Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Apr. 30, 2019 | Jun. 19, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | BODY & MIND INC. | |
Entity Central Index Key | 0001715611 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 97,272,558 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false |
Consolidated Interim Balance Sh
Consolidated Interim Balance Sheets - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Current | ||
Cash and cash equivalents | $ 2,588,798 | $ 324,837 |
Amounts receivable | 706,546 | 632,477 |
Prepaids | 74,806 | 99,014 |
Inventory (Note 5) | 1,674,756 | 953,417 |
Total current assets | 5,044,906 | 2,009,745 |
Convertible Loan Receivable (Note 6) | 7,863 | 0 |
Investment in NMG Ohio LLC (Note 17) | 3,106,258 | 77,600 |
Investment in GLDH (Note 18) | 6,204,792 | |
Property and Equipment (Note 7) | 2,653,043 | 2,615,898 |
Brand and Licenses (Note 14) | 8,172,000 | 8,172,000 |
Goodwill (Note 14) | 2,635,721 | 2,635,721 |
TOTAL ASSETS | 27,824,583 | 15,510,964 |
Current | ||
Accounts payables | 778,257 | 447,703 |
Accrued liabilities | 94,715 | 95,481 |
Income taxes | 654,030 | 239,358 |
Due to related parties (Note 8) | 112,509 | 51,081 |
Notes payable (Note 9) | 4,616,476 | 2,175,000 |
Total Current Liabilities | 6,255,987 | 3,008,623 |
Convertible Debenture (Note 10) | 1,168,852 | |
Deferred Tax Liability | 1,716,120 | 1,716,120 |
TOTAL LIABILITIES | 9,140,959 | 4,724,743 |
STOCKHOLDERS' EQUITY | ||
Capital Stock - Statement 3 (Note 11) Authorized: 900,000,000 Common Shares - Par Value $0.0001 Issued and Outstanding: 72,628,084 (31 July 2018 - 47,774,817) Common Shares | 7,263 | 4,778 |
Additional Paid-in Capital | 26,690,455 | 16,918,082 |
Shares to be Issued (Note 14) | 75,939 | 103,267 |
Equity component of convertible debenture | 88,797 | |
Other Comprehensive Income | 612,826 | 532,405 |
Deficit | (8,791,656) | (6,772,311) |
TOTAL STOCKHOLDERS' EQUITY | 18,683,624 | 10,786,221 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 27,824,583 | $ 15,510,964 |
Consolidated Interim Balance _2
Consolidated Interim Balance Sheets (Parenthetical) - $ / shares | Apr. 30, 2019 | Jul. 31, 2018 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 72,628,084 | 47,774,817 |
Common stock, shares outstanding | 72,628,084 | 47,774,817 |
Consolidated Interim Statements
Consolidated Interim Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Consolidated Interim Statements Of Operations | ||||
Sales | $ 1,238,494 | $ 787,512 | $ 3,760,217 | $ 1,618,967 |
Sales tax | (215,846) | (107,965) | (463,192) | (140,914) |
Cost of sales | (471,873) | (402,705) | (1,785,442) | (670,880) |
Total | 550,775 | 276,842 | 1,511,583 | 807,173 |
General and Administrative Expenses | ||||
Accounting and legal (Note 8) | 28,430 | 76,464 | 325,710 | 223,320 |
Consulting fees (Notes 8 and 16) | 79,356 | 19,143 | 189,643 | 136,295 |
Depreciation | 3,138 | 2,981 | 9,626 | 4,556 |
Insurance | 15,254 | 6,071 | 54,030 | 11,006 |
Interest expense (Notes 9 and 10) | 300,008 | 119,131 | 502,025 | 119,131 |
Licenses, utilities and office administration | 59,127 | 60,789 | 469,746 | 221,265 |
Listing fees | 471,408 | |||
Management fees (Note 8) | 130,080 | 73,184 | 297,354 | 189,210 |
Regulatory, filing and transfer agent fees | 17,974 | 3,280 | 67,023 | 19,187 |
Rent | 49,267 | 22,000 | 85,629 | 33,000 |
Salaries and wages | 224,437 | 144,830 | 607,577 | 241,171 |
Stock-based compensation (Notes 8 and 11) | 10,836 | 881,644 | 733,679 | |
Travel | 8,549 | 10,319 | 22,275 | 14,878 |
Total | (926,456) | (538,192) | (3,512,282) | (2,418,106) |
Loss Before Other Items | (375,681) | (261,350) | (2,000,699) | (1,610,933) |
Other Items | ||||
Foreign exchange, net | 52,791 | (21,958) | (43,158) | (91,427) |
Interest income | 442,380 | 2,185 | 442,380 | 2,185 |
Management fee income | 9,000 | 9,000 | ||
Gain (loss) of equity investee (Note 7) | 19,363 | (12,196) | ||
Write off of amounts receivable | (883) | |||
Net Income (Loss) for the Period Before Income Tax | 147,853 | (281,123) | (1,604,673) | (1,701,058) |
Income tax expense | (191,724) | (414,672) | ||
Net Income (Loss) for the Period | (43,871) | (281,123) | (2,019,345) | (1,701,058) |
Other Comprehensive Income (Loss) | ||||
Foreign currency translation adjustment | 106,735 | (149,856) | 80,421 | (16,936) |
Comprehensive Income (Loss) for the Period | $ 62,864 | $ (430,979) | $ (1,938,924) | $ (1,717,994) |
Earnings (Loss) per Share Basic and Diluted | $ 0 | $ (0.01) | $ (0.03) | $ (0.05) |
Weighted Average Number of Shares Outstanding | 72,628,084 | 47,704,317 | 62,253,943 | 36,572,733 |
Consolidated Interim Statemen_2
Consolidated Interim Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Shares to be Issued | Equity component of Convertible debenture | Other Comprehensive Income | Deficit | Total |
Beginning Balance, Shares at Jul. 31, 2017 | 19,137,783 | ||||||
Beginning Balance, Amount at Jul. 31, 2017 | $ 1,914 | $ 4,954,932 | $ 356,828 | $ (4,991,251) | $ 322,423 | ||
Private placements (Note 11), Shares | 9,739,534 | ||||||
Private placements (Note 11), Amount | $ 974 | 5,025,520 | 5,026,494 | ||||
Acquisition of Nevada Medical Group LLC (Notes 11 and 14), Shares | 18,827,000 | ||||||
Acquisition of Nevada Medical Group LLC (Notes 11 and 14), Amount | $ 1,883 | 6,335,482 | 135,202 | 6,472,567 | |||
Share issue costs (Note 11), Amount | (219,459) | (219,459) | |||||
Issuance of escrowed shares (Notes 11 and 14), Shares | 70,500 | ||||||
Issuance of escrowed shares (Notes 11 and 14), Amount | $ 7 | 31,928 | (31,935) | ||||
Stock-based compensation (Notes 8 and 11) | 789,679 | 789,679 | |||||
Foreign currency translation adjustment | 175,577 | 175,577 | |||||
Loss for the period | (1,781,060) | (1,781,060) | |||||
Ending Balance, Shares at Jul. 31, 2018 | 47,774,817 | ||||||
Ending Balance, Amount at Jul. 31, 2018 | $ 4,778 | 16,918,082 | 103,267 | 532,405 | (6,772,311) | 10,786,221 | |
Private placements (Note 11), Shares | 16,000,000 | ||||||
Private placements (Note 11), Amount | $ 1,600 | 4,882,240 | 4,883,840 | ||||
Exercise of warrants (Note 11), Shares | 3,206,160 | ||||||
Exercise of warrants (Note 11), Amount | $ 321 | 1,204,875 | 1,205,196 | ||||
Share issue costs (Note 11), Shares | 322,581 | ||||||
Share issue costs (Note 11), Amount | $ 31 | (270,767) | (270,736) | ||||
Issuance of escrowed shares (Notes 11 and 14), Shares | 70,500 | ||||||
Issuance of escrowed shares (Notes 11 and 14), Amount | $ 7 | 27,321 | (27,328) | ||||
Stock-based compensation (Notes 8 and 11) | 870,808 | 870,808 | |||||
Foreign currency translation adjustment | 80,421 | 80,421 | |||||
Finance fee for promissory note (Note 9 and 11), Shares | 1,105,083 | ||||||
Finance fee for promissory note (Note 9 and 11), Amount | $ 111 | 822,383 | 822,494 | ||||
Investment agreement with Australis (Note 11 and 16), Shares | 1,768,545 | ||||||
Investment agreement with Australis (Note 11 and 16), Amount | $ 177 | 786,946 | 787,123 | ||||
Acquisition of NMG Ohio LLC (Note 11 and 17), Shares | 2,380,398 | ||||||
Acquisition of NMG Ohio LLC (Note 11 and 17), Amount | $ 238 | 1,448,567 | 1,448,805 | ||||
Equity component of convertible debenture (Note 10) | 88,797 | 88,797 | |||||
Loss for the period | (2,019,345) | (2,019,345) | |||||
Ending Balance, Shares at Apr. 30, 2019 | 72,628,084 | ||||||
Ending Balance, Amount at Apr. 30, 2019 | $ 7,263 | $ 26,690,455 | $ 75,939 | $ 88,797 | $ 612,826 | $ (8,791,656) | $ 18,683,624 |
Consolidated Interim Statemen_3
Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Cash Resources Provided By (Used In) Operating Activities | ||
Loss for the period | $ (2,019,345) | $ (1,701,058) |
Items not affecting cash: | ||
Accrued interest and accretion | 502,025 | 119,131 |
Accrued interest income | (433,380) | |
Depreciation | 213,727 | 4,556 |
Foreign exchange | (18,774) | 1,484 |
Income tax | 414,672 | |
Loss of equity investee | 12,196 | |
Stock-based compensation | 881,644 | 733,679 |
Write off of amounts receivable | 883 | |
Amounts receivable and prepaids | (49,861) | (218,588) |
Inventory | (721,339) | (373,693) |
Trade payables and accrued liabilities | 329,788 | 117,530 |
Due to related parties | 61,428 | 31,881 |
Net Cash Used In Operating Activities | (827,219) | (1,284,195) |
Investing Activities | ||
Business combination, net of cash acquired | (2,194,663) | |
Pepper Lane North deposits | (250,000) | |
Investment in NMG Ohio, LLC | (1,592,049) | |
Investment in GLDH | (5,771,459) | |
Purchase of property and equipment | (250,872) | (494,141) |
Convertible loan receivable | (7,863) | |
Net Cash Used In Investing Activities | (7,622,243) | (2,938,804) |
Financing Activities | ||
Issuance of shares, net of share issue costs | 6,605,423 | 5,142,487 |
Loans obtained | 5,202,579 | (222,196) |
Loans repaid | (1,175,000) | |
Net Cash Provided by Financing Activities | 10,633,002 | 4,920,291 |
Effect of exchange rate changes on cash | 80,421 | (16,936) |
Net Increase in Cash | 2,263,961 | 680,356 |
Cash-Beginning of Period | 324,837 | 366,584 |
Cash-End of Period | $ 2,588,798 | $ 1,046,940 |
Nature and Continuance of Opera
Nature and Continuance of Operations | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
1. Nature and Continuance of Operations | Body and Mind Inc. (the “Company”) was incorporated on 5 November 1998 in the State of Delaware, USA, under the name Concept Development Group, Inc. In May 2004, the Company acquired 100% of Kaleidoscope Venture Capital, Inc. (formerly Vocalscape Networks, Inc.) (“Kaleidoscope”) and changed its name to Vocalscape, Inc. In November 2005, the Company changed its name to Nevstar Precious Metals Inc. and in September 2008, the Company changed its name to Deploy Technologies Inc. On 14 November 2017, the Company acquired Nevada Medical Group, LLC (“NMG”) and changed its name to Body and Mind Inc. The Company is now a supplier and grower of medical and recreational cannabis in the state of Nevada. These unaudited consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited consolidated interim financial statements do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended 31 July 2018. The unaudited consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended 31 July 2018. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended 30 April 2019 are not necessarily indicative of the results that may be expected for the year ending 31 July 2019. These unaudited consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. At 30 April 2019, the Company had cash of $2,588,798 (31 July 2018 – $324,837) and a working capital deficit of $1,211,081 (31 July 2018 – $998,878). Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Company’s capital resources will not be adequate to continue operating and maintaining its business strategy for the next 12 months. If the Company is unable to raise additional capital in the near future, management expects that the Company will need to curtail operations, seek additional capital on less favorable terms and/or pursue other remedial measures. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At 30 April 2019, the Company had incurred losses from activities to date. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Principles of Consolidation These consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, DEP Nevada Inc. (“Dep Nevada”), incorporated in the State of Nevada on 10 August 2017, and Nevada Medical Group LLC (“NMG”) from the date of acquisition on 14 November 2017. All inter-company transactions are eliminated upon consolidation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
