Here are some of the highlights from the 10-Q reports.
During the three-months ended June 30, 2010, the Company issued the following common stock:
On May 14, 2010, the Company issued 25,250,000 restricted common shares at $0.14 per share to several individuals for services rendered.
On May 14, 2010, the Company issued 400,000 restricted common shares at $0.135 per share to acquire the assets of Rockbrook Inc. Subsequent the quarter-end, on July 27, 2010, the Company signed a mutual termination agreement to reverse the acquisition and cancel the shares. (see Note 7 to Financial Statements, p.F-10).
On May 15, 2010, the Company issued 4,600,000 common shares for settlement of $46,000 of shareholder note payable.
On May 19, 2010, the Company issued 1,500,000 common shares for settlement of $15,000 of shareholder note payable.
On June 29, 2010, the Company issued 200,000 restricted common shares at $0.05 to an individual for proceeds of $10,000.
On June 30, 2010, the Company issued 200,000 restricted common shares at $0.05 to two individuals for proceeds of $10,000
Note 7 - Subsequent Events
On July 15, 2010, the Company issued 100,000 restricted common shares at $0.09 to two individuals for proceeds of $9,000.
On July 15, 2010, the Company issued 750,000 restricted common shares at $0.08 per share to an individual for services to be rendered through July 26, 2011.
On July 15, 2010, the Company issued 8,000,000 common shares for settlement of $80,000 of shareholder note payable.
On July 15, 2010, the Company issued 5,850,000 restricted common shares to shareholders of Montana Pain Management (“MPM”), 5,000,000 of which went to the principal shareholder, under management consulting agreements in conjunction with the agreed acquisition of the company. The Company was to receive 11,679,390 common shares representing 100% of the total issued and outstanding common shares of MPM. On July 22, 2010, the Company was notified by the majority shareholder of MPM that he had reconsidered the financial aspects of the signed Share Purchase Agreement and that he was not going to complete the agreement or deliver the shares of MPM to the Company, effectively cancelling the transaction. In addition, the Company discovered the principal shareholder of MPM was entering into an agreement with a scientific advisor of the Company who was introduced to the MPM shareholder; in direct and intentional breach of the non-disclosure and non-circumvention agreement, which he had signed with the Company on June 11, 2010. On July 23, 2010, the Company notified the principal shareholder of MPM, through his legal counsel, that he was in breach of a non-disclosure and non-circumvention agreement with the Company that he had signed on June 11, 2010 by engaging a scientific advisor who had been negotiating with the Company in violation of the non-disclosure agreement. The Company is currently consulting with legal counsel and intends to proceed with legal action against Montana Pain Management and its principal shareholder (see Item 1 – Legal Proceedings to this 10-Q, p.7).
On July 27, 2010, the Company signed a mutual termination agreement ( “ MTA ” ) to cancel the Share Purchase Agreement to acquire Rockbrook Inc. ( “ Rockbrook ” ). Due to regulatory changes in the state of Colorado it was no longer permissible for the Company to own Rockbrook, a Colorado dispensary, and therefore the May 8, 2010 acquisition was retroactively cancelled along with the 400,000 restricted common shares issued on May 14, 2010 to the sole shareholder of Rockbrook. The Company had not yet taken possession of Rockbrook shares or assets at the time of signing the MTA.
On August 19, 2010, the Company signed a license agreement with RockBrook Inc, a medical marijuana medicines company. RockBrook has been granted the full latitude and rights to manufacture, develop, produce, distribute and sell products developed from, or based on, Cannabis Science formulations, and delivery systems for the Cannabis Science Brand of Pharmaceutical Products and Cannabis Science Ailment Formulations within the State of Colorado. Under the agreement RockBrook will pay Cannabis Science an initial licence fee of $25,000, payable within the first year. RockBrook will also pay the Company a quarterly royalty payment of 50% of all positive revenues derived from the the Company Brand of Pharmaceutical Products. Additionally, in the event RockBrook executes any sublicensing agreements, Cannabis Science is entitled to royalty payments of 50% of all positive revenues received by the licensee for sales of any Cannabis Science Brand of Pharmaceutical Products. Within two years RockBrook is expected to invest a minimum of $250,000 in research and development for the Cannabis Science Brand of Pharmaceutical Products and will also pay the Company a renewable licence fee, payable annually on the anniversary of the execution of this agreement. The first anniversary payment will be $25,000, the second $50,000, third $75,000 and fourth $100,000. The fifth and subsequent anniversary payments will be $150,000.
F-11
PART I
This Interim Report on Form 10-Q contains forward-looking statements that have been made pursuant to the provisions of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995 and concern matters that involve risks and uncertainties that could cause actual results to differ materially from historical results or from those projected in the forward-looking statements. Discussions containing forward-looking statements may be found in the material set forth under “ Business, ” “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” and in other sections of this Form 10-Q. Words such as “ may, ” “ will, ” “ should, ” “ could, ” “ expect, ” “ plan, ” “ anticipate, ” “ believe, ” “ estimate, ” “ predict, ” “ potential, ” “ continue ” or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this Report, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this Interim Report on Form 10-Q. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations.
Readers should carefully review and consider the various disclosures made by us in this Report, set forth in detail in Part I, under the heading “ Risk Factors, ” as well as those additional risks described in other documents we file from time to time with the Securities and Exchange Commission, which attempt to advise interested parties of the risks, uncertainties, and other factors that affect our business. We undertake no obligation to publicly release the results of any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.
ITEM 1. LEGAL PROCEEDINGS
Management of the Company is currently consulting with legal counsel and intends to proceed with legal action against Montana Pain Management and its principal shareholder for breach of a Non-Disclosure/Non-Circumvention Agreement that was entered into on June 11, 2010
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended June 30, 2010, we have issued securities using exemptions available under the Securities Act of 1933:
As set out below, we sold the following unregistered securities:
On June 29, 2010, the Company issued 200,000 restricted common shares at $0.05 to an individual for proceeds of $10,000.
On June 30, 2010, the Company issued 200,000 restricted common shares at $0.05 to two individuals for proceeds of $10,000.
As set out below, we have issued securities in exchange for services, properties and for debt:
On May 14, 2010, the Company issued 25,250,000 restricted common shares at $0.14 per share to several individuals for services rendered.
On May 14, 2010, the Company issued 400,000 restricted common shares at $0.135 per share to acquire the assets of Rockbrook Inc. Subsequent to the quarter-end, on July 27, 2010, the Company signed a mutual termination agreement to reverse the acquisition and cancel the shares. (see Note 7 to Financial Statements, p.F-10).
On May 15, 2010, the Company issued 4,600,000 common shares for settlement of $46,000 of shareholder note payable.
On May 19, 2010, the Company issued 1,500,000 common shares for settlement of $15,000 of shareholder note payable.
