NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2021 and 2020
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION AND OPERATIONS
The Company was originally incorporated on April 12, 2004, in the State
of Nevada under the name of Ford-Spoleti Holdings, Inc. On June 4, 2009, the Company merged with Eagle Oil Holding Company, a Nevada corporation,
and the surviving entity, the Company, changed its name to “Eagle Oil Holding Company, Inc.” Inception of the current Company
occurred February 8, 2019 when the Company was acquired by Green Stream Holdings Inc. Previously there was no activity from July 31, 2017
until the acquisition of February 8, 2019. On April 25, 2019, the Company changed its name to “Green Stream Holdings Inc.”
and is deemed to be a continuation of business of Eagle Oil Holding Company, Inc. Additionally, the Company was reorganized that so that
the Company became operating as a holding company of Green Stream Finance, Inc., a Wyoming Corporation. That reorganization, inter alia,
gave Madeline Cammarata, President of Green Stream Finance, Inc., the majority of the voting power in the Company. On April 25, 2019 the
Company also filed the certificate of Amendment to Articles of Incorporation with the Secretary of State of Nevada providing for reverse
stock split: each thirty thousand shares of common stock of the Company issued and outstanding immediately prior to the “effective
time” of the filing were automatically and without any action on the part of the respective holders thereof, be combined and converted
into one (1) share of common stock, provided that no fractional shares were to be issued in connection with said reverse stock split.
On May 15, 2019, the Company filed the articles of conversion with the secretary of state of Nevada, to convert the company from Nevada
Corporation to Wyoming Corporation. The Company is in good standing in the State of Wyoming as of September 25, 2019. The Company’s
common shares are quoted on the “Pink Sheets” quotation market under the symbol “GSFI.”
B. PRINCIPALS OF CONSOLIDATION
These consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary Green Stream Finance, Inc. based in the state of Wyoming. All material inter-company balances
and transactions were eliminated upon consolidation.
C. BASIS OF ACCOUNTING
The Company utilizes the accrual method of accounting, whereby revenue
is recognized when earned and expenses when incurred. The financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. As such, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments considered necessary for a fair presentation have been included and these adjustments are of a normal recurring
nature.
D. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand; cash in banks and any
highly liquid investments with maturity of three months or less at the time of purchase. The Company maintains cash and cash equivalent
balances at several financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.
F. COMPUTATION OF EARNINGS PER SHARE
Net income per share is computed by dividing the net income by the
weighted average number of common shares outstanding during the period. Due to the net loss, the options and stock conversion
of debt are not used in the calculation of earnings per share because the stock conversions and options are considered to be antidilutive.
G. INCOME TAXES
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax 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 effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
The Company’s management has reviewed the Company’s tax
positions and determined there were no outstanding, or retroactive tax positions with less than a 50% likelihood of being sustained upon
examination by the taxing authorities, therefore the implementation of this standard has not had a material effect on the Company.
H. REVENUE RECOGNITION
Revenue for license fees is recognized upon the execution and closing
of the contract for the amount of the contract. Contract fees are generally due based upon various progress milestones. Revenue from contract
payments are estimated and accrued as earned. Any adjustments between actual contract payments and estimates are made to current operations
in the period they are determined.
I. FAIR VALUE MEASUREMENT
The Company determines the fair value of a financial instrument as
the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or
liquidation. The carrying amounts reported in the balance sheet for cash, accounts receivable, inventory, accounts payable and accrued
expenses, and loans payable approximate their fair market value based on the short-term maturity of these instruments.
Fair value measurements are determined based on the assumptions that
market participants would use in pricing an asset or liability. US GAAP establishes a hierarchy for inputs used in measuring
fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable
inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into
the following three levels:
·
|
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
|
·
|
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
·
|
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.
|
J. STOCK-BASED COMPENSATION
The Company measures and recognizes
compensation expense for all share-based payment awards made to employees, consultants and directors including employee stock
options based on estimated fair values. Stock-based compensation expense recognized for the years ended December 31, 2014 and 2013
was $24,000
and $0
respectively. Stock-based compensation expense recognized during the period is based on the value of the portion of
share-based payment awards that vest during the period.
Share-based compensation expense recognized in the Company’s
consolidated statement of operations for the years ended December 31, 2014 included compensation expense for share-based payment awards
granted in December 31, 2014.
K. SALES AND ADVERTISING
The costs of sales and advertising are
expensed as incurred. Sales and advertising expense was $476,290 and $4,098 for the three months ended July 31, 2021 and 2020,
respectively.