2. Recent Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02 (Topic 842) "Leases." Topic 842 supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840 "Leases." Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provide enhanced disclosures. Leases will continue to be classified as either finance or operating. Topic 842 is effective for annual reporting periods and interim periods within those years beginning after 15 December 2018. Early adoption by public entities is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and there are certain optional practical expedients that an entity may elect to apply. Full retrospective application is prohibited. The Company is currently evaluating the impact that this new standard will have on its financial statements. In June 2016, the FASB issued ASU No. 2016-13 "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after 15 December 2019. The Company does not anticipate this amendment to have a significant impact on the financial statements. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
3. Significant Accounting Policies | The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements. Basis of presentation The financial statements of the Company have been prepared in accordance with GAAP and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. Derivative financial instruments The Company has not, to the date of these financial statements, entered into derivative instruments. Amounts receivable Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 30 April 2019 and 31 July 2018, the Company has no allowance for doubtful accounts. Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its initial release, the FASB has issued several amendments to the standard, which include clarification of accounting guidance related to identification of performance obligations and principal versus agent considerations. Topic 606 became effective for the Company in the first quarter of the 2019 fiscal year. The adoption of this guidance had no impact on the Company’s financial statements. The Company derives revenue primarily from the sale of medical and recreational cannabis. In accordance with ASC 606, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet the Company’s high quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and record them in cost of goods sold as required. Inventory Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. Property and equipment Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years Brands and licenses Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. Start-up expenses The Company has adopted ASC 720-15, “Start-Up Costs”, which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s expenses for the period from the date of inception. Income taxes Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. 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 Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. Basic and diluted net loss per share The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. Segments of an enterprise and related information ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. Comprehensive loss ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 30 April 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. Foreign currency translation The Company’s functional currency is Canadian dollars and reporting currency is U.S. dollars. The Company’s subsidiary, NMG, has a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. Comparative figures Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
4. Financial Instruments | The following table represents the Company’s assets that are measured at fair value as of 30 April 2019 and 31 July 2018: As at 30 April 2019 As at 31 July 2018 Financial assets at fair value Cash $ 2,588,798 $ 324,837 Convertible loan receivable 7,863 - Total financial assets at fair value $ 2,596,661 $ 324,837 Management of financial risks The financial risk arising from the Company’s operations are credit risk, liquidity risk, interest rate risk and currency risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is not exposed to credit risk related to cash and cash equivalents as it does not hold cash in excess of federally insured limits, with major financial institutions. Credit risk associated with the convertible loan receivable (including the investment in GLDH) arises from the possibility that the principal and/or interest due may become uncollectible. The Company mitigates this risk by managing and monitoring the underlying business relationship. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company had a working capital deficit of $1,211,081 as at 30 April 2019. However, the Company has incurred losses from operations to date and is currently attempting to implement its business plan; therefore, the Company is exposed to liquidity risk. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to interest rate risk as it does not hold financial instruments that will fluctuate in value due to changes in interest rates. Currency risk Currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk by incurring expenditures and holding assets denominated in currencies other than its functional currency. Assuming all other variables remain constant, a 1% change in the Canadian dollar against the US dollar would not result in a significant change to the Company’s operations. Other risks The Company is not exposed to other risks unless otherwise noted. |
Inventory
Inventory | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
5. Inventory | 30 April 2019 31 July 2018 Raw materials $ 9,320 $ 9,705 Work in progress 114,019 151,039 Finished goods 932,690 567,563 Consumables 618,727 225,110 Total $ 1,674,756 $ 953,417 |
Convertible loan receivable
Convertible loan receivable | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
6. Convertible loan receivable | Effective March 15, 2018, the Company, through its wholly owned subsidiaries, DEP Nevada and NMG, entered into a convertible loan agreement and a management agreement with Comprehensive Care Group LLC (“CCG”), an Arkansas limited liability company, with respect to the development of a medical cannabis dispensary facility in West Memphis, Arkansas. Pursuant to the management agreement, NMG will provide operations and management services, including management, staffing, operations, administration, oversight, and other related services. Under the management agreement, NMG will be paid a monthly management fee equal to 66.67% of the monthly net profits of CCG, subject to conversion of the convertible loan as discussed below upon which the monthly management fee shall be $6,000 per month, unless otherwise agreed by the parties in writing. The convertible loan agreement is for an amount up to $1,250,000 from DEP to CCG with proceeds to be used to fund construction of a facility, working capital and initial operating expenses. The loan bears interest at a fixed rate of $6,000 per month until the parties mutually agree to increase the interest. Within one year of granting of a medical marijuana dispensary license or one year after entering into the convertible loan, DEP may elect to convert the loan into preferred units of CCG equal to 40% of all outstanding units of CCG, subject to approval of the Arkansas Medical cannabis Commission. The Company evaluated the convertible loan receivable’s settlement provisions and elected the fair value option in accordance with ASC 825 “Financial Instruments”, to value this instrument. Under such election, the loan receivable is measured initially and subsequently at fair value, with any changes in the fair value of the instrument being recorded in the consolidated financial statements as a change in fair value. The Company estimates the fair value of this instrument by first estimating the fair value of the straight debt portion, excluding the embedded conversion option, using a discounted cash flow model. The Company then estimates the fair value of the embedded conversion option using the Black-Scholes Option Pricing Model. The sum of these two valuations is the fair value of the loan receivable. Management believes that the accretion of the straight debt portion and embedded derivative related to the conversion option are not material. During the nine months ended 30 April 2019, the Company advanced $7,863 (2018 - $Nil) and accrued interest income of $9,000 (2018 - $Nil). |
Property and Equipment
Property and Equipment | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
7. Property and Equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Improvements Total Cost: Balance, 31 July 2018 $ 24,586 $ 435,109 $ 261,957 $ 27,694 $ 38,717 $ 1,644 $ 1,993,928 $ 2,783,635 Additions 7,491 28,647 22,701 - - 528 191,505 250,872 Balance, 30 April 2019 32,077 463,756 284,658 27,694 38,717 2,172 2,185,433 3,034,507 Accumulated Depreciation: Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Depreciation 3,828 55,046 32,608 3,327 5,797 268 112,853 213,727 Balance, 30 April 2019 7,005 96,215 58,054 5,881 11,297 496 202,516 381,464 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 2,615,898 As at 30 April 2019 $ 25,072 $ 367,541 $ 226,604 $ 21,813 $ 27,420 $ 1,676 $ 1,982,917 $ 2,653,043 |
Related Party Balances and Tran
Related Party Balances and Transactions | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
8. Related Party Balances and Transactions | In addition to those disclosed elsewhere in these consolidated financial statements, related party transactions for the nine month period ended 30 April 2019 and 2018 are as follows: a) During the nine months ended 30 April 2019, accounting fees of $28,573 (2018 - $22,088) and management fees of $Nil (2018 - $9,545) were paid/accrued to a company controlled by the former Chief Financial Officer and a director of the Company. b) During the nine months ended 30 April 2019, management fees of $68,103 (2018 - $43,544) and consulting fees of $Nil (2018 - $69,000) were paid/accrued to companies related to the Chief Executive Officer of the Company. c) During the nine months ended 30 April 2019, management fees of $150,673 (2018 - $93,869) were paid/accrued to a company controlled by a director of the Company. d) During the nine months ended 30 April 2019, management fees of $45,402 (2018 - $35,627) were paid/accrued to a company controlled by the Chief Financial Officer of the Company. e) During the nine months ended 30 April 2019, management fees of $Nil (2018 - $2,712) were paid/accrued to a former Chief Executive Officer of the Company. f) During the nine months ended 30 April 2019, management fees of $Nil (2018 - $9,500) were paid/accrued to a former Chief Executive Officer of the Company. g) As at 30 April 2019, the Company owed $23,467 (31 July 2018 - $17,028) to the Chief Executive Officer of the Company and a company controlled by him. h) As at 30 April 2019, the Company owed $27,379 (31 July 2018 - $4,033) to the Chief Financial Officer of the Company i) As at 30 April 2019, the Company owed $12,031 (31 July 2018 - $1,210) to a director of the Company and a company controlled by him. j) As at 30 April 2019, the Company owed $49,632 (31 July 2018 - $28,810) to a director of the Company and a company controlled by him. The above amounts owing to related parties are unsecured, non-interest bearing and are due on demand. In addition, there are amounts owing to related parties resulting from the purchase of NMG (Note 9). Included in stock-based compensation is $612,850 incurred to related parties. |
Notes Payable
Notes Payable | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
