NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2020
(UNAUDITED)
NOTE 1: DESCRIPTION OF BUSINESS
GRN Holding Corporation, a Nevada corporation, (“GRN,”
“the Company,” “We," "Us" or “Our’) is a publicly-quoted shell company seeking to create
value for its shareholders by pursuing acquisitions, mergers and business combinations.
On June 20, 2019, GRN Funds, LLC, a Washington limited
liability company, and its manager and Chief Executive Officer, Justin Costello, purchased a total of 139 million shares of the Company’s
common stock representing 55.65% of its issued and outstanding shares, in a private transaction with Stephen Flechner and David Cutler.
As a result of the closing of the transaction on June 25, 2019, GRN Funds, LLC and Mr. Costello acquired a majority of the issued shares
eligible to vote. As a condition to the closing of the transaction, the Company’s Directors Mr. Stephen Flechner and Mr. Ralph Shearing
resigned, and Mr. Flechner resigned as Chief Executive Officer and President, and Mr. Justin Costello was concurrently named Director
of the Company, President and Chief Executive Officer. As a term and condition of the transaction, Messrs. Flechner and Cutler agreed
to satisfy Company outstanding liabilities totaling $111,579 and forgive outstanding liabilities of $86,147.
On July 16, 2019, the Board of Directors met and unanimously
approved a resolution recommending an amendment to the Company’s articles of incorporation to change the name of the Company to
GRN Holding Corporation, and to file a Corporate Action Notification Form with FINRA to formally change the Company’s name and trading
symbol. The Board of Directors thereafter called for and convened a special meeting of the stockholders. On July 16, 2019, stockholders
beneficially owning a majority of the shares eligible to vote consented to the amendment of the Company’s articles of incorporation
to change its name to GRN Holding Corporation and authorized the filing of a Corporate Action Notification Form with FINRA to formally
change the Company’s name and trading symbol.
On August 19, 2019, the Company filed a formal amendment
to its articles of incorporation with the Nevada Secretary of State formally changing its name to GRN Holding Corporation.
On October 17, 2019, the Company entered into an executive
employment agreement with Justin Costello to secure his services as President, Secretary, Treasurer and Director of the Company. The term
of the agreement is for one year, which automatically renews for one-year terms. Mr. Costello agreed to an annual salary of $1.00.
On November 5, 2019, FINRA notified the Company of
its processing and completion of the Corporate Action Notification Form to change the Company’s name to GRN Holding Corporation,
and the concurrent issuance of the new trading symbol: “GRNF” that is currently listed on the OTC Markets.
On July 31, 2020, the Company announce that it had
entered into a binding letter of intent to acquire Microcap Advisors, LLC. This announcement follows the completion of due diligence earlier
this year and will help to define the terms of a mutual definitive agreement to finalize the pending acquisition. No acquisition date
is set. The final terms of the material definitive agreement are not complete. Microcap Advisors, LLC is a Nevada limited liability company.
Justin Costello is a managing member. Therefore, the transaction, once completed, will be deemed a related party transaction. The Company
expects to acquire all assets and interests of Microcap Advisors, LLC in the transaction. After the final material definitive agreement
is completed and executed, the Company will file Form 8-K and provide the required financial statements of Microcap Advisors, LLC pursuant
to Regulation SX.
On August 5, 2020, the Company announced that it had
entered into a binding letter of intent to acquire Sunshine Hemp, Inc. This announcement follows the completion of due diligence earlier
this year and will help to define the terms of a mutual definitive agreement to finalize the pending acquisition. No acquisition date
is set. The final terms of the material definitive agreement are not complete. Sunshine Hemp, Inc. is a Florida corporation. Justin Costello
is vice-president of Sunshine Hemp, Inc. Therefore, the transaction, once completed, will be deemed a related party transaction. The Company
expects to acquire all assets and interests of Sunshine Hemp, Inc. in the transaction. After the final material definitive agreement is
completed and executed, the Company will file Form 8-K and provide the required financial statements of Sunshine Hemp, Inc. pursuant to
Regulation SX.
On August 19, 2020, the Company announced that it
had entered into a binding letter of intent to acquire Pacific Merchant Processing, Inc. This announcement follows the completion
of due diligence earlier this year and will help to define the terms of a mutual definitive agreement to finalize the pending acquisition.
No acquisition date is set. The final terms of the material definitive agreement are not complete. Pacific Merchant Processing, Inc. is
a Washington corporation. Justin Costello is governor of Pacific Merchant Processing, Inc. Therefore, the transaction, once completed,
will be deemed a related party transaction. The Company expects to acquire all assets and interests of Pacific Merchant Processing, Inc.
in the transaction. After the final material definitive agreement is completed and executed, the Company will file Form 8-K and provide
the required financial statements of Pacific Merchant Processing, Inc. pursuant to Regulation SX.
