CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
Condensed
Balance Sheets
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September
30, 2017
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June
30, 2017
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(Unaudited)
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ASSETS
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Current Assets
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Cash
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$
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-
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$
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-
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Total Current Assets
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-
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-
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Property and Equipment
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Office
Equipment (Net of Accumulated Depreciation)
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1,553
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2,265
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Total
Fixed Assets
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1,553
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2,265
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Total
Assets
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$
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1,553
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$
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2,265
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LIABILITIES AND STOCKHOLDERS’
DEFICIT
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Current Liabilities
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Accounts Payable
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$
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175,720
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$
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177,374
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Accrued Liabilities
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6,545
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6,545
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Liability for Lawsuit Judgement
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200,761
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200,761
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Liability for Lease
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181,968
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181,968
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Payroll and Sales Taxes
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3,592
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3,592
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Shareholder Loans
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80,468
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62,825
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Total
Current Liabilities
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649,054
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633,065
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Total Liabilities
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649,054
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633,065
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Commitments and Contingencies
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Stockholders’
Deficit
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Preferred Stock $0.001 Par Value 25,000,000 Authorized
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No Shares Issued
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-
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-
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Common Stock $0.001 Par Value 200,000,000 Authorized 15,708,030
and 15,708,030 Issued and Outstanding at September 30, 2017 and June 30, 2017 Respectively
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15,708
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15,708
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Additional Paid-In Capital
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52,515,882
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52,515,882
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Deficit Accumulated
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(53,179,091
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)
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(53,162,390
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)
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Total
Stockholders’ Deficit
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(647,501
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)
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(630,800
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)
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Total
Liabilities and Stockholders’ Deficit
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$
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1,553
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$
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2,265
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The
accompanying notes are an integral part of these unaudited financial statements.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
Condensed
Statements of Operations
(Unaudited)
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For
the Three Months Ended September 30, 2017
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For
the Three Months Ended September 30, 2016
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Revenues
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$
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-
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$
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-
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Operating Expenses
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General
and Administrative Expenses
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16,701
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24,509
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Total Operating Expenses
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16,701
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24,509
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Operating Loss
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(16,701
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)
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(24,509
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)
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Provision
for Income Taxes
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-
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-
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Net
Loss
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$
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(16,701
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)
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$
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(24,509
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)
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Net
Loss Per Share Basic and Diluted
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted Average
Number of Common Shares Outstanding Basic and Diluted
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15,708,030
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15,673,791
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The
accompanying notes are an integral part of these unaudited financial statements.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
Condensed
Statements of Cash Flows
(Unaudited)
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For
the three Months ended September 30, 2017
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For
the three Months ended September 30, 2016
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Cash Flows from Operating
Activities
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Net Loss
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$
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(16,701
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)
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$
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(24,509
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)
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Adjustments to Reconcile
Net Loss to Net Cash Used in Operating Activities
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Depreciation Expense
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712
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712
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Shares Issued for Accounts Payable Related
Parties
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21,000
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Changes in Operating
Assets and Liabilities
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Increase in Accounts
Payable
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(1,654
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)
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(1,906
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)
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Net Cash Used in
Operations
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(17,643
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)
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(4,703
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)
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Cash
Flows from Investing Activities
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-
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-
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Net Cash Provided
by (Used In) Financing Activities
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-
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-
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Cash Flows from Financing
Activities
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Shareholder Loans
Advanced
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17,643
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4,703
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Net
Cash Provided by Financing Activities
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17,643
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4,703
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Net Increase / Decrease
in Cash
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-
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-
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Cash Beginning
of Period
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-
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-
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Cash Ending
of Period
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$
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-
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$
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-
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Supplemental Disclosure
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Income Taxes
Paid
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$
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-
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$
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-
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Interest Paid
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$
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-
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$
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-
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Supplemental Disclosure
of Non-Cash Investing and Financing Activities:
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Shares Issued
for Services Related Party
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$
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-
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$
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21,000
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Settlement of
Accounts Payable with Equity Related Parties
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$
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-
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$
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16,500
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The
accompanying notes are an integral part of these unaudited financial statements.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
FOOTNOTES
TO UNAUDITED FINANCIAL STATEMENTS
For
the Three Month Periods Ended September 30, 2017 and 2016
Note
1. The Company
On
August 13, 2015, Amaize Beverage Corporation, previously known as SnackHealthy, Inc., a Nevada corporation filed an amendment
to its articles of incorporation (the “Amendment”) with the Secretary of State of the state of Nevada. The Amendment
provided for the change of the Company’s name from SnackHealthy, Inc., to Amaize Beverage Corporation. The name change and
the change of the Company’s trading symbol were subsequently declared effective by the Financial Industry Regulatory Authority
(FINRA) as of August 19, 2015.
