FORM
one)
or
2015
_____________
Med-Cannabis Pharma, 000-28453
| Nevada | 45-0704149 |
(State
| (
|
2544 Tarpley Road , Ste. 112, Carrollton, TX 75006
(Address
(Registrant’s
number)
Act - None
(Title of class)
- Common Stock $0.0001- $0.001 par value
(Title of class)
Yes ¨o Nox
Yes ¨o Nox
YesxNo ¨o
Yesx No ¨o
¨
o
Large accelerated filer | Accelerated filer | |
Non-accelerated filer | Smaller reporting company |
As ofMay 7, 2015, the: Yes o No x
non-affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibits incorporated by reference are referred under Part IV.
TABLE OF CONTENTS
| Page Number | ||||
| Part I | ||||
| Item 1 | Business | |||
| Item 1A | Risk Factors | |||
| Item 1B | Unresolved Staff Comments | 11 | ||
| Item 2 | Properties | |||
| Item 3 | Legal Proceedings | |||
| Item 4 | Mine Safety Disclosures | |||
| Item 5 | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 12 | ||
| Item 6 | Selected Financial Data | |||
| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||
| Item 7A | Quantitative and Qualitative Disclosures About Market Risk | |||
| Item 8 | Financial Statements and Supplementary Data | |||
| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||
| Item 9A | Controls and Procedures | |||
| Item 9B | Other Information | |||
| Item 10 | Directors, Executive Officers and Corporate Governance | |||
| Item 11 | Executive Compensation | |||
| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||
| Item 13 | Certain Relationships and Related Transactions, and Director Independence | |||
| Item 14 | Principal | |||
| Part IV | ||||
| Item 15 | Exhibits, Financial Statement Schedules | 24 | ||
| Signatures | ||||
PART 1
Information
As used in this Annual Report, the terms "we", "us", "our", "MCPI", “Registrant”, and “Issuer” means Med-Cannabis Pharma, Inc. unless the context clearly requires otherwise.
Item 1. Business
Overview of Our Business
Nevada on February 23, 2011. The Company was originally incorporated as Southwest China Imports, Inc. on February 23, 2011 in the State of Nevada. The Company plannedCompany’s initial business plan was to import high-end handmade lace wigs, hairpieces, and other beauty supplies and accessories manufactured overseas into the United States.
In June 2014, the Company changed its name to Med-Cannabis Pharma, Inc. and changed the direction of theimplemented a new business plan to enter into the retail sale of medical marijuana. Med-Cannabis Pharma has two wholly ownedand personal use marijuana, where allowable. In October 2015, the Company changed its name to MCPI, Inc.
MPM was formedefforts in the State of Washington and, currently, had abandoned all activities in the State of Washington. Emerald Mountain Organics had established an early-phase growing operation and generated nominal sales through September 30, 2015.
accompanying consolidated financial statements.
In recent years a number of states have laws passed allowingallow for the growing, sale, and use of marijuana for medical and/orpurposes, of which 14 have active retail markets, and four (4) states; Washington, Colorado, Alaska and Oregon, as well as the District of Colombia have voter passed amendments permitting the use of marijuana for recreational marijuana.purposes. The regulatory, reporting, and taxation frameworks vary between jurisdictions and the United States of America still generally treats marijuana as a Class I drug under the Controlled Substances Act.
Twenty-three
others as State and Local Laws are changed, appended, amended or enacted.
As of
a working capital line-of-credit with an entity affiliated with the Company’s controlling stockholder, advanced approximately $393,000 to support the development and initial operations of these dispensaries.
$500,000.
Opening
Note: The
Long-Term Plan (5 Years)
We intend
Financing
We presently have
growth capital to independently-owned “mon-and-pop” dispensaries.
operations.
However, some R&D expenditures may occur in future periods concurrent with the development of a captive growing and cultivation operation.
We do
Property and Equipment
Our principal executive offices are located at 2544 Tarpley, #112, Carrolton, TX 75006. We currently operate locationsparticipate in Newport and and Bend, Oregon. We do not hold ownership or leasehold interest in any property or equipment.
Executive Offices and Telephone Number
Our executive office and main telephone number is currently:
2544 Tarpley, Suite 112
Carrolton, TX 75006
Tel: (214) 666-8364
www.med-cannabispharma.com
1A.1A - Risk FactorsIf anyfollowing risks actually occur, our business, financial condition and resultsservices of operations could be harmed and you may lose your entire investment.Industry Risk FactorsThe medical marijuana industry is in its infancy and is fragmented and highly competitive. This competitive situationsuch members of management could have a material adverse effect on our Company. We presently maintain no key-man insurance coverage on any of our officers.and/orand results of operations.still designatedquickly evolving, and activity in the sector is expanding rapidly. Demand and market acceptance for legal marijuana are subject to uncertainty and risk, as changes in the price and possible adverse political efforts could influence and denigrate demand. The Company cannot predict whether, or how fast, this market will grow or how long it can be sustained. If the market for legal marijuana develops more slowly than expected or becomes saturated with competitors, the Company’s operating results could be adversely impacted.Class I druggrowth strategy to enter a new and emerging industry, the Company’s operations may be adversely impacted as the industry’s competitive, operational, financial and other parameters take shape. Given the fluidity of the industry, the Company may make errors in implementing its business plan, thereby limiting some or all of its ability to perform in accordance with its expectations.· breakdown of equipment; · labor disputes; · imposition of new government regulations; · sabotage by operational personnel; · cost overruns; and · fire, flood, or other acts of God. Controlled Substances Act. This legal environmentsupervision of, the principal executive and principal financial office and effected by the board of directors, management and other personnel, 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 and includes those policies and procedures that:· pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. significant impactsufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identity other deficiencies that we may not be able to timely remediate. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on our operations ifan ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the federal government decidedSarbanes-Oxley Act of 2002 (“Sarbanes Oxley”). Moreover, effective internal controls, particularly those related to shut down operations under the Controlled Substance Act.Company Risk FactorsWe lack an operating historyrevenue recognition, are necessary for us to produce reliable financial reports and have losses which we expectare important to continue into the future. There is no assurance our future operations will result in profitable revenues.help prevent financial fraud. If we cannot generate sufficient revenues to operate profitably,provide reliable financial reports or prevent fraud, our business will fail.We were incorporated on February 23, 2011, have generated minimal revenues and as of December 31, 2014 have incurred a retained deficit of $59,418,274. We have very little operating history upon which an evaluationresults could be harmed, investors could lose confidence in our reported financial information, and the trading price of our future success or failure can be made. We have not achieved profitability and expectcommon stock, if a market ever develops, could drop significantly.to incur net losses over the next 12 months, probably even longer. We expect to incur significant operating expenses and, as a result, will needgoing concern.generate significantcomply with numerous financial reporting and legal requirements, including those pertaining to audits and internal control. The costs of this compliance could be significant. If our revenues to achieve profitability, which maydo not occur. Even ifincrease and/or we do achieve profitability,cannot satisfy many of these costs through the issuance of our shares, we may be unable to sustain or increase profitability on an ongoing basis which could cause us to go out of business.There is substantial uncertainty as to whether we will continue operations. If we discontinue operations, you could lose your entire investment.Our independent registered public accounting firm has discussed their uncertainty regarding our business operations in their audit report dated May 13, 2015, which is includedsatisfy these costs in the audited financial statementsnormal course of business that are a part of this Annual Report. This means that there is substantial doubt that we canwould result in our being unable to continue as an ongoing businessa going concern.next 12 months.benefit of directors and officers. The financial statements do not include any adjustmentsCompany has been advised that, might result fromin the uncertainty about our ability to continue in business. As such, we may have to cease operations and you could lose your entire investment.Our product introductions may not be as successful as we anticipate which could prevent us from generating sufficient levels of revenue and could cause our business to fail.The launch of our products carries risks, as well as the possibility of unexpected consequences, including:the acceptance of our products, and sales of these products to qualifying patients;our advertising, promotional, and marketing strategies may be less effective than planned and may fail to effectively reach our targeted consumer base or engender the desired consumption;we may incur costs exceeding our expectations as a resultopinion of the launch of our products, including,SEC, indemnification for example, advertising, promotionalliabilities arising under Federal Securities Laws is against public policy as expressed in the Securities Act and marketing expenses, or other costs normally associated with launching new products;Each of the risks referred to above could delay or impede our ability to achieve our sales objectives, which could affect our future sales, overall business, and force us to cease operations in which investors could lose their entire investment.Costs incurred because we are a public company may affect our future profitability.As a public company, we incur significant legal, accounting, and other expenses, and we are subject to the SEC’s rules and regulations relating to public disclosure that generally involve a substantial expenditure of financial resources. In addition, the Sarbanes-Oxley Act of 2002, as well as rules subsequently contemplated and implemented by the SEC, require changes in corporate governance practices of public companies. We expect that full compliance with such rules and regulations will significantly increase our legal and financial compliance costs and make some activities more time-consuming and costly, which may negatively impact our future financial results. To the extent that our future earnings suffer as a result of the financial impact of our SEC reporting or compliance costs, our ability to develop an active tradingis, therefore, unenforceable.our securities could be harmed.We have agreed to indemnify our officersthe MCPI Shares is extremely limited and directors against lawsuits to the fullest extent of the law.We are a Nevada corporation. Nevada law permits the indemnification of officers and directors against expenses incurred in successfully defending against a claim. Nevada law also authorizes Nevada corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been an officer or director. Our organizational documents provide for this indemnification to the fullest extent permitted by law.We currently do not maintain any insurance coverage. In the event that we are found liable for damages or other losses, we would incur substantial and protracted losses in paying any such claims or judgments. We have not maintained liability insurance in the past, but intend to acquire such coverage immediately upon resources becoming available. There is no guarantee that we can secure such coverage or that any insurance coverage, if ever secured, would protect us from any damages or loss claims filed against it.Risk Factors Relating to Our Common StockThere is a limited, volatile, and sporadic public trading market for oursporadic.and we cannot assure you that an active public trading market for our common stock will develop, of if developed, be sustained. Even if a market further develops, you may not be able to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.There is presently a limited public trading market for our registered common stock which presently trades on the OTCQ Bulletin Board under the trading