Our Strategic Alliances and Collaborations

To date, we have entered into a collaboration agreement with Sheba Academic Medical Center, the largest hospital in Israel and in the Middle East. Within the framework of a new collaboration agreement, the Company will initiate two studies; one on multiple myeloma and one on psoriasis, starting with a basic science on multiple myeloma cells.

We are in the process of finalizing additional collaboration agreements with other research institutes for several additional studies and clinical trials.

Market and Competition

According to the 2014 edition of the Marijuana Business Factbook, U.S. retail sales of medical Cannabis are expected to rise significantly over the next five years from an estimated $2.2 billion in 2014 to $8.2 billion in 2018.

We believe that North America will represent a major market for our cannabis-based medical Prospect Products due in large part to the success of recent efforts to legalize the use of medical marijuana at the state level throughout the United States, where it is now legal to some extent or other in 23 states and the District of Columbia. It can also be expected that there will be policy changes in the European Union concerning the use of marijuana and Cannabis-based products for medical use.

We believe that there will be rising demand for cannabis derived medical products and that future growth is expected to be driven by favorable changes in legislation and demographic factors.

We face competition from larger companies that are or may be in the process of offering similar products to ours. Many of our current and potential competitors have longer operating histories, significantly greater financial, marketing and other resources than we may be expected to have.

Competitors may include major pharmaceutical and biotechnology companies and public and private research institutions. However, we believe that our own Prospect Products will be able to compete with existing therapies and new therapies that may become available in the future.

Management cannot be certain that we will be able to compete against current or future competitors or that competitive pressure will not seriously harm our business prospects. These competitors may be able to react to market changes, respond more rapidly to new regulations or allocate greater resources to the development and promotion of their products than we can.

Furthermore, some of these competitors may make acquisitions or establish collaborative relationships among themselves to increase their ability to rapidly gain market share. Large pharmaceutical companies may eventually enter the market.

Given the rapid changes affecting the global, national, and regional economies in general and Cannabis-related medical research and development in particular, we may not be able to create and maintain a competitive advantage in the marketplace. Time-to-Market is an important factor and our success will depend on our ability to develop innovative products that will be accepted by patients.

Our success will also depend on our ability to respond quickly to, among other things, changes in the economy, market conditions, and competitive pressures. Any failure to anticipate or respond adequately to such changes could have a material effect on our financial condition, operating results, liquidity, cash flow and our operational performance.

There can be given no assurance that any of our on cannabidiol-based medical products will obtain regulatory approval in the US or in other markets that we intent to market such products.

Intellectual Property

To date, OWC have filed five provisional patent applications in the areas of cancer, skin disease, pain management, psychiatric treatment and recreational use. Five additional provisional applications are scheduled to be submitted during 2015.

The Company will retain the intellectual property rights to proprietary discoveries made in conjunction with OWC initiatives and plans to work to secure patent protections.

The table below depicts the Company's pending patent applications:

We anticipate additional patent applications in conjunction with our research, testing, and development of treatment options using the cannabidiol present in the Cannabis plant.

At present, there are legal limitations in the US related to granting federal trademarks for Cannabis and related products. To date, Cannabis is still designated a Schedule 1 drug as defined by the United States Controlled Substances Act. The following facts are required for drugs to be placed in this schedule:

1. The drug or other substance has a high potential for abuse.
2. The drug or other substance has no currently accepted medical use in treatment in the United States.
3. There is a lack of accepted safety for use of the drug or other substance under medical supervision.

Except as specifically authorized, it is illegal for any person:

- to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance; or
- to create, distribute, or dispense, or possess with intent to distribute or dispense, a counterfeit substance.

As a result, the Company believes that Federal courts are unlikely to hear intellectual property litigation cases, which poses limitations on our ability to protect use intellectual property protection.

U.S. Government Regulation

To date, there are twenty three states and the District of Columbia that have laws and/or regulation that recognize the legitimate medical uses for Cannabis and consumer use of Cannabis and related products in connection with medical treatment. Fifteen other states are in the process of considering legislation to similar effect. To date, the policy and regulations of the Federal government and its agencies is that Cannabis has no medical benefit and a range of activities including cultivation and use of Cannabis for personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law.

If the federal government decides to enforce the Controlled Substances Act in any U.S. state that has laws and/or regulation that recognize the legitimate medical uses for Cannabis and consumer use of Cannabis and related products, persons that are charged with distributing, possessing with intent to distribute, or growing marijuana could be subject to fines and terms of imprisonment, the maximum being life imprisonment and a $50 million fine.

The present administration has repeatedly stated that it is not inclined to use federal resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the present administration will not change its stated policy regarding the low-priority enforcement of federal laws. Additionally, any subsequent administration could modify this policy and decide to enforce the federal laws. Any such change in the federal government's enforcement of current federal laws could cause substantial harm to our business prospects in the U.S. While we do not intend to harvest, distribute or sell Cannabis, we may be irreparably harmed by a change in enforcement by the federal or state governments.