The
Board of Directors and the majority shareholders of the Company constituting a total of 9,180,143 shares of common stock (58.44%)
approved as of August 29, 2017, in a written consent of the Board of Directors and the majority of the shareholders of the Company
as of the same date, a name change from “Amaize Beverage Corporation” to “Curative Biosciences, Inc.”
The Company believes that its new name will better reflect the new direction of the Company’s business, that of developing
and commercializing novel therapeutics using hemp-derived CBD. On October 6, 2017, the Company filed an amendment to its articles
of incorporation (the “Amendment”) with the Secretary of State of the state of Nevada. The Amendment provided for
the change of the Company’s name from Amaize Beverage Corporation to its current name, Curative Biosciences, Inc. The Company
submitted to FINRA an Issuer Company Related Action Notification for the name change and request for a new trading symbol and
is waiting to be declared effective by FINRA.
Note.
2 Significant Accounting Policies
Basis
of Presentation
The
accompanying condensed unaudited financial statements of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q as
they are prescribed for smaller reporting companies. Accordingly, they do not include all the information and footnotes required
by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements
not misleading have been included. Operating results for the three-month period ended September 30, 2017 are not necessarily indicative
of the results that may be expected for the year ending June 30, 2018. These condensed statements should be read in conjunction
with the financial statements and related notes, which are included in the Company’s Annual Report on Form 10-K for the
year ended June 30, 2017.
Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.
Financial
Instruments
The
carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable, and amounts due to related parties, as reported in the accompanying condensed balance sheets, approximates fair value
due to the short-term nature of these financial instruments.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
FOOTNOTES
TO UNAUDITED FINANCIAL STATEMENTS
For
the Three Month Periods Ended September 30, 2017 and 2016
Property
and Equipment
Property
and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is three
to seven years.
Website
Development Costs
The
Company has adopted the provisions of FASB Accounting Standards Codification No. 350
Intangible-Goodwill and Other.
Costs
incurred in the planning state of websites are expensed, while costs incurred in the development stage are capitalized and amortized
over the estimated three-year life of the asset. All website development costs have been fully amortized at September 30, 2017.
Other
Assets
Our
drink license was amortized over three years and is fully amortized at September 30, 2017.
Long-Lived
Assets
In
accordance with ASC 350, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence
of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack
of recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair
value.
Income
Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”) Income Taxes. Under ASC
740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment date.
Revenue
Recognition
Revenue
is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, products are shipped,
which is when title and risk of loss pass to the customer and collectability of the amount is reasonably assured. Specifically,
revenue is recognized when products are shipped, which is when title and risk of loss pass to the customer. The Company classifies
selling discounts and rebates, if any, as a reduction of revenue.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred no advertising expenses
during the three month periods ended September 30, 2017 and 2016.
Stock-Based
Compensation
We
account for stock based compensation pursuant to FASB Accounting Standards Codification No. 718,
Compensation – Stock
Compensation
. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs
of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements
over the period during which employees are required to provide services. Share-based compensation arrangements include stock options,
restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation
cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective
vesting periods of the option grant.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
FOOTNOTES
TO UNAUDITED FINANCIAL STATEMENTS
For
the Three Month Periods Ended September 30, 2017 and 2016
Equity
instruments (“Instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments,
as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505,
Equity Based
Payments to Non-Employees
defines the measurement date and recognition period for such instruments. In general, the measurement
date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance
is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based
on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.
Non-Emplo
y
ee
Stock Options and Warrants
The
Company accounts for non-employee stock options and warrants under ASC 718, whereby option and warrant costs are recorded based
on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably
measurable. Unless otherwise provided for, the Company covers option and warrant exercises by issuing new shares.