symbol “MCPI”.An application for quotationquoted on the OTC Bulletin Board was submitted by aPink Sheets. The market maker who agreed to sponsor the security and who demonstrated compliance with Rule 15c2-11 of the Securities Exchange Act of 1934 (“Exchange Act”). The application for quotation of our registered common stock on the OTC Bulletin Board was accepted on September 11, 2012. We also caused a different market maker to submit an application in September 2012 on our behalf to the Depository Trust Corporation (“DTC”) to become eligible for electronic trading (“DTC Eligible”). We are currently approved for DTC electronic trading.Even though our registeredMCPI’s common stock is approved for quotationlimited and electronic tradingsporadic. Trading in stock quoted on the OTC Bulletin Board, the number of institutions and/or persons interestedPink Sheets is often thin and characterized by wide fluctuations in purchasing our registered common stock at or near asktrading prices, at any given timedue to many factors that may be relatively small or non-existent. This situation is attributablehave little to a number of factors, including, among others, the fact that we are a small and unproven company that is relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community responsible for generating or influencing trading volume, and that even if we were to come to the attention of such institutions and/or persons, they tend to be more risk averse and may be reluctant to follow an unproven business such as ours or purchase or recommend the purchase of our shares until such time as we have demonstrated sufficient successdo with our operations or business plan. As such, there may be periods of several daysprospects. This volatility could depress or more when trading activity in our shares of common stock is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without adversely affecting their share price. We cannot assure you that an active public trading market for our registered common stock will develop and, if developed, be sustained.Even if a sustained active public trading market develops for our registered common stock,exaggerate the market price of ourMCPI’s common stock for reasons unrelated to operating performance. Moreover, the trading of securities in the Pink Sheets is often more sporadic than the trading of securities listed on a quotation system like NASDAQ, or a stock exchange like the New York Stock Exchange.also fluctuate significantly in responsebe restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a stockholder’s ability to the following factors, most of which are beyond our control:variations in our quarterly operating results;changes in general economic conditionsbuy and consumer spending habits;announcements by us or our competitors of significant new contracts, acquisitions, strategic partnerships or joint ventures, or capital commitments;loss of a significant distributor, retailer, partner or joint venture participant; andthe addition or loss of key managerial and collaborative personnel.The equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies' securities and that have often been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price ofsell our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.We do not intend to pay any dividends on ourstock.therefore, there are limited ways in which you can makeis a profit on any investment in MCPI.We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we may seek additional funding in the future, our future funding sources may likely prohibit us from paying any dividends. Because we do not intend to declare dividends, any gain on an investment in our shares of common stock will need to come through the appreciation of our common stock’s share price, for which we can give no assurances that our common stock will ever appreciate in value and, even if it does appreciate in value, that you will be able to sell your shares of our common stock for a profit.We have anti-takeover provisions which may make it difficult to replace or remove our current management and could also result in significant dilution to an investment in our common stock.Our Articles of Incorporation authorizes the issuance of up to 500,000,000 shares of common stock and of up to 50,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our Board of Directors. Our Board of Directors may, without requiring shareholder approval, issue shares of preferred stock with dividends, liquidation, conversion, voting or other rights which could supersede and/or adversely affect the voting power and/or other rights of the holders of our commonpenny stock. The ability of our Board of Directors to issue shares of common stock and/or preferred stock may prevent any shareholder attempt to replace or remove current management and/or could make it extremely difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. Additionally, the issuance of additional securities in the future may significantly reduce your proportionate ownership and voting power.It is important to note that as of May 7, 2015, we had no shares of preferred stock issued or outstanding.We are presently subject to the "Penny Stock" rules of the SEC which could limit the trading and liquidity of our common stock, adversely affect the market price of our common stock, and increase your transaction costs to sell shares of our common stock.The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevantgenerally defines “penny stock” to us, asbe any equity security that has a market price of(as defined) less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a pennyMCPI’s common stock unless exempt, the rules require:that a broker or dealer approve a person's account for transactions in penny stocks; andthe broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity ofis covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to be purchased.In orderpersons other than established customers and accredited investors. The term “accredited investor ” refers generally to approveinstitutions with assets in excess of $5,000,000 or individuals with a person's account for transactionsnet worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stocks, the broker or dealer must:obtain financial information, investment experience and investment objectives of the person; andmakestock rules require a reasonable determination that the transactions in penny stocks are suitable for that person and that the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.The broker or dealer must also deliver,broker-dealer, prior to anya transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure schedule prescribeddocument in a form prepared by the SEC relatingwhich provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, MCPI’s common stock.market, which, in highlight form:sets forthrules promulgated by the basis on which the broker orSEC, FINRA (the Financial Industry Regulatory Authority) has adopted rules that require when recommending an investment to a customer, a broker- dealer made the suitability determination; andbroker or dealer receivedinvestment is suitable for that customer. Prior to recommending speculative low -priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a signed, written agreement from the investor prior to the transaction.Generally, brokers mayhigh probability that speculative low-priced securities will not be less willing to execute transactions in securities subject to the "penny stock" rules. This maysuitable for at least some customers. FINRA’s requirements make it more difficult for investorsbroker-dealers to recommend that their customers buy MCPI’s common stock, which may limit investor ability to buy and sell MCPI’s common stock.· control of the market for the security by one or a few broker-dealers that are often related to a promoter or issuer; · manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; · boiler room practices involving high pressure sales tactics and unrealistic price projections by sales persons; · excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and · wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. causethe conversion feature on the Line-of-Credit note, these parties are in a declineposition to significantly influence membership of our board of directors as well as all other matters requiring stockholder approval, as well as control the affairs of MCPI and it’s subsidiaries. The interests of our principal stockholders may differ from the interests of other stockholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of other officers and directors and other business decisions. The minority stockholders have no way of overriding decisions made by our principal stockholders. This level of control may also have an adverse impact on the market value of our shares because our principal stockholders may institute or undertake transactions, policies or programs that result in losses and/or may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.ourthe common stock.Disclosure also has to be made about the risksinvesting in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in casesshares of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.OurMCPI common stock presently tradespursuant to Rule 144 under $5 a share and is subject to the “penny stock” rules. The continued application of the “penny stock” rules to our common stockSecurities Act could limit the trading and liquidity of our common stock, adversely affect the market price of ourMCPI’s common stock, or cause an increase the transaction costs related to of our common stock.The OTCQ Bulletin Board is a quotation system, not an issuer listing service, market, or exchange. Therefore, buying and selling stock on the OTCQ Bulletin Board is not as efficient as buying and selling stock through an exchange.The OTCQ Bulletin Board is a regulated quotation service that displays real-time quotes, last sale prices, and volume limitations in over-the-counter securities. Because trades and quotations on the OTCQ Bulletin Board involve a manual process, the market information for such securities cannot be guaranteed. In addition, quote information, or even firm quotes, may not be available. The manual execution process may delay order processing and intervening price fluctuations may result in the failure of a limit order to execute or the execution of a market order at a significantly different price. Execution of trades, execution reporting, and the delivery of legal trade confirmation may be delayed significantly. Consequently, you may not be able to sellour common stock at the optimum trading prices.When fewer shares of a security are being traded on the OTCQ Bulletin Board, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Lower trading volumes in a security may result in a lower likelihood of an individual’s orders being executed, and current prices may differ significantly from the price that was quoted by the OTC Bulletin Board at the time of the order entry.Orders for OTCQ Bulletin Board securities may be cancelled or edited like orders for other securities. All requests to change or cancel an order must be submitted to, received by, and processed by the OTC Bulletin Board. Due to the manual order processing involved in handling OTC Bulletin Board trades, order processing and reporting may be delayed, and an individual may not be able to cancel or edit their order in a timely manner. Consequently, you may not be able to sell shares of our common stock at optimum trading prices.The dealer’s spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller of securities on the OTCQ Bulletin Board if the common stock or other security must be sold immediately. Further, purchasers of securities may incur an immediate “paper” loss due to the price spread. Moreover, dealers trading on the OTC Bulletin Board may not have a bid price for securities bought and sold through the OTC Bulletin Board. As such, demand for securities that are traded through the OTC Bulletin Board may be decreased or eliminated.We expect volatility in the price of ourits common stock which may subject uswere issued pursuant to exemptions from registration under the Securities Act and applicable state securities litigationlaws, but which are now available for public sale pursuant to Rule 144 under the Securities Act and thereby divert our resources which may materiallycomparable exemptions under applicable state securities laws. The potential of such sales could adversely affect our profitability and results of operations or force us to cease operations.If established, the market for our common stock may be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. MCPI’s common stock.future be the target of similar litigation. Securities litigation could result in substantial costsSEC that increase responsibilities and liabilities could divert management's attentionof directors and resources, and could ultimately force us to cease operations whereby you could lose your entire investment.executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.