Despite the foregoing, the Department of Justice has continued to enforce the Controlled Substance Act with respect to marijuana to prevent:

Ÿ the distribution of marijuana to minors;
Ÿ criminal enterprises, gangs and cartels receiving revenue from the sale of marijuana;
Ÿ the redistribution of marijuana from states where it is legal under state law to other states;
Ÿ state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
Ÿ violence and the use of firearms in the cultivation and distribution of marijuana;
Ÿ driving while impaired and the exacerbation of other adverse public health consequences associated with marijuana use;
Ÿ the growing of marijuana on public lands; and
Ÿ marijuana possession or use on federal property.

Government Regulations Outside of the US.

In addition to regulations in the United States, we will be subject, either directly or through our third-party affiliations or partnerships, to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our Cannabis related products, if and when approved.

Whether or not we obtain FDA approval for any Cannabis-related product, we must obtain the requisite approvals from regulatory authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United States have a process that requires the submission of a clinical trial application much like an IND prior to the commencement of human clinical trials. In Europe, for example, a clinical trial application ("CTA"), must be submitted to the each national health authority and to independent ethics committees in each country in which a company intends to conduct clinical trials. Once the CTA is approved in accordance with a country's requirements, clinical trial development may proceed in that country.

The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country, even though there is already some degree of legal harmonization in the European Union member states resulting from the national implementation of underlying E.U. legislation. In all cases, the clinical trials must be conducted in accordance with GCP and other applicable regulatory requirements.

For countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. However, the clinical trials in all countries must be conducted in accordance with GCP and the other applicable regulatory requirements.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

In addition, most countries are parties to the Single Convention on Narcotic Drugs 1961, which governs international trade and domestic control of narcotic substances, including Cannabis extracts. Countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to our obtaining marketing approval for any Cannabis related product in those countries. These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit our Cannabis related products to be marketed, or achieving such amendments to the laws and regulations may take a prolonged period of time. In that case, we would be unable to market our products in those countries in the near future or perhaps at all.

Employees

We presently have no full-time employees. Our CEO and CFO are employed under services agreements with the company. Our officers and directors are expected to dedicate approximately 60% of their professional time to our business development until such time that we receive regulatory approval of any prospect product.

ITEM 1A. RISK FACTORS Back to Table of Contents

Risks Related to Our Business

Our Independent Registered Public Accounting Firm has expressed substantial doubt as to our ability to continue as a going concern.

The audited financial statements included in this annual report have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern. We believe that in order to continue as a going concern, including the costs of being a public company, we will need approximately $60,000 per year simply to cover the administrative, legal and accounting fees. We have incurred significant losses since our inception. We have funded these losses primarily through the sale of restricted shares of our Common Stock and the issuance of convertible notes, which have subsequently been converted into restricted shares of Common Stock.

Based on our financial history, in their report on the financial statements for the year ended December 31, 2014, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern. We are a development stage company that has generated no revenue.

Notwithstanding our success in raising over $2.1 million from the sale of our securities, principally during 2014, there can be no assurance that we will be able to continue to raise equity and/or debt capital from investors at terms and conditions satisfactory to the Company, or otherwise, and/or have adequate capital resources required by us to fund our current and future planned operations. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our plan of operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.

We face many of the risks and difficulties frequently encountered by relatively new companies with respect to both of our operations.

The Company's business involves two distinct operations: (i) the development, manufacture and sale of our Electronic Percussion Device, relying on the services and expertise of GUMI; and (ii) on conducting scientific research, in collaboration with leading universities and institutions in Israel on Cannabis for medical treatment. We have not yet generated any revenues from our Device, nor do we anticipate generating revenues from our Cannabis-based medical product activities until in or about the second quarter of 2016, at the earliest. Notwithstanding the significant scientific and medical experience of OWC's management and advisory team, neither the Company nor OWC have any operating history as a medical research company engaged in Cannabis research or any other related field upon which an evaluation of the Company and its prospects could be based. There can be no assurance that our management will be successful in being able to commercially exploit the results, if any, from our medical and scientific research projects or that we will be able to develop products and treatments that will enable us to generate sufficient revenues to meet our expenses or to achieve and/or maintain profitability.

If we are unable to raise sufficient capital as needed, we may be required to reduce the scope of our research and development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you will lose all your investment.

We must rely on GUMI Tel-Aviv to develop, manufacture and market commercial models of our Electromagnetic Percussion Device.

We are dependent upon the ability of GUMI Tel-Aviv to develop, manufacture and market commercial models of our Electromagnetic Percussion Device. While GUMI has completed development of our Device and produced several commercial models, to date there have been no sales revenues from our Device and there can be no assurance that GUMI will be successful generating sufficient revenues or profits from the sale and marketing of our Device. 

We are a small company with limited resources compared to some of our potential competitors engaged in the manufacture and sale of electromagnetic percussion devices may not be able to compete effectively in this market.

The electromagnetic percussion industry is very competitive and although we believe our technology offers unique development opportunities, there can be no assurance that the perceived advantages and features of our Device are enough to effectively capture a significant enough market share to successfully launch and sustain our product. Most of our current and potential competitors have longer operating histories, significantly greater resources and name recognition, and a larger base of distributors and customers than we have.

