UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September
30, 2014
or
¨ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 333-173873
Med-Cannabis Pharma, Inc.
(Exact
name of registrant as specified in its charter)
Nevada |
45-0704149 |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
2544
Tarpley, #112, Carrolton, TX 75006
(Address
of principal executive offices)
Tel: (214) 666-8364
(Registrant’s
telephone number, including area code)
NA
(Former name, former
address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant
(1) has filed all reports to be filed by Section 13 or Section 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 and posted on its corporate Website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
x No ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large Accelerated Filer ☐ |
Accelerated Filer ☐ |
Non-Accelerated Filer ☐ Do not check if a smaller reporting company) |
Smaller Reporting Company ☒ |
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
x No ¨
The number of shares outstanding of the Registrant's
common stock, $0.0001 par value, as of November 7, 2014, was 50,070,000.
TABLE OF CONTENTS
Item |
|
Page |
|
|
|
PART I – FINANCIAL INFORMATION |
|
4 |
|
Item 1 |
Financial Statements |
|
4 |
|
Item 2 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
14 |
|
Item 3 |
Quantitative and Qualitative Disclosures About Market Risk |
|
19 |
|
Item 4 |
Controls and Procedures |
|
19 |
|
|
|
PART II – OTHER INFORMATION |
|
20 |
|
Item 1 |
Legal Proceedings |
|
20 |
|
Item 1A |
Risk Factors |
|
20 |
|
Item 2 |
Unregistered Sales of Equity Securities and Use of Proceeds |
|
20 |
|
Item 3 |
Defaults Upon Senior Securities |
|
21 |
|
Item 4 |
Mine Safety Disclosures |
|
21 |
|
Item 5 |
Other Information |
|
21 |
|
Item 6 |
Exhibits |
|
21 |
Signatures |
|
21 |
Forward-Looking Statements
Certain statements made in this Quarterly
Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform
Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown
risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Registrant to be materially
different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking
statements included herein are based on current expectations that involve numerous risks and uncertainties. The Registrant’s
plans and objectives are based, in part, on assumptions involving it continuing as a going concern and executing on its stated
business plan and objectives. Assumptions relating to the foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Registrant. Although the Registrant believes its assumptions underlying
the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance
the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation
by the Registrant or any other person that the objectives and plans of the Registrant will be achieved.
As used in this Quarterly Report, the terms
"we", "us", "our", "Med-Cannabis Pharma", “Registrant”, and “Issuer”
refers to Med-Cannabis Pharma, Inc. unless the context clearly requires otherwise.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MED-CANNABIS PHARMA, INC.
Consolidated Balance Sheets
ASSETS |
| |
| 9/30/14 | | |
| 12/31/13 | |
| |
| (unaudited) | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 3,701 | | |
$ | 37 | |
Total current assets | |
| 3,701 | | |
| 37 | |
| |
| | | |
| | |
Deposits | |
| 3,000 | | |
| — | |
| |
| | | |
| | |
Total assets: | |
4 | 6,701 | | |
$ | — | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS’ (DEFICIT) |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 640 | | |
$ | 20,198 | |
Accrued expenses | |
| 2,888 | | |
| — | |
Notes payable to stockholders | |
| 187,842 | | |
| 50,550 | |
| |
| 191,370 | | |
| 70,748 | |
| |
| | | |
| | |
Total liabilities | |
$ | 191,370 | | |
$ | 70,748 | |
| |
| | | |
| | |
Commitments and contingencies | |
| — | | |
| — | |
| |
| | | |
| | |
Stockholders’ (deficit): | |
| | | |
| | |
Preferred stock, $0.0001 par value, 25,000,000 shares authorized; no shares issued and outstanding | |
| — | | |
| — | |
Common stock, $0.0001 par value, 250,000,000 shares authorized; 50,070,000 and 210,000,000 shares issued and outstanding, respectively | |
| 5,007 | | |
| 21,000 | |
Additional paid-in capital | |
| 59,036,833 | | |
| 59,014,061 | |
Accumulated deficit | |
| (59,226,509 | ) | |
| (59,105,772 | |
| |
| | | |
| | |
Total stockholders’ (deficit) | |
$ | (184,669 | ) | |
$ | (70,711 | ) |
| |
| | | |
| | |
Total liabilities and stockholders’ (deficit) | |
$ | 6,701 | | |
$ | 37 | |
| |
| | | |
| | |
The accompanying notes to the financial statements
are an integral part of these statements.
MED-CANNABIS PHARMA, INC.
