CannaPharmarx Files Q2 2024 10-Q

TL;DR

CannaPharmarx (CPMD) filed its Q2 2024 10-Q. Financials and operations update.

AI Summary

CannaPharmarx, Inc. filed its 10-Q for the period ending June 30, 2024. The company, previously known as Golden Dragon Holding Co., Concord Ventures, Inc., and CCVG, Inc., is incorporated in Delaware and operates in the pharmaceutical preparations sector. Their business address is in Calgary, Alberta, Canada.

Why It Matters

This filing provides investors with an update on CannaPharmarx's financial performance and operational status for the second quarter of 2024.

Risk Assessment

Risk Level: medium — As a pharmaceutical company, CannaPharmarx faces inherent risks related to drug development, regulatory approval, and market competition.

Key Numbers

• Q2 2024 — Reporting Period (Covers the three months ended June 30, 2024)
• 12-31 — Fiscal Year End (Indicates the company's fiscal year concludes on December 31st)

Key Players & Entities

• CannaPharmarx, Inc. (company) — Filer of the 10-Q
• Golden Dragon Holding Co. (company) — Former name of CannaPharmarx, Inc.
• Concord Ventures, Inc. (company) — Former name of CannaPharmarx, Inc.
• CCVG, Inc. (company) — Former name of CannaPharmarx, Inc.
• 20240630 (date) — End of the reporting period
• 20240814 (date) — Filing date

FAQ

Key Financial Figures

• $3.30 — ional per gram pricing at approximately $3.30 Canadian dollars ("CAD") per gram. This

Filing Documents

• cannapharmarx_i10q-063024.htm (10-Q) — 907KB
• cannapharmarx_ex3101.htm (EX-31.1) — 11KB
• cannapharmarx_ex3102.htm (EX-31.2) — 11KB
• cannapharmarx_ex3200.htm (EX-32) — 5KB
• 0001683168-24-005699.txt ( ) — 4971KB
• cpmd-20240630.xsd (EX-101.SCH) — 51KB
• cpmd-20240630_cal.xml (EX-101.CAL) — 61KB
• cpmd-20240630_def.xml (EX-101.DEF) — 172KB
• cpmd-20240630_lab.xml (EX-101.LAB) — 337KB
• cpmd-20240630_pre.xml (EX-101.PRE) — 298KB
• cannapharmarx_i10q-063024_htm.xml (XML) — 655KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1

Financial Statements (unaudited)

Financial Statements (unaudited) 3 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations/Plan of Operation

Management's Discussion and Analysis of Financial Condition and Results of Operations/Plan of Operation 21 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4

Controls and Procedures

Controls and Procedures 30

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 31 Item 1A

Risk Factors

Risk Factors 31 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 31 Item 3 Defaults Upon Senior Securities 32 Item 4 Mine Safety Disclosures 32 Item 5 Other Information 32 Item 6 Exhibits 32

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CANNAPHARMAX, INC. CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS June 30, 2024 (Unaudited) December 31, 2023 ASSETS Current assets Cash $ 9,145 $ 650 Goods and services tax receivable 80,088 61,524 Accounts receivable 190,150 – Inventory 1,241,816 1,133,668 Total current assets 1,521,199 1,195,842 Non-current assets Property, plant and equipment, net 159,579 161,540 Right-of-use building, net 5,514,860 5,870,141 Investments 4,518,127 4,518,127 Total assets $ 11,713,765 $ 11,745,650 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities $ 8,651,952 $ 8,781,169 Accrued interest 1,143,932 523,680 Accrued legal settlement 190,000 190,000 Deferred revenue 432,893 – Notes payable 3,551,177 3,333,925 Convertible notes - net of discount 1,148,114 1,520,858 Derivative liability 645,298 1,264,388 Loan payable - related party 3,216,704 2,155,484 Liability for right-of-use building, current portion 179,255 190,177 Obligation to issue shares 3,588,613 204,220 Total current liabilities 22,747,938 18,163,901 Non-current liability Liability for right-of-use building 5,634,350 5,734,962 Total liabilities $ 28,382,288 $ 23,898,863 STOCKHOLDERS' DEFICIT Preferred stock series A, $ 1.00 par value, 100,000 shares authorized, 74,416 and 84,416 issued and outstanding as at June 30, 2024 and December 31, 2023, respectively $ 74,416 $ 84,416 Preferred stock series B, $ 1.00 par value, 3,000,000 shares authorized, 455,000 and 2,455,000 shares issued and outstanding as at June 30, 2024 and December 31, 2023, respectively 455,000 2,455,000 Preferred stock series C, $ 1.00 par value, 100,000 shares authorized, 100,000 shares issued and outstanding as at June 30, 2024 and December 31, 2023 100,000 750,000 Common stock, $ 0.0001 par value; 5,000,000,000 shares authorized, 662,501,405 an

