Notes
to the Financial Statements
August
31, 2015
(Unaudited)
NOTE
1 - Organization and Operations
GreenPlex
Services, Inc. (“GreenPlex” or the “Company”) was incorporated on September 2, 2009 under the laws of
the State of Nevada for the purpose of serving both residential and commercial customers in the greater Spokane and Coeur d’
Alene area. Its services include all aspects of lawn care, tree and shrub maintenance, landscape maintenance and a multiphase
pest and insect control program. The Company is committed to a “Green Philosophy” and where feasible, utilizing
organic and socially responsible products, such as fertilizer and pesticides.
GreenPlex
decided to expand its business and abandon its landscape and property management services at the end of 2014. GreenPlex
management decided to redirect its future business and focus on the cannabis industry and provide a variety of services consisting
of consulting, infrastructure build out, equipment rental and staffing.
NOTE
2 - Significant and Critical Accounting Policies and Practices
Basis
of Presentation
The
accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules
and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial
statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.
Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial
statements should be read in conjunction with the financial statements of the Company for the transitional period ended November
30, 2014 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on March 24, 2015.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant
estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Recently
Issued Accounting Pronouncements
The
Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact
on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE
3 – Going Concern
As
reflected in the unaudited financial statements, the Company has an accumulated deficit of $930,511 at August 31, 2015, and had
a net loss and net cash used in operating activities for reporting period then ended. These
factors raise substantial doubt about the Company's ability to continue as a going concern.
The
Company is attempting to generate sufficient revenue; however, the Company’s cash position may not be sufficient to support
its daily operations. While the Company believes in the viability of its strategy to generate sufficient revenues and in
its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue
as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and in
its ability to raise additional funds. The financial statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
NOTE
4 - Other Assets - Joint Venture Investment
On
January 16, 2015 GreenPlex Services, Inc. executed an Agreement with C.S. Analytics LLC ("CSA"). Previously, Greenplex
and CSA had executed an Option to Enter Into a Joint Venture agreement dated March 24, 2014. Under the terms of the option
agreement, GreenPlex had the option to enter into a 50/50 joint venture with CSA upon payment of $1,500,000 for the formation
of the proposed joint venture. The Option to Enter Into a Joint Ventures was superseded by a new agreement between GreenPlex
and CSA. Pursuant to the new agreement, the $305,000 advanced to CSA as a non-refundable deposit and a note in the amount
of $20,000 plus accrued interest was converted to a 25% ownership interest in the operating laboratory located in Pullman, WA.
The laboratory located in Pullman, WA has received a license from the Washington State Liquor Control Board and is currently
operating and testing cannabis and cannabis related products for growers and processors in the state of Washington. The
new contract provides an option to GreenPlex to purchase an additional 25% ownership interest in the Pullman laboratory for $300,000
for a period of 45 days. This option was not executed and has not been extended.
The
Management has evaluated if the investment has become impaired by discussions with management of the Investee Company, review
of projections and budgets, and analysis of actual results. Based on this management believes that the investment has become fully
impaired as of August 31, 2015.
NOTE
5 – Convertible Notes Payable
On
April 8, 2014, the Company entered into a definitive agreement with an unaffiliated accredited entity and executed a convertible
promissory note relating to a loan in the amount of $75,000 at 8% interest per annum due December 31, 2014. The note's principal
and interest are convertible at any time for common stock at the price of $0.027 per share. This note was extended to June 30,
2015. This note is in default.
On
June 17, 2014, the Company entered into a definitive agreement with an unaffiliated accredited entity and executed a convertible
promissory note relating to a loan in the amount of $75,000 at 8% interest per annum. The note's principal and interest
are convertible at any time for common stock at the price of $0.15 per share and Two Hundred Fifty Thousand (250,000) stock purchase
warrants that are exercisable at $.60 per share for a period of three years after issuance. The Warrants are callable at
the option of GreenPlex for $0.001 per Warrant at any time after June 30, 2015 when the Common Stock trades at an average closing
sales price of $0.75 or more for a period of 20 consecutive trading days, subject to the common stock underlying the warrants
being registered with the Securities and Exchange Commission. This
note is in default.
On
October 31, 2014, the Company entered into a definitive agreement with an unaffiliated accredited investor and executed a convertible
promissory note relating to a loan in the amount of $50,000 at 8% interest per annum. The note's principal and interest
are convertible at any time for common stock at the price of $0.15 per share. The note expired March 31, 2015, and has not
been extended. This note is in default.
