Company Quick10K Filing
EPHS Holdings
Price0.54 EPS-0
Shares74 P/E-61
MCap40 P/FCF-427
Net Debt2 EBIT-1
TEV42 TEV/EBIT-65
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-20
10-K 2018-12-31 Filed 2019-04-16
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-20
10-Q 2018-03-31 Filed 2018-06-28
8-K 2020-09-09
8-K 2020-06-16
8-K 2020-05-01
8-K 2020-03-30
8-K 2020-03-09
8-K 2020-01-17
8-K 2019-12-13
8-K 2019-11-14
8-K 2019-11-12
8-K 2019-10-29
8-K 2019-10-17
8-K 2019-06-14
8-K 2019-02-26
8-K 2019-01-28
8-K 2019-01-21
8-K 2018-11-20
8-K 2018-11-06
8-K 2018-10-12
8-K 2018-09-27
8-K 2018-08-27
8-K 2018-02-27
8-K 2018-02-23

STNN 10Q Quarterly Report

Part 1. Financial Information
Item 1. Financial Statements.
Note 1 - Organization and Business Description
Note 2 - Summary of Significant Accounting Policies
Note 3 - Going Concern
Note 4 - Property and Equipment
Note 5 - Loan Payable
Note 6 - Related Party Transactions
Note 7 - Mortgage Payable
Note 8 - Commitments and Contingencies
Note 9 - Capital Stock
Note 10 - Subsequent Event
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31 ephs_ex31z1.htm
EX-31.2 ephs_ex31z2.htm
EX-32 ephs_ex32z1.htm
EX-32.2 ephs_ex32z2.htm

EPHS Holdings Earnings 2019-09-30

Balance SheetIncome StatementCash Flow
3.22.61.91.30.60.02016201720182020
Assets, Equity
0.0-0.1-0.2-0.2-0.3-0.42016201720182020
Rev, G Profit, Net Income
1.91.10.2-0.6-1.5-2.32016201720182020
Ops, Inv, Fin

10-Q 1 ephs_10q.htm QUARTERLY REPORT Quarterly Report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

þ  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2019

 

or

 

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________________to__________________________

 

Commission File Number 000-55906

 

SKYE LIFE VENTURES LTD.

(Exact name of Registrant as specified in its charter)

 

Nevada

  

82-4383947

(State or other jurisdiction of incorporation or organization)

   

(I.R.S. employer identification number)

 

5490 Notre Dame Est, Montreal, Quebec, Canada H1N 2C4

(Address of principal executive offices) (Zip code)

 

(212) 321-0091

(Registrant's telephone number, including area code)

 

EPHS HOLDINGS, INC.

7694 Colony Palm Drive

Boynton Beach, Florida 33436

 (Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

N/A

N/A

N/A


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨  No  þ

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ  No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

 

 

Large accelerated filer   ¨

Accelerated filer   ¨

Non-accelerated filer     þ

Smaller reporting company  þ

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨  No þ

 

As of October 31, 2019, the registrant had 74,410,628 shares of common stock outstanding.

 

 





SKYE LIFE VENTURES LTD.

 

INDEX

 

 

 

 

 

 

Page No.

PART I

FINANCIAL INFORMATION

 

 

 

 

ITEM 1.

FINANCIAL STATEMENTS

1

 

Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018

1

 

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)

2

 

Statement of Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2019 (unaudited)

3

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)

4

 

Notes to Condensed Financial Statements (Unaudited)

5

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

13

ITEM 4.

CONTROLS AND PROCEDURES

16

 

 

 

PART II

OTHER INFORMATION

 

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

17

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

17

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

17

ITEM 4.

MINE SAFETY DISCLOSURES

17

ITEM 5.

OTHER INFORMATION

17

ITEM 6.

EXHIBITS

17

 

 

 

 

 

 

 

 

 

 




PART 1.  FINANCIAL INFORMATION

 

Item 1.  Financial Statements. 

 

EPHS HOLDINGS, INC. 

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

200,736

 

 

$

528,246

 

Sales tax receivable

 

 

12,627

 

 

 

4,763

 

Prepaid expenses and other current assets

 

 

18,559

 

 

 

5,404

 

Total current assets

 

 

231,922

 

 

 

538,413

 

 

 

 

 

 

 

 

 

 

Property and equipment

 

 

2,850,016

 

 

 

153,142

 

Operating lease right-of-use assets, net

 

 

100,463

 

 

 

 

Security deposit

 

 

14,073

 

 

 

6,335

 

Total assets

 

$

3,196,474

 

 

$

697,890

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

409,105

 

 

$

95,365

 

Accrued interest

 

 

12,712

 

 

 

 

Other payable

 

 

7,739

 

 

 

8,612

 

Loan payable

 

 

45,511

 

 

 

 

Lease liability

 

 

43,153

 

 

 

 

Due to related party - note payable

 

 

98,355

 

 

 

4,136

 

Total current liabilities

 

 

616,575

 

 

 

108,113

 

 

 

 

 

 

 

 

 

 

Lease liability

 

 

57,310

 

 

 

 

Loan payable

 

 

177,268

 

 

 

 

Mortgage payable

 

 

1,813,300

 

 

 

 

Total liabilities

 

 

2,664,453

 

 

 

108,113

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 2,400,000,000 shares authorized; 74,410,628 shares issued and outstanding as of September 30, 2019 and 63,299,592 issued and outstanding as of December 31, 2018

 

 

74,411

 

 

 

63,300

 

Additional paid in capital

 

 

4,316,094

 

 

 

1,839,253

 

Accumulated deficit

 

 

(3,818,771

)

 

 

(1,269,027

)

Accumulated other comprehensive loss

 

 

(39,713

)

 

 

(43,749

)

Total stockholders' equity

 

 

532,021

 

 

 

589,777

 

Total liabilities and stockholders' equity

 