On August 22, 2020 the Company’s Board of Directors
approved an amendment to the Company’s Articles of Incorporation designating a class of preferred stock from the Company’s
ten million authorized preferred shares. The class was entitled “Series A Preferred Stock” with 100 shares designated. The
corporate action is pending filing with the Nevada Secretary of State.
On August 22, 2020, the Company’s Board of Directors
approved an amendment to the Company’s Articles of Incorporation increasing the Company’s authorized shares to 760,000,000
common shares, 750,000,000 being common stock and 10,000,000 being preferred stock. The corporate action is pending filing with the Nevada
Secretary of State.
On August 22, 2020, by majority written consent of
the shareholders eligible to vote, the shareholders approved an amendment to the Company’s Articles of Incorporation increasing
the Company’s authorized shares to 760,000,000 common shares, 750,000,000 being common stock and 10,000,000 being preferred stock.
On August 28, 2020, the Company announced that it
had entered into a binding letter of intent to acquire SMLY, Inc., doing business as 7 Point Financial and 9 Square Consulting
This announcement follows the completion of due diligence earlier this year and will help to define the terms of a mutual definitive agreement
to finalize the pending acquisition. No acquisition date is set. The final terms of the material definitive agreement are not complete.
SMLY., Inc. is a California corporation. 7 Point Financial provides financial products and services for cannabis related business; 9 Square
Consulting is a processing and point-of-sale equipment and software company. The Company expects to acquire all assets and interests of
SMLY, Inc. in the transaction. After the final material definitive agreement is completed and executed, the Company will file Form 8-K
and provide the required financial statements of SMLY, Inc. pursuant to Regulation SX.
As further discussed in Note 10. Subsequent Events
below, the Company was formally operated by Justin Costello, who served as GRNF’s CEO, Director, Chairman, and Secretary. On April
21, 2022, the Company accepted the resignation of Justin Costello from the positions of CEO, Director, Chairman, and Secretary, and appointed
Donald Steinberg as the new CEO, Director, Chairman, and Secretary.
As further discussed in Note 10. Subsequent Events
below, on April 25, 2022, Justin Costello sold One Hundred and Forty-Four Million (144,000,000) Shares of Common Stock to Donald Steinberg
in exchange for $140,000 per a Stock Purchase Agreement dated April 20, 2022.
NOTE 2. GOING CONCERN
Our financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets
and the liquidation of liabilities in the normal course of business. We have no ongoing business or income. For the six months ended October
31, 2020, we reported a net loss of $384,899, and had an accumulated deficit of $9,172,707 as of October 31, 2020. These conditions raise
substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability
to raise additional debt or equity funding to meet our ongoing operating expenses and ultimately in merging with another entity with experienced
management and profitable operations. No assurances can be given that we will be successful in achieving these objectives. The COVID-19
pandemic could have an impact on our ability to obtain financing to fund operations. The Company is unable to predict the ultimate impact
at this time. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The summary of significant accounting policies is
presented to assist in the understanding of the financial statements. These policies conform to accounting principles generally accepted
in the United States of America (“US GAAP”) and have been consistently applied. The Company has elected an April 30 year-end.
The Company has not earned any revenue to date.
Interim Financial Statements
The accompanying unaudited interim condensed financial
statements have been prepared in accordance with US GAAP for interim financial information in accordance with Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The
accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash
flows at October 31, 2020 and for the related periods presented. The results for the six months ended October 31, 2020 are not necessarily
indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction
with the financial statements and footnotes thereto for the year ended April 30, 2020 included in the Form 10K, filed with the Securities
and Exchange Commission on August 13, 2020.
Use of Estimates
The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
We maintain cash balances in a non-interest-bearing
account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments
with a maturity of three months or less are considered to be cash equivalents. As of October 31, 2020 and April 30, 2020, our cash balance
was $19,201 and $0, respectively.
Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures
("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair
value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the
inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and
the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 – Quoted prices are available in active
markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly
liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 – Pricing inputs are other than quoted
prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and
liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable
inputs.
Level 3 – Significant inputs to pricing that
are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring
significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of
financial transmission rights.
Our financial instruments consist of prepaid expenses,
accounts payable and accruals, note payable and loan – related party. The carrying amount of our prepaid expenses, accounts
payable and accruals, note payable and loan – related party approximates their fair values because of the short-term maturities
of these instruments
Income Taxes
The provision for income taxes is computed using the
asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of
temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit
carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in
effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred
tax assets to the amount that is believed more likely than not to be realized.
