U.S.
Securities and Exchange Commission
Washington, D.C. 20549
FORM
10-K/A-1
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the fiscal year ended December 31, 2015
OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the transition period from _______ to ________
001-31444
(Commission File
Number)
EARTH
LIFE SCIENCES INC.
(Name of small business
issuer in its charter)
NEVADA
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98-0361119
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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Suite
880, 50 West Liberty Street, Reno, Nevada, 89501
(Address of principal executive offices) (Zip Code)
(514)
500-4111
Issuers telephone number
Former
name, former address and former fiscal year, if changed since last report: N/A
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which
registered
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Common
Stock
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CLTS
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OTC
Markets
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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 o No x
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such files).
Yes o No x
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a 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. (Check one):
Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
(Do
not check if a smaller reporting company)
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Smaller
Reporting Company x
Emerging
Growth Company o
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If
an emerging growth company, indicate by check mark 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. o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES . o
NO x
State
the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: As of March
15, 2016, the registrants outstanding common stock consisted of 270,817,339 shares. Of these shares 45,817,339 are held by non-affiliates
and have a market value of $nil.
EXPLANATORY
NOTE
This
Amendment No. 1 (this Amendment) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (the
Form 10-K) of Earth Life Sciences Inc.is being filed for the purpose of revising the financial statements for the
year ended December 31, 2015.
PART
I
This
annual report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors, including the risks in the section entitled Risk Factors that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements.
Although
we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United
States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our
financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles (US GAAP). In this annual report, unless otherwise specified, all dollar amounts are expressed
in United States dollars. All references to common shares refer to the common shares in our capital stock.
ITEM
1. DESCRIPTION OF BUSINESS
COMPANY
HISTORY
We
were incorporated in the State of Nevada on November 2, 2001 under the name Altus Explorations Inc. (Altus) as a company engaged
in the acquisition and exploration of oil and natural gas properties. The company has not been able to secure sufficient financing
to act on oil and gas investment opportunities as they were identified. Therefore, we did very little business and showed very
limited activity, with no profitability. In September 2010 we chose to enter the expanding field of training of peace and law
enforcement officers as well as other professionals involved in the fields of security and safety oriented civilian training at
both the individual and corporate levels. and entered into an agreement, in principle, to purchase Canadian Tactical Training
Academy Inc. from UWD Unitas World Development Inc. (UNITAS), a private Canadian company. We refer to this asset purchase
transaction as the Acquisition. On October 1, 2010, Altus entered into a Share Exchange Agreement (the Agreement)
with Unitas. 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. On November 4, 2010, Altus changed its name to Canadian Tactical Training Academy Inc. (CTTA) (the Company
subsequently changed its name to Earth Life Sciences Inc. on June 2, 2014) 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.
INVESTMENT
IN WHITE CHANNEL MINERAL CLAIMS
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 shall issue 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 (2,206 lbs.) 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.
The
Property consists of the following claims located in the caribou Mining Division in the province of British Columbia:
Tenure
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Tenure
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Map
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Mining
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Number
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Type
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Ownership
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Number
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Division
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399611
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Mineral
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100%
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093A024
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CARIBOO
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399044
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Mineral
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100%
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093A024
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CARIBOO
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416708
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Mineral
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100%
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093A024
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CARIBOO
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Geology
- Technical
The
local geology represents typical Cariboo complexity wit flow remnants of Miocene Basaltic age, with occasional window displaying
underlying white channel clasts, being part of a much older Cariboo basement with origin to the North-East. These gravels consist
of well-rounded white quartz and minor micaceous sericite clays rather loosely cemented made up of 1 cm to 10 cm of white aggregates
within the clays. The East and Northeast parts of the Claim Group are covered by older Triassic volcanics, mostly grey to green
Alkali Basalts, when oxidized appears red to maroon on the surface. The northern part of property was reported on by Kruchowski
(1978) identifying a cohesive blue clay over and underlying the quartz gravels passing downward into well sorted and rounded coarse
quartz sand. To the west, the flat-lying Miocene Flows are evident along a front of over 2 km. South to North substantial areas
of white channel material are covered up. The claims have been the subject
of a series of trench works to the west of China Cabin Lake. All previous testing has resulted in consistent grading of roughly
20% sericite clay matrix and 80% of a fairly uniformly graded 3/4 inch quartz clasts. The trench work covers
some 5 acres and displays a uniform grading to a depth of 6 metres.
Geology
– General
The
claims are an excellent footprint of industrial silica. The silica conglomerate outcrops are found on ridges to the west of China
Cabin Lake. The known deposit has a spotty outcropping thought to contain at least 100,000
cubic yards of silica rich material (approx. 250,000 tonnes). This material can be used for a host of product lines including
landscape rock, cement additives, silicon feed, mica, artisan clays, concrete aggregate, agricultural fillers, paint, window and
bottle glass, fibre optics, porcelain and ceramics. Half a metric tonne of plus 3 inch clasts have been hand cobbed from
the various trench exposures and surface outcrops across the White Channel claim. The cobbles are uniformly distributed across
the south and western edges of the property. For the initial testing, 2048 grams of split samples were submitted for crushing
tests. The clasts were only run through a jaw crusher and the materials screened for particle size development. In the test crushing
(1 opening jaw) of the cobbles sampled from the property the following size chart was obtained:
White
Channel Cobble Crush Test
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Certificate
No
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Sample
Name
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Assay
Wt. (g)
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Assay
Wt. (kg)
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Weighted
Average
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0V0681RA
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Cobble#(1-5)
+ 1 inch
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152
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0.17%
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0V0681RA
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Cobble#(1-5)
+ 1/2 inch
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28.4
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32.55%
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0V0681RA
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Cobble#(1-5)
+ 3/8 inch
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10.9
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12.49%
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0V0681RA
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Cobble#(1-5)
+ 1/4 inch
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38.1
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43.67%
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0V0681RA
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Cobble#(1-5)
+ 10 mesh
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27.7
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31.75%
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0V0681RA
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Cobble#(1-5)
+ 20 mesh
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8.7
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9.97%
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0V0681RA
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Cobble#(1-5)
+ 40 mesh
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6.3
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7.22%
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0V0681RA
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Cobble#(1-5)
+ 80 mesh
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4.4
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5.04%
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0V0681RA
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Cobble#(1-5)
+ 100 mesh
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945.2
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1.08%
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0V0681RA
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Cobble#(1-5)
+ 150 mesh
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372.5
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0.43%
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0V0681RA
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Cobble#(1-5)
+ 200 mesh
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390.6
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0.45%
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0V0681RA
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Cobble#(1-5)
+ 400 mesh
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249.8
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0.29%
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0V0681RA
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Cobble#(1-5)
- 400 mesh
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89.9
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0.10%
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2,200.0
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124.5
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These
results indicate that only primary crushing of the product is required to obtain a host of finer products without any additional
processing costs. The samples are available to be viewed at the Company offices.
