RCMW (RCMW) 10-Q/A2021 Q1 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 3

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2020

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________to ______________

Commission File Number 000-56135

HEMP TECHNOLOGY INC.

(Exact Name of Registrant as Specified in Its Charter)

(437) 230-7399

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

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 requirement for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of November 23, 2020, 44,029,197,258 of the registrant’s $0.00001 par value common shares were outstanding.

Explanatory Note

This Amendment No. 3 on Form 10-Q/A-3 amends Hemp Technology’s (“the Company’) Quarterly Report on Form 10-Q for the quarter ended July 31, 2020, which amends Amendment No. 2 on Form 10-Q/A-2, which was previously filed with the U.S. Securities Exchange Commission (“SEC”) on November 23, 2020, which amended Form 10-Q/A-1, which was previously filed with the U. S. Securities and Exchange Commission (“SEC”) on September 25, 2020, which amended the Company’s original Form 10-Q previously filed with the SEC on September 21, 2020. After we received the auditor’s signed-off reviewed financials for Form 10-Q/A-2, we mistakenly sent the wrong file to our filing agent. We have immediately notifed our auditor of this filing error and Form 10-Q/A-3 filing properly represents the auditor’s reviewed financials. As stated on Form 10-Q/A-1, the Original Form 10-Q was inadvertently filed without the review nor consent of its auditors. The financials included in the Original Form 10-Q should not be relied upon since the auditors had not completed their interim review.

We are filing this Amendment No. 3 to the Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2020 to reflect restatements of our Condensed Consolidated Balance Sheet at July 31, 2020, the Interim Condensed Consolidated Statements of Income (Loss) for the three months ended July 31, 2020, and the Interim Condensed Consolidated Statements of Cash Flows for the three months ended July 31, 2020, and the related notes thereto and to update our Controls and Procedures.

The following sections in the Original Filing are revised in this Form 10-Q/A, solely as a result of, and to reflect, the restatement:

Part I - Item 1 - Financial Statements

Part I - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Part II - Item 4 – Controls and Procedures

With regards to Part I – Item 1 – Financial Statements, we have restated:

● Our balance sheets as of July 31, 2020

● Our statements of operations for the three months ended July 31, 2020, and

● Our statement of cash flows for the three months ended July 31, 2020 has been restated to show:

Several parts of the Original 10-Q are amended and/or restated by this Amended 10-Q/A-3. We have amended the Original 10-Q, and/or restated the financial information and out Control and Procedures in this Amended 10-Q/A-2. We have also disclosed as a Recent Event a summary of our Annual Shareholder Meeting. Readers should therefore read and rely on this Amended 10-Q/A-3 in lieu of the Original 10-Q.

Except as described above, this Form 10-Q/A-2 does not modify or update disclosure in, or exhibits to, the original Form 10-Q. Information not affected by this Form 10-Q/A-2 remains unchanged and reflects the disclosures made at the time the original Form 10-Q was filed. Accordingly, this Amended 10-Q/A-3 should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original 10-Q, including any amendment to those filings.

Pursuant to the rules of the SEC, Part II, Item 6 of this Form 10-Q/A-3 includes the currently-dated certifications from our principal executive officer and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of the principal executive officer and principal financial officer are included in this Form 10-Q/A as Exhibits 31.1, 31.2 and 32.1.

HEMP TECHNOLOGY INC.

FORM 10-Q FOR THE THREE MONTHS ENDED July 31, 2020

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Balance Sheets

As of July 31, 2020, and April 30, 2020

(Amounts Expressed in United States Dollars, Except for Share Amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Statements of Operations

Three Months Ended July 31, 2020 and 2019

(Amounts Expressed in United States Dollars, Except for Share Amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Amounts Expressed in United States Dollars)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Statements of Cash Flows

Three Months Ended July 31, 2020 and 2019

(Amounts Expressed in United States Dollars)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Notes to the Interim Condensed Consolidated Financial Statements

Presented in U.S. Dollars

Note 1 - Company overview

Hemp Technology Inc. of Wyoming and its subsidiaries, Hemp Technology Inc. of Kentucky, Hemp Biotech Inc. of Kentucky, and Sol Terra SAS of Colombia, 4033000, 4033001 and 4033002 of Wyoming (collectively the “Company”) is publicly listed on the OTC under the symbol “HPTY.” The Company’s registered office is in Cheyenne, Wyoming and its principal executive office is located in Signal Hill, CA. The Company is a start-up in the production and distribution of innovative hemp-based, products. The Company’s planned primary products will be created from high quality strains of hemp. Hemp extracts are produced from industrial hemp, which is defined as Cannabis with less than 0.3% tetrahydrocannabinol (THC). THC causes psychoactive effects when consumed and is typically associated with marijuana (i.e. cannabis with high-THC content). The Company does not produce or sell medicinal or recreational marijuana or products derived from high-THC Cannabis/marijuana plants and is focused on industrial hemp usage related to fiber, building materials, seed derived oils and proteins.