Revenue Recognition
Revenues are recognized when control of the promised
goods or services are transferred to a customer, in an amount that reflects the consideration that we expect to receive in exchange for
those goods or services. Once we establish revenue-generating activities, likely through acquisition of an operating company, we intend
to apply the following five steps in order to determine the appropriate amount of revenue to be recognized as we fulfill our obligations
under each of our agreements:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the
contract(s)
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance
obligations
Step 5: Recognize revenue when the entity satisfies
a performance obligation
At this time, we have not identified specific planned
revenue streams.
During the six-month periods ended October 31, 2020
and 2019, we did not recognize any revenue.
Advertising Costs
We expense advertising costs when advertisements occur.
No advertising costs were incurred during the six-month periods ended October 31, 2020 or 2019.
Stock-Based Compensation
The cost of equity instruments issued to non-employees
in return for goods and services is measured by the fair value of the equity instruments issued. Measurement date for non-employees is
the grant date of the stock-based compensation. The cost of employee services received in exchange for equity instruments is based on
the grant date fair value of the equity instruments issued.
Net Loss per Share Calculation
Basic net loss per common share ("EPS")
is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period.
Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential
common shares were issued. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
No potentially dilutive debt or equity instruments
were issued or outstanding during the six-month periods ended October 31, 2020 and 2019.
Recently-Issued Accounting Pronouncements
We have reviewed all the recently-issued, but not
yet effective, accounting pronouncements and do not believe any of these pronouncements will have a material impact on our financial statements.
NOTE 4. PREPAID EXPENSES
As of October 31, 2020 and April 30, 2020, our balance
of prepaid expenses was $0 and $58,265, respectively.
Effective February 5, 2020, we entered into financing
agreement to purchase a Directors’ and Officers’ insurance policy at a projected annual cost of $75,809, excluding finance
costs. We accounted for this transaction by amortizing the anticipated annual cost of the policy on a straight-line basis over the anticipated
one-year life of the policy. On consideration, management decided not to maintain the policy in force and the policy was cancelled for
non-payment effective May 11, 2020 at which time the balance of the unamortized prepayment was written off. The financing agreement terminated
upon the Company’s decision to cancel the policy, and the Company incurred no fees or penalties in connection with the cancellation
of the financing agreement. The difference between the carrying value of the loan of $72,090 (Note 6) and the prepaid expense balance
of $58,265 resulted in a loss on cancellation of $13,825, which has been included in Other Income (Expense) on the Statements of Operations.
Effective July 1, 2020, we entered into a quarterly
subscription to publish investor relations materials for $1,500. We accounted for this transaction by amortizing the cost of the subscription
on a straight-line basis over the three-month term of the agreement, resulting in a prepaid publishing amount of $0 at October 31, 2020.
NOTE 5. ACCOUNTS PAYABLE AND ACCRUALS
As October 31, 2020 and April 30, 2020, our balance
of accounts payable and accruals was $197,802, and related primarily to legal fees.
NOTE 6. NOTE PAYABLE
As of October 31, 2020 and April 30, 2020, the balance
of the note payable was $72,090.
Effective February 5, 2020, we entered into a financing
agreement to purchase a Directors’ and Officers’ insurance policy. The policy was set to expire in February 2021. Under the
terms of the financing agreement, we were required to make 9 monthly payments of $6,374 commencing March 3, 2020.
As of April 30, 2020, we had made a single payment
of $6,374 under the terms of this agreement. Total outstanding balance on the debt at April 30, 2020 was $72,090. During the year ended
April 30, 2020, total interest paid on the note was $469. On consideration, management decided not to maintain the policy in force and
the policy was cancelled for non-payment effective May 11, 2020 and no further payments have been made under this finance agreement. The
financing agreement terminated upon the Company’s decision to cancel the policy, and the Company incurred no fees or penalties in
connection with the cancellation of the financing agreement. The difference between the carrying value of the loan of $72,090 and the
related prepaid expense balance of $58,265 (Note 4) resulted in a loss on cancellation of $13,825, which has been included in Other Income
(Expense) on the Statements of Operations.
NOTE 7. LOANS- RELATED PARTIES
As of October 31, 2020, and April 30, 2020 our balance
of loans – related parties was $174,884.
During the six-month period ended October 31, 2020
our former principal shareholder, GRN Funds, LLC, advanced $24,884 to us by way of loan to fund our working capital requirements.
During the six-month period ended October 31, 2020
an entity 100% owned by our former President, Secretary, Treasurer and Director, advanced $36,437 to us by way of loan to fund our working
capital requirements.
Both of these loans are unsecured, interest free and
due on demand.
