OWC Pharmaceutical Research (OWCP) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 14, 2018
Document And Entity Information
Entity Registrant Name	OWC Pharmaceutical Research Corp.
Entity Central Index Key	1,431,934
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		147,758,908
Trading Symbol	OWCP
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 691,558	$ 970,542
Prepaid expenses	11,669	74,298
Total Current Assets	703,227	1,044,840
Property and Equipment	32,919	16,243
Total Assets	736,146	1,061,083
Current Liabilities:
Accounts payable	70,926	64,814
Other current liabilities	63,546	105,671
Deferred revenue	100,000	100,000
Total Current Liabilities	234,472	270,485
Total Liabilities	234,472	270,485
Commitments and Contingencies (Note 4)
Stockholders' Equity:
Preferred stock, $0.00001 par value; 20,000,000 shares authorized at March 31, 2018 and December 31, 2017 ; no shares issued and outstanding at March 31, 2018 and December 31, 2017
Common stock, $0.00001 par value; 500,000,000 shares authorized at March 31, 2018 and December 31, 2017 ; 147,758,908 shares issued and outstanding at March 31, 2018 and December 31, 2017	1,478	1,478
Additional paid-in capital	16,513,950	16,168,469
Services receivable	(284,095)	(524,792)
Common stock subscriptions receivable	(238,724)	(344,006)
Accumulated deficit	(15,494,051)	(14,516,912)
Accumulated other comprehensive income	3,116	6,361
Total Stockholders' Equity	501,674	790,598
Total Liabilities and Stockholders' Equity	$ 736,146	$ 1,061,083

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	147,758,908	147,758,908
Common stock, shares outstanding	147,758,908	147,758,908

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses:
Research and development	$ 155,333	$ 34,016
General and administrative	821,181	1,401,349
Total operating expenses	976,514	1,435,365
Operating loss	(976,514)	(1,435,365)
Other expenses:
Financing expenses, net	(625)
Net Loss	(977,139)	(1,435,365)
Other comprehensive income (loss)
Foreign currency translation adjustment	(3,245)	6,969
Comprehensive loss	$ (980,384)	$ (1,428,396)
Basic and diluted per share amounts:
Basic and diluted net loss	$ (0.01)	$ (0.01)
Weighted average shares outstanding (basic and diluted)	147,758,908	143,028,447

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Services Receivable [Member]	Common Stock Subscriptions Receivable [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balance at Dec. 31, 2016	$ 1,395	$ 11,039,102	$ (592,083)	$ (395,011)	$ (9,958,465)	$ 6,050	$ 100,988
Balance, shares at Dec. 31, 2016	139,447,782
Stock-based compensation	$ 1	2,049,738
Stock-based compensation, shares	100,000
Financial instruments issued for services to be received	$ 12	1,187,014	(1,187,026)
Financial instruments issued for services to be received, shares	1,166,127
Amortization of services receivable			1,254,317
Common stock issued upon exercise of warrants	$ 18	225,142
Common stock issued upon exercise of warrants, shares	1,750,642
Common stock issued upon exercise of options and warrants on cashless basis	$ 8	(8)
Common stock issued upon exercise of options and warrants on cashless basis, shares	890,719
Payments received on subscriptions receivable				51,005
Common stock issued for cash @$0.13 together with detachable warrants	$ 9	117,631
Common stock issued for cash @$0.13 together with detachable warrants, shares	904,924
Common stock issued for cash @$0.17 together with detachable warrants	$ 6	99,994
Common stock issued for cash @$0.17 together with detachable warrants, shares	588,237
Common stock issued for cash @$0.25 together with detachable warrants	$ 5	129,995
Common stock issued for cash @$0.25 together with detachable warrants, shares	520,000
Common stock issued for cash @$0.50 together with detachable warrants	$ 18	883,607
Common stock issued for cash @$0.50 together with detachable warrants, shares	1,767,250
Common stock issued for cash @$0.70 together with detachable warrants	$ 6	436,254
Common stock issued for cash @$0.70 together with detachable warrants, shares	623,227
Other comprehensive income						311
Net loss					(4,558,447)
Balance at Dec. 31, 2017	$ 1,478	16,168,469	(524,792)	(344,006)	(14,516,912)	6,361	790,598
Balance, shares at Dec. 31, 2017	147,758,908
Stock-based compensation		345,481					345,481
Stock-based compensation, shares
Amortization of services receivable			240,697				240,697
Payments received on subscriptions receivable				105,282			105,282
Other comprehensive income						(3,245)	(3,245)
Net loss					(977,139)		(977,139)
Balance at Mar. 31, 2018	$ 1,478	$ 16,513,950	$ (284,095)	$ (238,724)	$ (15,494,051)	$ 3,116	$ 501,674
Balance, shares at Mar. 31, 2018	147,758,908

