Years of Converting Notes to Shares
DEBT of 8.5 Million
BUT Revenue is only $5000/ month
https://www.otcmarkets.com/otcapi/company/financial-report/352659/content
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8
NOTE A – SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial
statement follows.
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included in this year-end report.
The consolidated financial statements include a company which is effectively controlled directly by the Parent
Company, where control is defined as the power to govern the financial operation policies. This control is
generally evidenced when the company directly or indirectly owns more than 50% of the voting rights of the
company’s share capital. Significant intercompany transactions have been eliminated in consolidation.
In May of 2006, the Company’s former parent, Green Endeavors LTD., formerly Net2Auction, Inc., purchased
50,000 shares (50,000,000 shares prior to the pre-reverse stock split on June 27, 2006) to gain a 50.02%
ownership of BizAuctions, Inc. On June 27, 2006, the Company had a reverse stock split whereby each
shareholder received one (1) share for each 1,000 shares owned. On June 28, 2006, the former parent company,
Green Endeavors LTD., acquired 50,000,000 post reverse split shares to gain a 99.9% ownership of the
Company’s outstanding common stock. In this transaction, the Company acquired 100% of BizAuctions, Corp.
from its parent. This transaction was valued at $154,400 or $0.003, per share.
As of September 30, 2022, and December 31, 2021, Delmar Janovec and Brent Crouch, ("Parent" or its
"Affiliates"), controlled approximately 65% and 69%, respectively, of the outstanding common stock of the
Company. Upon the conversion of the Series A and Series D Preferred stock owned by Delmar Janovec and
Brent Crouch would have approximately 92% and 92% voting control of the Company as of September 30,
2022, and December 31, 2021.
Effective August 17, 2006, a forward stock split was effective whereby each shareholder of record received
two (2) shares of common stock for each share owned.
Business and Basis of Presentation
BizAuctions, Inc. was formed as a Delaware Corporation on May 5, 1995, as Topper’s Brick Oven Pizza, Inc.
Since the inception of the Company there have been four (4) subsequent name changes to its current name,
CannaGrow Holdings, Inc.
CannaGrow Holdings changed its business model during the spring of 2014 and has entered into the Medical
and Recreational Marijuana industry in the State of Colorado as a Lessor, Liaison, and Consultant to
developers, licensed growers, and operators.
During the reporting period the Company worked as a property manager on a 20-acre lease in which the
Company acted as a Liaison with the various County and State Agencies, and the Utility Companies. Also,
the Company is exploring potential business development opportunities and ancillary services within the real
estate industry.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9
NOTE A – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Business and Basis of Presentation-(Continued)
CannaGrow Holdings, Inc. does not and will not, until such time as Federal law allows, grow, harvest,
distribute or sell marijuana or any substance that violate the laws of the United States of America.
The Company operates out of its office in Pueblo, Co., and has two (2) full time employees at the end of this
reporting period, 2022.
CannaGrow Holdings revenue from operations for the quarter ending September 30, 2022, decreased to
$15,000 from $215,585 for the corresponding quarter ending September 30, 2021. The change in revenues is
due to business fluctuations, and changes in the business model.
Cash and Cash Equivalents
For the purposes of the Statements of Cash Flows, the company considers all highly liquid debt instruments
purchased with a maturity date of three months or less to be cash equivalents.
Income Taxes
The Company has adopted Financial Accounting Standard No. 109 (SFAS 109) which requires the recognition
of deferred tax liabilities and assets for the expected future tax consequences of events that have been included
in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined
based on the difference between financial statements and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse. Temporary differences between
taxable income reported for financial reporting purposes and income tax purposes are insignificant.
Net Loss Per Common Share
The Company computes earnings per share under Financial Accounting Standard No. 128, "Earnings Per
Share" (SFAS 128). Net loss per common share is computed by dividing net loss by the weighted average
number of shares of common stock and dilutive common stock equivalents outstanding during the year.
Dilutive common stock equivalents consist of shares issuable upon conversion of convertible preferred shares.
During the periods ended September 30, 2022, and December 31, 2021, common stock equivalents are not
considered in the calculation of the weighted average number of common shares outstanding because they
would be anti-dilutive, thereby decreasing the net loss per common share.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10
NOTE A – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Revenue Recognition
Revenue is recognized at the time the consulting services is provided to a client.
