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Veritas Pharma Announces Corrections to Financial Disclosures
May 21, 2020 6:40 PM EDT | Source: Indigenous Bloom Hemp Corp.
Vancouver, British Columbia--(Newsfile Corp. - May 21, 2020) - Veritas Pharma Inc. (CSE: VRT) (OTC Pink: VRTHF) (FSE: 2VP) ("Veritas" or the "Company") wishes to announce that as a result of a review of its continuous disclosures record by the British Columbia Securities Commission ("BCSC") on May 20th, 2020, the company has amended and re-filed three sets of its interim financial statements and MD&A. for the following dates: October 31, 2018; January 31, 2019; April 30th, 2019.
A detailed description of the changes made to the financial statements dated October 31, 2018; January 31, 2019; and April 30th, 2019 is provided below.
Restatements for October 31st, 2018 Financial Statements
The Company has restated its consolidated financial statements as at October 31, 2018 and for the three and six months ended to reflect the following:
-
Write-off the $1,000,000 advance to Liht Cannabis Corp. (formerly Marapharm Ventures Inc.) as an unauthorized payment. Reversal of accrued interest recorded for this advance.
-
Reclassification of amounts due from related parties from amounts receivable.
-
Adjustment to the fair value of shares issued for the advance for the investment in 3 Carbon Extractions Inc. from $375,000 to $367,500.
-
Reclassification of loan receivable from Springbank Capital Partners, LLC to non-current.
-
Reclassification of certain related party payables to accounts payable and accrued liabilities to be consistent with comparative amounts.
Consolidated statement of financial position
| As At October 31, 2018 | |||||||||
| | As Reported $ | Adjustment $ | As Restated $ | ||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Amounts receivable | 134,203 | (93,216 | ) | 40,987 | |||||
| Loans receivable | 1,144,087 | (1,144,087 | ) | - | |||||
| Due from related parties | - | 93,673 | 93,673 | ||||||
| Total current assets | 1,389,312 | (1,143,630 | ) | 245,682 | |||||
| Non-current assets | |||||||||
| Loan receivable | - | 108,561 | 108,561 | ||||||
| Advance for investment | - | 767,500 | 767,500 | ||||||
| Investment | 2,035,000 | (785,000 | ) | 1,250,000 | |||||
| Total non-current assets | 4,007,977 | 91,061 | 4,099,038 | ||||||
| Total assets | 5,397,289 | (1,052,569 | ) | 4,344,720 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | 268,067 | 68,117 | 336,184 | ||||||
| Due to related party | 115,123 | (68,117 | ) | 47,006 | |||||
| Total liabilities | 383,190 | - | 383,190 | ||||||
| Shareholders' equity | |||||||||
| Share capital | 23,052,704 | (29,351 | ) | 23,023,353 | |||||
| Share-based payment reserve | 673,159 | 21,851 | 695,010 | ||||||
| Deficit | (20,655,899 | ) | (1,045,069 | ) | (21,700,968 | ) | |||
| Total shareholders' equity | 5,014,099 | (1,052,569 | ) | 3,961,530 | |||||
| Total liabilities and shareholders' equity | 5,397,289 | (1,052,569 | ) | 4,344,720 | |||||
Consolidated statements of operations and comprehensive loss
| Three Months Ended October 31, 2018 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Expenses | |||||||||
| Professional fees | 74,215 | 10,000 | 84,215 | ||||||
| Total expenses | 1,235,002 | 10,000 | 1,245,002 | ||||||
| Loss before other income (expense) | (1,235,002 | ) | (10,000 | ) | (1,245,002 | ) | |||
| Other income (expense) | |||||||||
| Interest income | 35,527 | (35,422 | ) | 105 | |||||
| Interest and bank charges | (353 | ) | 353 | - | |||||
| Unauthorized payment | - | (1,000,000 | ) | (1,000,000 | ) | ||||
| Total other income (expense) | 35,174 | (1,035,069 | ) | (999,895 | ) | ||||