L. NEW ACCOUNTING PRONOUNCEMENTS
The Company reviews new accounting standards as issued. No new standards
had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial
statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements.
Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements
as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active
application of any accounting pronouncements issued subsequent to July 31, 2021 through the date these financial statements were issued.
M. FURNITURE AND EQUIPMENT
Furniture and equipment are recorded at
costs and consists of furniture and fixtures, computers and office equipment. We compute depreciation using the straight-line method
over the estimated useful lives of the assets. Expenditures for major betterments and additions are charged to the
property accounts, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are
charged to expense.
N. INTELLECTUAL PROPERTY
Intangible assets (intellectual property) are recorded at cost and
are amortized over the estimated useful life of the asset. Management evaluates the fair market value to determine if the asset
should be impaired at the end of each year.
O. IMPAIRMENT OF LONG-LIVED ASSETS
The Company tests long-lived assets or asset groups for recoverability
when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could
trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes
in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition
or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing
losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly
before the end of its estimated useful life.
Recoverability is assessed based on the carrying amount of the asset
and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the
eventual disposal of the asset, as well as specific appraisal in certain instances.
An impairment loss is recognized when the carrying amount is not recoverable
and exceeds fair value.
NOTE 2 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
liquidation of liabilities in the normal course of business. At July 31, 2021 the Company had a loss from operations, for the three
months ended, of $1,807,070, and an
accumulated deficit of $11,132,329
and negative working capital of $990,512, which
raises substantial doubt. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and
allow it to continue as a going concern.
The Company depends upon capital to be derived from future financing
activities such as subsequent offerings of its common stock or debt financing in order to operate and grow the business. There
can be no assurance that the Company will be successful in raising such capital. The key factors that are not within the Company's
control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the Company's business
plan, the ability to raise capital in the future, the ability to expand its customer base, and the ability to hire key employees to provide
services. There may be other risks and circumstances that management may be unable to predict.
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 possible inability of the Company to continue as a going concern.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment at July 31, 2021 and April
30, 2021 consists of the following:
Schedule
of property and equipment
|
|
|
|
|
|
|
|
|
July
31, 2021
|
|
|
April
30, 2021
|
|
|
|
|
|
|
|
|
Furniture
and Fixtures
|
|
$
|
1,180,675
|
|
|
$
|
1,180,675
|
|
Less:
Accumulated Depreciation
|
|
|
(60,080
|
)
|
|
|
(45,060
|
)
|
Net Property
and Equipment
|
|
$
|
1,120,595
|
|
|
$
|
1,135,615
|
|
Depreciation expense for the three months ended July 31,
2021 was $15,020 and $0 for July 31, 2020 respectively. Property and equipment are recorded at cost. Depreciation is computed on the
straight-line method, based on the estimated useful lives of the assets.
NOTE
4 –OTHER ASSETS
Green Stream Holdings, Inc. acquired Chuck’s Vintage, Inc., a
California Corporation on November 1, 2020. The address of the New York Store new retail location is 173 East 91st Street,
Basement, New York, NY 10128 as of 5/21/2021. Chuck’s Vintage, Inc. is a wholly-owned subsidiary of Green Stream Holdings, Inc.
The Company has invested $62,500 for store fixtures and furnishings. The Company has capitalized
these expenses and expects to begin depreciating them in the near future.
During the 3 months ended Green
Rain Solar, Inc., a wholly owned subsidiary of the Company, spent approximately $207,500 in fees to engineers and architects in development
of solar projects. These expenses will become part of the overall capital improvements to be depreciated in the future.
NOTE
5 – STOCKHOLDERS’ EQUITY/ (DEFICIT)
The Company issued approximately 37,251,609 common
shares during the three months ended July 31, 2021. The Company raised $1,231,000 thru its REG A issuing 27,183,352 shares.
The Company issued 8,343,000 common shares
for services recording a market value for the shares at $560,310 and allocating the expense in the three months ended July 31,
2021.
On March
26, 2021, the Board of Directors of Green Stream Holdings, Inc. (the “Company”) authorized a stock dividend of one (1) share
of the Company’s common stock, par value $0.001 par value (the “Common Stock”), for each one hundred (100) shares of
Common Stock held on May 1, 2021 (the “Record Date”). The Company issued 1,725,575 shares of common stock in the three months
ended July 31, 2021.
NOTE 6 – INCOME TAXES
Deferred tax assets arising as a result of net operation loss carry
forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.
