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United Cannabis Corporation (CNAB)
CNAB is starting to enter into licensing and consulting agreements with partners who desire to license the company’s entire turnkey seed-to-sale business model, and CNAB’s receives a percentage of gross revenues as payment. In addition CNAB offers consulting services on the design and build out of cultivation facilities; CNAB offers training and staffing services; and help partners find the right locations for cultivation facilities. CNAB provides partners access to its genetic catalogue which includes over 15 CBD strains, over 150 THC strains and over 30 Cannabis Cup winners.
CNAB provides partners access to the company’s extracted/infused medical products. CNAB’s plan includes licensing its intellectual property for whole plant activated oils, smokable concentrates, infused products, topical lotions, pills, sublingual transdermal patches and CNAB’s partners will have access to future technology and products developed. CNAB wants to develop new cannabinoid-based drugs for clinical FDA approval patents.
- During first quarter, revenue and costs of goods sold were $88,830 and $27,055, respectively.
- During the quarter, CNAB incurred losses of $1,335,900 and used $273,417 of cash in operating activities.
- The consolidated financial statements were prepared on a going concern basis. The going concern basis assumes that CNAB will continue operating for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business
- As of March 31, 2015, CNAB had a working capital deficit of $1,288,027 and an accumulated deficit of $3,960,867.
Kaya Holdings, Inc. (KAYS)
In 2014, KAYS incorporated a subsidiary, Marijuana Holdings Americas, focused on legal marijuana opportunities in the United States. In March 2014, MJAI applied for and was awarded its first license to operate a medical marijuana dispensary. KAYS developed the Kaya Shack brand for its retail operations and opened the first one July 3, 2014 in Portland.
KAYS Portland facility currently features over 30 strains of marijuana including our proprietary, high-grade Kaya Kush, various concentrates, high grade oils and tinctures for pain and cancer symptom alleviation, high CBD – low THC strains, and Kaya Candies, Kaya Caramels and an assortment of cookies and cakes for patients who do not smoke.
In April 2015, KAYS formed the Kaya Farms Medical Marijuana Grow to feed the Kaya Shack supply chain. KAYS is the first US publicly traded company to own a majority interest in a vertically integrated legal marijuana business. As of April 30th, KAYS harvested its first medical marijuana crop trials which yielded nearly 25 pounds. KAYS has a planned to expand grow operations.
- KAYS generated $30,339 in revenue.
- KAYS incurred $99,646 in selling, general and administrative expenses.
- KAYS incurred $547,010 in professional fees.
- KAYS had $44,335 worth of inventory at the end of quarter.
- KAYS generated a net loss of $784,074
- During the quarter, KAYS issued $135,000 convertible debt which can be converted into shares at $0.04 per share. The stated interest rate on the debt is 10%.
- During the quarter, KAYS issued $10,000 of debt with a stated interest rate of 10%. The note is payable on May 25, 2015
- As of March 31, 2015, cash reserves were $40,673, the company had a working capital deficiency of $710,612, an accumulated deficit of $6,303,543, and a net capital deficiency of $1,241,247. These matters raise substantial doubt about the company’s ability to continue as a going concern.
Monarch America (BTFL)
Monarch is the company’s management and consulting segment is positioned to provide services for building out indoor grow and cultivation facilities. The company aims to oversee and manage all facets of retail operations, from property management, technology and equipment leasing to inventory control, staffing, and day-to-day operational management.
The Big Tomato supplies hydroponics and indoor gardening supplies through a retail storefront and supply warehouse.
BTFL operates under two segments, Monarch America and The Big Tomato
- During the quarter, Monarch generated $51,854 in revenues from the sale of its branded hydroponic and cultivation supplies, such as lights and ballasts.
- Monarch’s operating expenses were $704,051. These costs are related to salaries and wages of $108,589, consulting and professional fees of $496,158, occupancy costs of $60,000, and travel and other of $39,304.
- Monarch had a net loss of $691,197. As part of its agreement with Green Sky, Monarch incurs the costs associated with building out the warehouse but BTFL is not yet collecting fees for providing services to offset its operating costs.
- The Tomato generated $1,105,534 in revenue and generated $400,515 of gross profit.
- Total operating expenses were $154,840 consisting of $3,351 of advertising, $1,480 of depreciation, $15,978 of insurance, $4,670 of professional fees, $32,440 of rent, $65,292 of wages, $10,233 of utilities, and $21,396 of other general expenses.
- Tomato generated a net income of $245,675, as compared with a net income of $98,256 for the quarter ended March 31, 2014, an increase in bottom line results of 150%.
- Management estimates that BTFL will need approximately $2,540,000 for the next 12 months of operations. The company does not have sufficient cash to fund its expenses over the next twelve months.
- As of March 31, 2015, BTFL had a working capital deficit of $1,963,885, an accumulated deficit of $1,693,541, cash of $226,060, and total liabilities of $3,697,608.
Surna Inc. (SRNA)
SRNA is a technology company that designs, manufactures, and distributes systems for controlled environment agriculture. The company’s products offer growers an improved process control that maximizes yield while using less energy and resources. SRNA wants to be able to provide full-scale solutions for entire controlled environment agriculture facilities.
SRNA generates revenue from the sale of climate control systems and related products to state-regulated cannabis cultivation facilities.
SRNA started selling products during the second quarter of 2014. During the same period last year, the company did not generate revenue and incurred $47,086 in operating expenses.
- SRNA generated $870,895 in revenue during the quarter.
- SRNA incurred an $879,546 net loss from operations.
- SRNA incurred a net loss of $1,418,443
- As of March 31, 2015, SRNA had an accumulated deficit of $7,186,020, a working capital deficit of $973,758, and a $194,958 outstanding balance on advances from operators and directors (SRNA received $288,186 in advances in 2014).
- SRNA has raised capital through the private sale of common stock and debt securities. The company requires capital for R&D activities focused on developing commercial products. SRNA plans to raise capital through equity and debt financing, or through public or private financing. The issuance of additional securities will cause dilution for shareholders.
- SRNA’s independent auditors included a note to the company’s 2014 financial statements regarding concerns about SRNA’s ability to continue as a going concern. SRNA’s business is dependent upon the company obtaining further financing, the market accepting its products, and operating at a profitable level.
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