10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

Form 10-Q/A

(Amendment No. 1)

(Mark one)

x	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2016
o	Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from ______________ to _____________

Commission File Number: 000-54770

MCPI, Inc.

(Exact name of registrant as specified in its charter)

Nevada	45-0704149
(State of incorporation)	(IRS Employer ID Number)

454 SW Coast Highway, Newport, OR 97365

(Address of principal executive offices)

(214) 666-8364

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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  x  NO  o

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  x  NO  o

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. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES  o  NO  x

State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: August 1, 2016: 50,220,000 shares of common stock, par value $0.001

MCPI, Inc.

AMENDMENT NO. 1 TO THE QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2016

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to our Quarterly Report on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on August 2, 2016 is to furnish Exhibits 101 to the Form 10-Q.

No changes have been made to the Quarterly Report other than the furnishing of Exhibit 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB and 101.PRE described above. This Amendment No. 1 to Form 10-Q does not reflect subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the Form 10-Q, as amended.

Part II - Other Information

Item 6 - Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002 - Chief Executive and Financial Officer (+)

32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 - Chief Executive and Financial Officer (+)

101 Interactive data files pursuant to Rule 405 of Regulation S-T.

(+) - previously filed

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MCPI, Inc.
Dated: August 4, 2016	/s/ R.Wayne Duke
	R.Wayne Duke
	Chief Executive and Financial Officer

2

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Aug. 01, 2016
Document And Entity Information
Entity Registrant Name	MCPI, Inc.
Entity Central Index Key	0001516559
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		50,220,000
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2016

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Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents
Total Current Assets	0	0
Total Assets	0	0
Current Liabilities
Accounts payable, Third parties	20,140	20,947
Accrued expenses, Related party	59,846	59,846
Accrued interest payable Related parties	105,703	81,816
Note payable to stockholder	685,851	607,314
Total Liabilities	811,540	769,923
Commitments and Contingencies
Stockholders' Equity (Deficit)
Preferred stock - $0.001 par value 25,000,000 shares authorized, None issued and outstanding.
Common stock - $0.001 par value, 500,000,000 shares authorized, 50,220,000 and 50,170,000 shares issued and outstanding	50,220	50,220
Additional paid-in capital	59,336,620	59,336,620
Accumulated deficit	(60,198,380)	(60,156,763)
Total Stockholders' Equity (Deficit)	(811,540)	(769,923)
Total Liabilities and Stockholders' Equity (Deficit)	$ 0	$ 0

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Consolidated Balance Sheets Parenthetical
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares outstanding	50,220,000	50,170,000
Common stock, shares issued	50,220,000	50,170,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares outstanding	0	0
Preferred stock, shares issued	0	0

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Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements Of Operations And Comprehensive Loss
Revenues
Cost of Sales
Gross Profit
Operating expenses
Professional fees	17,730	317,836
General and administrative costs		122,621
Depreciation and amortization
Total operating expenses	17,730	440,457
Loss from operations	(17,730)	(440,457)
Other income (expense)
Interest expense on notes payable to stockholder	(23,887)	(8,815)
Loss before provision for income taxes	(41,617)	(449,272)
Provision for income taxes
Net loss	(41,617)	(449,272)
Other comprehensive income
Comprehensive loss	$ (41,617)	$ (449,272)
Loss per weighted-average share of common stock outstanding, computed on net loss - basic and fully diluted	$ (0.00)	$ (0.01)
Weighted-average number of shares of common stock outstanding - basic and fully diluted	50,220,000	50,206,111