Based on its evaluation, the Company has concluded that there are no
significant uncertain tax positions requiring recognition in its financial statements. The Company’s evaluation was performed for
the tax years ended April 30, 2021 and 2020 for U.S. Federal Income Tax and for the State of Wyoming.
A reconciliation of income taxes at statutory
rates with the reported taxes follows:
Reconciliation
of income tax
|
|
|
|
|
|
|
|
|
July
31, 2021
|
|
|
April
30 2021
|
|
|
|
|
|
|
|
|
Loss
before income tax benefit
|
|
$
|
1,699,570
|
|
|
$
|
256,348
|
|
Expected
income tax benefit
|
|
|
(509,871
|
)
|
|
|
(94,283
|
)
|
Non-deductible
expenses
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Tax loss
benefit not recognized for book purposes, valuation allowance
|
|
$
|
509,871
|
|
|
$
|
94,283
|
|
Total income
tax
|
|
$
|
–
|
|
|
$
|
–
|
|
The Company has net operating loss carry forwards
in the amount of approximately $11,132,329 that will expire beginning in 2030. The deferred tax assets including the net operating loss
carry forward tax benefit of $3,344,000 total $1,526,063 which is offset by a valuation allowance. The other deferred tax assets include
accrued officer compensation, stock based compensation, and amortization.
The Company follows the provisions of uncertain tax positions. The
Company recognized approximately no increase in the liability for unrecognized tax benefits.
The Company has no tax position at April 30, 2021 for which the ultimate
deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented.
The Company had no accruals for interest and penalties at April 30, 2021. The open tax years are from 2019 through 2029.
NOTE 7 – RELATED PARTY TRANSACTIONS
During the three months ended July 31, 2021 and
2020 a Company shareholder had advanced $0
and $0
respectively of personal funds. As of July 31, 2021 and April 30, 2021 the Company owed the shareholder $225,077
respectively.
NOTE 8 –NOTES AND OTHER LOANS PAYABLE
On December 11, 2019 the company agreed to pay Cheryl Hintzen $40,000
in the form of a promissory note with a term of one year at 10 % interest compounded annually. The Company accrued interest for the
Three months ended January, 31, 2020 in the amount of $559. On January 8, 2020 the Company signed a promissory note for $8,000 with
Cheryl Hintzen. The note becomes due on March 8, 2020 and carries a per annum interest rate of 10%. The Company accrued interest
for the Six months ended June 30, 2020 in the amount of $1,321.64.
On February 21, 2020 the Company borrowed $25,000 from GPL Ventures
with interest at a rate of 10% and a due date of April 30, 2020.
On March 12, 2020 the Company agreed to pay Dr. Jason Cohen 1,000,000
shares at a valuation of $.20 per share plus 8 % interest until the shares are issued. The interest accrued through end is $2,147.95 which
equates to 10,740 shares.
In the month March, 2020 the escrow attorney for GPL Ventures advanced
$46,900 in funds for the purchase of REG A shares. The common shares had not been issued at year end and subsequently were issued. The
note will be reclassified as common shares issued and additional paid in capital in the subsequent period. No interest was accrued for
this note.
The following schedule is Notes Payable at July
31, 2021 and April 30, 2021:
Schedule
of debt
|
|
|
|
|
|
|
Description
|
|
July
31, 2021
|
|
|
April
30, 2021
|
|
|
|
|
|
|
|
|
Note
payable to Cheryl Hintzen due December 11, 2021; interest at 10%
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
|
|
|
|
|
|
|
|
|
Note Payable
to Cheryl Hintzen due March 8, 2020: interest 10%
|
|
|
14,000
|
|
|
|
14,000
|
|
|
|
|
|
|
|
|
|
|
Note payable
to GPL Ventures due March 8, 2020; interest at 10%
|
|
|
25,000
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
Note payable Dr.
Jason Cohen 1,000,000 shares @ $.20
|
|
|
200,000
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
Note payable
escrow attorney for REG A shares
|
|
|
17,900
|
|
|
|
17,900
|
|
|
|
|
|
|
|
|
|
|
Total
Notes Payable
|
|
$
|
311,900
|
|
|
$
|
311,900
|
|
NOTE 9 – CONVERTIBLE NOTES PAYABLE
On September 13, 2020 the Company borrowed $250,000
from Leonite Capital with interest at a rate of 10%
and a due date of March
13, 2021. Financing costs increased the principal to $290,000.