There
were no warrants or stock options issued or outstanding during the periods ended September 30, 2017 and 2016. All warrants and
stock options issued in prior periods expired without being exercised.
Basic
and Diluted Net Loss per Common Share
Net
loss per common share is computed pursuant to FASB Accounting Standards Codification No. 260,
Earnings per Share
. Basic
net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during
the period. Diluted net loss per share is computed in the same way as for basic net loss.
Reclassifications
Certain
amounts previously presented for prior year have been reclassified. The reclassifications had no effect on net loss, total assets,
or stockholders’ deficit.
Recent
Accounting Pronouncements
The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
Note
3. Going Concern
The
financial statements have been prepared assuming the Company will continue as a going concern which assumes the Company will be
able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company
incurred a net loss of $16,701 for the three month period ended September 30, 2017 and accumulated losses of $53,179,091 since
inception to September 30, 2017. Cash used in operations for the three month period ended September 30, 2017 was $17,643 and as
of September 30, 2017, we had a working capital deficit of $649,054. This raises substantial doubt about its ability to continue
as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise
additional capital and implement its business plan.
Management
believes that the actions presently being taken and the success of future operations will be sufficient to enable the Company
to continue as a going concern, however, there can be no assurance that the raising of equity will be successful or that the Company
will be able to achieve profitability. Failure to achieve the needed equity funding or establish profitable operations would have
a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
CURATIVE
BIOSCIENCES, INC.
(formerly
Amaize Beverage Corporation)
FOOTNOTES
TO UNAUDITED FINANCIAL STATEMENTS
For
the Three Month Periods Ended September 30, 2017 and 2016
Note
4. Property and Equipment
The
Company started the construction of several websites all of which have been completed and were amortized over three years. Computers
and furniture are being depreciated over three to seven years.
Property
and equipment were as follows:
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September
30, 2017
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June
30, 2017
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|
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|
|
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Office Equipment
|
|
$
|
22,165
|
|
|
$
|
22,165
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|
|
Accumulated Depreciation
|
|
|
20,612
|
|
|
|
19,900
|
|
|
Net Book Value
|
|
$
|
1,553
|
|
|
$
|
2,265
|
|
Note
5. Commitments and Contingencies
Lease
Commitments
The
Company has no current lease commitments. Our existing arrangement is month-to-month provided by an office center which is highly
cost effective and adequately satisfies our current requirements. The Company plans to seek leased or additional office space
when needed.
The
Company has not invested in, nor do we own any real property at this time. The Company has no formal policy with respect to investments
in real estate or investments with persons primarily engaged in real estate activities.
Legal
In
June of 2013, a former officer of the Company filed a lawsuit against the Company. As of March 31, 2015, the Company had accrued
in full for this liability of $200,761 in its financial statements.
In
January 2014, the Company terminated its Florida office space lease. A liability of $181,968 has been recorded in the Company’s
financial statements for the early termination of the lease and remainder of the monthly lease payments through June 2016.
Note
6. Stockholders’ Deficit
The
Company has authorized 200,000,000 shares of common stock with a par value of $0.001 and 25,000,000 shares of preferred stock
with a par value of $0.001.
During
the year ended June 30, 2017, the Company issued 150,000 shares of common stock valued at $37,500 to a related party for services
valued at $21,000 and accounts payable in the amount of $16,500.
Note
7. Loans from Directors and Shareholders
During
the three months ended September 30, 2017 a related party advanced the Company loans in the amount of $17,643. As of September
30, 2017, the balance of loans outstanding was $80,468. The loans are non-interest bearing and due on demand.
Note
8. Subsequent Events
On
December 22, 2017, the Company issued 3,866,665 shares of common stock for services valued at $425,333 to a related party.
The
Company has evaluated subsequent events from September 30, 2017 through the date the financial statements were available to be
issued and has determined that, other than as disclosed above, there have been no subsequent events after September 30, 2017 for
which additional disclosure is required.
On
March 5, 2018, the Company’s Board of Directors appointed Ms. West as the Company’s new Chief Operating Officer and
approved the major terms of the compensation of Ms. West, our Founder, Chairman of the Board of Directors, former Chief Executive
Officer, Executive Vice President, and now Chief Operating Officer. The compensation of Ms. West consists of a stock grant of
1,500,000 registered shares annually, to be issued on a quarterly basis, and a
s
tock grant of 12,000,000 restricted shares
of the Company’s common stock vesting will over a period of two years.
