Exhibit 10.2


 


 





Freedom Leaf, Inc.


 


Table of Contents


 


	 	 	Page
	Report of Independent Registered Public Accounting Firm	 	2
	 	 	 
	Balance Sheet	 	3
	 	 	 
	Statement of Operations	 	4
	 	 	 
	Statement of Cash Flows	 	5
	 	 	 
	Statement of Shareholder’s Deficit	 	6
	 	 	 
	Notes to Financial Statements	 	7
	 	 	 



 


 




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		Green
    & Company, CPAs
	A PCAOB Registered Accounting Firm


 


 


Report of Independent Registered Public Accounting
Firm


 


To the Board of Directors and Shareholders
of:


Freedom Leaf, Inc.


 


We have audited the accompanying balance sheet
of Freedom Leaf, Inc. as of November 6, 2014 and the related statements of operations and cash flows for the period then ended.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.


 


We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.


 


In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Freedom Leaf, Inc. as of November 6, 2014 and the
results of its operations and its cash flows for the period ended November 6, 2014 in conformity with accounting principles generally
accepted in the United States of America.


 


The accompanying financial statements have
been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company
reported a net loss of $7,773 for the period of July 1, 2014 through November 6, 2014, and operating activities provided cash of
$33,534. At November 6, 2014, the Company had a working capital deficit, shareholders’ deficit and accumulated deficit of
$12,750, $7,773 and $7,773, respectively. These matters raise substantial doubt about the Company’s ability to continue as
a going concern. Management’s plans as to these matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


 


 


/s/ Green & Company CPAs, Inc.


 


Green & Company CPAs, Inc.


Temple Terrace, Florida


September 9, 2015


 




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FREEDOM LEAF, INC.


Balance Sheet


November 6,
2015




 


	ASSETS	 
	 	 
	Current assets	 	 	 	 
	Cash	 	$	32,141	 
	Other receivable	 	 	10,243	 
	Total current assets	 	 	42,384	 
	Intangible assets, net	 	 	1,393	 
	Other assets	 	 	3,584	 
	Total assets	 	$	47,361	 
	 	 	 	 	 
	LIABILITIES AND STOCKHOLDERS' DEFICIT	 	 
	 	 	 
	Current liabilities	 	 	 	 
	Accounts payable	 	$	16,134	 
	Accounts payable to related parties	 	 	39,000	 
	Total current liabilities	 	 	55,134	 
	Total liabilities	 	 	55,134	 
	Commitments and contingencies	 	 	 	 
	Stockholders' deficit	 	 	 	 
	Accumulated deficit	 	 	(7,773	)
	Total stockholders' deficit	 	 	(7,773	)
	Total liabilities and stockholders' deficit	 	$	47,361	 



 


See accompanying
notes to financial statements. 
  




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FREEDOM LEAF, INC.


Statement of Operations


For the Period July 1, 2014 through November 6, 2014







 


	Revenue, net	 	$	369,357	 
	 	 	 	 	 
	Operating expenses	 	 	 	 
	Direct costs of revenue	 	 	61,429	 
	General and administrative	 	 	315,701	 
	Net loss	 	$	(7,773	)




 


See accompanying
notes to financial statements. 
  




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FREEDOM LEAF, INC.


Statement of Cash Flows


For the Period
July 1, 2014 Through November 6, 2014




 


	Cash flows from operating activities:	 	 	 	 
	Net loss	 	$	(7,773	)
	Changes in operating assets and liabilities:	 	 	 	 
	Other receivable	 	 	(10,243	)
	Other assets	 	 	(3,584	)
	Accounts payable	 	 	16,134	 
	Accounts payable to related parties	 	 	39,000	 
	Net cash provided by operating activities	 	 	33,534	 
	 	 	 	 	 
	Cash flows used in investing activities	 	 	 	 
	Intangibles acquired	 	 	(1,393	)
	Net cash used in investing activities	 	 	(1,393	)
	 	 	 	 	 
	Net increase in cash	 	 	32,141	 
	Cash at beginning of period	 	 	–	 
	Cash at end of period	 	$	32,141	 




 


See accompanying
notes to financial statements.
  




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FREEDOM LEAF, INC.


Statement of Shareholder's Deficit


November 6, 2014







 


		 	Common Stock	 	 	Accumulated	 	 	 	 
		 	Shares	 	 	Amount	 	 	Deficit	 	 	Total	 
	Balance at June 30, 2014	 	 	1,000	 	 	$	–	 	 	$	–	 	 	$	–	 
	Net loss for the period ended November 6, 2014	 	 	(7,773	)	 	 	(7,773	)	 	 	 	 	 	 	 	 
	Balance at November 6, 2014	 	 	1,000	 	 	$	–	 	 	$	(7,773	)	 	$	(7,773	)




 


See accompanying notes to financial statements.


 
 




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FREEDOM LEAF, INC.


