10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2017

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     

Commission file number: 333-167824

MJ HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of
incorporation or organization) 20-8235905
(I.R.S. Employer
Identification No.)

4141 NE 2nd Avenue, Suite 204-A, Miami, Florida 33137
(Address of principal executive offices) (Zip Code)

(305) 455-1881
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ   No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company þ
		(Do not check if a smaller reporting company)

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨   No þ

APPLICABLE TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of May 1, 2017
Common Stock, $0.001	12,227,939

MJ HOLDINGS, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements
	Notes to Condensed Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
Item 4.	Controls and Procedures
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Mine Safety Disclosures
Item 5.	Other Information
Item 6.	Exhibits
SIGNATURES

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PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

MJ HOLDINGS, INC.
Condensed Consolidated Balance Sheets
As of March 31, 2017 and December 31, 2016
(Unaudited)

	March 31, 2017			December 31, 2016
Assets
Current assets:
Cash	$	300,190		$	463,773
Accounts receivable		34,828			30,187
Prepaid assets		—			6,862
Current assets held for disposition		—			54,419
Total current assets		335,018			555,241
Property and equipment, net of accumulated depreciation of $944 and $778		1,056			1,222
Noncurrent assets held for disposition		—			3,807,782
Total Assets	$	336,074		$	4,364,245
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	35,567		$	130,889
Accrued liabilities due to related party		—			2,132
Current liabilities held for disposition		—			2,722,865
Total current liabilities		35,567			2,855,886
Security deposits		—			70,168
Total Liabilities		35,567			2,926,054
Stockholders’ Equity
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding		—			—
Common stock, par value $0.001, 95,000,000 shares authorized; 14,027,939 shares issued; 12,227,939 and 14,027,939 shares outstanding at March 31, 2017, and December 31, 2016, respectively		14,028			14,028
Additional paid-in capital		3,200,998			2,779,105
Accumulated deficit		(1,366,519	)		(1,354,942	)
Less: treasury stock, at cost; 1,800,000 shares at March 31, 2017		(1,548,000	)		—
Total Stockholders’ Equity		300,507			1,438,191
Total Liabilities and Stockholders’ Equity	$	336,074		$	4,364,245

See accompanying notes to unaudited condensed consolidated financial statements

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MJ HOLDINGS, INC.
Condensed Consolidated Statements of Operations
For the three months ended March 31, 2017 and 2016
Unaudited)

		2017			2016
Revenues	$	—		$	—
Operating Expenses:
General and administrative expenses		26,711			18,097
Depreciation expense		167			167
Total operating expenses		26,878			18,264
Operating loss		(26,878	)		(18,264	)
Other income		—			34
Loss before income taxes		(26,878	)		(18,230	)
Provision for income taxes		—			—
Loss from continuing operations, net of tax		(26,878	)		(18,230	)
Income from discontinued operations, net of tax		15,301			43,681
Net income (loss)	$	(11,577	)	$	25,451
Basic and diluted net income (loss) per common share:
Continuing operations	$	(0.002	)	$	(0.001	)
Discontinued operations		0.001			0.003
Net income (loss) per common share	$	(0.001	)	$	0.002
Weighted average shares outstanding, basic and diluted		12,427,939			14,027,939

See accompanying notes to unaudited condensed consolidated financial statements

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MJ HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2017 and 2016
(unaudited)

		2017			2016
Cash flow from operating activities:
Net income (loss)	$	(11,577	)	$	25,451
Less: income from discontinued operations, net of tax		(15,301	)		(43,681	)
Loss from continuing operations, net of tax		(26,878	)		(18,230	)
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities:
Depreciation		167			167
Changes in operating assets and liabilities:
Accounts receivables and other receivables		(4,641	)		—
Accounts payable and accrued liabilities		18,034			15,050
Net cash used in operating activities, continuing operations		(13,318	)		(3,013	)
Net cash provided by (used in) operating activities, discontinued operations		(15,232	)		11,377
Net Cash Provided by (Used in) Operating Activities		(28,550	)		8,364
Cash flow from investing activities:
Payment of cash through exchange offer (see Note 3)		(135,033	)		—
Net cash used in investing activities, continuing operations		(135,033	)		—
Net cash used in investing activities, discontinued operations		—			—
Net Cash Used in Investing Activities		(135,033	)		—
Cash flow from financing activities:
Net Cash Provided by Financing Activities		—			—
Net increase (decrease) in cash		(163,583	)		8,364
Cash at beginning of period		463,773			303,368
Cash at end of period	$	300,190		$	311,732
Supplemental disclosure of cash flow information:
Cash paid for interest to related party	$	45,417		$	68,125
Supplemental schedule of non-cash investing activities:
Disposition of real estate business through exchange offer (see Note 3)	$	1,126,107		$	—

See accompanying notes to unaudited condensed consolidated financial statements

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MJ HOLDINGS, INC.
Notes to the Unaudited Condensed Consolidated Financial Statements
March 31, 2017

Note 1 — Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The balance sheet at December 31, 2016, has been derived from the Company’s audited consolidated financial statements as of that date.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, that was filed with the SEC on March 30, 2017. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the full year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC, MJ Havana, LLC, and MJ Sheridan, LLC. Intercompany balances and transactions have been eliminated in consolidation.