| Net loss and comprehensive loss for the period | (1,199,828 | ) | (1,045,069 | ) | (2,244,897 | ) | |||
| Basic and diluted loss per share | (0.02 | ) | (0.01 | ) | (0.03 | ) | |||
| Expenses | |||||||||
| Professional fees | 95,722 | 10,000 | 105,722 | ||||||
| Total expenses | 1,988,353 | 10,000 | 1,998,353 | ||||||
| Loss before other income (expense) | (1,988,353 | ) | (10,000 | ) | (1,998,353 | ) | |||
| Other income (expense) | |||||||||
| Interest income | 35,527 | (35,422 | ) | 105 | |||||
| Interest and bank charges | (353 | ) | 353 | - | |||||
| Unauthorized payment | - | (1,000,000 | ) | (1,000,000 | ) | ||||
| Total other income (expense) | 35,174 | (1,035,069 | ) | (999,895 | ) | ||||
| Net loss and comprehensive loss for the period | (1,953,169 | ) | (1,045,069 | ) | (2,998,238 | ) | |||
| Basic and diluted loss per share | (0.03 | ) | (0.01 | ) | (0.04 | ) | |||
Consolidated statement of changes in equity
| Six Months Ended October 31, 2018 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Share capital | 23,052,704 | (29,351 | ) | 23,023,353 | |||||
| Share-based payment reserve | 673,159 | 21,851 | 695,010 | ||||||
| Deficit | (20,655,899 | ) | (1,045,069 | ) | (21,700,968 | ) | |||
| Total shareholders' equity | 5,014,099 | (1,052,569 | ) | 3,961,530 | |||||
Consolidated statement of cash flows
| Six Months Ended October 31, 2018 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Operating activities | |||||||||
| Net loss for the period | (1,953,169 | ) | (1,045,069 | ) | (2,998,238 | ) | |||
| Items not involving cash: | |||||||||
| Depreciation | 6,670 | 5,596 | 12,266 | ||||||
| Changes in non cash operating working capital: | |||||||||
| Amounts receivable | (127,538 | ) | 93,216 | (34,322 | ) | ||||
| Loans receivable | (1,144,087 | ) | 1,144,087 | - | |||||
| Accounts payable and accrued liabilities | 260,903 | (129,528 | ) | 131,375 | |||||
| Due to/from related parties | - | 35,855 | 35,855 | ||||||
| Net cash used in operating activities | (2,134,146 | ) | 104,157 | (2,029,989 | ) | ||||
| Investing activities | |||||||||
| Investments | (2,035,000 | ) | 2,035,000 | - | |||||
| Advance for acquisition of 3 Carbon | - | (400,000 | ) | (400,000 | ) | ||||
| Purchase of investment in 1182372 B.C. Ltd. | - | (1,250,000 | ) | (1,250,000 | ) | ||||
| Loan to Springbank Capital Partners, LLC | - | (108,561 | ) | (108,561 | ) | ||||
| Purchase of property and equipment | (33,706 | ) | (5,596 | ) | (39,302 | ) | |||
| Net cash used in investing activities | (2,068,706 | ) | 270,843 | (1,797,863 | ) | ||||
| Financing activities | |||||||||
| Shares issued for acquisition | 375,000 | (375,000 | ) | - | |||||
| Proceeds from issuance of shares and shares subscriptions received | 1,510,000 | 207,500 | 1,717,500 | ||||||
| Proceeds from exercise of stock options | 207,500 | (207,500 | ) | - | |||||
| Net cash provided by financing activities | 2,072,500 | (375,000 | ) | 1,697,500 | |||||
Restatements for January 31st, 2019 Financial Statements
The Company has restated its consolidated financial statements as at January 31, 2019 and for the three and nine months then ended to reflect the following:
Write-down of amounts due from related parties.
Write-off the $1,000,000 advance to Liht Cannabis Corp. (formerly Marapharm Ventures Inc.) as an unauthorized payment. Reversal of accrued interest recorded for this advance.
Adjustment to the fair value of shares issued to acquire shares of Indigenous Bloom Corp. from $5,000,000 to $4,166,666.
Adjustment to the fair value of shares issued for the advance for the investment in 3 Carbon Extractions Inc. from $375,000 to $367,500.
Reclassified the $180,000 advance from Leis Industries Limited from accounts payable and accrued liabilities to advance payable.
