EARTH LIFE SCIENCES INC - Quarter Report: 2016 June (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
. TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
001-31444
(Commission File Number)
EARTH LIFE SCIENCES INC.
(Name of small business issuer in its charter)
NEVADA |
| 98-0361119 |
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification No.) |
1324 Chemin de Chambly, Longueil, Quebec Canada J4J 3X3
(Address of principal executive offices) (Zip Code)
(514) 373-8411
Issuer's telephone number
Former name, former address and former fiscal year, if changed since last report: N/A
Check whether the registrant (1) filed all reports required to be filed by sections 13 or 15(d) of the Exchange Act during the past 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 X . No .
Large accelerated filer | . | Accelerated filer | . |
Non-accelerated filer | . (Do not check if a smaller reporting company) | Smaller reporting company | X . |
Check whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes . No X .
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
As of August 15, 2016 the registrant’s outstanding common stock consisted of 270,817,339 shares.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial statements included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial position and the results of our operations for the interim periods presented. Because of the nature of our business, the results of operations for the quarterly period and the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full fiscal year.
EARTH LIFE SCIENCES INC.
BALANCE SHEETS
(Unaudited
|
| June 30, 2016 |
| December 31, 2015 |
ASSETS |
|
|
|
|
Current |
|
|
|
|
Cash | $ | 114 | $ | 114 |
Accounts receivable |
| - |
| - |
Sales tax receivable |
| - |
| - |
Loan Receivable |
| - |
| - |
Total Current Assets |
| 114 |
| 114 |
Equipment |
| - |
| - |
Total Assets | $ | 114 | $ | 114 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and accrued liabilities | $ | 394,613 | $ | 394,613 |
Convertible Note and Loans payable |
| 332,163 |
| 332,163 |
Subscriptions received |
| - |
| - |
Total Liabilities |
| 726,776 |
| 726,776 |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Common Stock, at par value |
| 33,573 |
| 33,573 |
Additional Paid in Capital |
| 6,260,530 |
| 6,260,530 |
Deficit |
| (5,567,405) |
| (5,567,405) |
Total Stockholders' Deficit |
| (726,662) |
| (726,662) |
|
|
|
|
|
Total Liabilities and Stockholders' Deficit | $ | 114 | $ | 114 |
|
|
|
|
|
The Accompanying notes are integral part of these unaudited financial statements. | ||||
2
EARTH LIFE SCIENCES INC.
UNAUDITED STATEMENTS OF OPERATIONS
|
| Six months ended | ||
|
| June 30, |
| June 30, |
Period Ended |
| 2016 |
| 2015 |
|
|
|
|
|
REVENUES | $ | - | $ | 18,100 |
Total Revenues |
| - |
| 18,100 |
|
|
|
|
|
EXPENSES |
|
|
|
|
Amortization |
| - |
| - |
Interest expense |
| - |
| 1,912 |
Office and Administration |
| - |
| 11,123 |
Total Expenses |
| - |
| 13,035 |
NET INCOME (LOSS) FROM OPERATIONS |
| - |
| 5,065 |
Other Income and Expenses |
|
|
|
|
Unrealized Foreign Exchange Gain (Loss) |
| - |
| - |
Gain on forgiveness of debt |
| - |
| - |
Realized Gains (Losses) |
| - |
| - |
Interest income |
| - |
| - |
Total Other Income and Expenses |
| - |
| - |
NET INCOME (LOSS) |
| - |
| 5,065 |
Total Comprehensive income (loss) | $ | - | $ | 5,065 |
|
|
|
|
|
Basic and diluted loss per share | $ | (0.00) | $ | (0.00) |
|
|
|
|
|
Weighted average # of shares outstanding |
| 270,817,339 |
| 202,328,633 |
|
|
|
|
|
3
EARTH LIFE SCIENCES INC.