Note 2 — Summary of Significant Accounting Policies

The significant accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. There were no material changes to our significant accounting policies during the interim period ended March 31, 2017.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting the new accounting guidance, but does not expect the adoption to have a material impact on its consolidated financial statements.

Note 3 — Disposition of Real Estate Business

On November 22, 2016 in connection with a plan to divest its real estate business, the Company submitted to its shareholders an offer to exchange (the “Exchange Offer”) the Company’s common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of the Company’s common stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company holds ownership of the real estate properties, to MJRE. MJRE will also assume the

6

senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017.

On February 1, 2017, the 1,800,000 shares of the Company’s common stock acquired in the Exchange Offer was recorded as an acquisition of treasury stock at a cost equal to the market value of the shares of the Company’s common stock accepted in the exchange offer. The difference of $421,893 between the market value of the treasury stock acquired in the Exchange Offer and the net book value of the assets and liabilities exchanged was recorded as additional paid-in capital due to the common controlling interests between the two entities involved with the Exchange Offer. In addition, $135,033 of cash was transferred to MJRE to cover accrued property taxes and security deposits, less prepaid property insurance premiums, held by the Company that were previously collected from the tenants of the real estate properties exchanged.

The historical results of the disposed assets and liabilities are shown in the Company’s financial statements as discontinued operations for periods presented before the exchange. In subsequent periods, the Company’s financial statements will no longer reflect the assets, liabilities, results of operations or cash flows attributable to the disposed assets and liabilities.

A summary of the difference between the market value of the treasury stock acquired in the Exchange Offer and the net book value of the assets and liabilities exchanged that was recorded as additional paid-in capital on February 1, 2017, is as follows:

	February 1, 2017
Treasury stock acquired via exchange
1,800,000 shares at $0.86 per share (market value as of 1/10/2017)	$	1,548,000
Net book value of assets and liabilities exchanged:
Land	$	747,389
Building and improvements		3,145,167
Less: accumulated depreciation		(266,406	)
Real estate property, net		3,626,150
Deferred rent receivable		99,359
Deferred leasing costs		127,360
Total assets exchanged		3,852,869
Notes payable, net of unamortized debt issuance costs		(2,723,292	)
Other accrued liabilities		(3,470	)
Net book value of assets and liabilities exchanged	$	1,126,107
Change in additional paid-in capital	$	421,893

A summary of the results of operations reported as discontinued operations for the three months ended March 31, 2017 and 2016:

	For the three months ended March 31,
		2017			2016
Net revenues	$	57,978		$	168,873
Operating expenses:
Property expenses		9,883			24,456
Depreciation expense		9,659			28,871
Total operating expenses		19,542			53,327
Operating income		38,436			115,546
Interest expense, net - related party		(22,708	)		(68,125	)
Interest expense, net		(427	)		(3,740	)
Income before income taxes		15,301			43,681
Provision for income taxes		—			—
Income from discontinued operations, net of tax	$	15,301		$	43,681

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Note 4 — Going Concern

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the first quarter of 2017, the Company divested their real estate properties and associated business. During the three months ended March 31, 2017, the Company generated a loss from continuing operations of $26,878 and used $13,318 of cash for operating activities. Subsequent to the divestiture of its real estate business, the Company does not expect to generate revenues for the next six to nine months. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is developing mobile and computer based applications focused on providing cannabis for medical use content and educational materials to licensed medical professionals, in addition to matching patients with medical professionals who are familiar with the therapeutic effects and indications of cannabinoids and making social connections by and between cannabis users.

Our goal is to develop a “freemium” based business model, where we offer our services for free in an effort to build and develop a user-base. We expect to generate revenues in the future through advertising and by marketing premium products and services to our growing user-base.

Although we can provide no assurances, we believe our cash on hand will provide sufficient liquidity and capital resources to fund our business for the next twelve months.

In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

Note 5 — Related Party Transactions

During the three months ended March 31, 2017 and 2016, the Company paid $45,417 and $68,125, respectively, for interest due pursuant to $2,725,000 of promissory notes held by CMG, wholly-owned by the Company’s co-CEO and shareholder, Shawn Chemtov. On February 1, 2017, the promissory notes held by CMG were exchanged as part of the Exchange Offer discussed above in Note 3.

Note 6 — Outstanding Warrants

A summary of warrants issued, exercised and expired during the three months ended March 31, 2017, is as follows:

			Weighted
			Avg.
			Exercise
Warrants:	Shares		Price
Balance at January 1, 2017	166,665	$	5.88
Issued	—		—
Exercised	—		—
Expired	—		—
Balance at March 31, 2017	166,665	$	5.88

8 

Note 7 — Basic and Diluted Earnings (Loss) per Common Share

Basic earnings (loss) per share is computed by dividing the net income or net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive.