We have limited operating history in the field of medical research and face many of the risks and difficulties frequently encountered by early tage companies.

The Company's focus on conducting scientific research, in collaboration with leading universities and institutions in Israel on Cannabis for medical treatment has not yet generated any revenues, nor do we anticipate generating revenues until in or about the second quarter of 2016, at the earliest. Notwithstanding the significant scientific and medical experience of OWC's management and advisory team, neither the Company nor OWC have any operating history as a medical research company engaged in Cannabis research or any other related field upon which an evaluation of the Company and its prospects could be based. There can be no assurance that our management will be successful in being able to commercially exploit the results, if any, from our medical and scientific research projects or that we will be able to develop products and treatments that will enable us to generate sufficient revenues to meet our expenses or to achieve and/or maintain profitability.

If we are unable to raise sufficient capital as needed, we may be required to reduce the scope of our research and development activities, which could harm our business plans, financial condition and operating results, or cease our operations entirely, in which case, you will lose all your investment.

Our business success depends on laws, both U.S. and international, pertaining to Cannabis and Cannabinoids.

Our business is dependent on the laws and regulations in Israel, the United States and internationally that are or may become applicable currently and in the future to the Cannabis plant generally and to the use of Cannabis and its cannabinoid derivatives for scientific, medical and recreations purposes, specifically. The growth of the market related to Cannabis-related products is dependent upon continued legislative authorization of the wide and varied uses of Cannabis and cannabinoids. Any number of factors, such as litigation, could slow or halt progress in this area. In addition, further deregulation, while increasingly expected in the United States and/or among the states, as well as internationally, is not assured. While there may be growing public support, particularly in the United States, for legislative action liberalizing laws applicable to Cannabis, numerous factors can impact the legislative process in Israel, the United States, the different states and other countries. Any one of these factors could slow or halt Cannabis-based medical research and product and treatment development, which would negatively impact our business.

Changes in consumer preferences and acceptance of Cannabis-based medical products and treatments and any negative trends will adversely affect our business.

We are substantially dependent on continued market acceptance and proliferation of Cannabis-based medical products and treatments. We believe that as Cannabis-based products and treatments become more widely accepted by the medical/scientific communities and the public at large, the stigma associated with Cannabis-based medical products and treatments will moderate and, as a result, consumer demand will likely continue to grow. However, we cannot predict the future growth rate and size of the market, assuming that the regulatory climate permits, of which there can be no assurance. Any negative outlook on Cannabis-based medical products will adversely affect our business prospects.

In addition, we believe that large, well-funded pharmaceutical and other related businesses and industries may have a strong economic reasons to be in strong opposition to Cannabis-based medical products. We believe that the pharmaceutical industry may not easily surrender control of any product, such as Cannabis-based products, that could generate significant revenue. The pharmaceutical industry is well-funded with a strong and experienced lobby presence at both the federal and state levels as well as internationally, that surpasses financial resources of the current group of medical Cannabis research and development companies. Any effort the pharmaceutical lobby could or might undertake to halt or delay the newly developing medical Cannabis industry could have a detrimental impact on our business.

Cannabis-based medical products contain controlled substances, the use of which may generate negative public debate.

Since our prospect products will contain Cannabis and/or cannabinoids, which are currently controlled substances, efforts to secure requisite regulatory approvals may generate public controversy and negative responses by both the regulators and the public. Political and social pressures and adverse publicity could lead to delays in approval of, and increased expenses associated with the approval process for any Cannabis-based medical products and treatments that we may develop. These pressures could also limit or restrict the introduction and marketing of any such product. Adverse publicity from Cannabis misuse or adverse side effects from Cannabis or other cannabinoid products may adversely affect the commercial success or marketability. The nature of our business attracts and may be expected to continue to attract a high level of public and media interest and, in the event of any related adverse publicity, we may not succeed in monetizing our products.

Our Cannabis-related prospect products face uncertain demand.

Demand for medical Cannabis-based products is dependent on a number of social, political and economic factors that are beyond our control. While we believe that demand for such medical products will continue to grow, there is no assurance that such increase in demand will happen, that we will benefit from any demand increase or that our business, in fact, will ever become profitable.

Our involvement in the Cannabis industry may make it difficult to obtain insurance coverage.

In the event that we decide to commence business operations in the U.S., of which there can be no assurance, obtaining and maintaining necessary insurance coverage, for such things as workers compensation, general liability, product liability and directors and officers insurance, may be more difficult and/or expensive for us to find because we are involved in the Cannabis industry. There can be no assurance that we will be able to find such insurance in the near future, if needed, or that the cost of coverage will be affordable or cost-effective. If, either because of unavailability or cost prohibitive reasons, we are compelled to operate without insurance coverage, we may be prevented from entering certain business sectors, experience inhibited growth potential and/or expose us to additional risks and financial liabilities.

We are entering a potentially highly competitive market.