The
chart above details the weight percent of the crushing product with a clear working size of ½ inch to 10 mesh as a primary
size split. The finer products will become greater as the materials is re-handled. However, each current grain size has its own
industrial application.
Without
a great deal of processing, the White Channel property offers an industrial mineral source for white decorative aggregate. The
product can be mined in a fashion similar to a normal sand and gravel deposit. The main product produced from the property will
be coarse grained, rounded and frosted white quartz pebbles. The product can be bulked shipped and potentially bagged on site
for sale into the landscape markets in Western Canada and the west coast of the United States. The product can be either direct
shipped by truck and transfer or trans-loaded at a rail siding in Williams Lake, which is 65 kilometers west of the property.
Location
and Access
The
property is located approximately two kilometers west of the town of Horsefly. The claim consists of 20 units or 500 hectares,
with five units running north south and four units running east west. The rectangular claim block is bordered on the north by
the main paved all weather regional highway running east, 51 kilometers from 150 Mile House to Horsefly. Logging road access is
right to the center of the claim off the main paved road. Additional logging roads allow access to the southeast and southwest
corners of the claim.
Elevations
range roughly from 800 to 900 metres ASL with the property being slightly hilly with substantial tree cover. Four small, distinct
lower boggy areas are noted across the property with streams bordering the northern and eastern edges. China Cabin Lake is wholly
contained along the eastern border of the claim. The lake is fed and then emptied by a stream system running due north and south
of the main lake. China Cabin Lake sits at an elevation of 827 metres ASL.
Heavy
equipment for developing and processing the pebbles and subsequent additional minerals is readily available from Horsefly and
surrounding towns such as Williams Lake. A local work force is also present.
The
climate in the Caribou region is generally mild but can become harsh for extended periods in the winter. The operation would have
to be suspended during the winter months due to the problems with equipment freeze up. Full production could be possible on the
property roughly from May to November each year. The region has a large logging business and land clearing could be accomplished
during the winter months when the lower elevations are frozen to allow equipment traffic. This would also facilitate trench exploration
work during the non-production periods. The general positioning of the property makes it an excellent candidate to sustain a commercial
extraction and production operation.
INVESTMENT
IN CANADIAN TACTICAL TRAINING ACADEMY INC.
The
CANADIAN TACTICAL TRAINING ACADEMY (CTTA), a wholly owned subsidiary, was an educational organization to
provide professional training and operational objectives by offering the tools and guidance required to enhance careers and ensure
the survival of its participants. CTTA offers specialized programs such in :Executive Protection, Investigation and Surveillance,
Rapid Integrated Survival Kombat (RISK) System, Tactical Firearms, Handcuffing, Airport and Airline Security (IATA and ICAO standards),
Ports Facilities and Maritime Security (ISPS Code), Basic SWAT Techniques, Corporate Safety Awareness, and much more. Our civilian
training programs are recognized by numerous notable corporations, and our instructors are proud members of several prestigious
law enforcement and security associations.
The
operations of CTTA started in October of 2010 and ended on December 31, 2015. Sales revenue peaked in 2013 at $75,044. The subsidiary
incurred losses in every year and was unable to continue and provide professional services.
ITEM
1A. RISK FACTORS
RISK
FACTORS ASSOCIATED WITH OUR BUSINESS
You
should carefully consider the risks and uncertainties described below and the other information in this annual report. These are
not the only risks we face. Additional risks and uncertainties that we are not aware of or that we currently deem immaterial also
may impair our business. If any of the following risks actually occur, our business, financial condition and operating results
could be materially adversely affected.
Much
of the information included in this annual report includes or is based upon estimates, projections or other forward-looking
statements.
Such
forward-looking statements include any projections or estimates made by us and our management in connection with our business
operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and
reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation
to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Such
estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below.
Again, we caution readers of this annual report that important factors in some cases have affected and, in the future, could materially
affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections
or other forward-looking statements. In evaluating us, our business and any investment in our business, readers should
carefully consider the following factors.
WE
HAVE A LIMITED OPERATING HISTORY.
We
have a limited operating history upon which an evaluation of our future prospects can be made. Our business history has been limited
to oil and gas exploration, mineral exploration and the training of law enforcement personnel and personal security. Since inception,
our operation has been generating losses and we cannot give assurances that we will be successful in generating profits in the
future.
We
are regarded as a new or start-up venture with all of the unforeseen costs, expenses, problems, and difficulties to which such
ventures are subject to. We cannot give assurances that we will be able to raise the financing necessary to maintain our current
operation. Therefore, you may lose your entire investment in us.
BECAUSE
WE HAVE HISTORICALLY INCURRED LOSSES AND THESE LOSSES MAY INCREASE IN THE FUTURE, WE MUST BEGIN GENERATING A PROFIT FROM OUR OPERATIONS.
IF WE DO NOT BEGIN GENERATING A PROFIT WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
We
have never been profitable. If we do not obtain additional financing or begin generating revenues within the next year, we will
have to reduce or suspend or operations. In order to become profitable, we will need to generate significant revenues to offset
our cost of revenues, sales and marketing, research and development and general and administrative expenses. We may not achieve
or sustain our revenue or profit objectives and our losses may continue or increase in the future in which case you might lose
your investment.
WE
HAVE A LIMITED OPERATING HISTORY AND IF WE ARE NOT SUCCESSFUL IN CONTINUING TO GROW OUR BUSINESS, THEN WE MAY HAVE TO SCALE BACK
OR EVEN CEASE OUR ONGOING BUSINESS OPERATIONS.
We
have no history of substantial revenues from operations. We have yet to generate positive earnings and there can be no assurance
that we will ever operate profitably. Our company has a limited operating history and our success is significantly dependent on
increased sales and new product offerings.
We
will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the
absence of a significant operating history. We may be unable to increase sales or operate on a profitable basis. We are in the
development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development
stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their
investment in our company.
BECAUSE
OF THE EARLY STAGE OF DEVELOPMENT AND THE NATURE OF OUR BUSINESS, OUR SECURITIES ARE CONSIDERED HIGHLY SPECULATIVE.
Our
securities must be considered highly speculative, generally because of the nature of our business and the early stage of our development.
Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or
debt in order to continue our business operations.
Significant
investment risks and operational costs are associated with our exploration, development and mining activities. These risks and
costs may result in lower economic returns and may adversely affect our business.
Mineral
exploration is frequently unproductive. If mineralization is discovered, it may take a number of years until production is possible,
during which time the economic viability of the Project may change.
