Print    Close

Veritas Pharma Announces Corrections to Financial Disclosures

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:

  1. 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.

  2. Reclassification of amounts due from related parties from amounts receivable.

  3. 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.

  4. Reclassification of loan receivable from Springbank Capital Partners, LLC to non-current.

  5. 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:

  1. Write-down of amounts due from related parties.

  2. 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.

  3. Adjustment to the fair value of shares issued to acquire shares of Indigenous Bloom Corp. from $5,000,000 to $4,166,666.

  4. 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.

  5. 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