PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
ORGANIZATION
The Company was incorporated as “Minaro Corp.” under the laws of the State of Nevada on March 14, 2017.
On December 18, 2022, Minaro Corp., a Nevada corporation (the “Company”), Yulia Lazaridou, the majority shareholder of the Company (“Lazaridou”), Pineapple Consolidated, Inc., a California corporation (“PCI”) and the shareholders of PCI (“PCI Shareholders”), entered into a Share Exchange Agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the PCI Shareholders exchanged (the “Exchange Transaction”) 50,000 outstanding shares of common stock of PCI, representing fifty percent (50%) of the outstanding shares of PCI common stock, for eighteen million (18,000,000) newly issued shares of Minaro common stock.
In addition, on December 18, 2022, in a transaction related to and a condition to the Exchange Transaction, Lazaridou and the Company entered into that certain Resignation, Separation and Release Agreement (the “Resignation Agreement”), pursuant to which (a) the Company redeemed 2,800,000 shares of Company common stock owned by Lazaridou (the “Lazaridou Shares’) in exchange for a payment by the Company of $540,904 and (b) Lazaridou, as of December 21, 2022, resigned as the sole director, officer and employee of the Company.
In order to fund the payment for the Lazaridou Shares, contemporaneous with the Exchange, on December 18, 2022, PCI loaned $540,904 to the Company. The loan (the “PCI Loan”) matured on June 30, 2023 and earns interest at an annual rate of 1%.
In addition, on December 18, 2022, Lazaridou, as sole director and majority shareholder, executed a written consent in lieu of a meeting providing that (i) Matthew Feinstein be elected as the sole director of the Company as well as Chief Executive Officer, President, Secretary, Chairman of the Board and Interim Chief Financial Officer, (ii) accepted the resignation of Lazaridou and (iii) approved the Exchange Agreement and Resignation Agreement. As a result of these transactions, the PCI Shareholders own a majority of the shares of Minaro common stock, and the Company owns fifty percent (50%) of the PCI common stock.
On January 5, 2023, the Company filed Restated Articles of Incorporation with the State of Nevada following approval of the sole director and majority shareholder (“Restated Articles”). The Restated Articles (i) changed the name of the Company to Pineapple Express Cannabis Company, (ii) added an additional authorized class of capital stock, namely ten million (10,000,000) shares of Preferred Stock, in addition to the previously authorized seventy-five million (75,000,000) shares of Common Stock. As a result, the name of the Company now has been changed to Pineapple Express Cannabis Company.
On December 30, 2022 the Company applied to the Financial Industry Regulatory Authority (“FINRA”) for approval with respect to the change of the Company’s name in the Restated Articles. The Company separately applied to FINRA to change the Company’s stock ticker trading symbol. These two corporate actions were subject to FINRA review and clearance which was received during this reporting period.
On March 5, 2025, the Company issued 5,000,000 shares of its common stock pursuant to a Share Exchange Agreement with GROOVY Company, Inc. (f/k/a Santo Mining Corp.), in exchange for 350,000,000 shares of Series A Preferred Stock of GROOVY. As a result of the transaction, the Company acquired a controlling interest in GROOVY, which became a majority-owned subsidiary.
NATURE OF BUSINESS
PINYA XP operates as a comprehensive artificial intelligence-powered data analytics platform that delivers strategic market intelligence to the legal cannabis industry. The company addresses the fundamental challenge facing cannabis enterprises: the need for reliable, real-time market data in a rapidly evolving industry characterized by complex regulatory frameworks and fragmented market conditions across multiple jurisdictions.
The company leverages its proprietary GROOVY Platform as a Service infrastructure to systematically collect, aggregate, and analyze cannabis industry data through advanced blockchain technology, machine learning algorithms,
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
and incentivized participation models. This integrated approach enables PINYA XP to provide actionable business intelligence that supports strategic decision-making across the entire cannabis supply chain.
PINYA XP’s business model centers on monetizing comprehensive market intelligence through the sale of AI-powered marketing analysis to cannabis enterprises seeking competitive advantages in their respective markets. The platform combines enterprise-grade data security with innovative cryptocurrency incentive mechanisms to create a sustainable ecosystem that benefits all participants while generating substantial revenue streams.
GROOVY PLATFORM ARCHITECTURE
Blockchain Infrastructure Foundation
The GROOVY Platform operates on Hyperledger Fabric, an enterprise-grade permissioned blockchain network that ensures complete data integrity, immutability, and regulatory compliance. This blockchain architecture addresses the cannabis industry’s unique requirements for secure data sharing while maintaining strict privacy controls and audit capabilities across multiple regulatory jurisdictions.
The permissioned nature of Hyperledger Fabric restricts network access to authorized participants only, creating a trusted environment where cannabis businesses can confidentially share sensitive operational data. This approach ensures compliance with varying state regulations while enabling comprehensive market intelligence aggregation that would be impossible through traditional data collection methods.