$

3,196,474

 

 

$

697,890

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 



1



EPHS HOLDINGS, INC. 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Total revenue

 

$

 

 

$

 

 

$

 

 

$

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

367,666

 

 

 

111,977

 

 

 

2,498,089

 

 

 

290,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

 

(367,666

)

 

 

(111,977

)

 

 

(2,498,089

)

 

 

(290,762

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

3,296

 

 

 

 

 

 

(50,527

)

 

 

 

Exchange loss

 

 

(4

)

 

 

 

 

 

(1,128

)

 

 

 

Total other expense

 

 

3,292

 

 

 

 

 

 

(51,655

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(364,374

)

 

$

(111,977

)

 

$

(2,549,744

)

 

$

(290,762

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

 

(14,133

)

 

 

247

 

 

 

4,036

 

 

 

(13,648

)

Total comprehensive loss

 

$

(378,507

)

 

$

(111,730

)

 

$

(2,545,708

)

 

$

(304,410

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - basic and diluted

 

 

74,410,628

 

 

 

123,595,306

 

 

 

72,453,809

 

 

 

123,595,306

 

Loss per share - basic and diluted

 

$

(0.00

)

 

$

(0.00

)

 

$

(0.04

)

 

$

(0.00

)


The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

     



2



EPHS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

(Unaudited)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common Stock

 

 

Paid

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

Deficit

 

 

Loss

 

 

Total

 

BALANCES, December 31, 2018

 

 

63,299,592

 

 

$

63,300

 

 

$

1,839,253

 

 

$

(1,269,027

)

 

$

(43,749

)

 

$

589,777

 

Issuance of common stock

 

 

761,036

 

 

 

761

 

 

 

420,389

 

 

 

 

 

 

 

 

 

421,150

 

Acquisition of MVC

 

 

8,100,000

 

 

 

8,100

 

 

 

402,702

 

 

 

 

 

 

 

 

 

410,802

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,082

)

 

 

(6,082

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(212,825

)

 

 

 

 

 

(212,825

)

BALANCES, March 31, 2019

 

 

72,160,628

 

 

 

72,161

 

 

 

2,662,344

 

 

 

(1,481,852

)

 

 

(49,831

)

 

 

1,202,822

 

Issuance of bonus shares

 

 

2,250,000

 

 

 

2,250

 

 

 

1,653,750

 

 

 

 

 

 

 

 

 

1,656,000

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,251

 

 

 

24,251

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(1,972,545

)

 

 

 

 

 

(1,972,545

)

BALANCES, June 30, 2019

 

 

74,410,628

 

 

 

74,411

 

 

 

4,316,094

 

 

 

(3,454,397

)

 

 

(25,580

)

 

 

910,528

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital contribution

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Translation gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,133

)

 

 

(14,133

)

Net Income

 

 

 

 

 

 

 

 

 

 

 

(364,374

)

 

 

 

 

 

(364,374

)

BALANCES, September 30, 2019

 

 

74,410,628

 

 

$

74,411

 

 

$

4,316,094

 

 

$

(3,818,771

)

 

$

(39,713

)

 

$

532,021

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

Common Stock

 

 

Paid

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

Deficit

 

 

Loss

 

 

Total

 

BALANCES, December 31, 2017

 

 

20,000,000

 

 

$

20,000

 

 

$

(19,920

)

 

$

(735,552

)

 

$

(20,915

)

 

$

(756,387

)

Recap of EPHS Holdings, Inc.

 

 

113,600,892

 

 

 

113,601

 

 

 

(120,199

)

 

 

 

 

 

 

 

 

(6,598

)

Debt forgiveness by shareholders

 

 

 

 

 

 

 

 

812,113

 

 

 

 

 

 

 

 

 

812,113

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,564

)

 

 

(10,564

)

Common stock subscription

 

 

 

 

 

 

 

 

219,796

 

 

 

 

 

 

 

 

 

219,796

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(98,357

)

 

 

 

 

 

(98,357

)

BALANCES, March 31, 2018

 

 

133,600,892

 

 

 

133,601

 

 

 

891,790

 

 

 

(833,909

)

 

 

(31,479

)

 

 

160,003

 

Issuance of common stock for consulting services

 

 

25,000

 

 

 

25

 

 

 

(25

)

 

 

 

 

 

 

 

 

 

Common stock subscription

 

 

 

 

 

 

 

 

44,925

 

 

 

 

 

 

 

 

 

44,925

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,331

)

 

 

(3,331

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(80,428

)

 

 

 

 

 

(80,428

)

BALANCES, June 30, 2018

 

 

133,625,892

 

 

 

133,626

 

 

 

936,690

 

 

 

(914,337

)

 

 

(34,810

)

 

 

121,169

 

Cancellation of common stock

 

 

(75,000,000

)

 

 

(75,000

)

 

 

75,000

 

 

 

 

 

 

 

 

 

 

Common stock subscription

 

 

 

 

 

 

 

 

149,665

 

 

 

 

 

 

 

 

 

149,665

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

247

 

 

 

247

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(111,977

)

 

 

 

 

 

(111,977

)

BALANCES, September 30, 2018

 

 

58,625,892

 

 

 

58,626

 

 

 

1,161,355

 

 

 

(1,026,314

)

 

 

(34,563

)

 

 

159,104

 


The accompanying notes are an integral part of these consolidated financial statements. 