Note 2 - Going concern

These interim condensed consolidated financial statements are prepared on a going concern basis. The Company has incurred continuing losses from its operations and as of July 31, 2020, the Company had an accumulated deficit of $7,198,528 resulting primarily from its previous biofuels business. The Company had a Net loss of $ 353,875 during its most recent year ended April 30, 2020 and a net income $232,337 in the three months ended July 31, 2020, this casts significant doubt on the Company’s ability to continue as a going concern. The accompanying interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Note 3 – Restatement of previously issued interim condensed interim consolidated financial statements

The Company determined that its previously issued interim condensed interim consolidated financial statements as of and for the three months ended July 31, 2020 as originally filed with the Securities and Exchange Commission on September 21, 2020, should no longer be relied upon since the auditors had not completed their interim review and their comments were not incorporated into the documents as filed primarily related to the revenue, expenses, elimination of transaction between subsidiaries and related parties and the recent acquisitions of the assets valuation and purchase price allocations of the acquisition of Cannary Packaging Inc and Intangibles from Chad Costa and Vanessa Miskuski and related notes and disclosures regarding entities under common control.

The effects of these restatement adjustments of revenue of $32,216, expenses of $12,391, inventory of $367,578, decrease in intangibles $136,473, increase in accounts payable $178,727, related party transactions $137,077, and $136,473 decrease to Additional Paid in Capital, which impacted

Impacts of restatement

The effects of the restatement on the line items within the Company’s Interim Condensed Consolidated Financial Statements as of July 31, 2020 are as follows:

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Balance Sheets

(Amounts Expressed in United States Dollars, Except for Share Amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Statements of Operations

(Amounts Expressed in United States Dollars, Except for Share Amounts)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

Hemp Technology Inc.

Unaudited Interim Condensed Consolidated Statements of Cash Flows

(Amounts Expressed in United States Dollars)

Note 4 - Basis of preparation

The accompanying interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10–Q and Rule 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of the management of the Company, all adjustments necessary for a fair presentation of the financial position and operating results have been included in these statements. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10 for the fiscal year ended April 30, 2020.

Basis of consolidation – The interim condensed consolidated financial statements include the accounts of Hemp Technology Inc. and its subsidiaries, as of July 31, 2020 and 2019. The Company has six wholly owned subsidiaries: Hemp Technology Inc. of Kentucky, Hemp Biotech Inc. of Kentucky, Sol Terra SAS of Colombia, 4033000, 4033001 and 4033002 of Wyoming. Inter-company balances and transactions are eliminated in preparing the interim condensed consolidated financial statements. The accounting policies of the subsidiaries are consistent with Hemp Technology Inc.

Use of estimates - The preparation of interim condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim condensed consolidated financial statements and the reported amounts of expenses. We believe that the accounting estimates employed are appropriate and that the resulting balances are reasonable; however, due to the inherent uncertainty in making estimates, actual results could differ from the original estimates, resulting in changes to these balances in future periods.

Net income (loss) per share

We calculate net income (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic net loss per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period, and diluted earnings per share is computed by including common stock equivalents outstanding for the period in the denominator. For the three months period ended July 31, 2020 and 2019, any equivalents would have been anti-dilutive as we had a loss for the period then ended.

Foreign Currency Translation

The reporting currency of the Company, including its subsidiaries, is the United States dollar. The financial statements of subsidiaries located outside of the U.S. are measured in their functional currency, which is the local currency. The functional currency of the parent is the U.S. dollar. Monetary assets and liabilities of these subsidiaries are translated at the exchange rates at the balance sheet date. Income and expense items are translated using average monthly exchange rates. Non-monetary assets are translated at their historical exchange rates. Translation adjustments are included in accumulated other comprehensive loss in the condensed consolidated balance sheets.