1B.1B - Unresolved Staff CommentsNone.2.2 - PropertiesOur principal executive offices areat 2544 Tarpley, Suite 112, Carrolton, TX 75006. We currently operate locations, leased by others, in Newport;Newport, Bend and Cottage Grove; and Bend,Grove, Oregon. The Cottage Grove propertyCompany is being remodelednot liable for any obligations related to these operating storefronts.yet openedWe do not hold ownership or leasehold interest in any property or equipment.
3.3 - Legal ProceedingsNo officer, director, or persons nominated for these positions,promoter or significant employee (current or former) of our corporation has been involved in legalsuch proceedings that wouldare known to be material to an evaluation of our management. We are not aware of any pending or threatened legal proceedings involving MCPI.contemplated.
applicable to the Company. Issuer Purchases of Equity Securities Company. 2015:4.4 - Mine Safety Disclosuresapplicable.5.5 - Market for the Registrant’s Common Equity, Related Stockholder Matters andthe OTC Bulletin Board on September 11, 2012 at the time under the2012. Our current trading symbol “SWCI” and now under the trading symbolis “MCPI”. Currently there is only a limited, sporadic, and volatile market for our stock on the OTC Bulletin Board.stock. The following table sets forth the high and low sales prices of our common stock as reported by the OTC Bulletin Boardon www.bigcharts.com for the periods indicated. These prices represent prices between inter-dealer prices, do not include retail markups, markdowns, or commissions, and do not necessarily reflect actual transactions. High Low Year Ended December 31, 2014 First Quarter $ 0.1100 $ 0.0012 Second Quarter $ 0.1500 $ 0.0600 Third Quarter $ 1.1400 $ 0.1400 Fourth Quarter $ 0.4000 $ 0.2300 High Low Year Ended December 31, 2013 First Quarter $ 0.2200 $ 0.1200 Second Quarter $ 0.2700 $ 0.0003 Third Quarter $ 0.0039 $ 0.0022 Fourth Quarter $ 0.0035 $ 0.0015 (1)Our common stock received clearance from FINRA to trade on the OTC Bulletin Board on September 11, 2012. It did not start trading until November 2012. High Low Fiscal year ended December 31, 2015 Quarter ended December 31, 2015 $ 0.30 $ 0.25 Quarter ended September 30, 2015 $ 0.40 $ 0.27 Quarter ended June 30, 2015 $ 0.40 $ 0.17 Quarter ended March 31, 2015 $ 0.23 $ 0.04 Fiscal year ended December 31, 2014 Quarter ended December 31, 2014 $ 0.30 $ 0.24 Quarter ended September 30, 2014 $ 0.80 $ 0.14 Quarter ended June 30, 2014 $ 0.12 $ 0.02 Quarter ended March 31, 2014 $ 0.02 $ 0.001 May 7, 2015April 22, 2016 was $0.40$0.065 as reported by the OTCQOTCQB Bulletin Board.May 7, 2015,July 16, 2016, we had 50,220,000 shares of our common stock issued and outstandoutstanding held by approximately 74 stockholders of record. We had no shares of preferred stock issued and outstanding.total numberCompany is authorized to issue up to 500,000,000 shares of common shares authorized that may be issued by the Company is 250,000,000 sharesstock with a par value of $0.0001$0.001 per share.Asperiod ending December 31, 2014Company sold 210,000,000 issued and outstanding shares of the Company issued an aggregate of 100,000 sharesto Big Sky Oil, Inc. and asanother investor in a private transaction, effecting a change in control of the period ending December 31, 2014, the Company cancelled an aggregate of 159,930,000 shares.Med-Cannabis Pharma Inc. (the “Company”),the Company, as a result of the March 2014 change in control transaction, surrendered for no compensation and returned to the Company’s treasury 159,930,000 shares of the Company’s common stock it had purchased from prior management.acquired in the March 2014 transaction. Big Sky agreed to return these shares to the treasury for use in future possible issuances by the Company.total numberCompany is authorized to issue up to 25,000,000 shares of preferred shares authorized that may be issued by the Company is 25,000,000 sharesstock with a par value of $0.0001$0.001 per share.2014,2015, the Company had no shares of its preferred stock issued and outstanding.2014,2015, we have not adopted an equity compensation plan and have not granted any stock options.2014:SW Chinathe Company an aggregate of 300,000,000 shares of our restricted common stock, $0.0001 par value, which were subsequently cancelled by our Board of Directors. These shares have beenwere returned to our corporate treasury.(formerlyor SW China, Inc.) sold 210,000,000 of their shares 210,000,000, to Big Sky Oil, Inc. and another investor, resulting in a change of control.(the “Company”or SW China, Inc.), voluntarily 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 theseThese shares were returned to the treasury for use in future possible issuances by the Company.WilliamsWienert for services in conjunction with on-site store management. The Company relied on exemptions from registration pursuant to Regulation D and Section 4(2) of the Securities Act of 1933, as amended.
6.6 - Selected Financial Dataapplicable.applicable
7.7 - Management’s Discussion and Analysis of Financial Condition and Results of OperationsWe are a corporationlimited operations. Our independent registered public accounting firm has issued a going concern opiniongovernment regulations; adverse publicity; competition; fluctuations and difficulty in their audit report dated May 13, 2015, which can be foundforecasting operating results; changes in our Annual Report onbusiness strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings.filedand investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.SecuritiesCompany releasing any and all interests it may have had in the Stores and MMS. Additionally, the Company agreed to assign a trademark to Mr. Stidham as well as executing a new Note in the principal sum of $752,694.19. The effect of the June 1, 2016 Settlement Agreement , due to the timing of this release of these amended financial statements and this transaction, is reflected in the accompanying consolidated financial statements.Commission (“SEC”) on May 13, 2015. This meansAct unless and until such time that the Company begins meaningful operations.auditors believeofferings. By investing in or starting a cultivation operation, we anticipate that the Company will be able to support its retail assets by providing superior products and also establish a consistent crop schedule. We will pursue quality strains and phenotypes through our growing techniques to offer patients quality and consistency.that we can continue as an on-going business forabout 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 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 Annual Report as filed with the SEC on Form 10-K.Limited Operating History; Need for Additional CapitalThere 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.Plan of OperationsThe 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 Bend, Oregon.Results of OperationsFor the ease of reference, we refer to the fiscal year ended December 31, 2014 as fiscal 2014 and the fiscal year ended December 31, 2013 as fiscal 2013.Fiscal Year Ended December 31, 2014Revenues. We generated $0 in revenue fiscal 2014 versus $8,148 in fiscal 2013. The 2013 revenue was derived solely from design consulting services.Gross Profit. Our gross profit was $0 during fiscal 2014 versus $7,970 in fiscal 2013.Operating Expenses. Our total operating expenses for fiscal 2014 were $299,052, which is a $233,880, or 359%, increase compared to operating expenses of $65,172 in fiscal 2013. The increase in expenses was primarily attributable to costs related to payment of accrued Washington State sales taxes, $17,300; Website Expenses $10,900; Payroll $25,300; Rent $25,600; Travel $55,900; Due diligence expenses $10,500, Promotional expenses $5,400 and Management fees of $4,000. The increases were partially offset by reduced Consulting and Contract Fees of $11,000.Income (Loss) From Operations. We had a loss from operations of ($299,052) for fiscal 2014 compared to an operating loss of ($57,202) for fiscal 2013, which represented an increase of $242,300.Other income (expenses). During fiscal years 2014 and 2013 we recorded ($13,450) and ($4,298) of interest expense respectively. The interest expense is in 2014 is comprised of imputed interest expenses related to line-of-credit interest and notes outstanding payable to a related party. In fiscal 2013 interest expense is solely made up of imputed interest. The imputed interest was recorded in our financial statements under additional paid-in capital.Net Income (Loss). We had a net loss of ($312,502) for fiscal 2014 compared to a net loss of ($61,500) for fiscal 2013, which represented an increase of $251,002, in net loss. Total Stockholders’ Deficit. Our stockholders’ deficit was ($346,434) as of December 31, 2014.Liquidity and Capital ResourcesAs of December 31, 2014, we had $14,763 of assets. Our total liabilities were $361,197, which consisted of accounts payable of $8,523, accrued expenses of $24,095, deferred revenue of $5,000, and a line-of-credit aggregating $323,579 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 $175,000 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 ConsiderationOur independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about ourCompany's ability to continue as a going concern.contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.Off –Balance Sheet OperationsAs of December 31, 2014, we had no off-balance sheet activities or operations.CRITICAL ACCOUNTING POLICIESThe accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) forand related public financial information and in accordance withare based on the Securities and Exchange Commission’s (“SEC”) Regulation S-X. They reflect all adjustments which are, in the opinionapplication of Med-Cannabis Pharma’s management, necessary for a fair presentation of the financial position and operating results as of December 31, 2014 and 2013.Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States of America(“GAAP”). GAAP 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; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates inherentcan also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the financial reporting process, actualcircumstances. Actual results may differ significantlymaterially from those estimates.Cash and Cash EquivalentsFor purposesthese estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of the statementour financial statements.cash flows, Med-Cannabis Pharma considers highly liquidour financial instruments purchased with a maturity of three months or less to be cash equivalents. As of December 31, 2014, we had $14,763 in cash and equivalents.Fair Value of Financial InstrumentsASC 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. Astatements. While all these significant accounting policies impact our 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:LevelDescriptionLevel 1Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Applies 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 3Applies 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.Net Loss per Share CalculationBasic 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 fiscal years 2014 and 2013 we had no dilutive financial instruments issued or outstanding.Revenue RecognitionMed-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 the management of legal, retail marijuana despensaries.Income TaxesWe 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 positioncondition and results of operations, for the current period. Future realizationwe view certain 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, suchthese policies as Med-Cannabis Pharma generating taxable income, could cause a change in judgment about its abilitycritical. Policies determined 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 PronouncementsOn November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16—Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative featurecritical are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrumentpolicies that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods.On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17—Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in whichhave the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle.On August 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements – Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.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.In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a materialsignificant impact on our financial positionstatements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations.In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on ouroperations, financial position or results of operations.Besides what’s noted aboveliquidity for the Company does not expect the impact of recent accounting pronouncements to have a material effect on the Company’s financial statements.Contractual ObligationsThe Company has enteredperiods presented in five leases that have varying lengths with one of them going through April 2021. The Company’s lease obligations follow: 2015 43,191 2016 31,097 2017 12,811 2018 12,811 2019 12,811 Total 112,721
7A.7A - Quantitative and Qualitative Disclosures Aboutabout Market Risk
and Subsidiaries For the year ended December 31, 2014 For the year ended December 31, 2013 (Loss) per common share, basic and diluted Weighted average number of common shares outstanding, basic and diluted Additional Paid in Capital Accumulated Deficit Balance, December 31, 2013 Additional Paid-In Capital Accumulated Deficit Balance, December 31, 2014 For the year ended December 31, 2014 For the year ended December 31, 2013 For the year ended December 31, 2014 For the year ended December 31, 2013 Consolidated Financial Statements Washington. Emerald Mountain Organics had established an early-phase growing operation and generated nominal sales through September 30, 2015. there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps. Fair Value Measurement at December 31, 2014 Using: December 31, 2014 Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 5,000 323,579 Fair Value Measurement at December 31, 2013 Using: December 31, 2013 Quoted Prices In Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) share calculation date. For the period February 23, 2011 (inception) to 12/31/13 earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates. The Company Future Obligation Name of Beneficial Owner Shares of Common Stock Percentage of Class (Common) Shares of Preferred Stock Percentage of Class (Preferred) 0 0.0% -0- 0% 76.9% -0- 0% For the Fiscal Year Ended December 31, 2014 For the Fiscal Year Ended December 31, 2013 next page)8.8 - Financial Statements and Supplementary DataTableContentsthis document.– Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; – Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and – Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Name Age Position Held and Tenure R. Wayne Duke 75 President, Chief Executive Officer, Chief Financial Officer and SoleDirector, since November 2014 (1) No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations or is subject to any pending criminal proceeding. (2) No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers. (3) No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. (4) No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law. Year Salary($) Bonus ($) Total ($) 2015 $ 33,365 $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Former Principal 2014 $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ 2,500 $ 2,500 Executive Officer 2013 $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- Gracela Moreno, 2015 $ 15,000 -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ 15,000 Former Principal 2014 $ 22,000 -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ 22,000 Executive Officer 2013 $ 2,500 -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ 2,500
The Company has no other executive compensation issues which would require the inclusion of other mandated table disclosures. Shares Beneficially Owned (1) Number of Shares South Beach Live, Inc. 15,663,710 31.19 % 454 SW Coast Highway Newport OR 97365 Charles Stidham 9,756,153 19.37 % 454 SW Coast Highway Newport OR 97365 R. Wayne Duke (1) -0- 0.00 % 454 SW Coast Highway Newport OR 97365 All Executive officers and Directors as a Group (1 person) -0- 0.00 % (1) On August 1, 2016, there were 50,220,000 shares of our common stock outstanding and no shares of preferred stock issued and outstanding. We have no outstanding stock options or warrants. (2) Under applicable SEC rules, a person is deemed the "beneficial owner" of a security with regard to which the person directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose, or direct the disposition, of the security, in each case irrespective of the person's economic interest in the security. Under SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of another security. (3) In determining the percent of voting stock owned by a person on December 31, 2015 (a) the numerator is the number of shares of common stock beneficially owned by the person, including shares the beneficial ownership of which may be acquired within 60 days upon the exercise of options or warrants or conversion of convertible securities, and (b) the denominator is the total of (i) the 50,220,000 shares of common stock outstanding on December 31, 2015, and (ii) any shares of common stock which the person has the right to acquire within 60 days upon the exercise of options or warrants or conversion of convertible securities. Neither the numerator nor the denominator includes shares which may be issued upon the exercise of any other options or warrants or the conversion of any other convertible securities.
Changes in Control· None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating management time among various business activities. · In the course of their other business activities, our officers and directors may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be presented. · Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by us. · Since all of our directors own shares of our common stock that could be sold, in whole or in part, as a negotiated element of a business acquisition, our board may have a conflict of interest in determining whether a particular target business is appropriate to effect a business combination. The personal and financial interests of our directors and officers may influence their motivation in identifying and selecting a target business and completing a business combination.