Consolidated Statements of Operations
(unaudited)
| |
Three Months Ended September 30, 2014 | |
Three Months Ended September 30, 2013 | |
Nine Months Ended September 30, 2014 | |
Nine Months Ended September 30, 2013 |
| |
| |
| |
| |
|
Revenues, net | |
$ | — | | |
$ | 1,077 | | |
$ | — | | |
$ | 8,148 | |
Cost of revenues | |
| — | | |
| — | | |
| — | | |
| 178 | |
Gross profit | |
| — | | |
| 1,077 | | |
| — | | |
| 7,970 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | |
General and administrative | |
| 27,571 | | |
| — | | |
| 71,211 | | |
| 616 | |
Consulting fees | |
| 8,050 | | |
| 26,000 | | |
| 10,169 | | |
| 26,000 | |
Legal fees | |
| 6,363 | | |
| 7,500 | | |
| 18,941 | | |
| 22,575 | |
Accounting fees | |
| — | | |
| 1,000 | | |
| 4,000 | | |
| 5,175 | |
Director fees | |
| 6,451 | | |
| — | | |
| 6,451 | | |
| — | |
Transfer agent fees | |
| — | | |
| 422 | | |
| 2,103 | | |
| 1,924 | |
Total expenses | |
| 48,435 | | |
| 34,922 | | |
| 112,875 | | |
| 56,290 | |
| |
| | | |
| | | |
| | | |
| | |
Operating loss | |
| (48,435 | ) | |
| (33,845 | ) | |
| (112,875 | ) | |
| (48,320 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| (3,753 | ) | |
| (1,069 | ) | |
| (7,862 | ) | |
| (3,104 | ) |
Total other income (expense) | |
| (3,753 | ) | |
| (1,069 | ) | |
| (7,862 | ) | |
| (3,104 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (52,188 | ) | |
$ | (34,914 | ) | |
$ | (120,737 | ) | |
$ | (51,424 | ) |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per common share | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
| 98,744,348 | | |
| 208,804,348 | | |
| 172,507,253 | | |
| 334,835,165 | |
The accompanying notes to the financial statements
are an integral part of these statements.
MED-CANNABIS PHARMA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
(DEFICIT)
For the periods January 1, 2013 to December
31, 2013 and January 1, 2014 to September 30, 2014
(unaudited)
| |
| Common Stock
| | |
| Additional Paid-In | | |
| (Deficit)
Accumulated
During the
Development
| |
Description | |
| Shares | | |
| Amount | | |
| Capital | | |
| Stage | | |
| Total | |
Balance, January 1, 2013 | |
| 500,000,000 | | |
$ | 50,000 | | |
$ | 58,954,763 | | |
$ | (59,044,272 | ) | |
$ | (39,509 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Cancellation of shares of common stock | |
| (300,000,000 | ) | |
| (30,000 | ) | |
| 30,000 | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of shares of common stock to consultant | |
| 10,000,000 | | |
| 1,000 | | |
| 25,000 | | |
| — | | |
| 26,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Imputed interest on related party loan | |
| — | | |
| — | | |
| 4,298 | | |
| — | | |
| 4,298 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net (loss) for the period | |
| — | | |
| — | | |
| — | | |
| (61,500 | ) | |
| (61,500 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, December 31, 2013 | |
| 210,000,000 | | |
$ | 21,000 | | |
$ | 59,014,061 | | |
$ | (59,105,772 | ) | |
$ | (70,711 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Cancellation of shares of common stock | |
| (159,930,000 | ) | |
| (15,993 | ) | |
| 15,993 | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Forgiveness of debt | |
| | | |
| | | |
| 1,806 | | |
| | | |
| 1,806 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Imputed interest on related party loan | |
| — | | |
| — | | |
| 4,973 | | |
| | | |
| 4,973 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net (loss) for the period | |
| — | | |
| — | | |
| | | |
| (120,737 | ) | |
| (120,737 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, September 30, 2014 | |
| 50,070,000 | | |
| 5,007 | | |
| 59,036,833 | | |
| (59,226,509 | ) | |
| (184,669 | ) |
The accompanying notes to the financial statements
are an integral part of these statements.
MED-CANNABIS PHARMA, INC.
Consolidated Statements of Cash Flows
(unaudited)
| |
For the nine months ended September 30, |
| |
2014 | |
2013 |
Cash flows from operating activities: | |
| | | |
| | |
Net (loss) | |
$ | (120,737 | ) | |
$ | (51,424 | ) |
Adjustments to reconcile net (loss) to net cash (provided by) operating activities | |
| | | |
| | |
Common stock issued in connection with services provided by consultants | |
| — | | |
| 26,000 | |
Common stock issued to officers | |
| — | | |
| — | |
Imputed interest on related party loan | |
| 4,973 | | |
| 3,104 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
(Increase) in accounts receivable | |
| — | | |
| — | |
(Increase) in other assets | |
| (3,000 | ) | |
| — | |
Increase (decrease) in accounts payable / accrued expenses | |
| (17,752 | ) | |
| 13,663 | |
| |
| | | |
| | |
Net cash provided (used) by operating activities | |
| (136,516 | ) | |
| (8,657 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Increase in notes payable to a stockholder | |
| 140,180 | | |
| 15,800 | |
Decrease in notes payable to a stockholder | |
| — | | |
| (5,000 | ) |
Borrowings on debt | |
| — | | |
| — | |
Proceeds from issuance of common stock | |
| — | | |
| — | |
| |
| | | |
| | |
Net cash provided (used) by financing activities | |
| 140,180 | | |
| 10,800 | |
| |
| | | |
| | |
Net increase (decrease) in cash | |
| 3,664 | | |
| 2,143 | |
| |
| | | |
| | |
Cash – beginning of period | |
| 37 | | |
| 600 | |
| |
| | | |
| | |
Cash – end of period | |
$ | 3,701 | | |
$ | 2,743 | |
The accompanying notes to the financial statements
are an integral part of these statements.