In consideration for entering into the note Leonite received 1,500,000 common shares upon closing. The Company has the right to repay
the note prior to maturity at a rate of 110% of the then principal and interest. The note is convertible to common stock at a fixed conversion
price of $.015.
The balance on the note is $267,500.
On March 24, 2021 the Company borrowed the sum of $153,750.00 from GENEVA ROTH REMARK HOLDINGS, INC.,
a New York corporation. The note has a Maturity date of September 9, 2021 and carries an interest rate of 8% per annum. The note also
has conversion rights. During the period beginning on the date of funding of this Note and ending on the date which is one hundred eighty
(180) days following such date (the “Initial Period”), the Conversion Price shall be fixed at $0.09. At any time following
the Initial Period, the Conversion Price shall be equal to the Variable Conversion Price (as defined herein)(subject to equitable adjustments
for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of
any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The
"Variable Conversion Price" shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate
of 35%). The balance on the note is $.
On May 1, 2021 the Company borrowed the sum of
$53,750.00 from GENEVA ROTH REMARK HOLDINGS, INC., a New York corporation. The note has a Maturity date of November 1, 2022 and carries
an interest rate of 8% per annum. The note also has conversion rights. During the period beginning on the date of funding of this Note
and ending on the date which is one hundred eighty (180) days following such date (the “Initial Period”), the Conversion Price
shall be fixed at $0.04. At any time following the Initial Period, the Conversion Price shall be equal to the Variable Conversion Price
(as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to
the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 65% multiplied by the Market Price
(as defined herein) (representing a discount rate of 35%). The balance on the note is $.
On June 1, 2021 the Company borrowed the sum of
$53,750.00 from GENEVA ROTH REMARK HOLDINGS, INC., a New York corporation. The note has a Maturity date of November 1, 2022 and carries
an interest rate of 8% per annum. The note also has conversion rights. During the period beginning on the date of funding of this Note
and ending on the date which is one hundred eighty (180) days following such date (the “Initial Period”), the Conversion Price
shall be fixed at $0.04. At any time following the Initial Period, the Conversion Price shall be equal to the Variable Conversion Price
(as defined herein)(subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to
the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price" shall mean 65% multiplied by the Market Price
(as defined herein) (representing a discount rate of 35%). The balance on the note is $.
On July 1, 2021 the Company borrowed the sum of $53,750.00 from GENEVA
ROTH REMARK HOLDINGS, INC., a New York corporation.
The note has a Maturity date of January 1, 2023
and carries an interest rate of 8% per annum. The note also has conversion rights. During the period beginning on the date of funding
of this Note and ending on the date which is one hundred eighty (180) days following such date (the “Initial Period”), the
Conversion Price shall be fixed at $0.04.
At any time following the Initial Period, the
Conversion Price shall be equal to the Variable Conversion Price (as defined herein)(subject to equitable adjustments for stock splits,
stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of
the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 65% multiplied by the Market Price (as defined herein) (representing a discount rate of 35%). The balance
on the note is $.
NOTE 10 – COMMITMENTS AND CONTINGENCIES
From time to time, disputes have arisen
between the Company and one of the contracting parties, Leonite Capital. The Company claims that Leonite is not entitled to certain
securities and if it is, the timing or ability to treat the shares as free for trading is subject to legal disagreement. The Company
filed notice of claims, but not a full complaint under New York law. Leonite has made counter claims and may have filed its own
legal filings. While the Company is attempting to settle the claims it is also contemplating filing a full complaint and is
obtaining more detailed information from its litigation lawyers and will update its filing accordingly. The Company is currently
unable to determine amount of additional loss contingencies, if any, and therefore, no additional losses have been accrued. The
Company fully intends to rigorously defend our position.
NOTE 11 - SUBSEQUENT EVENTS
On August 20, 2021 The Company
entered into a Common Stock Purchase Agreement between the buyer being V Gtel, Inc. (hereinafter referred to as “Buyer”),
and the Company as the seller. The Company is the holder of all of the issued and outstanding shares (the “Shares”) of common
stock of Chuck’s Vintage, Inc. a Wyoming corporation and a wholly-owned subsidiary of the Company and agreed to sell to the Buyer
the Shares. The Company sold to Buyer and Buyer agreed to purchase the Shares in consideration for the assumption of certain liabilities.
The liabilities were: Accounts Payable $48,234.00. The parties just confirmed and finalized matters relating to the transaction.
Subsequent events were evaluated through September 23, 2021 which
is the date the financial statements were available to be issued. There were no events that would require additional disclosure at the
time of financial statement presentation.