The emerging markets for Cannabis-related medical research and development is and will likely remain both competitive and evolve into becoming even more so. In particular, we face strong competition from larger and better funded companies that may be in the process of offering similar products and treatments that we intend to offer. Many of our current and potential competitors have longer operating histories, significantly greater financial, marketing and other resources than we may be expected to have for the foreseeable future, notwithstanding our belief in the strength of our management team.

These competitors may be able to react to market changes, respond more rapidly to new regulations and/or allocate greater resources to the development and promotion of their products than we can. Furthermore, some of these competitors may make acquisitions or establish collaborative relationships among themselves or with third parties to increase their ability to rapidly gain market share.

Given the rapid changes affecting the global, national, and regional economies generally and the Cannabis-related medical research and development industry, in particular, we may not be able to create and maintain a competitive advantage in the marketplace. Our success will depend on our ability to develop innovative Cannabis-related products and treatments working with our university and institutional partners that will be accepted, especially with ever-changing legal and regulatory environment. Our success will depend on our ability to respond to, among other things, changes in the economy, market conditions, and competitive pressures. Any failure by us to anticipate or respond adequately to such changes could have a material adverse effect on our financial condition, operating results, liquidity, cash flow and our operational performance.

Changes in legislation or regulation in the health care systems in the United States and foreign jurisdictions may affect us.

Our ability to successfully commercialize our Cannabis-based medical products and treatments, alone and/or, as anticipated, with collaborators including major universities and scientific institutions principally in Israel, may depend on how Israel and other respective governments and/or health administrations provide coverage and/or reimbursements for our Cannabis-based prospect products and treatments. The ongoing efforts of governments, insurance companies, and other participants in the health care services industry to trim health care costs may adversely affect our ability to achieve profitability.

In certain foreign markets, including major markets in the European Union, pricing of prescription pharmaceuticals is subject to governmental control. Price negotiations with governmental authorities may range from 6 to 12 months or longer after the receipt of regulatory marketing approval for a product. Our business could be detrimentally effected if reimbursements of our Cannabis-based products is unavailable or limited if pricing is set at unacceptable levels.

Our failure to comply with existing and potential future laws and regulations could harm our plan of operations.

We will be subject to wide-ranging, existing as well as new laws and regulations by U.S. federal, state and foreign governments and in each of the countries we plan to market our products. We must comply to all regulatory requirements if we expect to be successful.

If any of our Cannabis-based prospect products and treatments is approved in the United States, it will be subject to ongoing regulatory requirements including federal and state requirements. As a result, we and our collaborators and/or joint venture partners must continue to expend time, money and effort in all areas of regulatory compliance, including, if applicable, manufacturing, production, quality control and assurance and, of upmost importance, clinical trials. We will also be required to report certain adverse reactions and production problems, if any and applicable, to the FDA, and to comply with advertising and promotion requirements for our Cannabis-based prospect products and treatments.

Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to conduct clinical trials which are prerequisite to our ability to commercialize our Cannabis-based medical products and related treatments. If regulatory sanctions are applied or if regulatory approval, once obtained, is for any reason withdrawn, the value of our business and our operating results could be materially adversely affected.

We will rely to a great extend on research collaboration with third-party institutions.

We will rely significantly on research collaboration with hospitals and research institutes, virtually all of which are in Israel. We have already entered into agreements and intend to enter into additional agreements with leading institutions in Israel for pre-clinical and clinical trials on Cannabis-related treatments of a variety of medical conditions.

Our research collaboration agreements provide and are expected to continue to provide that all intellectual property rights, including both patents, use patents and non-manufacturing related know-how, treatments and dosages, among other things, be owned by us and/or jointly with the partner institutions. To date, we have 6 patent applications pending before the U.S. Patent and Trademark Office. If we decide to jointly own intellectual property, we may need to seek our partners consent to pursue, use, license and/or enforce some of the jointly-owned intellectual property. Deterioration in any research collaboration relationship would have a material adverse effect on our business, results of operations and financial condition.

Collaboration agreements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize Cannabis-based product.

We may also enter into collaboration agreements with pharmaceutical or biotechnology institutes for the development or commercialization of our Cannabis-based prospect products and treatments. We may enter into such agreements based on the merits of retaining certain rights. We will face significant competition in seeking appropriate collaborators and in negotiating agreements at acceptable terms, if at all. We may not be successful in our efforts to enter, implement and maintain collaboration agreements. Disagreements stemming from collaboration agreements concerning development, intellectual property, regulatory or commercialization matters can lead to delays and, in some cases, termination of such collaboration agreements or otherwise result in the potentially significant costs and fees in seeking to enforce or protect our rights, if any. These disagreements can be difficult if, in fact, neither of the parties has final decision making authority. The resulting outcome of any disputes and/or disagreements could in all likelihood adversely affect our business.

Clinical trials of Cannabis-based medical products and treatments are novel terrain with very limited or non-existing clinical trials history; we face a significant risk that the trials will not result in commercially viable products and treatments.