3



EPHS HOLDINGS, INC. 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(2,549,744

)

 

$

(290,762

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation expense

 

 

36,328

 

 

 

39,844

 

Amortization of right-of-use asset

 

 

30,327

 

 

 

 

Accretion of lease liability

 

 

9,187

 

 

 

 

Issuance of bonus shares

 

 

1,656,000

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Sales tax receivable

 

 

(4,569

)

 

 

85

 

Accounts payable

 

 

312,846

 

 

 

33,516

 

Accrued interest

 

 

12,712

 

 

 

 

Other payable

 

 

(1,123

)

 

 

 

Prepaid expenses

 

 

(13,139

)

 

 

(6,299

)

Security deposit

 

 

(7,523

)

 

 

 

CASH USED IN OPERATING ACTIVITIES

 

 

(518,698

)

 

 

(223,616

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,728,354

)

 

 

(136,048

)

Net cash acquired from MVC

 

 

410,802

 

 

 

 

CASH USED IN INVESTING ACTIVITIES

 

 

(2,317,552

)

 

 

(136,048

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from related party payable

 

 

95,566

 

 

 

16,762

 

Proceeds from third party payable

 

 

222,779

 

 

 

 

Proceeds from mortgage

 

 

1,813,299

 

 

 

 

Proceeds from common stock subscription

 

 

 

 

 

414,386

 

Proceeds from issuance of commons stock

 

 

421,150

 

 

 

 

CASH PROVIDED BY FINANCING ACTIVITIES

 

 

2,552,794

 

 

 

431,148

 

 

 

 

 

 

 

 

 

 

Effect of translation changes on cash

 

 

(44,054

)

 

 

(7,492

)

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

 

(327,510

)

 

 

63,992

 

 

 

 

 

 

 

 

 

 

Cash, beginning of period

 

 

528,246

 

 

 

4,195

 

 

 

 

 

 

 

 

 

 

Cash, end of period

 

$

200,736

 

 

$

68,187

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

18,176

 

 

$

 

Cash paid for income taxes

 

$

 

 

$

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 



4



EPHS HOLDINGS, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)

 

NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION

 

EPHS Holdings, Inc. (the "Company") was incorporated in the State of Nevada on January 28, 1999. The Company's original plan was to build and use technology to mine gold, platinum, precious metals and rare earth metals in situ from seawater and from slurries created from land based ores. The Company was originally known as Quantum Induction Technology, Inc. On November 30, 2011 the Company changed its name to Quantumbit, Inc. and continued to operate under this name until September 25, 2013 when the Company's name was changed to Sertant, Inc. The Company ceased operations in January 2015.

 

In February 2017, one of the Company's shareholders sued the Company for breach of fiduciary duties of care, loyalty and good faith to the Company's shareholders. In July 2017, the court appointed an exclusive receiver over the Company. In September 2017, the Company entered into an agreement with the shareholder and the receiver to resolve the legal claim by issuing 4,750,000 shares of common stock to the shareholder. In January 2018, the Company's name was changed to EPHS Holdings, Inc.


On November 12, 2019 the Company filed a change of its name from EPHS Holdings Inc to Skye Life Ventures Ltd under  the British Columbia Business Corporations Act. The British Columbia Registrar issued a Certificate of Name change November 12, 2019.

 

On December 28, 2017, the Company issued to EPHS, Inc., a Florida corporation, 75,000,000 shares of the Company's common stock for $110,000 which represented approximately 62% of the Company's issued and outstanding shares of common stock.

 

On February 27, 2018, pursuant to the terms of a Share Exchange Agreement, the Company acquired all of the issued and outstanding shares of common stock of Emerald Plants Health Source, Inc. ("Emerald"), all of Emerald's outstanding debt to shareholders was forgiven, and Emerald became the wholly owned subsidiary of the Company in a reverse merger (the "Merger"). Pursuant to the Merger, all of the issued and outstanding shares of Emerald common stock were converted, at an exchange ratio of 200,000-for-1, into an aggregate of 20,000,000 shares of the Company's common stock, resulting in Emerald becoming a wholly owned subsidiary of the Company. The accompanying financial statements' share information has been retroactively adjusted to reflect the exchange ratio in the Merger.

 

Under generally accepted accounting principles in the United States ("US GAAP"), because the combined entity will be dependent on Emerald's senior management, the merger was accounted for as a recapitalization effected by a share exchange, wherein Emerald is considered the acquirer for accounting and financial reporting purposes. On the Merger date, the assets and liabilities of Emerald were brought forward at their book value and consolidated with EPHS Holdings, Inc.'s assets, which comprised of cash and cash equivalents of $58,075 and prepaid expenses and current assets of $5,000 and liabilities which comprises accounts payable of $3,576 (see Note 2 Principles of Consolidation below). No goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements are those of Emerald and are recorded at the historical cost basis of Emerald.

 

On November 6, 2018, the Company executed a Share Exchange Agreement with Merritt Valley Cannabis Corp. ("MVC") (the "MVC Transaction") and its shareholders (the "MVC Shareholders") whereby MVC Shareholders agreed to exchange all of their respective shares in MVC in consideration for 8,100,000 shares of EPHS common stock, with a par value of $0.001 per share (the "MVC Transaction"). In furtherance of the MVC Transaction, on January 4, 2019, the Company completed the purchase of lands located in Merritt, British Columbia, Canada with the purpose of the cultivation of cannabis. On January 11, 2019, the Company and MVC completed the MVC Transaction.

 

In January 2017, the FASB issued ASU 2017-01, which changes the definition of a business. The new guidance requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If that threshold is met, the set of assets and activities is not a business. On the acquisition date, MVC only had petty cash in the amount of $14 and land deposit for land purchase in the amount of $410,788. MVC did not commence any operations at the acquisition date. Based on above, the significant asset of MVC on the acquisition date was the land deposit, which was regarded as a single identifiable asset. Therefore, this acquisition was treated as an asset acquisition under ASC 805-50 instead of a business acquisition.

 

The Company's fiscal year end is December 31.



5



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying financial statements have been prepared in accordance with US GAAP and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.

 

Principles of Consolidation and Basis of Presentation

 

The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Interim Financial Statements

 

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the US GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the consolidated 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 such adjustments are of a normal recurring nature. These consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the SEC on April 16, 2019. The results of operations for the three and nine months ended September 30, 2019, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2019. 