Consolidated statement of financial position
| As At January 31, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Amounts receivable | 68,395 | (11,776 | ) | 56,619 | |||||
| Loans receivable | 1,169,840 | (1,060,274 | ) | 109,566 | |||||
| Due from related parties | 94,243 | (94,243 | ) | - | |||||
| Total current assets | 1,397,747 | (1,166,293 | ) | 231,454 | |||||
| Non-current assets | |||||||||
| Advance for investment | - | 767,500 | 767,500 | ||||||
| Investments | 7,035,000 | (1,618,334 | ) | 5,416,666 | |||||
| Total non-current assets | 9,000,594 | (850,834 | ) | 8,149,760 | |||||
| Total assets | 10,398,341 | (2,017,127 | ) | 8,381,214 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | 727,074 | (180,000 | ) | 547,074 | |||||
| Advance payable | - | 180,000 | 180,000 | ||||||
| Total liabilities | 794,438 | - | 794,438 | ||||||
| Shareholders' equity | |||||||||
| Share capital | 29,612,704 | (847,685 | ) | 28,750,019 | |||||
| Share-based payment reserve | 684,945 | 21,851 | 706,796 | ||||||
| Deficit | (21,377,881 | ) | (1,176,293 | ) | (22,554,174 | ) | |||
| Total shareholders' equity | 9,603,903 | (2,002,127 | ) | 7,586,776 | |||||
| Total liabilities and shareholders' equity | 10,398,341 | (2,002,127 | ) | 8,381,214 | |||||
Consolidated statements of operations and comprehensive loss
| Three Months Ended January 31, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Expenses | |||||||||
| Depreciation | 7,891 | (1,500 | ) | 6,391 | |||||
| Office and miscellaneous | 17,932 | 1,500 | 19,432 | ||||||
| Total expenses | 747,573 | - | 747,573 | ||||||
| Loss before other income (expense) | (747,573 | ) | - | (747,573 | ) | ||||
| Other income (expense) | |||||||||
| Interest income | 25,693 | (25,307 | ) | 386 | |||||
| Interest and bank charges | (102 | ) | 102 | - | |||||
| Write off of related party receivables | - | (106,019 | ) | (106,019 | ) | ||||
| Total other income (expense) | 25,591 | (131,224 | ) | (105,633 | ) | ||||
| Net loss and comprehensive loss for the period | (721,982 | ) | (131,224 | ) | (853,206 | ) | |||
| Basic and diluted loss per share | (0.07 | ) | (0.02 | ) | (0.09 | ) | |||
| Nine Months Ended January 31, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Expenses | |||||||||
| Depreciation | 20,157 | (1,500 | ) | 18,657 | |||||
| Office and miscellaneous | 62,987 | 1,500 | 64,487 | ||||||
| Professional fees | 149,503 | 10,000 | 159,503 | ||||||
| Total expenses | 2,735,916 | 10,000 | 2,745,916 | ||||||
| Loss before other income (expense) | (2,735,916 | ) | (10,000 | ) | (2,745,916 | ) | |||
| Other income (expense) | |||||||||
| Interest income | 61,220 | (60,729 | ) | 491 | |||||
| Interest and bank charges | (455 | ) | 455 | - | |||||
| Unauthorized payment | - | (1,000,000 | ) | (1,000,000 | ) | ||||
| Write off of related party receivables | - | (106,019 | ) | (106,019 | ) | ||||
| Total other income (expense) | 60,765 | (1,166,298 | ) | (1,105,528 | ) | ||||
| Net loss and comprehensive loss for the period | (2,675,151 | ) | (1,176,293 | ) | (3,851,444 | ) | |||
| Basic and diluted loss per share | (0.33 | ) | (0.15 | ) | (0.48 | ) | |||
Consolidated statement of changes in equity
| Nine Months Ended January 31, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Share capital | 29,612,704 | (855,185 | ) | 28,757,519 | |||||
| Share-based payment reserve | 684,945 | 21,851 | 706,796 | ||||||
| Deficit | (21,377,881 | ) | (1,176,293 | ) | (22,554,174 | ) | |||
| Total shareholders' equity | 9,603,903 | (2,009,627 | ) | 7,594,276 | |||||
Consolidated statement of cash flows
| Nine Months Ended January 31, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Re-stated $ | |||||||
| Operating activities | |||||||||
| Net loss for the period | (2,675,151 | ) | (1,176,293 | ) | (3,851,444 | ) | |||
| Items not involving cash: | |||||||||
| Depreciation | 20,157 | (1,500 | ) | 18,657 | |||||
| Shares issued for services | - | 300,000 | 300,000 | ||||||
| Write-off of related party receivables | - | 106,019 | 106,019 | ||||||
| Changes in non cash operating working capital: | |||||||||
| Amounts receivable | (61,730 | ) | 11,776 | (49,954 | ) | ||||