On
November 4, 2014, the Company entered into a definitive agreement with two unaffiliated accredited investors and executed two
convertible promissory notes relating to loans in the aggregate amount of $80,000 at 8% interest per annum. The two notes'
principal and interest are convertible at any time for common stock at the price of $0.15 per share. The notes expired March
30, 2015 and have not been extended. This note is in default.
Notes
payable with related parties are disclosed in Note 6.
NOTE
6 - Related Party Transactions
On
March 25, 2014, the Company entered into a definitive agreement with Mr. Manuel Graiwer and executed a ninety-day promissory note
relating to a loan in the amount of $60,000 at 6% interest per annum. The due date of this was extended to June 30, 2015.
This individual became a director of the company and an affiliate on April 30, 2014. As a consideration of the loan,
Greenplex issued a three years stock purchase warrant to purchase 550,000 shares of restricted common stock at $0.009 per share.
The Company valued these warrants issued at $2,100 on the date of grant using the Black-Scholes Option Pricing Model, and
recorded the fair value of warrants of $2,100 as additional paid-in capital. This
note is in default.
Accounting
and Tax Services
Certain
accounting and tax services are performed by accounting firm Murray & Josephson, CPAs, LLC, that is owned by Marty Murray,
a former officer and director of the Company. As of August 31, 2015 and November 30, 2014, the Company owes this accounting
firm $29,438 and $16,934, respectively, which is included with accounts payable and accrued expenses, and $12,504 was included
in the Company’s expenses for the nine months ended August 31, 2015.
Consulting
Services
Key
Financial Services, Inc., an entity that is owned by a 5% shareholder of the Company provides consulting services to the Company.
As of August 31, 2015 and November 30, 2014, the Company owes this firm $5,250 and has a credit of $10,750, respectively,
which is included with accounts payable and accrued expenses. $24,000 and $0 were included in the expenses for the nine
months ended August 31, 2015 and 2014, respectively.
Compensation
of officers
Included
in the financial statements, accounts payable and accrued expenses is $45,000 for the unpaid salaries at August 31, 2015.
At
August 31, 2015 and November 30, 2014, Greenplex had accounts receivable for services to 5% related parties in aggregate of $0
and $3,601, respectively.
NOTE
7 – Warrants
The
table below summarizes the Company’s warrant activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Warrant Shares
|
|
Exercise Price
Range
Per Share
|
|
Weighted Average
Exercise Price
|
|
Fair Value at
Date of Issuance
|
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, November 30, 2013
|
|
|
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
Granted
|
|
|
|
6,749,999
|
|
|
|
|
|
|
|
0.0036-0.60
|
|
|
|
0.066
|
|
|
|
29,206
|
|
|
|
882,695
|
|
|
Canceled
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Exercised
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Expired
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Balance, November 30, 2014
|
|
|
|
6,749,999
|
|
|
|
|
|
|
|
0.0036-0.60
|
|
|
|
0.066
|
|
|
|
29,206
|
|
|
$
|
882,695
|
|
|
Granted
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Canceled
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Exercised
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Expired
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
Balance, August 31, 2015
|
|
|
|
6,749,999
|
|
|
|
|
|
|
|
0.0036-0.60
|
|
|
|
0.066
|
|
|
|
29,206
|
|
|
$
|
882,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned and exercisable,
August 31, 2015
|
|
|
|
6,749,999
|
|
|
|
$
|
|
|
|
0.0036-0.60
|
|
|
$
|
0.066
|
|
|
$
|
29,206
|
|
|
$
|
882,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following table summarizes information concerning outstanding and exercisable warrants as of August
31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants
Outstanding
|
|
|
Warrants
Exercisable
|
|
Range
of Exercise Prices
|
|
Number
Outstanding
|
|
|
Average
Remaining
Contractual
Life
(in
years)
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Number
Exercisable
|
|
|
Average
Remaining
Contractual
Life
(in
years)
|
|
|
Weighted
Average
Exercise
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.0091
|
|
|
550,000
|
|
|
|
2.07
|
|
|
$
|
0.0091
|
|
|
|
550,000
|
|
|
|
1.60
|
|
|
$
|
0.0091
|
|
$0.00364
|
|
|
5,500,000
|
|
|
|
1.07
|
|
|
$
|
0.00364
|
|
|
|
5,500,000
|
|
|
|
.25
|
|
|
$
|
0.00364
|
|
$0.60
|
|
|
699,999
|
|
|
|
2.52
|
|
|
|
0.60
|
|
|
|
699,999
|
|
|
|
2.00
|
|
|
|
0.60
|
|
NOTE
8 – Subsequent Events
In
accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial
statements were available to be issued and has determined that it does not have any material subsequent events to disclose in
these financial statements.