Notes to Financial Statements


November 6, 2014


 


 


Note 1 – Nature of Business, Presentation and Going
Concern


 


Organization


 


Freedom Leaf, Inc. (the “Company”)
was incorporated in the State of Nevada on June 19, 2014. The Company is engaged in the business of print and online publications.
The Company was founded and is solely owned by Clifford Perry.


 


On November 6, 2014, the Company merged with
Freedom Leaf, Inc. (f/k/a Arkadia International, Inc.), a publicly-registered Nevada corporation. The Company, due to the merger,
was dissolved effective November 6, 2014. The public company changed its name from Arkadia International, Inc., to Freedom Leaf,
Inc.


 


Basis of Presentation


 


The accompanying financial statements of Freedom
Leaf, Inc. have been prepared in accordance with generally accepted accounting principles for financial information and the instructions
to Form 10-Q and Article 8 of Regulation S-X. In the opinion of the Company’s management, the information contained herein
reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s
results of operations, financial position and cash flows.


  


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 sustained net loss of $7,773 and cash provided by operating activities of $33,534 for
the period July 1, 2014 through November 6, 2014. The Company had negative working capital, stockholders’ deficit and accumulated
deficit of $12,750, $7,773 and $7,773, respectively, at November 6, 2014. These factors raise substantial doubt about the ability
of the Company to continue as a going concern for a reasonable period of time. The Company’s continuation as a going concern
is dependent upon its ability to generate revenues and its ability to continue receiving investment capital and loans from third
parties to sustain its current level of operations. The Company is in the process of securing working capital from investors for
common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that the Company will be successful
in these efforts.


 


Use of Estimates


 


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 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. Significant estimates in the accompanying financial statements include the amortization period
for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the web site and property
and equipment, valuation of warrants and beneficial conversion feature debt discounts, valuation of derivatives, valuation of share-based
payments and the valuation allowance on deferred tax assets.


 


Reclassifications


 


Certain amounts in the prior period financial
statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported
losses, total assets, or stockholders’ equity as previously reported.


 




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FREEDOM LEAF INC.


Notes to Financial Statements


November 6, 2014


 


 


Note 1 – Nature of Business, Presentation and Going
Concern (Continued)


 


Development Stage Company


 


Since inception, the Company became a “development
stage company” as defined in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) Topic 915 “Development Stage Entities”. On June 10, 2014 the FASB issued authoritative guidance
which eliminates the concept of a development stage entity. The incremental reporting requirements for presenting the development
stage operations and cash flows since inception will no longer apply to development stage entities. The amendments of Topic 915
are to be applied retrospectively and are effective for fiscal years beginning after December 15, 2014. The Company has elected
early adoption of this guidance effective with the filing of its previous quarterly report.


 


Revenue Recognition


 


The Company recognizes revenue for its services
in accordance with ASC 605-10, “Revenue Recognition in Financial Statements.” Under these guidelines, revenue is recognized
on transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred,
the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has two primary revenue
streams as follows:


 


		·	Consulting services.



		·	Advertising services.



 


Net Earnings (Loss) Per Share


 


In accordance with ASC 260-10, “Earnings
Per Share,” basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by
the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using
the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.


 


Segment Information


 


In accordance with the provisions of ASC 280-10,
“Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial
and descriptive information about its reportable operating segments.


 


Effect of Recent Accounting Pronouncements


 


The Company reviews new accounting pronouncements
as issued. No new pronouncements had any material effect on these financial statements. The accounting pronouncements issued subsequent
to the date of these financial statements that were considered significant by management were evaluated for the potential effect
on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on
these financial statements as presented and does not anticipate the need for any future restatement of these financial statements
because of the retro-active application of any accounting pronouncements issued through the date these financial statements were
issued.


 


Note 2 – Intangible Assets


 


The Company has $1,393 recorded for various
trademarks (Hemp Inspired®, Cannabizu®, and Cannabiz®) as of November 6, 2014.




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FREEDOM LEAF INC.


Notes to Financial Statements


November 6, 2014


 


Note 3 – Stockholders’ Equity (Deficit)


 


The Company is authorized to issue up to 1,000
shares of common stock, with no par value per share. Each outstanding share of common stock entitles the holder to one vote per
share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no
pre-emptive rights.


 


On November 6, 2014, the Company merged with
Freedom Leaf, Inc. (f/k/a Arkadia International, Inc.), a publicly-registered Nevada corporation (see Note 1). After the completion
of the merger, there were 173,401,200 shares of common stock issued, issuable and outstanding.


 


Note 4 – Commitments and Contingencies


 


From time to time, the Company may become subject
to legal proceedings, claims and litigation arising in the ordinary course of its business. The Company is not currently a party
to any material legal proceedings, nor is the Company aware of any other pending or threatened litigation that would have a material
adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be
resolved unfavorably.


 


 




 






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