GOLDEN LEAF HOLDINGS LTD.
Consolidated Statements of Financial Position
As at December 31, 2017 and 2016
(Expressed in U.S. dollars)
2017 2016
ASSETS
CURRENT
Cash Cash 6,009,447 $ 3,940,463 $
Accounts receivable Note 7 AR 377,746 97,538
Current portion of financing lease receivable Note 8 se - 44,328
Other receivables Receivables - 369,937
Income tax recoverable Note 31es 432,000 575,000
Sales tax recoverable HST 442,832 192,112
Biological assets Note 9 ets 90,627 - Inventory Note 9 ory 3,623,255 942,450
Prepaid expenses and deposits Prepaid 348,176 402,451
Assets held for sale Note 10FS 305,274 2,156,000
Total current assets 11,629,357 $ 8,720,279 $
Financing lease recievable Note 8 se - 388,228
Available for sale purchase option Note 12se - 4,670,000
Property, plant and equipment Note 10PE 5,956,910 1,713,285 Intangible assets Note 11ble 26,227,116 9,350,000 Goodwill Note 11will 31,971,398 - Total assets 75,784,781 $ 24,841,792 $
LIABILITIES
CURRENT
Accounts payable and accrued liabilities Accrued 2,867,735 $ 1,626,443 $
Interest payable est payable 48,524 188,200
Current portion of long-term debt Note 13TD 131,610 1,489,172
Current portion of convertible debentures
carried at fair value Note 12FV 271,245 10,315,555
Related party notes payable Note 25ote 389,916 1,500,000
Derivative liability Note 12ity 61,044 - Total current liabilities 3,770,074 $ 15,119,370 $
Long term debt Note 13TD 80,381 109,905
Convertible debentures carried at fair value Note 12FV 30,360,225 12,132,000
Consideration payable Note 21ent 9,527,350 -Warrant liability Note 14ity 14,300,616 416,414
Total liabilities 58,038,646 $ 27,777,689 $
SHAREHOLDERS' EQUITY
Share capital Note 15tal 108,552,681 $ 34,282,314 $
Warrant reserve Note 16ve 5,083,561 3,501,409
Share option reserve Note 17ve 1,087,640 993,211
Shares to be issued ns paybable - 267,701 Contributed surplus uted surplus 59,940 59,940
Accumulated other comprehensive loss OCI 9,828 (530,000)
Deficit Deficit (97,047,515) (41,510,472)
Total shareholders' equity 17,746,135 (2,935,897)
Total liabilities and shareholders' equity 75,784,781 $ 24,841,792 $
Going concern (Note 2)
Commitments (Note 19)
Subsequent events (Note 33)
See accompanying notes to these consolidated financial statements.
/s/ Alex Winch, Director
/s/ Gary Zipfel, Director
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GOLDEN LEAF HOLDINGS LTD.
Consolidated Statements of Operations and Comprehensive Loss
For the years ended December 31, 2017 and December 31, 2016
(Expressed in U.S. dollars)
2017 2016
Revenues
Product sales R 10,411,232 $ 7,241,554 $
Royalties R 1,100,066 419,934
Total Revenue 11,511,298 $ 7,661,488 $
Inventory expensed to cost of sales Note 9 C 9,535,602 6,962,331
Production costs P 465,658 909,409
Gain on changes in fair value of biological as s ets Note 9 G (198,000) (276,135)
Cost of sales expense 9,803,260 $ 7,595,605 $
Gross profit 1,708,038 $ 65,883 $
Expenses
General and administration G 8,610,318 7,009,610
Share based compensation Note 17 S 1,239,670 1,026,504
Profes s ional fees paid with equity ins truments Note 12 p 80,436 668,615
Sales and marketing S 1,114,628 892,436
Research and development R - 185,136
Depreciation and amortization Note 10 D 572,695 208,922
Impairment of long-lived as s ets Note 10 Im 50,254 1,555,612
Inv Impairment
Total expenses 11,668,001 $ 11,546,835 $
Inter es t
Loss before undernoted items O (9,959,963) $ (11,480,952) $
Interes t expens e In 1,549,780 1,216,586
Transaction costs Note 24 D 8,518,490 4,712,218
Loss on extinguishment L - 11,215,118
Accretion interest expense A - 665,772
Loss on disposal of assets Note 10 L 470,071 -
Impairment of financing lease receivable Note 8 Im 432,557 243,181
Impairment of intangible asset Note 11 Im 9,350,000 -
Impairment of purchase option Im 5,200,000 -
Other loss O 437,413 256,203
(Gain)Loss on change in fair value of warrant liabilities Note 14 F 7,714,578 (4,152,077)
(Gain)Loss on change in fair value of liabilities Note 12 F 12,296,260 (4,234,000)
Loss before income taxes (55,929,112) (21,403,953)
Current income tax expens e Note 31 T 143,230 (74,136)
Net Los s (56,072,342) $ (21,329,817) $
Other comprehensive loss
Reversal of unrealized loss on available for sale purchase option,
net of tax for impairment $ 530,000 $ -
Items that will be reclassified subsequently to profit or loss:
Unrealized loss on available for sale purchase option, net oftax - (530,000)
Cumulative translation adjustment 9,828 -
Comprehensive Loss (55,532,514) $ (21,859,817) $
Basic and diluted loss per share (0.21) $ (0.23) $
Weighted average number of common shares outstanding 262,011,877 91,207,720
See accompanying notes to these consolidated financial statements.