MED-CANNABIS PHARMA, INC.
(unaudited)
(continued)
| |
For the nine months ended September 30, |
| |
2014 | |
2013 |
Non-cash investing and financing activities: | |
| | | |
| | |
Forgiveness of debt | |
$ | 1,806 | | |
$ | — | |
Assumption of accounts payable | |
| (29,502 | ) | |
| — | |
Issuance of common shares to directors (founder’s shares) | |
| — | | |
| — | |
Conversion of note payable into common stock | |
| — | | |
| — | |
Rescinding of common shares | |
| — | | |
| — | |
Cancellation of common shares | |
| — | | |
| — | |
Return of shares | |
| (15,993 | ) | |
| | |
| |
| | | |
| | |
Supplemental disclosure of cash flow information: | |
| | | |
| | |
Cash paid during the period for: | |
| | | |
| | |
Interest | |
$ | — | | |
$ | — | |
| |
| | | |
| | |
Income taxes | |
$ | — | | |
$ | — | |
The accompanying notes to the financial statements
are an integral part of these statements.
MED-CANNABIS PHARMA, INC.
September 30, 2014
(unaudited)
NOTE 1 – Summary of Significant Accounting
Policies
Unaudited Interim Financial Information
The accompanying Consolidated Balance Sheet
as of September 30, 2014, Consolidated Statements of Operations for the nine months ended September 30, 2014, Consolidated Statement
of Stockholder’s (Deficit) and the Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 are
unaudited. These unaudited interim financial statements have been prepared in accordance with accounting principles accepted in
the United States of America (“GAAP”). In the opinion of the company’s management, the unaudited interim
financial statements have been prepared on the same basis as the audited financial statements and included all adjustments necessary
for the fair presentation of the Company’s statement of financial position at September 30, 2014 and its results of operations
and its cash flows for the period ended September 30, 2014. The results for the period ended September 30, 2014 are not necessarily
indicative of the results to be expected for the fiscal year ending December 31, 2014.
Organization
Med-Cannabis Pharma, Inc. (“Company”
or “Med-Cannabis Pharma”) was incorporated under the laws of the State of Nevada on February 23, 2011. Med-Cannabis
Pharma has one wholly owned subsidiary, Med-Pharma Management, Inc., that as of September 30, 2014 had no revenue but did incur
due diligence and other administrative expenses.
Basis of Presentation
The accompanying financial statements have
been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and
in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X. They reflect all adjustments which are,
in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results
as of and for the period ended September 30, 2014.
Use of Estimates
The accompanying financial statements of the
Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because
a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements
for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from
these estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows,
the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.
As of September 30, 2014, the Company had $3,701 in cash and equivalents and $37 at December 31, 2013.
Investments
The Company accounts for its marketable securities,
which are classified as trading securities, in accordance with generally accepted accounting principles for certain investments
in debt and equity securities, which requires that trading securities be carried at fair value. Unrealized gains and losses due
to changes in fair value as well as realized gains and losses resulting from sales of securities are reported as Other Income/Expenses
in the statement of operations. Fair value of the securities is based upon quoted market prices in active markets or estimated
fair value when quoted market prices are not available. The cost basis for realized gains and losses is determined on a specific
identification basis. As of September 30, 2014 the Company had no investments.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements”
and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may
be used to measure fair value:
Level |
|
Description |
|
|
|
Level 1 |
|
Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
|
Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
|
Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The estimated fair values of the Company’s
financial instruments are as follows:
|
Fair Value Measurement at September 30, 2014 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
9/30/14 |
|
Quoted
Prices In
Active
Markets For
Identical
Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
Assets |
|
|
|
|
|
|
|
|
|
Cash and equivalents |
$ |
3,701 |
$ |
3,701 |
$ |
- |
$ |
- |
|
$ |
3,701 |
$ |
3,701 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
640 |
$ |
640 |
$ |
- |
$ |
- |
|
Accrued expenses |
|
2,888 |
|
2,888 |
|
|
|
|
|
Note payable to stockholder |
|
187,842 |
|
187,842 |
|
- |
|
- |
|
$ |
191,370 |
$ |
191,370 |
$ |
- |
$ |
- |
|
Fair Value Measurement at December 31, 2013 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
12/31/13 |
|
Quoted
Prices In
Active
Markets For
Identical
Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
Assets |
|
|
|
|
|
|
|
|
|
Cash and equivalents |
$ |
37 |
$ |
37 |
$ |
- |
$ |
- |
|
$ |
37 |
$ |
37 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
20,198 |
$ |
20,198 |
$ |
- |
$ |
- |
|
Note payable to stockholder |
|
50,550 |
|
50,550 |
|
- |
|
- |
|
$ |
70,748 |
$ |
70,748 |
$ |
- |
$ |
- |
Net Loss per Share Calculation
Basic net loss per common share is computed
by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. During the period ended September 30, 2014 and cumulative from February 23, 2011 (inception)
to September 30, 2014 the Company had no dilutive financial instruments issued or outstanding.