Comprehensive Data Collection Methodology
The platform implements multiple sophisticated data collection mechanisms that capture information throughout the entire cannabis ecosystem. The foundation of this system relies on NFT-based product authentication, where each cannabis product receives a cryptographically unique QR code containing a non-fungible token that serves as an immutable digital certificate.
Consumer interactions with these QR codes generate continuous streams of real-time market intelligence, capturing product preferences, geographic demand patterns, purchasing behaviors, and consumption trends. This dual-purpose system provides consumers with product verification and authentication while simultaneously contributing valuable market research data to the platform’s comprehensive database.
The platform’s Geno-NFT system maintains a sophisticated genetic library that tracks cannabis intellectual property, strain performance metrics, yield optimization data, and cultivation success rates across diverse geographic regions and environmental conditions. This system captures breeding data, phenotype performance analytics, royalty distribution patterns, and licensing arrangements, providing comprehensive insights into genetic trends and intellectual property valuations within the cannabis industry.
Supply Chain Integration Capabilities
GROOVY’s data collection extends across four critical stages of the cannabis supply chain. Cultivation integration captures environmental monitoring data, nutrient program specifications, harvest yield analytics, and quality assessment metrics. Processing integration monitors extraction methodologies, product formulation processes, batch testing protocols, and manufacturing efficiency measurements.
Distribution tracking provides real-time inventory movement analysis, wholesaler preference identification, regional demand pattern recognition, and logistics performance optimization. Retail integration encompasses point-of-sale transaction analysis, customer demographic profiling, purchasing pattern identification, and inventory turnover optimization across dispensary networks.
The consumer-facing mobile application creates value exchange relationships where users receive product information, strain details, user reviews, and reward incentives in exchange for voluntary data contribution. This approach transforms traditional market research paradigms by creating sustainable participation models where consumers actively contribute to market intelligence generation while receiving tangible benefits.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING APPLICATIONS
Advanced Analytics Capabilities
The platform’s artificial intelligence systems transform comprehensive raw data into actionable business intelligence through sophisticated machine learning algorithms designed specifically for cannabis industry applications. These systems excel at identifying complex patterns and correlations that would be impossible for human analysts to detect manually, including subtle relationships between environmental conditions and consumer purchasing behaviors, regulatory changes and market dynamics, and demographic shifts and product preferences.
The machine learning algorithms continuously improve their predictive accuracy as additional data becomes available, creating increasing returns for platform participants and enhancing the value of analytical insights over time. This continuous learning approach ensures that market intelligence becomes more precise and reliable as platform adoption expands.
Predictive Market Intelligence
Demand forecasting capabilities analyze seasonal consumption patterns, regulatory impact scenarios, demographic transitions, and economic indicators to predict future market conditions and demand patterns across different product categories and geographic regions. These predictive models enable cannabis businesses to optimize cultivation planning, inventory management, expansion strategies, and product development initiatives.
The system provides comprehensive new product launch success prediction using historical performance data and current market condition analysis. This capability helps businesses reduce risk and increase success probability for product introductions while identifying market opportunities and expansion possibilities across different jurisdictions.
Consumer segmentation analysis creates detailed consumer profiles based on purchasing behavior, product preferences, consumption methods, desired effects, and lifestyle characteristics. These sophisticated behavioral clustering algorithms develop comprehensive psychographic profiles that reveal consumer motivations, values, and decision-making processes, enabling businesses to develop targeted marketing strategies and optimize product portfolios.
Competitive Intelligence and Market Analysis
The platform delivers comprehensive competitive analysis that tracks market share changes, pricing strategies, product innovations, and performance metrics across brands, companies, and geographic regions. This intelligence enables businesses to understand their competitive position, identify market opportunities, and develop strategic responses to competitive threats while benchmarking performance against industry leaders.
Market dynamics analysis provides insights into consolidation trends, regulatory impacts, emerging competitive threats, and long-term strategic considerations that affect business planning and investment decisions. This comprehensive competitive intelligence would be impossible for individual businesses to conduct independently due to the scale and complexity of data required.
REVENUE GENERATION MODEL
Market Intelligence Monetization
PINYA XP generates revenue through the sale of comprehensive AI-powered marketing analysis to cannabis enterprises requiring strategic insights for competitive positioning and operational optimization. This business model leverages the platform’s unique access to real-time, comprehensive market data to provide intelligence products that significantly exceed the value and accuracy of traditional market research approaches.
The company’s revenue model creates sustainable competitive advantages by transforming the comprehensive data collected through the GROOVY platform into premium market intelligence products that cannabis businesses cannot
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
obtain elsewhere. The continuous data collection and AI-powered analysis enable PINYA XP to offer insights based on actual market transactions and consumer behaviors rather than limited survey data or small sample sizes.
Product Portfolio and Customer Segmentation
The company offers multiple categories of market intelligence products designed to address specific business requirements within the cannabis industry. Market trend analysis products examine seasonal demand patterns, emerging product categories, shifting consumer preferences, and regulatory impact assessments across different demographics and geographic regions.
