necessary. This determination was based largely on the negative evidence represented by the losses incurred. The Company decided not to recognize any deferred tax asset, as it is not more likely than not to be realized. Therefore, a valuation allowance of $1,982,275 and $1,465,757, for the years ended February 28, 2017 and February 29, 2016, respectively, was recorded to offset deferred tax assets. As of February 28, 2017 and February 29, 2016, the Company has approximately $5,830,222 and $4,311,049, respectively, of non-capital losses available to offset future taxable income. As of February 28, 2017 and February 29, 2016, the Company is not subject to any uncertain tax positions. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note- 10 COMMITMENTS | On March 8, 2016, the Company entered into an operating lease contract for its office premises in Oakville, Ontario for a three year and eight months term commenced from May 1, 2016. The monthly lease payment is between $3,350 to $4,890 plus applicable taxes. On December 6, 2016, the Company entered into a second operating lease contract for its additional office premises in Oakville, Ontario for a three year term commencing from January 1, 2017. The monthly lease payment is between $2,500 to $3,800 plus applicable taxes |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
Note- 11 SUBSEQUENT EVENTS | The Companys management has evaluated subsequent events up to June 14, 2017, the date the combined financial statements were issued, pursuant to the requirements of ASC 855 and has determined that there are no material subsequent events to report. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Cash | Cash includes cash on hand and balances with banks. |
Use of Estimates | The preparation of combined financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant estimates and assumptions include: deferred income tax assets and related valuation allowance and accruals. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. |
Loss Per Share | The Company has adopted the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) Topic 260-10 which provides for calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect is anti-dilutive. There were no potentially dilutive shares outstanding as at February 28, 2017 and February 29, 2016. |
Foreign Currency Translation | The functional currency of the Parent Company is United States dollar and the functional currency of the wholly owned subsidiary is Canadian dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for the year. The translation gains and losses resulting from the changes in exchange rates are reported in accumulated other comprehensive gain (loss). |
Equipment | Equipment is stated at cost less accumulated depreciation and depreciated over their estimated useful lives at the following rate and method. Furniture and fixtures 20% per annum declining balance method Computer equipment 55% per annum declining balance method Routine repairs and maintenance are expensed as incurred. Improvements, that are betterments, are capitalized at cost. The Company applies a half-year rule in the year of acquisition. |
Impairment of Long-Lived Assets | In accordance with ASC 360-10, the Company, on a regular basis, reviews the carrying amount of long-lived assets for the existence of facts or circumstances, both internally and externally, that suggest impairment. The Company determines if the carrying amount of a long-lived asset is impaired based on anticipated undiscounted cash flows, before interest, from the use of the asset. In the event of impairment, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined based on appraised value of the assets or the anticipated cash flows from the use of the asset or asset group, discounted at a rate commensurate with the risk involved. |
Fair Value of Financial Instruments | ASC 820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ● Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities. ● Level 2 Valuation based on quoted market prices for similar assets and liabilities in active markets. ● Level 3 Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring managements best estimate of what market participants would use as fair value. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash and accounts payable. The Company's cash, which is carried at fair value, is classified as a Level 1 financial instrument. The Companys bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk. |
Income Taxes | The Company accounts for income taxes in accordance with ASC 740. The Company provides for federal and provincial income taxes payable, as well as for those deferred because of the timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled. The effect of a change in tax rates is recognized as income or expense in the period of the change. A valuation allowance is established, when necessary, to reduce deferred income tax assets to the amount that is more likely than not to be realized |
Research and Development | Research and development costs, which relate primarily to product and software development, are charged to operations as incurred. Under certain research and development arrangements with third parties, the Company may be required to make payments that are contingent on the achievement of specific developmental, regulatory and/or commercial milestones. Before a product receives regulatory approval, milestone payments made to third parties are expensed when the milestone is achieved . |
Operating Leases | The Company leases office space under operating lease agreements. The lease term begins on the date of initial possession of the leased property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term. |
Stock Based Compensation | The Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period. The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. |