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Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Biginning Balance, Amount at Dec. 31, 2014	$ 50,170	$ 59,021,670	$ (59,418,274)	$ (346,434)
Biginning Balance, Shares at Dec. 31, 2014	50,170,000
Issuance of common stock for consulting fees, Amount	$ 50	14,950		15,000
Issuance of common stock for consulting fees, Shares	50,000
Contributed capital		300,000		300,000
Net loss for the year			(738,488)	(738,488)
Ending Balance, Amount at Dec. 31, 2015	$ 50,220	59,336,620	(60,156,762)	(769,923)
Ending Balance, Shares at Dec. 31, 2015	50,220,000
Issuance of common stock for consulting fees, Amount
Net loss for the year			(41,617)	(41,617)
Ending Balance, Amount at Mar. 31, 2016	$ 50,220	$ 59,336,620	$ (60,198,380)	$ (811,540)
Ending Balance, Shares at Mar. 31, 2016	50,220,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net income (loss) for the period	$ (41,617)	$ (449,272)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization
Common stock issued for professional fees		15,000
Donated capital		300,000
(Increase) Decrease in
Accounts Receivable
Accounts payable		7,726
Accrued expenses	23,080	10,143
Deferred revenues		(5,000)
Net cash used in operating activities	(18,537)	(121,403)
Cash Flows from Investing Activities
Net cash used in investing activities
Cash Flows from Financing Activities
Cash received from notes payable to stockholders	18,537	117,000
Net cash provided by financing activities	18,537	117,000
Increase (Decrease) in Cash		(4,403)
Cash at beginning of period		14,763
Cash at end of period		10,360
Supplemental Disclosure of Interest and Income Taxes Paid
Interest paid during the period
Income taxes paid during the period
Supplemental Disclosure of Non-Cash Investing and Financing Activities

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Background and Description of Business

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note A - Background and Description of Business

MCPI, Inc. (“Company” or “Med-Cannabis Pharma”) was incorporated under the laws of the State of Nevada on February 23, 2011.  The Company was originally incorporated as Southwest China Imports, Inc. on February 23, 2011 in the State of Nevada.  The Company’s initial business plan was to import high-end handmade lace wigs, hairpieces, and other beauty supplies and accessories manufactured overseas into the United States.  In June 2014, the Company changed its name to Med-Cannabis Pharma, Inc. and implemented a new business plan to enter into the retail sale of medical and personal use  marijuana, where allowable.  In October 2015, the Company changed its name to MCPI, Inc.

Effective March 31, 2016, the Company ceased activities in all of its subsidiaries and disposed of Med-Pharma Management, Inc. and High Desert MMJ, Inc.  Prior thereto, the Company’s  subsidiaries were Medical Management Systems, Inc., an Oregon corporation engaged in providing back-office and support services to marijuana dispensaries in the State of Oregon; Med-Pharma Management, Inc., a Washington State corporation which was formed to own, manage or provide back-office and support services to marijuana dispensaries in Washington State; and High Desert MMJ, Inc. an Oregon corporation, which is a 99.0% partner in Emerald Mountain Organics, an Oregon joint venture, formed to facilitate the development and growing of medical marijuana plants for wholesale distribution to licenced dispensaries in the State of Oregon.

As of September 30, 2015, Medical Management Systems, Inc. held a Management Contract for three marijuana dispensaries located in Newport, Bend and Cottage Grove, Oregon; which are owned by a company controlled by a related party.  This Management Contract was terminated by the consent of both parties, effective March 31, 2016.   Med-Pharma only conducted introductory due diligence efforts in the State of Washington and, currently, had abandoned all activities in the State of Washington.  Emerald Mountain Organics had, as of September 30,2015, established an early-phase growing operation and has generated nominal sales.

During the first 10 days of October 2015, the Company’s subsidiary, High Desert MMJ, Inc., learned that the 1.0% minority partner in the Emerald Mountain Organics joint venture had absconded with all of the assets of the joint venture.  Efforts to locate and recover either the individuals representing said 1.0% minority partner or the said absconded assets were unsuccessful.  Accordingly, effective October 10, 2015, High Desert MMJ, Inc. abandoned the Emerald Mountain Organics joint venture and wrote off said investment.  The cumulative start-up losses in the Company’s consolidated financial statements for the Emerald Mountain Organics joint venture, through the date of abandonment were approximately $53,000 and the Company recognized a loss on the stolen assets of approximately $51,000 during the quarter ended December 31, 2015.