9. Notes Payable | In connection with the Acquisition of NMG, on 14 November 2017, the Company issued promissory notes totaling $2,175,000 to NMG Members (Note 14). As these promissory notes are non-interest bearing, they were discounted to a present value of $1,887,863 at a rate of 12%. These promissory notes are non-interest bearing, secured by the assets of the Company, and due the earlier of 14 February 2019 or within 30 days from the date of the Company completes a financing of at least $500,000. Any unpaid amounts at maturity will bear interest at a rate of 10% per annum. At 31 July 2018, the promissory notes were accreted to their face value as it was estimated that repayment would occur imminently due to the Company’s fund raising initiatives. During the nine months ended 30 April 2019, the Company accrued interest expense of $16,577 (2018 - $277,219). On 12 November 2018 the notes were amended such that $1,175,000 was repaid and the balance of $1,000,000 would be due on 14 February 2019. As the balance was not repaid on 14 February 2019, then interest would commence accruing at 8% per annum and the principal plus interest is to be repaid on the earlier of i) 12 months from due date or ii) within 10 business days of closing a financing greater than $5,000,000 subsequent to 12 November 2018. During the nine months ended 30 April 2019, the Company accrued interest expense of $16,438 (2018 - $277,219). In connection with the investment of Green Light District Holdings, Inc. (“GLDH”) on 29 November 2018, the Company issued a promissory note in the amount of $4,000,000 to Australis Capital Inc. (“Australis”) (Note 18). The promissory note bears interest at a rate of 15% per annum, is secured by the assets of the Company, matures in two years and requires semi-annual interest payments unless the Company elects to accrue the interest by adding it to the principal amount. The Company issued 1,105,083 common shares of the Company as a finance fee to Australis valued at $822,494 (Note 11). During the nine months ended 30 April 2019, the Company accrued interest and accretion expense of $422,532 (2018 - $Nil). 30 April 2019 31 July 2018 Balance, beginning $ 2,175,000 $ - Issuance of promissory notes 4,000,000 1,887,277 Deferred finance costs (822,494 ) - Partial repayment of promissory notes (1,175,000 ) - Interest and accretion expense 438,970 277,219 Foreign exchange adjustment - 10,504 Balance, ending $ 4,616,476 $ 2,175,000 |
Convertible debenture
Convertible debenture | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
10. Convertible debenture | In connection with an investment agreement with Australis on 30 October 2018 (Note 16), the Company issued an unsecured convertible debenture in the amount of CAD$1,600,000 to Australis. The convertible debenture bears interest at a rate of 8% per annum. Repayment of the outstanding principal amount of the convertible debenture, together with any accrued and unpaid interest, is to be made on or prior to 30 October 2020. The convertible debenture is convertible at the option of Australis into common shares of the Company at a conversion price of CAD$0.55 per common share, subject to adjustment and acceleration in certain circumstances. At the date of issue, a beneficial conversion feature of $88,797 (CAD$116,714) was recognized and the debt portion of the convertible debentures was recorded at a value of $1,128,750 (CAD$1,483,636). The value of the beneficial conversion feature was recorded in equity as additional paid-in capital. Subsequent to initial recognition, the debt has been amortized over the term of the debt using the effective interest rate method at a rate of 11.3%. During the nine months ended 30 April 2019, the Company accrued interest expense of $48,296 (2018 - $Nil). 30 April 2019 31 July 2018 Balance, beginning $ - $ - Issuance of convertible debenture 1,128,750 - Interest and accretion expense 64,541 - Foreign exchange adjustment (24,439 ) - Balance, ending $ 1,168,852 $ - |
Capital Stock
Capital Stock | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
11. Capital Stock | The Company’s authorized share capital comprises 900,000,000 Common Shares, with a $0.0001 par value per share. On 13 March 2017, a total of 150,000 Class A preferred shares were converted into 500,000 common shares of the Company. On 8 May 2017, the remaining 2,325,500 Class A preferred shares were converted into 7,751,765 common shares of the Company. In connection with the Acquisition, on 14 November 2017, the Company eliminated its authorized Class A Preferred share class and completed a consolidation of its common shares on the basis of three pre-consolidation common shares to one post-consolidation common share (Note 14). Unless otherwise noted, all figures in the financial statements are retroactively adjusted to reflect the consolidation. On 15 August 2017 and 16 August 2017, the Company closed the first two of four tranches of a non-brokered private placement and issued 8,276,294 Subscription Receipts (defined below) at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $4,270,017 (CAD$5,462,354). On 31 October 2017, the Company closed a third tranche of a non-brokered private placement and issued 757,666 Subscription Receipts at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $390,822 (CAD$500,060) (Note 14). On 1 November 2017, the Company closed a fourth and final tranche of a non-brokered private placement and issued 68,181 Subscription Receipts at a price of $0.52 (CAD$0.66) per Subscription Receipt for aggregate gross proceeds of $35,169 (CAD$45,000) (Note 14). On 14 November 2017, the Company issued a total of 18,827,000 common shares valued at $6,337,190 in connection with the Acquisition of NMG (Note 14). The Company is obligated to issue 423,000 common shares, which have a fair value of $135,202 (Note 14). On 14 November 2017, a total of 9,102,141 Subscription Receipts converted to 9,102,141 common shares and 9,102,141 share purchase warrants exercisable at CAD $0.66 or CAD$0.90 for a period of 24 months pursuant to the closing of the Acquisition of NMG (Note 14). The Company issued a total of 367,286 brokers’ warrants with a fair value of $62,357 (CAD$78,122) in connection with these financings. The brokers’ warrants are exercisable at CAD$0.90 for a period of 24 months. The Company incurred other share issuance costs of $219,459 (CAD$279,352) in relation to this private placement. On 1 December 2017, the Company closed a non-brokered private placement of 637,393 units at a price of $0.52 (CAD$0.66) per unit for aggregate gross proceeds of $330,486 (CAD$420,680). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.90 per warrant for a period of 24 months from the closing. On 16 May 2018, the Company issued 70,500 previously escrowed shares with a fair value of $27,328 to Toro Pacific Management Inc. in connection with the acquisition of NMG (Note 14). On 30 October 2018, the Company closed a non-brokered private placement of 16,000,000 units at a price of $0.30 (CAD$0.40) per unit for aggregate gross proceeds of $4,883,840 (CAD$6,400,000). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional common share of the Company at a price of CAD$0.50 per warrant for a period of two years. The Company paid cash of $270,735 and issued 322,581 common shares valued at $221,658 as finders’ fees in relation to this private placement. On 29 November 2018, the Company issued 1,105,083 common shares as a finance fee to Australis valued at $822,494 (Note 9). On 30 November 2018, the Company issued 3,206,160 common shares upon exercise of 3,206,160 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $1,205,196 (CAD$1,603,080). On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 which is included in subscriptions receivable, pursuant to the Investment Agreement (Note 16). On 31 January 2019, the Company issued 2,380,398 common shares valued at $1,448,805 in relation to acquiring the remaining 70% of NMG Ohio LLC (Note 17). Stock options The Company previously approved an incentive stock option plan, pursuant to which the Company may grant stock options up to an aggregate of 10% of the issued and outstanding common shares in the capital of the Company from time to time. On 24 November 2017, the Company issued an aggregate of 3,850,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.66 per share for a five year term expiring 24 November 2022. The options were granted to officers, directors and consultants of the Company. The fair value of the stock options was calculated to be $733,679 (CAD$922,403) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 198% Expected dividend yield 0% Risk-free interest rate 1.63% On 6 June 2018, the Company issued 175,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.47 per share for a five year term expiring 6 June 2023. The options were granted to a consultant of the Company. The fair value of the stock options was calculated to be $63,101 (CAD$81,129) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 262% Expected dividend yield 0% Risk-free interest rate 2.16% On 11 December 2018, the Company issued 2,050,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.57 per share for a five year term expiring 10 December 2023. The options were granted to current directors, officers, employees and consultants of the Company. The fair value of the stock options was calculated to be $881,644 (CAD$1,165,117) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 265% Expected dividend yield 0% Risk-free interest rate 2.03% 30 April 2019 31 July 2018 Number of options Exercise Price Number of options Exercise Price Opening balance 4,025,000 CAD$0.65 - - Options granted 2,050,000 CAD$0.57 4,025,000 CAD$0.65 Closing balance 6,075,000 CAD$0.62 4,025,000 CAD$0.65 Share purchase warrants and brokers’ warrants 30 April 2019 31 July 2018 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance 10,106,820 CAD$0.89 - - Warrants issued 16,000,000 CAD$0.50 10,106,820 CAD$0.89 Warrants exercised (3,206,160 ) CAD$0.50 - - Closing balance 22,900,660 CAD$0.67 10,106,820 CAD$0.89 As at 30 April 2019, the following warrants are outstanding: Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,102,141 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 12,793,840 CAD$0.50 30 October 2020 22,900,660 |
Segmented Information
Segmented Information | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
12. Segmented Information | The Company’s activities are all in the one industry segment of medical and recreational cannabis. All of the Company’s revenue generating activities and capital assets relate to this segment and are located in the USA. |
Supplemental Disclosures with R
Supplemental Disclosures with Respect to Cash Flows | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
13. Supplemental Disclosures with Respect to Cash Flows | Nine Month Period Ended 30 April 2019 2018 Cash paid during the period for interest $ - $ - Cash paid during the period for income taxes $ - $ - |
Business Acquisition
Business Acquisition | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