 

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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company's policy is to present bank balances under cash and cash equivalents, including bank overdrafts when balances fluctuate frequently from being positive to overdrawn and term deposits with a maturity period of three months or less from the date of acquisition.

 

Property and Equipment

 

Property and equipment is initially recorded at cost and stated at cost less accumulated depreciation other than land which is stated at cost. Major additions and improvements are capitalized. Depreciation of furniture, vehicles and equipment is calculated using the diminishing balance method at a rate of 20% per year, and leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the lease term (which is five years). The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale are recorded as a gain or loss on sale of equipment.

 

Foreign Exchange Translation

 

The functional currency of the subsidiary is the Canadian Dollar ("CAD"). For financial statement purposes, the reporting currency is the United States Dollar ("USD").

 

For financial reporting purposes, the financial statements are translated into the Company's reporting currency, USD, using the period-end rates of exchange for assets and liabilities, equity is translated at historical exchange rates and average rates of exchange (for the period) are used for revenues and expenses and cash flows.

 



6



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



Adjustments resulting from the translation, if any, are included in accumulated other comprehensive loss in stockholder's equity (deficit).

 

Impairment of Long-lived Assets

 

The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, in accordance with ASC Topic 360, "Property, Plant and Equipment" ("ASC 360"). The test for impairment is required to be performed by management at least annually. An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate. If an asset or asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value. If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

  

Income Taxes

 

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

 

The Company has adopted the provisions of ASC 740-10-05 "Accounting for Uncertainty in Income Taxes." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Sales Tax Receivable

 

The Company is charged approximately 12% sales taxes on all taxable purchases. The rates are a blend of Federal (Canada) of 5% and Provincial (Quebec) of 7%. The Company is reimbursed for all Federal sales taxes paid to suppliers. The Company has not charged sales taxes on product sold as it has no revenues.

 

Net Loss Per Share, Basic and Diluted

 

Basic loss per share is calculated by dividing our net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing our net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common share equivalents outstanding as of September 30, 2019.

 

Related Party Transactions

 

The Company follows the guidance in ASC 850. The Company discloses related transactions and certain common control relationships. Transactions between related parties are related party transactions even though they may not be given accounting recognition.

 



7



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



Subsequent Event

 

The Company follows the guidance in SFAS 165 (ASC 855-10-50) for the disclosure of subsequent events. The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them with the SEC on the EDGAR system.

 

Leasing

 

Effective January 1, 2019 the Company adopted the Financial Accounting Standards Board's ("FASB") Accounting Standards Update No. 2016-02, "Leases (Topic 842)" which superseded previous lease guidance ASC 840, Leases. Topic 842 is a new lease model that requires a company to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet. The Company adopted the standard using the modified retrospective approach that does not require the restatement of prior year financial statements. The adoption of Topic 842 did not have a material impact on the Company's consolidated income statement or consolidated cash flow statement. The adoption of Topic 842 resulted in the recognition of ROU assets of CAD 173,343 (approximately $130,906) and corresponding lease liabilities of CAD 173,343 (approximately $130,906) as of January 1, 2019 for leases classified as operating leases.

 

The Company adopted the package of practical expedients and transition provisions available for expired or existing contracts, which allowed the Company carryforward its historical assessments of 1) whether contracts are or contain leases, 2) lease classification and 3) initial direct costs. Additionally, for real estate leases, the Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. The Company also elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Further, the Company elected the short-term lease exception policy, permitting it exclude the recognition requirements for leases with terms of 12 months or less. See Note 8 for additional information about leases.

 

Stock-Based Compensation

 

The Company accounts for stock-based compensation expense under FASB ASC 718, "Compensation-Stock Compensation," which requires the measurement and recognition of stock-based compensation expense based on estimated fair values, for all stock-based payment awards made to employees, and FASB ASC 505-50, "Equity-Based Payments to Non-Employees," which requires the measurement and recognition of stock-based compensation expense based on the estimated fair value of services or goods being received, for all stock-based payment awards made to other service providers and non-employees.

 

Fair Value of Financial Instruments

 

The carrying amounts of the Company's financial instruments, which include cash and cash equivalents, sales tax receivable, accounts payable, mortgage payable, and related party payable approximate their fair values at September 30, 2019 and December 31, 2018, respectively, principally due to the short-term nature of the above listed items.

 

Recent Accounting Pronouncements

 

The Company has reviewed all other FASB issued ASU accounting pronouncements and interpretations thereof that have effective dates during the period reported and in future periods. The Company has carefully considered the new pronouncements that alter the previous US GAAP and do not believe that any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.

 

During June 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07") to simplify the accounting for share- based payments to nonemployees by aligning it with the accounting for share-based payments to employees. ASU No. 2018-07 is effective for the Company for fiscal years beginning after December 31, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company has adopted ASU No. 2018-07, and the adoption of ASU No. 2018-07 did not have a material impact on its financial statements.



8



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



In August 2016, the FASB issued an accounting standard update addressing the classification and presentation of eight specific cash flow issues that currently result in diverse practices. The amendments provide guidance in the presentation and classification of certain cash receipts and cash payments in the statement of cash flows including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, and distributions received from equity method investees. This pronouncement is effective for annual reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, for nonpublic entities. The amendments in this ASU should be applied using a retrospective approach. The Company has carefully considered the new pronouncement and does not believe it has an impact on its financial statements and related disclosures.