For the three months ended March 31, 2017 and 2016, basic and diluted earnings (loss) per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. Outstanding warrants as of March 31, 2017 and 2016, to purchase 166,665 shares of common stock were not included in the calculations of diluted income per share because the impact would have been anti-dilutive for each of the periods presented.

Note 8 — Subsequent Event

On April 24, 2017, the Company entered into an employment agreement with Mr. Laufer and Mr. Chemtov, whereby Mr. Laufer and Mr. Chemtov will serve as its co-Chief Executive Officer and members of the board of directors for a term that shall begin on April 24, 2017, and, unless sooner terminated as provided therein, shall end on April 24, 2018; provided that such term of employment shall automatically extend for successive one-year periods unless either party gives at least six months’ advance written notice of its intention not to extend the term of employment.

Messrs. Laufer and Chemtov will each receive a base salary of $75,000 salary and a one-time retention bonus of $75,000. Mr. Laufer and Mr. Chemtov shall be eligible to participate in the Company’s annual performance based bonus program, as the same may be established from time to time by the Company’s Board of Directors for executive officers of the Company.

9 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our Management’s Discussion and Analysis should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this quarterly report.

Forward-Looking Statements

This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “believe,” “anticipate,” “expect,” “will,” “estimate,” “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved. Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and in our subsequent filings with the SEC, and include, among others, the following: marijuana is illegal under federal law, competition, our business is dependent on laws pertaining to the marijuana industry, government regulation, our business model depends on the availability of private funding, we will be subject to general real estate risks and the availability, if debt payments to note holder are not made we could lose our investment in our real estate properties, terms and deployment of capital. The terms “MJ Holdings, Inc.,” “MJ Holdings,” “MJ,” “we,” “us,” “our,” and the “Company” refer to MJ Holdings, Inc. 

Business Overview

MJ Holdings owned and leased real estate to licensed operators in the regulated cannabis industry. Additionally, we are developing desktop and mobile social, meet-up and health and wellness applications. Our mobile and computer based applications are focused on providing cannabis for medical use content and educational materials to licensed medical professionals, in addition to matching patients with medical professionals who are familiar with the therapeutic effects and indications of cannabinoids and making social connections by and between cannabis users.

On November 22, 2016 in connection with a plan to divest ourselves of our real estate business, we submitted to our shareholders an offer to exchange (the “Exchange Offer”) our common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, we accepted for exchange 1,800,000 shares of our common stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, we transferred our ownership interests in the real estate properties and our subsidiaries, through which we held ownership of the real estate properties, to MJRE. Effective February 1, 2017, MJRE assumed the senior notes and any and all obligations associated with the real estate properties and business.

The MJ Real Estate Partners separation was due to our inability to scale and expand our real estate business as previously planned and our intention to engage in business opportunities where we believe we have greater growth opportunities to which capital will be more readily available.

How We Plan to Generate Revenue

Our Digital Assets

We operate and are developing mobile and computer based applications focused on:

· providing cannabis for medical use content and educational materials to licensed medical professionals,

· matching patients with medical professionals who are familiar with the therapeutic effects and indications of cannabinoids and;

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· making social connections by and between cannabis users.

We have not generated any revenue from our digital assets and do not anticipate generating revenues in the next six to nine months. Our goal is to develop a “freemium” based business model, where we offer our services for free in an effort to build and develop a user-base. We expect to generate revenues in the future through advertising and by marketing premium products and services to our growing user-base.

The Company does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substances that violate the laws of the United States of America.

Critical Accounting Policies and Estimates

There were no material changes to our critical accounting policies and estimates during the interim period ended March 31, 2017.

Please see our Annual Report on Form 10-K for the year ended December 31, 2016, for a discussion of our critical accounting policies and estimates and their effect, if any, on the Company’s financial results.

Results of Operations For the Three Months Ended March 31, 2017, Compared to the Three Months Ended March 31, 2016

Revenue

We generated no revenue from continuing operations for the three months ended March 31, 2017 and 2016.

Operating Expenses

General and administrative expenses for the three months ended March 31, 2017, increased by $8,614 to $26,711 compared with general and administrative expenses of $18,097 for the three months ended March 31, 2016. The increase in general and administrative expenses during the first quarter of 2017 was primarily attributed to additional professional fees associated the Exchange Offer executed during the first quarter of 2017.

Loss from Continuing Operations

We had a loss from continuing operations of $26,878 for the three months ended March 31, 2017, compared with a loss from continuing operations of $18,230 for the three months ended March 31, 2016. The increase of $8,614 in the loss from continuing operations was primarily driven by the increase in general and administrative expenses discussed above.

Discontinued Operations

As a result of the Exchange Offer, the real estate properties and corresponding assets and liabilities included in the Exchange Offer qualified as assets held for disposition, and the results of operations to be reported as discontinued operations for the current and prior periods presented.