On June 1, 2016, the Company entered into a Settlement, General and Mutual Release of Claims and Assignment of Interest Transfer Agreement (Settlement Agreement) with its majority shareholder and a related party.  The Settlement Agreement relates to the Company’s management of three medical marijuana dispensaries (Stores) located in Oregon, which are owned by Bendor Investments, Ltd. (Bendor), whose sole shareholder is Charles Stidham.  The Company owes Mr. Stidham approximately $1,100,000, including accrued interest, as of the date of the Settlement Agreement.

The Company asserted a claim for management fees of approximately $80,000 and reimbursement of monies advanced to support the operations of the Stores totaling approximately $343,000 for the services of the Company’s wholly-owned subsidiary, Medical Management Systems, Inc. (MMS), in managing the Stores.  Bendor disputed this claim.  To resolve the dispute, the parties agreed to forgive the accrued management fees and to offset the approximately $343,000 due from Bendor against the approximately $1,100,000 owed to Mr. Stidham with the Company releasing any and all interests it may have had in the Stores and MMS.  Additionally, the Company agreed to assign a trademark to Mr. Stidham as well as executing a new Note in the principal sum of $752,694.19.  The effect of the June 1, 2016 Settlement Agreement , due to the timing of this release of these amended financial statements and this transaction, is reflected in the accompanying consolidated financial statements.

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Preparation of Financial Statements

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note B - Preparation of Financial Statements

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles and has elected a year-end of December 31.

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K for the year ended December 31, 2015.  The information presented within these interim financial statements may not include all disclosures required by accounting principles generally accepted in the United States of America and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S.  Securities and Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented.  The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2016.

For segment reporting purposes, the Company operated in only one industry segment during the periods represented in the accompanying financial statements and makes all operating decisions and allocates resources based on the best benefit to the Company as a whole.

The accompanying consolidated financial statements, as of and for the periods ended March 31, 2016 and 2015, respectively, contain the accounts of MCPI, Inc.; its wholly-owned subsidiaries, Medical Management Systems, Inc., Med-Pharma Management, Inc., High Desert MMJ, Inc.; and it’s majority-owned joint venture, Emerald Mountain Organics.  All significant intercompany transactions have been eliminated.  The consolidated entities are collectively referred to as “Company”.

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Going Concern Uncertainty

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note C - Going Concern

The Company was in the initial phases of providing back-office and support services to marijuana dispensaries and participates in a marijuana development and growing operation, all located in the State of Oregon.  The dispensary operations under management by Medical Management Systems, Inc. began generating positive cash flows from operations during the 4th quarter of 2015.  However, management terminated the Medical Management Systems, Inc. Management Agreement on March 31, 2016 and wrote off all management fees (and deferred revenues) through that date.  Further, the Company liquidated its Med-Pharma Management, Inc. and High Desert MMJ, Inc. subsidiaries as of March 31, 2016.  All other efforts started by the Company and/or its subsidiaries in prior periods were either unsuccessful or abandoned.  There is no assurance that the Company will be able to successful in the implementation or operation of its current business plan.

The Company has limited operating history, limited cash on hand, no operating assets and has a business plan with inherent risk.  Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s financial statements which includes a statement describing our going concern status.  This means, in the auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.

Because of the Company's lack of operating assets, the Company’s continuance may become fully dependent upon either future sales of securities and/or advances or loans from significant stockholders or corporate officers to provide sufficient working capital to preserve the integrity of the corporate entity during the development phase.

The Company's continued existence is dependent upon its ability to implement its business plan, generate sufficient cash flows from operations to support its daily operations, and provide sufficient resources to retire existing liabilities and obligations on a timely basis.  The Company faces considerable risk in it’s business plan and a potential shortfall of funding due to our uncertainty to raise adequate capital in the equity securities market.