Income Taxes
The Company accounts for income taxes pursuant
to FASB ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary
differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax
assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating
the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. Med-Cannabis Pharma establishes a valuation allowance based upon the potential likelihood
of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations
for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within
the carryforward period under the Federal tax laws.
Changes in circumstances, such as the Company
generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset. Any change
in the valuation allowance will be included in income in the year of the change in estimate.
Fiscal Year
The Company elected December 31st
for its fiscal year end.
NOTE 2 –Going Concern
The Company plans to acquire medical
marijuana collectives and or medical marijuana dispensaries, which are currently in operations legally within the states that medical
marijuana has been approved and is legal. Currently the Company has been actively negotiating with existing collectives in the
states of Washington and Oregon. In addition, the Company intends to further expand by opening new medical marijuana collectives
and medical marijuana dispensaries in locations where an acquisition is not readily available such as states where medical marijuana
has been newly legalized.
While management of the Company believes that
Med-Cannabis Pharma will be successful in its planned operating activities under its business plan and capital formation activities,
there can be no assurance that it will be able to successfully execute on either of these or that it will be able to generate adequate
revenues to earn a profit or sustain its operations.
The accompanying financial statements have
been prepared in conformity with accounting principles generally accepted in the United State of America, which contemplate continuation
of the Company as a going concern. The Company has not established a source of revenues sufficient to cover its operating costs,
and as such, has incurred an operating loss since its inception. Further, as of September 30, 2014, the Company had a working capital
deficiency of ($187,669). These and other factors raise substantial doubt about the Company’s ability to continue as a going
concern. The accompanying financial statements do not include any adjustments or classifications that may result from the possible
inability of the Company to continue as a going concern.
NOTE 3 – Common Stock
The total number of common shares authorized
that may be issued by the Company is 250,000,000 shares with a par value of $0.0001 per share.
As of the period ending September 30, 2014
the Company issued an aggregate of 516,000,000 shares and as of the period ending September 30, 2014, the Company cancelled an
aggregate of 465,930,000 shares.
On July 28, 2014, Big Sky Oil, Inc., the majority
shareholder of Med-Cannabis Pharma Inc. (the “Company”), returned to the Company’s treasury 159,930,000 shares
of the Company’s common stock it had purchased from prior management. Big Sky agreed to return these shares to the treasury
for use in future possible issuances by the Company.
As of September 30, 2014, the Company had 50,070,000
shares of its common stock issued and outstanding.
NOTE 4 – Preferred Stock
The total number of preferred shares authorized
that may be issued by the Company is 25,000,000 shares with a par value of $0.0001 per share.
As of September 30, 2014, the Company had no
shares of its preferred stock issued and outstanding.
NOTE 5 – Income Taxes
The provision (benefit) for income taxes for
the period from February 23, 2011 (inception) to September 30, 2014 was as follows, assuming a 35 percent effective tax rate:
|
|
For the nine
months ended
9/30/14 |
|
For the year
ended
12/31/13 |
Current tax provision: |
|
|
|
|
|
|
|
|
Federal |
|
|
|
|
|
|
|
|
Taxable income |
|
$ |
— |
|
|
|
|
|
Total current tax provision |
|
$ |
— |
|
|
|
|
|
Deferred tax provision: |
|
|
|
|
|
|
|
|
Federal |
|
|
|
|
|
|
|
|
Loss carryforwards |
|
$ |
79,554 |
|
|
$ |
37,296 |
|
Change in valuation allowance |
|
|
(79,554 |
) |
|
|
(37,296 |
) |
Total deferred tax provision |
|
$ |
— |
|
|
$ |
— |
|
As of September 30, 2014, the Company had approximately
$278,342 in tax loss carryforwards that can be utilized in future periods to reduce taxable income through 2032.