The following is a summary of the results of operations reported as discontinued operations for the three months ended March 31, 2017 and 2016:

	For the three months ended March 31,
	2017			2016
Rental income	$	57,978		$	168,873
Operating expenses:
Property expenses		9,883			24,456
Depreciation expense		9,659			28,871
Total operating expenses		19,542			53,327
Operating income		38,436			115,546
Interest expense, net - related party		(22,708	)		(68,125	)
Interest expense, net		(427	)		(3,740	)
Income before income taxes		15,301			43,681
Provision for income taxes		—			—
Income from discontinued operations, net of tax	$	15,301		$	43,681

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Revenues from discontinued operations for the three months ended March 31, 2017, decreased by $110,895 to $57,978 compared with revenue of $168,873 for the three months ended March 31, 2016. Revenues from discontinued operations were generated as a result of rental income from operating leases on three real estate properties that were divested as part of the Exchange Offer effective February 1, 2017. The decrease in revenue was primarily related to generating one month of revenues prior to the divestiture in February 2017, compared with three months of revenue for the first quarter of 2016.

Property expenses from discontinued operations consist of those costs associated with acquiring and leasing real estate properties that were divested as part of the Exchange Offer effective February 1, 2017. These expenses include costs for commissions, appraisals, real property taxes, insurance, repairs and maintenance. For the three months ended March 31, 2017, we incurred property expenses of $9,883 compared with $24,456 for the three months ended March 31, 2016. The decrease of $14,573 in property expenses was primarily attributed to incurring one month of expenses prior to the divestiture in February 2017, compared with three months of expenses during the first quarter of 2016.

Depreciation expense recorded for real estate properties divested as part of the Exchange Offer effective February 1, 2017, was $9,659 for the three months ended March 31, 2017, compared with depreciation expense of $24,456 for the three months ended March 31, 2016. The decrease in depreciation expense for the first quarter of 2017 was due to the divestiture of the real estate properties effective February 1, 2017.

Other Expenses

Interest expense paid to a related party is associated with promissory notes held on certain real estate properties that were divested as part of the Exchange Offer. Interest expense for the first quarter of 2017 decreased by $45,417 to $22,708 compared with interest expense of $68,125 for the first quarter of 2016. The decrease in interest expense the first quarter of 2017 was due to the divestiture of the real estate properties and the associated promissory notes effective February 1, 2017.

Interest expense associated with the amortization of debt issuance costs decreased by $3,313 to $427 for the first quarter of 2017 compared with interest expense of $3,740 for the first quarter of 2016. The decrease in the amortization of debt issuance costs for the first quarter of 2017 was due to the divestiture of the real estate properties and the associated promissory notes effective February 1, 2017.

Liquidity and Capital Resources

The following table summarizes the cash flows for the three months ended March 31, 2017 and 2016:

	For the three months ended March 31,
	2017			2016
Cash Flows:
Operating Activities:
Continuing operations	$	(13,318	)	$	(3,013	)
Discontinued operations		(15,232	)		11,377
Net cash provided by (used in) operating activities		(28,550	)		8,364
Investing Activities:
Continuing operations		(135,033	)		—
Discontinued operations		—			—
Net cash used in investing activities		(135,033	)		—
Net cash provided by financing activities		—			—
Net increase (decrease) in cash		(163,583	)		8,364
Cash at beginning of period		463,773			303,368
Cash at end of period	$	300,190		$	311,732

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The Company had cash of $300,190 at March 31, 2017, compared with cash of $463,773 at December 31, 2016, a decrease of $163,583. The decrease in cash during the three months ended March 31, 2017, was attributed to cash used in the investing activities of $135,033 and cash used in operating activities of $28,550.

Operating Activities

Continuing Operations

We had net cash used in operating activities for continuing operations of $13,318 for the three months ended March 31, 2017, which consisted of a net loss from continuing operations of $26,878 and an increase in other receivables of $4,641; partially offset by depreciation of $167 and an increase in accounts payable and accrued liabilities of $18,034.

We had net cash used in operating activities for continuing operations of $3,013 for the three months ended March 31, 2016, which consisted of a net loss from continuing operations of $18,230, partially offset by depreciation of $167 and an increase in accounts payable and accrued liabilities of $15,050.

Discontinued Operations

We had net cash used in operating activities from discontinued operations of $15,232 for the three months ended March 31, 2017, which consisted of income from discontinued operations of $15,301, non-cash charges of $9,760; offset by an increase in working capital requirements of $40,293, consisting of a decrease in accounts payable and accrued liabilities of $41,449, partially offset by a decrease in prepaid and other assets of $1,156.

We had net cash provided by operating activities from discontinued operations of $11,377 for the three months ended March 31, 2016, which consisted of income from discontinued operations of $43,681, non-cash charges of $28,445; partially offset by an increase in working capital requirements of $60,749, consisting of a decrease in accounts payable and accrued liabilities of $38,841 and a decrease in security deposits of $25,035, partially offset by a decrease in prepaid assets and other assets of $3,127.