Development
projects may have no operating history upon which to base estimates of future operating costs and capital requirements. Development
project items such as estimates of reserves, recoveries and cash operating costs are to a large extent based upon the interpretation
of geologic data, obtained from a limited number of sampling techniques, and feasibility studies. Estimates of cash operating
costs are then derived based upon anticipated tonnage to be processed, the configuration of the ore body, expected recovery rates,
comparable facility and equipment costs, anticipated climate conditions and other factors. As a result, actual cash operating
costs and economic returns of any and all development projects may materially differ from the costs and returns estimated, and
accordingly, our financial condition and results of operations may be negatively affected.
BECAUSE
THE MARKET FOR OUR COMMON STOCK IS LIMITED, YOU MAY NOT BE ABLE TO RESELL YOUR SHARES OF COMMON STOCK.
There
is currently a limited trading market for our common stock. Our common stock trades on the OTC Bulletin Board operated by the
National Association of Securities Dealers, Inc. under the symbol CLTS. As a result, you may not be able to resell
your securities in open market transactions.
BECAUSE
THE SEC IMPOSES ADDITIONAL SALES PRACTICE REQUIREMENTS ON BROKERS WHO DEAL IN OUR SHARES THAT ARE PENNY STOCKS, SOME BROKERS MAY
BE UNWILLING TO TRADE THEM. THIS MEANS THAT YOU MAY HAVE DIFFICULTY IN RESELLING YOUR SHARES AND MAY CAUSE THE PRICE OF THE SHARES
TO DECLINE.
Our
shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934, which imposes additional
sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. In particular, prior
to selling a penny stock, broker/dealers must give the prospective customer a risk disclosure document that: contains a description
of the nature and level of risk in the market for penny stocks in both public offerings and
secondary trading; contains a description of the broker/dealers duties to the customer and of the rights and remedies available
to the customer with respect to violations of such duties or other requirements of Federal securities laws; contains a brief,
clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the
significance of the spread between the bid and ask prices; contains the toll free telephone number for inquiries on disciplinary
actions established pursuant to section 15(A)(i); defines significant terms used in the disclosure document or in the conduct
of trading in penny stocks; and contains such other information, and is in such form (including language, type size, and format),
as the SEC requires by rule or regulation. Further, for sales of our securities, the broker/dealer must make a special suitability
determination and receive from you a written agreement before making a sale to you. Because of the imposition of the foregoing
additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from
reselling your shares and may cause the price of the shares to decline.
TRADING
OF OUR STOCK MAY BE RESTRICTED BY THE SECS PENNY STOCK REGULATIONS WHICH MAY LIMIT A STOCKHOLDERS ABILITY TO BUY AND SELL OUR
STOCK.
The
U.S. Securities and Exchange Commission has adopted regulations which generally define penny stock to be any equity
security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements
on broker-dealers who sell to persons other than established customers and accredited investors. The term accredited
investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess
of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.
The
penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations
for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements
showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to
the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability
of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the
marketability of, our common stock.
WE
DO NOT EXPECT TO DECLARE OR PAY ANY DIVIDENDS.
We
have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends
for the foreseeable future.
ANTI-TAKEOVER
PROVISIONS
We
do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a change in our management and directors.
OUR
BY-LAWS CONTAIN PROVISIONS INDEMNIFYING OUR OFFICERS AND DIRECTORS AGAINST ALL COSTS, CHARGES AND EXPENSES INCURRED BY THEM.
Our
By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount
paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made
a party by reason of his being or having been one of our directors or officers.
ITEM
2. DESCRIPTION OF PROPERTY
We
do not own real property. Corporate offices and training facilities were rented from UWD Unitas World Development Inc. until March
31, 2015. The space was fully furnished and secure office space, including a network of personal computers for a minimum of seven
persons located at 7000 Chemin Cote de Liesse, Suite 8, Montreal, Quebec. UWD also provided printers, telephone system, e-mail
system, Fax, photocopier, security system including video surveillance and recording system, storage space, fully equipped kitchen
and eating area, meeting area, and cleaning services. After March 31, 2015 the space was operated by 3041557 Canada Ltd. The cost
of the above rental was $8,000 per year.
ITEM
3. LEGAL PROCEEDINGS
From
time to time we may be involved in litigation incidental to the conduct of our business, such as contractual matters and employee-related
matters. Currently, we are not a party to any material legal proceeding or litigation, whether current or threatened, nor are
any of our officers, directors or affiliates, a party adverse to us in any legal proceeding or litigation.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No
matters were submitted to a vote of shareholders.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND PURCHASE OF EQUITY SECURITIES
Our
authorized number of shares is 450,000,000.
On
June 2, 2014 we declared a reverse stock split and each shares of common stock outstanding were replaced by one fortieth of a
share of common stock. No fractional shares were issued. As of that date and following the reverse split of the stock, we had
a total of 632,277 common shares issued and outstanding.
On
April 25, 2014, we converted $55,000 of convertible debt into 184,375 shares of common stock (pre-split 59,000,000 shares.)
As
of December 31, 2014, there were 169 holders of record of our common stock. As of such date, 816,656 common shares were issued
and outstanding.
TRANSFER
AGENT
Our
common shares are issued in registered form. ClearTrust LLC, 16540 Pointe Village Drive, Suite 210, Lutz, FL, 33558 (Telephone:
813-235-4490; Facsimile: 813-388-4549) is the registrar and transfer agent for our common shares. We have no other exchangeable
securities.
DIVIDEND
POLICY
We
have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our
common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business.
Our future dividend policy will be determined from time to time by our board of directors.
ITEM
7. MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
RESULTS
OF OPERATIONS
TWELVE
MONTHS ENDED DECEMBER 31, 2015 AND 2014
Our
net loss for the twelve months ended December 31, 2015 totaled $889,258 compared to our net loss of $35,635 for the twelve months
ended December 31, 2014.
The
Company divested of and discontinued the operations of CTTA, a subsidiary company. The Company started operations of CTTA in October
2010 ending on December 31, 2015. The following table gives a summary of the operations for this period.
