Electronic (XESP) 10-Q for FY2020 Q2, filed Aug 13, 2020

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended JUNE 30, 2020

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

Commission file number: 000-55809

CANNASSIST INTERNATIONAL CORP.

(Exact name of registrant as specified in its charter)

Delaware	82-1873116
(State or Other Jurisdiction of Incorporation or<br><br>Organization)	(I.R.S. Employer Identification No.)
1548 Loch Ness Dr., Fallbrook, CA 92028	82834
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 990-3091

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

Title of each class	Trading Symbol(s)	Name of each exchange on which<br><br>registered
Common Stock	CNSC	OTCQB

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days). Yes 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.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller Reporting Company	x
Emerging growth company	x

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(1) of the Exchange Act. ¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of August 12, 2020, the Company had 18,435,000 shares of its common stock, par value $.0001 per share, issued and outstanding.

TABLE OF CONTENTS

PART I
Item 1.	Condensed Unaudited Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of<br><br>Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	16
PART II
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mining Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
	Signatures	19
2
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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CANNASSIST INTERNATIONAL CORP.

INDEX TO FINANCIAL STATEMENTS

Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019	4
Statements of Operations for the three and six months ended June 30, 2020 and 2019 (unaudited)	5
Statements of Changes in Stockholders’ Deficit for the six months ended June 30, 2020 and 2019 (unaudited)	6
Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited)	7
Notes to Condensed Financial Statements (unaudited)	8
3
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CannAssist International Corp.<br><br>Balance Sheets
---
	June 30, 2020		December 31, 2019
---	---	---	---	---
ASSETS	(unaudited)
Current assets:
Cash	17,687		80,021
Accounts receivable	1,564		1,135
Prepaid expenses	6,190		4,145
Other asset	1,567		1,567
Inventory	76,189		50,592
Total assets	103,197		137,460
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accruals	198,294		124,796
Accounts payable – related party	11,843		9,857
Convertible notes payable, net of debt discount of $2,762	12,238		-
Customer deposits	-		54,660
Due to a related party	16,840		9,498
Loans payable	11,000		1,000
Total current liabilities	250,215		199,811
Commitments and contingencies	-		-
Stockholders’ Deficit:
Preferred stock, $0.0001 par value 20,000,000 shares<br>authorized; none issued and outstanding	-		-
Common Stock, $0.0001 par value, 100,000,000 shares<br>authorized; 18,435,000 issued and<br>outstanding	1,844		1,844
Additional paid in capital	3,132,589		358,317
Accumulated deficit	(3,281,451	)	(422,512	)
Total Stockholders’ deficit	(147,018	)	(62,351	)
Total Liabilities and Stockholders’ Deficit	103,197		137,460

All values are in US Dollars.

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

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CannAssist International Corp.<br><br>Statements of Operations<br><br>(Unaudited)
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	For the Three Months Ended June 30,				For the Six Months Ended June 30,
---	---	---	---	---	---	---	---	---
	2020		2019		2020		2019
Revenue	59,825		165,865		269,912		438,678
Cost of revenue	44,593		118,698		143,598		328,568
Gross margin	15,232		47,167		126,314		110,110
Operating expenses:
General and administrative	72,046		73,484		154,423		124,608
General and administrative– related party	-		153,600		-		154,100
Commissions – related party	-		314		4,373		12,567
Professional fees	24,240		69,816		56,850		105,032
Preferred stock issued for change of control	-		-		2,765,250		-
Total operating expenses	96,286		297,214		2,980,896		396,307
Loss from operations	(81,054	)	(250,047	)	(2,854,582	)	(286,197	)
Other expense:
Interest expense	(2,516	)	(516	)	(4,357	)	(516	)
Total other expense	(2,516	)	(516	)	(4,357	)	(516	)
Loss before provision for income taxes	(83,570	)	(250,563	)	(2,858,939	)	(286,713	)
Provision for income taxes	-		-		-		-
Net loss	(83,570	)	(250,563	)	(2,858,939	)	(286,713	)
Loss per share, basic and diluted	(0.00	)	(0.02	)	(0.16	)	(0.02	)
Weighted average shares outstanding, basic<br>and diluted	18,435,000		15,871,538		18,435,000		14,150,331

All values are in US Dollars.

