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: June 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)
15800 Crabbs Branch Way, Ste. 310, Rockville, MD 20855
(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 August 12, 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 |
|
21 |
|
Item 4 |
Controls and Procedures |
|
21 |
|
|
|
PART II – OTHER INFORMATION |
|
22 |
|
Item 1 |
Legal Proceedings |
|
22 |
|
Item 1A |
Risk Factors |
|
23 |
|
Item 2 |
Unregistered Sales of Equity Securities
and Use of Proceeds |
|
23 |
|
Item 3 |
Defaults Upon Senior Securities |
|
23 |
|
Item 4 |
Mine Safety Disclosures |
|
23 |
|
Item 5 |
Other Information |
|
23 |
|
Item 6 |
Exhibits |
|
23 |
Signatures |
|
23 |
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 –
FINANICAL INFORMATION
Item 1. Financial Statements
MED-CANNABIS
PHARMA, INC.
CONSOLIDATED
BALANCE SHEETS
ASSETS |
| |
| 6/30/14 (unaudited) | | |
| 12/31/13 | |
Current assets: | |
| | | |
| | |
Cash
and cash equivalents | |
$ | 1,183 | | |
$ | 37 | |
Total current assets | |
| 1,183 | | |
| 37 | |
| |
| | | |
| | |
Deposits | |
| 3,000 | | |
| — | |
| |
| | | |
| | |
Total
assets: | |
$ | 4,183 | | |
$ | — | |
| |
| | | |
| | |
LIABILITIES
AND STOCKHOLDERS’ (DEFICIT) |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 624 | | |
$ | 20,198 | |
Notes payable to stockholders | |
| 136,904 | | |
| 50,550 | |
| |
| 137,528 | | |
| 70,748 | |
| |
| | | |
| | |
Total liabilities | |
$ | 137,528 | | |
$ | 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; 210,000,000 and 210,000,000 shares issued and outstanding, respectively | |
| 21,000 | | |
| 21,000 | |
Additional paid-in capital | |
| 59,019,976 | | |
| 59,014,061 | |
(Deficit) accumulated
during the development stage | |
| (59,174,321 | ) | |
| (59,105,772 | ) |
| |
| | | |
| | |
Total stockholders’
(deficit) | |
$ | (133,345 | ) | |
$ | (70,711 | ) |
| |
| | | |
| | |
Total
liabilities and stockholders’ (deficit) | |
$ | 4,183 | | |
$ | 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 June 30, 2014 | |
Three Months Ended June 30, 2013 | |
Six Months Ended June 30, 2014 | |
Six Months Ended June 30, 2013 |
| |
| |
| |
| |
|
Revenues, net | |
$ | — | | |
$ | 2,153 | | |
$ | — | | |
$ | 7,071 | |
Cost of revenues | |
| — | | |
| — | | |
| — | | |
| 178 | |
Gross profit | |
| — | | |
| 2,153 | | |
| — | | |
| 6,893 | |
| |
| | | |
| | | |
| | | |
| | |
Expenses: | |
| | | |
| | | |
| | | |
| | |
General and administrative | |
| 40,612 | | |
| — | | |
| 43,640 | | |
| 616 | |
Consulting fees | |
| 1,869 | | |
| — | | |
| 2,119 | | |
| — | |
Legal fees | |
| 5,003 | | |
| 7,500 | | |
| 12,578 | | |
| 15,075 | |
Accounting fees | |
| 3,000 | | |
| 1,675 | | |
| 4,000 | | |
| 4,175 | |
Director fees | |
| — | | |
| — | | |
| — | | |
| — | |
Transfer agent fees | |
| 1,731 | | |
| 525 | | |
| 2,103 | | |
| 1,502 | |
Total expenses | |
| 52,215 | | |
| 9,700 | | |
| 64,440 | | |
| 21,368 | |
| |
| | | |
| | | |
| | | |
| | |
Operating loss | |
| (52,215 | ) | |
| (7,547 | ) | |
| (64,440 | ) | |
| (14,475 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| (2,655 | ) | |
| (1,032 | ) | |
| (4,109 | ) | |
| (2,035 | ) |
Total other income (expense) | |
| (2,656 | ) | |
| (1,032 | ) | |
| (4,109 | ) | |
| (2,035 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (54,870 | ) | |
$ | (8,579 | ) | |
$ | (68,549 | ) | |
$ | (16,510 | ) |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss per common share | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted | |
| 210,000,000 | | |
| 298,901,000 | | |
| 210,000,000 | | |
| 398,895,028 | |
The accompanying
notes to the financial statements are an integral part of these statements.
MED-CANNABIS
PHARMA, INC.
