NOTE 1 –BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

Current Operations and Background – United Cannabis Corporation ("we", "our", "us" or "UCC") a Colorado corporation, was originally formed as a California corporation under the name MySkin, Inc. on November 15, 2007. UCC was formed as a Colorado corporation on March 25, 2014, and on May 2, 2014, MySkin, Inc. merged into UCC, a wholly-owned subsidiary of MySkin, Inc., for the purpose of changing domicile from California to Colorado and changing the corporation's name to United Cannabis Corporation.

On March 26, 2014, we entered into a License Agreement with Earnest Blackmon ("Blackmon"), Tony Verzura ("Verzura") and Chad Ruby ("Ruby") pursuant to which Blackmon, Verzura and Ruby licensed certain intellectual property to us in exchange for a total of 38,690,000 shares of our common stock.

In connection with this transaction:


•	Blackmon, Verzura and Ruby licensed to us all of their knowledge and know-how relating to the design and buildout of cultivation facilities, growing/cultivation systems, seed-to-sale protocols and procedures, products, a genetic catalogue including over 150 different strains, an advanced (non-psychoactive) cannabinoid (cannabidol or "CBD") therapy program called "A.C.T. Now", security, regulatory compliance, and any other methods and processes which relate to the cannabis industry.

•	The territory for this license is the entire world and the license runs in perpetuity. There are no royalty payments under the License Agreement.

•	Blackmon, Verzura and Ruby were appointed to our board of directors effective April 8, 2014.

•	Blackmon was elected as our President, Ruby was elected as Chief Operating Officer and Verzura was elected as Vice President. On June 24, 2014, Blackmon was elected as our CEO and CFO.

•	A total of 41,690,000 previously outstanding shares of common stock were cancelled resulting in a total of 43,620,000 shares of common stock outstanding on March 26, 2014.

As a result of this transaction our business plan has changed. We are beginning to create partnerships with businessmen, entrepreneurs, scientists and others, both domestically and internationally, for the purpose of developing cannabis-based products worldwide.

For example, we are starting to enter into licensing and consulting agreements with partners who desire to license our entire turnkey seed-to-sale business model in jurisdictions where it is legal to do so, and we plan to typically receive a percentage of their gross revenues as our fee. In addition to licensing our intellectual property, we are offering consulting services on the design and buildout of cultivation facilities; we offer training and staffing services; and we will assist our partners in finding the right locations for cultivation facilities. We provide our partners access to our genetic catalogue which includes over 15 CBD strains, over 150 THC strains and over 30 Cannabis Cup winners.

We also provide our partners access to our full range of extracted/infused medical products. Our plan includes licensing our intellectual property for whole plant activated oils, smokable concentrates, infused products, topical lotions, pills, sublingual transdermal patches and our partners will have access to future technology and products that we develop.

Our goals are to establish strong cultivation positions through our local partners in markets where it is legal and use these revenues to develop new cannabinoid based drugs for clinical FDA approval patents.

On March 31, 2014, we sold all right, title and interest in the tangible and intangible assets, trademarks, customer lists, intellectual property and rights, which we owned and were related to our advanced skin care business since we have entered into a new business and no longer have any use for these assets. The assets were sold to MySkin Services, Inc. (“MTA”), a business partly owned by Marichelle Stoppenhagen, our former officer and director, in exchange for the $15,000 payable which we owed to Ms. Stoppenhagen and/or MTA. In addition, MTA assumed all costs associated with these assets starting on March 31, 2014.

Government Regulation - Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal laws.

As of November 19, 2014, 23 states and the District of Columbia allow their citizens to use medical marijuana, and voters in the states of Colorado, Washington, Oregon, Alaska and the District of Columbia approved ballot measures to legalize cannabis for adult recreational use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration has effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the current administration will not change its stated policy regarding the low-priority enforcement of federal laws, or that any future administration would not change this policy and decide to enforce the federal laws vigorously. Any such change in the federal government's enforcement of current federal laws could cause significant financial damage to us.