ITEM
2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking
Statements
This
document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical
fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections
of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future
operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions
or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements
may include the words “may,” “will,” “estimate,” “intend,” “continue,”
“believe,” “expect” or “anticipate” and any other similar words. Although we believe that
the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from
those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations,
as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed
or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our
actual results, performance and achievements, or industry results to differ materially from estimates or projections contained
in our forward- looking statements include, among others, the following:
|
●
|
product
liability claims;
|
|
|
|
|
●
|
our
relationship with, and our ability to influence the actions of, our distributors;
|
|
|
|
|
●
|
adverse
publicity associated with our industry, products or ingredients;
|
|
|
|
|
●
|
improper
action by our employees in violation of applicable law;
|
|
|
|
|
●
|
changing
consumer preferences and demands;
|
|
|
|
|
●
|
loss
or departure of any member of our senior management team which could negatively impact our distributor and/or buyer relations
and operating results;
|
|
|
|
|
●
|
the
competitive nature of our business;
|
|
|
|
|
●
|
regulatory
matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of
our products or ingredients;
|
|
|
|
|
●
|
risks
associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, pricing
and currency devaluation risks;
|
|
|
|
|
●
|
our
dependence on increased penetration of existing markets;
|
|
|
|
|
●
|
contractual
limitations on our ability to expand our business;
|
|
|
|
|
●
|
our
reliance on our information technology infrastructure and outside manufacturers;
|
|
|
|
|
●
|
the
sufficiency of trademarks and other intellectual property rights;
|
|
|
|
|
●
|
product
concentration;
|
|
|
|
|
●
|
our
reliance on our management team;
|
|
|
|
|
●
|
uncertainties
relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;
|
|
|
|
|
●
|
changes
in tax laws, treaties or regulations, or their interpretation;
|
|
●
|
any
collateral impact resulting from the ongoing worldwide financial “crisis,” including the availability of liquidity
to us, our customers and our suppliers or the willingness of our customers to purchase products in a recessionary economic
environment; and;
|
|
|
|
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●
|
whether
we will purchase any of our shares in the open markets or otherwise.
|
OVERVIEW
GENERAL
Curative
Biosciences, Inc., formerly Amaize Beverage Corporation, (“the Company”, “the Registrant”, “we”,
“us” or “our”) is a life sciences company focused on developing and commercializing novel therapeutics
using hemp derived CBD. Our consumer product segment is focused on manufacturing, marketing and selling plant-based CBD products
to a range of market sectors.
Through
our consumer products business, we plan to manufacture, market and sell consumer products containing plant-based CBD under our
brand
Curative Biosciences
. All of our products are non-psychoactive allowing for the global distribution of our hemp oil
into international markets that have a zero tolerance for any levels of THC.
We
expect to realize revenue from our consumer products business segment to fund a portion of our working capital needs, however,
we will need to raise additional capital either through the issuance of equity and/or the issuance of debt. Given the small size
of our company and the development stage of the Company, we may find it difficult to raise sufficient capital to meet our needs.
We do not have any firm commitments for all of our capital needs, and there are no assurances they will be available to us. We
made no sales during the three months ended September 30, 2017 or 2016.
Our
principal executive office address is 2 South Biscayne Boulevard, #3760, Miami, Florida 33131 and our telephone number is (949)
287-3164.
ORGANIZATION
Curative
Biosciences, Inc., formerly Amaize Beverage Corporation is organized under the laws of the state of Nevada. The Board of Directors
and the majority shareholders of the Company constituting a total of 9,180,143 shares of common stock (58.44%) approved as of
August 29, 2017, in a written consent of the Board of Directors and the majority of the shareholders of the Company as of the
same date, a name change from “Amaize Beverage Corporation” to “Curative Biosciences, Inc.” The Company
believes that its new name will better reflect the new direction of the Company’s business, that of developing and commercializing
novel therapeutics using hemp-derived CBD. The Company seeks to manufacture, market and sell consumer products containing plant-based
CBD under our brand
Curative Biosciences
. On October 6, 2017, the Company filed an amendment to its articles of incorporation
(the “Amendment”) with the Secretary of State of the state of Nevada. The Amendment provides for the change of the
Company name from Amaize Beverage Corporation to its current name, Curative Biosciences, Inc. The Company has applied for a new
trading symbol from FINRA and will announce the name and symbol change once it has been declared effective.