In general, officers and directors of a Nevada corporation are required to present business opportunities to a corporation if:· the corporation could financially undertake the opportunity; · the opportunity is within the corporation's line of business; and · it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. Year ended Year ended December 31, December 31, 2015 2014 1. Audit fees M&K CPA’s, PLLC $ 13,285 $ 5,500 L & L, CPA’s PA (formerly Bongiovanni & Associates, PA) 8,000 — 2. Audit-related fees — — 3. Tax fees — — 4. All other fees — — Totals $ 21,285 $ 5,500 3.1* Articles of Incorporation 3.2* Bylaws 31.1 Section 302 Certifications under Sarbanes-Oxley Act of 2002 32.1 Section 906 Certification under Sarbanes Oxley Act of 2002
* Incorporated by our Registration Statement on Form S-1 filed May 3, 2011.Page Reports of Registered Independent Public Accounting Firm L&L CPA’s PA F-2 M&K CPAS, PLLC F-3 Report of Independent Registered Public Accounting FirmConsolidated Financial StatementsF-2 Consolidated Balance Sheets F-3as of December 31, 2015 and 2014 F-4 Consolidated Statements of Operations and Comprehensive Loss F-4for the years ended December 31, 2015 and 2014 F-5 Consolidated Statement of Changes in Stockholders’ Equity (Deficit) F-5for the years ended December 31, 2015 and 2014 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014 F-7 Notes to theConsolidated Financial StatementsF-9F-8 REGISTERED PUBLIC ACCOUNTING FIRMTo the Med-Cannabis Pharma, and ShareholdersCarrolton, Texasaccompanying consolidated balance sheets of Med-Cannabis Pharma, Inc.Company”) as of December 31, 2014 and 20132015 and the related consolidated statements of operations, stockholders’ deficit and consolidated cash flows for the years then ended.ended December 31, 2015. These consolidated financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.auditsaudit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our auditsaudit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.audits provideaudit provides a reasonable basis for our opinion.2013 and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.2C to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2.C. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/MED-CANNABIS PHARMA, INC.CONSOLIDATED BALANCE SHEETSASSETS 12/31/14 12/31/13 Current assets: Cash and equivalents $ 14,763 $ 37 Total current assets 14,763 37 Total assets: $ 14,763 $ 37 LIABILITITES AND STOCKHOLDERS’ (DEFICIT) Current liabilities: Accounts payable $ 3,944 $ 20,198 Accounts payable – related party 4,579 — Accrued expenses 2,340 — Accrued expenses – related party 21,755 — Deferred revenue – related party 5,000 — Notes payable to stockholder 323,579 50,550 361,197 70,748 Total liabilities $ 361,197 $ 70,748 Stockholders’ (deficit): Preferred stock, $0.0001 par value, 25,000,000 shares authorized;
no shares issued and outstanding — — Common stock, $0.0001 par value, 500,000,000 and 250,000,000 shares authorized, respectively;
50,170,000 and 210,000,000 shares issued and outstanding, respectively 5,017 21,000 Additional paid-in capital 59,066,823 59,014,061 Accumulated deficit (59,418,274 ) (59,105,772 ) Total stockholders’ (deficit) $ (346,434 ) $ (70,711 ) Total liabilities and stockholders’ (deficit) $ 14,763 $ 37 December 31, December 31, 2015 2014 ASSETS Current Assets Cash and cash equivalents $ — $ 14,763 Accounts receivable Related party, net of allowance for doubtful accounts of approximately $-0- and $50,745 — — — 14,763 $ — $ 14,763 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts payable Third parties $ — $ 3,944 Accrued expenses Third parties 20,947 2,340 Related parties 59,846 4,579 Accrued interest payable Related parties 81,816 21,755 Deferred revenue — 5,000 Note payable to stockholder 607,314 323,579 769,923 361,197 Commitments and Contingencies Stockholders' Equity (Deficit) Preferred stock - $0.0001 par value 25,000,000 shares authorized. None issued and outstanding. — — Common stock - $0.0001 par value. 500,000,000 shares authorized. 50,220,000 and 50,170,000 shares issued and outstanding 5,022 5,017 Additional paid-in capital 59,381,818 59,066,823 Accumulated deficit (60,156,763 ) (59,418,274 ) (769,923 ) (346,434 ) $ — $ 14,763 to the financial statements are an integral part of these consolidated financial statements.MED-CANNABIS PHARMA, INC.CONSOLIDATED STATEMENTS OF OPERATIONS Revenues, net $ — $ 8,148 Cost of revenues — 178 Gross profit — 7,970 Expenses: General and administrative 209,848 626 Consulting fees 48,400 26,000 Legal fees 22,325 30,075 Accounting fees 5,330 6,175 Director fees 10,493 — Transfer agent fees 2,656 2,296 Total expenses 299,052 65,172 (Loss) from operations (299,052 ) (57,202 ) Other income (expense): Interest expense (13,450 ) (4,298 ) Total other income (expense) (13,450 ) (4,298 ) Provision for income taxes — — Net (loss) $ (312,502 ) $ (61,500 ) $ (0.00 ) (0.00 ) 141,659,233 303,369,863 Year ended Year ended December 31, December 31, 2015 2014 Revenues $ — $ — Cost of Sales — — Gross Profit — — Operating expenses Professional fees 462,640 89,204 General and administrative costs 98,485 209,848 Depreciation and amortization — — 561,125 299,052 Loss from operations (561,125 ) (299,052 ) Other income (expense) Loss on abandonment of grow operation (52,644 ) — Loss on theft of grow operation assets (51,380 ) — (73,340 ) (13,450 ) Loss before provision for income taxes (738,489 ) (312,502 ) Provision for income taxes — — Net loss (738,489 ) (312,502 ) Other comprehensive income — — Comprehensive loss $ (738,489 ) $ (312,502 ) Loss per weighted-average share of common stock outstanding, computed on net loss - basic and fully diluted $ (0.01 ) $ (0.00 ) Weighted-average number of shares of common stock outstanding - basic and fully diluted 50,217,945 141,659,233 to the financial statements are an integral part of these consolidated financial statements.MED-CANNABIS PHARMA, INC..CONSOLIDATED STATEMENT OF STOCKHOLDERS’ (DEFICIT)For the period from January 1, 2013 toDescription Common Stock Shares Amount 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 common shares to consultants 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 ) 210,000,000 $ 21,000 $ 59,014,061 $ (59,105,772 ) $ (70,711 ) Additional Common Stock paid-in Accumulated Shares Amount capital Deficit Total Balances at January 1, 2014 210,000,000 $ 21,000 $ 59,014,061 $ (59,105,772 ) $ (70,711 ) Cancellation of common stock (159,930,000 ) (15,993 ) 15,993 — — Forgiveness of debt — — 1,806 — 1,806 Issuance of common stock for consulting fees 100,000 10 29,990 — 30,000 Imputed interest on related party loan — — 4,973 — 4,973 Net loss for the year — — — (312,502 ) (312,502 ) Balances at December 31, 2014 50,170,000 5,017 59,066,823 (59,418,274 ) (346,434 ) Issuance of common stock for consulting fees 50,000 5 14,995 — 15,000 Contributed capital — — 300,000 — 300,000 Net loss for the year — — — (738,489 ) (738,489 ) Balances at December 31, 2015 50,220,000 $ 5,022 $ 59,381,818 $ (60,156,763 ) $ (769,923 ) to the financial statements are an integral part of these consolidated financial statements.MED-CANNABIS PHARMA, INC..CONSOLODATED STATEMENT OF STOCKHOLDERS’ (DEFICIT)For the period January 1, 2013 to (continued) Common Stock Description Shares Amount Total Cancellation of shares of common stock (159,930,000 ) (15,993 ) 15,993 — — Shares issued for services 100,000 10 29,990 — 30,000 Forgiveness of debt — — 1,806 — 1,806 Imputed interest on related party loan — — 4,973 — 4,973 Net (loss) for the period — — — (312,502 ) (312,502 ) 50,170,000 $ 5,017 $ 59,066,823 $ (59,418,274 ) $ (346,434 ) The accompanying notes Year ended Year ended December 31, December 31, 2015 2014 Cash Flows from Operating Activities Net income (loss) for the period $ (738,489 ) $ (312,502 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization — — Common stock issued for professional fees 315,000 30,000 Imputed interest on related party loan — 4,973 (Increase) Decrease in Accounts receivable — — Increase (Decrease) in Accounts payable 53,561 17,827 Accrued expenses 76,430 (5,407 ) Deferred revenues (5,000 ) 5,000 Net cash used in operating activities (298,498 ) (260,109 ) Cash Flows from Investing Activities — — Net cash used in investing activities (342,695 ) — Cash Flows from Financing Activities Cash received from notes payable to stockholders 283,735 274,835 Net cash provided by financing activities 283,735 274,835 Increase (Decrease) in Cash (14,763 ) 14,726 Cash at beginning of period 14,763 37 Cash at end of period $ — $ 14,763 Supplemental Disclosure of Interest and Income Taxes Paid Interest paid during the period $ — $ — Income taxes paid during the period $ — $ — Forgiveness of debt $ — $ 1,806 Cancellation of shares of common stock $ — $ (15,993 ) Assumption of accounts payable $ — $ (29,502 ) the financial statements are an integral part of these statements.MED-CANNABIS PHARMA, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS Cash flows from operating activities: Net (loss) $ (312,502 ) $ (61,500 ) Adjustments to reconcile net (loss) to net cash (used in) operating activities Common stock issued in connection with services provided by consultants 30,000 26,000 Imputed interest on related party loan 4,973 4,298 Changes in operating assets and liabilities: Change in accounts payable 17,827 19,639 Change in accrued expenses (5,407 ) — Change in deferred revenue 5,000 — Net cash provided (used) by operating activities (260,109 ) (11,563 ) Cash flows from financing activities: Increase in notes payable to a stockholder 274,835 16,000 Decrease in notes payable to a shareholder — (5,000 ) Net cash provided (used) by financing activities 274,835 11,000 Net increase (decrease) in cash 14,726 (563 ) Cash – beginning of period 37 600 Cash – end of period $ 14,763 $ 37 The accompanying notes to the financial statements are an integral part of these statements.MED-CANNABIS PHARMA, INC..CONSOLODATED STATEMENTS OF CASH FLOWS (continued) Non-cash investing and financing activities: Cancellation of common shares $ (15,993 ) $ (30,000 ) Forgiveness of debt $ 1,806 $ — Assumption of accounts payable $ (29,502 ) $ — 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.NOTES TO FINANCIAL STATEMENTSNOTE 1 – SummarySignificant Accounting PoliciesOrganizationMed-Cannabis Pharma,BusinessCompany”Company” or “Med-Cannabis Pharma”“Med-Cannabis Pharma”) was incorporated under the laws of the State of Nevada on February 23, 2011. The Company was originally incorporated as Southwest China Imports, Inc. on February 23, 2011 in the State of Nevada. The Company’s initial business plan was to import high-end handmade lace wigs, hairpieces, and other beauty supplies and accessories manufactured overseas into the United States. In June 2014, the Company changed its name to Med-Cannabis Pharma, has one wholly owned subsidiary,Inc. and implemented a new business plan to enter into the retail sale of medical and personal use marijuana, where allowable. In October 2015, the Company changed its name to MCPI, Inc.that asa Washington State corporation which was formed to own, manage or provide back-office and support services to marijuana dispensaries in Washington State; and High Desert MMJ, Inc. an Oregon corporation, which is a 99.0% partner in Emerald Mountain Organics, an Oregon joint venture, formed to facilitate the development and growing of medical marijuana plants for wholesale distribution to licenced dispensaries in the State of Oregon.2014 had no revenue but did incur2015, Medical Management Systems, Inc. held a Management Contract for three marijuana dispensaries located in Newport, Bend and Cottage Grove, Oregon; which are owned by a company controlled by a related party. This Management Contract was terminated by the consent of both parties, effective March 31, 2016. Med-Pharma only conducted introductory due diligence efforts in the State of Washington and, other administrative expenses.Basiscurrently, had abandoned all activities in the State of Presentationaccompanyingcumulative start-up losses in the Company’s consolidated financial statements have been preparedfor the Emerald Mountain Organics joint venture, through the date of abandonment were approximately $53,000 and the Company recognized a loss on the stolen assets of approximately $51,000 during the quarter ended December 31, 2015.