14. Business Acquisition | On 15 May 2017, the Company entered into an assignment and novation agreement (the “Assignment Agreement”) with Toro Pacific Management Inc. (the “Transferor”) pursuant to which the Transferor assigned a letter of intent (the “LOI”) effective 12 May 2017 to the Company in accordance with its terms. The Assignment Agreement and the LOI contemplated a business combination transaction (the “Acquisition”) to acquire all of the issued and outstanding securities of NMG, an arm’s length Nevada-based licensed producer of medical cannabis. As consideration for the Assignment Agreement, the Company will issue to the Transferor 1,000,000 common shares of the Company. On November 13, 2017, the Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a. 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b. 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c. 470,000 common shares to the Transferor according to the following schedule: • 1/10 of the Transferor’s shares upon closing of the Acquisition (issued); • 1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition (issued); • 1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition; • 1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition; • 1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition; • 1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and • the remaining Transferor’s shares 36 months after closing the Acquisition. The remaining 423,000 shares to be issued to the Transferor over the 36 month period are included in equity as shares to be issued with a total fair value of $135,202 (Note 11). On 14 September 2017, the Company and Dep Nevada entered into a definitive agreement (the “Share Exchange Agreement”) with NMG. Pursuant to the Share Exchange Agreement, Dep Nevada acquired all of the issued and outstanding securities of NMG in exchange for the issuance of the Company’s common shares and certain cash and other non-cash consideration (the “Acquisition”). The Company completed a concurrent financing consisting of 9,102,141 subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than CAD$1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release. These Subscription Receipts were recognized as liability on initial receipt. During the year ended 31 July 2018, the Acquisition closed and the shares were issued; therefore the Subscription Receipts were reclassified from liability to equity on conversion to common shares. On 14 November 2017, the Company closed the Acquisition, and acquired all of the issued and outstanding membership units of NMG (the “Units”). In consideration for the Units, the Company issued to the NMG Members an aggregate of 16,000,000 common shares with a fair value of $5,386,155 as well as a cash payment of $2,309,000 pro rata amongst the NMG members and promissory notes to the NMG members in the aggregate amount of $2,175,000. The Company also issued 2,037,879 common shares to TI Nevada with a fair value of $685,788, 212,121 common shares to Charles Fox with a fair value of $71,383, 47,000 common shares to Toro Pacific Management Inc. with a fair value of $15,816, 60,000 common shares to Chris Hunt with a fair value of $20,192, and 470,000 common shares to Benjamin Rutledge with a fair value of $159,114 in connection with the Acquisition. The Company has an obligation to issue a further 423,000 common shares to Toro Pacific Management Inc., which had a fair value of $135,202 on the date of acquisition. The Company recognized $330,324 in transaction costs in connection with the shares issued to non-NMG members. The promissory notes totaling $2,175,000 were discounted to a present value of $1,887,277 (Note 9). In connection with the closing of the Acquisition, the net proceeds of the Company’s private placements of Subscription Receipts in support of the Acquisition was released to the Company from escrow. Immediately prior to closing of the Acquisition, the Company completed a consolidation of its common shares on the basis of three (3) pre-consolidation common shares to one (1) post-consolidation common share, as well a name change, changing the name of the Company from Deploy Technologies, Inc. to Body and Mind Inc. The Company eliminated its authorized Class A Preferred shares (Note 11). As a result of the acquisition of NMG, the Company changed its business focus to growing and supplying medical and recreational cannabis in the state of Nevada. The acquisition of NMG was accounted for as a business combination, in which the assets acquired and the liabilities assumed are recorded at their estimated fair values. The allocation of the purchase consideration is as follows: Purchase consideration Share considerations $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL $ 10,339,603 Assets acquired: Cash $ 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 Goodwill recognized comprises the assembled workforce and their knowledge with respect to NMG, regulatory affairs and the cannabis industry; and expected revenue growth and future market development with legalization of recreational cannabis in Nevada. |
Commitments
Commitments | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
15. Commitments | a) On 11 November 2014, NMG entered into a five year lease for its premises. The Company has five options to extend the lease and each option is for five years. The monthly rent was $12,500, increased to $15,000 on 1 January 2018. The guaranteed minimum monthly rent is subject to a 3% increase on each anniversary date of the lease. b) On 14 November 2017, the Company entered into the following consulting agreements: i. $16,667 per month to TI Nevada, which is controlled by an officer of the Company, for a term of three years; and ii. CAD$10,000 per month to Toro Pacific Management Inc., which is controlled by an officer of the Company. |
Investment Agreement
Investment Agreement | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
16. Investment Agreement | On 30 October 2018, the Company entered into a strategic investment agreement (the “Investment Agreement”) with Australis. Pursuant to the terms of the Investment Agreement, Australis will acquire (i) 16,000,000 units of the Company (Note 11), and (ii) CAD$1,600,000 principal amount 8% unsecured convertible debentures (Note 9). Under the terms of the Investment Agreement, the parties agreed to negotiate in good faith a license agreement pursuant to which the Company will grant Australis an exclusive and assignable license to use the Body and Mind brand outside of the United States of America on commercially reasonable terms. In addition, the Company will enter into a commercial advisory agreement with Australis Capital (Nevada) Inc. (“Australis Nevada”), a wholly-owned subsidiary of Australis, pursuant to which Australis Nevada will provide advisory and consulting services to the Company at $16,500 per month for a term ending on the date that is the earlier of: (i) five years following the closing of the transactions contemplated by the Investment Agreement, and (ii) the date Australis no longer holds 10% or more of the issued and outstanding Common Shares. Subject to certain exceptions, Australis will be entitled to maintain its’ pro rata interest in the Company until such time as it no longer holds 10% or more of the issued and outstanding Common Shares. Subject to applicable laws and the rules of the Canadian Securities Exchange (“CSE”), for as long as Australis owns at least 10% of the issued and outstanding common shares, Australis will be entitled to nominate one director for election to the Board of Directors of the Company (the “Board”). If Australis exercises all of the warrants and converts all of the debentures purchased, Australis will be entitled to nominate a second director for election to the Board. On 2 November 2018, the Company executed the Investment Agreement and completed the sale of securities pursuant to the Investment Agreement. On 31 January 2019, the Company issued 1,768,545 common shares to Australis for proceeds of $787,123 pursuant to the Investment Agreement whereby the Company granted Australis anti-dilution participation rights to allow Australis to maintain a 35.783% ownership interest in the Company (Note 11). |
Investment in NMG Ohio LLC
Investment in NMG Ohio LLC | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
17. Investment in NMG Ohio LLC | On 7 June 2018, the Company acquired a 30% interest in NMG Ohio LLC (“NMG Ohio”). The investment is accounted for using the equity method of accounting. During the nine month period ended April 30, 2019, the Company advanced an additional $435,272 to NMG Ohio to fund the build-out of a dispensary. On 31 January 2019, the Company entered into a definitive agreement (“Definitive Agreement”) to acquire 100% ownership of NMG Ohio. The Company will purchase the remaining 70% interest for total cash payments of $1,575,000 and issuance of 3,173,864 common shares of the Company. As at April 30, 2019 the Company had issued 2,380,398 of the 3,173,864 common shares with a fair value of $1,448,805. During the nine months ended April 30, 2019, the Company made cash payments of $1,181,250. At 30 April 2019 the Definitive Agreement had not closed. The remaining cash payments totaling $393,750 and the remaining issuance of 793,466 common shares are expected to be paid and issued upon completion of the remaining Definitive Agreement closing items. Until such time as the Definitive Agreement closes, the Company will continue to account for its 30% ownership interest in NMG Ohio as an investment using the equity method of accounting. During the nine months ended April 30, 2018, NMG Ohio recorded net revenues of $401,942, expenses of $442,596 and net income of $40,654. The Company recorded $12,196 relating to its 30% pro rata share of net loss and was included in other items on the statement of operations. 30 April 2019 Balance, 31 July 2018 $ 77,600 Acquisition costs: Common shares issued to vendors at fair value 1,448,805 Acquisition costs: Cash payments to vendors 1,181,250 Dispensary build-out related costs 410,799 Equity loss (12,196 ) Total $ 3,106,258 |
Loans to GLDH
Loans to GLDH | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
18. Loans to GLDH | On 29 November 2018, the Company and Australis announced an investment by the Company into Green Light District Holdings, Inc. (“GLDH”) by way of a $5,200,000 senior secured convertible note which bears interest at a rate of 20% per annum and is due on 29 November 2020. In conjunction with the note, an additional amount of $562,585 was advanced to cover payables and which shall be repaid at an unspecified date. During the nine months ended 30 April 2019, the Company accrued interest income of $433,380 (2018 - $Nil). The note and any accrued interest is convertible into 89.75% of the shares of GLDH at the option of the Company. The Company has an agreement to issue additional consideration totaling $6,297,580 payable in 11,255,899 shares of the Company at a price of CAD$0.7439 upon GLDH meeting certain milestones. 30 April 2019 Senior secured note $ 5,200,000 GLDH working capital advances 571,412 Interest income (433,380 ) Total $ 6,204,792 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Apr. 30, 2019 | |
Notes to Financial Statements | |