Competitive analysis products provide detailed insights into brand performance, market share analysis, pricing strategy evaluation, product performance comparisons, and strategic positioning across competitive landscapes. Consumer behavior analysis represents the most valuable product category, delivering detailed insights into consumer discovery processes, evaluation criteria, purchasing decisions, and usage patterns across different market segments.
Regulatory impact analysis helps businesses understand how changing legal frameworks affect market opportunities, compliance requirements, and strategic planning considerations. This analysis becomes particularly valuable as new jurisdictions legalize cannabis or existing markets modify their regulatory structures.
Pricing Strategies and Revenue Optimization
The platform serves diverse customer segments through flexible pricing structures that accommodate different business sizes and intelligence requirements. Small dispensaries may purchase basic market reports for local market analysis, while large multi-state operators invest in comprehensive competitive intelligence across all operational markets.
Subscription-based pricing models provide ongoing access to updated analysis and real-time market intelligence dashboards, creating predictable recurring revenue streams while ensuring customers maintain access to current insights. Custom analysis projects serve businesses with specific strategic questions or unique market situations, such as market entry analysis for expansion planning or consumer preference research for new product development.
This revenue model succeeds because it creates measurable value for all ecosystem participants while enabling PINYA XP to monetize the comprehensive market intelligence generated through platform participation. The AI-powered approach ensures that insights become more accurate and valuable over time, creating increasing returns that benefit both the company and its customers.
TOKEN ECONOMY AND INCENTIVE FRAMEWORK
GROOVY Rewards System
The platform implements sophisticated economic incentives that encourage voluntary participation in the comprehensive data collection ecosystem. This approach addresses limitations of traditional market research methodologies by creating ongoing incentives for continuous data sharing from large participant populations rather than relying on limited surveys or focus groups.
Consumer engagement activities that generate rewards include product authentication scanning, detailed product review submission, consumption pattern and preference data sharing, loyalty program participation, and market research survey completion. Business participants earn rewards through supply chain data contribution, point-of-sale and compliance system integration, verified dataset provision, and strategic partner onboarding facilitation.
PINYA Meme Token Structure and Integration
PINYA operates as a meme token within the Solana blockchain ecosystem, deriving primary value from community engagement and trading activity rather than direct platform utility functions. This structure creates a sophisticated dual-blockchain approach where GROOVY rewards exist on the secure Hyperledger infrastructure while PINYA tokens trade freely on Solana’s decentralized exchanges.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
The company maintains strategic ownership of forty to sixty percent of all PINYA tokens, serving as the bridge between the centralized Hyperledger system and the decentralized Solana ecosystem. When participants accumulate GROOVY rewards through platform activities, they may redeem these rewards for PINYA tokens using the company’s treasury holdings, creating a unidirectional flow from the enterprise blockchain to the public trading environment.
Liquidity Pool and Trading Mechanisms
PINYA maintains dedicated liquidity pools on Solana that function as automated market makers, ensuring continuous token availability for purchase and sale transactions. This liquidity infrastructure provides real market value that fluctuates based on supply and demand dynamics, creating potential value appreciation opportunities for participants who convert GROOVY rewards to tradeable tokens.
The company’s substantial token holdings provide market stabilization while ensuring redemption availability regardless of trading activity levels. This flexibility enables the company to source tokens for reward redemptions from either treasury holdings or liquidity pools depending on market conditions, maintaining system reliability while participating in potential token value appreciation.
STRATEGIC MARKET POSITION AND COMPETITIVE ADVANTAGES
Sustainable Competitive Differentiation
PINYA XP’s integrated approach creates substantial competitive advantages that would be difficult for competitors to replicate due to the comprehensive nature of the platform’s data collection and the network effects generated by increasing participation. The real-time processing capabilities provide immediate insights that enable faster business decision-making compared to traditional market research approaches that require weeks or months for completion.
The regulatory compliance features address fundamental cannabis industry challenges by ensuring that data collection and sharing activities occur within legal frameworks across different jurisdictions. The industry-specific AI models represent significant development investments and training on cannabis-specific data, creating algorithms that understand unique market dynamics better than generic business intelligence tools.
The blockchain security infrastructure provides data integrity guarantees essential for businesses making strategic decisions based on platform insights. The comprehensive data coverage spanning the entire supply chain creates network effects where platform value increases exponentially as more participants join the ecosystem.
Long-Term Value Creation
The token-based incentive economy creates sustainable participation by aligning interests of all ecosystem participants. Unlike traditional market research where companies pay for limited data access, GROOVY creates ongoing value for data contributors while providing comprehensive insights to data users, establishing a self-reinforcing cycle of participation and value creation.
The multi-chain Web3 integration positions the platform for expansion into broader decentralized finance ecosystems, potentially creating additional revenue streams and partnership opportunities as the cryptocurrency economy evolves. The platform creates significant switching costs for participants because leaving the ecosystem means losing access to comprehensive market intelligence that becomes increasingly difficult to replicate as platform adoption grows.