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical)	Dec. 31, 2017$ / shares
Statement of Stockholders' Equity [Abstract]
Cash with detachable warrants, share per price value	$ 0.13
Cash with detachable warrants one, share per price value	0.17
Cash with detachable warrants two, share per price value	0.25
Cash with detachable warrants three, share per price value	0.50
Cash with detachable warrants four, share per price value	$ 0.70

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net Loss	$ (977,139)	$ (1,435,365)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	1,564	2,450
Stock-based compensation	345,481	1,057,904
Amortization of services receivable	240,697	178,866
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses	62,629	(4,246)
Increase (decrease) in accounts payable	(1,648)	(2,631)
Increase (decrease) in other current liabilities	(42,125)	5,431
Cash used in operating activities:	(370,541)	(197,591)
Cash flows from investing activities:
Purchase of property and equipment	(10,480)	(1,080)
Cash used in investing activities	(10,480)	(1,080)
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants		1,650,900
Proceeds from the exercise of warrants		66,666
Proceeds from the payment of stock subscriptions	105,282
Proceeds of debt borrowings, net of related expenses		50,000
Cash provided by financing activities	105,282	1,767,566
Foreign currency translation adjustments on cash and cash equivalents	(3,245)	6,969
Change in cash and cash equivalents	(278,984)	1,575,864
Balance of cash and cash equivalents at beginning of period	970,542	472,282
Balance of cash and cash equivalents at end of period	691,558	2,048,146
Non-cash transactions:
Net share settlement of warrant exercise		$ 130,000

General

General	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
General	NOTE 1 – GENERAL A. Organizational Background OWC Pharmaceutical Research Corp. (“OWCP” or the “Company”) is a Delaware corporation and was incorporated under the laws of the State of Delaware on March 7, 2008. The Company is a medical cannabis-based research and development company that applies conventional pharmaceutical research protocols and disciplines to the field of medical cannabis with the objective of establishing a leadership position in the research and development of medical cannabis therapies, products and delivery technologies. The Company is currently engaged in the research and development of cannabis-based medical products (the “Product Prospects”) for the treatment of multiple myeloma, psoriasis, chronic pain syndromes, fibromyalgia PTSD and development of unique delivery systems. These include a cannabis-based topical cream, cannabis sublingual disintegrating tablet and advanced Nasal delivery. The accompanying consolidated financial statements of OWCP and its wholly owned subsidiary One World Cannabis, Ltd. (“OWC” or the “Israeli subsidiary”) were prepared from the accounts of the Company under the accrual basis of accounting. B. Liquidity The development and commercialization of the Company’s product is expected to require substantial expenditures. The Company has not yet generated material revenues from operations and therefore is dependent upon external sources for financing its operations. As of March 31, 2018, the Company has an accumulated deficit of $15,494,051. In addition, during the three months ended March 31, 2018, the Company reported losses and negative cash flows from operating activities. On April 30, 2018, the Company entered into and consummated a Securities Purchase Agreement with a new investor, pursuant to which, the Company issued (i) 500 shares of Preferred Stock designated as Series A Preferred Stock that are convertible into 25,000,000 shares of common stock and (ii) Warrants that are eligible for conversion into 12,500,000 shares of common stock for an aggregate purchase price of $5,000,000 (see also Note 5). Raising of funds mitigates any substantial doubt related to the Company’s ability to continue as a going concern. C. Risk factors The Company has a limited operating history and faces a number of risks and uncertainties, including risks and uncertainties regarding continuation of the development process, demand and market acceptance of the Company’s products, the effects of technological changes, competition and the development of products by competitors. Additionally, other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations on the Company’s future results and the availability of necessary financing. In addition, the Company expects to continue incurring significant operating costs and losses in connection with the development and marketing of its products. D. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from the estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to stock-based compensation related to employees and non-employees awards.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Presentation Accounting Principles The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The accompanying condensed consolidated balance sheet as of December 31, 2017 and the condensed consolidated statement of changes in stockholders’ equity for the year then ended have been derived from the consolidated financial statements contained in our Annual Report on form 10-K. The results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period in the future. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Net Loss Per Share Diluted loss per share for the three months ended March 31, 2018 and 2017, excludes the impact of common stock options and common stock warrants, totaling 27,005,370 and 18,884,843 shares, respectively, as the effect of their inclusion would be anti-dilutive, due to the net loss. B. Recent Accounting Pronouncements 1. In February 2016, the FASB issued ASU No. 2016-02, Leases. This guidance will require that lease arrangements longer than 12 months result in an entity recognizing an asset and liability equal to the present value of the lease payments in the statement of financial position. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. This standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements and related disclosures. 2. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This new guidance did not have a material impact on the Company’s consolidated financial statements. 3. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation”. The amendment provides guidance about which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance became effective for the fiscal year beginning on January 1, 2018, including interim periods within that year. This new guidance did not have a material impact on the Company’s consolidated financial statements. 4. In July 2017, the FASB issued ASU 2017-11, “Earnings per share: I. Accounting for Certain Financial Instruments with Down Round Features”, which allows companies to exclude a down round feature when determining whether a financial instrument is considered indexed to the entity’s own stock. As a result, financial instruments with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements.