NOTE 8. COMMITMENTS & CONTINGENCIES
Legal Proceedings
As of April 30, 2020, and to date the following are
pending material litigations involving claims exceeding $5,000, that individually or in the aggregate, involves the Company, or any of
its directors, officers or affiliates:
1) Dean Huge
vs. Orlando Birgrager, Erik Blum, BBVI Consulting, SA, Weiser Global Capital Markets, Ltd., GRN Holding Corporation. Case No. A-20-814980-C;
District Court for Nevada, Clark County. This action seeks damages by plaintiff Huge against BBVI, Blum and Weiser for breach of contract
having to do with a private stock sale. The Company is named, but no allegations are made against the Company in the complaint, nor is
there any prayer for relief that seeks legal damages or costs against the Company that could reasonably be calculated as a contingent
liability at this time. The Company expects this case to be dismissed without any damages against it that would result in a reasonably
determinable and reportable contingent liability.
2) CCSAC,
Inc., a California corporation and CANN DISTRIBUTORS, INC., a California corporation vs. PACIFIC BANKING CORP., a Washington corporation,
JUSTIN COSTELLO, an individual and GRN FUNDS, LLC, a Washington limited liability company. Case No. 20-cv-02102, filed in the U.S. District
Court for the Northern District of California. This case involves claims of plaintiff CCSAC and CANN against Pacific Banking Corp. for
breach of contract whereby Pacific Banking Corp. was obligated to (1) make certain tax payments on behalf of plaintiffs; (2) pay certain
vendors; and, (3) make timely payroll payments. Plaintiff alleges that: (a) it transferred $2.8 million dollars to Pacific Banking Corp.
for these purposes pursuant to contract; (b) Pacific Banking Corp. transferred the funds to GRN Funds, LLC, the former majority stockholder
of the Company, and its sole manager, Justin Costello, the Company’s former sole officer and director; and (c) defendant Pacific
Banking Corp. failed to make the necessary payments under contract, provide a reconciliation, or account for the funds. Aside from breach
of contract, plaintiffs seek damages for negligence, fraud, declaratory relief/indemnification and an injunction. Damages requested by
the plaintiffs include compensatory damages of $2.8 million. Plaintiffs also pray for punitive damages. Counsel for defendants filed motions
to dismiss for lack of subject-matter and personal jurisdiction and for lack of adequate process and for sanctions. The court has not
issued a case management order setting discovery and related deadlines. Given the early stages of litigation. We are not able to reasonably
determine of what amount of reportable contingent liability, if any, may be attributable to GRN Funds, LLC or Mr. Costello as a result
of this action. Mr. Costello is our former sole director and officer. He is also the manager of GRN Funds, LLC, our former majority shareholder,
and is an affiliate and owner of Pacific Banking Corp.
We were not subject to any pending material legal
proceedings during the six-month periods ended October 31, 2020 and 2019 that are likely to result in a reasonably determinable and reportable
contingent liability.
Contractual Obligations
On October 17, 2019, the Company entered into an executive
employment agreement with Justin Costello, its former sole director and president, secretary and treasurer, for a term of one year, which
automatically renews for consecutive one-year terms, with an annual salary of $1.00.
On October 21, 2019, the Company retained Nancy Norton
as legal counsel. The contract is terminable at will. The Company terminated the contract on September 11, 2020.
NOTE 9. SHAREHOLDERS’ DEFICIT
Preferred Stock
As of October 31, 2020 and April 30, 2020, we were
authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001.
As of October 31, 2020 and April 30, 2020, no shares
of preferred stock were issued and outstanding.
Common Stock
As of October 31, 2020 and April 30, 2020, we were
authorized to issue 750,000,000 and 250,000,000 shares of common stock, respectively, with a par value of $0.001.
As of October 31, 2020 and April 30, 2020, 279,275,977
and 249,843,977 shares of common stock were issued and outstanding, respectively.
On August 22, 2020, our board of directors by resolution
and a majority of our shareholders by written consent approved an amendment to our articles of incorporation increasing our authorized
shares from 260,000,000 to 760,000,000 shares: 750,000,000 being common shares and 10,000,000 being preferred shares.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events after October
31, 2020, in accordance with FASB ASC 855 Subsequent Events, through the date of the issuance of these financial statements
and has determined there have been no subsequent events for which disclosure is required other than as discussed below:
The Company was formally operated by Justin Costello,
who served as GRNF’s CEO, Director, Chairman, and Secretary. On April 21, 2022, the Company accepted the resignation of Justin Costello
from the positions of CEO, Director, Chairman, and Secretary, and appointed Donald Steinberg as the new CEO, Director, Chairman, and Secretary.
On April 25, 2022, Justin Costello sold One Hundred
and Forty-Four Million (144,000,000) Shares of Common Stock to Donald
Steinberg in exchange for $140,000 per a Stock Purchase
Agreement dated April 20, 2022.