The Company is dependent upon existing cash balances to support its day-to-day operations.  In the event that working capital sufficient to maintain the corporate entity and implement our business plan is not available, the Company’s existing controlling stockholders intend to maintain the corporate status of the Company and provide all necessary working capital support on the Company's behalf.  However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist.  There is no legal obligation for either management or existing controlling stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for the Company’s existing controlling stockholders to have the resources available to support the Company.

The Company anticipates offering future sales of equity securities.  However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

The Company’s Articles of Incorporation authorizes the issuance of up to 25,000,000 million shares of preferred stock and 500,000,000 shares of common stock.  The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede the implementation of the Company’s business plan.  The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.

In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities.  Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note D - Summary of Significant Accounting Policies

1.           Cash and cash equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2.           Organization costs

The Company has adopted the provisions of provisions required by the Start-Up Activities topic of the FASB Accounting Standards Codification whereby all costs incurred with the incorporation and reorganization, post-bankruptcy, of the Company were charged to operations as incurred.

3.           Revenue recognition

Revenue is recognized by the Company at the point at which a transaction is delivered or services are provided to a consumer at a fixed price, collection is reasonably assured, the Company has no remaining performance obligations and no right of return by the purchaser exists.

4.           Income taxes

The Company files income tax returns in the United States of America and various states, as appropriate and applicable.  The Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to January 1, 2011.

The Company uses the asset and liability method of accounting for income taxes.  At March 31, 2016 and December 31, 2015, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences.  Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification.  The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority.  As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.

5.           Income (Loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

As of March 31, 2016 and 2015, respectively, the Company does not have any outstanding items which could be deemed to be dilutive.

6.           New and Pending Accounting Pronouncements

The Company is of the opinion that any and all other pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note E - Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates.  The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates.  The Company does not use derivative instruments to moderate its exposure to financial risk, if any.

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Notes Payable to Stockholders

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note F - Notes Payable to Stockholders

On July 28, 2014, the Company entered into a $500,000 Line of Credit note payable with South Beach Live, Ltd. (South Beach), a Company stockholder and an entity related to a significant Company stockholder, to provide funds necessary to support the corporate entity and provide working capital to pursue business combination or acquisition opportunities.  This note bore interest at 10.0% and matured in July 2015.  This note replaced a non-interest bearing shareholder note payable to a former controlling stockholder that was assumed during a 2014 change in control transaction.  During the twelve months ended December 31, 2014, the Company recognized an aggregate $4,973 as additional paid-in capital for the economic event related to the non-interest bearing feature on the assumed note payable through its retirement.

On September 30, 2015, the Company executed a replacement Promissory Note with the principal stockholder of South Beach Live, Ltd. in the amount of $927,000, bearing interest at 12.0% and payable in monthly installments of approximately $13,300, including accrued interest with a final maturity and balloon payment due on October 31, 2016.

Through March 31, 2016 and December 31, 2015, respectively, an aggregate of approximately $625,851 and $607,314, inclusive of the effect of the June 1, 2016 Settlement Agreement, as the lender continues to advance funds to support the Company’s working capital needs.  The Company is delinquent in making the required monthly installment payments.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note G - Income Taxes

The components of income tax (benefit) expense for the each of the three months ended March 31, 2016 and 2015, respectively, are as follows:

	Three months		Three months
	ended		ended
	March 31,		March 31,
	2016		2015
Federal:
Current	$	—	$	—
Deferred		—		—
		—		—
State:
Current		—		—
Deferred		—		—
		—		—
Total	$	—	$	—

As of March 31, 2016, the Company had aggregate net operating loss carryforward(s) to offset future taxable income of approximately $1,100,000.   The amount and availability of any net operating loss carryforward(s) will be subject to the limitations set forth in the Internal Revenue Code.  Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).