 

NOTE 3 - GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with US GAAP, which contemplate continuation of the Company as a going concern. However, the Company has no revenues. The Company currently has losses and has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company's ability to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In spite of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 4 - PROPERTY AND EQUIPMENT


 

 

September 30,

 

 

December 31,

 

Classification

 

2019

 

 

2018

 

Furniture

 

$

190,353

 

 

$

170,341

 

Leasehold improvements

 

 

318,395

 

 

 

203,387

 

Total cost

 

 

508,748

 

 

 

373,728

 

Accumulated depreciation

 

 

(263,557

)

 

 

(220,586

)

Net cost

 

$

245,191

 

 

$

153,142

 

Land

 

 

2,604,825

 

 

 

 

Total property and equipment

 

 

2,850,016

 

 

 

153,142

 

 

The Company had Property and Equipment acquisitions of $123,529 for the nine months ended September 30, 2019.

  

On February 7, 2019, the Company, through its wholly owned subsidiary MVC, completed the purchase of land that is located in Merritt, British Columbia, Canada with the purpose of the cultivation of cannabis. The total consideration was CAD 3,449,268 (approximately $2,604,825). The land is an indefinite long-lived asset that is assessed for impairment on a periodic basis.


NOTE 5 – LOAN PAYABLE


On July 26, 2019, the Company signed a settlement and release agreement with a third party. As of the date of the agreement, the third party has incurred various business expenses for the benefit of the Company with an amount of CAD 75,000 (approximately $56,639). The Company agrees to reimburse the third party in five monthly installments of CAD 15,000 (approximately $11,328) beginning on August 7, 2019. If a monthly payment is missed, interest will accrue on the outstanding amount at 5% per annum and will become payable on January 7, 2020. As of September 30, 2019, the Company has paid two monthly installments timely and CAD 45,000 (approximately $33,983) was outstanding.  




9



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



On September 23, 2019, the Company signed a loan agreement with a third party in the principal amount of CAD 250,000 (approximately $188,796) for working capital purposes. The loan bears interest at 10% per annum over the term from the issuance date through maturity date on September 30, 2021. As of September 30, 2019, the outstanding principal balance of the note was $188,796. The third party subsequently became a director of the Company on October 17, 2019.

 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

Amounts due to related parties as of September 30, 2019 and December 31, 2018:

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

2019

 

 

2018

 

Paolo Gervasi

 

Shareholder and employee of the Company

 

$

2,129

 

 

$

2,068

 

Calogero Caruso

 

Shareholder and employee of the Company

 

 

4,395

 

 

 

2,068

 

Chris Thompson

 

Shareholder and founder of MVC

 

 

26,431

 

 

 

 

Kyle McDiarmid

 

Shareholder and founder of MVC

 

 

18,884

 

 

 

 

Stevan Perry

 

President of the Company

 

 

46,158

 

 

 

 

Other

 

Shareholder and founder of MVC

 

 

358

 

 

 

 

 

 

 

 

$

98,355

 

 

$

4,136

 

 

On February 27, 2018, all loans by Paolo Gervasi and Calogero Caruso were forgiven in exchange for shares of the Company, pursuant to the terms and conditions of the Share Exchange Agreement. Paolo Gervasi and Calogero Caruso further loaned the Company $2,129 and $4,395, respectively, for working capital purposes. These notes payable were unsecured, non-interest bearing and due on demand.

 

On January 28, 2019, the Company signed a promissory note with Kyle McDiarmid in the principal amount of CAD 25,000 (approximately $18,884) for land purchase. This note bears no interest and matures on May 31, 2019. As of September 30, 2019, the outstanding principal balance of the note was $18,884.

 

On January 28, 2019, the Company signed a promissory note with Sean Piekaar in the principal amount of CAD 25,000 (approximately $18,884) for land purchase. This note bears no interest and matures on May 31, 2019. The note was paid in full during the nine months ended September 30, 2019.

 

On January 29, 2019, the Company signed a promissory note with Stevan Perry in the principal amount of CAD 112,000 (approximately $84,432) for land purchase. This note bears annually interest at 7% over the term from the issuance date through maturity date on April 30, 2019. On July 4, 2019, the Company made a payment to the principal of CAD 50,000 (approximately $38,274). As of September 30, 2019, the outstanding principal balance of the note was $46,158, with an accrued interest of $3,348.

 

On March 6, 2019, the Company signed a promissory note with Chris Thompson in the principal amount of CAD 135,000 (approximately $101,950) for working capital purposes. This note bears interest at 18% per annum over the term from the issuance date through maturity date on September 30, 2019. In September 2019, the Company paid CAD 100,000 (approximately $75,519) to principal. As of September 30, 2019, the outstanding principal balance of the note was $26,431, with an accrued interest of $2,360. Subsequent to September 30, 2019, the outstanding principal and interest were paid in full.


NOTE 7 - MORTGAGE PAYABLE

 

On January 8, 2019, the Company entered into a mortgage with Redabe Holdings Inc. for CAD 1,675,000 (approximately $1,264,930) for land purchase. The mortgage bears interest at 5% per annum with interest only payments commencing on February 1, 2019 until February 1, 2020. Starting March 1, 2020, the Company is obligated to make monthly payment to Redabe Holdings in the amount of CAD 11,054 (approximately $8,348) until January 1, 2024. The loan matures on February 1, 2024, and any remaining principal and interest at the maturity of the loan are due in full.

 



10



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



Subsequently, the Company further borrowed CAD 700,000 (approximately $528,627) from Redabe Holdings Inc. As of September 30, 2019, the balance on the mortgage payable was $1,813,300 with an accrued interest of $7,004.


NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

On October 21, 2012, the Company entered into a rental agreement for an office and grow space of 8,387 square feet located in Montreal, Quebec, Canada. The Company renewed the rental agreement on December 1, 2018 with a base gross rent of CAD 8.35 (approximately $6.31) per square foot and security deposit of CAD 8,636 (approximately $6,522). The Company will owe monthly rental payments of CAD 5,836 (approximately $4,391) until the rental agreement terminates on November 30, 2021, which the Company used to establish the Company's ROU assets and lease liabilities.