Conclusion
PINYA XP represents a fundamental transformation in cannabis industry market intelligence creation and distribution. The platform’s integration of blockchain security, artificial intelligence analysis, and cryptocurrency incentive mechanisms creates a self-sustaining ecosystem where all participants benefit from contributing to and accessing comprehensive market intelligence while generating substantial revenue opportunities for the company.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
The platform’s success depends on achieving network effects where increased participation creates exponentially greater value for all users. As additional businesses and consumers join the ecosystem, the quality and comprehensiveness of market intelligence improves, creating stronger incentives for continued participation and platform growth.
This comprehensive approach addresses fundamental challenges facing the cannabis industry, including information asymmetries, regulatory compliance complexities, and the critical need for reliable market intelligence in a rapidly evolving market environment. By providing solutions to these challenges while creating measurable economic value for all participants, PINYA XP positions itself as essential infrastructure supporting the cannabis industry’s continued growth and market maturation.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company includes obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated.
BASIS OF PRESENTATION AND USE OF ESTIMATES
The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
FISCAL YEAR END
The Company elected January 31, as its fiscal year ending date.
USE OF ESTIMATES
The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company uses one financial institution for its cash balances and has not maintained cash balances that exceed federally insured limits.
CASH FLOWS REPORTING
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
RELATED PARTIES
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
REVENUE RECOGNITION
The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers, which is effective for public business entities with annual reporting periods beginning after December 15, 2017. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures and there was no cumulative effect of the adoption of ASC 606.
Revenue is recognized when all of the following criteria are met:
•Identification of the contract, or contracts, with a customer
A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and the parties are committed to perform, and (iii) we determine that collection of substantially all consideration to which it will be entitled in exchange for goods or services that will be transferred is probable based on the customer’s intent and ability to pay the promised consideration.
•Identification of the performance obligations in the contract
Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation.
•Determination of the transaction price
The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. Constraints are applied when estimating variable considerations based on historical experience where applicable.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
•Allocation of the transaction price to the performance obligations in the contract
All current contracts are of a single performance obligation thus the entire transaction price is allocated to the single performance obligation. We determine standalone selling price taking into account available information such as historical selling prices of the performance obligation, geographic location, overall strategic objective, market conditions and internally approved pricing guidelines related to the performance obligation.
•Recognition of revenue when, or as, we satisfy performance obligation
We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at or over the time the related performance obligation is satisfied by transferring a promised good or service to a customer.
FINANCIAL INSTRUMENTS
The Company’s balance sheet includes certain financial instruments. 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 entity’s 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 April 30, 2025. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
INTANGIBLE ASSETS
The Company has applied the provisions of ASC topic 350 - Intangible - goodwill and other, in accounting for its intangible assets. Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 to 17 years. The balance at April 30, 2025 and January 31, 2025 was $190,000 and $0, respectively.
|
| April 30, 2025
|
| January 31, 2025
|
Intellectual property
| $
| 190,000
| $
| -
|
Less: Accumulated amortization and impairment
|
| -
|
| -
|
Totals
| $
| 190,000
| $
| -
|
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
IMPAIRMENT OF LONG- LIVED ASSETS
The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.
DERIVATIVE LIABILITIES
Derivative liabilities include the fair value of instruments such as common stock warrants, preferred stock warrants and convertible features of notes, that are initially recorded at fair value and are required to be re-measured to fair value at each reporting period under provisions of ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging. The change in fair value of the instruments is recognized as a component of other income (expense) in the Company’s statements of operations until the instruments settle, expire or are no longer classified as derivative liabilities. The Company estimates the fair value of these instruments using the Black-Scholes pricing model. The significant assumptions used in estimating the fair value include the exercise price, volatility of the stock underlying the instrument, risk-free interest rate, estimated fair value of the stock underlying the instrument and the estimated life of the instrument. At April 30, 2025 and January 31, 2025, the Company had $3,429,126 and $0 derivative liability, respectively.
INCOME TAXES
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities and net operating loss and tax credit carryforwards given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.
ASC 740-10 requires that the Company recognize 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 the “more-likely-than-not” threshold, 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.
The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices as of January 31, 2025.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded a full valuation allowance against its net deferred tax assets because it is not currently able to conclude that it is more likely than not that these assets will be realized. The amount of deferred tax assets considered to be realizable could be increased in the near term if estimates of future taxable income during the carryforward period are increased.
As of January 31, 2025, the Company had unused net operating loss carry forwards of $390,000 available to reduce federal taxable income. The Company’s ability to offset future taxable income, if any, with tax net operating loss carryforwards may be limited due to the non-filing of tax returns. Under the CARES act, net operating losses arising after 2017 are able to be carried forward indefinitely. Furthermore, changes in ownership may result in limitations under Internal Revenue Code Section 382.
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PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
No deferred tax assets or liabilities were recognized as of January 31, 2025 or 2024.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each year 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 April 30, 2025 and at January 31, 2025. At April 30, 2025 and January 31, 2025, the Company had no dilutive potential common shares.