Discontinued Operations of CTTA
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2010
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2011
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2012
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2013
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2014
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|
2015
|
|
Sales
|
|
$
|
10,178
|
|
|
$
|
15,613
|
|
|
$
|
50,309
|
|
|
$
|
75,044
|
|
|
$
|
57,879
|
|
|
$
|
47,575
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
78
|
|
|
|
1,222
|
|
|
|
1,209
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Interest expense
|
|
|
-
|
|
|
|
-
|
|
|
|
11,719
|
|
|
|
14,369
|
|
|
|
16,057
|
|
|
|
2,476
|
|
Expenses
|
|
|
23,505
|
|
|
|
137,365
|
|
|
|
212,960
|
|
|
|
141,667
|
|
|
|
90,137
|
|
|
|
46,687
|
|
Foreign exchange
|
|
|
407
|
|
|
|
(6,878
|
)
|
|
|
(17,978
|
)
|
|
|
(16,395
|
)
|
|
|
-
|
|
|
|
(37,453
|
)
|
Gain on debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(439,118
|
)
|
Total expenses
|
|
|
23,990
|
|
|
|
131,709
|
|
|
|
207,910
|
|
|
|
139,641
|
|
|
|
106,194
|
|
|
|
(427,408
|
)
|
Net gain (loss)
|
|
$
|
(13,812
|
)
|
|
$
|
(116,096
|
)
|
|
$
|
(157,601
|
)
|
|
$
|
(64,597
|
)
|
|
$
|
(48,315
|
)
|
|
$
|
474,983
|
|
The
details for the discontinued operations for the years ended December 31, 2015 and 1014 are as follows:
Discontinued Operations
|
|
For the year ended
December 31, 2015
|
|
|
For the year ended
December 31, 2014
|
|
Revenues
|
|
$
|
47,575
|
|
|
$
|
57,879
|
|
Total revenues
|
|
|
47,575
|
|
|
|
57,879
|
|
Expenses
|
|
|
|
|
|
|
|
|
Bad debts
|
|
|
-
|
|
|
|
31,277
|
|
Bank charges and interest
|
|
|
3,943
|
|
|
|
15,933
|
|
Consulting and subcontractors
|
|
|
22,165
|
|
|
|
21,194
|
|
Office and general
|
|
|
23,055
|
|
|
|
21,733
|
|
|
|
|
(49,163
|
)
|
|
|
(90,137
|
)
|
Net loss
|
|
|
(1,588
|
)
|
|
|
(32,258
|
)
|
Other items
|
|
|
|
|
|
|
|
|
Gain on reversal of debt
|
|
|
439,118
|
|
|
|
-
|
|
Foreign exchange gain
|
|
|
37,453
|
|
|
|
19,822
|
|
Total comprehensive income (loss)
|
|
$
|
474,983
|
|
|
$
|
(32,258
|
)
|
|
|
|
|
|
|
|
|
|
The
components of major assets and liabilities of discontinued operations at December 31, 2015 and 2014 were as follows:
|
|
2015
|
|
|
2014
|
|
Assets
|
|
$
|
-
|
|
|
$
|
244
|
|
Accounts payable
|
|
$
|
-
|
|
|
$
|
3,782
|
|
Accrued management fees
|
|
$
|
-
|
|
|
$
|
26,387
|
|
Accrued liabilities from previous years
|
|
$
|
-
|
|
|
$
|
82,584
|
|
Accounts payable, related party *
|
|
$
|
-
|
|
|
$
|
144,957
|
|
Notes payable
|
|
$
|
-
|
|
|
$
|
125,485
|
|
Notes payable, related party *
|
|
$
|
-
|
|
|
$
|
118,554
|
|
|
●
|
Related
party having a common director until July 31, 2014, filed for bankruptcy on June 30, 2015 was owed $27,781 by the Company. Related
party having a large share position until June 2, 2014 filed for bankruptcy on July 29, 2015 was owed accounts payable of $122,860
and a note for $105,116 by the Company. The operations of CTTA were transacted in Canadian dollars causing variance in translation
to US dollars.
|
The
Company issued 45 million shares pursuant to a convertible debt at a conversion price of $0.001 per share. The Company calculated
a stock-based compensation expense of $1,305,000 based on the market value of the shares issued less the conversion value, of
$0.029 per share.
Pursuant
to the acquisition of the White Channel claims the Company expended $12,058 in field exploration.
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 year ending December 31, 201, we project cash requirements of approximately $100,000 as we continue to restructure our activities.
Operating, general and administrative costs
|
|
$
|
50,000
|
|
Mining Claim costs
|
|
|
50,000
|
|
TOTAL
|
|
$
|
100,000
|
|
PURCHASE
OF SIGNIFICANT EQUIPMENT
We
do not intend to purchase any significant equipment over the next twelve months ending December 31, 2016.
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 managements 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
8. FINANCIAL STATEMENTS
The
financial statements are attached to this report following the signature page. Audited financial statements have been prepared
for the year ended December 31, 2014. The Company has engaged the auditors to audit the management prepared financial statements
for the year ended December 31, 2015.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
In
February 2016, we retained BF Borgers CPAs to be the Companys PCAOB auditor.
ITEM
9A. CONTROLS AND PROCEDURES.
Disclosure
Controls and Procedures
Under
the supervision and with the participation of our management, we have evaluated the effectiveness of our disclosure controls and
procedures as required by Exchange Act Rule 13a-15(b) as of December 31, 2015 (the Evaluation Date). Based on that
evaluation, the Principal Executive Officer/ Principal Accounting Officer have concluded that these disclosure controls and procedures
were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting
discussed below.
Disclosure
controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated
to management to allow timely decisions regarding required disclosure. Notwithstanding the assessment that our internal control
over financial reporting was not effective and that there were material weaknesses as identified below, we believe that our financial
statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 fairly present our financial
condition, results of operations and cash flows in all material respects.
Managements
Report on Internal Control over Financial Reporting
Management
of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Companys
internal control over financial reporting is a process, under the supervision of the management, designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the Companys financial statements for external
purposes in accordance with United States Generally Accepted Accounting Principles (GAAP). Internal control over financial reporting
includes those policies and procedures that:
|
●
|
Pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the
Companys assets;
|
|
●
|
Provide
reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations
of management and the Board of Directors; and
|
|
●
|
Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companys
assets that could have a material effect on the financial statements.
|
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The
Companys management conducted an assessment of the effectiveness of the Companys internal control over financial reporting as
of December 31, 2015, based on criteria established in Internal Control –Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). As a result of this assessment, management identified
a material weakness in internal control over financial reporting.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there
is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented
or detected on a timely basis.
The
material weakness identified is described below.
|
1.
|
Certain
entity level controls establishing a tone at the top were considered material weaknesses. As of December 31, 2014,
the Company did not have a separate audit committee or a policy on fraud. A whistleblower policy is not necessary given the small
size of the organization.
|
|
2.
|
Due
to the significant number and magnitude of out-of-period adjustments identified during the year- end closing process, management
has concluded that the controls over the period-end financial reporting process were not operating effectively. A material weakness
in the period-end financial reporting process could result in us not being able to meet our regulatory filing deadlines and, if
not remediated, has the potential to cause a material misstatement or to miss a filing deadline in the future. Management override
of existing controls is possible given the small size of the organization and lack of personnel.
|
|
3.
|
There
is no system in place to review and monitor internal control over financial reporting. The Company maintains an insufficient complement
of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.
|
As
a result of the material weakness in internal control over financial reporting described above, the Companys management has concluded
that, as of December 31, 2015, the Companys internal control over financial reporting was not effective based on the criteria
in Internal Control - Integrated Framework issued by COSO.