We have no clinical trial history from which we can, at present, derive any conclusions from or to prove that our assumptions for the trials, other than limited sporadic observational or anecdotal studies are scientifically compelling. Furthermore, no officer or director of the Company, other than Dr. Yehuda Baruch and Dr. Alan Shackelford, has a direct record of accomplishment of conducting such scientific studies, none of which were conducted since they accepted positions with OWC. As a result, we face a significant risk that requires us to use outsourced specific researchers for several or all studies, which may be expected to be highly costly.

If the clinical trial studies of our Cannabis-based prospect products and treatments do not produce results necessary to support regulatory clearance or approval, we will be unable to commercialize our products.

We intend, with and through our collaborator institutions, to conduct clinical trials and we reasonably expect several trials to commence during the fourth quarter of 2015. To date, we applied for internal review board (IRB) approval to the multiple myeloma study. We expect to obtain the approval and that the basic science phase of the trial will commence during Q2 of 2015. The actual clinical trials are expected to take in between from 3 and 18 months, are expensive and carry uncertain outcomes in each instance. The initiation and completion of the trial study may be prevented, delayed, or halted for numerous reasons, including, but not limited to, the following:

- patients do not enroll in, or enroll at a lower rate than we expect, or do not complete a clinical trial study;
- patients or investigators do not comply with study protocols;
- patients do not return for post-treatment follow-up at the expected rate;
- patients experience serious or unexpected adverse side-effects for a variety of reasons that may or may not be related to our products, treatments and/or dosages, causing a clinical trial study to be put on hold or terminated;
- sites participating in an ongoing clinical study withdraw, requiring us to engage new sites;
- third-party clinical investigators decline to participate in our clinical studies, do not perform the clinical studies on the anticipated schedule, or act in ways inconsistent with the established investigator agreement, clinical study protocol, good clinical practices, and other Institutional Review Board requirements;
- third-party entities do not perform data collection and analysis in a timely or accurate manner or at all;
- regulatory inspections of our clinical studies require us to undertake corrective action or suspend or terminate our clinical studies;
- changes in federal, state, or foreign governmental statutes, regulations or policies;
- interim results are inconclusive or unfavorable as to immediate and long-term safety or efficacy; or
- the study design is inadequate to demonstrate safety and efficacy.

Clinical trial failure can occur at any stage of the testing. Our clinical study may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and/or non-clinical testing in addition to those we have planned and for which we have budgeted. Our failure to adequately demonstrate the safety and efficacy of our Cannabis-based prospect products and treatments could prevent receipt of regulatory clearance or approval and, ultimately, the commercialization of these products or indications for use. Any of these occurrences may harm our business, financial condition and prospects significantly.

If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business may fail.

Our future success depends, to a significant extent, on our ability to attract, train and retain capable scientists and physicians, enter into collaboration agreements for our research and managerial personnel. Recruiting and retaining capable personnel, particularly those with expertise with medical research, is vital to our success. If we are unable to attract and retain qualified employees, our business may fail and our investors could lose their entire investment.

At present, we believe to have the necessary key personal to carry out our business plans but there can be no assurance that our beliefs prove unfounded. If we are unable to protect our intellectual property, our business will be materially adversely affected.

We may become subject to frequent and costly litigation regarding patent and other intellectual property rights. It is possible that our prospect products and treatments may not withstand challenges made by others or that any patents protecting our rights are inadequate or inadequately defended.

Our success depends in large part on our ability to secure and maintain effective patent protection for our products and treatments in the United States and internationally. We have 6 patent applications pending before the United States Patent and Trademark Office, and expect to continue to file patent applications for various aspects of our prospect products and related treatments. However, we face the risks that:

- we may fail to secure necessary patents on our prospect products pending prior to or after obtaining regulatory clearances, thereby permitting competitors to market competing products using our perceived proprietary rights and intellectual property; and
- previously granted patents may be re-examined, invalidated or not extended.
If we are unable to protect our intellectual property adequately, our business and commercial prospects will suffer.

We may be accused of infringing on intellectual property rights of third-party competitors.

Other parties may claim that our Cannabis-based medical products infringe on their proprietary and perhaps patent protected rights. We may be subject to claims and costly legal proceedings regarding alleged infringement by us of the intellectual property rights and patents of third parties. Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, legal fees, result in injunctions, temporary restraining orders and/or require the payment of damages. In the event that our patents do not fully protect us, we may need to obtain licenses from third parties who allege that we have infringed on their lawful rights. However, such licenses may not be available on terms acceptable to us or at all. In addition, we may not be able to obtain or utilize on terms that are favorable to us, or at all, licenses or other rights with respect to intellectual property we do not own.

Our by-laws provide for indemnification of our directors and the purchase of D&O insurance at our expense and limit their potential or actual liability which may result in a significant cost to us and damage the interests of our shareholders.