Fair Values of Financial Instruments

The carrying amounts of cash, accounts receivable, accounts payable, and due to related parties approximate their fair value due to the short-term nature of these instruments. The Company’s operations and financing activities are conducted primarily in United States dollars and as a result, the Company is not subject to significant exposure to market risks from changes in foreign currency rates. The Company is exposed to credit risk through its cash but mitigates this risk by keeping these deposits at major financial institutions.

ASC 820 “Fair Value Measurements and Disclosures” provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability.

Income taxes

The Company utilizes the liability approach for accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.

The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for “unrecognized tax benefits” is recorded for any tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

The Company’s policy for recording interest and penalties associated with tax audits is to record such items as a component of general and administrative expense. The Company has identified its federal tax return and its state tax return in Kentucky as its “major” tax jurisdictions, and all prior year returns remain subject to examination. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35% to 21%. As December 31, 2017, the Company had made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company has finalized the accounting for the effects of the Tax Act during 2020. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined.

Stock based compensation

The Company follows ASC 718, Compensation - Stock Compensation, which addresses the accounting for stock-based payment transactions, requiring such transactions to be accounted for using the fair value method. Awards of shares for property or services are recorded at the more readily measurable of the fair value of the stock and the fair value of the service. The Company uses the Black-Scholes option-pricing model to determine the grant date fair value of stock- based awards under ASC 718. The fair value is charged to earnings depending on the terms and conditions of the award, and the nature of the relationship of the recipient of the award to the Company. The Company records the grant date fair value in line with the period over which it was earned. For employees and management, this is typically considered to be the vesting period of the award. For consultants, the fair value of the award is recorded over the term of the service period, and unvested amounts are revalued at each reporting period over the service period. The Company estimates the expected forfeitures and updates the valuation accordingly.

Impairment of Long-Lived Assets

Management reviews for impairment whenever events or changes in circumstances indicate that the carrying amount of property and equipment may not be recoverable under the provisions of accounting for the impairment of long-lived assets. If it is determined that an impairment loss has occurred based upon expected future cash flows, the loss is recognized in the Condensed Interim Consolidated Statement of Operations.

Inventories

Inventories is stated at the lower of cost, determined principally under the first-in, first-out method, or net realizable value. Inventories include the cost of vape hardware, terpenes and packaging. Obsolete or excess inventories are reflected at their estimated realizable values. Net realizable value is the estimated sales revenue for a normal period of activity less expected selling costs. Allowances for excess and obsolete inventory are recognized for excess amounts, obsolescence and declines in net realizable value below cost. Estimation and judgement are required in determining the value of the allowance for excess and obsolete inventory at each balance sheet date. Management specifically analyzes estimates of future demand for products when determining allowances for excess and obsolete inventory. Changes in these estimates could result in revisions to the valuation of inventory in future periods.

Property and Equipment

Property, equipment and improvements to leased premises are depreciated using the straight-line method over the estimated useful lives of the assets, or when applicable, the term of the lease, whichever is shorter. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows:

Machinery and equipment – 20%

Office Equipment – 30%

Furniture & Fixtures – 20%

Revenue Recognition

Sales comprise the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Company’s activities. Sales are presented, net of sales tax, rebates and discounts, and after eliminating sales within the Company. The Company recognizes revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related receivables is reasonably assured and when the specific criteria for each of the Company’s activities are met as follows:

Sale of goods –Revenue from these sales is recognized when an entity has delivered the parts to locations specified by its customers and the customers have accepted the parts in accordance with the sales contract. Products are sold to certain customers with volume discount and these customers also have the right to return faulty parts. Revenue from these sales is recorded based on the contracted price less the estimated volume discount and returns at the time of sale. Past experience and projections are used to estimate the anticipated volume of sales and returns.

Cost of Goods Sold

Costs are directly related to expenses to sell the Company’s products and services are recorded as cost of goods sold when the related revenue is recognized. The Company records inventory costs of the associated products delivered to customers within cost of goods sold.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying interim condensed consolidated financial statements.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The ASU removes, modifies, and adds certain disclosure requirements and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company determined there is no material impact on the adoption of this standard on its interim condensed consolidated financial statements.

In December 2019, the FASB Issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting of Income Taxes”, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating this guidance to determine its impact it may have on its financial statements.

