Some highlites from LDS filing
The Company’s principal business activity is development of proprietary filmstrip technologies that produce oral delivery systems that can be used for energy elixirs, herbal remedies and a smokeless alternative option to medical and recreational users of cannabis (the “Technology”). The main objective is to improve the Technology for use with cannabis, allowing for safer and healthier option to smoking through accurately metered dosage and control of the product quality (the “CannaStrips”, or “CannaStrips Technology”). In November 2016, the Company entered into a provisional patent license agreement (the “License”) with an entity controlled by the Company’s Chief Science Officer (the “CSO”), Dr. Sanderson, to acquire a world-wide, exclusive, royalty-free license to use a patent-pending method developed by Dr. Sanderson, which allows for improved delivery of biological molecules through mucous membranes, which can target specific processes in the body. The acquisition of the License allowed the Company to further refine its CannaStrips. On August 19, 2016, the Company entered into a memorandum of understanding (the “Original MOU”) with NHMC, Inc. (“NHMC”) to set up a joint venture (the “JV”) for the development, manufacturing, production, and commercialization of products based on the CannaStrips Technology. The JV will be conducted under a conditional use permit (the “CUP”), which was issued by the City of Adelanto, California on October 25, 2016. On October 6, 2016, the Company signed an additional letter of intent (the “LOI”) with NHMC and CSPA Group Inc. (the “CSPA”), which confirmed the intention of the parties to enter into the JV, as contemplated under the Original MOU. CSPA and NHMC are non-profit mutual benefit organizations controlled by the same parties. Pursuant to the terms set out in the Original MOU, the Company agreed to design and retrofit a 20,000 squarefoot facility located in the City of Adelanto to meet California energy efficiency standard and provide the JV with all equipment necessary to run the operations. The facility, when ready, will house a full manufacturing cycle starting with nursery, cultivation, extraction, distillation, strip coating and, finishing with packaging of the products based on the Company’s CannaStrips Technology. The retrofitting of the facility started in late November of 2016. The Company expects that the manufacturing division will be finalized and ready for use by the end of May. Nursery and cultivation division is expected to be completed in late June early July. With the entry into the Original MOU and the subsequent LOI, the Company was required to modify its plan of operations, therefore, during its fiscal 2016, it did not renew its license agreements with Healthy Asylum Inc. (“HA”) and Wisdom Homes of America, Inc., and allowed for the memorandum of understanding with a third party to laps. In preparation for the JV with CSPA and NHMC, in January of 2017 the Company incorporated two additional subsidiaries, LDS Agrotech Inc., which will form cultivation and biomass production division of the Company, and LDS Scientific Inc., which will form extraction and formulation division of the Company. The Company holds 75% of the issued and outstanding shares of each subsidiary.
The statements of financial position as of December 31, 2016 and December 31, 2015 indicated a cash position of $440,352 and $119,261, respectively, and total current assets of $578,758 and $174,666, respectively. The increase in total current assets was mainly associated with the cash the Company received from its private placements which were required to support the Company’s new business direction associated with acquisition of the Technology from CDS, completed on May 1, 2015. The long-term assets of the Company were represented by the equipment and production facility totaling $336,693 (2015 - $418,566), deposits on additional equipment to be received in the Fiscal 2017 of $485,655 (2015 - $Nil), and the license of $268,540 (2015 – $Nil). At the date of this MD&A the permitted production facility in Adelanto (the “Facility”), was being retrofitted pursuant to the terms of Original MOU with NMHC. Once the retrofitting of the Facility is completed, the Company is planning to start the production and packaging of the CannaStrips under its binding Original MOU for Joint Venture with NHMC and CSPA. At December 31, 2016, the Company fully impaired its CannaStrips Technology, which at December 31, 2015 was valued at $840,169
The statements of financial position as of December 31, 2016 and December 31, 2015 indicated a cash position of $440,352 and $119,261, respectively, and total current assets of $578,758 and $174,666,
respectively. The increase in total current assets was mainly associated with the cash the Company received from its private placements which were required to support the Company’s new business direction associated with acquisition of the Technology from CDS, completed on May 1, 2015. The long-term assets of the Company were represented by the equipment and production facility totaling $336,693 (2015 - $418,566), deposits on additional equipment to be received in the Fiscal 2017 of $485,655 (2015 - $Nil), and the license of $268,540 (2015 – $Nil). At the date of this MD&A the permitted production facility in Adelanto (the “Facility”), was being retrofitted pursuant to the terms of Original MOU with NMHC. Once the retrofitting of the Facility is completed, the Company is planning to start the production and packaging of the CannaStrips under its binding Original MOU for Joint Venture with NHMC and CSPA. At December 31, 2016, the Company fully impaired its CannaStrips Technology, which at December 31, 2015 was valued at $840,169
Of 56,098,346 shares issued and outstanding 6,300,000 remain in escrow. (2) Authorized: Unlimited common shares without par value.
Regulatory Risks Factors The activities of the Company will be subject to intense regulation by governmental authorities. Achievement of the Company`s business objectives are contingent, in part, upon compliance with regulatory requirements enacted by these governmental authorities and obtaining all regulatory approvals, where necessary, for the sale of its products. The Company cannot predict the time required to secure all appropriate regulatoryapprovals for its products, or the extent of testing and documentation that may be required by governmental authorities. Any delays in obtaining, or failure to obtain regulatory approvals would significantly delay the development o f markets and products and could have a material adverse effect on the business, results of operations and financial condition of the Company. [url][/url][tag]insert-text-here[/tag]
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