The Company's By-Laws include provisions that eliminate the personal liability of the directors of the Company for monetary damages to the fullest extent possible under the laws of the State of Delaware as well as other applicable laws. These provisions eliminate the liability of directors to the Company and its shareholders for monetary damages arising out of any violation of a director of his fiduciary duty of due care. Under Delaware law, however, such provisions do not eliminate the personal liability of a director for: (i) breach of the director's duty of loyalty; (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law; (iii) payment of dividends or repurchases of stock other than from lawfully available funds; or (iv) any transaction from which the director derived an improper benefit. These provisions do not affect a director's liabilities under the federal securities laws or the recovery of damages by third parties.

Reporting requirements under the Exchange Act and compliance with the Sarbanes-Oxley Act of 2002, including establishing and maintaining acceptable internal controls over financial reporting, are costly and may increase substantially.

The rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require that the Company engage legal, accounting, auditing and other professional service providers. The engagement of such services is costly and continuing. Additionally, the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") requires, among other things, that we design, implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley Act and the limited technically qualified personnel we have may make it difficult for us to design, implement and maintain adequate internal controls over financial reporting. We expect these costs to be approximately $25,000 per year or perhaps more as our operations increase in scope and magnitude. In the event that we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports and/or discover and report fraud, which may harm our overall financial condition and result in loss of investor confidence and a decline in our share price.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act of 2010 and other applicable securities rules and regulations. Our legal and financial compliance costs related to these rules and regulations may increase, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual and quarterly, and, from time-to-time, current reports with respect to our business and operating results.

We are working with our legal, independent accounting and financial advisors to identify those areas in which changes should or could be made to improve our financial and management control systems in order to manage our growth and our legal obligations as a public company. These areas include corporate governance, corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, if and when any perceived deficiencies are discovered. However, we anticipate that the expenses associated with being a reporting public company are expected to be both material and continuing. We estimate that the aggregate cost of increased legal services; accounting and audit functions; personnel, such as a chief financial officer familiar with the obligations of public company reporting; consultants to design and implement internal controls could be material. In addition, if and when we retain independent directors and/or additional members of senior management, we may incur additional expenses related to director compensation and/or premiums for directors' and officers' liability insurance ("D&O Insurance"), the costs of which we cannot estimate at this time. We may also incur additional expenses associated with investor relations and similar functions, the cost of which we also cannot estimate at this time. However, these additional expenses individually, or in the aggregate, may also be expected to be material.

In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including D&O Insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

The increased costs associated with operating as a public company may decrease our net income or increase our net loss, and may cause us to reduce costs in other areas of our business or increase the prices of our product to offset the effect of such increased costs. Additionally, if these requirements divert our management's attention from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to the Cannabis Industry

Risk of government action.

While we will use our best efforts to comply with all laws, including U.S. federal, state and local laws and regulations, as well as those in other countries where we operate and market our Cannabis-based prospect products, there is a possibility that governmental action to enforce any alleged violations may result in legal fees and damage awards that would adversely affect us.

Our Cannabis-related activities may be prohibited or limited significantly by U.S. federal law.

The U.S. federal government and its agencies have expressed and may enforce their opinion that Cannabis has no established medical benefit and activities such as ours as well as the use of Cannabis for personal use, medical or otherwise, is prohibited under U.S. federal law, which, they maintain supersedes all newly enacted state laws to the contrary. The active enforcement of the currently existing federal law and regulatory position related to Cannabis may directly and adversely affect our ability to execute our business plan despite the fact that an increasing number of state laws and regulation may allow it.

The Company's business plan focuses on research and development of cannabinoid-based products and treatments. We have no present intention to apply for or otherwise seek to obtain state licenses for the production and sale of Cannabis products. We believe that our activities are not in violation of existing U.S. federal laws and regulations. However, if the Company decides to apply and obtain a state licenses and if federal law does not change, we believe the Company will, at that time, be in violation of federal law. If, at that time, then existing U.S. federal laws are enforced, it is likely that our business will be significantly, adversely affected and investors may lose their investment.

The U.S. Department of Justice (the "DOJ") has not, to our knowledge, published any policy or guidance specifically regarding the participation of a United States corporation in lawful Cannabis-related medical activities outside of the United States such as those being and to be conducted by OWC in Israel.

In light of the position of the DOJ, we do not anticipate that we will be targeted for prosecution by the DOJ or any other U.S. agency based upon our current and planned future operations.

Laws and regulations affecting our business are constantly evolving.

The constant evolution of laws and regulations affecting the research and development of Cannabis-based medical products and treatments could detrimentally affect our business. Federal, state and local medical laws and regulations related to the use of Cannabis are broad in scope and subject to changing interpretations. These changes may require us to incur substantial costs associated with legal and compliance fees and ultimately require us to alter our business plan. Furthermore, violations or alleged violation of these laws could disrupt our business and result in a material adverse effect on our operations. In addition, we cannot predict the nature of any future laws, regulations, interpretations or applications of laws and regulations and it is possible that new laws and regulations may be enacted in the future that will be directly applicable to our business.

Controlled substance legislation differs and may restrict our ability to sell our Cannabis-based prospect products and/or their use in medical treatments.