In January 2020, the FASB issued ASU 2020-1, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-1made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is evaluating the potential impact of adoption of this standard on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Update on COVID-19

On March 11, 2020, the World Health Organization (“WHO”) recognized COVID-19 as a global pandemic, prompting many national, regional, and local governments, including in the markets that the Company operates in, to implement preventative or protective measures, such as travel and business restrictions, temporary store closures, and wide-sweeping quarantines and stay-at-home orders. As a result, COVID-19 has significantly curtailed global economic activity, including in the industries in which the Company operates.

Note 5 - Due to related parties and management compensation

At July 31, 2020, the Company had non-interest bearing, unsecured, payables with no specified terms of repayment, due to an entity controlled by two Officers of the Company in the amount of $137,077 ($172,390 as at April 30, 2020)

Note 6 – Transactions between entities under common control

The transactions that have been completed during the period ended July 31, 2020 have been accounted for pursuant to ASC 805-50, Transactions Between Entities Under Common Control. A common control transaction is similar to a business combination, however, does not meet the definition of a business combination, because there is no change in control over the entity by the parent. Therefore, the accounting and reporting for the transaction between entities under common control are outside the scope of the business combinations guidance in ASC 805-10, ASC 805-20, and ASC 805-30, and addressed in ASC 805-50.

Note 7 - Common stock

The Company’s authorized share capital consists of 50 billion of shares of common stock and 10 billion of preferred stock. There are no preferred shares issued, and 44,029,197,258 common shares issued at July 31, 2020.

During the three months ended July 31, 2020:

Note 8 Commitments and Contingencies

Claims and Litigation

From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to defend itself against all legal claims. As of the date of this report, the Company is not aware of any other material or significant claims against it.

Commitments

The Company has a lease commitment related to the office space, facilities and warehouses expiring on July 31 2023.

Note 9 – Subsequent Events

On August 11, 2020, Hemp Technology Inc entered into a purchase and sale agreement dated August 11, 2020, to acquire substantially all of the assets of True Leaf Pet Inc. (“TLP”) in exchange for $300,000 CAD. The closing of the transaction pursuant to the Sale Agreement (the “Transaction”) was subject to approval by the Court of the Transaction within 30 days of the execution date. The Transaction closed September 11, 2020.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this registration statement, the terms “we”, “us” and “our” mean Hemp Technology Inc. and its subsidiaries, Hemp Technology Inc., Hemp Biotech Inc., Sol Terra, 4033000, 4033001 and 4033001 unless otherwise specified. In this registration statement, the terms “dollar”, “US$” or “$” refer to United States dollars and the term CDN$ refers to Canadian dollars.

Forward-Looking Statements

This registration statement contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, including the risks in the section entitled “Risk Factors”, uncertainties and other factors, which may cause our company’s or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance 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 or performance. Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Corporate History

Our Company was originally incorporated in July 2005 in Nevada under the name “Loma Verde Inc.” Our Company was initially formed for the purpose of acquiring and developing mineral properties and was therefore considered to be in the pre-exploration stage. Mineral claims with unknown reserves were acquired, but we did not establish the existence of commercially mineable ore deposits and we decided to abandon our mineral claims and to pursue other business opportunities, one of which was the alternative energy business.

In March 2007, we engaged in a merger with our wholly owned subsidiary, “Clean Power Concepts Inc.”, for the purpose of changing our name.

In April 2010, we changed our business focus to the operation of the business conducted by our subsidiary “General Bio Energy Inc.”, which was focused on the environmentally friendly green energy industry. General Bio Energy Inc. was incorporated in the Province of Saskatchewan in February 2006 under the name “Canadian Green Fuels Inc.” and changed its name to “General Bio Energy Inc.” in September 2008. General Bio Energy Inc. commenced its pre-production stage in May 2006 and began selling products in July 2008. From 2008 to 2011, we were engaged in the development of a bioenergy business focused on agricultural processing and the environmentally friendly green energy industry. We produced a range of products manufactured by crushing oilseeds and refining the by-products. Our subsidiary, General Bio Energy Inc., operated a fully integrated commercial oilseed crushing, bio-diesel refinery, which used its proprietary processes to produce two main co-products, oil and meal, each of which were further processed and then sold. The oil products produced from this process could be divided into three subcategories: (i) vegetable oil for human and animal consumption; (ii) biofuel and biofuel additives; and (iii) environmental lubricants and conditioners, penetrating sprays, dust suppressants, cutting oils and other “ECO-lubricants”. We also added a new group of oil products to our product mix: natural consumer health products. The meal and protein related products were used for agricultural and aquaculture feedstock. We considered our facility to be a “green” manufacturing facility because it had minimal effluents, using methods which are emissions friendly. Our production facility and head office were located in Regina, Saskatchewan.