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

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CannAssist International Corp.<br><br>Statements of Changes in Stockholders’<br>Deficit<br><br>For the Six Months Ended June 30, 2019<br>and 2020<br><br>(Unaudited)
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				Additional	Stock				Total
---	---	---	---	---	---	---	---	---	---	---
	Common Stock			Paid-in	Subscription		Retained		Stockholders'
	Shares		Amount	Capital	Receivable		Earnings		Deficit
Balance, December 31,<br>2018		12,410,000	1,241	13,920	(30	)	20,294		35,425
Cash collected on receivable					30		-		30
Net loss		-	-	-	-		(36,150	)	(36,150	)
Balance, March 31, 2019		12,410,000	1,241	13,920	-		(15,856	)	(695	)
Common stock issued for<br>license agreement –<br>related party		5,000,000	500	149,500	-		-		150,000
Net loss		-	-	-	-		(250,563	)	(250,563	)
Balance, June 30, 2019		17,410,000	1,741	163,420	-		(266,419	)	(101,258	)

All values are in US Dollars.

							Additional			Total
	Preferred Stock			Common Stock			Paid-in	Retained		Stockholders'
	Shares		Amount	Shares		Amount	Capital	Earnings		Deficit
Balance, December 31,<br><br>2019		-	-		18,435,000	1,844	358,317	(422,512	)	(62,351	)
Preferred stock issued for<br><br>change of control		1,000	-		-	-	2,765,250	-		2,765,250
Net loss		-	-		-	-	-	(2,775,369	)	(2,775,369	)
Balance, March 31, 2020		1,000	-		18,435,000	1,844	3,123,567	(3,197,881	)	(72,470	)
Warrants issued		-	-		-	-	9,022	-		9,022
Net loss		-	-		-	-	-	(83,570	)	(83,570	)
Balance, June 30, 2020		1,000	-		18,435,000	1,844	3,132,589	(3,281,451	)	(147,018	)

All values are in US Dollars.

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

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CannAssist International Corp.<br><br>Statements of Cash Flows<br><br>(Unaudited)
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	For the Six Months Ended June 30,
---	---	---	---	---
	2020		2019
Cash flows from operating activities:
Net loss	(2,858,939	)	(286,713	)
Adjustments to reconcile net loss to net cash<br>used in operating activities:
Preferred stock issued for change of control	2,765,250		-
Warrant expense	6,260		-
Common stock issued for licensing expense – related party	-		150,000
Changes in Operating Assets and Liabilities:
Accounts receivable	(429	)	54,047
Inventory	(25,597	)	(17,275	)
Prepaid expenses and other assets	(2,045	)	51,687
Accounts payable and accrued liabilities	75,484		56,903
Customer deposits	(54,660	)	(59,671	)
Net cash used by operating activities	(94,676	)	(51,022	)
Cash flows from Investing activities:	-		-
Cash flows from Financing activities:
Proceeds from loans - related party	12,852		9,496
Repayment of related party loans	(5,510	)	-
Proceeds from loans payable	10,000		-
Proceeds from convertible loans payable	15,000		-
Proceeds from stock subscription receivable	-		30
Net cash provided by financing activities	32,342		9,526
Net decrease in cash	(62,334	)	(41,496	)
Cash, beginning of period	80,021		67,351
Cash, end of period	17,687		25,855
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	-		-
Cash paid for taxes	-		-

All values are in US Dollars.

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

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CANNASSIST INTERNATIONAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

NOTE 1 - DESCRIPTION OF BUSINESS AND HISTORY

Description of business

CannAssist International Corp. (the “Company” or “CannAssist”) was incorporated on May 17, 2017 under the laws of the state of Delaware under the name Iris Grove Acquisition Corporation to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On May 23, 2018 the Company changed its name to CannAssist International Corporation.

On June 18, 2018, the Company cancelled all 20,000,000 shares of its issued and outstanding stock and issued 3,000,000 shares of common stock pursuant to Section 4(a)(2) of the Securities Act of 1933 at par representing 100% of the total outstanding common stock at the time. With the issuance of the stock and the redemption of the 20,000,000 shares of stock, the Company effected a change in its control and the new majority shareholder was elected as the new management of the Company.