Changes
in Internal Controls
There
were no changes in our internal control over financial reporting during the fiscal year ended December 31, 2015 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM
9B. OTHER INFORMATION. - none
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS
AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
officers of the Company are appointed by our board of directors and hold office until their death, resignation or removal from
office. Our directors, executive officers and significant employees, their ages, positions held, and duration as such, are as
follows:
Name
|
|
Position Held with our Company
|
|
Age
|
|
Date First Elected or Appointed
|
Angelo Marino
|
|
President, Secretary, Vice President
|
|
43
|
|
October 1, 2010
|
Lin Han
|
|
Director
|
|
32
|
|
May 28, 2014
|
Jocelyn Moisan
|
|
Ex -President
|
|
44
|
|
October 1, 2010 to July 31, 2014
|
John Farinaccio
|
|
Ex-Treasurer, Vice President
|
|
39
|
|
October 1, 2010 to March 1, 2014
|
BUSINESS
EXPERIENCE
The
following is a brief account of the education and business experience during at least the past five years of each director, executive
officer and key employee, indicating the principal occupation during that period, and the name and principal business of the organization
in which such occupation and employment were carried out.
ANGELO
M. MARINO, PRESIDENT AND SECRETARY
Educated
and certified in various North American institutions, the President and CEO of UNITAS WORLD completed a Bachelor of Science in
Criminal Justice Administration and a Master of Science in Policing and Social Conflict. Possessing a strong and diversified background
in both the public and private sectors of the security world, Mr. Marinos experience includes 23 years as a personal protection
specialist having escorted clients to and from various Canadian, U.S., South American, European and African destinations, 17 years
as a security and personal protection trainer, 10 years as director of a network of specialized security and protection operatives,
7 years as a municipal public safety officer, and 15 years as a protection officer specialized in the secure transport of high-risk
cargo, including 5 years as coordinator of special operations.
Mr.
Marino is considered to be one of Canadas most renowned Specialists and Master Instructors in the fields of Armored and Non-Armored
High Risk Cargo Protection, Tactical Operations and Executive, Personal and Family Protection, having trained more than 4300 security,
police and military personnel.
Having
worked in over 40 countries to this date, Mr. Marino has created and directed a variety of training programs for numerous domestic
and international security and Law Enforcement agencies and has trained the presidential security details of two countries.
LIN
HAN - DIRECTOR
Mr.
Lin Han, age 34, is a Metallurgical Engineer. He graduated in 2003 from Northeastern University in Liaoning, China, with a Bachelor
of Engineering degree, specializing in Non-Ferrous Metallurgy. In 2006, He graduated from the General Research Institute for Nonferrous
Metals (GRINM) in China with a masters degree in Non-Ferrous Metallurgy. From 2006 to present, Mr. Lin has worked as a
regional manager at the Bekaert Binjiang Steel Cord Co. Ltd. He speaks Mandarin and English.
FAMILY
RELATIONSHIPS
There
are no family relationships between any of our directors or executive officers.
INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
None
of our directors, executive officers, promoters or control persons has been involved in any of the following events during the
past five years:
|
1.
|
any bankruptcy
petition filed by or against any business of which such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
|
|
2.
|
any
conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other
minor offences);
|
|
3.
|
being
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities
or banking activities; or
|
|
4.
|
being
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
SECTION
16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section
16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common
stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission
and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written
representations from certain reporting persons, we believe that during fiscal year ended December 31, 2014, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial owners were complied with.
CODE
OF ETHICS
Effective
February 27, 2004, the Companys board of directors adopted a Code of Business Conduct and Ethics that applies to, among other
persons, members of our Board of Directors, our companys officers including our president (being our principal executive officer)
and our companys chief financial officer (being our principal financial and accounting officer), contractors, consultants and
advisors. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing
and to promote:
|
1.
|
honest
and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional
relationships;
|
|
2.
|
full,
fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities
and Exchange Commission and in other public communications made by us;
|
|
3.
|
compliance
with applicable governmental laws, rules and regulations
|
|
4.
|
the
prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified
in the Code of Business Conduct and Ethics; and
|
|
5.
|
accountability
for adherence to the Code of Business Conduct and Ethics.
|
Our
Code of Business Conduct and Ethics requires, among other things, that all of the Companys personnel shall be accorded full access
to our president and secretary with respect to any matter which may arise relating to the Code of Business Conduct and Ethics.
Further, all of our companys personnel are to be accorded full access to our companys board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our Company officers.
In
addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly managers and/or supervisors,
have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles,
and federal, provincial and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting
manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate
supervisor or to our companys president or secretary. If the incident involves an alleged breach of the Code of Business Conduct
and Ethics by the president or secretary, the incident must be reported to any member of our board of directors. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company
policy to retaliate against any individual who reports in good faith the violation or potential violation of our companys Code
of Business Conduct and Ethics by another.
Our
Code of Business Conduct and Ethics is filed with the Securities and Exchange Commission as Exhibit 14.1.
CORPORATE
GOVERNANCE
The
Board of Directors currently has no standing audit committee, compensation committee, or nominating committee.
ITEM
11. EXECUTIVE COMPENSATION
The
following table summarizes the compensation of key executives during the last two complete fiscal years. No other officers or
directors received annual compensation in excess of $100,000 during the last two complete fiscal years.
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Compensation
|
|
Long Term Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards
|
|
Payouts
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
Restricted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
Stock
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
Other Annual
|
|
Options/SARs
|
|
Award(s)
|
|
|
|
All Other
|
Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Compensation(1)
|
|
Granted
|
|
Share Units
|
|
LTIP
|
|
Compensation
|
Angelo Marino
|
|
2015
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
President and
|
|
2014
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lin Han
|
|
2015
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jocelyn Moisan
|
|
2015
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Ex-president
|
|
2014
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
John Farinaccio
|
|
2015
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Ex Treasurer
|
|
2014
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
LONG-TERM
INCENTIVE PLANS
There
are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers,
except that our directors and executive officers may receive stock options at the discretion of our board of directors. We do
not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors
or executive officers, except that stock options may be granted at the discretion of our board of directors.
We
have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate
such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change
of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.
DIRECTORS
COMPENSATION
We
reimburse our directors for expenses incurred in connection with attending board meetings. We have no present formal plan for
compensating our directors for their service in their capacity as directors, although in the future, such directors are expected
to receive compensation and options to purchase shares of common stock as awarded by our board of directors or (as to future options)
a compensation committee which may be established in the future. Directors are entitled to reimbursement for reasonable travel
and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors
may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily
required of a director. Other than indicated in this annual report, no director received and/or accrued any compensation for his
or her services as a director, including committee participation and/or special assignments.