The Company provided a valuation allowance
equal to the deferred income tax assets for the period from February 23, 2011 (inception) to September 30, 2014 because it is not
presently known whether future taxable income will be sufficient to utilize the tax loss carryforwards.
The Company has no uncertain tax positions.
NOTE 6 – Change of Control
On March 27, 2014 the shareholders of Med-Cannabis
Pharma, Inc. sold their shares, 210,000,000, to Big Sky Oil, Inc. and another investor, resulting in a change of control.
NOTE 7 – Related Party Transactions
As of September 30, 2014, the Company had a
line-of-credit (”LOC”) to a related party stockholder in the amount of $187,842, with interest at 10% annually. This
LOC was entered into on July 28, 2014 and replaced the shareholder note that was assumed during the change of control transaction.
During the nine months ended September 30, 2014 the imputed interest expense on the old notes was $4,973 and interest expense on
the LOC was $2,889 for a total of $7,862.
In the change of control agreements dated March
27, 2014, $1,806 of related party debt was forgiven by a former shareholder.
NOTE 8 – Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Update ("ASU") 2014-10, "Development Stage Entities".
The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing
the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition,
the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements
of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose
a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the
entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this
update are applied retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements
from the Company, which elected early adoption.
Besides what’s noted above the Company does not expect the impact of recent accounting pronouncements to have a material
effect on the Company’s financial statements.
NOTE 9 – Subsequent Events
On October 14, 2014 the Company announced that
it is engaged in discussions concerning managing a medical dispensary in Oregon and hopes to commence operations there if the due
diligence for this business is successful.
On October 29, 2014 the Company announced that
it accepted the resignation of one of its directors. Peter A. Preksto resigned from the Company on October 29, 2014 and the Company
has not appointed a director to replace Mr. Preksto.
On October 29, 2014 the
Company announced that it formed a new wholly-owned subsidiary, Medical Management Systems, Inc. (“MMS”), an Oregon
corporation. The new subsidiary was formed to act as a management company for medical marijuana dispensaries in Oregon. The Company,
through MMS, has agreed to act as manager of a dispensary anticipated to be opened in Bend, Oregon in December, 2014.
On October 29, 2014 the
Company announced that it connection with the formation of MMS, the Company negotiated an extension of its current $200,000 line
of credit. The lender agreed to extent the Company an additional $200,000 line of credit, at ten percent (10%) interest, subject
to the lender’s approval of any material expenditures
Other than the items noted above no other material
events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in
the financial statements.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
We are a development stage corporation with
limited operations. Our independent registered public accounting firm has issued a going concern opinion in their audit report
dated March 25, 2014, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”)
on March 25, 2014. This means that our auditors believe there is substantial doubt that we can continue as an on-going business
for the next 12 months. Accordingly, we must raise additional cash to sustain our limited operations.
We presently are exploring other such sources
of funding, including raising funds through a second public offering, a private placement of securities, or loans. If we are unable
to raise this additional funding, we will either have to suspend operations until we do raise the cash or cease operations entirely.
The following discussion should be read in
conjunction with our Financial Statements and the notes thereto and the other information included in this Quarterly Report as
filed with the SEC on Form 10-Q.
Limited Operating History; Need for Additional
Capital
There is limited historical financial information
about us upon which to base an evaluation of our performance. We remain in the start-up stage of operations and have only begun
to generate nominal revenue. 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,
such as increases in marketing costs, increases in administration expenditures associated with daily operations, increases in accounting
and audit fees, and increases in legal fees related to filings and regulatory compliance.
Currently, we do not have any arrangements
for additional financing. We have no assurance that future financing will be available to us on acceptable terms. If financing
is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could
result in additional dilution to existing shareholders.
Status as a Shell Company
As of September 30, 2014, because we have nominal
operations and minimal assets, we are considered to be a shell company under the Securities Exchange Act of 1934, as amended. Because
we are considered a shell company, the securities sold in previous offerings can only be resold through (i) registration under
the Securities Act of 1933, as amended (“Securities Act”), (ii) Section 4(1) of the Securities Act, if available,
for non-affiliates, or (iii) by meeting the conditions of Rule 144(i) of the Securities Act.
Plan of Operations
The Company plans to acquire medical
marijuana collectives and or medical marijuana dispensaries, which are currently in operations legally within the states that
medical marijuana has been approved and is legal. Currently the Company has been actively negotiating with existing collectives
in the states of Washington and Oregon.
The company intends to further expand by opening new medical marijuana collectives and
medical marijuana dispensaries in locations where an acquisition is not readily available such as states where medical marijuana
has been newly legalized. The new locations will be based on medicinal demand and location analysis to support maximum potential
of success.
The Company currently has offices in Dallas,
Texas and Port Ludlow, Washington.