Events During the Period

Events During the Period	3 Months Ended
	Mar. 31, 2018
Events During Period
Events During the Period	NOTE 3 - EVENTS DURING THE PERIOD A. Stock-based compensation 1. In 2016, the Company approved the 2016 Employee Incentive Plan (the “2016 Plan”) which provides for the issuance of common stock, stock options and other stock-based awards to employees, officers, directors, consultants, and advisors. The number of shares reserved for issuance under the 2016 Plan is 36,000,000 shares of common stock. 2. On February 12, 2018, the Company granted options exercisable into 150,000 shares to its Chairperson of the Audit Committee under the 2016 Plan at an exercise price of $0.05 per share. The options become vested over a three-year period from the date of grant. The options shall vest 1/3 one year from the grant date and the remaining 2/3 on a quarterly basis (8.33% per quarter). The Company used the Black-Scholes-Merton pricing model to estimate the fair value. The Black-Sholes-Merton pricing model assumptions used are as follows: expected dividend yield of 0%; risk-free interest rate of 1.8%-2.07%; expected volatility of 242%, and expected term of 5 years. The fair value of the options at the grant date was $63,615. During the three month period ended March 31, 2018, as result of such grant, the Company recognized compensation expense of $5,520, and there was $58,095 of unrecognized compensation expense related to non-vested option grants. 3. The following tables present a summary of the status of the grants to employees, officers and directors as of March 31, 2018. Shares Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value* Options outstanding at December 31, 2017 27,300,000 $ 0.05 4.6 $ 11,015,580 Granted 150,000 $ 0.05 Exercised - $ 0.00 Lapsed - $ 0.00 Options outstanding at March 31, 2018 27,450,000 $ 0.05 4.4 $ 5,218,850 Options exercisable at March 31, 2018 18,654,500 $ 0.05 3.9 $ 3,538,910 *The aggregate intrinsic value represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of first quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2018. This amount is impacted by the changes in the fair value of the Company’s shares. 4. The following table summarizes information about stock options outstanding at March 31, 2018: Options Outstanding Options Exercisable Range of exercise prices Shares weighted average exercise price Weighted average remaining life in months Shares weighted average exercise price $0.05 27,250,000 $ 0.05 52.3 18,454,500 $ 0.05 $ 0.10-$ 0.30 200,000 $ 0.20 42.6 200,000 $ 0.20 Total Shares 27,450,000 $ 0.05 52.2 18,654,500 $ 0.05 5. As of March 31, 2018, there was $663,084 of total unrecognized compensation cost related to non-vested stock options granted under the 2016 Plan. This cost is expected to be recognized over a weighted-average period of 1.2 years. 6. The total equity-based compensation expense related to all of the Company’s equity-based awards, recognized for the three months periods ended March 31, 2018 and 2017, amounting to $586,178 and $1,236,770, respectively. These expenses have been recorded as general and administrative expenses as part of the statement of comprehensive loss. 7. On December 12, 2017, the Company entered into a new agreement with a service provider, Lyons Capital LLC, pursuant to which the service provider rendered services in February 2018 relating to the 2018 Wall Street Conference at the Deerfield Beach Florida Hilton and sponsorship in the conference for consideration of 150,000 fully vested restricted shares of Common Stock of the Company. The grant was accounted for under ASC 505-50 “share-based payment arrangement with nonemployees”, when the fair value of the grant amounting to $72,000 was recorded as part of general and administrative expenses for the three months ended March 31, 2018. As of March 31, 2018, the aforesaid shares have not been issued by the Company. B. Common stock subscriptions receivable In January 2018, the Company received a cash payment of $105,282 for common stock subscriptions receivable from a former employee.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 4 - COMMITMENTS AND CONTINGINCIES A. Commitments 1. On October 11, 2015, OWC entered into a memorandum of understanding with Medmar for the purpose of granting an exclusive, non-transferable, royalty-bearing license, to manufacture, produce, publicize, promote and market the licensed products described therein in the State of Hawaii and the State of Pennsylvania, pursuant to which Medmar has paid OWC $100,000 ($50,000 during each year ended December 31, 2016 and 2015). On February 8, 2016, OWC and Medmar II, an affiliate of Medmar, executed a right of first refusal agreement providing Medmar certain rights in connection with the commercialization of OWC’s Cannabis-Based Medical Products in other states in the USA, pursuant to which Medmar has paid $50,000 to the Company. 1. (cont.) On March 17, 2016, Medmar and OWC executed a consulting and License Agreement (the “Agreement”), pursuant to which OWC granted to Medmar an exclusive, non-transferable, royalty-bearing license, to manufacture, produce, publicize, promote and market certain of OWC’s products (as defined in the Agreement) in the State of Maryland, against payment by Medmar to OWC of a royalty. As part of the Agreement, the Company received from Medmar an amount of $50,000 as a non-refundable advance. In 2016, and as OWC does not have any performance obligation in connection with the agreement, OWC recorded revenues in an amount of $50,000. 2. In April 2015 OWC engaged G.C. Group Ltd., an Israeli corporation specializing in pharmaceutical R&D to provide formulation development services for OWC’s new delivery system in the form of a cannabis soluble tablet. G.C. Group Ltd. successfully completed the first phase of development, a proof of concept of the desired end-product (the soluble tablet) to test the fabric, durability, solidification and other features of the cannabis soluble tablet. The agreement was terminated on December 31, 2015. 3. In August 2017 OWC engaged PharmItBe Ltd, a company specializing in pharmaceutical R&D to develop a second generation of its cannabis soluble tablet. This development is expected to be completed during the second quarter of 2018. 