REPORT
ON EXECUTIVE COMPENSATION
Our
compensation program for our executive officers is administered and reviewed by our board of directors. Historically, executive
compensation consists of a combination of base salary and bonuses. Individual compensation levels are designed to reflect individual
responsibilities, performance and experience, as well as the performance of our company. The determination of discretionary bonuses
is based on various factors, including implementation of our business plan, acquisition of assets, development of corporate opportunities
and completion of financing.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
BENEFICIAL
OWNERSHIP
The
following table sets forth, as of April 15, 2016, certain information with respect to the beneficial ownership of our common shares
by each shareholder known to us to be the beneficial owner of 5% of our common shares, and by each of our officers and directors.
Each person has sole voting and investment power with respect to the common shares, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the common shares, except as otherwise indicated.
Name
and address of Beneficial Owner
|
Amount
and Nature of Beneficial Ownership
|
Percentage
of Class
|
Mr.
Song Bo
700 Cote de Liesse Suite 8
Montreal, Quebec
|
225,000,000
Common
shares
|
83%
|
CHANGES
IN CONTROL
On
June 14, 2015, the Company issued 225,000,000 shares of common stock to Mr. Song Bo in exchange for rights for certain mineral
assets.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except
as disclosed herein and in the Notes to Financial Statements, there have been no transactions or proposed transactions in which
the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed
fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares
of our common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct
or material indirect interest.
ITEM
14. EXHIBITS
Exhibits
required by Item 601 of Regulation S-B
(3)
ARTICLES OF INCORPORATION AND BYLAWS
3.1
|
Articles
of Incorporation (incorporated by reference to our SB2 Registration Statement filed January 29, 2002).
|
3.2
|
Bylaws
(incorporated by reference to our SB2 Registration Statement filed January 29, 2002).
|
3.3
|
Certificate
of Forward Stock Split filed with Nevada Secretary of State on November 6, 2003. (incorporated by reference from our
Annual Report on Form 10-KSB, filed on April 13, 2004)
|
3.4
|
Certificate
of Change Pursuant to NRS 78.209 filed with the Nevada Secretary of State on February 2, 2004. (incorporated by reference
from our Annual Report on Form 10-KSB, filed on April 13, 2004)
|
3.5
|
Certificate
of Amendment (Name Change) filed with the Nevada Secretary of State on November 4, 2010.
|
3.6
|
Certificate
of Amendment to increase the number of authorized shares from 250,000,000 to 450,000,000) filed with the Nevada
Secretary of State on June 2, 2011.
|
(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).
|
10.3
|
Convertible
Loan Agreement between Altus Explorations Inc. and DLS Energy Associates, LLC dated March 8, 2007 (incorporated by reference
from our Current Report on Form 8-K, filed on March 13, 2007).
|
10.4
|
2004 Stock Option Plan (incorporated by reference from our Registration Statement
of Form S-8, filed on February 27, 2004)
|
10.5
|
Agreement between Earth Life Science Inc. and Bo Song pursuant to the acquisition of the White Channel mineral property dated May 16, 2015.
|
(14)
CODE OF ETHICS
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on March 10, 2020.
EARTH
LIFE SCIENCES INC.
By:
/s/ Angelo Marino
Angelo Marino
President
In
accordance with the requirements of the Exchange Act, this Form 10-K/A for the year ended December 31, 2015 report has been signed
by the following persons on behalf of the registrant and in the capacities indicated on the dates indicated.
Signature
|
Title
|
Date
|
By:
/s/Angelo Marino
|
President
|
March
10, 2020
|
Earth Life Sciences Inc.
|
Balance Sheets
|
For the years ended December 31
|
|
|
Note
|
|
Amended
2015
|
|
|
2014
|
|
|
|
|
|
(unaudited)
|
|
|
(audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Assets of discontinued operations
|
|
3
|
|
|
-
|
|
|
$
|
244
|
|
|
|
|
|
|
-
|
|
|
|
244
|
|
Mineral properties
|
|
4
|
|
|
6,750,000
|
|
|
|
-
|
|
Equipment
|
|
|
|
|
1,960
|
|
|
|
-
|
|
Total assets
|
|
|
|
$
|
6,751,960
|
|
|
$
|
244
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
$
|
116,697
|
|
|
$
|
59,974
|
|
Accounts payable and accrued liabilities, discontinued operations
|
|
3
|
|
|
-
|
|
|
|
112,753
|
|
Accounts payable from discontinued operations, related party
|
|
3
|
|
|
-
|
|
|
|
144,957
|
|
Convertible debt
|
|
5
|
|
|
32,720
|
|
|
|
77,720
|
|
Notes payable from discontinued operations
|
|
3
|
|
|
-
|
|
|
|
125,485
|
|
Notes payable from discontinued operations, related party
|
|
3
|
|
|
-
|
|
|
|
118,554
|
|
|
|
|
|
|
149,417
|
|
|
|
639,443
|
|
SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
Common shares, authorized 450,000,000 shares at par value $0.001, issued and outstanding as of December 31, 2015 – 270,817,339 shares and December 31, 2014 - 817,339 shares.
|
|
|
|
|
270,817
|
|
|
|
817
|
|
Additional paid in capital
|
|
|
|
|
14,090,531
|
|
|
|
6,260,531
|
|
Accumulated comprehensive income
|
|
|
|
|
131,859
|
|
|
|
101,058
|
|
Deficit
|
|
|
|
|
(7,890,664
|
)
|
|
|
(7,001,605
|
)
|
|
|
|
|
|
6,602,543
|
|
|
|
(639,199
|
)
|
Total liabilities and shareholders equity
|
|
|
|
$
|
6,751,960
|
|
|
$
|
244
|
|
The
accompanying notes form an integral part of these financial statements
Earth Life Sciences Inc.
|
Statement of Operations
|
For the years ended December 31
|
|
|
Note
|
|
Amended
2015
|
|
|
2014
|
|
|
|
|
|
(unaudited)
|
|
|
(audited)
|
|
Revenues
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total revenues
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Consulting and subcontractors
|
|
|
|
$
|
35,000
|
|
|
$
|
-
|
|
Depreciation
|
|
|
|
|
490
|
|
|
|
-
|
|
Office and general
|
|
|
|
|
11,494
|
|
|
|
3,377
|
|
Mineral exploration costs
|
|
|
|
|
12,058
|
|
|
|
-
|
|
Stock-based compensation
|
|
2
|
|
|
1,305,000
|
|
|
|
-
|
|
|
|
|
|
|
(1,364,042
|
)
|
|
|
(3,377
|
)
|
Net loss
|
|
|
|
|
(1,364,042
|
)
|
|
|
(3,377
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations of subsidiary
|
|
3
|
|
|
|
|
|
|
|
|
Revenue from discontinued operations
|
|
|
|
|
47,575
|
|
|
|
57,879
|
|
Expenses from discontinued operations
|
|
|
|
|
(49,163
|
)
|
|
|
(90,137
|
)
|
Gain on reversal of debt from discontinued operations
|
|
|
|
|
439,118
|
|
|
|
-
|
|
Foreign exchange gain
|
|
|
|
|
37,453
|
|
|
|
-
|
|
|
|
|
|
|
474,983
|
|
|
|
(32,258
|
)
|
Net loss for the year
|
|
|
|
|
(889,059
|
)
|
|
|
(35,635
|
)
|
Other items
|
|
|
|
|
|
|
|
|
|
|
Unrealized foreign exchange
|
|
|
|
|
30,801
|
|
|
|
56,605
|
|
Total comprehensive income (loss)
|
|
|
|
$
|
(858,258
|
)
|
|
$
|
20,970
|
|
Loss per share, basic and diluted
|
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
|
144,965,690
|
|
|
|
758,564
|
|
The
accompanying notes form an integral part of these financial statements
Earth Life Sciences Inc.
