,,,,,,,,,,,,,,,,,,,the START of a NEW ERA........???????????From the Last Quarterly Earnings Report released by Management March 27th__this SETS
the Starting Gate Current STATUS__for WHAT We ALL HOPE will finally RESULT in GREAT
THINGS eh !!!!!!!!!!!
HARRYS MANUFACTURING INC.
Notes to Condensed Interim Consolidated Financial Statements
For the six months ended January 31, 2020
(unaudited)
(Expressed in Canadian dollars)
11. Capital disclosures
The Company manages its capital in a manner consistent with the risk characteristics of the assets it holds.
All financing, including equity and debt, are analyzed by management and approved by the Board of
Directors.
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a
going concern and provide returns for shareholder. The Company is meeting its objective of managing capital
through its detailed review and performance of due diligence on all potential acquisitions, preparing shortterm and long-term cash flow analysis to ensure an adequate amount of liquidity and monthly review of
financial results. The Company considers cash, shareholder loans and shareholders’ equity (deficiency) to be
capital. The Company does not have any externally imposed requirements on its capital.
There have been no changes in the Company’s approach to capital management from the previous years.
12. Commitments
(a) On November 16, 2018, the Company entered into a sales and distribution agreement. Pursuant to the
agreement, the Company granted distribution rights to sell products manufactured by the Company in
Asia and Europe for a term of two years.
(b) On July 5, 2019, the Company entered into a Consulting Agreement with Aboriginal Import Export Ltd.
(the “Consultant”) to provide consulting services for a term of 7 months. As per the terms of the
agreement, the Company granted 500,000 stock options to the Consultant. In addition, the Company
agreed to pay the Consultant $60,000 (paid) and $15,000 per month starting August 1, 2019 for the
balance of the term of the agreement. Either party may terminate the agreement by giving 30 days’
notice and upon expiration of the 30 days, all obligations between the parties shall be terminated.
(c) On September 3, 2019, the Company signed and announced a Strategic Production Agreement (the
“Strategic Agreement”) with Sopatyk Seed Farms Ltd. (the “Sopatyk Farms”) for the operation of hemp
cultivation facilities in Canada (the “Transaction”).
Pursuant to the terms of the Strategic Agreement, the Company and Sopatyk Farms intend to jointly
manage a facility on Sopatyk Farms property (the "Facility") located in Saskatoon, Saskatchewan for the
cultivation of hemp. Under the terms of the Strategic Agreement, the Company will fund the operation
of the Facility and Sopatyk Farms will provide its farming expertise to cultivate and grow hemp.
Pursuant to the terms of the Strategic Agreement, Sopatyk Farms will initially plant a test plot of 50
acres upon receipt of the requisite licenses required under the Cannabis Act (Canada) and other
applicable laws, with the option to increase up to 2,000 acres. The Company is responsible for engaging
a licensed processor to process the hemp using the Company’s rolling technology.
The continuation of the Strategic Agreement is subject to the satisfaction of a number of conditions,
including but not limited to: receipt of all licenses required to cultivate and grow hemp and hemp related
products; the parties obtaining all consents, waivers and corporate and third party approvals necessary,
including any required approval of the Canadian Securities Exchange; finding a suitable licensed third
party processor to produce the hemp cigarettes; and receipt of all permits, licenses, zoning approvals and
any other related approvals required for the Facility.
The Company also entered in a consulting agreement with Sopatyk Farms for consulting services in
cultivating and growing hemp. In consideration, the Company granted 500,000 stock options exercisable
at $0.125 per share for five years after the date of grant.
(d) On December 18, 2019, the Company signed and announced an Independent Sales Agreement (the
“Agreement”) with a consultant (the “Consultant”) who will act as the Company’s exclusive distributor
and sales agent in Canadian retail markets for a term of one year. Pursuant to the Agreement, the
Company granted the Consultant 250,000 stock options exercisable at $0.25 per share until December
18, 2024. In addition, the Company agreed to pay the Consultant $5,000 per month for three months.
13. Subsequent Events
a) On February 4, 2020, the Company issued 175,000 common shares upon the exercise of 175,000 stock
options at $0.10 per share to the CFO of the Company.
b) On February 24, 2020, the Company issued 100,000 common shares upon the exercise of 100,000 stock
options at $0.125 per share.