4. On November 3, 2016, OWC entered into a Joint Venture Memorandum of Understanding with Michepro Holding Ltd. (“EU Partner”), (“JV” or “MOU”). The EU Partner and OWC have agreed as follows: (i) to establish a strategic marketing and distribution alliance (the “JV”) to promote the sale of OWC’s Products in the European Union (the “EU”); (ii) the interest of the parties in the JV shall be held by the parties such that the EU Partner shall hold 25% of such interest and OWC shall hold the remaining 75% of such interest; (iii) OWC shall provide the JV with OWC’s Products for sale and distribution solely in the EU, at prices to be agreed between the parties from time to time; and (iv) EU Partner shall be responsible for the day-to-day management of the JV, at its own costs, and for this purpose shall make available to the JV its knowledge, business connection and personnel, all in order to maximize the sales of OWC’s Products in the EU through the JV. The JV had not commenced operations and did not have any assets or liabilities as of March 31, 2018. 5. On August 6, 2015, OWC signed a Memorandum of Understanding with Emilia Cosmetics Ltd. (“Emilia”), a large Israeli private label manufacturer which operates in the field of development, production, manufacturing and packaging of health and beauty products including for treatment of human skin disease, for the development, manufacture and marketing of a cannabinoid-based topical cream to treat psoriasis. On November 27, 2016, the Company and OWC (the “Group”) entered into a license agreement with Emilia (the “License Agreement”). During the fourth quarter of 2016, the Group completed the development process and then initiated a phase I study at Chaim Sheba Medical Center (“Sheba”) to explore the safety of the topical cream on psoriasis. Prior to entering into the License Agreement, the Group and Emilia conducted a development and evaluation program (as defined in the License Agreement) for the development of a specific product comprising Emilia’s formulation with certain medical cannabis extract provided by the Group for topical treatment of psoriasis. Pursuant to the License Agreement, Emilia granted a limited license to the Group with respect to Emilia’s licensed intellectual property to be developed and commercialized worldwide in the topical treatment of psoriasis in humans with OWC’s Product, as defined in the License Agreement. If such trial proves successful, Emilia will grant the Group an exclusive, worldwide, transferable, royalty-bearing license, with the right to grant sublicenses, to use, sell and commercially exploit the Emilia intellectual property, in consideration for which, from and after the first commercial sales of the licensed product, the Group shall pay to Emilia a royalty at the rate of ten percent of net sales during the period beginning upon the first commercial sale and ending ten years thereafter. In the event the sale of the licensed product during the royalty term reaches the minimum sales targets set forth in the License Agreement, the royalty term will be extended for an additional five-year term. 6. On December 29, 2016, OWC entered into a Research Agreement with Medical Research Infrastructure Development and Health Services Fund (“fund”) by Chaim Sheba Medical Center. Pursuant to the Research Agreement, the Fund shall perform a Phase I, double blind, randomized, placebo-controlled, maximal dose study (the “Study”) to determine the safety and tolerability of topical cream containing MGC (“Medical Grade Cannabis” or the “Study Drug”) in healthy volunteers, employing the services of Professor. Aviv Barzilay, Director of the Department of Dermatology- Chaim Sheba Medical Center, Tel Hashomer, Israel, to lead the Study (the “Investigator”). The Study shall be conducted in compliance with the following, as defined in the Research Agreement: (1) the Protocol; (2) the Ministry Guidelines; (3) the instructions and terms specified in the Helsinki Committee’s approval; (4) the ICH-GCP; (5) the Helsinki Declarations; (6) the applicable laws, rules and regulations regulating such studies which are applicable in Israel (the “Applicable Laws”); and (7) written instructions and prescriptions issued by OWC and governing the administration of the Study Drug. Pursuant to the collaboration agreements and the related amendments, OWC is obliged to pay Sheba $170,000 throughout 2017 and 2018 for conducting the safety study for the cream. As of March 31, 2018, OWC has paid Sheba $43,066 as per Sheba’s payment requests. The Company has recorded $28,969 as Research and Development expenses related to the Study in the three months period ended March 31, 2018. On October 22, 2014, OWC entered into a collaboration agreement with Sheba Academic Medical Center, a hospital in Tel-Aviv, Israel, relating to the use of cannabis to treat Myeloma. Within the framework of this collaboration agreement, OWC conducted pre-clinical studies on multiple myeloma, which commenced in April 2015. Pursuant to the collaboration agreements, OWC was required to pay Sheba $170,000 for conducting the multiple myeloma trial between the 3rd quarter of 2015 and the second quarter of 2016. As of March 31, 2018, the Company has paid Sheba $65,669 as per Sheba’s payment requests. The Company has not recorded any Research and Development expenses related to this agreement in the three months period ended March 31, 2018. At present, OWC uses its available working capital to fund these studies. 7. On January 16, 2018, the Company entered a three-month period exclusivity agreement with Newbridge Securities Corporation (“Newbridge”) effective from December 21, 2017. Pursuant to the agreement, the Company engaged Newbridge to act as its placement agent for a fund raising of up to $7 million. On April 12, 2018, the parties decided to extend the terms of the agreement for another period of three-months. The Company agreed to pay Newbridge a fee of 7.5% of the gross purchase price paid by an investor for securities of the Company at closing of a successful financing. In addition, the Company agreed to issue to Newbridge warrants to purchase the number of shares of common stock of the Company equal to 10% of the aggregate number of fully diluted shares of common stock that have been purchased by an investor. The Warrants shall be exercisable for three years from the financing closing date with an exercise price per share equal to the effective per share price paid for a share of common stock of the Company by an investor. Warrants shall contain customary terms, including provisions for “cashless” exercise, change