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 adjustmentsOregon, which are inowned by Bendor Investments, Ltd. (Bendor), whose sole shareholder is Charles Stidham. The Company owes Mr. Stidham approximately $1,100,000, including accrued interest, as of the opiniondate of the Settlement Agreement.necessary forfees and to offset the approximately $343,000 due from Bendor against the approximately $1,100,000 owed to Mr. Stidham with the Company releasing any and all interests it may have had in the Stores and MMS. Additionally, the Company agreed to assign a fair presentationtrademark to Mr. Stidham as well as executing a new Note in the principal sum of $752,694.19. The effect of the financial position and operating results asJune 1, 2016 Settlement Agreement , due to the timing of and for the period ended December 31, 2014.Usethis release of EstimatesThe accompanyingthese amended financial statements and this transaction, is reflected in the accompanying consolidated financial statements.Company have been preparedaccrual basis of accounting in accordance with generally accepted accounting principles and has elected a year-end of December 31.America. Because a precise determinationAmerica requires management to make estimates and assumptions that affect the reported amounts of many assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.events,funding. Further, the preparationCompany is at the mercy of financial statementsfuture economic trends and business operations for the Company’s existing controlling stockholders to have the resources available to support the Company.period necessarily involvesrestricted cash flow scenario, the useCompany would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.whichof the Company’s ability to secure additional capital in the future to reach its goals have been made, using careful judgment. Actual results may vary from these estimates.Cash EquivalentsFor purposes of the statement of cash flows, theequivalentshighly liquid financial instruments purchasedall cash on hand and in banks, certificates of deposit and other highly-liquid investments with a maturitymaturities of three months or less, when purchased, to be cash and cash equivalents. Ashad $14,763 in cash and equivalents and $37 at December 31, 2013.InvestmentsThe Company accountsdid not incur any liability 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 December 31, 2014 the Company had no investments.Fair Value of Financial InstrumentsASC 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 1Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2Level 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 3Level 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: Assets Cash and equivalents $ 14,763 $ 14,763 $ — $ — $ 14,763 $ 14,763 $ — $ — Liabilities Accounts payable/Accrued exp. $ 32,618 $ 32,618 $ — $ — Deferred revenue
Note payable to stockholder 5,000
323,579 — — $ 361,197 $ 361,197 $ — $ — Assets Cash and equivalents $ 37 $ 37 $ — $ — $ 13 $ 13 $ — $ — Liabilities Accounts payable/Accrued exp. $ 20,198 $ 20,198 $ — $ — Note payable to shareholder $ 50,550 $ 50,550 $ — $ — $ 70,748 $ 70,748 $ — $ — Net Lossunrecognized tax benefits.Share Calculationnet lossearnings (loss) per common share is computed by dividing the net loss attributableincome (loss) available to common stockholders by the weighted-average number of common shares outstanding forduring the period. Dilutedrespective period presented in our accompanying financial statements.sharesshare is computed similar to basic lossincome (loss) per share except that the denominator is increased to include the number of additional common shares that would have beenstock equivalents (primarily outstanding options and warrants).potential common shares had been issued and if the additional common shares were dilutive. During the fiscal years ended December 31, 2014 and December 31, 2013, the Company had nostock equivalents are considered dilutive financial instruments issued or outstanding.Revenue RecognitionFor the year ended December 31, 2014, the Company realized 0$ in revenue versus $8,418 in 2013.The Company recognizes revenue in accordance with ASC 605-10, "Revenue Recognition in Financial Statements". Revenue will be recognized only when all of the following criteria have been met:· Persuasive evidence of an arrangement exists;· Ownership and all risks of loss have been transferred to buyer, which is generally upon shipment;· The price is fixed and determinable; and· Collectability is reasonably assured.Revenue is recorded net of any sales taxes charged to customers.Income TaxesThe 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. SW China Imports establishes a valuation allowance based upon the potential likelihood of realizingCompany’s net income (loss) position at 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 YearThe Company elected December 31st for its fiscal year end.NOTE 2 –Going ConcernThe Company plans to acquire medical marijuana collectives and or medical marijuana dispensaries, which are 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 December 31, 2014, the Company had a working capital deficiency of ($346,434). 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 StockThe total number of common shares authorized that may be issued by the Company is 500,000,000 shares with a par value of $0.0001 per share.As of the period ending December 31, 2014 the Company issued an aggregate of 100,000 shares for services rendered in conjunction with store management and they were valued at $30,000 using the closing price on the date the shares were granted.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.On April 30, 2013, nine shareholders returned to SW China an aggregate of 300,000,000 shares of our restricted common stock, $0.0001 par value, which were subsequently cancelled by our Board of Directors. These shares have been returned to our corporate treasury.On July 11, 2013, we issued 10,000,000 shares of common stock to Taurus Financial Partners, LLC in consideration of its services of assisting us with our continued SEC and EDGAR filing requirements. We valued these services at $26,000, or $0.0026 a share, which was the closing price of our common stock as quoted on the OTC Bulletin Board on the same day. In connection with this issuance, we relied upon the exemption from the registration requirements pursuant to the provisions of Section 4(2) of the Securities Act as a transaction by an issuer not involving any public offering. By virtue of its relationship to us, Taurus Financial Partners had access to all relevant information relating to our business and represented that it had the required investment intent. In addition, the securities issued bore an appropriate restrictive legend.had 50,170,000 shares of its common stock issued and outstanding.NOTE 4 – Preferred StockThe total number of preferred shares authorized that maydoes not have any outstanding items which could be issued by the Company is 25,000,000 shares with a par value of $0.0001 per share.As of deemed to be dilutive.20142015 and 2013, the Company had no shares2014its preferred stock issuedSignificant Accounting Policies - Continuedoutstanding.NOTE 5 – Income TaxesThe provision (benefit) for income taxes for the period from February 23, 2011 (inception) to December 31, 2014 was as follows, assuming a 35 percent effective tax rate: For the period
February 23, 2011
(inception) to
12/31/14 Current tax provision: Federal Taxable income $ — $ Total current tax provision $ — $ Deferred tax provision: Federal Loss carryforwards $ 134,432 $ 37,296 Change in valuation allowance (134,432 ) (37,296 ) Total deferred tax provision $ — $ — As of December 31, 2014, the Company had approximately $384,090 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 December 31, 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 ControlOn 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.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.NOTE 7 – Related Party TransactionsAs of December 31, 2014, the Company had a line-of-credit (”LOC”) to a related party stockholder in the amount of $323,579, 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 twelve months ended December 31, 2014 the imputed interest expense on the old notes was $4,973 and interest expense on the LOC was $8,477 for a total of $13,450. The LOC has a limit of $500,000.$29,502 of the Company’s accounts payable and accrued expenses are to related parties. $24,923 of this amount was assumed when current management took control.A related party receivable of $50,748 was fully reserved at year-end because of questionable collectability.During the year the company accrued $19,800 for nine month’s rent for the sublease of office space from a related party. This lease expires in May 2015.Deferred Revenue of $5,000 was neither earned nor recognized as income and is carried as a liability. This item relates to activities with a related party.In the change of control agreements dated March 27, 2014, $1,806 of related party debt was forgiven by a former shareholder.NOTE 8 – RecentPending Accounting PronouncementsOn November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-16—Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update do not change the current criteria in GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. That is, an entity will continue to evaluate whether the economic characteristics and risks of the embedded derivative feature are clearly and closely related to those of the host contract, among other relevant criteria. The amendments clarify how current GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The effects of initially adopting the amendments in this Update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods.On November 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-17—Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force). The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle.On August 2014, The Financial Accounting Standards Board (FASB) issued Accounting Standard Update No. 2014-15, Presentation of Financial Statements – Going Concerns (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.