Investing Activities

During the three months ended March 31, 2017, $135,033 of cash was transferred to MJRE to cover accrued property taxes and security deposits, less prepaid property insurance premiums, that were previously collected from the tenants of the real estate properties divested as part of the Exchange Offer.

Financing Activities

There were no financing activities during the three months ended March 31, 2017 and 2016.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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Seasonality

We do not consider our business to be seasonal.

Inflation and Changing Prices

Neither inflation or changing prices for the three and nine months ended September 30, 2016, had a material impact on our operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2017. Based on that evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2017.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2017, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rules 13a-15 or 15d-15 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

14 

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There are no legal proceedings, which are pending or have been threatened against us or any of our officers, directors or control persons of which management is aware.

Item 1A. Risk Factors

Not required for smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

The documents set forth below are filed, incorporated by reference or furnished herewith as indicated.

Index to Exhibits

Exhibit No,	Description of Exhibit
31.1*	Rule 13a14(a)/15d-14(a) Certification of co-Chief Executive Officer
31.2*	Rule 13a14(a)/15d-14(a) Certification of Chief Financial Officer
31.3*	Rule 13a14(a)/15d-14(a) Certification of co-Chief Executive Officer
32.1*	Section 1350 Certification of Chief Executive Officer
32.2*	Section 1350 Certification of Chief Financial Officer
32.3*	Section 1350 Certification of Chief Executive Officer
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**	XBRL Taxonomy Definition Linkbase Document

*	Filed Herewith
**	Furnished herewith (not filed).

15 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MJ HOLDINGS, INC.
Date: May 12, 2017	By:	/s/ Adam Laufer
		Adam Laufer
		Co-Chief Executive Officer (co-Principal Executive Officer )

	MJ HOLDINGS, INC.
Date: May 12, 2016	By:	/s/ Shawn Chemtov
		Shawn Chemtov
		Co-Chief Executive Officer and Chief Financial Officer (co-Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer )

16 

EX-31.1

Exhibit 31.1

CO-CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Adam Laufer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MJ Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: May 12, 2017	/s/ Adam Laufer
	Name:	Adam Laufer
	Title:	Co-Chief Executive Officer

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Shawn Chemtov, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MJ Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: May 12, 2017	/s/ Shawn Chemtov
	Name:	Shawn Chemtov
	Title:	Chief Financial Officer

EX-31.3

Exhibit 31.3

CO-CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Shawn Chemtov, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of MJ Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: May 12, 2017	/s/ Shawn Chemtov
	Name:	Shawn Chemtov
	Title:	Co-Chief Executive Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Adam Laufer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of MJ Holdings, Inc. on Form 10-Q for the period ended March 31, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of MJ Holdings, Inc.

Dated: May 12, 2017	/s/ Adam Laufer
	Name:	Adam Laufer
	Title:	Co-Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to MJ Holdings, Inc. and will be retained by MJ Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Shawn Chemtov, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of MJ Holdings, Inc. on Form 10-Q for the period ended March 31, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of MJ Holdings, Inc.

Dated: May 12, 2017	/s/ Shawn Chemtov
	Name:	Shawn Chemtov
	Title:	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to MJ Holdings, Inc. and will be retained by MJ Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.3

Exhibit 32.3

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Shawn Chemtov, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of MJ Holdings, Inc. on Form 10-Q for the period ended March 31, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of MJ Holdings, Inc.

Dated: May 12, 2017	/s/ Shawn Chemtov
	Name:	Shawn Chemtov
	Title:	Co-Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to MJ Holdings, Inc. and will be retained by MJ Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	MJ Holdings, Inc.
Entity Central Index Key	0001456857
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		12,227,939

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash	$ 300,190	$ 463,773
Accounts receivable	34,828	30,187
Prepaid assets		6,862
Current assets held for disposition		54,419
Total current assets	335,018	555,241
Property and equipment, net of accumulated depreciation of $944 and $778	1,056	1,222
Noncurrent assets held for disposition		3,807,782
Total Assets	336,074	4,364,245
Current liabilities:
Accounts payable and accrued liabilities	35,567	130,889
Accrued liabilities due to related party		2,132
Current liabilities held for disposition		2,722,865
Total current liabilities	35,567	2,855,886
Security deposits		70,168
Total Liabilities	35,567	2,926,054
Stockholders' Equity
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding
Common stock, par value $0.001, 95,000,000 shares authorized; 14,027,939 shares issued; 12,227,939 and 14,027,939 shares outstanding at March 31, 2017, and December 31, 2016, respectively	14,028	14,028
Additional paid-in capital	3,200,998	2,779,105
Accumulated deficit	(1,366,519)	(1,354,942)
Less: treasury stock, at cost; 1,800,000 shares at March 31, 2017	(1,548,000)
Total Stockholders' Equity	300,507	1,438,191
Total Liabilities and Stockholders' Equity	$ 336,074	$ 4,364,245