of control, price based anti-dilution, and customary demand or piggyback registration rights. The Company shall also pay Newbridge warrants solicitation fee equal to 4% of the gross proceeds received by the Company upon cash exercise of any warrants purchased by an investor in connection with the offering. These fees were paid to Newbridge in connection with the transaction described in Note 5. B. Contingencies 1. On February 28, 2017, the Company filed an action for alleged legal malpractice against the NYC law firm of Sichenzia Ross FerenceKesner LLP and Marc J. Ross, Esq. a partner at Sichenzia Ross in New York State Supreme Court in New York County. The Company’s claims arise out of legal services allegedly negligently performed by Ross and Sichenzia Ross. The Company brought the action seeking recovery of monetary damages due to the defendants’ alleged failure to exercise a professional standard of care in their representation of OWCP. The action is currently pending in the Supreme Court of the State of New York, County of New York and is in the discovery phase. 2. The Company has sued certain individuals in the Supreme Court of the State of New York regarding defaulted obligations related to 2,354,480 shares granted to them. The matter was conditionally settled as against certain individuals; The Company received during the period a payment of $105,282 from one individual, (see Note 3B) and is now seeking to enforce that settlement agreement in court for additional funds amounting to $120,500. The Company has reserved its right to pursue its claims against one individual for an outstanding sum of approximately $15,000. 3. On November 22, 2017, Mr. Ziv Turner, the Company’s subsidiary’s former General Manager (the “Plaintiff”) filed a claim (the “Claim”) with the Tel Aviv Regional Court of Labor against the Company, its subsidiary and the Company’s CEO. The Plaintiff alleged the right to receive Company’s 4,125,000 shares of the Company’s Common Stock in connection with options granted to him in 2016 and a cash compensation of approximately $180,000 for breach of rights and damages. On January 23, 2018, the Company filed a statement of defense rejecting all of the Plaintiffs claims. On April 30, 2018, a first mediation meeting was held, at which the parties presented their positions. At this stage the Company is unable to assess the Claim’s probable outcome. 4. In November 2017, the Company signed a two-year rental agreement with a landlord for its principle office located in Ramat Gan, Israel. The rental agreement includes an option for one additional year. The monthly rental fees are approximately $4,200 and the remaining minimum payments total approximately $88,000 as of March 31, 2018. During the option period the monthly rental fees shall increase by approximately 7%. During the first quarter ended March 31, 2018, the Company recorded $12,600 as rental expenses.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	NOTE 5 - SUBSEQUENT EVENTS On April 30, 2018, the Company entered into and consummated a Securities Purchase Agreement (the “Agreement”) with a non-US-based institutional investor (the “Purchaser”), pursuant to which, the Company sold and the Purchaser bought, (i) 500 shares of Preferred Stock designated as Series A Preferred Stock (the “Preferred Stock”), which are convertible into shares of common stock at a conversion price of $0.20 per share, subject to adjustment pursuant to the antidilution provisions of the Preferred Shares, and (ii) Warrants (the “Warrants”) representing the right to acquire 12,500,000 shares of common stock at an exercise price of $0.22 subject to adjustment pursuant to the antidilution provisions of the Warrants, for an aggregate purchase price of $5,000,000. As noted in Note 4.A.7, the Company engaged Newbridge. through LifeTech Capital, as exclusive placement agent for this Agreement, pursuant to which the Company paid Newbridge a cash fee of $375,000 and issued to them warrants to purchase 2.5 million shares of common stock at an exercise price of $0.20 per share. The Warrants shall contain customary terms, including provisions for “cashless” exercise, change of control, price based anti-dilution, and customary demand or piggyback registration rights. In addition, the Company is also obligated to pay Newbridge a warrants solicitation fee equal to 4% of the gross proceeds received by the Company upon cash exercise of any Warrants purchased by the Purchasers in connection with the Agreement. The total cash direct and incremental issuance costs (including the cash fee related to the above placement agent) amounted to $406,000. In addition, the Company is evaluating with external appraiser the value of the Warrants issued in relation to this Agreement. The terms of the Preferred Stock contain conditional redemption provisions and a deemed liquidation preference which are outside of the control of the Company. Each Holder of Preferred Shares shall be entitled to receive dividends on each Preferred Share, payable quarterly on March 31, June 30, September 30, and December 31, commencing June 30, 2018, in an amount equal to 5% per annum of the Stated Value amounting to $10,000 of each Preferred Share and which shall be cumulative. In addition, the terms of each the Preferred Stock and Warrants provide for anti-dilution protection for issuances of shares of Common Stock at a price per share less than a price equal to the conversion price or exercise price, as applicable and, that in the event of a “fundamental transaction” (as described in the Warrants), the Purchaser will have the right to receive the value of the Warrant as determined in accordance with the Black Scholes option pricing model. In connection with the Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchaser, pursuant to which, among other things, the Company has agreed to use its commercially reasonable best efforts to (i) prepare and file with the SEC within 60 calendar days of the offering a registration statement covering the shares of Common Stock underlying the Preferred Stock and Warrants and (ii) have the registration statement and any amendment thereto to be declared effective by the SEC within 90 calendar days from the date of the initial filing of such registration statement. The Company is currently evaluating the accounting treatment that will be applied during the second quarter of 2018 for each instrument that was in the aforesaid Agreement.