The Company's income tax (benefit) expense for the each of the three months ended March 31, 2016 and 2015, respectively, are as follows:

	Three months			Three months
	ended			ended
	March 31,			March 31,
	2016			2015
Statutory rate applied to income before income taxes	$	(14,000	)	$	(152,800	)
Increase (decrease) in income taxes resulting from:
State income taxes		—			—
Other, including reserve for deferred tax asset
and application of net operating loss carryforward(s)		14,000			152,800
Income tax expense	$	—		$	—

Temporary differences, consisting primarily of the prospective usage of net operating loss carryforwards give rise to deferred tax assets and liabilities as of March 31, 2016 and December 31, 2015, respectively:

	March 31,			December 31,
	2016			2015
Deferred tax assets
Net operating loss carryforwards	$	399,000		$	385,000
Less valuation allowance		(399,000	)		(385,000	)
Net Deferred Tax Asset	$	—		$	—

During the three months ended March 31, 2016 and for the year ended December 31, 2015, respectively, the valuation allowance against the deferred tax asset increased by approximately $14,000 and $251,000.

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Common Stock Transactions

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note H - Common Stock Transactions

On March 23, 2016, the Company filed an amendment to its Articles of Incorporation stating “After giving effect to a ten for one reverse split, Article III is amended to read as follows: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is five hundred twenty five million (525,000,000) shares, of which five hundred million (500,000,000) shares, par value $0.001 per share, shall be designated as “Common Stock” and twenty five million (25,000,000) shares, par value $0.001 per share, shall be designated as “Preferred Stock.”  The effect of this action is reflected in the accompanying financial statements as of the first day of the first period presented.

On January 15, 2015, the Company issued an aggregate of 50,000 shares for consulting services related to the provision of back-office and other management support services to marijuana dispensaries located in the State of Oregon.  This stock was valued at $0.30 per share, which approximated the closing price on date of the issuance.

During the period ended March 31, 2015, South Beach Live, Inc., a corporation controlled by a majority shareholder of the Company, transferred 1,000,000 shares of its holdings in the Company’s common stock to consultants for ongoing services associated with marketing strategies.  South Beach Live, Inc. is a related party and does not expect to be repaid for this transaction which was valued at approximately $300,000 and recorded as professional fees and contributed capital on the books of the Company.

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Preferred Stock

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note I - Preferred Stock

The Company is authorized to issue up to 25,000,000 shares of preferred stock, $0.001 par value.  As of December 31, 2015, there are no shares of preferred stock issued and outstanding.

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Subsequent Events

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Note J - Subsequent Events

On February 29, 2016, the Company filed a Definitive Information Statement on Schedule 14C with the Securities and Exchange Commission noting a pending 1 for 10 reverse split of the Company’s issued and outstanding common stock; as approved by the Company’s Board of Directors, and a concurrent amendment to the Company’s Articles of Incorporation setting the authorized capital of the Company from the authorized, as adjusted, 25,000,000 post-split shares of common stock to 500,000,000 shares of $0.001 par value common stock and the authorized, as adjusted, 250,000 post-split shares of preferred stock to 25,000,000 shares of $0001 par value preferred stock.  This action is anticipated to be completed during the 3rd quarter of Calendar 2016.

On June 1, 2016, the Company entered into a Settlement, General and Mutual Release of Claims and Assignment of Interest Transfer Agreement (Settlement Agreement) with its majority shareholder and a related party.  The Settlement Agreement relates to the Company’s management of three medical marijuana dispensaries (Stores) located in Oregon, which are owned by Bendor Investments, Ltd. (Bendor), whose sole shareholder is Charles Stidham.  The Company owes Mr. Stidham approximately $1,100,000, including accrued interest, as of the date of the Settlement Agreement.