From 2012 to 2019, we focused on clearing our debts from prior biofuels operations by issuing shares in exchange for the settlement of these liabilities, and on seeking a different venture for our shareholders. In 2013, our company changed its corporate jurisdiction to the State of Wyoming.

Our Current Business

On January 18, 2020, we changed our name to “Hemp Technology Inc.” and announced a new business plan in the emerging hemp related products business. We hired new management to carry out these plans and raised $0.3 million seed capital between March and September 2020 to commence the process.

The Company operates and intends to further obtain a diversified portfolio of subsidiary companies. Focusing on a variety of assets, products, and ancillary offerings in the hemp and related industries, the Company’s fluid business model is positioned to capitalize on, and adapt to, changing market conditions. Management of the Company continues to seek opportunities and strategic acquisitions that support its business model. Hemp Technology Inc., operates and intends to further augment their diversified portfolio of subsidiary companies. Focusing on a variety of assets, products, and ancillary offerings in the hemp and related industries, HPTY’s fluid business model is positioned to capitalize on, and quickly adapt to, changing market conditions. The Company is continually seeking opportunities and strategic acquisitions that support its business model and maintain alignment with the dynamic industry environment. The Company consists of subsidiaries which hold two hemp processing licenses in the state of Kentucky, Cannary Distribution in the Los Angeles metropolitan area, Verified Vapes, hardware manufacturer, and Pettanicals a high-quality nutritional pet supplement performance products brand. The Company currently has operations in the U.S. and Canada.

On May 2, 2020, Hemp Technology, a Wyoming corporation (the “Registrant” or “the Company”) and its wholly owned subsidiary 4033002, a newly formed Wyoming Corporation entered into an Asset/Share Exchange Agreement and corresponding Bulk Asset Sale Agreement with Cannary Packaging, Inc., “Cannary”), a private British Columbia company. Under the terms of the Asset/Share Exchange Agreement, Cannary agreed to exchange its non-operating assets to 4033002, the Registrant’s subsidiary. The non-operating assets were valued at approximately $2,200,000 and were exchanged for 21,852,907,580 of the Registrant’s unregistered restricted common shares (the “Issued Shares”) of newly issued common stock to existing shareholders of Cannary based on their pro-rata ownership in Cannary.

The purpose of acquiring these Non-Operating Assets is twofold: 1) 4033002 becomes the operating asset acquisition subsidiary for the Registrant; and 2) the acquisition of these Non-Operating Assets helps qualify Registrant for a NASDAQ listing.

On May 20, 2020, Hemp Technology, a Wyoming corporation (the “Registrant” or “the Company”) and its wholly owned subsidiary 4033001, a newly formed Wyoming Corporation entered into a Bulk Asset Sale Purchase Agreement with Vanessa Miskuski and Chad Costa. Under the terms of the Bulk Asset Sales Purchase Agreement Vanessa and Chad Costa agreed to sell to 4033001, the Registrant’s subsidiary, intangible assets valued at historical cost, in exchanged for 1,000,000,000 unregistered restricted common shares of the Registrant. The intangible assets were formerly owned by Pettanicals Pet Treats, Inc., a private Canadian company, which has been dissolved in accordance with section 314(1) of the British Columbia Business Corporations Act. Management believes that by purchasing these intangibles, it may be able to revive the pet vitamin business, which is now defunct. There is no assurance or guarantees that management will be successful or able to revive this former business.

Recent Event

On November 12, 2020 the Company held its Annual Shareholder meeting. At the meeting, approximately 86% of the total issued and outstanding shares voted in favor of:

Results of Operations

Revenue

Comprised of sales made to other distributors.

Operating Expenses

We incurred operating expenses of $38,890 during the three months ended July 31, 2020. These expenses were primarily the result of engaging key staff to develop our business plan and fulfilling public company reporting obligations. Generally, the operation expenses were much lower due to the reduction of startup costs and staff being laid off due to the pandemic as a result of the Corona Virus (Covid-19).

Net Income from Operations

We incurred a Net operating income of $232,377 before other income, provision for income taxes net loss from operations during the three-month period ended July 31, 2020 and a net loss of $105,054 in the comparable period in 2019.