Advertising
The Company follows the policy of charging the costs of advertising to expenses as incurred. For the periods
ended September 30, 2022, and December 31, 2021, advertising costs were not material to the statement of
loss.
Liquidity
As shown in the accompanying financial statements, the Company has incurred a loss from operations of
($15,153) during the period ended September 30, 2022. As of September 30, 2022, the Company had working
capital deficit of ($835,771). In order for the Company to sustain operations, additional working capital must
be raised by increases in revenue realizing profitable margins, by the sale of equity securities, advances or
loans from financial institutions or its affiliates.
Concentrations of Credit Risk
Financial instruments and related items, which potentially subject the Company to concentrations of credit
risk, consist primarily of cash, cash equivalents and related party receivables. The Company places its cash
and temporary cash investments with credit quality institutions. At times, such investments may be in excess
of the FDIC insurance limit.
Stock Based Compensation
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition
and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123, "Accounting for StockBased Compensation," to provide alternative methods of transition for a voluntary change to the fair valuebased method of accounting for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company has chosen to continue to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25 and related interpretations.
Accordingly, compensation expense for stock options is measured as the excess, if any, of the fair market value
of the Company's stock at the date of the grant over the exercise price of the related option. The Company has
adopted the annual disclosure provisions of SFAS No. 148 in its financial reports for the reporting periods of
September 30, 2022, and December 31, 2021.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11
NOTE A – SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Comprehensive Income
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130),
establishes standards for reporting and display of comprehensive income, its components, and accumulated
balances. Comprehensive income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items
that are required to be recognized under current accounting standards as components of comprehensive income
be reported in a financial statement that is displayed with the same prominence as other financial statements.
The Company adopted SFAS 130 during the periods ended September 30, 2022, and December 31, 2021, and
has no items of comprehensive income to report.
Segment Information
Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise, and
Related Information (SFAS 131) establishes standards for reporting information regarding operating segments
in annual financial statements and requires selected information for those segments to be presented in interim
financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about
products and services and geographic areas. Operating segments are identified as components of an enterprise
about which separate discrete financial information is available for evaluation by the chief operating decision
maker, or decision-making group, in making decisions to allocate resources and assess performance. The
information disclosed herein, materially represents all of the financial information related to the Company's
principal operating segment.
New Accounting Pronouncements
SFAS No. 168. In June of 2009, the Financial Accounting Standards Board, (“FASB”), issued SFAS No. 168,
The FASB Accounting Standards Codification, and the Hierarchy of Generally Accepted Accounting
Principles-replacement of SFAS No. 162. No 168 established the FASB Accounting Standards Codification
as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation
of financial statements in conformity with generally accepted accounting principles. No.168 explicitly
recognizes rule and interpretive releases of the Securities and Exchange Commission (SEC) under federal
securities laws issued for fiscal years and interim periods ending after September 15, 2009. The Company has
adopted SFAS No. 168 and there was no impact on the Company’s consolidated financial statements or results
of operations.
SFAS No. 165. In May of 2009, the Financial Accounting Standards Board, (“FASB), issued SFAS No. 165,
Subsequent Events No. 165 establishes general standards of accounting for, and requires disclosures of events
that occur after the balance sheet date but before the financial statements are issued or available to be issued.
SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009 and should be
applied prospectively. The Company has adopted SFAS 165 and there was no impact on the Company’s
consolidated financial statements or results of operations.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
NOTE B – ACQUISITION
On June 28, 2006, the Company entered into a purchase agreement ("Agreement") with Green Endeavors
LTD., formerly Net2Auction, Inc., to acquire a 100% interest in BizAuctions, Corp. for the issuance of Fifty
(50,0000,000) million shares of common restricted stock.
NOTE C – DUE FROM AFFILIATES
The Company had zero amounts of receivables due from Affiliates as of this reporting period, September 30,
2022.
NOTE D – INVENTORY
Inventory is valued at the lower of cost or market value.
NOTE E – RELATED PARTY TRANSACTIONS
During the calendar year 2012, the Company issued 33,333,300 shares of common restricted stock at $0.015,
per share, to an officer and director of the Company in exchange for a partial reduction of a note payable, in
the amount of $49,999.