Results of Operations
Three and Nine months Ended September 30,
2014 and 2013
Revenues. We generated $0 in revenue
during the three months ended September 30, 2014 and $1,077 for the same period a year ago. This revenue was derived solely from
design consulting services.
We generated $0 in revenue during the nine
months ended September 30, 2014 and $8,148 for the same period a year ago. This revenue was derived solely from design consulting
services.
Gross Profit. Our gross profit was $0
during the three months ended September 30, 2014 and $1,077 for the same period a year ago.
Our gross profit was $0 during the nine months
ended September 30, 2014 and $7,970 for the same period a year ago.
Operating Expenses. Our total operating
expenses for the three months ended September 30, 2014 were $48,435, which is a $13,513, or 39%, increase compared to operating
expenses of $34,922 for the same period a year ago. The increase in expenses was primarily attributable to Due Diligence costs
$6,500; Payroll $6,500; Management Fee $4,000; Rent $3,900; and office/promotional costs of $3,700. The increases were partially
offset by reduced Consulting Fees of $18,000.
Our total operating expenses for the nine months
ended September 30, 2014 were $112,875, which is a $56,585, or 101%, increase compared to operating expenses of $56,290 for the
same period a year ago. The increase in expenses was primarily attributable to costs related to payment of accrued Washington State
sales taxes, $17,300; Website Expenses $8,800; Payroll $12,500; Rent $7,900; Travel $6,300; Promotional expenses $5,300 and Management
fees of $4,000. The increases were partially offset by reduced Consulting Fees of $15,800.
Income (Loss) From Operations. We had
a loss from operations of ($48,435) for the three months ended September 30, 2014 compared to an operating loss of ($33,845) for
the same period a year ago, which represented a $13,513 increase in operating loss.
We had a loss from operations of ($112,875)
for the nine months ended September 30, 2014 compared to an operating loss of ($48,320) for the same period a year ago, which represented
a $69,313 increase in operating loss.
Other income (expenses). During the
three and nine months ended September 30, 2014 we recorded ($3,753) and ($7,862) interest expense respectably, compared to ($1,069)
and ($3,104) for the same period a year ago,. The interest expense is comprised of imputed interest expenses related to line-of-credit
interest and notes outstanding payable to a related party. The imputed interest was recorded in our financial statements under
additional paid-in capital.
Net Income (Loss). We had a net loss
of ($52,188) for the three months ended September 30, 2014 compared to a net loss of ($34,914) for the same period a year ago,
which represented an increase of $17,274, in net loss.
We had a net loss of ($120,737) for the nine
months ended September 30, 2014 compared to a net loss of ($51,424) for the same period a year ago, which represented an increase
of $69,313, in net loss.
Total Stockholders’ Deficit. Our
stockholders’ deficit was ($184,669) as of September 30, 2014.
Liquidity and Capital Resources
As of September 30, 2014, we had $6,701 of
assets. Our total liabilities were $191,370, which consisted of accounts payable of $640, accrued interest on the LOC of $2,888
and a line-of-credit aggregating $187,842 to a related party. The LOC has a 10% annual interest rate. Further, we had no external
credit facilities (i.e. bank loans, revolving lines of credit, etc.).
We expect to incur continued losses over the
next 12 months, possibly even longer. We believe that we need at least $150,000 in additional funding to commence operations and
meet our minimal working capital requirements over the next 12 months.
We are presently exploring various sources
of funding, including raising funds through a secondary public offering, a private placement of our securities, or loans. Without
limiting our available options, future equity financings will most likely be through the sale of additional shares of our common
stock. It is possible that we could also offer warrants, options and/or rights in conjunction with any future issuances of our
common stock. However, we can give no assurance that financing will be made available to us, and if made available to us, in amounts
or on terms acceptable to us. If we cannot secure adequate financing, we may be forced to cease operations and you will lose your
entire investment.
Going Concern Consideration
Our independent registered public accounting
firm has issued a going concern opinion in their audit report dated March 25, 2014, which can be found in our Annual Report on
Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 11, 2014. This means that our
auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Our financial
statements found within this Quarterly Report on Form 10-Q and the aforementioned Annual Report on Form 10-K contain additional
note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
Off –Balance Sheet Operations
As of September 30, 2014, we had no off-balance sheet activities
or operations.
CRITICAL ACCOUNTING POLICIES
The accompanying financial statements have
been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for financial
information and in accordance with the Securities and Exchange Commission’s (“SEC”) Regulation S-X. They
reflect all adjustments which are, in the opinion of Med-Cannabis Pharma’s management, necessary for a fair presentation
of the financial position and operating results as of and for the three and nine months ended September 30, 2014 and 2013.
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 the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use
of estimates inherent in the financial reporting process, actual results may differ significantly from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows,
Med-Cannabis Pharma considers highly liquid financial instruments purchased with a maturity of three months or less to be cash
equivalents. As of September 30, 2014, we had $1,183 in cash and equivalents.
