EQUITY METHOD INVESTMENTS

9 Months Ended

Sep. 30, 2014

EQUITY METHOD INVESTMENTS [Abstract]

EQUITY METHOD INVESTMENTS

NOTE 7 – EQUITY METHOD INVESTMENTS

Our equity method investments consist of:

	September 30,2014		December 31, 2013
Lone Mountain Partners, LLC – 25% interest	$	50,000		$	—
Om of Medicine, LLC – 15% interest		45,000			—
OM of Illinois, LLC – 33% interest		99,000			—
Cannibinoid Research & Development Company Limited – 50%		88,000			—
Total equity method investments	$	282,000		$	—

On August 14, 2014, we acquired a 25% membership interest in Lone Mountain Partners, LLC, (“Lone Mountain”) for $50,000 and a commitment to provide future services, including, but not limited to, assisting with the application to obtain licenses to operate a medical marijuana entity in Nevada and to provide  standard operating procedures, security protocols, extract processing and equipment design, cultivation and processing center management, staffing and assistance with ongoing management of Lone Mountain. As of September 30, 2014, Lone Mountain did not have any operations or operating activities. We accounted for the $50,000 cash contribution as an equity method investment on our condensed balance sheet.

On August 15, 2014, and August 31, 2014, we acquired a 15% and 33% membership interest in Om of Medicine, LLC and OM of Illinois, LLC (together the “Oms”), respectively, in return for a commitment to provide $144,000 of future services, including, but not limited to, assisting with the application to obtain licenses to operate a medical marijuana entity in Illinois and to provide  standard operating procedures, security protocols, extract processing and equipment design, cultivation and processing center management, staffing and assistance with ongoing management of the Oms. As of September 30, 2014, the Oms did not have any operations or operating activities. We accounted for this $144,000 commitment to provide services as deferred revenue in our condensed statements of operations and included this amount in equity method investments on our condensed balance sheets.

On August 15, 2014, we acquired a 50% interest in Cannibinoid Research & Development Company Limited (“CRD”), a Jamaican company, in exchange 40,000 shares of our common stock valued at $88,000 based on the previous day's closing price of our stock. We also committed to provide expertise on design-build, genetics, cultivation, production, processing, productizing, labeling, packaging, marketing, branding and distribution of products, as well as our intellectual property in the operations of CRD. As of September 30, 2014, CRD did not have any operations or operating activities. We accounted for this $88,000 as an equity method investment on our condensed balance sheet. As we have not yet issued the 40,000 shares, the $88,000 is classified as common stock not yet issued on our condensed balance sheets.