On July 12, 2018, the “Company, entered into a share exchange acquisition agreement with Xceptor LLC, a private company organized under the laws of Wyoming (“Xceptor”). The Acquisition was effected by the Company through the exchange of all the outstanding membership interests of Xceptor for 3,000,000 shares of common stock of the Company, valued at $0.0001 per share. At the time of the Acquisition, there was one shareholder of the Company who was also a shareholder and manager of Xceptor. Xceptor has become a wholly owned subsidiary of the Company and the Company has taken over its operations and business plan. Prior to the Acquisition, the Company had no ongoing business or operations. Since the Company and Xceptor were entities under common control prior to the Acquisition, the transaction is accounted for as a restructuring transaction. The Company has recast prior period financial statements to reflect the conveyance of Xceptor’s common shares as if the restructuring transaction had occurred as of the earliest date of the financial statements.

CannAssist produces and sells products formulated using its cannabidiol ("CBD") product, “Cibidinol,” which is formulated based on a process developed by its founder Mark Palumbo. CBD is a non-psychoactive compound found in hemp. CannAssist’s initial research and development work, aimed at enhancing the bioavailability of desired molecular structures, resulted in the creation of a line of CBD products, most notably its CBD product, Cibidinol. Cibidinol will be available in a line of consumable and topical products that the Company believes will make enhanced CBD products more available and accessible to consumers.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable

Revenues that have been recognized but not yet received are recorded as accounts receivable. Losses on receivables will be recognized when it is more likely than not that a receivable will not be collected. An allowance for estimated uncollectible amounts will be recognized to reduce the amount of receivables to its net realizable value when needed. The allowance for uncollectible amounts is evaluated quarterly.

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CANNASSIST INTERNATIONAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery.

The Company recognizes revenue when product is shipped. The Company will often receive payment and/or pay for the cost of goods prior to shipping. When this occurs, the result is both a prepaid for the supplies to be used in their product and a customer deposit. As of December 31, 2019, the Company has a prepaid expense of $4,145 and customer deposits of $54,660, for orders to be shipped in Q1, 2020.

Cost of Sales

Cost of sales is determined on the basis of the cost of production or the purchase of goods, adjusted for the variation of inventory Cost of sale is recognized as the direct cost of products or services sold during the period.

Recently issued accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 - GOING CONCERN

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated revenues of $269,912 during the six months ended June 30, 2020 and had a net loss of $2,858,939 for six months ended June 30, 2020, which consisted of a $2,765,250 non-cash expense for the issuance of preferred stock. The Company has an accumulated deficit of $3,281,451 as of June 30, 2020. The Company requires capital for its contemplated operational and marketing activities. The obtainment of additional financing, through an initial capital raise, the successful development of the Company’s contemplated plan of operations, and its transition to the attainment of continued profitable operations are necessary for the Company to continue operations. There is no guarantee that the Company will be able to obtain the necessary financing or profitable operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

NOTE 4 – LOANS PAYABLE

On October 11, 2017, the Company received a $1,000 loan from a third party. The loan is unsecured, due on demand and non-interest bearing.

On June 29, 2020, the Company received a $10,000 loan from a third party. The loan is unsecured, due on demand and non-interest bearing.

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CANNASSIST INTERNATIONAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

NOTE 5 – CONVERTIBLE NOTES PAYABLE

On June 2, 2020, the Company issued a convertible note payable to a third party for $10,000. The note is unsecured, non-interest bearing and is due and payable in six months. If the loan is not repaid by the due date is can be converted into shares of common stock at $0.25 per share. In addition, the Company issued warrants to purchase 13,500 shares of common stock. The warrants have an exercise price of $0.50 and expire in five years.

On June 12, 2020, the Company issued a convertible note payable to a third party for $5,000. The note is unsecured, non-interest bearing and is due and payable in six months. If the loan is not repaid by the due date is can be converted into shares of common stock at $0.25 per share. In addition, the Company issued warrants to purchase 2,500 shares of common stock. The warrants have an exercise price of $0.50 and expire in five years.

The above notes are shown net of $2,762 of debt discount.

NOTE 6 – RELATED PARTY TRANSACTIONS

Marla Palumbo has advanced the Company a limited amount of funds to cover some general operating expenses and travel costs. These advances are unsecured, due on demand and non-interest bearing. As of June 30, 2020, and December 31, 2019, the balance due to Ms. Palumbo for cash advances is $16,840 and $9,498, respectively. Ms. Palumbo is the President of the Company and wife of the CEO, Mark Palumbo.

During the six months ended June 30, 2020 and 2019, the Company paid sales commissions of $4,373 and $12,567, respectively, to EME Ltd.