UNAUDITED STATEMENTS OF CASH FLOW
|
| Six months ended | ||
|
| June 30, |
| June 30, |
|
| 2016 |
| 2015 |
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
Net income (loss) for the period | $ | - | $ | 500 |
Adjustment for non-cash expenses |
|
|
|
|
Amortization |
| - |
| - |
Foreign currency loss (gain) |
| - |
| - |
Gain on Settlement of Debt |
| - |
| - |
Accrued interest on convertible debt |
| - |
| - |
Change in: |
|
|
|
|
Accounts Receivable |
| - |
| - |
Accounts payable and accrued liabilities |
| - |
| - |
Cash used in operating activities |
| - |
| 500 |
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
Purchase of equipment |
| - |
| - |
Cash used in Investing Activities |
| - |
| - |
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
Convertible Loan |
| - |
| - |
Loans payable |
| - |
| - |
Subscriptions received |
| - |
| - |
Cash from Financing Activities |
| - |
| - |
|
|
|
|
|
INCREASE (DECREASE) IN CASH FOR PERIOD |
| - |
| - |
Cash, beginning of period |
| 114 |
| 2,172 |
Cash (overdraft), end of period | $ | 114 | $ | 2,172 |
|
|
|
|
|
4
EARTH LIFE SCIENCES INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2016
NOTE 1 - NATURE OF BUSINESS
Nature of Business
Altus Explorations, Inc. (the "Company") was incorporated in the state of Nevada on November 2, 2001.
On October 1, 2010, Altus entered into a Share Exchange Agreement (the "Agreement") with UWD Unitas World Development Inc. ("UWD"), a privately held Canadian incorporated company. Pursuant to the Agreement, Altus issued 80,000,000 shares of common stock for the acquisition of 450 shares of common stock of The Canadian Tactical Training Academy Inc., representing 100% of the issued and outstanding shares of common stock, which were held by UWD. Further, Altus changed its name to Canadian Tactical Training Academy Inc. and increased the authorized share capital from 40,000,000 to 250,000,000 shares of common stock and then further from 250,000,000 to 450,000,000. The Company assumed the business Canadian Tactical Training Academy Inc., which is the training of law enforcement, security, investigation and protection for officers and individuals.
On June 2, 2014 the Company changed its name to Earth Life Sciences Inc. On June 12, 2015, the Company, through an option agreement, issued 225,000,000 shares to Mr. Song Bo, to earn the mineral rights for the White Channel mineral claims located in British Columbia.
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern and the ability of the Company to emerge from the Development stage are dependent upon management's successful efforts to raise additional equity financing to continue operations and generate sustainable significant revenues.
These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company will require significant additional financial resources and will be dependent on future financings to fund its ongoing operations as well as other working capital requirements. There is no guarantee that management will be able to raise adequate equity financings or generate profits from operations. These factors raise substantial doubt regarding the Company's ability to continue as a going concern.
Management of the Company has undertaken steps as part of a plan with the goal of sustaining Company operations for the next twelve months and beyond. These steps include: (a) continuing efforts to raise additional capital and/or other forms of financing; and (b) controlling overhead and expenses. Management is aware that material uncertainties exist, related to current economic conditions, which could cast a doubt about the Company's ability to continue to finance its activities. It is to be expected that the Company may incur further losses in the Development of its business and there can be no assurance that any of these efforts will be successful.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in U.S. dollars. The Company's fiscal year-end is December 31. The functional currency of the Company is Canadian Dollars
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 amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of impairment of long lived assets, expected tax rates for future income tax recoveries and determining the fair values of financial instruments.
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Equipment
Equipment is recorded at cost. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets which is three years for computers.
Impairment of Assets
The Company reviews the carrying value of its long-lived assets annually or whenever events or changes in circumstances indicate that the historical carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value cost of the asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.
Other Comprehensive Income
The Company reports and displays comprehensive income and its components in the financial statements. During the years ended December 31, 2015 and 2014, the Company had no components that would cause comprehensive income to be different than net loss.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting this standard, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
Basic and Diluted Loss per Share
Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the "if converted" method. For the years presented, diluted loss per share is equal to basic loss per share as the effect of the computations are anti-dilutive.
Financial Instruments
The carrying value of the Company's financial instruments, consisting of cash, accounts payable, convertible loans and subscriptions received in advance approximates their fair value. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Stock-based Compensation
Compensation cost related to share-based payments, such as stock options and employee stock purchase plans, are recognized in the financial statements based on the grant-date fair value of the award. The compensation cost associated with the issuance of stock options will be recognized over its vesting period based on the estimated grant-date fair value.
Stock awards outstanding under the Company's current plans are fully vested, therefore there is no unrecognized compensation cost related to non vested options. No options were granted or exercised during the years ended December 31, 2015 and 2014.