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ (DEFICIT)
For the periods
January 1, 2013 to December 31, 2013 and January 1, 2014 to June 30, 2014
(unaudited)
| |
| Common Stock
| | |
| Additional Paid-In | | |
| Common
Stock | | |
| (Deficit)
Accumulated
During
the
Development | |
Description | |
| Shares | | |
| Amount | | |
| Capital | | |
| Subscribed | | |
| 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 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Forgiveness of debt | |
| | | |
| | | |
| 1,806 | | |
| | | |
| | | |
| 1,806 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Imputed interest on related party loan | |
| | | |
| | | |
| 4,109 | | |
| | | |
| | | |
| 4,109 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net (loss) for the period | |
| | | |
| | | |
| | | |
| | | |
| (68,549 | ) | |
| (68,549 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, June 30, 2014 | |
| 210,000,000 | | |
| 21,000 | | |
| 59,019,976 | | |
| | | |
| (59,174,321 | ) | |
| (133,345 | ) |
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 six months ended June 30, |
| |
2014 | |
2013 |
Cash flows from operating
activities: | |
| | | |
| | |
Net (loss) | |
$ | (68,549 | ) | |
$ | (16,510 | ) |
Adjustments to reconcile net (loss) to net
cash (provided by) operating activities | |
| | | |
| | |
Common stock issued in connection with services
provided by consultants | |
| — | | |
| — | |
Common stock issued to officers | |
| — | | |
| — | |
Imputed interest on related party loan | |
| 4,109 | | |
| 2,035 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
(Increase) in accounts receivable | |
| — | | |
| (344 | ) |
(Increase) in other assets | |
| (3,000 | ) | |
| — | |
Increase (decrease) in accounts payable | |
| (9,930 | ) | |
| 11,965 | |
| |
| | | |
| | |
Net cash provided (used) by operating activities | |
| (57,510 | ) | |
| (2,854 | ) |
| |
| | | |
| | |
Cash flows from financing
activities: | |
| | | |
| | |
Increase in notes payable to a stockholder | |
| 58,656 | | |
| 9,800 | |
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 | |
| 58,656 | | |
| (4,800 | ) |
| |
| | | |
| | |
Net increase (decrease)
in cash | |
| 1,146 | | |
| 1,946 | |
| |
| | | |
| | |
Cash – beginning of period | |
| 37 | | |
| 600 | |
| |
| | | |
| | |
Cash – end of period | |
$ | 1,183 | | |
$ | 2,546 | |
The accompanying
notes to the financial statements are an integral part of these statements.
MED-CANNABIS
PHARMA, INC.
(unaudited)
(continued)
| |
For the six months ended June 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 | |
| — | | |
| — | |
| |
| | | |
| | |
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.
June 30, 2014
(unaudited)
NOTE 1 –
Summary of Significant Accounting Policies
Unaudited
Interim Financial Information
The accompanying
Consolidated Balance Sheet as of June 30, 2014, Consolidated Statements of Operations for the six months ended June 30, 2014 and
2013, Consolidated Statement of Stockholder’s (Deficit) and the Consolidated Statements of Cash Flows for
the six months ended June 30, 2014 and 2013 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 June 30, 2014 and its results of operations and
its cash flows for the period ended June 30, 2014. The results
for the period ended June 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”) is a development stage company with minimal
operations. 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 June 30, 2014 had no activity.
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 June 30, 2014 and for the period February 23, 2011 (inception) to
June 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 June 30, 2014, the Company had $1,183 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 June 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 June 30, 2014 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
6/30/14 |
|
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 |
$ |
1,183 |
$ |
1,183 |
$ |
- |
$ |
- |
|
$ |
1,183 |
$ |
1,183 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
624 |
$ |
624 |
$ |
- |
$ |
- |
|
Note payable to stockholder |
|
136,904 |
|
136,904 |
|
- |
|
- |
|
$ |
137,528 |
$ |
137,528 |
$ |
- |
$ |
- |
|
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 June 30, 2014 and cumulative from February
23, 2011 (inception) to June 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 –
Development Stage Activities and Going Concern
The Company
is in the development stage and has minimal operations, and as such has devoted most of its efforts since its inception to developing
its business plan, issuing common stock, attempting to raise capital, establishing its accounting systems and other administrative
functions.
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 June 30, 2014, the
Company had a working capital deficiency of ($138,087). 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 June 30, 2014 the Company issued an aggregate of 516,000,000 shares and as of the
period ending June 30, 2014, the Company cancelled an aggregate of 306,000,000 shares.
As of June 30,
2014, the Company had 210,000,000 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 June 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 June 30, 2014 was as follows, assuming a 35 percent
effective tax rate:
|
|
For the
six
months
ended
6/30/14 |
|
For the
period
February
23, 2011
(inception)
to
12/31/13 |
Current tax provision: |
|
|
|
|
|
|
|
|
Federal |
|
|
|
|
|
|
|
|
Taxable
income |
|
$ |
— |
|
|
|
|
|
Total
current tax provision |
|
$ |
— |
|
|
|
|
|
Deferred tax provision: |
|
|
|
|
|
|
|
|
Federal |
|
|
|
|
|
|
|
|
Loss
carryforwards |
|
$ |
61,228 |
|
|
$ |
37,296 |
|
Change
in valuation allowance |
|
|
(61,228 |
) |
|
|
(37,296 |
) |
Total
deferred tax provision |
|
$ |
— |
|
|
$ |
— |
|
As of June 30,
2014, the Company had approximately $226,154 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 June
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 June 30,
2014, the Company had notes payable to a related party stockholder in the amount of $136,904. These notes were assumed during
the change of control transaction and are payable on demand and do not bear interest. During the six months ended June 30, 2014
the imputed interest expense on the notes was $4,109.