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GOLDEN LEAF HOLDINGS LTD.
Consolidated Statement of Changes in Shareholders’ Equity
For the years ended December 31, 2017 and 2016
Share Capital
Warrant
Res er v e
Stock options
reserve
Shares to be
issued
Contributed
surplus
Accumulated other
comprehensive loss Deficit Total
Balance, January 1, 2016 15,481,051 $ 2,968,655 $ 319,091 $ 123,526 $ 59,940 $ - $ (20,657,748) $ (1,705,485) $
Issuance ofcommon shares (note 15) 17,326,699 - - - - - - 17,326,699
Issuance ofw arrants and broker units (note 16) - 1,245,753 - - - - - 1,245,753
Exercise ofw arrants and options for common shares 1,279,934 (330,218) (5,342) - - - - 944,374
Issuance ofshare-basedcompensation (note 17) 194,630 - 773,774 - - - - 968,404
Ex pir y ofw arrants and stock options - (382,781) (94,312) - - - 477,093 -Net loss andcomprehensive loss for the year - - - - - (530,000) (21,329,817) (21,859,817)
Shares to be issued - - - 144,175 - - - 144,175
Balance at December 31, 2016 34,282,314 $ 3,501,409 $ 993,211 $ 267,701 $ 59,940 $ (530,000) $ (41,510,472) $ (2,935,897) $
Share Capital
Warrant
Res er v e
Stock options
reserve
Shares to be
issued
Contributed
surplus
Accumulated other
comprehensive loss Deficit Total
Balance, January 1, 2017 34,282,314 $ 3,501,409 993,211$ 267,701 $ 59,940 $ (530,000) $ (41,510,472) $ (2,935,897) $
Issuance of common shares (note 16) 72,901,778 - - (267,701) - - - 72,634,077
Issuance of w arrants and broker units (note 16) - 2,109,487 - - - - - 2,109,487
Exercise of w arrants and options for common shares 798,781 (302,539) (264,930) - - - - 231,312
Issuance of share-based compensation (note 17) 569,808 - 669,862 - - - - 1,239,670
Expiry of w arrants and stock options - (224,796) (310,503) - - - 535,299 -Net loss and comprehensive loss for the year - - - - - 539,828 (56,072,342) (55,532,514)
Balance at December 31, 2017 108,552,681 $ 5,083,561 $ 1,087,640 $ - $ 59,940 $ 9,828 $ (97,047,515) $ 17,746,135 $
See accompanying notes to consolidated financial statements.
GOLDEN LEAF HOLDINGS LTD.
Consolidated Statement of Cash Flows
2017 2016
(as restated)
Cash provide by (used in):
OPERATING ACTIVITIES
Net Loss (56,072,342) (21,329,817)
Depreciation of property, plant and equipment Note 10 572,695 208,922
Loss on disposal of assets Note 10 470,071 -
Interest expense 852,427 1,216,586
Income taxes paid - (956,000)
Income tax expense 143,230 500,865
Income tax recovery - (575,000)
Bad debt expense Note 7 - 373,494
Share based compensation Note 15 1,239,670 1,026,504
Professional fees paid with equity instruments 377,528 668,615
(Gain)/loss on fairvalue adjustment to warrants liability Note 14 7,714,578 (4,152,077)
(Gain/loss on fair value adjustment to debt liability 12,296,260 -Transaction cost Note 24 3,554,305 4,363,755
Gain on fair value of biological assets Note 9 (198,000) (276,135)
Impairment of finance lease receivable Note 8 432,556 243,181
Impairment of intangible assets Note 11 14,550,000 1,537,097
Other non-cash transactions 1,041,230 8,940,275
Changes in working capital items
Accounts receivable Note 7 (127,240) 255,593
Other receivabales 691,725 (369,937)
Sales tax recoverable (198,945) (98,110)
Accounts payable and accrued liabilities (2,030,245) (279,312)
Biological assets Note 9 107,373 333,050
Inventory Note 9 (1,024,665) (794,023)
Prepaid expenses and deposits 54,275 69,583
Cash used in operating activities (15,553,514) (9,092,891)
INVESTING ACTITIVES
Deposits on property, plant and equipment Note 10 - -
Purchase of property, plant and equipment Note 10 (1,791,466) (494,208)
Proceeds from disposal of property plant and equipment Note 10 2,304,182 -Purchase of BMF Assets - (1,500,000)
Payment of deposits and retainers - -Purchases of intangible assets - -Net cash outflow on acquisition of subsidiaries Note 20 (21,487,027) -Cash used in investment activities (20,974,311) (1,994,208)
FINANCING ACTIVITIES
Issuance of common shares Note 15 27,935,000 1,097,594
Payment of share issuance costs (1,326,209) -
Issuance of convertible notes payable Note 12 14,313,056 14,864,969
Repayment of convertible notes (621,776) -Repayment of long-term debt (1,787,086) (538,551)
Interest paid during the year 354,953 (660,145)
Proceeds from related party loan Note 25 - 290,000
Repayment of related party loan Note 25 (271,129) (290,000)
Cash provided by financing activities 38,596,809 14,763,867
Increase in cash during the year 2,068,984 3,676,768
Cash, beginning of year 3,940,463 263,695
Cash, end of year 6,009,447 3,940,463
Interest paid during the year 185,813 770,027
Taxes paid during the year - 956,000
See accompanying notes to these consolidated financial statements. |