The Company asserted a claim for management fees of approximately $80,000 and reimbursement of monies advanced to support the operations of the Stores totaling approximately $343,000 for the services of the Company’s wholly-owned subsidiary, Medical Management Systems, Inc. (MMS), in managing the Stores.  Bendor disputed this claim.  To resolve the dispute, the parties agreed to forgive the accrued management fees and to offset the approximately $343,000 due from Bendor against the approximately $1,100,000 owed to Mr. Stidham with the Company releasing any and all interests it may have had in the Stores and MMS.  Additionally, the Company agreed to assign a trademark to Mr. Stidham as well as executing a new Note in the principal sum of $752,694.19.

Management has evaluated all other activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition in the accompanying financial statements or disclosure in the Notes to Consolidated Financial Statements.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Summary Of Significant Accounting Policies Policies

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

Organization costs

The Company has adopted the provisions of provisions required by the Start-Up Activities topic of the FASB Accounting Standards Codification whereby all costs incurred with the incorporation and reorganization, post-bankruptcy, of the Company were charged to operations as incurred.

Revenue Recognition

Revenue is recognized by the Company at the point at which a transaction is delivered or services are provided to a consumer at a fixed price, collection is reasonably assured, the Company has no remaining performance obligations and no right of return by the purchaser exists.

Income Taxes

The Company files income tax returns in the United States of America and various states, as appropriate and applicable.  The Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to January 1, 2011.

The Company uses the asset and liability method of accounting for income taxes.  At March 31, 2016 and December 31, 2015, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences.  Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.

The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification.  The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority.  As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.

Income (Loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

As of March 31, 2016 and 2015, respectively, the Company does not have any outstanding items which could be deemed to be dilutive.

New and Pending Accounting Pronouncements

The Company is of the opinion that any and all other pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Income Taxes Tables

Components of income tax (benefit) expense

The components of income tax (benefit) expense for the each of the three months ended March 31, 2016 and 2015, respectively, are as follows:

	Three months		Three months
	ended		ended
	March 31,		March 31,
	2016		2015
Federal:
Current	$	—	$	—
Deferred		—		—
		—		—
State:
Current		—		—
Deferred		—		—
		—		—
Total	$	—	$	—

The Company's income tax (benefit) expense for the each of the three months ended March 31, 2016 and 2015, respectively, are as follows:

	Three months			Three months
	ended			ended
	March 31,			March 31,
	2016			2015
Statutory rate applied to income before income taxes	$	(14,000	)	$	(152,800	)
Increase (decrease) in income taxes resulting from:
State income taxes		—			—
Other, including reserve for deferred tax asset
and application of net operating loss carryforward(s)		14,000			152,800
Income tax expense	$	—		$	—

Schedule of deferred tax assets and liabilities

Temporary differences, consisting primarily of the prospective usage of net operating loss carryforwards give rise to deferred tax assets and liabilities as of March 31, 2016 and December 31, 2015, respectively:

	March 31,			December 31,
	2016			2015
Deferred tax assets
Net operating loss carryforwards	$	399,000		$	385,000
Less valuation allowance		(399,000	)		(385,000	)
Net Deferred Tax Asset	$	—		$	—

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Notes Payable to Stockholders (Details Narrative) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Notes Payable To Stockholders Details Narrative
Note payable to stockholder	$ 685,851	$ 607,314

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Income Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Federal:
Current
Deferred
Total
State:
Current
Deferred
Total
Total

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Income Taxes (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes Details 1
Statutory rate applied to income before income taxes	$ (14,000)	$ (152,800)
Increase (decrease) in income taxes resulting from:
State income taxes
Other, including reserve for deferred tax asset and application of net operating loss carryforward(s)	14,000	152,800
Income tax expense

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Income Taxes (Details 2) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Deferred tax assets
Net operating loss carryforwards	$ 399,000	$ 385,000
Less valuation allowance	(399,000)	(385,000)
Net Deferred Tax Asset

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Income Taxes (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes Details Narrative
Loss carry-forwards	$ 1,100,000
Deferred tax asset valuation allowance	$ 14,000	$ 251,000

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Preferred Stock (Details Narrative) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred Stock Details Narrative
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares outstanding	0	0
Preferred stock, shares issued	0	0