SHARE-BASED EXPENSE
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 consolidated 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. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
Share-based expense was $3,001 and $0 for the three months ending April 30, 2025 and 2024, respectively.
COMMITMENTS AND CONTINGENCIES
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of April 30, 2025 and January 31, 2025.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
NOTE 3 - INTANGIBLE PROPERTY
The Company purchased the rights in the amount of $190,000 to and further developed the Intellectual Property below:
•Goovy Platform
The Company recorded the property and intangibles as an intangible asset. The valuation of the properties was booked at Fair Market Value.
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Notes to the Consolidated Condensed Financial Statements
NOTE 4 - CONVERTIBLE NOTES PAYABLE
The following table represents the convertible notes payable at April 30, 2025. Per footnote 2, all convertible notes payable are in default.
Date of Note
Issuance
| April 30,
2025
| January 31,
2025
| Maturity
Date
| Conversion
Terms
| Name of Noteholder
|
2/14/17
| 2,800
| 0
| 8/14/17
| See Footnote 1
| Joseph Canouse
|
12/11/18
| 5,000
| 0
| 12/10/19
| See Footnote 1
| Carpathia, LLC, Manager Joseph Canouse
|
1/10/19
| 5,000
| 0
| 1/10/20
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
2/11/19
| 5,000
| 0
| 2/11/20
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/21/19
| 5,000
| 0
| 10/21/20
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
11/13/19
| 6,250
| 0
| 11/13/20
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
1/13/21
| 5,000
| 0
| 1/13/22
| See Footnote 1
| Carpathia, LLC, Manager Joseph Canouse
|
2/10/21
| 27,000
| 0
| 2/10/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
3/12/21
| 104,000
| 0
| 3/12/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
3/19/21
| 104,000
| 0
| 3/19/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
4/9/21
| 37,000
| 0
| 4/9/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
4/21/21
| 52,000
| 0
| 4/21/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
5/10/21
| 104,000
| 0
| 5/10/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
5/27/21
| 156,000
| 0
| 5/27/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
6/18/21
| 104,000
| 0
| 6/18/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
8/3/21
| 104,000
| 0
| 8/3/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/5/21
| 15,000
| 0
| 10/5/22
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/20/21
| 100,000
| 0
| 10/20/22
| See Footnote 1
| Carpathia, LLC, Manager Joseph Canouse
|
12/17/21
| 75,000
| 0
| 12/17/22
| See Footnote 1
| Carpathia, LLC, Manager Joseph Canouse
|
12/30/21
| 50,000
| 0
| 12/30/22
| See Footnote 1
| Carpathia, LLC, Manager Joseph Canouse
|
3/7/22
| 100,000
| 0
| 3/7/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
5/13/22
| 50,000
| 0
| 5/13/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/06/22
| 38,500
| 0
| 10/06/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/27/22
| 16,500
| 0
| 10/27/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
12/1/22
| 30,000
| 0
| 12/1/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
F-15
PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
Date of Note
Issuance
| April 30,
2025
| January 31,
2025
| Maturity
Date
| Conversion
Terms
| Name of Noteholder
|
12/22/22
| 49,500
| 0
| 12/22/23
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
2/9/23
| 27,500
| 0
| 2/9/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
3/9/23
| 22,000
| 0
| 3/10/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
4/3/23
| 26,950
| 0
| 4/3/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
6/9/23
| 22,000
| 0
| 6/9/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
6/23/23
| 16,500
| 0
| 6/23/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
8/1/23
| 33,000
| 0
| 8/1/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
8/21/23
| 27,500
| 0
| 8/21/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
9/19/23
| 3,190
| 0
| 9/19/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/2/23
| 27,500
| 0
| 10/2/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
10/23/23
| 16,500
| 0
| 10/23/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
11/9/23
| 22,000
| 0
| 11/9/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
12/11/23
| 33,000
| 0
| 12/11/24
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
1/26/24
| 22,000
| 0
| 1/26/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
2/15/24
| 22,000
| 0
| 2/15/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
3/11/24
| 16,500
| 0
| 3/11/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
4/14/24
| 35,000
| 0
| 4/14/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
5/20/24
| 25,000
| 0
| 5/20/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
6/20/24
| 22,500
| 0
| 6/20/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
7/26/24
| 17,500
| 0
| 7/26/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
8/20/24
| 17,500
| 0
| 8/20/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
9/19/24
| 17,500
| 0
| 9/19/25
| See Footnote 1
| JP Carey Enterprises, Inc. Joseph Canouse, Manager
|
Sub-totals
| $ 1,823,690
| $ 0
|
|
|
|
Default Principal(2)
| $ 1,862,690
| $ 0
|
|
|
|
Less: Debt Discount
| (6,489)
| $ 0
|
|
|
|
Footnote 1 -Lowest of 75% of issuance day price or 50% lowest bid price in 30 days prior to conversion
Footnote 2 -Cross-Default. Upon the occurrence and during the continuation of any Event of Default, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO 200% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all
F-16
PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.