| Loans receivable | (1,169,840 | ) | 1,169,840 | - | |||||
| Accounts payable and accrued liabilities | 877,908 | (535,643 | ) | 342,265 | |||||
| Due to/from related parties | - | 43,867 | 43,867 | ||||||
| Net cash used in operating activities | (2,108,395 | ) | (81,934 | ) | (2,190,329 | ) | |||
| Investing activities | |||||||||
| Investments | (7,035,000 | ) | 7,035,000 | - | |||||
| Advance for acquisition of 3 Carbon | - | (400,000 | ) | (400,000 | ) | ||||
| Purchase of investment in 1182372 B.C. Ltd. | - | (1,250,000 | ) | (1,250,000 | ) | ||||
| Cash acquired from advance payable | - | 180,000 | 180,000 | ||||||
| Loan to Springbank Capital Partners, LLC | - | (109,566 | ) | (109,566 | ) | ||||
| Purchase of property and equipment | (39,810 | ) | 1,500 | (38,310 | ) | ||||
| Net cash used in investing activities | (7,074,810 | ) | 5,456,934 | (1,617,876 | ) | ||||
| Financing activities | |||||||||
| Shares issued for acquisitions | 6,635,000 | (6,635,000 | ) | - | |||||
| Proceeds from issuance of shares and shares subscriptions received | 394,500 | 1,323,000 | 1,717,500 | ||||||
| Proceeds from exercise of stock options | 63,000 | (63,000 | ) | - | |||||
| Net cash provided by financing activities | 7,072,500 | (5,375,000 | ) | 1,697,500 | |||||
Restatements for April 30th, 2019 Financial Statements
The Company has restated its consolidated financial statements for the year ended April 30, 2019 to reflect the write-off of the $1,000,000 advance to Liht Cannabis Corp. as an unauthorized payment and to improve disclosures relating to various impairments recognized.
Consolidated statements of operations and comprehensive loss
| Year Ended April 30, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Restated $ | |||||||
| Other income (expense) | |||||||||
| Impairment of loans receivable | (1,214,580 | ) | 1,000,000 | (214,580 | ) | ||||
| Unauthorized payment | - | (1,000,000 | ) | (1,000,000 | ) | ||||
| Total other income (expense) | (8,659,513 | ) | - | (8,659,513 | ) | ||||
Consolidated statement of cash flows
| Year Ended April 30, 2019 | |||||||||
| As Reported $ | Adjustment $ | As Re-Stated $ | |||||||
| Operating activities | |||||||||
| Items not involving cash: | |||||||||
| Impairment of loans receivable | 1,214,580 | (1,000,000 | ) | 214,580 | |||||
| Net cash used in operating activities | (1,244,932 | ) | (1,000,000 | ) | (2,244,932 | ) | |||
| Investing activities | |||||||||
| Loan to Liht Cannabis Corp. | (1,000,000 | ) | 1,000,000 | - | |||||
| Net cash used in investing activities | (2,609,068 | ) | 1,000,000 | (1,609,068 | ) | ||||
About Veritas Pharma
Veritas Pharma Inc. has developed some intellectual property relating to various cannabis strains. It is the Company's aim to advance the science behind medical cannabis, by developing the most effective cannabis based treatments for specific disease conditions and acquire income producing assets in the cannabis industry. The Company's mission is to commercialize its proprietary cannabis products. In addition, Veritas aims to utilize its expertise to enter into mergers and acquisitions with various cannabis industry participants in order to generate revenue by the end of the second quarter of 2020.
Veritas Pharma Inc. is a publicly traded company in Canada, on the Canadian Securities Exchange under the ticker VRT; in the United States, on the OTC under the ticker VRTHF; and in Germany, on the Frankfurt exchange under the ticker 2VP.
For more information, please visit our website: veritaspharmainc.com
On behalf of the Board of Directors
"Peter McFadden"
Peter McFadden
Interim Chief Executive Officer & CFO
Further information about the Company is available on our website at www.veritaspharmainc.com or under our profile on SEDAR at www.sedar.com, and on the CSE website at www.thecse.com.
Investor and Public Relations Contact
Veritas Pharma Inc.
Telephone: +1.416.918.6785
Email: ir@veritaspharmainc.com
Website: www.veritaspharmainc.com
The CSE has not reviewed, nor approved or disapproved the content of this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/56270