Fair Value of Financial Instruments
ASC 820, “Fair Value Measurements”
and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding
the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon
the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may
be used to measure fair value:
Level |
|
Description |
|
|
|
Level 1 |
|
Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
Level 2 |
|
Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
Level 3 |
|
Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
[This space intentionally left blank.]
The estimated fair values of the Company’s
financial instruments are as follows:
|
Fair Value Measurement at September 30, 2014 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
9/30/14 |
|
Quoted
Prices In
Active
Markets For
Identical
Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
Assets |
|
|
|
|
|
|
|
|
|
Cash and equivalents |
$ |
3,701 |
$ |
3,701 |
$ |
- |
$ |
- |
|
$ |
3,701 |
$ |
3,701 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
640 |
$ |
640 |
$ |
- |
$ |
- |
|
Accrued expenses |
|
2,888 |
|
2,888 |
|
|
|
|
|
Note payable to stockholder |
|
187,842 |
|
187,842 |
|
- |
|
- |
|
$ |
191,370 |
$ |
191,370 |
$ |
- |
$ |
- |
|
Fair Value Measurement at December 31, 2013 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
12/31/13 |
|
Quoted
Prices In
Active
Markets For
Identical
Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
Assets |
|
|
|
|
|
|
|
|
|
Cash and equivalents |
$ |
37 |
$ |
37 |
$ |
- |
$ |
- |
|
$ |
37 |
$ |
37 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
20,198 |
$ |
20,198 |
$ |
- |
$ |
- |
|
Note payable to stockholder |
|
50,550 |
|
50,550 |
|
- |
|
- |
|
$ |
70,748 |
$ |
70,748 |
$ |
- |
$ |
- |
Net Loss per Share Calculation
Basic net loss per common share is computed
by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per shares is computed similar to basic loss per share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. During the three and nine months ended September, 2014 and the period February 23, 2011
(inception) to September 30, 2014 we had no dilutive financial instruments issued or outstanding.
Revenue Recognition
Med-Cannabis Pharma follows the guidance of
FASB ASC Topic 605 for revenue recognition. In general, Med-Cannabis Pharma recognizes revenue when (1) the price is fixed and
determinable, (2) persuasive evidence of an arrangement exists, (3) the service has been provided, and (4) collectability is reasonably
assured.
Med-Cannabis Pharma generates revenue from
two sources: (i) sales of its high-end handmade lace wigs and hairpieces and other beauty supplies to beauty supply stores, hair
salons, independent hair stylists, and retail customers via the Internet and (ii) consulting services consisting of product and
retail channel development for beauty and fashion products. Revenue from sales of its high-end handmade lace wigs, hairpieces and
other beauty supplies is recognized at the time of the sale and revenues from consulting services are recognized when the services
are performed, evidence of an arrangement exists, the fee is fixed and determinable, and collectability is probable.
Income Taxes
We account for income taxes pursuant to FASB
ASC 740, Income Taxes. Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences
between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and
liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
We maintain a valuation allowance with respect
to deferred tax assets. Med-Cannabis Pharma establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration Med-Cannabis Pharma’s financial position and results of operations for
the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within
the carryforward period under the Federal tax laws.
Changes in circumstances, such as Med-Cannabis
Pharma generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.
Any change in the valuation allowance will be included in income in the year of the change in estimate.
Recently Issued Accounting Pronouncements
In June 2014, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Update ("ASU") 2014-10, "Development Stage Entities".
The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing
the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition,
the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements
of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose
a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the
entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this
update are applied retrospectively. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements
from the Company, which elected early adoption.
Besides what’s noted above the Company does not expect the impact of recent accounting pronouncements to have a material
effect on the Company’s financial statements.
Contractual Obligations
As of September 30, 2014, Med-Cannabis Pharma
had one contractual obligation. On June 16, 2014 the Company leased 1,250 sq.ft. of office space in Port Ludlow, WA for $1,650
per month. The length of the contract is one year.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Not applicable since we are a smaller reporting
company.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this
report, we conducted an evaluation under the supervision and with the participation of our sole officer and director, Gracie Moreno,
we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)
and 15d-15(e) of the Exchange Act).
A material weakness is a deficiency, or a combination
of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be presented or detected on a timely basis.
Based on management’s assessment, we
have concluded that, as of September 30, 2014, our disclosure controls and procedures were not effective in timely alerting management
to the material information relating to us required to be included in our annual and interim filings with the SEC.
