Note 4 - Property, Plant and Improvements

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment Disclosure [Text Block]

NOTE

– PROPERTY, PLANT AND IMPROVEMENTS

Property and equipment placed in service as of

December

31,

2016

and

2015,

consists of the following:

Description	2016		2015
Furniture and equipment	$	17,668	$	-
Accumulated depreciation		1,325		-
Net furniture and equipment	$	16,343	$	-

We have recorded

$1,325

and $- in depreciation expense for these assets for the years ended

December

31,

2016

and

2015,

respectively.

Property and improvements not placed in service as of

December

31,

2016

and

2015,

consist of the following:

Description	2016		2015
Leasehold improvements	$	6,105,711	$	6,130,644
Accumulated impairment		4,835,596		-
Net Leasehold Improvements		1,270,115		-
Land		-		1,064,651
Construction in progress		-		1,096,816
Net leasehold improvements	$	1,270,115	$	8,292,111

The Company’s fixed assets consist of the following: a property at

135

North Rear Road, and leasehold improvements at

North Rear Road. The company paid

$1,064,651

in order to buy

135

North Rear Road, which is intended to serve as an office and an experimental growing space for the Company. This amount was capitalized as an asset in the balance sheet called “land.” All of these assets were acquired during

2014.

September

2016,

the property at

135

North Rear Road was included in the deal to acquire a technology patent – see Note

for details.

The Company leases

North Rear Road from a cousin of Mr. Chaaban, the Company’s President (see note

8).

Over the course of

2014,

the Company constructed improvements to this property, including structures and equipment for growing marijuana, security fencing required for licensing as a marijuana producer, and other infrastructure. According to the terms of the lease, the owner of the property will retain possession of any immovable improvements upon the termination of the lease, but the Company believes it can realize the value of these assets once it begins operations. The Company also believes renewal of the lease is likely, but this cannot be guaranteed (see Note

for more on the lease).

The assets will be classified on the balance sheet as improvements in progress until the Company obtains a license to produce pharmaceutical-grade medical marijuana and is able to begin operations. Until that time, the Company cannot make the final additions that will be necessary for the sites to

function as growing spaces. Although there are currently grow rooms outfitted and ready to grow. The amount listed represents the capitalized costs the Company incurred in constructing the improvements, some of which were paid to related parties (see Note

7).

Our impairment assessment as of

December

31,

2016

concluded the investment at

North Rear Road is substantially impacted by the changes in Canada’s MMPR and the company is reporting impairment charges of

$4,835,596

based upon our assessment related to specialty use elements of the leasehold improvements at

North Rear Road.