During the six months ended June 30, 2020 and 2019, respectively, the Company incurred $0 and $4,100 of expense for Matthew Palumbo for product design services. Matthew Palumbo is the son of Mark Palumbo, CEO.

On April 29, 2019, the Company entered into a Technology License Agreement with Mark Palumbo (“Licensor”) whereby the Licensor granted to the Company an exclusive worldwide license (the “License”) to use, market, promote and distribute certain technology related to a provisional patent application for a “Process for creating Carbohydrate Complexes with Cannabinoids and other Hydrophobic Molecules in large scale,” related patent applications, related trade-secrets and associated knowhow, including methods, techniques, specifications, procedures, information, systems, knowledge and business processes required to practice and carry on business in the field of data collection, security and management (the “Technology”). The initial term of the License is 5-years (the “Initial Term”) and shall automatically be renewed for successive 1-year terms (each, a “Renewal Term”) unless the Company elects to terminate the License by giving 30 days’ written notice prior to commencement of a Renewal Term. In exchange for the License of the Technology, the Company shall issue to the Licensor 5,000,000 restricted shares of its common stock, valued at par value per share, at the effective date of the agreement, and shall issue to the Licensor an additional 1,000,000 restricted shares of its common stock, valued at par value per share, at the commencement of each Renewal Term.

On March 30, 2020, the Company issued 1,000 shares of its Series A Preferred Stock to Mark Palumbo, an officer and director of the Company. Based on the rights of the designation the shares of preferred stock were value at 60% of the value of the total common stock outstanding. The shares of common stock have a current fair value of $0.25 per shares resulting in total non-cash expense of $2,765,250.

NOTE 7 – PREFERRED STOCK

The Company has designated 1,000 shares of Series A Preferred Stock. The shares of Series A Preferred Stock have a par value of $0.0001 per share. The Series A Preferred Shares do not have a dividend rate or liquidation preference and are not convertible into shares of common stock. Series A Preferred Stock, voting together as a class, have the right to vote 60% of the Company’s voting shares on any and all shareholder matters (the “Majority Voting Rights”). Additionally, the Company shall not adopt any amendments to the Company’s Bylaws, Articles of Incorporation, as amended, make any changes to the Certificate of Designations establishing the Series A Preferred Stock, or effect any reclassification of the Series A Preferred Stock, without the affirmative vote of at least a majority of the outstanding shares of Series A Preferred Stock. However, the Company may, by any means authorized by law and without any vote of the holders of shares of Series A Preferred Stock, make technical, corrective, administrative or similar changes to such Certificate of Designations that do not, individually or in the aggregate, adversely affect the rights or preferences of the holders of shares of Series A Preferred Stock. Other than the Majority Voting Rights, the Series A Preferred Stock does not have any other dividend, liquidation, conversion, or redemption rights, whatsoever.

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CANNASSIST INTERNATIONAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

NOTE 8 – WARRANTS

On April 1, 2020, the Company entered into an agreement with an independent consultant pursuant to which the consultant shall be paid a cash monthly retainer of $5,000 a month and shall be issued 110,000 warrants to purchase shares of the common stock of the Company at an exercise price equal to $0.25 per share, subject to certain conditions regarding vesting. This agreement has a term of 12 months and shall be automatically renewed on a month to month basis unless terminated upon 30 days’ written notice.

The warrants were evaluated for purposes of classification between liability and equity. The warrants do not contain features that would require a liability classification and are therefore considered equity. The warrants were fair valued at $25,038. The expense is being amortized over the one-year term of the agreement. The Black Scholes pricing model was used to estimate the fair value of the Warrants issued with the following inputs:

Warrants	110,000
Share price	0.25
Exercise Price	0.25
Term	10 years
Volatility	103.5	%
Risk Free Interest Rate	2.49	%
Dividend rate	-

All values are in US Dollars.

During the six months ended June 30, 2020, the Company issued 16,000 warrants in conjunction with the issuance of two convertible promissory notes (Note 5). The warrants have an exercise price of $0.50 and expire in five years. Using the fair value calculation, the relative fair value between the debt issued and the warrants was calculated to determine the warrants recorded equity amount of $2,762, accounted for in additional paid in capital.

The Black Scholes pricing model was used to estimate the fair value of the warrants issued with the following inputs:

Warrants	16,000
Share price	0.25
Exercise Price	0.25
Term	5 years
Volatility	103.5	%
Risk Free Interest Rate	1.88	%
Dividend rate	-

All values are in US Dollars.