BUSINESS
OVERVIEW
In
November 2013, Richard Damion joined our Company as the acting Chief Executive Officer. He was then approved by the Board of Directors
as the Company’s President and Chief Executive Officer in January 2014. On February 15, 2015, the Board of Directors of
the Company appointed A.R. Grandsaert as the Company’s new President. Richard Damion resigned as the Company’s President
as of that date; however, he remains the Company’s Chief Executive Officer and Director.
We
determined during the first quarter of 2015 that we would transition out of our lower margin, perishable snack food product lines.
The Company intends to manufacture and market natural health products and operate within the medical cannabis industry. We are
building a portfolio of hemp derived Cannabidiol (CBD) products under our
Curative
brand. The demand for hemp-derived CBD
products has grown at an estimated 22% CAGR over the last three years and is expected to increase substantially over the next
five years. Curative Biosciences aims to be a significant player in the industry.
We
are a virtual company with distributed employees. We focus on staying lean through the employment of cloud based technologies,
maintaining low overhead, subcontracting services, creating sales through commissioned brokers, developing products through reputable
co-packers and keeping minimum inventory to ensure freshness and shelf life for our customers and distribution partners.
OUR
PRODUCTS
Our
product formulas are derived from natural genetic strains of phytocannabinoid-rich hemp and are grown using 100% organic farming
practices. The plants are registered with the Colorado State Department of Agriculture and tested to ensure the THC levels are
below .3%.
All of our products are non-psychoactive
allowing for global distribution into international markets that have a zero tolerance for any levels of THC. The proprietary
and patented extraction and purification processing technology used in the manufacturing of our products preserves all the phytocannabinoids,
terpenes, and plant lipids, while eliminating any remaining THC and chlorophyll.
Our
Curative brand Softgels have been developed with a patent pending water-soluble liquid with CBD, and other phytocannabinoids including
CBG, CBN, CBC, and over 40 naturally present terpenes. We plan to offer the Curative brand of softgels in 30 and 60 count bottles
of “body ready” potencies designed to deliver 10mg CBD and 25mg of CBD per serving. We designed the Curative Softgels
for maximum absorption and optimum bioavailability without THC.
Our pharmaceutical grade
formula utilizes proprietary water-soluble hemp oil, increasing bioavailability by an order of magnitude compared with an oil
form.
Our
Curative brand of Tinctures have been developed with cannabidiol (CBD) oil in varying concentrations and formulated using our
full spectrum hemp oil blended with hemp seed oil, grape seed oil, or MCT derived from coconut oil. Our Tinctures contain no THC.
DISTRIBUTION
We
intend to employ several distribution methods to ensure maximum growth, market share and profitability. Initially, we plan to
focus our distribution efforts on ecommerce and targeted specialty retail shops.
Our
marketing efforts will be focused on online consumers and retail distribution channels in the United States. We believe this approach
is ideal for our products market as it provides an opportunity to focus our marketing efforts on educating targeted customers
about the potential health benefits of CBD and other key ingredients in our products.
INDUSTRY
OUTLOOK
Hemp
Business Journal’s data demonstrates the hemp industry is growing with a 22% CAGR, and they estimate that the hemp industry
will grow to $1.8 billion USD in sales by 2020, led by food, body care, and CBD-based products.
1,2
The
report estimated $130 million USD in hemp-derived CBD sales in 2016. This category is being driven by channel sales in the natural
products industry, smoke shops and online verticals, with pharmaceutical players quickly moving into position to capture market
share.