19. Subsequent Events | i. The Company closed a private placement of 11,780,904 units (“Unit”) at a price of $0.93 (CAD$1.25) per unit for aggregate gross proceeds of $10,956,241 (CAD$14,726,130) (the “Offering). Each Unit is comprised of one common share of the Company (each, a "Share") and one common share purchase warrant of the Company (each, a "Warrant"). Each Warrant entitles the holder thereof to acquire one common share of the Company (each, a "Warrant Share") at an exercise price of CAD$1.50 per Warrant Share for a period of 48 months following the closing date, subject to adjustment in certain events. The Agents received a cash commission on the sale of the Offering to non-U.S. persons of CAD$793,937.50. The Agents also received as additional consideration 635,150 non-transferable broker warrants (each, a "Broker Warrant"). Each Broker Warrant entitles the holder thereof to acquire one Unit of the Company at an exercise price of CAD$1.25 per Unit for a period of 48 months following the closing date. M Partners Inc. also received a corporate finance fee of CAD$84,750. ii. The Company issued 12,793,840 common shares upon exercise of 12,793,840 warrants by Australis at a price of CAD$0.50 per common share for aggregate proceeds of $4,733,721 (CAD$6,396,920). The proceeds were used, in part, to fully repay an outstanding senior secured note (the "Note") in the amount of $4,495,890.41 owing to Australis by the Company. Payment of the Note included the principal amount of $4,000,000 including accrued interest and an early repayment fee. The remaining Warrant Proceeds will be used for working capital purposes. iii. The Company and NMG entered into a management and administrative services agreement (the "Management Agreement") with Satellites Dip, LLC, ("SD"), a licensed cannabis business conducting commercial cannabis activity within the state of California. The one year Management Agreement commenced on June 6, 2019 and encompasses the following: a. Management Fee: NMG will be paid a management fee of 30 % of Net Profits or Ten Thousand Dollars ($10,000) per month, whichever is greater. b. Brand Licensing: NMG shall work to broker commercial arrangements between SD and third-party cannabis brand owners whereby SD licenses commercial cannabis brands from third parties in connection with SD's commercial cannabis activity in exchange for a license fee; c. Equipment and Capital: NMG shall furnish all equipment and machinery necessary for SD's manufacturing of the Branded Products. Any equipment provided by NMG to SD shall be owned by NMG in its entirety and, subject to SD's approval of the terms, leased to SD pursuant to an Equipment Lease Agreement entered into between NMG and SD, dated June 6, 2019; and d. Loan: The Parties have entered into a certain secured loan agreement dated June 6, 2019 whereby NMG has loaned SD Two Hundred and Fifty Thousand Dollars ($250,000) (the "Loan") to be used solely in connection with SD's commercial cannabis activity. The Loan shall be due and payable on June 6, 2020 (the "Maturity Date") and shall bear interest at a rate of 12% per annum which shall be accrued, compounded quarterly and payable on the Maturity Date. The Loan will be secured by a security interest in and to all of SD's assets. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Apr. 30, 2019 | |
Significant Accounting Policies | |
Basis of presentation | The financial statements of the Company have been prepared in accordance with GAAP and are expressed in U.S. dollars. The Company’s fiscal year end is 31 July. |
Cash and cash equivalents | Cash and cash equivalents include highly liquid investments with original maturities of three months or less. |
Derivative financial instruments | The Company has not, to the date of these financial statements, entered into derivative instruments. |
Amounts receivable | Amounts receivable represents amounts owed from customers for sale of medical and recreational cannabis and sales tax recoverable. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a quarterly basis. As at 30 April 2019 and 31 July 2018, the Company has no allowance for doubtful accounts. |
Revenue recognition | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its initial release, the FASB has issued several amendments to the standard, which include clarification of accounting guidance related to identification of performance obligations and principal versus agent considerations. Topic 606 became effective for the Company in the first quarter of the 2019 fiscal year. The adoption of this guidance had no impact on the Company’s financial statements. The Company derives revenue primarily from the sale of medical and recreational cannabis. In accordance with ASC 606, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. The Company does not have standard terms that permit return of product; however, in certain markets where returns occur management estimates the amount of returns as variable consideration based on historical return experience and adjust revenue accordingly. Products that do not meet the Company’s high quality standards are returned by the customer or recalled and destroyed and are recorded as a reduction of revenue. The reversal of revenue is recorded upon determination that the product will be recalled and destroyed. Management estimates the costs required to facilitate product returns and record them in cost of goods sold as required. |
Inventory | Inventory consists of raw material, work in progress (live plants and plants in the drying process), finished goods, and consumables. The Company values its raw material, finished goods and consumables at the lower of the actual costs or its current estimated market value less costs to sell. The Company values its work in progress at cost. The Company periodically reviews its inventory for obsolete and potentially impaired items. |
Property and equipment | Property and equipment are stated at cost and are amortized over their estimated useful lives on a straight-line basis: Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years |
Brands and licenses | Intangible assets acquired from third parties are measured initially at fair value and either classified as indefinite life or finite life depending on their characteristics. Intangible assets with indefinite lives are tested for impairment at least annually and intangible assets with finite lives are reviewed for indicators of impairment at least annually. The Company’s brands and licenses have indefinite lives; therefore no amortization is recognized. |
Start-up expenses | The Company has adopted ASC 720-15, “Start-Up Costs”, which requires that costs associated with start-up activities be expensed as incurred. Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s expenses for the period from the date of inception. |
Income taxes | Deferred income taxes are reported for timing differences between items of income or expense reported in the consolidated financial statements and those reported for income tax purposes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. 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 Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. |
Basic and diluted net loss per share | The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excluded all dilutive potential shares if their effect is anti-dilutive. |
Segments of an enterprise and related information | ASC 280, “Segment Reporting” establishes guidance for the way that public companies report information about operating segments in annual consolidated financial statements and requires reporting of selected information about operating segments in interim consolidated financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. ASC 280 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has evaluated this Codification and does not believe it is applicable at this time. |
Comprehensive loss | ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive income/loss and its components in the consolidated financial statements. As at 30 April 2019, the Company reported foreign currency translation adjustments as other comprehensive income or loss and included a schedule of comprehensive income/loss in the consolidated financial statements. |
Foreign currency translation | The Company’s functional currency is Canadian dollars and reporting currency is U.S. dollars. The Company’s subsidiary, NMG, has a functional currency of U.S. dollars. The consolidated financial statements of the Company are translated to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. |
Use of estimates and assumptions | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from these estimates. |
Comparative figures | Certain comparative figures have been adjusted to conform to the current year’s presentation. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Significant Accounting Policies Tables Abstract | |
Property and equipment estimated useful lives | Office equipment 7 years Cultivation equipment 7 years Production equipment 7 years Kitchen equipment 7 years Vehicles 7 years Vault equipment 7 years Leasehold improvements 15 years |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Financial Instruments | |
Schedule of financial assets at fair value | As at 30 April 2019 As at 31 July 2018 Financial assets at fair value Cash $ 2,588,798 $ 324,837 Convertible loan receivable 7,863 - Total financial assets at fair value $ 2,596,661 $ 324,837 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Inventory Tables Abstract | |
Schedule of inventory Table | 30 April 2019 31 July 2018 Raw materials $ 9,320 $ 9,705 Work in progress 114,019 151,039 Finished goods 932,690 567,563 Consumables 618,727 225,110 Total $ 1,674,756 $ 953,417 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Property And Equipment | |
Property and Equipment | Office Equipment Cultivation Equipment Production Equipment Kitchen Equipment Vehicles Vault Equipment Improvements Total Cost: Balance, 31 July 2018 $ 24,586 $ 435,109 $ 261,957 $ 27,694 $ 38,717 $ 1,644 $ 1,993,928 $ 2,783,635 Additions 7,491 28,647 22,701 - - 528 191,505 250,872 Balance, 30 April 2019 32,077 463,756 284,658 27,694 38,717 2,172 2,185,433 3,034,507 Accumulated Depreciation: Balance, 31 July 2018 3,177 41,169 25,446 2,554 5,500 228 89,663 167,737 Depreciation 3,828 55,046 32,608 3,327 5,797 268 112,853 213,727 Balance, 30 April 2019 7,005 96,215 58,054 5,881 11,297 496 202,516 381,464 Net Book Value: As at 31 July 2018 21,409 393,940 236,511 25,140 33,217 1,416 1,904,265 2,615,898 As at 30 April 2019 $ 25,072 $ 367,541 $ 226,604 $ 21,813 $ 27,420 $ 1,676 $ 1,982,917 $ 2,653,043 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Notes Payable | |
Schedule of promissory notes tables | 30 April 2019 31 July 2018 Balance, beginning $ 2,175,000 $ - Issuance of promissory notes 4,000,000 1,887,277 Deferred finance costs (822,494 ) - Partial repayment of promissory notes (1,175,000 ) - Interest and accretion expense 438,970 277,219 Foreign exchange adjustment - 10,504 Balance, ending $ 4,616,476 $ 2,175,000 |
Convertible debenture (Tables)
Convertible debenture (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Convertible Debenture | |
Schedule of convertible debenture | 30 April 2019 31 July 2018 Balance, beginning $ - $ - Issuance of convertible debenture 1,128,750 - Interest and accretion expense 64,541 - Foreign exchange adjustment (24,439 ) - Balance, ending $ 1,168,852 $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Schedule of fair value of stock options | On 24 November 2017, the Company issued an aggregate of 3,850,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.66 per share for a five year term expiring 24 November 2022. The options were granted to officers, directors and consultants of the Company. The fair value of the stock options was calculated to be $733,679 (CAD$922,403) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 198% Expected dividend yield 0% Risk-free interest rate 1.63% On 6 June 2018, the Company issued 175,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.47 per share for a five year term expiring 6 June 2023. The options were granted to a consultant of the Company. The fair value of the stock options was calculated to be $63,101 (CAD$81,129) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 262% Expected dividend yield 0% Risk-free interest rate 2.16% On 11 December 2018, the Company issued 2,050,000 stock options in accordance with the Company’s stock option plan at an exercise price of CAD$0.57 per share for a five year term expiring 10 December 2023. The options were granted to current directors, officers, employees and consultants of the Company. The fair value of the stock options was calculated to be $876,517 (CAD$1,165,117) using the Black-Scholes Option Pricing Model with the following assumptions: Expected life of the options 5 years Expected volatility 265% Expected dividend yield 0% Risk-free interest rate 2.03% |