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 944	$ 778
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	95,000,000	95,000,000
Common stock, shares issued	14,027,939	14,027,939
Common stock, shares outstanding	12,227,939	14,027,939
Treasury stock, shares	1,800,000

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Revenues
Operating Expenses:
General and administrative expenses	26,711	18,097
Depreciation expense	167	167
Total operating expenses	26,878	18,264
Operating loss	(26,878)	(18,264)
Other income		34
Loss before income taxes	(26,878)	(18,230)
Provision for income taxes
Loss from continuing operations, net of tax	(26,878)	(18,230)
Income from discontinued operations, net of tax	15,301	43,681
Net income (loss)	$ (11,577)	$ 25,451
Basic and diluted net income (loss) per common share:
Continuing operations	$ (0.002)	$ (0.001)
Discontinued operations	0.001	0.003
Net income (loss) per common share	$ (0.001)	$ 0.002
Weighted average shares outstanding, basic and diluted	12,427,939	14,027,939

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flow from operating activities:
Net income (loss)	$ (11,577)	$ 25,451
Less: income from discontinued operations, net of tax	(15,301)	(43,681)
Loss from continuing operations, net of tax	(26,878)	(18,230)
Adjustments to reconcile loss from continuing operations to net cash provided by operating activities:
Depreciation	167	167
Changes in operating assets and liabilities:
Accounts receivables and other receivables	(4,641)
Accounts payable and accrued liabilities	18,034	15,050
Net cash used in operating activities, continuing operations	(13,318)	(3,013)
Net cash provided by (used in) operating activities, discontinued operations	(15,232)	11,377
Net Cash Provided by (Used in) Operating Activities	(28,550)	8,364
Cash flow from investing activities:
Payment of cash through exchange offer (see Note 3)	(135,033)
Net cash used in investing activities, continuing operations	(135,033)
Net cash used in investing activities, discontinued operations
Net Cash Used in Investing Activities	(135,033)
Cash flow from financing activities:
Net Cash Provided by Financing Activities
Net increase (decrease) in cash	(163,583)	8,364
Cash at beginning of period	463,773	303,368
Cash at end of period	300,190	311,732
Supplemental disclosure of cash flow information:
Cash paid for interest to related party	45,417	68,125
Supplemental schedule of non-cash investing activities:
Disposition of real estate business through exchange offer (see Note 3)	$ 1,126,107

XML

Interim Financial Statements

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Note 1 — Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The balance sheet at December 31, 2016, has been derived from the Company’s audited consolidated financial statements as of that date.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, that was filed with the SEC on March 30, 2017. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the full year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC, MJ Havana, LLC, and MJ Sheridan, LLC. Intercompany balances and transactions have been eliminated in consolidation.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 — Summary of Significant Accounting Policies

The significant accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. There were no material changes to our significant accounting policies during the interim period ended March 31, 2017.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting the new accounting guidance, but does not expect the adoption to have a material impact on its consolidated financial statements.

XML

Disposition of Real Estate Business

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Disposition of Real Estate Business

Note 3 — Disposition of Real Estate Business

On November 22, 2016 in connection with a plan to divest its real estate business, the Company submitted to its shareholders an offer to exchange (the “Exchange Offer”) the Company’s common stock for shares in MJ Real Estate Partners, LLC, (“MJRE”) a newly formed LLC formed for the sole purpose of effecting the Exchange Offer. On January 10, 2017, the Company accepted for exchange 1,800,000 shares of the Company’s common stock in exchange for 1,800,000 shares of MJRE’s common units, representing membership interests in MJRE. Effective February 1, 2017, the Company transferred its ownership interests in the real estate properties and its subsidiaries, through which the Company holds ownership of the real estate properties, to MJRE. MJRE will also assume the senior notes and any and all obligations associated with the real estate properties and business, effective February 1, 2017.

On February 1, 2017, the 1,800,000 shares of the Company’s common stock acquired in the Exchange Offer was recorded as an acquisition of treasury stock at a cost equal to the market value of the shares of the Company’s common stock accepted in the exchange offer. The difference of $421,893 between the market value of the treasury stock acquired in the Exchange Offer and the net book value of the assets and liabilities exchanged was recorded as additional paid-in capital due to the common controlling interests between the two entities involved with the Exchange Offer. In addition, $135,033 of cash was transferred to MJRE to cover accrued property taxes and security deposits, less prepaid property insurance premiums, held by the Company that were previously collected from the tenants of the real estate properties exchanged.

The historical results of the disposed assets and liabilities are shown in the Company’s financial statements as discontinued operations for periods presented before the exchange. In subsequent periods, the Company’s financial statements will no longer reflect the assets, liabilities, results of operations or cash flows attributable to the disposed assets and liabilities.