Management has concluded that our disclosure
controls and procedures had the following material weaknesses:
- We were unable to maintain any segregation of duties within our financial
operations due to our reliance on limited personnel in the finance function. While this control deficiency has not resulted in
any audit adjustments to our interim or annual financial statements, it could have resulted in a material misstatement that might
have been prevented or detected by a segregation of duties;
- Med-Cannabis Pharma lacks sufficient resources to perform the internal
audit function and does not have an Audit Committee;
- We do not have an independent Board of Directors, nor do we have a
board member designated as an independent financial expert to Med-Cannabis Pharma. The Board of Directors is comprised of one (1)
member who also serves as Med-Cannabis Pharma’s sole executive officers. As a result, there is a lack of independent oversight
of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures
made by Med-Cannabis Pharma; and
- Documentation of all proper accounting procedures is not yet complete.
These weaknesses have existed since our inception
on February 23, 2011 and, as of September 30, 2014, have not been remedied.
To the extent reasonably possible given our
limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the
following:
- Considering the engagement of consultants to assist in ensuring that
accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement
disclosures;
- Hiring additional qualified financial personnel, including a Chief
Financial Officer, on a full-time basis;
- Expanding our current board of directors to include additional independent
individuals willing to perform directorial functions; and
- Increasing our workforce in preparation for exiting the development
stage and commencing revenue producing operations.
Since the recited remedial actions will require
that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited
financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals
and consultants.
Changes in Controls and Procedures
There have been no changes in our internal
control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
PART II
Item 1. Legal Proceedings
No officer, director, or persons nominated
for these positions, and no promoter or significant employee (current or former) of our corporation has been involved in legal
proceedings that would be material to an evaluation of our management. We are not aware of any pending or threatened legal proceedings
involving Med-Cannabis Pharma, Inc.
During the past ten (10) years, Gracie Moreno
has not been the subject of the following events:
|
1) |
Any bankruptcy petition filed by or against any business of which Mr. Won was a general partner or executive officer either at the time of the bankruptcy or within two (2) years prior to that time; |
|
2) |
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding; |
|
3) |
An order, judgment, or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting Mr. Won’s involvement in any type of business, securities or banking activities; and |
|
4) |
Found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Future Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. |
Item 1A. Risk Factors
Not applicable since we are a smaller reporting
company.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibit Number |
|
Description of Exhibit |
|
|
|
3.1(1) |
|
Articles of Incorporation |
3.2(1) |
|
Bylaws |
3.3(2) |
|
Amendment to Articles of Incorporation |
31.1 |
|
Section 302 Certifications under Sarbanes-Oxley Act of 2002 |
32.1 |
|
Section 906 Certification under Sarbanes Oxley Act of 2002 |
|
(1) |
Incorporated by our Registration Statement on Form S-1 filed May 3, 2011. |
|
(2) |
Incorporated by our Current Report on Form 8-K filed July 1, 2014. |
|
|
|
The Company filed the following significant
8-K’s in the quarter:
July 28, 2014. Announced that 159,930,000 common
shares were returned to the Company Big Sky Oil.
August 4, 2014. The Company announced the termination
of a definitive material agreement.
August 19, 2014. The Company announced it planned
to open two stores in the State of Washington.
September 8, 2014. The appointment of Peter
A. Preksto to the Board of Directors.
September 18, 2014. The Company announced that
it will no longer open two stores in the State of Washington.
October 27, 2014. The Company announced the
resignation of Peter A. Preksto from the Board of Directors and that it had formed a new wholly-owned subsidiary, Medical Management
Systems, Inc. (an Oregon company). THe Company also announced an extension of its line-of-credit to $400,000.
SIGNATURES
Pursuant to the requirements of Section 13
or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned,
thereto duly authorized on this thirteenth the day of November, 2014.
|
MED-CANNABIS PHARMA, INC. |
|
|
|
|
|
By: /s/ Gracie Moreno |
|
Gracie Moreno |
|
President, Chief Executive Officer, |
|
Principal Executive Officer, Principal |
|
Accounting Officer, Treasurer, Secretary, and |
|
Director |
|
(Sole Officer and Director) |
EXHIBIT 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Gracie Moreno, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Med-Cannabis
Pharma, INC.
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 amended 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
officer 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 conclusion 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 to 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 officer 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 and material weaknesses in the design or operation of internal controls
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. |
Date: November 13, 2014
/s/ Gracie Moreno
Gracie Moreno
President and Chief Executive Officer
EXHIBIT 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Gracie Moreno, certify that:
1. I have reviewed this quarterly report on Form 10-Q
MED-CANNABIS PHARMA, INC.
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 amended 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
officer 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 conclusion 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 to 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 officer 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 and material weaknesses in the design or operation of internal controls
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. |
Date: November 13, 2014
/s/ Gracie Moreno
Gracie Moreno
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of
MED-CANNABIS PHARMA, INC. (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with
the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the
dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1. the Report fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the Company.
Dated: November 13, 2014
/s/ Gracie Moreno
Name: Gracie Moreno
Title: Chief Executive Officer
Dated: November 13, 2014
/s/ Gracie Moreno
Name: Gracie Moreno
Title: Chief Financial Officer
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