Note 9 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Text Block]

NOTE 9 – COMMITMENTS AND CONTINGENCIES

On March 11, 2015, the Company’s application for a license to produce marijuana for medical purposes was formally rejected by Health Canada. The Company filed an application for judicial review in Canadian federal court on April 10, 2015 in order to obtain a reversal of this decision. The outcome of this legal proceeding cannot be predicted. The file is currently making its way through the legal process in Federal Court in Canada.

The Company’s President signed a five-year contract in August 2013 under which he is entitled to an annual salary of $1,200,000 which is reviewed each February.. Mr. Chaaban waived the Company’s accrued wages owed to him in each year that the contract was outstanding.

The Company entered into a sublease with Creative on September 1, 2013 for a 10.4 acre site of land in Canada (see Note 4). The lease has been accounted for as an operating lease. The sublease extends through March 31, 2018 and requires annual rent payments of CAD $339,000, including tax. There are two buildings on the site – one of 27,000 square feet and one of 53,000 square feet. There is also a 4,000 square foot vault for security purposes. The lessor is a cousin of Mr. Chaaban. At December 31, 2015 and 2014, the balance sheets included accrued rent of (in USD) $289,159 and $99,975, respectively. Future minimum lease payments under this operating lease (including tax) are as follows:

Fiscal Year Ending December 31,	Amount (CAD)

2016	$	339,000
2017		339,000
2018		84,750
Total	$	762,750