A summary of the difference between the market value of the treasury stock acquired in the Exchange Offer and the net book value of the assets and liabilities exchanged that was recorded as additional paid-in capital on February 1, 2017, is as follows:

	February 1, 2017
Treasury stock acquired via exchange
1,800,000 shares at $0.86 per share (market value as of 1/10/2017)	$	1,548,000
Net book value of assets and liabilities exchanged:
Land	$	747,389
Building and improvements		3,145,167
Less: accumulated depreciation		(266,406	)
Real estate property, net		3,626,150
Deferred rent receivable		99,359
Deferred leasing costs		127,360
Total assets exchanged		3,852,869
Notes payable, net of unamortized debt issuance costs		(2,723,292	)
Other accrued liabilities		(3,470	)
Net book value of assets and liabilities exchanged	$	1,126,107
Change in additional paid-in capital	$	421,893

A summary of the results of operations reported as discontinued operations for the three months ended March 31, 2017 and 2016:

	For the three months ended March 31,
		2017			2016
Net revenues	$	57,978		$	168,873
Operating expenses:
Property expenses		9,883			24,456
Depreciation expense		9,659			28,871
Total operating expenses		19,542			53,327
Operating income		38,436			115,546
Interest expense, net - related party		(22,708	)		(68,125	)
Interest expense, net		(427	)		(3,740	)
Income before income taxes		15,301			43,681
Provision for income taxes		—			—
Income from discontinued operations, net of tax	$	15,301		$	43,681

XML

Going Concern

3 Months Ended

Mar. 31, 2017

Going Concern [Abstract]

Going Concern

Note 4 — Going Concern

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the first quarter of 2017, the Company divested their real estate properties and associated business. During the three months ended March 31, 2017, the Company generated a loss from continuing operations of $26,878 and used $13,318 of cash for operating activities. Subsequent to the divestiture of its real estate business, the Company does not expect to generate revenues for the next six to nine months. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is developing mobile and computer based applications focused on providing cannabis for medical use content and educational materials to licensed medical professionals, in addition to matching patients with medical professionals who are familiar with the therapeutic effects and indications of cannabinoids and making social connections by and between cannabis users.

Our goal is to develop a “freemium” based business model, where we offer our services for free in an effort to build and develop a user-base. We expect to generate revenues in the future through advertising and by marketing premium products and services to our growing user-base.

Although we can provide no assurances, we believe our cash on hand will provide sufficient liquidity and capital resources to fund our business for the next twelve months.

In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Note 5 — Related Party Transactions

During the three months ended March 31, 2017 and 2016, the Company paid $45,417 and $68,125, respectively, for interest due pursuant to $2,725,000 of promissory notes held by CMG, wholly-owned by the Company’s co-CEO and shareholder, Shawn Chemtov. On February 1, 2017, the promissory notes held by CMG were exchanged as part of the Exchange Offer discussed above in Note 3.

XML

Outstanding Warrants

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Outstanding Warrants

Note 6 — Outstanding Warrants

A summary of warrants issued, exercised and expired during the three months ended March 31, 2017, is as follows:

			Weighted
			Avg.
			Exercise
Warrants:	Shares		Price
Balance at January 1, 2017	166,665	$	5.88
Issued	—		—
Exercised	—		—
Expired	—		—
Balance at March 31, 2017	166,665	$	5.88

XML

Basic and Diluted Earnings (Loss) per Common Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Basic and Diluted Earnings (Loss) per Common Share

Note 7 — Basic and Diluted Earnings (Loss) per Common Share

Basic earnings (loss) per share is computed by dividing the net income or net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive.

For the three months ended March 31, 2017 and 2016, basic and diluted earnings (loss) per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. Outstanding warrants as of March 31, 2017 and 2016, to purchase 166,665 shares of common stock were not included in the calculations of diluted income per share because the impact would have been anti-dilutive for each of the periods presented.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 8 — Subsequent Event

On April 24, 2017, the Company entered into an employment agreement with Mr. Laufer and Mr. Chemtov, whereby Mr. Laufer and Mr. Chemtov will serve as its co-Chief Executive Officer and members of the board of directors for a term that shall begin on April 24, 2017, and, unless sooner terminated as provided therein, shall end on April 24, 2018; provided that such term of employment shall automatically extend for successive one-year periods unless either party gives at least six months’ advance written notice of its intention not to extend the term of employment.

Messrs. Laufer and Chemtov will each receive a base salary of $75,000 salary and a one-time retention bonus of $75,000. Mr. Laufer and Mr. Chemtov shall be eligible to participate in the Company’s annual performance based bonus program, as the same may be established from time to time by the Company’s Board of Directors for executive officers of the Company.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting the new accounting guidance, but does not expect the adoption to have a material impact on its consolidated financial statements.