Schedule of warrants outstanding | Number of warrants outstanding and exercisable Exercise price Expiry dates 248,350 CAD$0.66 15 August 2019 58,324 CAD$0.66 16 August 2019 60,612 CAD$0.66 3 November 2019 9,102,141 CAD$0.90 14 November 2019 637,393 CAD$0.90 1 December 2019 12,793,840 CAD$0.50 30 October 2020 22,900,660 |
Warrant [Member] | |
Schedule of fair value of stock options | 30 April 2019 31 July 2018 Number of warrants Exercise Price Number of warrants Exercise Price Opening balance 10,106,820 CAD$0.89 - - Warrants issued 16,000,000 CAD$0.50 10,106,820 CAD$0.89 Warrants exercised (3,206,160 ) CAD$0.50 - - Closing balance 22,900,660 CAD$0.67 10,106,820 CAD$0.89 |
Stock Options [Member] | |
Schedule of fair value of stock options | 30 April 2019 31 July 2018 Number of options Exercise Price Number of options Exercise Price Opening balance 4,025,000 CAD$0.65 - - Options granted 2,050,000 CAD$0.57 4,025,000 CAD$0.65 Closing balance 6,075,000 CAD$0.62 4,025,000 CAD$0.65 |
Supplemental Disclosures with_2
Supplemental Disclosures with Respect to Cash Flows (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Supplemental Disclosures With Respect To Cash Flows | |
Schedule of cash flow supplemental disclosures | Nine Month Period Ended 30 April 2019 2018 Cash paid during the period for interest $ - $ - Cash paid during the period for income taxes $ - $ - |
Business Acquisition (Tables)
Business Acquisition (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Business Acquisition | |
Schedule of business acquisitions by acquisition | Purchase consideration Share considerations $ 6,143,326 Cash considerations 2,309,000 Promissory notes issued 1,887,277 TOTAL $ 10,339,603 Assets acquired: Cash $ 260,842 Amounts receivable 253,697 Prepaid expenses 44,552 Inventory 498,680 Property and equipment 1,951,696 Brand 247,000 Licenses 7,925,000 Liabilities assumed: Trade payable and accrued liabilities (367,385 ) Loans payable (250,000 ) Deferred tax liability (2,860,200 ) Net assets acquired 7,703,882 Goodwill 2,635,721 TOTAL $ 10,339,603 |
Investment in NMG Ohio LLC (Tab
Investment in NMG Ohio LLC (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Investment In Nmg Ohio Llc | |
Schedule of Investment in NMG Ohio LLC | 30 April 2019 Balance, 31 July 2018 $ 77,600 Acquisition costs: Common shares issued to vendors at fair value 1,448,805 Acquisition costs: Cash payments to vendors 1,181,250 Dispensary build-out related costs 410,799 Equity loss (12,196 ) Total $ 3,106,258 |
Loans to GLDH (Tables)
Loans to GLDH (Tables) | 9 Months Ended |
Apr. 30, 2019 | |
Loans To Gldh | |
Schedule of Loans to GLDH | 30 April 2019 Senior secured note $ 5,200,000 GLDH working capital advances 571,412 Interest income (433,380 ) Total $ 6,204,792 |
Nature and Continuance of Ope_2
Nature and Continuance of Operations (Details Narrative) - USD ($) | 9 Months Ended | ||||
Apr. 30, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 | May 31, 2004 | |
State of incorporation | Delaware | ||||
Date of incorporation | Nov. 5, 1998 | ||||
Cash and cash equivalents | $ 2,588,798 | $ 324,837 | $ 1,046,940 | $ 366,584 | |
Working capital deficit | $ (1,211,081) | $ (998,878) | |||
Kaleidoscope Venture Capital [Member] | |||||
Ownership percentage | 100.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 9 Months Ended |
Apr. 30, 2019 | |
Office Equipment [Member] | |
Estimated useful lives | 7 years |
Cultivation equipment [Member] | |
Estimated useful lives | 7 years |
Production Equipment [Member] | |
Estimated useful lives | 7 years |
Kitchen equipment [Member] | |
Estimated useful lives | 7 years |
Vehicles [Member] | |
Estimated useful lives | 7 years |
Vault equipment [Member] | |
Estimated useful lives | 7 years |
Leasehold Improvements [Member] | |
Estimated useful lives | 15 years |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 |
Financial assets at fair value | ||||
Cash | $ 2,588,798 | $ 324,837 | $ 1,046,940 | $ 366,584 |
Convertible Loan Receivable (Note 6) | 7,863 | 0 | ||
Total financial assets at fair value | $ 2,596,661 | $ 324,837 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Financial Instruments Details Narrative Abstract | ||
Working capital deficit | $ (1,211,081) | $ (998,878) |
Inventory (Details)
Inventory (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Inventory Details Abstract | ||
Raw materials | $ 9,320 | $ 9,705 |
Work in progress | 114,019 | 151,039 |
Finished goods | 932,690 | 567,563 |
Consumables | 618,727 | 225,110 |
Total | $ 1,674,756 | $ 953,417 |
Convertible loan receivable (De
Convertible loan receivable (Details Narrative) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Jul. 31, 2018 | |
Convertible Loan Receivable (Note 6) | $ 7,863 | $ 0 |
Accrued interest income | 9,000 | $ 0 |
NMG [Member] | ||
Management fee (per month) | 6,000 | |
CCG [Member] | Convertible Loan Agreement [Member] | ||
Proceeds from fund construction | 1,250,000 | |
Loan bears interest | $ 6,000 | |
Outstanding units percentage | 40.00% |
Property and Equipment (Details
Property and Equipment (Details) | 9 Months Ended |
Apr. 30, 2019USD ($) | |
Cost | |
Balance, 31 July 2018 | $ 2,783,635 |
Additions | 250,872 |
Balance, 30 April 2019 | 3,034,507 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 167,737 |
Depreciation | 213,727 |
Balance, 30 April 2019 | 381,464 |
Net Book Value | |
As at 31 July 2018 | 2,615,898 |
As at 30 April 2019 | 2,653,043 |
Office Equipment [Member] | |
Cost | |
Balance, 31 July 2018 | 24,586 |
Additions | 7,491 |
Balance, 30 April 2019 | 32,077 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 3,177 |
Depreciation | 3,828 |
Balance, 30 April 2019 | 7,005 |
Net Book Value | |
As at 31 July 2018 | 21,409 |
As at 30 April 2019 | 25,072 |
Cultivation equipment [Member] | |
Cost | |
Balance, 31 July 2018 | 435,109 |
Additions | 28,647 |
Balance, 30 April 2019 | 463,756 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 41,169 |
Depreciation | 55,046 |
Balance, 30 April 2019 | 96,215 |
Net Book Value | |
As at 31 July 2018 | 393,940 |
As at 30 April 2019 | 367,541 |
Production Equipment [Member] | |
Cost | |
Balance, 31 July 2018 | 261,957 |
Additions | 22,701 |
Balance, 30 April 2019 | 284,658 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 25,446 |
Depreciation | 32,608 |
Balance, 30 April 2019 | 58,054 |
Net Book Value | |
As at 31 July 2018 | 236,511 |
As at 30 April 2019 | 226,604 |
Kitchen equipment [Member] | |
Cost | |
Balance, 31 July 2018 | 27,694 |
Additions | |
Balance, 30 April 2019 | 27,694 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 2,554 |
Depreciation | 3,327 |
Balance, 30 April 2019 | 5,881 |
Net Book Value | |
As at 31 July 2018 | 25,140 |
As at 30 April 2019 | 21,813 |
Vehicles [Member] | |
Cost | |
Balance, 31 July 2018 | 38,717 |
Additions | |
Balance, 30 April 2019 | 38,717 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 5,500 |
Depreciation | 5,797 |
Balance, 30 April 2019 | 11,297 |
Net Book Value | |
As at 31 July 2018 | 33,217 |
As at 30 April 2019 | 27,420 |
Vault equipment [Member] | |
Cost | |
Balance, 31 July 2018 | 1,644 |
Additions | 528 |
Balance, 30 April 2019 | 2,172 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 228 |
Depreciation | 268 |
Balance, 30 April 2019 | 496 |
Net Book Value | |
As at 31 July 2018 | 1,416 |
As at 30 April 2019 | 1,676 |
Leaseholder Improvements [Member] | |
Cost | |
Balance, 31 July 2018 | 1,993,928 |
Additions | 191,505 |
Balance, 30 April 2019 | 2,185,433 |
Accumulated Depreciation | |
Balance, 31 July 2018 | 89,663 |
Depreciation | 112,853 |
Balance, 30 April 2019 | 202,516 |
Net Book Value | |
As at 31 July 2018 | 1,904,265 |
As at 30 April 2019 | $ 1,982,917 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Jul. 31, 2018 | |
Consulting fees | $ 79,356 | $ 19,143 | $ 189,643 | $ 136,295 | |
Due to related party | 112,509 | 112,509 | $ 51,081 | ||
Stock-based compensation (Note 11) | 10,836 | 881,644 | 733,679 | ||
Director one [Member] | |||||
Due to related party | 49,632 | 49,632 | 28,810 | ||
Director [Member] | |||||
Management fees | 150,673 | 93,869 | |||
Due to related party | 12,031 | 12,031 | 1,210 | ||
Chief Financial Officer [Member] | |||||
Management fees | 45,402 | 35,627 | |||
Due to related party | 27,379 | 27,379 | 4,033 | ||
Chief Executive Officer [Member] | |||||
Management fees | 68,103 | 43,544 | |||
Consulting fees | 69,000 | ||||
Due to related party | $ 23,467 | 23,467 | $ 17,028 | ||
Former Chief Executive Officer One [Member] | |||||
Management fees | 9,500 | ||||
Former Chief Executive Officer [Member] | |||||
Management fees | 2,712 | ||||
Chief Financial Officer and director [Member] | |||||
Accounting fees | 28,573 | 22,088 | |||
Management fees | $ 9,545 | ||||
Related parties [Member] | |||||
Stock-based compensation (Note 11) | $ 612,850 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jul. 31, 2018 | |
Promissory Notes Details Abstract | ||
Balance, beginning | $ 2,175,000 | |
Issuance of promissory notes | 4,000,000 | 1,887,277 |
Deferred finance costs | (822,494) | |
Partial repayment of promissory notes | (1,175,000) | |
Interest and accretion expense | 438,970 | 277,219 |
Foreign exchange adjustment | 10,504 | |
Balance, ending | $ 4,616,476 | $ 2,175,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 29, 2018 | Apr. 30, 2019 | Jul. 31, 2018 |
Promissory note | $ 1,000,000 | |||
Interest rate | 10.00% | |||
Accrued interest expense | $ 16,577 | $ 277,219 | ||
Repayment of promissory note | $ 1,175,000 | |||
Promissory notes description | On 12 November 2018 the notes were amended such that $1,175,000 was repaid and the balance of $1,000,000 would be due on 14 February 2019. If the balance was not repaid on 14 February 2019, then interest would commence accruing at 8% per annum and the principal plus interest is to be repaid on the earlier of i) 12 months from due date or ii) within 10 business days of closing a financing greater than $5,000,000 subsequent to 12 November 2018. | |||
Common stock share issued | 72,628,084 | 47,774,817 | ||
Deferred finance costs | $ (822,494) | |||
Notes Payable [Member] | ||||
Accrued interest expense | 16,438 | 277,219 | ||
TI Nevada [Member] | ||||
Promissory note | $ 500,000 | |||
NMG [Member] | ||||
Promissory note | $ 2,175,000 | |||
Present value factor | 12.00% | |||
Present value of promissory note | $ 1,887,863 | |||
Debt maturity date | Feb. 14, 2019 | |||
Debt in default, interest rate description | Any unpaid amounts at maturity will bear interest at a rate of 10% per annum | |||
Australis Capital Inc. [Member] | ||||
Promissory note | $ 4,000,000 | |||
Interest rate | 15.00% | |||
Accrued interest expense | $ 422,532 | $ 0 | ||
Maturity terms | 2 years | |||
Common stock share issued | 1,105,083 | |||
Deferred finance costs | $ 822,494 |
Convertible debenture (Details)
Convertible debenture (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Apr. 30, 2019 | Jul. 31, 2018 | |
Convertible Debenture Details Abstract | ||
Balance, beginning | ||
Issuance of convertible debenture | 1,128,750 | |