The
US medical cannabis market is a rapidly growing market with estimated retail cannabis sales rising from an estimated $2.2-$2.6
billion USD in 2014 to $7.4-8.2 billion USD in 2018. A 2016 Bloomberg report predicted the US cannabis market to reach $50 billion
USD by 2026.
|
|
1.
|
See
https://votehemp.com/PR/PDF/4-14-17%20VH%20Hemp%20Market%20Data%202016%20-%20FINAL.pdf.
|
|
|
2.
|
See
https://mjbizdaily.com/new-forecast-u-s-medical-marijuana-and-recreational-cannabis-sales-to-hit-8-billion-by-2018/?nomobile=1.
|
|
|
3.
|
See
https://www.bloomberg.com/news/articles/2016-09-12/cannabis-industry-to-expand-to-50-billion-by- 2026-analysts-say.
|
THE
LAW AND DEVELOPMENT PROGRAMS
For
the first time since 1937, industrial hemp has been decriminalized at the federal level and can be grown legally in the United
States, but on a limited basis. A landmark provision passed in the Agricultural Act of 2014 recognizes hemp as distinct from its
genetic cousin, marijuana. Federal law now exempts industrial hemp from U.S. drug laws to allow for crop research by universities,
colleges and state agriculture departments. The new Federal law allows for agricultural pilot programs for industrial hemp “in
states that permit the growth or cultivation of hemp.”
COMPETITION
The
hemp derived CBD sector of the cannabis industry is in its infancy. Competition is highly fragmented with no dominant player.
Curative’s competition will include CW Hemp, Medical Marijuana, Inc., CV Sciences, Bluebird Botanicals, and Elixinol, among
others. There are also large nutritional companies that currently do not offer hemp derived CBD products but may in the future.
We expect this and new entrants in the marketplace in the coming years.
We
expect Curative to be competitive in the marketplace as we intend to focus our efforts on social media, education and awareness,
beautifully designed eco-friendly packaging, competitive pricing, quality and potency in product formulation and a superior customer
experience.
CBD
RESEARCH
A
large body of research data on cannabinoids and their potential therapeutic effects on inflammation and oxidative associated diseases,
disorders and health conditions has been published. Clinical trials have been conducted on a range of disorders, from general
analgesia
4
and inflammation
5
, to major cardiovascular
6
, oncological
7
and neurodegenerative
disorders
8
. This body of clinical trials is publicly available via the National Institutes of Health website.
|
|
4.
|
W,
Hauser., M, Fitzcharles., et al. “Cannabinoids in Pain Management and Palliative Medicine” (2017) 114: 38 Dtsch
Arztebl Int at p. 627; DG, Boychuk., G, Goddard., et al. “The effectiveness of cannabinoids in the management of chronic
nonmalignant neuropathic pain: a systematic review” (2015) 29: 1.
|
|
|
5.
|
R,
Zurier., SH, Burstein., “Cannabinoids, inflammation and fibrosis” (2016) 30: 11 at pp. 3682-3689.
|
|
|
6.
|
WSV,
Ho., MEM., Kelly “Cannabinoids in the Cardiovascular System” (2017) Vol. 80 Advances in Pharmacology at pp. 329-366;
Y Lu., HD, Anderson., “Cannabinoid signaling in health and disease” (2017) 94: 4 Canadian Journal of Physiology
and Pharmacology at pp. 311-327, 7V
|
|
|
7.
|
Maida.,
PJ, Daeninck “A user’s guide to cannabinoid therapies in oncology” 6 Current Oncology at pp. 398-406; R,
Ramer., B, Hinz., “Cannabinoids as Anticancer Drugs” Vol. 80 Advances in Pharmacology at pp. 397-436.
|
|
|
8.
|
C,
De Caro., A, Leo., et al., “The potential role of cannabinoids in epilepsy treatment” (2017) 17: 11 Expert Review
of Neurotherapeautics at pp. 1069-1079; CM, Koo., HC, Kang, “Could Cannabidiol be a Treatment Option for Intractable
Childhood and Adolescent Epilepsy?” (2017) 7:1 Journey of Epilepsy Research at pp 16-20.
|
|
|
9.
|
See
https://www.ncbi.nlm.nih.gov/pubmed/?term=cannabinoids.
|
GOVERNMENT
REGULATION
In
addition to the typical regulation of any manufacturing and commercial business, our operations are subject to state and federal
regulation of cultivation of hemp and the manufacturing of products intended for human ingestion or topical application intended
for use by either humans or animals. All of our hemp oil products are or will be governed under the FDA Harmonized Tariff Code
1515.90.80.10. All hemp oil extracts are procured from supply contacts in compliance with the s. 7606 of the 2014 Agricultural
Act as well as the CSA under the legal precedent of HIA v. DEA, 357 F.3d 1012 (9th Cir. 2004).