 

As the Company's lease does not provide an implicit rate, the Company's incremental borrowing rate based on the information available at lease commencement date was used to determine the present value of lease payments. Components of lease cost are as follows:

 

 

 

Nine months ended

 

 

 

September 30,

2019

 

Operating lease costs*

 

$

39,515

 

Operating cash flow information:

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

39,515

 


* Includes right-of-use asset amortization of $30,327.

 

Weighted-average remaining lease term and discount rate for operating leases are as follows:

 

 

 

Nine months ended

 

 

 

September 30,

2019

 

Weighted-average remaining lease term

 

 

2.17

 

Weighted-average discount rate

 

 

12

%

 

Maturities of lease liabilities by year for leases are as follows:

 

 

 

Amount

 

2019*

 

$

13,222

 

2020

 

 

52,886

 

2021 and beyond

 

 

48,479

 

Total lease payments

 

 

114,587

 

Less: imputed interest

 

 

(14,124

)

Present value of lease liabilities

 

$

100,463

 

 

* Excluding the nine months ended September 30, 2019

 



11



EPHS HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2019

(Unaudited)



As of December 31, 2018, minimum lease payments under non-cancelable leases by period were expected to be as follows:

 

Years ending December 31,

 

Amount

 

2019

 

$

54,048

 

2020

 

 

54,048

 

2021 and thereafter

 

 

49,544

 

Total minimum rentals

 

$

157,640

 

 

Legal Proceedings

 

The Company is contemplating filing a lawsuit against its two of its shareholders for breach of contract to recover 20,000,000 shares of the Company's common stock that were previously issued and authorized by a predecessor board of directors. The Company is currently in settlement negotiations with said shareholders. The settlement negotiations have not produced a positive outcome and the Company is considering its alternatives. While the ultimate result, if any, from the proceeding is presently indeterminable, in the opinion of management, this matter should not have a material adverse effect on the Company's consolidated financial statements.

 

NOTE 9 - CAPITAL STOCK

 

On January 15, 2019, pursuant to the terms of a Share Exchange Agreement, the Company acquired all of the issued and outstanding MVC shares in consideration for issuance of 8,100,000 shares of EPHS common stock, par value $.001 per share.

 

On February 11, 2019, the Company issued 25,000 shares for cash.

 

On March 11, 2019, the Company further issued 736,036 shares of common stock for cash.

 

On June 14, 2019, the Company issued 2,250,000 shares of common stock to the owner of Redabe Holdings Inc. in compensation for advancing the Company CAD 2,375,000 (approximately $1,793,557) in the form of a mortgage to the Company's subsidiary.

 

As of September 30, 2019, the Company had 74,410,628 shares of common stock outstanding.

 

NOTE 10 - SUBSEQUENT EVENT


On October 29, 2019, EPHS Holdings, Inc. (the “Company”) completed its corporate continuation process whereby the Company changed its corporate jurisdiction from the State of Nevada to the Province of British Columbia, Canada (the “Continuation”). The Continuation was approved by the Company’s stockholders at the Company’s annual and special meeting on October 17, 2019. The British Columbia Registrar issued a Certificate of Continuation approving the Continuation on October 29, 2019 at 11:25 AM Pacific Time (the “Effective Time”).


As a result of the Continuation, the Company is now governed by its Notice of Articles and Articles under the Business Corporations Act (British Columbia) (the “BCBCA”) rather than its previous Nevada Articles of Incorporation and bylaws.


Material Modifications to Rights of Security Holders is contained in an 8-K filing by the Company and is available on EDGAR.


On November 12, 2019 the Company filed a change of its name from EPHS Holdings Inc to Skye Life Ventures Ltd under  the British Columbia Business Corporations Act. The British Columbia Registrar issued a Certificate of Name change November 12, 2019.

 



 



12



 


MATTER OF FORWARD-LOOKING STATEMENTS


THIS FORM 10-Q CONTAINS "FORWARD-LOOKING STATEMENTS" THAT CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL," "SHOULD," OR "ANTICIPATES," OR THE NEGATIVE OF THESE WORDS OR OTHER VARIATIONS OF THESE WORDS OR COMPARABLE WORDS, OR BY DISCUSSIONS OF PLANS OR STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. MANAGEMENT WISHES TO CAUTION THE READER THAT THESE FORWARD-LOOKING STATEMENTS, INCLUDING, BUT NOT LIMITED TO, STATEMENTS REGARDING THE COMPANY'S MARKETING PLANS, GOALS, COMPETITIVE CONDITIONS, REGULATIONS THAT AFFECT PUBLIC COMPANIES THAT HAVE NO EXISTING BUSINESS AND OTHER MATTERS THAT ARE NOT HISTORICAL FACTS ARE ONLY PREDICTIONS. NO ASSURANCES CAN BE GIVEN THAT SUCH PREDICTIONS WILL PROVE CORRECT OR THAT THE ANTICIPATED FUTURE RESULTS WILL BE ACHIEVED. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY EITHER BECAUSE ONE OR MORE PREDICTIONS PROVE TO BE ERRONEOUS OR AS A RESULT OF OTHER RISKS FACING THE COMPANY. FORWARD-LOOKING STATEMENTS SHOULD BE READ IN LIGHT OF THE CAUTIONARY STATEMENTS AND IMPORTANT FACTORS DESCRIBED IN THIS FORM 10-Q FOR EPHS HOLDINGS, INC., INCLUDING, BUT NOT LIMITED TO THE MATTERS SET FORTH IN MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. THE RISKS INCLUDE, BUT ARE NOT LIMITED TO, THE RISK FACTORS AND UNCERTAINTIES SET FORTH IN ITEM 1A, "RISK FACTORS" OF THE COMPANY'S REGISTRATION STATEMENT ON FORM 10, AS AMENDED, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, THE RISKS ASSOCIATED WITH A SMALLER REPORTING COMPANY THAT HAS ONLY A LIMITED HISTORY OF OPERATIONS, THE COMPARATIVELY LIMITED FINANCIAL RESOURCES OF THE COMPANY, THE INTENSE COMPETITION THE COMPANY FACES FROM OTHER ESTABLISHED COMPETITORS, ANY ONE OR MORE OF THESE OR OTHER RISKS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FUTURE RESULTS INDICATED, EXPRESSED, OR IMPLIED IN SUCH FORWARD-LOOKING STATEMENTS. WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT TO REFLECT EVENTS, CIRCUMSTANCES, OR NEW INFORMATION AFTER THE DATE OF THIS FORM 10-Q OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED OR OTHER SUBSEQUENT EVENTS, EXCEPT AS REQUIRED BY LAW.