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.
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 July 1, 2014,
as a result of the Company’s name change, the trading symbol was changed to MCPI.OB.
On July 28,
2014, Big Sky Oil, Inc., the majority shareholder of Med-Cannabis Pharma Inc. (the “Company”), returned to the Company’s
treasury all 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.
On
August 4, 2014, Med-Cannabis Pharma, Inc. (the “Company”) announced that it was terminating the Purchase Agreement
with Loe & Associates, LLC due to its inability to audit the books and records of Loe & Associates. The decision to terminate
was mutual and no shares will be issued pursuant to that agreement. Mr. Loe will remain with the Company as a director, COO and
vice president. Mr. Loe acquired ten million (10,000,000) shares of the Company in a private transaction with another shareholder
on July 29, 2014. The Company will continue to own and operate medical cannabis stores in the State of Washington.
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 June 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
Six Months Ended June 30, 2014 and 2013
Revenues.
We generated $0 in revenue during the three months ended June 30, 2014 and $2,153 for the same period a year ago. This revenue
was derived solely from design consulting services.
We generated
$0 in revenue during the six months ended June 30, 2014 and $7,071 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 June 30, 2014 and $2,153 for the same period a year ago.
Our gross profit
was $0 during the six months ended June 30, 2014 and $6,893 for the same period a year ago.
Operating
Expenses. Our total operating expenses for the three months ended June 30, 2014 were $52,215, which is a $42,515, or 438%,
increase compared to operating expenses of $9,700 for the same period a year ago. Our operating expenses were primarily attributable
to costs related to payment of accrued Washington State sales taxes, $17,100; Website Expenses $6,100; Payroll $6,000; Rent $4,100..
Our total operating
expenses for the six months ended June 30, 2014 were $64,440, which is a $43,072, or 202%, increase compared to operating expenses
of $21,368 for the same period a year ago. Our operating expenses were primarily attributable to costs related to payment of accrued
Washington State sales taxes, $17,100; Website Expenses $6,100; Payroll $6,000; Rent $4,100; Travel $3,192.
Income (Loss)
From Operations. We had a loss from operations of ($52,215) for the three months ended June 30, 2014 compared to an operating
loss of ($7,547) for the same period a year ago, which represented a $44,668 increase in operating loss.
We had a loss
from operations of ($64,440) for the six months ended June 30, 2014 compared to an operating loss of ($14,475) for the same period
a year ago, which represented a $49,965 increase in operating loss.
Other income
(expenses). During the three and six month ended June 30, 2014 we recorded ($2,655) and ($4,105) interest expense respectably,
compared to ($1,032) and ($2,035) for the same period a year ago,. The interest expense is comprised entirely of imputed interest
expenses related to 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 ($54,870) for the three months ended June 30, 2014 compared to a net loss of ($8,579) for the
same period a year ago, which represented an increase of $46,291, in net loss.
We had a net
loss of ($68,549) for the six months ended June 30, 2014 compared to a net loss of ($16,510) for the same period a year ago, which
represented an increase of $52,039, in net loss.
Liquidity
and Capital Resources
As of June 30,
2014, we had $4,183 of assets. Our total liabilities were $137,528, which consisted of accounts payable of $624 and notes payable
aggregating $136,904 to a related party. These are demand notes do not interest. 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 June 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 months ended June 30, 2014 and 2013,
and cumulative from March 3, 2011 (inception) to June 30, 2014.
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 June 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 June 30, 2014 Using: |
|
|
|
|
|
|
|
|
|
Description |
|
6/30/14 |
|
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 |
$ |
1,183 |
$ |
1,183 |
$ |
- |
$ |
- |
|
$ |
1,183 |
$ |
1,183 |
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
$ |
624 |
$ |
624 |
$ |
- |
$ |
- |
|
Note payable to stockholder |
|
136,904 |
|
136,904 |
|
- |
|
- |
|
$ |
137,528 |
$ |
137,528 |
$ |
- |
$ |
- |
|
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 June 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
The
Company does not expect the impact of recent accounting pronouncements to have a material effect on the Company’s
financial statements. The Company elected early adoption of ASU 2014-10.
Contractual
Obligations
As of June 30,
2014, Med-Cannabis Pharma had one contractual obligations. 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 June 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 June 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 May 1,
2013. |
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 eighteenth the day of August, 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: August 18, 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: August 18, 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 June 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: August 18, 2014
/s/ Gracie Moreno
Name: Gracie Moreno
Title: Chief Executive Officer
Dated: August 18, 2014
/s/ Gracie Moreno
Name: Gracie Moreno
Title: Chief Financial Officer
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