Below is a sample of the first two notes per the cross-default clause.
|
| 200% of
| Accrued
| Default
| Section
|
|
Note
| Current
| Principal
| Interest
| Interest
| 1.3 & 1.4(g) fees
| Total Due
|
Date
| Principal
| (W)
| (X)
| (Y)
| 1 (Z)
| (W+X+Y+Z)
|
2/14/2017
| $ 2,800
| $ 5,600
| $ 2,658
| $ 1,646
| $ -
| $ 9,904
|
1/10/2019
| $ 5,000
| $ 10,000
| $ 2,985
| $ 1,988
| $ -
| $ 14,973
|
1 (Z) is unknown and cannot be calculated unless the fees are provided by the lender at conversion.
NOTE 5 - ACCRUED INTEREST
The Company’s accrued interest consisted of the following:
|
| April 30,
2025
|
| January 31,
2025
|
Carpathia, LLC
| $
| 153,330
| $
| -
|
JP Carey, LLC
|
| 906,961
|
| -
|
Total Accrued Interest
| $
| 1,060,291
| $
| -
|
NOTE 6 - RELATED PARTY TRANSACTIONS
EMPLOYMENT AND BOARD OF DIRECTOR AGREEMENTS
The Company executed employment and board of director agreements with its key employees, the controlling shareholders, who are its officers and directors of the Company.
Mr. Franjose Yglesias, Employment Agreement: Ten (10) year contract, annual salary of $150,000.
Mr. Kevin Jodrey, Employment Agreement: Ten (10) year contract, annual salary of $150,000.
Mr. Marc Williams, Employment Agreement: Ten (10) year contract, annual salary of $150,000.
Amounts included in accruals represent amounts due to the officers and directors for corporate obligations under the above-mentioned agreements. Payments on behalf of the Company and accruals made under contractual obligation are accrued. As of April 30, 2025, and January 31, 2025 accrued expenses were $112,500 and $0, respectively.
Sale of Interest in Pineapple Consolidated, Inc.
On January 31, 2025, the Company entered into a Stock Purchase Agreement with Mr. Matthew Feinstein, the Company’s then-President, Chief Executive Officer, Treasurer, and a member of the Board of Directors. Pursuant to the agreement, the Company sold its remaining 25% ownership interest in Pineapple Consolidated, Inc. (“PCI”) to Mr. Feinstein in exchange for a $3,000,000 reduction in the outstanding principal amount of a promissory note previously issued by PCI to the Company. As a result of the transaction, the Company no longer retains any ownership interest in PCI.
Change in Control and Executive Transition
On January 30, 2025, Mr. Matthew Feinstein and Mr. Shawn Credle collectively sold an aggregate of 16,000,000 shares of the Company’s common stock to Mr. Franjose “Frank” Yglesias for $335,000 in cash pursuant to a Share Purchase Agreement. The transaction resulted in a change in control of the Company.
Following this change in control, on February 12, 2025, Mr. Feinstein resigned from all positions with the Company, including as Chief Executive Officer, President, Director, and Chairman of the Board. On the same date, the Board of Directors appointed Mr. Yglesias as the new Chief Executive Officer, President, Director, and Chairman of the Board.
F-17
PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
Mr. Yglesias is also the Chief Executive Officer and controlling shareholder of GROOVY Company, Inc. (“GROOVY”), which was acquired by the Company on March 5, 2025, as described in Note 1 - Description of Business. Accordingly, Mr. Yglesias is considered a related party with respect to transactions between the Company and GROOVY following the change in control.
Acquisition of GROOVY Company, Inc.
On March 5, 2025, subsequent to the fiscal year end, the Company entered into a Share Exchange Agreement with GROOVY Company, Inc. Under the agreement, the Company agreed to issue 5,000,000 shares of common stock in exchange for 350,000,000 shares of Series A Preferred Stock of GROOVY, resulting in the Company obtaining majority voting control of GROOVY. In connection with the acquisition, the Company also assumed certain outstanding convertible notes of GROOVY, which may convert into common shares of the Company in future periods.
Given Mr. Yglesias’s dual role as CEO of both companies at the time of the transaction, this transaction is considered a related party transaction.
NOTE 7 - STOCKHOLDERS’ EQUITY AUTHORIZED CAPITAL
As of April 30, 2025, the Company was authorized to issue up to 85,000,000 shares of capital stock, consisting of 75,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. The terms and rights of preferred stock may be designated in one or more series as determined by the Board of Directors in accordance with the Company’s Amended and Restated Articles of Incorporation.
Common Stock
As of April 30, 2025, and January 31, 2025, the Company had 24,834,550 and 19,834,550 shares of common stock issued and outstanding, respectively. During fiscal 2025, 1,000,000 shares of common stock were cancelled and 90,000 shares were sold for cash proceeds of $45,000.
Each share of common stock is entitled to one vote per share on all matters submitted to a vote of the shareholders. Holders of common stock are entitled to receive dividends when and if declared by the Board of Directors. There are no conversion rights, redemption rights, or preemptive rights associated with the common stock.