 

As used herein, the term "the Company," "we," "us, "and" "our" refer to EPHS Holdings, Inc., a Nevada corporation, unless otherwise noted.


Item 2.  Management's Discussion and Analysis of Financial Conditions and Results of Operations. 


Overview

 

EPHS Holdings, Inc. was incorporated under the laws of the State of Nevada on January 28, 1999 under the name Quantum Bit Induction Technology, Inc. On November 14, 2011, the Company filed Amended and Restated Articles of Incorporation changing its name to Quantumbit, Inc. On September 26, 2013, the Company filed a Certificate of Amendment changing its name to Sertant, Inc. On January 11, 2018, the Company filed a Certificate of Amendment with the Nevada Secretary of State changing its name to EPHS Holdings, Inc.

 

The Company's original plan was to build and use technology to mine gold, platinum, precious metals and rare earth metals in situ from seawater and from slurries created from land-based ores. The Company's property was located in Nevada. The Company also explored developing technology to selectively electroplate precious and rare earth metals from solution or seawater onto collector electrodes. These endeavors were not successful, and the Company has since ceased operations with respect to these endeavors.

 

With no operations, the Company was placed into receivership on February 15, 2017 (Case No. 2017-10544, as filed in the District Court of Harris County, Texas, 151st Judicial District) and remained in receivership until December 2017. In July 2017, the court appointed Angela Collette as exclusive receiver over the Company. Angela Collette was also appointed as the Company's president. In February 2017, one of the Company's shareholders sued the Company for breach of fiduciary duties of care, loyalty and good faith to the Company's shareholders. In September 2017, the Company entered into an agreement with the shareholder and the receiver to resolve the legal claim by issuing 4,750,000 shares of common stock to the shareholder.

 

On December 28, 2017, the Company issued to EPHS, Inc., a Florida corporation, 75,000,000 shares of the Company's common stock for $110,000 which represented approximately 62% of the Company's issued and outstanding shares of common stock.



13



 


The Company sought to effect a merger, exchange of capital stock, asset acquisition or other similar business combination (a "Business Combination") with an operating or development stage business (the "Target Business") which desired to utilize the Company's status as a reporting corporation under the Exchange Act. In furtherance thereof, the Company signed a Letter of Intent to acquire all of the issued and outstanding shares of common stock of Emerald Plants Health Source, Inc., a Quebec corporation ("Emerald"). Emerald was a Canada based company engaged in the cultivation of cannabis. On February 27, 2018, pursuant to the terms of a Share Exchange Agreement (the "Emerald Agreement"), we acquired all of the issued and outstanding shares of common stock of Emerald and Emerald became a wholly owned subsidiary of the Company.

 

Pursuant to the terms and conditions of the Emerald Agreement, executed between the Company and the shareholders of Emerald, we acquired all of the issued and outstanding shares of common stock of Emerald in exchange for the issuance of 20,000,000 restricted shares of the Company's common stock, which at the time, represented approximately 14% of the then issued and outstanding common stock of EPHS Holdings. Paolo Gervasi and Calogero Caruso were the sole shareholders of Emerald and received a total of 14,000,000 shares of our common stock. The remaining 6,000,000 shares were issued to consultants, including 1,250,000 shares to our president, Gianfranco "John" Bentivoglio for services rendered as part of the negotiations of the Emerald Agreement. The transaction closed on February 27, 2018.

 

As a result of the transactions affected by the Share Exchange Agreement, Emerald became a wholly owned subsidiary of EPHS Holdings. Emerald is a development stage company with limited operations and no revenues to date. Emerald's business plan is to cultivate and distribute cannabis entirely within Canada.

 

On November 6, 2018, the Company executed a Share Exchange Agreement with MVC (the "MVC Transaction") and its shareholders (the "MVC Shareholders") whereby MVC Shareholders agreed to exchange all of their respective shares in MVC in consideration for 8,100,000 shares of EPHS common stock, with a par value of $0.001 per share (the "MVC Transaction"). In furtherance of the MVC Transaction, on January 4, 2019, the Company completed the purchase of lands located in Merritt, British Columbia, Canada with the purpose of the cultivation of cannabis. On January 11, 2019, the Company and MVC completed the MVC Transaction.


On October 29, 2019, EPHS Holdings, Inc. (the “Company”) completed its corporate continuation process whereby the Company changed its corporate jurisdiction from the State of Nevada to the Province of British Columbia, Canada (the “Continuation”). The Continuation was approved by the Company’s stockholders at the Company’s annual and special meeting on October 17, 2019. The British Columbia Registrar issued a Certificate of Continuation approving the Continuation on October 29, 2019 at 11:25 AM Pacific Time (the “Effective Time”).


As a result of the Continuation, the Company is now governed by its Notice of Articles and Articles under the Business Corporations Act (British Columbia) (the “BCBCA”) rather than its previous Nevada Articles of Incorporation and bylaws.