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES CannaPharmaRX Inc. ("CPRX" or the "Company") was originally incorporated in the state of Colorado in August 1998 as Network Acquisitions, Inc. The Company focuses its business efforts on evaluation, negotiation, acquisition, and development of cannabis cultivation projects in Canada. On January 6, 2022, the Company entered into a 20-year operating lease with Formosa Mountain Ltd. for the use of a leased facility located in Cremona, Alberta, Canada. The facility was built in 2015 and was previously operating as a cannabis production facility until it was decommissioned, and the license cancelled by the previous owner making the facility ready for sale in 2020. CPRX recommissioned the 55,000 square foot facility which contains 11 growing rooms and 10 drying and packing rooms into a new indoor cannabis farm during 2022. The Company received an operating license from Health Canada on December 9, 2022, and a cannabis license from the Canada Revenue Agency ("CRA") on December 22, 2022. On February 21, 2023, the Company entered into a supply agreement with Y.S.A. Holdings Ltd ("Y.S.A."), an Israeli corporation, whereby the Company will supply 450kg of cannabis biomass in the form of dried flowers and dried trim per annum to Y.S.A over a two-year period. No biomass has been delivered to Y.S.A as at the date of this Report. Preliminary discussions with export partners would set conditional per gram pricing at approximately $3.30 Canadian dollars ("CAD") per gram. This price would be based on achieving satisfactory test results associated to tetrahydrocannabinol ("THC") and cannabidiol ("CBD") content of the dried flower. Basis of presentation The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standard Codification, the source of author

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued) Comprehensive income or loss ASC 220 Comprehensive Income establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As at June 30, 2024, and December 31, 2023, the Company determined that it had items that represented components of comprehensive income and therefore has included a statement of comprehensive income in the financial statements. Inventory Inventory is valued at the lower of cost and net realizable value, with cost determined using the weighted average cost method. Net realizable value is calculated as the estimated selling price in the ordinary course of business, less any estimated costs to complete and sell the goods. Costs are capitalized to inventory, until substantially ready for sale. Costs include direct and indirect labor, raw materials, consumables, packaging supplies, utilities, facility costs, quality and testing costs, production related depreciation, and other overhead costs. Leases The Company recognizes right-of-use assets and corresponding liabilities for leases with terms greater than 12 months or leases that contain a purchase option that is reasonably certain to be exercised as either operating or finance leases at the inception of an agreement where it is determined that a lease exists. This classification of operating or finance lease determines the presentation of corresponding expenses over the lifetime of the lease. Finance lease assets represent the right to use an underlying asset for the lease term, and finance lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at commencement date. A collateralized incremental borrowing rate based on the informa

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition The Company recognizes revenue from the sale of products in accordance with ASC 606, "Revenue Recognition" following the five steps procedure: Step 1: Identify the contract(s) with customers - The invoice has been generated and provided to the customer. Step 2: Identify the performance obligations in the contract - The performance obligations of delivery of products are stated in the invoice. Step 3: Determine the transaction price - The transaction price has been identified in the invoice. Step 4: Allocate the transaction price to performance obligations - The Company has allocated the transaction price to performance obligation in the invoice. Step 5: Recognize revenue when the entity satisfies a performance obligation - The Company has shipped out the product and, therefore, satisfied the performance obligation. The risk of loss is passed to the customers at the point of shipment. Foreign currency translation The functional currency and the reporting currency of the Company's US operations is USD. The functional currency of the Company's Canadian operations is CAD. Management adopted ASC 830 Foreign Currency Matters for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company's operations are translated into the reporting currency,

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023 NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (continued) Stock-based compensation The Company has adopted ASC Topic 718 Compensation - Stock Compensation , which establishes a fair value method of accounting for stock-based compensation plans. In accordance with guidance now incorporated in ASC Topic 718, the fair value of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on a straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. The fair value of share purchase warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The Company had no stock options outstanding as at June 30, 2024 or December 31, 2023. Long-lived assets The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. The long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value of the assets, the assets are written down to the estimated fair value. Fair values of assets and liabilities The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to

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