Preferred Stock
As of April 30, 2025, 3,000,800 preferred shares have been issued. The Board of Directors is authorized to establish one or more series of preferred stock and to fix the designations, preferences, and relative, participating, optional or other special rights, and qualifications, limitations or restrictions of each series, including dividend rights, conversion rights, voting rights, redemption terms, and liquidation preferences.
Equity Transactions
On March 5, 2025, subsequent to the fiscal year end, the Company issued 5,000,000 shares of its common stock pursuant to a Share Exchange Agreement with GROOVY Company, Inc. (f/k/a Santo Mining Corp.), in exchange for 350,000,000 shares of Series A Preferred Stock of GROOVY. As a result of the transaction, the Company acquired a controlling interest in GROOVY, which became a majority-owned subsidiary.
Warrants And Options
The Company has one (1) Warrant outstanding as of April 30, 2025, which contains standard anti-dilution protections in the event of subsequent rights offerings, stock splits, stock dividends or other extraordinary dividends, or other similar changes in the Company’s Common Stock or capital structure, the warrant has no participating rights for any losses: The Warrant was issued in connection with the convertible note executed on June 23, 2023. The Warrant is convertible into the Company’s Common Stock at an Exercise Price equal to $0.0001 of the price per share of the Company’s Common Stock. This warrant contains a cashless exercise provision.
The Company accounts for warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, depending on the specific terms of the warrant agreement. The Company determined the fair value of the warrants using the Black-Scholes pricing model and treated the valuation as equity instruments. The warrants are marked-to-market each reporting period, which will have an impact to earnings. Any future exercises of the warrants will be recorded as cash
F-18
PINEAPPLE EXPRESS CANNABIS COMPANY AND SUBSIDIARIES
Notes to the Consolidated Condensed Financial Statements
received and recorded in cash, with a corresponding increase to Common Stock and additional paid-in capital in equity.
As of April 30, 2025, the warrant liability had an initial value of $5,000 based on 100,000,000 shares of Common Stock underlying the Warrant, the following assumptions were observed:
Fair value assumptions - warrant liability
| 4/30/2025
|
Risk-free interest rate
| 5.25%
|
Expected lives (years)
| 7.0
|
Expected price volatility
| 141.52%
|
NOTE 8 - SALE OF INVESTMENT IN PINEAPPLE CONSOLIDATED, INC.
On January 31, 2025, the Company entered into a Stock Purchase Agreement with Matthew Feinstein, the Company’s President, Chief Executive Officer, Treasurer, and Director, pursuant to which the Company sold its remaining 25% equity interest in Pineapple Consolidated, Inc. (“PCI”) to Mr. Feinstein. In consideration for the transfer of these shares, the Company agreed to a $3,000,000 reduction in the outstanding principal amount due to the Company under a previously issued $3,000,000 promissory note from PCI.
In connection with the disposition, the Company also transferred certain related assets and liabilities associated with PCI. The assets disposed of consisted of equipment with a carrying value of $1,495 and an intangible asset with a carrying value of $3,000,000, representing the Company’s recorded value of its investment in PCI. In exchange, the Company extinguished $2,966,714 outstanding notes payable and $20,485 of accounts payable and accrued liabilities.
No cash was exchanged in the transaction. The disposition was accounted for as a non-cash investing and financing activity and resulted in a loss of $14,296, calculated as follows:
Description
|
| Amount
|
Total assets disposed
|
| $3,001,495
|
Less: Total liabilities settled
|
| (2,987,199)
|
Loss on disposition
|
| $14,296
|
The loss has been recorded in other expenses in the consolidated statement of operations for the year ended January 31, 2025.
This transaction was considered a related party transaction, as Mr. Feinstein was an officer and director of the Company.
NOTE 9 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the company has analyzed its operations subsequent to April 30, 2025, through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
F-19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations for the three months ended April 30 2025 and 2024:
Revenue and cost of goods sold
The company had no revenues for the three months ended April 30, 2025 and 2024.
Operating expenses
Total expenses for the three months ended April 30 , 2025 and 2024 were $184,594 and $5,580, respectively. The expenses for the three months ended April 30, 2025 and 2024 consisted of management compensation of $112,500 and $0 respectively; stock issued for services of $3,001 and $0, respectively; professional fees of $68,249 and $0, respectively; general and administrative costs of $544 and $5,580, respectively and rent expense of $300 and $0, respectively.
Net Loss
The net loss for the three months ended April 30, 2025 and 2024 was $184,594 and $5,580 respectively.
Liquidity, and Capital Resources, and Cash Requirements
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.
As of April 30, 2025, the Company had $0 in cash and cash equivalents. The Company has not generated revenues and has relied primarily upon capital generated from public and private offerings of its securities.
The Company sustained a loss of $659,293 for the three ended April 30, 2025 and $3,616 for the three months ended April 30, 2024. The Company has accumulated losses totaling $1,332,939 at April 30, 2025. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We are presently able to meet our obligations as they come due through our borrowing and the support of our shareholders. At April 30, 2025, we had a working capital deficit of $8,396,980. Our working capital deficit is due to the results of operations.