On November 12, 2019 the Company filed a change of its name from EPHS Holdings Inc to Skye Life Ventures Ltd under  the British Columbia Business Corporations Act. The British Columbia Registrar issued a Certificate of Name change November 12, 2019.

 

Business Strategy

 

Emerald Plants Health Source (EPHS), Inc., the Company's Canadian subsidiary, is a Health Canada Licensed Producer. EPHS is committed to organic and high-quality craft cannabis production. The Company's core strategy is to combine low cost energy, high yield cultivation methods and premium cannabis strains for scaled cannabis operations. EPHS's cultivation methods are proven through seven years of experience allowing us to compete with other low-cost producers in the market. With our expansion in Merritt through the company's second subsidiary, Merritt Valley Cannabis ("MVC"), the Company now has access to low-cost power, all the services required for a scaled low cost cannabis center, and when developed, will allow EPHS to be one the leading and most efficient cannabis producers in Canada. The Company is currently negotiating to expand its production capacity at its Montreal facility, where currently it has 10,000 square feet of production area and is planning on expanding that facility to 40,000 square feet through leasing additional space in the existing building.

  

Results of Operations

 

Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018

 

Revenues and Cost of Sales

 



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The Company generated no revenues in either the three months ended September 30, 2019 or the three months ended September 30, 2018. As a result, the Company did not generate any cost of sales for the three months ended September 30, 2019 or the three months ended September 30, 2018.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative ("SG&A") expenses were $367,666 and $111,977 for the three months ended September 30, 2019 and 2018, respectively. The increased selling, general and administrative expenses was mainly due to the increase in professional fees.

 

 Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

 

Revenues and Cost of Sales

 

The Company generated no revenues in either the nine months ended September 30, 2019 or the nine months ended September 30, 2018. As a result, the Company did not generate any cost of sales for the nine months ended September 30, 2019 or the nine months ended September 30, 2018.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative ("SG&A") expenses were $2,498,089 and $290,762 for the nine months ended September 30, 2019 and 2018, respectively. The increased selling, general and administrative expenses was mainly due to the increase in professional fees relating to the cost of the AGM and the continuation of the Company and the change in its corporate jurisdiction from Nevada to British Columbia Canada.

 

Liquidity and Capital Resources

 

We may experience illiquidity and may be dependent on our management and shareholders to provide funds to maintain our activities. However, there is no assurance that our management and shareholders will continue to fund our operations. We have no commitment for either additional debt or equity funding from any source.

 

Net cash used by operating activities for the nine months ending September 30, 2019 and 2018 was $518,698 and $223,616, respectively.

 

Net cash used by investing activities for the nine months ending September 30, 2019 and 2018 was $2,317,552 and $136,048, respectively.

 

Net cash provided by financing activities for the nine months ending September 30, 2019 and 2018 was $2,552,794 and $431,148, respectively.

 

At September 30, 2019 and 2018, the Company had cash of $200,736 and $68,187, and total assets of $3,196,474 and $209,543. Liabilities totaled $2,664,453 and $50,439 of which $98,355 and $4,368 were due to related parties. 

 

The accumulated deficit for the Company at September 30, 2019 totaled $(3,818,771) as compared to $(1,026,314) at September 30, 2018.

  

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 



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Summary of Critical Accounting Policies and Estimates

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions. We have identified in Note 2 - "Summary of Significant Accounting Policies" to the Financial Statements contained in this Quarterly Report certain critical accounting policies that affect the more significant judgments and estimates used in the preparation of the financial statements.


Item 4.  Controls and Procedures. 


As of the end of the period covered by this annual report, our management carried out an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Exchange Act. Based on this evaluation, as of the end of the period covered by this annual report, our Chief Executive Officer and our Chief Financial Officer concluded:

 

(i) that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow for timely decisions regarding required disclosures; and

 

(ii) that our disclosure controls and procedures are effective.


 

 

 



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PART II - OTHER INFORMATION

 

Item 1.  Legal Proceedings. 

 

No proceedings are pending to which the Company or any of its property is subject, nor to the knowledge of the Company, are any such legal proceedings threatened against the Company.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds. 

 

On January 15, 2019, pursuant to the terms of a Share Exchange Agreement, the Company acquired all of the issued and outstanding MVC shares in consideration for issuance of 8,100,000 shares of EPHS common stock, par value $.001 per share.

 

On February 11, 2019, the Company issued 25,000 shares for cash.

 

On March 11, 2019, the Company further issued 736,036 shares of common stock for cash.

 

On June 14, 2019, the Company further issued 2,250,000 shares of common stock for cash.

 

On June 14, 2019, the Company issued 2,250,000 shares of common stock to the owner of Redabe Holdings Inc. in compensation for advancing the Company CAD 2,375,000 (approximately $1,793,557) in the form of a mortgage to the Company's subsidiary.

 

As of September 30, 2019, the Company had 74,410,628 shares of common stock outstanding.

 

Item 3.  Defaults Upon Senior Securities. 

 

None.

 

Item 4.  Mine Safety Disclosures. 

 

None.

 

Item 5.  Other Information. 

 

None.

 

Item 6.  Exhibits. 


Exhibits

 

Description

31.1

 

Certification of the Company's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

 

Certification of the Company's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

 

Certification of the Company's Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

 

Certification of the Company's Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

  

XBRL Instance Document

101.SCH

  

XBRL Taxonomy Extension Schema

101.CAL

  

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

  

XBRL Taxonomy Extension Definition Linkbase

101.LAB

  

XBRL Taxonomy Extension Label Linkbase

101.PRE

  

XBRL Taxonomy Extension Presentation Linkbase

 




17



 


SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

         

SKYE LIFE VENTURES LTD.

 

Registrant

 

 

 

November 14, 2019

By:  

/s/ Gianfranco Bentivoglio

Date

 

GIANFRANCO BENTIVOGLIO,
Chief Executive Officer

 

 

 





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