A summary of the status of the Company’s outstanding stock warrants and changes during the year is presented below:

Activity for the six months ended June 30, 2020 is as follows:

		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2019	-	-	-
Granted	126,000	0.25	9.15	-
Expired	-	-	-	-
Exercised	-	-	-	-
Outstanding at June 30, 2020	126,000	0.25	9.15	-
Exercisable at June 30, 2020	61,000	0.25	9.15	-

All values are in US Dollars.

Range of Exercise<br>Prices	Number Outstanding 6/30/2020	Weighted Average Remaining<br>Contractual Life	Weighted Average<br>Exercise Price
$0.25	126,000	9.15 years	$0.25
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CANNASSIST INTERNATIONAL CORP.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2020

NOTE 9 – SUBSEQUENT EVENTS

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the following.

Subsequent to June 30, 2020, the Company issued convertible promissory notes for total proceeds of $15,500. The notes are unsecured, non-interest bearing and is due and payable in six months. If the loans are not repaid by the due date they can be converted into shares of common stock at $0.25 per share. In addition, the Company issued warrants to purchase 22,002 shares of common stock. The warrants have an exercise price of $0.50 and expire in five years.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.

Forward Looking Statements

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:

·our future strategic plans

·our future operating results;

·our business prospects;

·our contractual arrangements and relationships with third parties;

·the dependence of our future success on the general economy;

·our possible future financings; and

·the adequacy of our cash resources and working capital.

These forward-looking statements can generally be identified as such because the context of the statement will include words such as we “believe,” “anticipate,” “expect,” “estimate” or words of similar meaning. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Form 10-Q, and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Executive Overview

CannAssist International Corporation (“CannAssist” or the "Company") was incorporated on May 17, 2017 under the laws of the State of Delaware.

CannAssist produces and sells its cannabidiol ("CBD") product, “Cibidinol,” which is formulated based on a process developed by its founder Mark Palumbo. CBD is a non-psychoactive compound found in hemp and cannabis. CannAssist’s initial research and development work, aimed at enhancing the bioavailability of desired molecular structures, resulted in the creation of a line of CBD products, most notably its CBD product, Cibidinol. Cibidinol will be available in a line of consumable and topical products that the Company believes will make enhanced CBD products more available and accessible to consumers.

The Company's independent auditors have issued a report raising substantial doubt about the Company's ability to continue as a going concern. At present, the Company has no operations and the continuation of the Company as a going concern is dependent upon financial support from its stockholders, its ability to obtain necessary equity financing to continue operations and/or to successfully locate and negotiate with a business entity for the combination of that target company with it.

Results of Operation for the Three Months Ended June 30, 2020 and 2019

Revenues

For the three months ended June 30, 2020, the Company had revenues of $59,825, costs of revenue of $44,593 and gross margin of $15,232. In comparison, for the three months ended June 30, 2019, the Company had revenue of $165,865, cost of revenue of $118,698 and gross margin of $47,167. The decrease in revenue, cost of revenue, and gross margin resulted from changes in general economic conditions.

General and administrative expenses

General and administrative expenses were $72,046 for the three months ended June 30, 2020 compared to $73,484 for the three months ended June 30, 2019. The decrease in general and administrative expenses are negligible for the purposes of comparison.

General and administrative expenses to a related party, were $0 for the three months ended June 30, 2020 compared to $153,600 for the three months ended June 30, 2019. General and administrative expenses to a related party have decreased because the non-cash expense for stock issuance paid in 2019 in connection with a licensing agreement with an affiliate of the Company was a one-time expense.

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Commissions

Commission expense was $0 for the three months ended June 30, 2020 compared to $314 for the three months ended June 30, 2019. Commission expense was paid to EME, LLC, a related party.

Professional fees

Professional fees were $24,240 for the three months ended June 30, 2020 compared to $69,816 for the three months ended June 30, 2019. Professional fees consist of audit, accounting and legal fees. The fees have decreased with the decrease in services required to comply with SEC filing requirements during the relevant periods.

Net Loss

For the three months ended June 30, 2020, we realized a net loss of $83,570 as compared to a net loss of $250,563 for three months ended June 30, 2019. The decrease in net loss in the current period is due to the non-cash expense for stock issuance paid in 2018 in connection with a licensing agreement with an affiliate of the Company was a one-time expense and a decrease in other operating expenses in conjunction with the decrease in business activity.