During the calendar year 2012, the Company issued 1,090,910 shares of common restricted stock at $0.037,
per share, to an officer and director of the Company in exchange for a partial reduction of a note payable in
the amount of $40,367.
During the calendar year 2012, the Company issued 508,075 shares of common restricted stock at $0.02, per
share, to an officer and director of the Company in exchange for a partial reduction of a note payable, in the
amount of $10,162.
During the calendar years 2009 and 2008, the Company issued its parent 60,000,000 shares of common
restricted stock and 42,000,000 of Series A Preferred for services rendered and financial guarantees.
During the calendar year 2009, the Company issued 50,000,000 shares of common restricted stock to the
officers of the Company for services rendered and financial guarantees.
During the calendar year 2009, the Company issued its parent 10,000,000 shares of Series D Preferred in
exchange for the partial reduction of debt in the amount of $179,046 owed to its parent.
During the calendar year 2008, the Company issued 8,000,000 shares of restricted common stock to an officer
of the Company for the conversion of debt in the amount of $80,000 that was owed to the officer of the
Company.
On June 28, 2006, the Company purchased 100% of Green Endeavors LTD., formerly Net2Auction, Inc.’s
subsidiary, BizAuctions, Corp. for the issuance of Fifty (50,000,000) million shares of its common restricted
stock. The total value of the transaction was $154,400.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13
NOTE F – NOTES PAYABLE-RELATED PARTY
As of September 30, 2022, the Company had notes payable to an officer of the Company in the amount of
$416,234. The note is payable on demand and is non-interest bearing and is convertible into common stock, at
the option of the note holder.
On September 30, 2022, the Company had notes payable to Brent Crouch, a former officer, in the amount of
$416,234. The note is payable on demand and interest of 9% and is convertible into common stock, at the
option of the note holder.
NOTE G – NOTES PAYABLE
The Company received notice during the 4th quarter 2021 from the accredited investors holding debt
instruments in the Company that all of the convertible promissory notes and accrued interests were forgiven,
effectively immediately. The cancellation was due in part to the reinterpretation of the SEC Regulations
governing Convertible Promissory Notes.
(For additional information, please see Year-End reports for December 31, 2021 and December 31, 2020 filed
with the OTC Markets at, http://www.otckmarkets.com ).
NOTE H – NOTE RECEIVABLE
During the 4th quarter 2021, the Company determined the Note Receivables to be uncollectible.
NOTE I– STOCHOLDERS’ DEFICIT
Preferred Stock:
The Company is authorized to issue 150,000,000 shares with 100,000,000 of Series A Preferred stock,
5,000,000 shares of Series B Preferred stock, 20,000,000 shares of Series C Preferred stock, and 25,000,000
shares of Series D Preferred stock.
The Series A Preferred stock is convertible at the option of the holder into common stock at the rate of 10
shares of common for every one share of Series A Preferred after one year from the date of issue. Each share
of Series A Preferred stock has voting rights equal to 10 shares of common stock.
The Series B Preferred stock is convertible at the option of the holder into common stock at the rate of 1 share
of common for each share of Series B after one year from the date of issue. Each share of Series B Preferred
stock has voting rights equal to 1 share of common stock.
The Series C Preferred stock has a stated conversion value of $5.00, per share, upon conversion to common
stock. Each share of Series C Preferred stock has voting rights equal to five shares of common stock.
CannaGrow Holdings, Inc.
(formerly BizAuctions, Inc.)
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14
NOTE I– STOCHOLDERS’ DEFICIT-(CONTINUED)
The Series D Preferred stock has a stated conversion value of $2.00 divided by 50% of the average closing
price of the Common Stock on five business days preceding the date of conversion. Each share of the Series
D Preferred stock has voting rights equal to the conversion factor at the time of conversion.
As of September 30, 2022, and December 31, 2021 respectively, the Company had 42,000,000 and 42,000,000
shares of Series A preferred stock outstanding, 0 and 0 shares of Series B preferred stock outstanding, 184,500
and 134,500 shares of Series C preferred stock outstanding, 10,000,000 and 10,000,000 shares of Series D
preferred stock outstanding
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