|
Statements of Cash Flows
|
For the years ended December 31
|
|
|
Note
|
|
Amended
2015
|
|
|
2014
|
|
|
|
|
|
(unaudited)
|
|
|
(audited)
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
|
|
$
|
(889,059
|
)
|
|
$
|
(35,635
|
)
|
Items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
490
|
|
|
|
-
|
|
Stock-based compensation
|
|
2
|
|
|
1,305,000
|
|
|
|
-
|
|
|
|
|
|
|
416,431
|
|
|
|
(35,635
|
)
|
Changes in non-cash working capital:
|
|
|
|
|
|
|
|
|
|
|
Amounts receivable
|
|
|
|
|
-
|
|
|
|
24,640
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
(12,907
|
)
|
|
|
(35,942
|
)
|
Discontinued operations
|
|
3
|
|
|
(401,318
|
)
|
|
|
-
|
|
Net cash provided by (used in) operating activities
|
|
|
|
|
2,206
|
|
|
|
(46,937
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Repayment of convertible debt with shares
|
|
|
|
|
45,000
|
|
|
|
47,523
|
|
Conversion of debt to shares
|
|
|
|
|
(45,000
|
)
|
|
|
(47,523
|
)
|
Loan receivable
|
|
|
|
|
-
|
|
|
|
45,278
|
|
Net cash provided by financing activities
|
|
|
|
|
-
|
|
|
|
45,278
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Acquisition of exploration and evaluation assets
|
|
|
|
|
-
|
|
|
|
-
|
|
Purchase of equipment
|
|
|
|
|
(2,450
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
|
|
(2,450
|
)
|
|
|
-
|
|
Change in cash and cash equivalents
|
|
|
|
|
(244
|
)
|
|
|
(1,659
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
244
|
|
|
|
1,903
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
-
|
|
|
$
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents consist of:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
-
|
|
|
$
|
244
|
|
|
|
|
|
$
|
-
|
|
|
$
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes paid
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Shares issued for debt
|
|
2
|
|
$
|
1,350,000
|
|
|
$
|
47,523
|
|
Shares issued for mineral property
|
|
4
|
|
$
|
6,750,000
|
|
|
$
|
-
|
|
Shares issued for services
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes form an integral part of these financial statements
Earth
Life Sciences Inc.
|
Statements
of Changes in Shareholders Equity
(Amended)
|
|
|
Share Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Additional
paid-in capital
|
|
|
Deficit
|
|
|
Cumulative
other
comprehensive
income
|
|
|
Total
|
|
Balance, January 1, 2013
|
|
|
632,960
|
|
|
$
|
632
|
|
|
$
|
6,213,193
|
|
|
$
|
(6,965,970
|
)
|
|
$
|
44,453
|
|
|
$
|
(707,692
|
)
|
Conversion of debt
|
|
|
184,379
|
|
|
|
185
|
|
|
|
47,338
|
|
|
|
-
|
|
|
|
-
|
|
|
|
47,523
|
|
Unrealized exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
56,605
|
|
|
|
56,605
|
|
Loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(35,635
|
)
|
|
|
-
|
|
|
|
(35,635
|
)
|
Balance, December 31, 2014
|
|
|
817,339
|
|
|
$
|
817
|
|
|
$
|
6,260,531
|
|
|
$
|
(7,001,605
|
)
|
|
$
|
101,058
|
|
|
$
|
(639,199
|
)
|
Property acquisition - White Channel
|
|
|
225,000,000
|
|
|
|
225,000
|
|
|
|
6,525,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,750,000
|
|
Conversion of debt
|
|
|
45,000,000
|
|
|
|
45,000
|
|
|
|
1,305,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,350,000
|
|
Unrealized exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
30,801
|
|
|
|
30,801
|
|
Loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(889,059
|
)
|
|
|
-
|
|
|
|
(889,059
|
)
|
Balance, December 31, 2015
|
|
|
270,817,339
|
|
|
$
|
270,817
|
|
|
$
|
14,090,531
|
|
|
$
|
(7,890,664
|
)
|
|
$
|
131,859
|
|
|
$
|
6,602,543
|
|
The
accompanying notes form an integral part of these financial statements
EARTH
LIFE SCIENCES INC.
|
NOTES
TO THE FINANCIAL STATEMENTS
|
December
31, 2015
|
|
NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS
Earth
Life Sciences Inc. (the Company) was incorporated in the state of Nevada on November 2, 2001. Originally the corporate
name was Altus Explorations, Inc. On June 2, 2014 the Company changed its name to Earth Life Sciences Inc.
On
October 1, 2010, the Company 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, the Company issued 80,000,000
shares of common stock for the acquisition 100% of the issued shares of Canadian Tactical Training Academy Inc (CTTA).
The Company operations consisted of the training of law enforcement, security, investigation and protection for officers and individuals.
During the year ended December 31, 2015 the Company discontinued the operations of CTTA and returned the shares of CTTA.
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. The Company embarked on mineral exploration program. As a result
of continued losses and lack of potential from the operation of the tactical training business, the Company divested itself of
the operations of Canadian Tactical Training Academy Inc. and has shown these operations as discontinued operations.
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 managements 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 Companys 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 Companys 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 Companys fiscal year-end is December 31.
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.
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.
Mineral
properties and development costs
All
direct costs related to the acquisition of mineral property interests are capitalized. Mineral property exploration expenditures
are expensed when incurred. When it has been established that a mineral deposit is commercially mineable, an economic analysis
has been completed in accordance with SEC Industry Guide 7 and permits are obtained, the costs subsequently incurred to develop
a mine on the property prior to the start of mining operations are capitalized. Capitalized costs will be amortized following
commencement of production using the unit of production method over the estimated life of proven and probable reserves.