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	A. Basis of Presentation Accounting Principles The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The accompanying condensed consolidated balance sheet as of December 31, 2017 and the condensed consolidated statement of changes in stockholders’ equity for the year then ended have been derived from the consolidated financial statements contained in our Annual Report on form 10-K. The results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other interim period in the future. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Net Loss Per Share Diluted loss per share for the three months ended March 31, 2018 and 2017, excludes the impact of common stock options and common stock warrants, totaling 27,005,370 and 18,884,843 shares, respectively, as the effect of their inclusion would be anti-dilutive, due to the net loss.
Recent Accounting Pronouncements	B. Recent Accounting Pronouncements 1. In February 2016, the FASB issued ASU No. 2016-02, Leases. This guidance will require that lease arrangements longer than 12 months result in an entity recognizing an asset and liability equal to the present value of the lease payments in the statement of financial position. This guidance is effective for annual periods beginning after December 15, 2018, and interim periods therein. This standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements and related disclosures. 2. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. This new guidance did not have a material impact on the Company’s consolidated financial statements. 3. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation”. The amendment provides guidance about which changes to terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance became effective for the fiscal year beginning on January 1, 2018, including interim periods within that year. This new guidance did not have a material impact on the Company’s consolidated financial statements. 4. In July 2017, the FASB issued ASU 2017-11, “Earnings per share: I. Accounting for Certain Financial Instruments with Down Round Features”, which allows companies to exclude a down round feature when determining whether a financial instrument is considered indexed to the entity’s own stock. As a result, financial instruments with down round features may no longer be required to be accounted classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is currently evaluating the potential effect of the guidance on its consolidated financial statements.