(“FASB”) issued Accounting Standards Update (“ASU”) 2014-10, “DevelopmentDevelopment Stage Entities”.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 inon the statements of income, cash flows, and shareholdershareholder’s 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.In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Earlytherein, and early adoption is permitted. The adoption ofCompany evaluated and adopted ASU 2014-10 commencing with the reporting period ended June 30, 2014.expectedyet required to be adopted, will not have a materialsignificant impact on ourthe Company's financial position or results of operations.Besides what’s noted aboveexpectuse derivative instruments to moderate its exposure to interest rate risk, if any.impact of recent accounting pronouncements to have a material effect onrisk that the Company’s financial statements.NOTE 9 – Commitmentshas entered in five leases that have varying lengths with one of them going through April 2021. The Company’s future lease obligations are as follows: 2015 43,191 2016 31,097 2017 12,811 2018 12,811 2019 12,811 Total $ 112,721 During the year ended December 31,does not use derivative instruments to moderate its exposure to financial risk, if any.incurred $30,921entered into a $500,000 Line of rent expense. NOTE 10 – Subsequent EventsIn the normal course of business theCredit note payable with South Beach Live, Ltd. (South Beach), a Company is supervising the renovation ofstockholder and an entity related to a store in Cottage Grove, OR location which it will operate for a related party.In January 2015 thesignificant Company issued 50,000 of restricted common stock to for services provided regarding store management.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 9. Changes in and Disagreements With Accountants on Accounting and Financial DisclsoureNone.Item 9A. Controls and ProceduresDisclosure Controls and ProceduresUnder the supervision and with the participation of our CEO and CFO, Graciela 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 as of a date ("Evaluation Date") within ninety (90) days prior to the filing of our December 31, 2014 Annual Report with the SEC on Form 10-K.Based upon that evaluation, our management has concluded that, as of December 31, 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 periodic filings with the SEC.Ms. Moreno 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 did not result in any audit adjustments to our 2014 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 Med-Cannabis Pharma as its sole executive officer. 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; andDocumentation of all proper accounting procedures is not yet complete.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 qualified accountant, on a full-time basis;Expanding our current board of directors to include additional independent individuals willing to perform directorial functions; andIncreasing 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.We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2015, subject to our ability to obtain sufficient future financing and subject to our ability to start generating revenue.Internal Control over Financial Reporting(a) Management’s Annual Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designedstockholder, to provide reasonable assurance regardingfunds necessary to support the reliability of financial reportingcorporate entity and the preparation of financial statements for external purposesprovide working capital to pursue business combination or acquisition opportunities. This note bore interest at 10.0% and matured in accordance with generally accepted accounting principles.A material weakness isJuly 2015. This note replaced a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis.Our CEO and CFO, Graciela Moreno, assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of The Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that assessment under such criteria, management concluded that our internal controls over financial reporting were not effective as of December 31, 2014 due to control deficiencies that constituted material weaknesses.Management has identified a lack of sufficient personnel in the accounting function due to the limited resources of Med-Cannabis Pharma with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles.We are in the process of developing and implementing remediation plans to address our material weaknesses in our internal controls.Management has identified specific remedial actions to address the material weaknesses described above:Improve the effectiveness of the accounting group by augmenting our existing resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures. We plan to mitigate the segregation of duties issue by hiring additional personnel in the accounting department once we have achieved positive cash flow from operations and/or have raised significant additional working capital; andImprove segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where appropriate.Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.(b) Attestation Report of the Registered Public Accounting FirmThis Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by Med-Cannabis Pharma's independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit Med-Cannabis Pharma to provide only management's report in this Annual Report. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this Annual Report.(c) Changes in Controls and ProceduresThere were no significant changes made in our internal controls over financial reporting during the year ended December 31, 2014 that have materially affected or are reasonably likely to materially affect these controls. Thus, no corrective actions with regard to significant deficiencies or material weaknesses were necessary.Item 9B. Other InformationNone.PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceOur executive officers and directors and their respective ages as of the date of December 31, 2014 are as follows:NameAgePositionGraciela Moreno31President, Chief Executive Officer, Treasurer, Secretary, and DirectorCarla Williams52DirectorOur Board of Directors is comprised of only one class of director. Each director is elected to hold office until the next annual meeting of shareholders and until his successor has been elected and qualified. Officers are elected annually by the Board of Directors and hold office until successors are duly elected and qualified. There are no arrangements, agreements, or understandings between non-management shareholders and management under which non-management shareholders may, directly or indirectly, participate in or influence the management of our business affairs. The following is a brief account of the business experience of each of our directors and executive officers. There is no family relationship between any director or executive officer.Graciela Moreno, the Company’s President, CEO and CFO most recently has been self-employed as an oil and gas consultant with GEM Consulting, LLC, in Dallas, Texas. From 2011 to 2013, Ms. Moreno was an investor relations officer for Areola Operating & Consulting, Inc., also in Dallas, Texas. From 2010 until 2011, Ms. Moreno was assistant director of operations for Americas Response Team Asset Management in Dallas, Texas. Ms. Moreno has extensive experience in corporate business development, new client systems, and exploration and development in both the upstream and downstream sectors of the oil and gas industry. The majority of her career has been involved in exploring new oil and gas resources for major oil and gas companies domestically and internationallyMs. Carla Williams was the founder, president and PRF of Central Coast ReLeaf. Ms. Williams brings an extensive amount of knowledge concerning the operations and business of a medical dispensary in Oregon. Ms. Williams has served on the City of Newport, Oregon advisory board for medical marijuana facility business licenses. Ms. Williams owns and operates Newport Florist and Gift in Newport, Oregon. Ms. Williams and her family have lived in Newport, Oregon for over 28 years and she is a long-time volunteer for Newport’s Young Life organization .Committees of the Board of DirectorsOur Board of Directors presently does not have any active committees.Audit Committee Financial ExpertOur Board of Directors does not currently have any member who qualifies as an audit committee financial expert. We believe that the cost of retaining such a financial expert at this time is prohibitive. Further, because we are in the start-up stage of our business operations, we believe the services of an audit committee financial expert are not necessary at this time.Involvement in Legal ProceedingsNone of our officers or directors – past or present – has appeared as a party during the past ten (10) years in any legal proceedings that may bear on their ability or integrity to serve as an officer or director of Med-Cannabis Pharma.Information Concerning Non-Director Executive OfficersWe currently have no executive officers serving who are non-directors.Code of EthicsWe do not currently have a Code of Ethics applicable to our principal executive, financial, and accounting officers.Potential Conflict of InterestSince we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our Board of Directors. Thus, there is a potential conflict of interest in that our directors have the authority to determine issues concerning management compensation, including their own, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our officers or directors.Board’s Role in Risk OversightThe Board of Directors assesses on an ongoing basis the risks faced by Med-Cannabis Pharma. These risks include financial, technological, competitive, and operational risks. The Board dedicates time at each of its meetings to review and consider the relevant risks faced at that time. In addition, since Med-Cannabis Pharma does not have an Audit Committee, the Board of Directors is also responsible for the assessment and oversight of Med-Cannabis Pharma’s financial risk exposures.Compliance with Section 16(A) of the Securities Exchange Act of 1934Section 16(a) of the Securities Exchange Act of 1934, as amended, require Med-Cannabis Pharma's executive officers, directors and persons who own more than 10% of a registered class of Med-Cannabis Pharma's equity securities, to file with the SEC initial statements of beneficial ownership, reports of changes in ownership, and annual reports concerning their ownership of common stock and other equity securities of Med-Cannabis Pharma on Form(s) 3, 4, and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish Med-Cannabis Pharma with copies of all Section 16(a) reports they file.Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that for the fiscal year ended December 31, 2014, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with during the period.Item 11. Executive CompensationThe following table sets forth information with respect to compensation paid by us to our officers for the years ended December 31, 2014 and 2013. Summary Compensation Table(In Thousands of Dollars)(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)Name and PrincipalPositionYearSalary($)Bonus($)StockAwards($)OptionAwards($)Non-EquityIncentive PlanCompensation($)Change inPension Value& NonqualifiedDeferredCompensationEarnings ($)All OtherCompensation($)Totals($) Graciela Moreno President, CEO, CFO, Treasurer, Secretary, Director2014201322,0002,50000000000000022,0002,500Carla WilliamsDirector201420130000000000000000Seon Won, (1)Former President, CEO,Treasurer, Secretary,Director(Sole Officer& Director)201420130000000000000000Employment AgreementsWe have not entered into any employment agreements with any of our officers or directors. As of May 7, 2015 we had a total of eight employees including the directors listed above. All future employment arrangements are subject to the discretion of our Board of Directors.Long-Term Incentive Plan AwardsWe do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.Officer CompensationMs. Moreno was paid $22,000 in fiscal 2014 and $0 in fiscal 2013.Director CompensationMs. Williams was paid $2,500 in fiscal 2014 after joining the company as a director in November, 2014.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe following table sets forth information regarding beneficial ownership as of March 6, 2014 by (i) each named executive officer, (ii) each member of our Board of Directors, (iii) each person deemed to be the beneficial owner of more than five percent (5%) of any class of our common stock, and (iv) all of our executive officers and directors as a group. Unless otherwise indicated, each person named in the following table is assumed to have sole voting power and investment power with respect to all shares of our common stock listed as owned by such person.As of May 7, 2015, we had 50,220,000 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. Officers and Directors All officers and directors as a group (1 person) Five Percent Stockholders Cede & Co. (1) 38,610,000 Charles Stidham 8,750,000 17.4% -0- 0% (1) Cede & Co holds stock for the beneficial interest of others Securities Authorized for Issuance Under Equity Compensation PlansWe do not have any authorized Equity Compensation Plans nor do we intend to establish any such plans during the fiscal year ending December 31, 2014.Changes in ControlWe are unaware of any contract or other arrangement that could result in a change of control of Med-Cannabis Pharma.Item 13. Certain Relationships and Related Transactions, and Director IndependenceOn March 27, 2014 certain shareholders of Med-Cannabis Pharma, Inc. sold their shares, totaling 210,000,000, to Big Sky Oil, Inc. and another investor, resulting in a change of control.As of December 31, 2014, the Company had a line-of-credit (”LOC”)non-interest bearing shareholder note payable to a related partyformer controlling stockholder in the amount of $323,579, with interest at 10% annually. This LOC was entered into on July 28, 2014 and replaced the shareholder note that was assumed during thea 2014 change ofin control transaction. During the twelve months ended December 31, 2014, the imputed interest expenseCompany recognized an aggregate $4,973 as additional paid-in capital for the economic event related to the non-interest bearing feature on the old notes was $4,973assumed note payable through its retirement.onfor the LOC was $8,477each of the years ended December 31, 2015 and 2014, respectively, are as follows: Year ended Year ended December 31, December 31, 2015 2014 Federal: Current $ — $ — Deferred — — — — State: Current — — Deferred — — — — $ — $ — a totalthe each of $13,450. The LOC has a limitthe years ended December 31, 2015 and 2014, respectively, are as follows: Year ended Year ended December 31, December 31, 2015 2014 Statutory rate applied to income before income taxes $ (251,000 ) $ (106,000 ) Increase (decrease) in income taxes resulting from: State income taxes — — Other, including reserve for deferred tax asset and application of net operating loss carryforward(s) 251,000 106,000 $ — $ — $500,000.In the changeprospective usage of control agreements datednet operating loss carryforwards give rise to deferred tax assets and liabilities as of December 31, 2015 and 2014, respectively: December 31, December 31, 2015 2014 Deferred tax assets Net operating loss carryforwards $ 385,000 $ 134,000 Less valuation allowance (385,000 ) (134,000 ) $ - $ - $1,806the then-controlling shareholders of related party debt was forgiven by a former shareholder.Share Issuances to PromotersOn April 30, 2013, we requested that Taurus voluntarily return 10,000,000 restrictedthe Company sold 210,000,000 issued and outstanding shares of ourthe Company to Big Sky Oil, Inc. and another investor in a private transaction, effecting a change in control of the Company.stock. Taurus complied and we subsequently cancelledstock it had acquired in the March 2014 transaction. Big Sky agreed to return these shares to the treasury for use in future possible issuances by the Company.returned themother support services to our Treasury.On July 11, 2013, we issued Taurus an additional 10,000,000 restrictedmarijuana dispensaries located in both Oregon and Washington State. These shares of our common stock as an incentive to continue assisting us with our ongoing SEC and EDGAR filing requirementsIndemnificationUnder our Articles of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his/her position, if he/she acted in good faith and in a manner he/she reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. Towere valued at $30,000 using the extent that the officer or director is successfulclosing price on the merits in a proceeding as to which he/she is to be indemnified, we must indemnify him/her against all expenses incurred, including reasonable attorney's fees. With respect to a derivative action, indemnity may be made onlydate the shares were issued.expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to beconsulting services related to the fullest extent permitted by the lawsprovision of back-office and other management support services to marijuana dispensaries located in the State of Nevada.Regarding indemnification for liabilities arising underOregon. This stock was valued at $0.30 per share, which approximated the Securities Actclosing price on date of 1933, which may be permitted to officers or directors under Nevada law, we are informed that,the issuance.opinionCompany’s common stock to consultants for ongoing services associated with marketing strategies. South Beach Live, Inc. is a related party and does not expect to be repaid for this transaction which was valued at approximately $300,000 and recorded as professional fees and contributed capital on the books of the Company.indemnificationnoting a pending 1 for 10 reverse split of the Company’s issued and outstanding common stock; as approved by the Company’s Board of Directors, and a concurrent amendment to the Company’s Articles of Incorporation setting the authorized capital of the Company from the authorized, as adjusted, 25,000,000 post-split shares of common stock to 500,000,000 shares of $0.001 par value common stock and the authorized, as adjusted, 250,000 post-split shares of preferred stock to 25,000,000 shares of $0001 par value preferred stock. This action is anticipated to be completed during the 2nd quarter of Calendar 2016.public policy, as expressedthe approximately $1,100,000 owed to Mr. Stidham with the Company releasing any and all interests it may have had in the ActStores and is, therefore, unenforceable.Director IndependenceOur common stock current trades onMMS. Additionally, the OTC Bulletin Board (“OTCBB”) under the trading symbol “SWCI”. The OTCBB does not have any director independence requirements. In determining whether our directors are independent, we referCompany agreed to NASDAQ Stock Market Rule 4200(a)(15). Based on these widely-accepted criteria, we have determined that none of our directors are independent at this time.No member of management is or will be required by usassign a trademark to work on a full time basis. Accordingly, certain conflicts of interest may arise between us and our officer(s) and director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer's understanding of his/her fiduciary duties to us.The Sarbanes-Oxley Act of 2002,Mr. Stidham as well as rule changes proposed and enacted byexecuting a new Note in the SEC, New York Stock Exchange (NYSE), American Stock Exchange (AMEX), and NASDAQ Stock Market, as a resultprincipal sum of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the NASDAQ Stock Market. Because we are not presently required to comply with many$752,694.19.corporate governance provisions and because we chose to avoid incurringCompany through the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.Because noneissue date of our directors are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.Item 14. Principal Accounting Fees and ServicesAudit FeesThe aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the annual audit of our financial statements and review of financial statements includedconcluded that no subsequent events have occurred that would require recognition in our quarterly reports and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: Audit Fees $ 5,500 $ 5,500 Audit Related Fees -0- -0- Tax Fees -0- 675 All Other Fees -0- -0- Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent AuditorsGiven the small size of our Board of Directors, as well as the limited financial resources and minimal operations of MCPI, our Board acts as our Audit Committee. Our Board pre-approves all audit and permissible non-audit services. These services may include audit services, audit-related services, tax services and other services. Our Board approves these services on a case-by-case basis.PART IVItem 15. Exhibits, Financial Statements SchedulesThe following documents are filed as a part of this Annual Report:(1) Financial StatementsThe financial statements required to be filed as part of this report are set forth in Item 8 of Part II of this Annual Report.(2) Financial Statement SchedulesAll schedules are omitted for the reason that the information is included in theaccompanying financial statements or disclosure in the notes thereto or that they are not required or are not applicable.(3) ExhibitsExhibit NumberDescription of Exhibit3.1*Articles of Incorporation3.2*Bylaws31.1Section 302 Certifications under Sarbanes-Oxley Act of 200231.2Section 302 Certifications under Sarbanes-Oxley Act of 200232.1Section 906 Certification under Sarbanes Oxley Act of 200232.2Section 906 Certification under Sarbanes Oxley Act of 2002* Incorporated by our Registration StatementNotes to Consolidated Financial Statements.Form S-1 filed May 3, 2011.15 (d)15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, theretothereunto duly authorized on this 12th day of May, 2015.authorized.MED-CANNABIS PHARMA, INC. MCPI, Inc. May 14, 2015/s/ Graciela Moreno Graciela Moreno President, Dated: August 1, 2016 /s/ R.Wayne Duke R.Wayne Duke Chief Executive Officer and Financial Officer MCPI, Inc. Dated: August 1, 2016 /s/ R.Wayne Duke R.Wayne Duke Chief Executive Officer and Financial Officer Principal Executive Officer, Treasurer,Secretary, Principal Financial Officer,and Director (Sole Officer and Director)31