The
acquisition of title to mineral properties is a complicated and uncertain process. The Company has taken steps, in accordance
with industry standards, to verify the title to mineral properties in which it has an interest. Although the Company has made
efforts to ensure that legal titles to its mining assets are properly recorded, there can be no assurance that such title will
be secured indefinitely.
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 assets 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 recorded unrealized foreign exchange gains of $30,801 and $56,605 respectfully.
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
Companys balance sheet includes financial instruments, specifically accounts payable, accrued expenses, and payables to
related parties. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively
short period of time between the origination of these instruments and their expected realization.
ASC
820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources
(observable inputs) and (2) an entitys own assumptions about market participant assumptions developed based on the
best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and
the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level
1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets
or liabilities
Level
2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar
assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability
(e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation
or other means.
Level
3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as
of December 31, 2015. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair
values due to the short-term nature of these instruments.
Revenue
Recognition
The
Company follows ASC 605, Revenue Recognition -The Company recognizes revenue when it is realized or realizable and earned. The
Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence
of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales
price is fixed or determinable, and (iv) collectability is reasonably assured. The Company provides services to companies on a
time and materials basis and recognizes revenues upon billing of time and materials at which all services have been completed
and there is no warranty or returns on services.
Deferred
Income Taxes and Valuation Analysis
The
Company accounts for income taxes under ASC 740 Income Taxes. Under the asset and liability method of ASC 740, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements
carrying amounts of existing 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not
that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized
as of December 31, 2015 or December 31, 2014.
Net
Income (loss) per Common Share
Net
income (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. The weighted-average number
of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per
share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential
common shares are additional common shares assumed to be exercised.
Basic
net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at December 31,
2015 and at December 31, 2014.
Share
Based Compensation
ASC
718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment
transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue
shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based
payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements
based on their fair values. That expense is recognized over the period during which an employee is required to provide services
in exchange for the award, known as the requisite service period (usually the vesting period).
The
Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC
505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees
is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments
issued.
Share-based
expense for the periods ended December 31, 2015 and 2014 totaled $1,305,000 and $nil, respectively.
Recent
Accounting Pronouncements
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 awards 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 Entitys 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 entitys 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 entitys 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 entitys liquidation is
not imminent, there may be conditions or events that raise substantial doubt about the entitys 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.
NOTE
3 – DISCONTINUED OPERATIONS
As
at December 31, 2015, the Company disinvested and discontinued the operations of subsidiary company, CTTA, based on poor earnings
and potential future losses. Operations for the year ended December 31, 2015 and operations previously reported for the year ended
December 31, 2014 have been shown as discontinued operations as per the following schedule:
Discontinued Operations
|
|
For the year ended
December 31, 2015
|
|
|
For the year ended
December 31, 2014
|
|
Revenues
|
|
$
|
47,575
|
|
|
$
|
57,879
|
|
Total revenues
|
|
|
47,575
|
|
|
|
57,879
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Bad debts
|
|
|
-
|
|
|
|
31,277
|
|
Bank charges and interest
|
|
|
3,943
|
|
|
|
15,933
|
|
Consulting and subcontractors
|
|
|
22,165
|
|
|
|
21,194
|
|
Office and general
|
|
|
23,055
|
|
|
|
21,733
|
|
|
|
|
(49,163
|
)
|
|
|
(90,137
|
)
|
Net loss
|
|
|
(1,588
|
)
|
|
|
(32,258
|
)
|
|
|
|
|
|
|
|
|
|
Other items
|
|
|
|
|
|
|
|
|
Gain on reversal of debt (note 6 and note 7)
|
|
|
439,118
|
|
|
|
-
|
|
Unrealized foreign exchange
|
|
|
37,453
|
|
|
|
-
|
|
Total comprehensive income (loss)
|
|
$
|
474,983
|
|
|
$
|
(32,258
|
)
|
The components of major assets and liabilities of discontinued operations at December 31, 2015 and 2014 were as follows:
|
|
2015
|
|
|
2014
|
|
Assets
|
|
$
|
-
|
|
|
$
|
244
|
|
Accounts payable
|
|
$
|
-
|
|
|
$
|
3,782
|
|
Accrued management fees
|
|
$
|
-
|
|
|
$
|
26,387
|
|
Accrued liabilities from previous years
|
|
$
|
-
|
|
|
$
|
82,584
|
|
Accounts payable, related party
|
|
$
|
-
|
|
|
$
|
144,957
|
|
Notes payable
|
|
$
|
-
|
|
|
$
|
125,485
|
|
Notes payable, related party
|
|
$
|
-
|
|
|
$
|
118,554
|
|
NOTE
4 – MINERAL PROPERTIES
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 will 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 fair value of the issuance of
the restricted shares was calculated to be $6,750,000.
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.
NOTE
5 – CONVERTIBLE NOTE PAYABLE
As
at December 31, 2015, the Company had a convertible note payable totaling $32,720 (2014 - $77,720). The convertible note was issued
in 2011 and has no interest rate and no fixed terms of repayment. The Note is convertible into common shares at $0.001 per share.
Currently, the note could be converted to 32,720,000 shares. On July 15, 2015, the Company converted $45,000 of the convertible
note payable into 45,000,000 shares of the Company. The Company calculated a beneficial conversion factor of $1,305,000 and recorded
this amount as stock-based compensation in the statement of operations.
NOTE
6 – NOTES PAYABLE
As
at December 31, 2015, the Company had Notes Payable in the amount of $nil (2014 - $168,608). The notes were unsecured, had no
repayment terms, and no interest rate. Pursuant to the disinvestment and discontinuance of CTTA, the Company had a recovery on
the write-down of Notes Payable (see Note 3).
NOTE
7 – RELATED PARTY TRANSACTIONS
As
at December 31, 2015, the Company had Accounts Payable due to related parties totaling $nil (2014 - $144,957). As of December
31, 2015, the Company had Notes Payable to related parties of $nil (2014 - $118,554). These notes were demand, with no interest
rates. Pursuant to the disinvestment and discontinuance of CTTA, the Company had a recovery on the write-down of Accounts payable
to related parties for $144,957 and Notes Payable to related parties for $118,554 (see Note 3).
NOTE
8 – COMMON STOCK
As
at December 31, 2015, the Company had 450,000,000 shares of $0.001 par value common shares authorized. 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 July 15, 2015 the Company converted $45,000 of its convertible debt into 45,000,000 shares of
common stock of the Company. On June 20, 2015 the Company issued 225,000,000 common shares pursuant to the acquisition of White
channel mineral property.
NOTE
9 – 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 2014. 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.
NOTE
10 – SUBSEQUENT EVENTS
Nil
Grafico Azioni Earth Life Sciences (CE) (USOTC:CLTS)
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Da Set 2024 a Ott 2024
Grafico Azioni Earth Life Sciences (CE) (USOTC:CLTS)
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