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Recent Accounting Pronouncements
In May 2009, the Financial Accounting Standards Board ("FASB") issued guidance that establishes general standards of accounting for and disclosure of events that occur subsequent to the balance sheet date but before financial statements are issued. The statements defines two types of subsequent events: 1) recognized subsequent events, which provide additional evidence about conditions that existed at the balance sheet date, and (2) non-recognized subsequent events, which provide evidence about conditions that did not exist at the balance sheet date, but arose before the financial statements were issued. Recognized subsequent events are required to be recognized in the financial statements, and non-recognized subsequent events are required to be disclosed. The adoption had no material impact on the Company's financial position, results of operations or cash flows.
In June 2009, the FASB issued the Accounting Standards Codification, which establishes a sole source of US authoritative GAAP. The Codification is meant to simplify user access to all authoritative accounting guidance by reorganizing US GAAP pronouncements into approximately ninety accounting topics within a consistent structure; its purpose is not to create new accounting and reporting guidance. The adoption of this guidance did not have an effect on the Company's results of operations, financial position or cash flows.
In June 2014, FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation . As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after 15 December 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.
In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met conditions which would subject these financial statements for additional disclosure.
We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.
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NOTE 3 - ACCOUNTS AND CONVERTIBLE LOANS PAYABLE
As at December 31, 2015, the Company had accounts payable of $317,941 and convertible loans payable of $422,534.
The Company has outstanding various convertible loans at the following terms:
Party |
| Original Amount |
| Balance |
| Interest Rate |
| Conversion Rate | ||||||
LagunaFinance - 2011 |
| $ | 77,464 |
|
| Demand |
|
| 0 | % |
| $ | 0.001 |
|
Unitas – 2011 |
|
| 107,588 |
|
| Demand |
|
| 0 | % |
| $ | 0.001 |
|
M. Landaverde - 2011 |
|
| 145,312 |
|
| Demand |
|
| 0 | % |
| $ | 0.001 |
|
SSIS – 2011 |
|
| 32,170 |
|
| Demand |
|
| 0 | % |
| $ | 0.001 |
|
SG - 2011 |
|
| 15,000 |
|
| Demand |
|
| 0 | % |
| $ | 0.001 |
|
TOTAL |
| $ | 422,534 |
|
|
|
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|
|
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|
|
|
|
The Loans are convertible at the shareholders' option into common stock at a conversion rate of $0.001 per common share. The Company may prepay the Loans at anytime without penalty or bonus.
As at December 31, 2015, the Company has not repaid all of the Loans, nor have the shareholders' provided a Notice of Conversion to the Company.
On July 15, 2015, the Company converted $45,000 of Loans into 45,000,000 shares of the Company.
NOTE 4 - COMMON STOCK
On April 25, 2014, the Company converted $55,000 of its convertible debt into 184,371 shares of common stock of the Company. Pre-split, this equated to 55,000,000 shares.
On June 2, 2015, the Company completed a reverse stock split of 40:1.
On June 10, 2015, the Company completed a reverse stock split of 8:1.
On June 19, 2015, the Company entered into an option agreement (“Agreement”) with Song Bo, a private mineral holder, to earn a 100% beneficial interest in certain mineral concessions known as the White Channel mineral claims (the “Property”). Under the terms of the Agreement the Company will have the right to purchase the right, title, and interest in the Property as well as enter onto the Property to conduct reconnaissance, exploration, and development work on the Property. In exchange, the Company issued 225,000,000 restricted shares and pay the sum of $180,000 payable in instalments of $30,000 on the 15th of every month commencing July 15, 2015 through December 15, 2015. In addition, the Company shall pay a further $50,000 on each anniversary of the Agreement for a period of four years commencing June 19, 2016 through June 19, 2019.
The Property is subject to a 4% NSR on precious metals, and also subject to royalty payments of $0.25 per tonne on the sale of pit run products or processed products; or $0.35 per tonne on the sale of processed mineral products where the selling price of the processed minerals products sell for a price in excess of $35 per tonne; or an amount of $1.00 per tonne on the same of processed mineral products where the selling price of the processed mineral products sell for a price in excess of $100 per tonne. 50% of the NSR can purchased by the Company for $1,000,000 at any time before the fifth year anniversary of the Agreement.
On July 2, 2015, the Company issued a total of 45,000,000 shares to satisfy certain outstanding convertible debt in the amount of $45,000.
The Company will maintain its security business as well as develop its mining interests.