We
are constantly monitoring the development of applicable US laws and the Company engages US legal counsel to interpret US laws
to ensure we and our suppliers are operating in compliance with all applicable laws and permits.
ENVIRONMENTAL
MATTERS
Compliance
with federal, state and local requirements regulating the discharge of materials into the environment, or otherwise relating to
the protection of the environment, have not had, nor are they expected to have, any material effect on the capital expenditures,
earnings or competitive position of the Company.
Significant
Accounting Policies
For
the Company’s significant accounting policies see
“Footnote 2”
to the accompanying September 30, 2017
unaudited financial statements.
Presentation
“Net
sales,”
reflect distribution allowances, handling and shipping income, represent what we collect and recognize as net
revenues in our financial statements.
Our
“gross profit”
consists of net sales less
“cost of sales,”
which represents the prices we
pay to our raw material suppliers and manufacturers of our products as well as costs related to product shipments to our warehouse
and distribution center, duties and tariffs, expenses relating to shipment of products to customers and importers and similar
expenses.
“Selling
fees”
consist of commissions, overrides and production bonuses.
Our
“operating margins”
consist of net sales, less cost of sales and selling fees.
“General
and administrative expenses”
represent our operating expenses, components of which include labor and benefits, sales
and marketing events, professional fees, travel and entertainment, marketing, occupancy costs, communication costs, bank fees,
depreciation and amortization and other miscellaneous operating expenses.
RESULTS
OF OPERATIONS
Our
results of operations for the periods below are not necessarily indicative of results of operations for future periods, which
depend on numerous factors, including our ability to distribute our products through major retailers, open new markets, penetrate
existing markets, and our ability to secure, develop and introduce new products.
Three
Months Ended September 30, 2017 Compared to Three September 30, 2016.
Revenue
The
Company had no revenues in the three months ended September 30, 2017 and 2016.
Cost
of Revenues
The
Company recognized no cost of sales in the three month ended September 30, 2017 or 2016 as it recognized no sales during these
periods.
Gross
Profit
The
Company recognized no gross profit in the three months ended September 30, 2017 and 2016 due to the factors described above.
Selling
Expenses
The
Company incurred no selling expenses in the three months ended September 30, 2017 and 2016 as it had no sales activity in these
periods.
General
and Administrative Expenses
General
and administrative expenses comprised the following for the three months ended September 30, 2017 and 2016.
|
|
|
GENERAL
AND ADMINISTRATIVE
|
|
|
|
|
Three
months ended
September 30, 2017
|
|
|
Three
months ended
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Independent contractors
|
|
$
|
-
|
|
|
$
|
21,000
|
|
|
Website
|
|
|
600
|
|
|
|
-
|
|
|
Professional fees
|
|
|
3,189
|
|
|
|
656
|
|
|
Technology
|
|
|
1,052
|
|
|
|
1,212
|
|
|
Product development
|
|
|
293
|
|
|
|
-
|
|
|
Travel and entertainment
|
|
|
8,582
|
|
|
|
-
|
|
|
Office expenses
|
|
|
263
|
|
|
|
89
|
|
|
Telephone
|
|
|
987
|
|
|
|
840
|
|
|
Utilities
|
|
|
1,023
|
|
|
|
|
|
|
Depreciation
|
|
|
712
|
|
|
|
712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,701
|
|
|
$
|
24,509
|
|
General
and administrative expenses consist primarily of professional advisor fees, audit fees and travel associated with exploring new
opportunities. Our general and administrative expenses for the three months ended September 30, 2017 were $7,808 less than September
30, 2016.
The
major expenses for the three months ended September 30, 2017 were in travel in developing our new product and related professional
fees.
Provision
for Income Taxes
We
incurred taxable losses; consequently, no liability for taxation was incurred during the three months ended September 30, 2017.
Net
Loss
The
net loss for the three months ended September 30, 2017 was $16,701.