Events During the Period (Table

Events During the Period (Tables)	3 Months Ended
	Mar. 31, 2018
Events During Period
Schedule of Stock Option Activity	Shares Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value* Options outstanding at December 31, 2017 27,300,000 $ 0.05 4.6 $ 11,015,580 Granted 150,000 $ 0.05 Exercised - $ 0.00 Lapsed - $ 0.00 Options outstanding at March 31, 2018 27,450,000 $ 0.05 4.4 $ 5,218,850 Options exercisable at March 31, 2018 18,654,500 $ 0.05 3.9 $ 3,538,910 *The aggregate intrinsic value represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of first quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2018. This amount is impacted by the changes in the fair value of the Company’s shares.
Schedule of Stock Option Outstanding	Options Outstanding Options Exercisable Range of exercise prices Shares weighted average exercise price Weighted average remaining life in months Shares weighted average exercise price $0.05 27,250,000 $ 0.05 52.3 18,454,500 $ 0.05 $ 0.10-$ 0.30 200,000 $ 0.20 42.6 200,000 $ 0.20 Total Shares 27,450,000 $ 0.05 52.2 18,654,500 $ 0.05

General (Details Narrative)

General (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Accumulated deficit	$ 15,494,051	$ 14,516,912
April 30, 2018 [Member]
Preferred stock designated	500
Proceeds from issuance of warrant	$ 5,000,000
April 30, 2018 [Member] | Warrants [Member]
Stock conversion into common stock	12,500,000
April 30, 2018 [Member] | Series A Preferred Stock [Member]
Stock conversion into common stock	25,000,000

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Accounting Policies [Abstract]
Potentially dilutive shares unexercised stock warrants and stock options	27,005,370	18,884,843

Events During the Period (Detai

Events During the Period (Details Narrative) - USD ($)	Feb. 12, 2018	Dec. 12, 2017	Mar. 31, 2018	Mar. 31, 2017	Jan. 31, 2018
Stock options granted during the period			150,000
Stock options exercisable price per share			$ 0.05
Recognized compensation expense			$ 5,520
Unrecognized compensation expense non-vested option			58,095
Number of restricted shares issued		150,000
Common stock subscriptions receivable					$ 105,282
General and Administrative Expenses [Member]
Stock option granted, value			$ 72,000
2016 Employee Incentive Plan [Member]
Number of shares reserved for future issuance			36,000,000
Stock options granted during the period	150,000
Stock options exercisable price per share	$ 0.05
Stock option vesting period	3 years
Stock options vested descriptions	The options shall vest 1/3 one year from the grant date and the remaining 2/3 on a quarterly basis (8.33% per quarter).
Expected dividend yield	0.00%
Risk-free interest rate, minimum	1.80%
Risk-free interest rate, maximum	2.07%
Expected volatility	242.00%
Expected term	5 years
Stock option granted, value	$ 63,615
Unrecognized compensation expense non-vested option			$ 663,084
2016 Plan [Member]
Stock option vesting period			1 year 2 months 12 days
Recognized compensation expense			$ 586,178	$ 1,236,770

Events During the Period - Sche

Events During the Period - Schedule of Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Equity [Abstract]
Number of stock options balance, beginning of year | shares	27,300,000
Number of stock options, granted | shares	150,000
Number of stock options, exercised | shares
Number of stock options, lapsed | shares
Number of stock options balance, end of year | shares	27,450,000
Number of stock options, exercisable | shares	18,654,500
Weighted average exercise price balance, beginning of year | $ / shares	$ 0.05
Weighted average exercise price, stock options granted | $ / shares	0.05
Weighted average exercise price, stock options exercised | $ / shares	0
Weighted average exercise price, stock options lapsed | $ / shares	0
Weighted average exercise price balance, end of year | $ / shares	0.05
Weighted average exercise price, exercisable | $ / shares	$ 0.05
Weighted average remaining contractual ter (years), beginning	4 years 7 months 6 days
Weighted average remaining contractual ter (years), ending	4 years 4 months 24 days
Weighted average remaining contractual ter (years), exercisable	3 years 10 months 25 days
Aggregate intrinsic value, beginning | $	$ 11,015,580	[1]
Aggregate intrinsic value, ending | $	5,218,850	[1]
Aggregate intrinsic value exercisable, ending | $	$ 3,538,910	[1]
[1]	The aggregate intrinsic value represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of first quarter of 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2018. This amount is impacted by the changes in the fair value of the Company’s shares.