4
Cash flows
The following table sets forth the primary sources and uses of cash and cash equivalents for the three months ended April 30, 2025 and 2024 as presented below:
|
| For the Three Months Ended
April 30,
|
|
| 2025
|
| 2024
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
Net loss
| $
| (659,293)
| $
| (3,616)
|
Adjustment to reconcile net loss to net cash provided in operations:
|
|
|
|
|
Change in fair market value of derivatives
|
| 306,141
|
| ---
|
Amortization of debt discount
|
| 40,138
|
| ---
|
Depreciation and amortization
|
| -
|
| 115
|
Stock issued for services provided
|
| 8,001
|
| ---
|
Change in assets and liabilities:
|
|
|
|
|
Accounts receivable, net
|
| -
|
| (1,964)
|
Accounts payable and accrued expenses
|
| 69,093
|
| (6,279)
|
Accrued compensation
|
| 112,500
|
| ---
|
Accrued interest
|
| 1,060,291
|
| ---
|
Warrant liability
|
| -
|
| ---
|
Net Cash provided by (used in) operating activities
|
| 936,871
|
| (11,744)
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
Payments of notes payable, related party
|
| (190,000)
|
| ---
|
Net Cash used in investing activates
|
| (190,000)
|
| ---
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
Proceeds (payments) notes payable, related party
|
| -
|
| 11,714
|
Groovy Company, Inc. Acquisition
|
| (746,871)
|
| ---
|
Net Cash provided by (used in) financing activates
|
| (746,871)
|
| 11,714
|
|
|
|
|
|
Net change in cash and cash equivalents
|
| -
|
| (30)
|
Cash and cash equivalents Beginning of period
|
| -
|
| 30
|
Cash and cash equivalents End of period
| $
| -
| $
| -
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
Cash paid for interest
| $
| -
| $
| -
|
Cash paid for taxes
| $
| -
| $
| -
|
We cannot guarantee that we will manage to sell all the shares required within current offerings. We will attempt to raise the necessary funds to proceed with all phases of our plan of operation.
Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a public reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations. Accordingly, the Company’s management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to achieve our business plan objectives or be able to achieve or maintain cash- flow-positive operating results. If we are unable to generate adequate funds from operations or raise sufficient additional funds, we may not be able to repay our existing debt, continue to operate our business network, respond to competitive
5
pressures or fund our operations. As a result, we may be required to significantly reduce, reorganize, discontinue or shut down our operations.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated minimal revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.
Management’s Report on Internal Controls over Financial Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. 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. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of January 31, 2025 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of January 31, 2025, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
6
1.We do not have an Audit Committee - While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.We did not maintain appropriate cash controls - As of January 31, 2025, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.
3.We did not implement appropriate information technology controls - As of January 31, 2025, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of January 31, 2025 based on criteria established in Internal Control- Integrated Framework issued by COSO.
System of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of January 31, 2025. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As described above, the Company has concluded that the internal control over financial reporting is ineffective in 2023 because of the material weakness identified by our independent auditor.
7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are involved in ordinary routine litigation typical for companies engaged in our line of business. As of the date of this Quarterly Report on Form 10-Q, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company that we believe would be likely, individually or in the aggregate, to have a material adverse effect on our financial condition or results of operations.
Item 1A. Risk Factors
Smaller reporting companies are not required to provide disclosure pursuant to this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended April 30, 2025, the Company issued unregistered equity securities as follows:
None.
The above securities issuances (if any) were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Regulation D and Section 4(a)(2), as applicable under the Securities Act.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
(a) None.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors since we last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K promulgated under the Exchange Act
Item 6. Exhibits
The following exhibits are included as part of this report by reference:
Number
|
| Description
|
31.1*
|
| Certification of Chief Executive Officer pursuant to Exchange Act Rule 15d-14(a) , as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
| Certification of Principal Financial Officer pursuant to Exchange Act Rule 15d-14(a) , as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1**
|
| Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
| Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
8
Number
|
| Description
|
101. INS
|
| XBRL Instance Document
|
101. SCH
|
| XBRL Taxonomy Extension Schema Document
|
101. CAL
|
| XBRL Taxonomy Calculation Linkbase Document
|
101. DEF
|
| XBRL Taxonomy Extension Definition Linkbase Document
|
101. LAB
|
| XBRL Taxonomy Label Linkbase Document
|
101. PRE
|
| XBRL Taxonomy Presentation Linkbase Document
|
*Filed herewith.
**Furnished herewith.
9
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PINEAPPLE EXPRESS CANNABIS COMPANY
|
Dated: June 26, 2025
|
|
|
| By:
| /s/ Franjose Yglesias
|
| Name:
| Franjose Yglesias
|
| Title:
| Chief Executive Officer, President and Interim Chief Financial Officer (principal executive officer, principal financial officer and principal accounting officer)
|
10