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Disposition of Real Estate Business (Tables)

3 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Summary of Assets and Liabilities Held for Disposition

A summary of the difference between the market value of the treasury stock acquired in the Exchange Offer and the net book value of the assets and liabilities exchanged that was recorded as additional paid-in capital on February 1, 2017, is as follows:

	February 1, 2017
Treasury stock acquired via exchange
1,800,000 shares at $0.86 per share (market value as of 1/10/2017)	$	1,548,000
Net book value of assets and liabilities exchanged:
Land	$	747,389
Building and improvements		3,145,167
Less: accumulated depreciation		(266,406	)
Real estate property, net		3,626,150
Deferred rent receivable		99,359
Deferred leasing costs		127,360
Total assets exchanged		3,852,869
Notes payable, net of unamortized debt issuance costs		(2,723,292	)
Other accrued liabilities		(3,470	)
Net book value of assets and liabilities exchanged	$	1,126,107
Change in additional paid-in capital	$	421,893

Schedule of Summary of Results of Operations Reported as Discontinued Operations

A summary of the results of operations reported as discontinued operations for the three months ended March 31, 2017 and 2016:

	For the three months ended March 31,
		2017			2016
Net revenues	$	57,978		$	168,873
Operating expenses:
Property expenses		9,883			24,456
Depreciation expense		9,659			28,871
Total operating expenses		19,542			53,327
Operating income		38,436			115,546
Interest expense, net - related party		(22,708	)		(68,125	)
Interest expense, net		(427	)		(3,740	)
Income before income taxes		15,301			43,681
Provision for income taxes		—			—
Income from discontinued operations, net of tax	$	15,301		$	43,681

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Outstanding Warrants (Tables)

3 Months Ended

Mar. 31, 2017

Outstanding Warrants Tables

Summary of warrants issued, exercised and expired

A summary of warrants issued, exercised and expired during the three months ended March 31, 2017, is as follows:

			Weighted
			Avg.
			Exercise
Warrants:	Shares		Price
Balance at January 1, 2017	166,665	$	5.88
Issued	—		—
Exercised	—		—
Expired	—		—
Balance at March 31, 2017	166,665	$	5.88

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Disposition of Real Estate Business (Narrative) (Details) - USD ($)	Jan. 10, 2017	Feb. 01, 2017
Disposition Of Real Estate Business Narrative Details
Treasury stock, cost per share	$ 0.86
Additional paid-in capital		$ 421,893
Cash transferred for acrrued taxes		$ 135,033
Number of shares issued in exchange for same number of MJRE's common units	1,800,000
Treasury stock shares acquired	1,800,000

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Disposition of Real Estate Business (Schedule of Summary of Assets and Liabilities Held for Disposition) (Details) - USD ($)	Mar. 31, 2017	Feb. 01, 2017	Dec. 31, 2016
Treasury stock acquired via exchange
1,800,000 shares at $0.86 per share (market value as of 1/10/2017)	$ 1,548,000	$ 1,548,000
Net book value of assets and liabilities exchanged:
Land		747,389
Building and improvements		3,145,167
Less: accumulated depreciation		(266,406)
Real estate property, net		3,626,150
Deferred rent receivable		99,359
Deferred leasing costs		127,360
Total assets exchanged		3,852,869
Notes payable, net of unamortized debt issuance costs		(2,723,292)
Other accrued liabilities		(3,470)
Net book value of assets and liabilities exchanged		1,126,107
Change in additional paid-in capital		$ 421,893

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Disposition of Real Estate Business (Schedule of Summary of Results of Operations Reported) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]
Net revenues	$ 57,978	$ 168,873
Operating expenses:
Property expenses	9,883	24,456
Depreciation expense	9,659	28,871
Total operating expenses	19,542	53,327
Operating income	38,436	115,546
Interest expense, net - related party	(22,708)	(68,125)
Interest expense, net	(427)	(3,740)
Income before income taxes	15,301	43,681
Provision for income taxes
Income from discontinued operations, net of tax	$ 15,301	$ 43,681

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Going Concern (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Going Concern [Abstract]
Loss before income taxes	$ 26,878	$ 18,230
Cash used for operating activities	$ 13,318	$ 3,013

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Related Party Transactions (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transaction [Line Items]
Promissory note held by related party			$ 2,132
Chemtov Mortgage Group [Member]
Related Party Transaction [Line Items]
Interest paid to the promissory note held by CMG	45,417	$ 68,125
Promissory note held by related party	$ 2,725,000

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Outstanding Warrants (Schedule of Warrants Issued, Exercised and Expired) (Details) - Warrant [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Warrants:
Balance at the beginning of the period | shares	166,665
Issued | shares
Exercised | shares
Expired | shares
Balance at the end of the period | shares	166,665
Weighted Avg. Exercise Price
Balance at the beginning of the period | $ / shares	$ 5.88
Issued | $ / shares
Exercised | $ / shares
Expired | $ / shares
Balance at the end of the period | $ / shares	$ 5.88

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Basic and Diluted Earnings (Loss) per Common Share (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Warrants excluded from calculation of of diluted income per share	166,665	166,665

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Subsequent Events (Details) - Subsequent Event [Member]	1 Months Ended
	Apr. 24, 2017 USD ($)
Messr Laufer [Member]
Subsequent Event [Line Items]
Salary	$ 75,000
One time retention bonus	75,000
Messr Chemtov [Member]
Subsequent Event [Line Items]
Salary	75,000
One time retention bonus	$ 75,000