Note 14 - Contingencies and Uncertainties

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

1

4

– 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,

2016

and

2015,

the balance sheets included accrued rent of (in USD)

$552,934

and

$289,159,

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