8
NOTE 5 - INCOME TAXES
The Company is subject to United States federal and state income taxes at an approximate rate of 35%. The amount taken into income as deferred income tax assets must reflect that portion of the income tax loss carry forwards that is more likely-than-not to be realized from future operations. The Company has chosen to provide a full valuation allowance against all available income tax loss carry forwards, regardless of their time of expiry.
No provision for income taxes has been provided in these financial statements due to the net loss for the years ended December 31, 2015 and 2013. The potential tax benefit of these losses may be limited due to certain change in ownership provisions under Section 382 of the Internal Revenue Code and similar state provisions.
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
RESULTS OF OPERATIONS
Six months ended June 30, 2016 and 2015
Our net income for the six months ended June 30, 2016 totalled $-. This compares with our net income of $500 for the six months ended June 30, 2015. General and administrative expenses for the six months ended June 30, 2016 and 2015 were $- and $11,123, respectively.
We incurred interest expense during the six months ended June 30, 2016 and 2015 were $- and $1,912, respectively. The Company had revenues during the six months ended June 30, 2016 and 2015 were $- and $18,100, respectively.
LIQUIDITY AND CAPITAL RESOURCES
If we are unsuccessful in obtaining financing and fail to achieve and sustain a profitable level of operations, we may be unable to fully implement our business plans or continue operations. Future financing through equity, debt or other sources could result in the dilution of Company equity, increase our liabilities, and/or restrict the future availability and use of cash resources. Additionally, there can be no assurance that adequate financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to execute our business plans, and will be required to scale back the pace and magnitude of our oil and gas prospects drilling and development initiatives. We also may not be able to meet our vendor and service provider obligations as they become due. In such event, we will be forced to cease our operations.
FUTURE OPERATIONS
CASH REQUIREMENTS
During the twelve month period ending December 31, 2016, we project cash requirements of approximately $250,000 as we continue to restructure our activities.
Our estimated funding needs for the next twelve months are summarized below:
Estimated Funding Required During the Twelve Month Period Ending December 31, 2016
Operating, general and administrative costs |
| $ | 300,000 |
Revenue |
|
| 50,000 |
TOTAL |
| $ | 250,000 |
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment over the next twelve months ending June 30, 2016.
GOING CONCERN
The accompanying financial statements have been prepared assuming we will continue as a going concern. We incurred a net loss of $- for the six months ended June 30, 2015 and a net gain of $500 for the same period in 2015.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
There are no assurances that we will be able, over the next twelve months, to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings, bank financing or shareholder advances necessary to support Canadian Tactical Training Academy Inc.'s working capital requirements. To the extent that funds generated from operations and any private placements, public offerings or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to Canadian Tactical Training Academy Inc. If adequate working capital is not available, Canadian Tactical Training Academy Inc. may be required to cease its operations.
10
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. These conditions raise substantial doubt about our ability to continue as a going concern. There are no definitive agreements or arrangements for future funding.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our balance sheet, the statements of operations and stockholders' equity, and the cash flows statements included elsewhere in this filing.
ITEM 4 CONTROLS AND PROCEDURES
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Principal Executive Officer who is also our Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
As of June 30, 2015, management assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that the Company's management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) inadequate segregation of duties consistent with control objectives; (2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Principal Financial Officer in connection with the audit of our financial statements as of December 31, 2009 and communicated the matters to our management.
Management believes that the material weaknesses set forth in items (1), (2) and (3) above did not have an effect on the Company's financial results.
We are committed to improving our financial organization. As part of this commitment, we will i) create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company ii) preparing and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. This annual report does not include an attestation report of the Company's registered accounting firm regarding internal control over financial reporting.
Management's report is not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission.
11
PART II – OTHER INFORMATION
Exhibits required by Item 601 of Regulation S-B
(3) ARTICLES OF INCORPORATION AND BYLAWS
(10) MATERIAL CONTRACTS
10.1 | Convertible Loan Agreement between Altus Explorations Inc. and CodeAmerica Investments, LLC dated March 8, 2007 (incorporated by reference from our Current Report on Form 8-K, filed on March 13, 2007). |
10.2 | Convertible Loan Agreement between Altus Explorations Inc. and Paragon Capital, LLC dated March 8, 2007 (incorporated by reference from our Current Report on Form 8-K, filed on March 13, 2007). |
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.
Date: August 15, 2016
EARTH LIFE SCIENCES INC.
(Registrant)
By: /s/ Lin Han
Lin Han
12