Recently Issued Accounting Pronouncements | In January 2017, an accounting pronouncement was issued by the Financial Accounting Standards Board (FASB) to simplify the accounting for goodwill impairment. This guidance eliminates the requirement that an entity calculates the implied fair value of goodwill when measuring an impairment charge. Instead, an entity would record an impairment charge based on the excess of a reporting units carrying amount over its fair value. This pronouncement is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The adoption is required to be applied on a prospective basis. The Company does not believe this guidance will have a material impact on its combined financial position and/or results of operations. In March 2016, the Company adopted the accounting pronouncement issued by the FASB to update guidance on how companies account for certain aspects of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits on the statement of cash flows. We adopted these provisions on a prospective basis. In addition, this pronouncement changes guidance on: (a) accounting for forfeitures of share-based awards and (b) employers accounting for an employees use of shares to satisfy the employers statutory income tax withholding obligation. The adoption of this pronouncement did not have any impact on the Companys combined financial position and/or results of operations. In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its combined financial position and/or results of operations. On January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB which eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of this pronouncement did not have a material impact on the Companys combined financial position and/or results of operations. On January 1, 2016, we adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset. The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on the Companys combined financial position and/or results of operations. In November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. This pronouncement is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company intend to adopt this pronouncement on March 1, 2017, and the adoption will not have a material impact on the Companys combined financial position and/or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 28, 2017 | |
Summary Of Significant Accounting Policies Tables | |
Estimated useful lives rate and method | Furniture and fixtures 20% per annum declining balance method Computer equipment 55% per annum declining balance method |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 12 Months Ended |
Feb. 28, 2017 | |
Equipment Tables | |
EQUIPMENT | As at February As at February 28, 2017 29, 2016 $ $ Furniture 31,889 10,035 Computer equipment 24,864 5,727 Total cost 56,753 15,762 Less: Accumulated depreciation (15,098 ) (4,524 ) 41,655 11,238 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 28, 2017 | |
Income Taxes Tables | |
Income tax recovery | Year ended February 28, 2017 Year ended February 29, 2016 $ $ Net loss before income taxes (42,323,920 ) (1,075,857 ) Expected income tax recovery from net loss (14,390,133 ) (365,791 ) Non-deductible expenses 13,873,614 - Change in valuation allowance 516,519 365,791 - - |
Deferred tax asset | Year ended February 28, 2017 Year ended February 29, 2016 $ $ Non-capital loss carry forwards (1,982,275 ) (1,465,757 ) Change in valuation allowance 1,982,275 1,465,757 - - |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - $ / shares | 12 Months Ended | |||
Feb. 28, 2017 | Nov. 04, 2016 | Oct. 31, 2016 | Feb. 29, 2016 | |
Entity incorporation state name | Nevada | |||
Entity incorporate date | Jan. 7, 2014 | |||
Equity interests | 100.00% | |||
Common stock, shares issued | 120,000,000 | 120,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
MBE [Member] | ||||
Common stock, shares issued | 5,248,626 | |||
Common stock, par value | $ 0.001 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
Going Concern Details | ||
Working capital deficiency | $ 2,618,599 | $ 1,061,395 |
Accumulated deficit | $ (46,634,969) | $ (4,311,049) |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Feb. 28, 2017 |
Furniture and Fixtures [Member] | |
Estimated useful lives, rate | 20.00% |
Computer Equipment [Member] | |
Estimated useful lives, rate | 55.00% |
EQUIPMENT (Details)
EQUIPMENT (Details) - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
Equipment Details | ||
Furniture | $ 31,889 | $ 10,035 |
Computer equipment | 24,864 | 5,727 |
Total cost | 56,753 | 15,762 |
Less: Accumulated depreciation | (15,098) | (4,524) |
Equipment [Note 5] | $ 41,655 | $ 11,238 |
STOCKHOLDERS DEFICIENCY (Detail
STOCKHOLDERS DEFICIENCY (Details Narrative) | 12 Months Ended | ||||
Feb. 28, 2017USD ($)Votes$ / sharesshares | Nov. 04, 2016$ / sharesshares | Oct. 31, 2016$ / sharesshares | Oct. 03, 2016$ / sharesshares | Feb. 29, 2016$ / sharesshares | |
Common stock, shares issued | 120,000,000 | 120,000,000 | |||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |
Restricted common stock issued and outstanding percentage | 62.50% | ||||
Restricted common stock | 5,248,626 | 5,000,000 | 5,248,626 | ||
Stock Purchase agreement per share | $ / shares | $ 0.037 | ||||
Common stock, shares outstanding | 120,000,000 | 120,000,000 | |||
Preferred stock, shares issued | 1,000,000 | 0 | |||
Percentage of aggregate valuation | 20.00% | ||||
Common stock, shares converted | 100 | ||||
Number of votes | Votes | 200 | ||||
Preferred stock, shares | 1,000,000 | ||||
Preferred stock, value | $ | $ 38,694,414 | ||||
Premium | 11.15% | ||||
Merger and stock price | $ / shares | $ 0.69 | ||||
Warrant issued | $ | $ 18,275,000 | ||||
Strike price | $ / shares | $ 0.40 | ||||
Expiration date | Dec. 1, 2019 | ||||
Forfeiture rate | 0.00% | ||||
Stock price | $ / shares | $ 0.12 | ||||
Exercise price | $ / shares | $ 0.4 | ||||
Volatility | 265.20% | ||||
Risk free interest rate | 1.45% | ||||
Expected life | 3 years | ||||
Expected dividend rate | 0.00% | ||||
Fair value of warrants | $ | $ 2,110,333 | ||||
Outstanding warrants | 18,275,000 | ||||
Contractual life | 33 months | ||||
Series A Preferred Stock [Member] | |||||
Preferred stock, shares issued | 1,000,000 | ||||
Restricted Stock [Member] | |||||
Common stock, shares outstanding | 75,000,000 | ||||
Unrestricted Stock [Member] | |||||
Common stock, shares outstanding | 45,000,000 | ||||
MBE [Member] | |||||
Common stock, shares issued | 5,248,626 | ||||
Restricted common stock issued and outstanding | 157,458,778 | ||||
Common stock, par value | $ / shares | $ 0.001 |
RELATED PARTY TRANSACTIONS AN27
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Related Party Transactions And Balances Details Narrative | ||
Research and development expenses | $ 478,736 | $ 295,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Income Taxes Details | ||
Net loss before income taxes | $ (42,323,920) | $ (1,075,857) |
Expected income tax recovery from net loss | (14,390,133) | (365,791) |
Non-deductible expenses | 13,873,614 | |
Change in valuation allowance | 516,519 | 365,791 |
[us-gaap:OtherTaxExpenseBenefit] |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
Income Taxes Details 1 | ||
Non-capital loss carry forwards | $ (1,982,275) | $ (1,465,757) |
Change in valuation allowance | 1,982,275 | 1,465,757 |
Deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Income Taxes Details Narrative | ||
Change in valuation allowance | $ 1,982,275 | $ 1,465,757 |
Non-capital losses | $ 5,830,222 | $ 4,311,049 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) | Dec. 06, 2016 | Mar. 08, 2016 |
Operating lease contract | 3 years | 3 years 8 months |
Minimum [Member] | ||
Monthly lease payment | $ 2,500 | $ 3,350 |
Maximum [Member] | ||
Monthly lease payment | $ 3,800 | $ 4,890 |