Interest and accretion expense | 64,541 | |
Foreign exchange adjustment | (24,439) | |
Balance, ending | $ 1,168,852 |
Convertible debenture (Details
Convertible debenture (Details Narrative) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 30, 2018CAD ($)$ / shares | Apr. 30, 2019USD ($) | Jul. 31, 2018USD ($) | |
Interest rate | 11.30% | ||
Beneficial conversion feature | $ 88,797 | ||
Convertible debentures | 1,128,750 | ||
Accrued interest expense | $ 48,296 | $ 0 | |
Investment Agreement [Member] | Australis Capital Inc. [Member] | |||
Unsecured convertible debenture | $ 1,600,000 | ||
Interest rate | 8.00% | ||
Maturity date | Oct. 30, 2020 | ||
Acquired warrant unit price | $ / shares | $ 0.55 |
Capital Stock (Details)
Capital Stock (Details) | Dec. 11, 2018 | Jun. 06, 2018 | Nov. 24, 2017 |
Capital Stock | |||
Expected life of the options | 5 years | 5 years | 5 years |
Expected volatility | 265.00% | 262.00% | 198.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.03% | 2.16% | 1.63% |
Capital Stock (Details 1)
Capital Stock (Details 1) - Stock Options [Member] - $ / shares | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Nov. 24, 2017 | Apr. 30, 2019 | Jul. 31, 2018 | |
Opening balance | 4,025,000 | ||
Options granted | 3,850,000 | 2,050,000 | 4,025,000 |
Closing balance | 6,075,000 | 4,025,000 | |
Weighted average exercise price, opening balance | $ 0.65 | ||
Weighted average exercise price, options granted | $ 0.66 | 0.57 | 0.65 |
Weighted average exercise price, closing balance | $ 0.62 | $ 0.65 |
Capital Stock (Details 2)
Capital Stock (Details 2) - Warrant [Member] | 9 Months Ended | 12 Months Ended | ||
Apr. 30, 2019USD ($)shares | Apr. 30, 2019$ / shares | Jul. 31, 2018USD ($)shares | Jul. 31, 2018$ / shares | |
Opening balance | shares | 10,106,820 | |||
Warrants issued | $ | $ 16,000,000 | $ 10,106,820 | ||
Warrants exercised | $ | $ (3,206,160) | |||
Closing balance | shares | 22,900,660 | 10,106,820 | ||
Weighted average exercise price, opening balance | $ 0.89 | |||
Weighted average exercise price, options granted | 0.50 | 0.89 | ||
Weighted average exercise price, options exercised | 0.50 | |||
Weighted average exercise price, closing balance | $ 0.67 | $ 0.89 |
Capital Stock (Details 3)
Capital Stock (Details 3) | 9 Months Ended |
Apr. 30, 2019$ / sharesshares | |
Number of warrants outstanding and exercisable | 22,900,660 |
Range One [Member] | |
Number of warrants outstanding and exercisable | 248,350 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | 15 August 2019 |
Range Two [Member] | |
Number of warrants outstanding and exercisable | 58,324 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | 16 August 2019 |
Range Three [Member] | |
Number of warrants outstanding and exercisable | 60,612 |
Exercise price | $ / shares | $ 0.66 |
Expiry dates | 3 November 2019 |
Range Four [Member] | |
Number of warrants outstanding and exercisable | 9,102,141 |
Exercise price | $ / shares | $ 0.90 |
Expiry dates | 14 November 2019 |
Range Five [Member] | |
Number of warrants outstanding and exercisable | 637,393 |
Exercise price | $ / shares | $ 0.90 |
Expiry dates | 1 December 2019 |
Range Six [Member] | |
Number of warrants outstanding and exercisable | 12,793,840 |
Exercise price | $ / shares | $ 0.50 |
Expiry dates | 30 October 2020 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) | Dec. 11, 2018USD ($)shares | Dec. 11, 2018$ / shares | Jun. 06, 2018USD ($)shares | Jun. 06, 2018$ / shares | Dec. 01, 2017USD ($)$ / sharesshares | Dec. 01, 2017$ / shares | Nov. 14, 2017USD ($)shares | Nov. 14, 2017USD ($)$ / sharesshares | Aug. 15, 2017USD ($)$ / sharesshares | May 08, 2017shares | Mar. 13, 2017shares | Jan. 31, 2019USD ($)shares | Nov. 30, 2018USD ($)shares | Nov. 30, 2018$ / sharesshares | Nov. 29, 2018USD ($)shares | Oct. 30, 2018USD ($)$ / sharesshares | Oct. 30, 2018$ / shares | Nov. 24, 2017USD ($)shares | Nov. 24, 2017$ / shares | Oct. 31, 2017USD ($)$ / sharesshares | Aug. 16, 2017USD ($)$ / sharesshares | Apr. 30, 2019USD ($)$ / sharesshares | Apr. 30, 2019USD ($)$ / shares$ / sharesshares | Apr. 30, 2018USD ($) | Jul. 31, 2018USD ($)$ / sharesshares | Jul. 31, 2018$ / shares$ / sharesshares | May 16, 2018USD ($)shares |
Capital stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||||
Capital stock, shares authorized | shares | 900,000,000 | 900,000,000 | 900,000,000 | 900,000,000 | |||||||||||||||||||||||
Preferred stock converted into common shares | shares | 7,751,765 | 500,000 | |||||||||||||||||||||||||
Common stock shares issued | shares | 3,206,160 | 1,105,083 | |||||||||||||||||||||||||
Fair value of warrant | $ | $ 62,357 | ||||||||||||||||||||||||||
Warrants shares issued | shares | 3,206,160 | 3,206,160 | 367,286 | 367,286 | |||||||||||||||||||||||
Warrant exercisable price per share | (per share) | $ 0.50 | $ 0.90 | |||||||||||||||||||||||||
Share issuance costs | $ | $ 270,736 | $ 219,459 | |||||||||||||||||||||||||
Warrant exercisable period | 24 months | ||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 1,205,196 | $ 6,605,423 | $ 5,142,487 | ||||||||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||||||||
Stock options granted | shares | 3,850,000 | 2,050,000 | 4,025,000 | ||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.66 | $ 0.57 | $ 0.65 | ||||||||||||||||||||||||
Term of options | 5 years | ||||||||||||||||||||||||||
Expiry period | Nov. 24, 2022 | ||||||||||||||||||||||||||
Fair value of stock options | $ | $ 733,679 | ||||||||||||||||||||||||||
Australis Capital Inc. [Member] | |||||||||||||||||||||||||||
Finance fee fair valued | $ | $ 822,494 | ||||||||||||||||||||||||||
Australis Capital Inc. [Member] | Investment Agreement [Member] | |||||||||||||||||||||||||||
Common stock shares issued | shares | 1,768,545 | ||||||||||||||||||||||||||
Common stock share subscriptions receivable | $ | $ 787,123 | $ 787,123 | |||||||||||||||||||||||||
Consultant [Member] | Stock Options [Member] | |||||||||||||||||||||||||||
Stock options granted | shares | 2,050,000 | 175,000 | |||||||||||||||||||||||||
Exercise price | $ / shares | $ 0.57 | $ 0.47 | |||||||||||||||||||||||||
Term of options | 5 years | 5 years | |||||||||||||||||||||||||
Expiry period | Dec. 10, 2023 | Jun. 6, 2023 | |||||||||||||||||||||||||
Fair value of stock options | $ | $ 881,644 | $ 63,101 | |||||||||||||||||||||||||
Toro Pacific Management Inc. [Member] | |||||||||||||||||||||||||||
Escrowed shares issued | shares | 70,500 | ||||||||||||||||||||||||||
Escrowed shares fair value | $ | $ 27,328 | ||||||||||||||||||||||||||
NMG Ohio LLC [Member] | |||||||||||||||||||||||||||
Common stock shares issued | shares | 2,380,398 | ||||||||||||||||||||||||||
Common stock value | $ | $ 1,448,805 | ||||||||||||||||||||||||||
Acquiring revenue remaining performance obligation | 70.00% | 70.00% | |||||||||||||||||||||||||
NMG [Member] | |||||||||||||||||||||||||||
Common stock shares issued | shares | 18,827,000 | ||||||||||||||||||||||||||
Common stock value | $ | $ 6,337,190 | ||||||||||||||||||||||||||
Number of warrants purchase exercisable shares | shares | 9,102,141 | 9,102,141 | |||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.66 | ||||||||||||||||||||||||||
Share issuance costs | $ | $ 219,459 | ||||||||||||||||||||||||||
Term of options | 24 months | ||||||||||||||||||||||||||
Business acquisition shares issued or issuable | shares | 423,000 | ||||||||||||||||||||||||||
Business acquisition, fair value of shares issued or issuable | $ | $ 135,202 | $ 135,202 | |||||||||||||||||||||||||
Class A Preferred Shares | |||||||||||||||||||||||||||
Converted preferred stock | shares | 2,325,500 | 150,000 | |||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||
Private placements shares issued | shares | 637,393 | 16,000,000 | |||||||||||||||||||||||||
Subscription receipts per price | $ / shares | $ 0.52 | $ 0.30 | |||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 330,486 | $ 4,883,840 | |||||||||||||||||||||||||
Common stock shares issued | shares | 322,581 | ||||||||||||||||||||||||||
Common stock value | $ | $ 221,658 | ||||||||||||||||||||||||||
Warrant exercisable price per share | $ / shares | $ 0.90 | $ 0.50 | |||||||||||||||||||||||||
Warrant exercisable period | 24 months | 24 months | |||||||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 270,735 | ||||||||||||||||||||||||||
Private Placement [Member] | Tranches One [Member] | |||||||||||||||||||||||||||
Private placements shares issued | shares | 8,276,294 | ||||||||||||||||||||||||||
Subscription receipts per price | $ / shares | $ 0.52 | ||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 4,270,017 | ||||||||||||||||||||||||||
Private Placement [Member] | Tranches Two [Member] | |||||||||||||||||||||||||||
Private placements shares issued | shares | 8,276,294 | ||||||||||||||||||||||||||
Subscription receipts per price | $ / shares | $ 0.52 | ||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 4,270,017 | ||||||||||||||||||||||||||
Private Placement [Member] | Tranches Three [Member] | |||||||||||||||||||||||||||
Private placements shares issued | shares | 757,666 | ||||||||||||||||||||||||||
Subscription receipts per price | $ / shares | $ 0.52 | ||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 390,822 | ||||||||||||||||||||||||||
Nov. 1, 2017 [Member] | Private Placement [Member] | Tranches Four [Member] | |||||||||||||||||||||||||||
Private placements shares issued | shares | 68,181 | ||||||||||||||||||||||||||
Subscription receipts per price | $ / shares | $ 0.52 | ||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 35,169 |
Supplemental Disclosures with_3
Supplemental Disclosures with Respect to Cash Flows (Details) - USD ($) | 9 Months Ended | |
Apr. 30, 2019 | Apr. 30, 2018 | |
Supplemental Disclosures With Respect To Cash Flows Details Abstract | ||
Cash paid during the period for interest | ||
Cash paid during the period for income taxes |
Business Acquisition (Details)
Business Acquisition (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jul. 31, 2017 |
Purchase consideration | ||||
Cash considerations | $ 2,588,798 | $ 324,837 | $ 1,046,940 | $ 366,584 |
Promissory notes issued | 4,616,476 | 2,175,000 | ||
Assets acquired: | ||||
Amounts receivable | 706,546 | 632,477 | ||
Inventory | 1,674,756 | 953,417 | ||
Property and equipment | 2,653,043 | 2,615,898 | ||
Liabilities assumed: | ||||
Goodwill | 2,635,721 | $ 2,635,721 | ||
NMG [Member] | ||||
Purchase consideration | ||||
Share considerations | 6,143,326 | |||
Cash considerations | 2,309,000 | |||
Promissory notes issued | 1,887,277 | |||
TOTAL | 10,339,603 | |||
Assets acquired: | ||||
Cash | 260,842 | |||
Amounts receivable | 253,697 | |||
Prepaid expenses | 44,552 | |||
Inventory | 498,680 | |||
Property and equipment | 1,951,696 | |||
Brand | 247,000 | |||
Licenses | 7,925,000 | |||
Liabilities assumed: | ||||
Trade payable and accrued liabilities | (367,385) | |||
Loans payable | (250,000) | |||
Deferred tax liability | (2,860,200) | |||
Net assets acquired | 7,703,882 | |||
Goodwill | 2,635,721 | |||
TOTAL | $ 10,339,603 |
Business Acquisition (Details N
Business Acquisition (Details Narrative) - USD ($) | Nov. 14, 2017 | Nov. 14, 2017 | Nov. 13, 2017 | May 15, 2017 | Apr. 30, 2019 |