Results of Operation for the Six Months Ended June 30, 2020 and 2019

Revenues

For the six months ended June 30, 2020, the Company had revenues of $269,912, costs of revenue of $143,598 and a gross margin of $126,314. In comparison, for the six months ended June 30, 2019, the Company had revenue of $438,678, cost of revenue of $328,568 and a gross margin of $110,110. The decrease in revenue cost of revenue and gross margin resulted from changes in general economic conditions.

General and administrative expenses

General and administrative expenses were $154,423 for the six months ended June 30, 2020 compared to $124,608 for the six months ended June 30, 2019 have increased with the recent increase in business activity.

General and administrative expenses to a related party were $0 for the six months ended June 30, 2020 compared to $154,100 for the six months ended June 30, 2019. General and administrative expenses to a related party have decreased because the non-cash expense for stock issuance paid in 2019 in connection with a licensing agreement with an affiliate of the Company was a one-time expense.

Commissions

Commission expense was $4,373 for the six months ended June 30, 2020 compared to $12,567 for the six months ended June 30, 2019. Commission expense was paid to EME, LLC, a related party

Professional fees

Professional fees were $56,850 for the six months ended June 30, 2020 compared to $105,032 for the six months ended June 30, 2018. Professional fees consist of audit, accounting and legal fees. The fees have decreased with the decrease in services required to comply with SEC filing requirements during the relevant periods.

Preferred Stock

Preferred Stock expense was $2,765,250 for the six months ended June 30, 2020 compared to $0 for the six months ended June 30, 2019. The preferred stock was issued to Mark Palumbo, a related party.

Net Loss

For the six months ended June 30, 2020, we realized a net loss of $2,858,939 as compared to a net loss of $286,713 for six months ended June 30, 2019. The increase in net loss in the current period is primarily due to the expense incurred in connection with the issuance of preferred stock.

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Liquidity and Capital Resources

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has generated revenues of $269,912 during the six months ended June 30, 2020 and had a net loss of $2,854,582 for the six months ended June 30, 2020. The Company has an accumulated deficit of $3,281,451 as of June 30, 2020. The Company requires capital for its contemplated operational and marketing activities. The obtainment of additional financing, through an initial capital raise, the successful development of the Company’s contemplated plan of operations, and its transition to the attainment of continued profitable operations are necessary for the Company to continue operations. There is no guarantee that the Company will be able to obtain the necessary financing or profitable operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

The Company used $94,676 of cash from operations for the six months ended June 30, 2020. Net cash provided by financing activities for the six months ended June 30, 2020 was $32,342.

As of June 30, 2019, the Company had $17,687 in cash.

Critical Accounting Estimates and Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.

We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Recent Accounting Pronouncements

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, they concluded that our disclosure controls and procedures were not effective for the quarterly period ended June 30, 2020.

The following aspects of the Company were noted as potential material weaknesses:

·	timely and accurate reconciliation of accounts
·	lack of segregation of duties
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In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Changes in Internal Controls

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during the quarter ended June 30, 2020, that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are not presently any material pending legal proceedings to which the Company is a party or as to which any of our property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINING SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

None

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ITEM 6. EXHIBITS

No.	Description
31.1	Chief Executive Officer Section 302 Certification
31.2	Chief Financial Officer Section 302 Certification
32.1	Section 906 Certification
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
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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CANNASSIST INTERNATIONAL CORPORATION

Dated: August 12, 2020	By: /s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Executive Officer
	By: /s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Financial Officer

Exhibit 31.1

CHIEF EXECUTIVE OFFICER

I, Mark Palumbo, hereby certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q for the period ending June 30, 2020 of CannAssist International Corporation;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: August 12, 2020	/s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Executive Officer

Exhibit 31.2

CHIEF FINANCIAL OFFICER

I, Mark Palumbo, hereby certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q for the period ending June 30, 2020 of CannAssist International Corporation;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: August 12, 2020	/s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officers of CannAssist International Corporation., a Delaware corporation (the "Company"), do hereby certify, to the best of their knowledge, that:

The Quarterly Report on Form 10-Q for the period ending June 30, 2020 (the "Report") of the Company complies in all material respects with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 12, 2020	/s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Executive Officer
Dated: August 12, 2020	/s/ Mark Palumbo<br><br>Mark Palumbo<br><br>Chief Financial Officer
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Electronic Servitor Publication Network, Inc 10-Q for FY2020 Q2

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