Liquidity and Capital Resources

Net cash used in operating activities

For the three-month period ended July 31, 2020 the Company had net income of $232,337. Accounts payable increased by $163,396 during the period, increase in accounts receivable recorded subsequent to acquisition of $711,183, and decrease in inventory subsequent to acquisition of $350,817. During the comparable period in 2019, the Company had minimal activity.

Net cash provided by financing activities

During the three-month period ended July 31, 2020 the Company had a decrease in amounts due to related parties of $35,313. During the comparable periods in 2019 the Company had no financing activities.

Working capital

The Company’s current assets are substantially made up of Accounts receivables and Inventory. Cash balances stayed consistent since April 30, 2020 as the Company issued shares for transactions during the three-month period.

The Company’s current liabilities are made up of accounts payable and accrued liabilities, and dues to a related party.

Going concern

The Company has incurred continuing losses from its operations and as of April 30, 2020, the Company had an accumulated deficit of $7,430,865 resulting primarily from its previous biofuels business. The Company had a loss of $211,229 during its most recent year ended April 30, 2020 and net income of $232,337 in the three months ended July 31, 2020.

Off Balance Sheet Arrangements

As of July 31, 2020, the Company had no off balance-sheet arrangements. The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk or commodity risk.

Critical Accounting Estimates and Policies

The preparation of these interim condensed consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the interim condensed consolidated financial statements and reported amounts of expenses during the reporting period.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, include, but are not limited to, the following: fair value of transactions involving shares of common stock, assessment of the useful life and evaluation for impairment of capital assets. Other areas requiring estimates include allocations of expenditures, depletion and amortization of capital assets.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

NA

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on their evaluation of our disclosure controls and procedures, our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were not effective as of July 31, 2020, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.

Description of Material Weakness

Management has concluded that the Company’s disclosure controls and procedures were not effective as of July 31, 2020, due to the lack of segregation of duties, internal miscommunications, lack of timely review of the financials; and need for an audit committee.

Remediation of Material Weakness

Management is developing a plan to institute protocols to avoid miscommunications and to identify causes of the control deficiencies that give rise to the material weaknesses. Until the remediation efforts are fully implemented, and an audit committee is appointed, management expects material weaknesses will continue to exist.

Remediation Efforts Management

Management is committed to the remediation of the material weaknesses, as well as the continued improvement of our internal control over financial reporting. To address the material weakness noted above, the Company is in the process of:

1) Putting into effect chronological actions, effective immediately, to begin preparing the financials immediately after the reporting period. Such measures would include to immediately send over to the independent auditor’s preliminary financials, at which point, the Company will contact its law firm with these preliminary financials. Also, establish a channel of communications with the Company’s law firm, its independent auditors and the filing agent to ensure that proper sign-off has been secured from the independent auditors before the filing agent makes any filing;

2) reviewing and updating the required timeline and requirements for the accounting close to provide sufficient time to review the financials and footnotes in the inclusion of the interim condensed consolidated financial statements;

3) reviewing recent and subsequent events to ensure adequate resources to ensure readiness and timeliness to be included in the Company’s financial statements;

4) assessing the required training needs to ascertain continuous development of existing personnel;

5) developing a segregation of duties, where checks and balances can be established in preparing the financials; and

6) when resources become available, establish an audit committee.

It is our goal to continue our evaluation and improve our internal control over financial reporting, management may modify the actions described above or identify and take additional measures to address control deficiencies. The Company is in the process of implementing the internal control processes effective immediately.

Changes in Internal Control over Financial Reporting

We believe the remedial measures discussed above will help us remediate the material weaknesses noted. We believe the corrective actions and controls need to be in operation for a sufficient period of time for management to conclude that the control environment is operating effectively and has been adequately tested through audit procedures. Accordingly, the material weaknesses have not been remediated as of the date of this report. As we continue to evaluate and work to remediate the control deficiencies that gave rise to the material weaknesses, we may determine that additional measures or time are required to address the control deficiencies or that we need to modify or otherwise adjust the remediation measures described above. We will continue to assess the effectiveness of our remediation efforts in connection with our evaluation of our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In the opinion of management, we are not involved in any claims, legal actions or regulatory proceedings as of July 31, 2020, the ultimate disposition of which would have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Item 1A. Risk Factors

For information on risk factors, please refer to “Risk Factors” in the Company’s Form 10 Registration Statement, Section 1A, for the year ended April 30, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three-month period ended July 31, 2020 the Company issued common stock as follows:

Item 6. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.