Description of subscription receipts under concurrent financing | The Company completed a concurrent financing consisting of 9,102,141 subscription receipts of the Company (the “Subscription Receipts”), at an issue price of CAD$0.66 per Subscription Receipt, with each Subscription Receipt being automatically converted, at no additional cost to the subscriber, upon the completion of the Acquisition for one common share and one share purchase warrant exercisable at a price of CAD$0.90 for a period of 24 months from the date of issuance. Each warrant is subject to acceleration provisions following the six-month anniversary of the date of closing, if the closing trading price of the common shares is equal to or greater than CAD$1.20 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a press release announcing the reduced warrant term whereupon the warrant will expire 21 calendar days after the date of such press release. | ||||
Toro Pacific Management Inc. [Member] | Assignment and Novation Agreement [Member] | |||||
Business acquisition shares issued or issuable | 423,000 | 1,000,000 | |||
Deemed share price | $ 0.66 | ||||
Description for modification of agreement | The Assignment Agreement was amended, whereby the Company would issue the 1,000,000 common shares as follows: a. 470,000 common shares to Benjamin Rutledge upon closing of the Acquisition (issued); b. 60,000 common shares to Chris Hunt upon closing of the Acquisition (issued); c. 470,000 common shares to the Transferor according to the following schedule: • 1/10 of the Transferor’s shares upon closing of the Acquisition (issued); • 1/6 of the remaining Transferor’s shares 6 months after closing the Acquisition (issued); • 1/5 of the remaining Transferor’s shares 12 months after closing the Acquisition; • 1/4 of the remaining Transferor’s shares 18 months after closing the Acquisition; • 1/3 of the remaining Transferor’s shares 24 months after closing the Acquisition; • 1/2 of the remaining Transferor’s shares 30 months after closing the Acquisition; and • the remaining Transferor’s shares 36 months after closing the Acquisition. | ||||
Business acquisition, fair value of shares issued or issuable | $ 135,202 | ||||
NMG Acquisition [Member] | NMG [Member] | |||||
Business acquisition shares issued or issuable | 16,000,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 5,386,155 | $ 5,386,155 | |||
Business acquisition consideration transferred in cash | 2,309,000 | ||||
Promissory note issued | $ 2,175,000 | 2,175,000 | |||
NMG Acquisition [Member] | Toro Pacific Management Inc. [Member] | |||||
Business acquisition shares issued or issuable | 47,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 15,816 | $ 15,816 | |||
NMG Acquisition [Member] | TI Nevada [Member] | |||||
Business acquisition shares issued or issuable | 2,037,879 | ||||
Business acquisition, fair value of shares issued or issuable | 685,788 | $ 685,788 | |||
Promissory note issued | 2,175,000 | 2,175,000 | |||
Repayment of loan | 330,324 | ||||
Present value of promissory note | 1,887,277 | $ 1,887,277 | |||
NMG Acquisition [Member] | Charles Fox [Member] | |||||
Business acquisition shares issued or issuable | 212,121 | ||||
Business acquisition, fair value of shares issued or issuable | $ 71,383 | $ 71,383 | |||
NMG Acquisition [Member] | Chris Hunt [Member] | |||||
Business acquisition shares issued or issuable | 60,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 20,192 | 20,192 | |||
NMG Acquisition [Member] | Benjamin Rutledge [Member] | |||||
Business acquisition shares issued or issuable | 470,000 | ||||
Business acquisition, fair value of shares issued or issuable | $ 159,114 | $ 159,114 |
Commitments (Details Narrative)
Commitments (Details Narrative) | Nov. 14, 2017USD ($) | Nov. 11, 2014USD ($) | Oct. 30, 2018USD ($) | Apr. 30, 2019 | Jul. 31, 2018USD ($) | Nov. 14, 2017CAD ($) |
NMG [Member] | ||||||
Term of lease | 5 years | |||||
Description for lease option to extend | The Company has five options to extend the lease and each option is for five years. | |||||
Periodic rent payable, amount | $ 12,500 | |||||
Frequency of periodic payment | Monthly | |||||
NMG [Member] | On January 1, 2018 [Member] | ||||||
Description for lease option to extend | The guaranteed minimum monthly rent is subject to a 3% increase on each anniversary date of the lease. | |||||
Periodic rent payable, amount | $ 15,000 | |||||
Frequency of periodic payment | Monthly | |||||
TI Nevada [Member] | Consulting agreement [Member] | ||||||
Frequency of periodic payment | Monthly | |||||
Periodic consulting fees payable | $ 16,500 | |||||
Term of contract | 5 years | |||||
TI Nevada [Member] | Consulting agreement [Member] | Officer [Member] | ||||||
Frequency of periodic payment | Monthly | |||||
Periodic consulting fees payable | $ 16,667 | |||||
Term of contract | 3 years | |||||
Toro Pacific Management Inc. [Member] | Consulting agreement [Member] | ||||||
Periodic consulting fees payable | $ 10,000 |
Investment Agreement (Details N
Investment Agreement (Details Narrative) | 1 Months Ended | ||
Oct. 30, 2018USD ($)shares | Apr. 30, 2019USD ($)shares | Oct. 30, 2018CAD ($)shares | |
Interest rate | 11.30% | ||
Investment Agreement [Member] | Australis Capital Inc. [Member] | |||
Acquired units | shares | 16,000,000 | 16,000,000 | |
Unsecured convertible debentures | $ 1,600,000 | ||
Interest rate | 8.00% | 8.00% | |
Ownership percentage | 35.783% | ||
Common stock shares issued | shares | 1,768,545 | ||
Proceeds from issuance of common stock value | $ 787,123 | ||
Consulting agreement [Member] | TI Nevada [Member] | |||
Frequency of periodic payment | Monthly | ||
Periodic consulting fees payable | $ 16,500 | ||
Term of contract | 5 years |
Investment in NMG Ohio LLC (Det
Investment in NMG Ohio LLC (Details) | 9 Months Ended |
Apr. 30, 2019USD ($) | |
Investment In Nmg Ohio Llc Details Abstract | |
Balance, 31 July 2018 | $ 77,600 |
Acquisition costs: Common shares issued to vendors at fair value | 1,448,805 |
Acquisition costs: Cash payments to vendors | 1,181,250 |
Dispensary build-out related costs | 410,799 |
Equity loss | (12,196) |
Total | $ 3,106,258 |
Investment in NMG Ohio LLC (D_2
Investment in NMG Ohio LLC (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | Jul. 31, 2018 | Jun. 07, 2018 | |
Investment in NMG Ohio LLC | $ 435,272 | $ 435,272 | ||||
Remaining cash payments totaling | $ 393,750 | $ 393,750 | ||||
Remaining issuance of common stock shares | 793,466 | 793,466 | ||||
Net revenues | $ 1,238,494 | $ 787,512 | $ 3,760,217 | $ 1,618,967 | ||
Net income | $ (43,871) | $ (281,123) | $ (2,019,345) | $ (1,701,058) | $ (1,781,060) | |
NMG Ohio LLC [Member] | ||||||
Ownership percentage | 100.00% | 30.00% | 100.00% | 30.00% | 30.00% | |
Purchase of remaining ownership interest percentage | 70.00% | 70.00% | ||||
Consideration in cash to be paid for the acquisition of remaining interest | $ 1,575,000 | $ 1,575,000 | ||||
Cash payments | $ 1,181,250 | $ 1,181,250 | ||||
Issuance of common stock | 3,173,864 | |||||
Common stock shares issued | 2,380,398 | 2,380,398 | ||||
Common stock shares fair value | $ 1,448,805 | |||||
Net revenues | $ 401,942 | |||||
Expenses | 442,596 | |||||
Net income | 40,654 | |||||
Net income related to 30% pro rata shares | $ 12,196 |
Loans to GLDH (Details)
Loans to GLDH (Details) - USD ($) | Apr. 30, 2019 | Jul. 31, 2018 |
Loans To Gldh Details Abstract | ||
Senior secured note | $ 5,200,000 | |
GLDH working capital advances | 571,412 | |
Interest income | (433,380) | |
Total | $ 6,204,792 |
Loans to GLDH (Details Narrativ
Loans to GLDH (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Nov. 29, 2018 | Apr. 30, 2019 | Apr. 30, 2018 | |
Senior secured convertible note | $ 5,200,000 | ||
Interest rate | 11.30% | ||
working capital advances | $ 571,412 | ||
Accrued interest income | $ (433,380) | ||
Investment agreement One [Member] | Australis Capital Inc. [Member] | GLDH [Member] | |||
Senior secured convertible note | $ 5,200,000 | ||
Interest rate | 20.00% | ||
Maturity date | Nov. 29, 2020 | ||
working capital advances | $ 562,585 | ||
Conversion description | The note and any accrued interest is convertible into 89.75% of the shares of GLDH at the option of the Company. | ||
Additional consideration, amount | $ 6,297,580 | ||
Additional consideration, shares | 11,255,899 | ||
Additional consideration, price per share | $ 0.7439 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jun. 06, 2019USD ($) | Dec. 01, 2017USD ($) | Oct. 30, 2018USD ($) | Apr. 30, 2019USD ($)$ / sharesshares | Apr. 30, 2019CAD ($)shares | Apr. 30, 2019$ / sharesshares |
Private Placement [Member] | ||||||
Proceeds from issuance of private placement | $ 330,486 | $ 4,883,840 | ||||
Subsequent Event [Member] | Secured loan agreement [Member] | ||||||
Interest rate on loan given by NMG to SD | 12.00% | |||||
Maturity date of loan given by NMG to SD | Jun. 6, 2020 | |||||
Loan given by NMG to SD | $ 250,000 | |||||
Subsequent Event [Member] | Australis [Member] | ||||||
Exercise price of warrants | $ / shares | $ 0.50 | |||||
Common stock shares issued upon exercise of warrants | shares | 12,793,840 | 12,793,840 | ||||
Number of warrants exercised | shares | 12,793,840 | 12,793,840 | ||||
Proceeds from exercise of warrants | $ 4,733,721 | |||||
Subsequent Event [Member] | Australis [Member] | Senior Notes [Member] | ||||||
Repayment of senior debt | 4,495,890 | |||||
Repayment of senior debt, principal | $ 4,000,000 | |||||
Subsequent Event [Member] | NMG [Member] | Management agreement [Member] | ||||||
Management fee payable, description | NMG will be paid a management fee of 30 % of Net Profits or Ten Thousand Dollars ($10,000) per month, whichever is greater. | |||||
Subsequent Event [Member] | Private Placement [Member] | ||||||
Number of units issued under private placement | shares | 11,780,904 | 11,780,904 | ||||
Proceeds from issuance of private placement | $ 10,956,241 | |||||
Description for the units issued under private placement | Each Unit is comprised of one common share of the Company (each, a "Share") and one common share purchase warrant of the Company (each, a "Warrant") | Each Unit is comprised of one common share of the Company (each, a "Share") and one common share purchase warrant of the Company (each, a "Warrant") | ||||
Description for the exercise of warrants | Each Warrant entitles the holder thereof to acquire one common share of the Company (each, a "Warrant Share") at an exercise price of CAD$1.50 per Warrant Share for a period of 48 months following the closing date, subject to adjustment in certain events | Each Warrant entitles the holder thereof to acquire one common share of the Company (each, a "Warrant Share") at an exercise price of CAD$1.50 per Warrant Share for a period of 48 months following the closing date, subject to adjustment in certain events | ||||
Maturity period | 48 months | 48 months | ||||
Commission received by the agent under offering | $ 793,938 | |||||
Subsequent Event [Member] | Private Placement [Member] | Warrant [Member] | ||||||
Price per unit | $ / shares | $ 0.93 | |||||
Exercise price of warrants | $ / shares | 1.50 | |||||
Subsequent Event [Member] | Private Placement [Member] | Broker Warrants [Member] | ||||||
Description for the exercise of warrants | Each Broker Warrant entitles the holder thereof to acquire one Unit of the Company at an exercise price of CAD$1.25 per Unit for a period of 48 months following the closing date | Each Broker Warrant entitles the holder thereof to acquire one Unit of the Company at an exercise price of CAD$1.25 per Unit for a period of 48 months following the closing date | ||||
Exercise price of warrants | $ / shares | $ 1.25 | |||||
Maturity period | 48 months | 48 months | ||||
Warrants issued as additional consideration | shares | 635,150 | 635,150 | ||||
Corporate finance fee received by M Partners Inc. | $ 84,750 |