Events During the Period - Sc19

Events During the Period - Schedule of Stock Option Outstanding (Details)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Outstanding stock options | shares	27,450,000
Weighted average exercise price, outstanding	$ 0.05
Weighted average remaining contractual life (months)	52 years 2 months 12 days
Option exercisable | shares	18,654,500
Weighted average exercise price, exercisable	$ 0.05
Exercise Price Range 1 [Member]
Range of exercise prices, upper range limit	$ 0.05
Outstanding stock options | shares	27,250,000
Weighted average exercise price, outstanding	$ 0.05
Weighted average remaining contractual life (months)	55 years
Option exercisable | shares	18,454,500
Weighted average exercise price, exercisable	$ 0.05
Exercise Price Range 2 [Member]
Range of exercise prices, lower range limit	0.10
Range of exercise prices, upper range limit	$ 0.30
Outstanding stock options | shares	200,000
Weighted average exercise price, outstanding	$ 0.20
Weighted average remaining contractual life (months)	42 years 7 months 6 days
Option exercisable | shares	200,000
Weighted average exercise price, exercisable	$ 0.20

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)

Jan. 16, 2018

Dec. 29, 2016

Nov. 03, 2016

Mar. 17, 2016

Feb. 08, 2016

Oct. 11, 2015

Nov. 30, 2017

Mar. 31, 2018

Mar. 31, 2017

Jun. 30, 2016

Sep. 30, 2015

Dec. 31, 2016

Dec. 31, 2015

Revenues

$ 50,000

Agreement termination description

The Company agreed to pay Newbridge a fee of 7.5% of the gross purchase price paid by an investor for securities of the Company at closing of a successful financing. In addition, the Company agreed to issue to Newbridge warrants to purchase the number of shares of common stock of the Company equal to 10% of the aggregate number of fully diluted shares of common stock that have been purchased by an investor. The Warrants shall be exercisable for three years from the financing closing date with an exercise price per share equal to the effective per share price paid for a share of common stock of the Company by an investor. Warrants shall contain customary terms, including provisions for “cashless” exercise, change of control, price based anti-dilution, and customary demand or piggyback registration rights. The Company shall also pay Newbridge warrants solicitation fee equal to 4% of the gross proceeds received by the Company upon cash exercise of any warrants purchased by an investor in connection with the offering.

The agreement was terminated on December 31, 2015.

Research and Development expenses

$ 155,333

$ 34,016

Proceeds from settlement funds

$ 7,000,000

$ 120,500

Default loan obligation related to shares granted

2,354,480

Share options granted

150,000

Rental agreement description

The Company signed a two-year rental agreement with a landlord for its principle office located in Ramat Gan, Israel. The rental agreement includes an option for one additional year.

Monthly rental fee

$ 4,200

Remaining minimum payment total

$ 88,000

Increased percentage of monthly rental fees

7.00%

Rental expenses

$ 12,600

Sheba [Member]

Repayment of related party debt

43,066

Sheba [Member] | Throughout 2017 and 2018 [Member]

Repayment of related party debt

$ 170,000

One Individual [Member]

Received period payment

105,282

Settlement on Contingency

15,000

Former Genera Managerl [Member]

Settlement on Contingency

$ 180,000

Share options granted

4,125,000

Research Agreement [Member]

Research and Development expenses

$ 28,969

Collaboration Agreements [Member]

Repayment of related party debt

$ 65,669

Collaboration Agreements [Member] | Sheba [Member]

Repayment of related party debt

$ 170,000

$ 170,000

Medmar LLC [Member]

Payments for royalties

$ 50,000

$ 100,000

$ 50,000

$ 50,000

Medmar LLC [Member] | License Agreement [Member]

Proceeds from non-refundable advance

$ 50,000

Michepro Holding Ltd [Member]

Interest percentage, description

The interest of the parties in the JV shall be held by the parties such that the EU Partner shall hold 25% of such interest and OWC shall hold the remaining 75% of such interest

Subsequent Events (Details Narr

Subsequent Events (Details Narrartive) - USD ($)	Apr. 30, 2018	Mar. 31, 2018	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Preferred stock, stated value		$ 0.00001				$ 0.00001
Subsequent Event [Member]
Preferred stock designated	500
Warrant exercise price per share	$ 0.22
Proceeds from issuance of warrant	$ 5,000,000
Dividend percentage		5.00%	5.00%	5.00%	5.00%
Preferred stock, stated value		$ 10,000	$ 10,000	$ 10,000	$ 10,000
Subsequent Event [Member] | Newbridge Securities Corporation [Member]
Warrant exercise price per share	$ 0.20
Paid cash fee	$ 375,000
Purchase for warrants	$ 2,500,000
Solicitation fee percentage	4.00%
Subsequent Event [Member] | Warrants [Member]
Stock conversion into common stock	12,500,000
Stock issued during period of services	$ 406,000
Subsequent Event [Member] | Series A Preferred Stock [Member]
Conversion price per share	$ 0.20