Most countries are parties to the Single Convention on Narcotic Drugs 1961, which governs trade and control of narcotic substances, including Cannabis extracts. While we do not intend to sell Cannabis-based medical products containing narcotic substances, countries may interpret and implement their treaty obligations in a way that creates a legal obstacle to obtaining marketing approval for our Cannabis-based products and use of these products in various medical treatments. Certain countries may not be willing or able to amend or otherwise modify their laws and regulations to allow our products to be marketed and treatments to be administered, thereby adversely effecting our financial condition and potential profitability.

If any of our Cannabis-based prospect products becomes subject to U.S. controlled substance laws and regulations, our cost of compliance with these laws and regulations will likely be substantial.

If a prospect product we intent to develop contains controlled substances as defined in the Federal Controlled Substances Act of 1970, or CSA, we will become subject to extensive regulation under the CSA administered by the DEA. Controlled substances are classified into Schedule I, II, III, IV or V substances by the DEA. While Cannabis is defined as a Schedule I controlled substance, products approved for medical use in the United States that contain Cannabis or Cannabis extracts must be placed in Schedules II-V, since approval by the FDA satisfies the "accepted medical use" requirement. The DEA will make a scheduling determination of any Cannabis-related product in a schedule other than Schedule I in order for it to be prescribed to patients in the United States. Moreover, if the FDA, DEA or any comparable foreign regulatory authority determines that any of our Cannabis-based prospect products may have potential for abuse, it may require us to provide additional clinical or other data, which could increase the cost and/or delay of any of our planned product launch.

The approval and use of medical and recreational marijuana in various U.S. states may impact our business.

There is a substantial amount of change occurring in various states of the United States regarding both the medical and recreational use of marijuana. While marijuana is designated as a Schedule 1 substance and its possession and use is not permitted according to federal law, a number of individual states have enacted laws to enable possession and use of marijuana for medical purposes, and in some states for recreational purposes also. To date, a total of 27 states and the District of Columbia have enacted laws approving the use of marijuana to some degree or other. While we believe that our business is quite distinct from that of herbal, psychoactive marijuana, our business prospects may nevertheless be negatively impacted by developments of these laws at the state level in the United States.

Risks Related to Our Common Stock

The Company has warrants and options outstanding, which exercise may dilute the value of shares.

The Company has granted warrants and if those are exercised, the issuance of up to 33,144,490 shares of Common Stock of the Company may dilute the value of shares held by existing shareholders.

There can be no assurance of a liquid public trading market for our common stock or whether investors will be able to readily be able to sell their shares of common stock.

At present, our Common Stock is subject to quotation of the OTCQB market under the symbol OWCP. There is only a limited, liquid public trading market for our Common Stock and there can be no assurance that a more liquid market will ever develop or be sustained. Market liquidity will depend on the perception of our business and any steps that our management might take to bring public awareness of our business to the investing public within the parameters of the federal securities laws. There can be given no assurance that there will be any awareness generated or sustained. Consequently, investors may not be able to liquidate their investment or liquidate it at a price that reflects management's perceived value of our business or the price paid by investors equal to or greater than their initial investment in our Common Stock. As a result, holders of our Common Stock may not find purchasers for their shares should they to decide to sell the Common Stock held by them at any particular time if ever. Consequently, our Common Stock should be purchased only by investors who have no immediate need for liquidity in their investment and who can hold our Common Stock, possibly for a prolonged period of time.

In the event an active trading market develops for our common stock, the market price may, from time-to-time, be volatile.

In the event an active trading market develops for our Common Stock, the market price of our Common Stock may be highly volatile, as is the stock market in general, and the market for securities subject to quotation on OTC Markets in particular. Some of the factors that may materially affect the market price of our Common Stock are beyond our control, such as changes in conditions or trends in the industry in which we operate, general market and economic conditions in the United States and world-wide as well as the number of our shares of Common Stock being purchased and sold at any particular time. These factors may materially adversely affect the market price of our Common Stock, regardless of our historic business performance or future prospects, both near and long-term. In addition, the public stock markets have experienced and, in the future may be expected to experience, extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies and many countries for reasons frequently unrelated to the operating performance of the specific companies or the economic conditions in affected countries. These broad market fluctuations may adversely affect the market price of our Common Stock.

A large number of additional shares will be available for resale into the public market pursuant to this offering as well as in the near future, which may cause the market price of our common stock to decline significantly.

Sales of a substantial number of shares of our Common Stock in the public market will become available pursuant to Rule 144 promulgated by the SEC under the Act, could adversely affect the market price of our Common Stock. As of December 31, 2014, we have 78,429,241 shares of Common Stock outstanding of which 43,710,419 shares of Common Stock are restricted as a result of applicable federal securities laws. As restrictions on resale of other shares of Common Stock expire, pursuant to the provisions of Rule 144 or otherwise, the market price could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them at any given date or over any particular period of time. For a more detailed description of the risks associated with this Risk Factor, see the disclosure under the caption "Shares Eligible for Future Sale" contained in this Prospectus.

If holders of restricted securities sell a large number of shares pursuant to Rule 144 under the Act, they could adversely affect the market price for our Common Stock, which adverse affect could be sustained and over which we have no control.