Liquidity
and Capital Resources
The
Company had no cash balance as of September 30, 2017 and a working capital deficit as follows:
|
Total Current Assets
|
|
$
|
-
|
|
|
Total
Current Liabilities
|
|
|
649,054
|
|
|
Working Capital
Deficit
|
|
$
|
(649,054
|
)
|
The
ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital
and to successfully implement its business plan. Management believes that the actions presently being taken and the success of
future operations may be sufficient to enable the Company to continue as a going concern. However, there can be no assurance that
the raising of equity will be successful. Failure to achieve the needed equity funding could have a material adverse effect on
the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Cash
Flows
The
following table summarizes selected items from our accompanying
Statement of Cash Flows
for the three months ended September
30, 2017 and 2016.
|
Net Cash Provided by
(Used In):
|
|
September
30, 2017
|
|
|
September
30, 2016
|
|
|
Operating Activities
|
|
$
|
(17,643
|
)
|
|
$
|
(4,703
|
)
|
|
Investment Activities
|
|
|
-
|
|
|
|
-
|
|
|
Financing Activities
|
|
|
17,643
|
|
|
|
4,703
|
|
|
Total Change
in Cash
|
|
$
|
-
|
|
|
$
|
-
|
|
During
the three months ended September 30, 2017 and 2016, the Company’s operating expenses of $17,643 and $4,703 respectively,
were paid by loans from a shareholder of the Company.
Off
Balance Sheet Arrangements
At
September 30, 2017, we had no material off balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
ITEM
4 - Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
A
system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-l5(e)) under the Securities Exchange Act of
1934,as amended the “Exchange Act” are controls and other procedures that are designed to provide reasonable assurance
that the information that the Company is required to disclose in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such
information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the
effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention
or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating
the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls is based
in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed
in achieving its stated goals under all potential future conditions. Moreover, over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations
in a control system, misstatements due to error or fraud may occur and not be detected.
The
Company’s Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure
controls and procedures for the Company, and have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report, based on their evaluation
of these controls and procedures required by paragraph (b) of Rules 13a-15(f) and 15d-15(f), due to certain material weaknesses
in our internal control over financial reporting as discussed below.
Internal
Control over Financial Reporting
The
Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting
for the Company. Due to limited resources, Management conducted an evaluation of internal controls based on criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
The results of this evaluation determined that our internal control over financial reporting was ineffective as of September 30,
2017, due to material weaknesses. A material weakness in internal control over financial reporting is defined as a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that
a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely
basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting
that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our
financial reporting.
Management’s
assessment identified the following material weaknesses in internal control over financial reporting:
|
|
●
|
The
small size of our Company limits our ability to achieve the desired level of separation of internal controls and financial
reporting. We currently do not have independent directors on our Board of Directors to review and oversee the financial policies
and procedures of the Company.
|
|
|
|
|
|
|
●
|
We
do not have a functional audit committee since our Board of Directors acts as the audit committee.
|
|
|
|
|
|
|
●
|
We
have not achieved the desired level of documentation of our internal controls and procedures. When the Company obtains sufficient
funding, this documentation will be strengthened through utilizing a third-party consulting firm to assist management with
its internal control documentation and further help to limit the possibility of any lapse in controls occurring.
|
As
a result of the material weaknesses in internal control over financial reporting described above, the Company’s management
has concluded that, as of September 30, 2017, the Company’s internal control over financial reporting was not effective
based on the criteria in Internal Control - Integrated Framework issued by the COSO.
To
date, the Company has not been able to establish an Audit Committee with an independent director due its limited financial resources.
When the Company obtains sufficient funding, Management intends to add establish its Audit Committee and charge them with assisting
the Company in addressing the material weaknesses noted above. The Company’s lack of current financial resources makes it
impossible for the Company to hire the appropriate personnel needed to overcome these weaknesses and ensure that appropriate controls
and separation of responsibilities of a larger organization exist. We also will continue to follow the standards for the Public
Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:
|
|
●
|
Pertain
to the maintenance of records in reasonable detail accurately that fairly reflect the transactions and dispositions of the
Company’s assets;
|
|
|
|
|
|
|
●
|
Provide
reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations
of management and the Board of Directors; 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.
|
Changes
in Internal Control over Financial Reporting
Our
management determined that there were no changes made in our internal controls over financial reporting during the three months
ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect our internal control over
financial reporting.