You will experience dilution of your ownership interest because of the future issuance of additional shares of our common stock or our preferred stock.

In the future, we may issue our authorized but previously unissued equity securities, including shares of our Common Stock, resulting in the dilution of the ownership interests of our present shareholders. We are authorized to issue an aggregate of 500,000,000 shares of Common Stock, par value $0.00001 per share, of which 80,592,403 shares are currently outstanding.

We may also issue additional shares of our Common Stock, warrants or other securities that are convertible into or exercisable for the purchase of shares of our Common Stock in connection with hiring and/or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our Common Stock or other securities, for any reason including those stated above, may have a negative impact on the market price of our Common Stock. There can be no assurance that the issuance of any additional shares of Common Stock, warrants or other convertible securities may not be at a price (or exercise prices) below the then prevailing price at which shares of our Common Stock will be quoted on the OTCQB Market.

We may never pay any dividends to our shareholders.

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any dividends in the foreseeable future, but will review this policy as circumstances dictate. The declaration and payment of all future dividends, if any, will be at the sole discretion of our board of directors, which retains the right to change our dividend policy at any time. Consequently, shareholders must rely on sales of their Common Stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

Insiders will continue to have substantial control over us after this offering and will be able to influence corporate matters.

Our directors and executive officers and present shareholders holding more than 5% of our Common Stock ("Affiliated Persons") will continue to own of record and beneficially, in the aggregate, approximately 26.31% of our outstanding Common Stock. As a result, if these shareholders were to choose to act together, they would be able to exercise significant influence over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our Company or all or a significant percentage of our assets. This concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us. For information regarding the ownership of our outstanding stock by our executive officers and directors and their affiliates, see the disclosure under the caption "Security Ownership of Certain Beneficial Owners and Management."

We cannot assure you that the interests of our management and Affiliated Persons will coincide with the interests of the investors. So long as our management and Affiliated Persons collectively controls a significant portion of our Common Stock, these individuals and/or entities controlled by them, will continue to collectively be able to strongly influence or effectively control our decisions.

Anti-takeover provisions of the Delaware General Corporation Law may discourage or prevent a change of control, even if an acquisition would be beneficial to our shareholders, which could reduce our stock price.

We are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with shareholders owning 15% or more of our outstanding voting stock. These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for shareholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including a merger, tender offer or proxy contest involving our company. Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our Common Stock to decline.

State Blue Sky registration, potential limitations on resale of our common stock.

The holders of our shares of Common Stock and those persons, who desire to purchase our Common Stock in any trading market that might develop, should be aware that there may be state blue-sky law restrictions upon the ability of investors to resell our securities. Accordingly, investors should consider the secondary market our securities to be a limited one.

It is the present intention of management after the active commencement of operations in to seek coverage and publication of information regarding the Company in an accepted publication manual, which permits a manual exemption. The manual exemption permits a security to be distributed in a particular state without being registered if the Registrant issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuer's officers, and directors, (2) an issuer's balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities.

Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they "recognize securities manuals" but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin.

Our common stock is considered a Penny Stock, which may be subject to restrictions on marketability, so you may not be able to sell your shares.

We may be subject now and in the future to the Penny Stock rules if our shares of Common Stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer's confirmation.

In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any Offerings and reduce the trading activity for shares of our Common Stock. As long as our shares of Common Stock are subject to the penny stock rules, the holders of such shares of Common Stock may find it more difficult to sell their securities.

The control deficiencies in our internal control over financial reporting may until remedied cause errors in our financial statements or cause our filings with the SEC to not be timely.

We have identified control deficiencies in our internal control over financial reporting as of the evaluation done by management as of December 31, 2014, including those related to (i) absent or inadequate segregation of duties within a significant account or process, (ii) inadequate documentation of the components of internal control, and (iii) inadequate design of information technology general and application controls that prevent the information system from providing complete and accurate information consistent with financial reporting objectives and current needs. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our financial statements that could require a restatement or our filings may not be timely made with the SEC. Based on the work undertaken and performed by us, however, we believe the financial statements contained in our reports filed with the SEC are fairly stated in all material respects in accordance with GAAP for each of the periods presented. We intend to implement additional corporate governance and control measures to strengthen our control environment as we are able, but we may not achieve our desired objectives. We may identify material weaknesses and control deficiencies in our internal control over financial reporting in the future that may require remediation and could lead investors losing confidence in our reported financial information, which could lead to a decline in our stock price.

None.

Our principal executive office is located at 22 Shaham Street, P.O. Box 8324, Petach Tikva, 4918103, Israel. Our telephone number in Israel is +972 (0)3-758-2657/9. Our executive office is a rented suite located on the second floor in the Beit Dvir building. The Company pays $1,650 per month for 461 square foot of office space including all other office expenses. We believe that this space is adequate for our current and immediately foreseeable operating needs. Once our business grows and generates revenue, we will look for more office space.

None.

ITEM 4. MINE SAFETY DISCLOSURES Back to Table of Contents