UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2015

 

☐  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to__________

 

Commission File Number: 000-55373

 

RX Safes, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada		27-2928918
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

170 Green Valley Parkway, Suite 300 Henderson, NV 89012

(Address of principal executive offices)

  

702-800-4620

(Registrant’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  ☐ No

 

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  ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

☐  Large accelerated filer	☐  Accelerated filer
☐  Non-accelerated filer	☒  Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes  ☒ No

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 116,591,472 common shares as of May 19, 2015.

 

 

 

	TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	1
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4:	Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	26
Item 1A:	Risk Factors	26
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3:	Defaults Upon Senior Securities	26
Item 4:	Mine Safety Disclosure	26
Item 5:	Other Information	26
Item 6:	Exhibits	26

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

RX SAFES INC.

FINANCIAL STATEMENTS

ENDED MARCH 31, 2015 AND 2014 (UNAUDITED) AND DECEMBER 31, 2014

 

CONTENTS

 

FINANCIAL STATEMENTS		Page(s)
Condensed Balance Sheets - (Unaudited) - March 31, 2015 and December 31, 2014		2
Condensed Statements of Operations - (Unaudited) The Three Month Ended March 31, 2015 and 2014		3
Condensed Statements of Cash Flows - (Unaudited) Three Month Ended March 31, 2015 and 2014		4
Notes to Interim Condensed Financial Statements - (Unaudited)		5-15

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2015 are not necessarily indicative of the results that can be expected for the full year.

 

 

RX SAFES INC.

CONDENSED BALANCE SHEETS

 

		March 31,				December 31,
		2015				2014
ASSETS		(Unaudited)
Current Assets
Cash and cash equivalents		$	74,994			$	13,087
Inventory			333				25,698
Total Current Assets			75,327				38,785
Total Assets		$	75,327			$	38,785
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued expenses		$	255,655			$	226,274
Loans payable to related party			70,000				110,274
Convertible debt (net of discount $94,933 and $0 respectively)			5,067				-
Derivative liability			125,846				-
Interest payable			4,470				4,745
Total Current Liabilities			461,038				341,293
Total Liabilities			461,038				341,293
Stockholders Deficit
Common stock, par value $.001, 250,000,000 authorized 115,491,472 shares issued and outstanding as of March 31, 2015 and December 31, 2014			115,490				115,490
Additional paid in capital			1,742,336				1,742,336
Additional Paid in capital - Options			1,403,675				-
Additional paid in capital - Warrants			-				389,235
Additional paid in capital - expired options and warrants			410,537				21,302
Accumulated Deficit			(4,057,749	)			(2,570,871	)
Total Stockholders' Deficit			(385,711	)			(302,508	)
Total Liabilities and Stockholders' Deficit		$	75,327			$	38,785

 

See notes to interim condensed financial statements.

 

 

RX SAFES INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		Three Months Ended
		March 31,
		2015				2014
REVENUES		$	49,920			$	1,066
COST OF GOODS SOLD
PRODUCT SOLD			25,292				290
GROSS PROFIT			24,628				776
OPERATING EXPENSES
General and Administrative Expense			1,479,641				12,930
TOTAL OPERATING EXPENSES
NET LOSS FROM OPERATIONS			(1,455,013	)			(12,154	)
OTHER INCOME (EXPENSE)
Gain on derivative revaluation			16,769				100
Interest Expense			(48,634	)			(858	)
TOTAL OTHER INCOME (EXPENSES)			(31,865	)			(758	)
LOSS BEFORE INCOME TAXES			(1,486,878	)			(12,912	)
PROVISION FOR INCOME TAX			-				-
NET LOSS		$	(1,486,878	)		$	(12,912	)
BASIC AND DILUTED NET LOSS PER SHARE		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING FOR BASIC AND DILUTED CALCULATIONS			115,491,472				115,095,072

 

See notes to interim condensed financial statements.

 

 

RX SAFES INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		Three Months Ended
		March 31,
		2015				2014
OPERATING ACTIVITIES
Net loss		$	(1,486,878	)		$	(12,912	)
Adjustments to reconcile net loss to net cash used in operations:
Expenses related to issue of stock options			1,403,675				-
Debt discount-convertible notes			(94,933	)			-
Interest/gain on Derivative liability			125,847				-
Decrease (increase) in assets
Inventory			25,364				807
Increase (decrease) in liabilities
Accounts payable & accrued expenses			(14,369	)			(9,575	)
Salary payable			43,750				-
Other current liabilities			-				858
Interest Payable			(275	)			-
Net cash provided by/(used for) operating activities			2,181				(20,822	)
INVESTING ACTIVITIES
FINANCING ACTIVITIES
Proceeds from issuance of convertible notes			100,000				-
Proceeds on related party loan advances			-				56,000
Repayment of related party loan advances			(40,274	)			-
Net cash from financing activities			59,726				56,000
NET INCREASE (DECREASE) IN CASH			61,907				35,178
Cash and cash equivalents beginning of period			13,087				1,721
Cash and cash equivalents end of period		$	74,994			$	36,899
Supplemental Disclosure of Cash Flow Information
Cash Paid
Interest		$	1,226			$	-
Income Taxes		$	-			$	-

 

See notes to interim condensed financial statements.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

NOTE 1.

 

Nature of Operations:

 

Rx Safes, Inc. (“the Company”) was incorporated under the laws of the State of Nevada on June 1, 2010. The Company develops, designs, manufactures, and sells finger print activated medication safes and other health care storage equipment.

 

Interim reporting:

 

The interim condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation and a reasonable understanding of the information presented. The Interim Condensed Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-Q should be read in conjunction with the financial statements and the related notes, for the fiscal year ended December 31, 2014, previously filed with the SEC.

 

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of financial position as of March 31, 2015, results of operations for the three months ended March 31, 2015 and 2014, and cash flows for the three months ended March 31, 2015 and 2014, as applicable, have been made. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

 

NOTE 2.

 

Summary of Significant Accounting Policies:

 

The financial statements of the Company have been prepared using generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) of America that are applicable to a going concern which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

 

Management’s use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

 

Cash and cash equivalents

 

Cash and cash equivalents include funds on hand and short-term investments with original maturities of three months or less. Cash deposits are insured in limited amounts by the Federal Deposit Insurance Corporation (FDIC).

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

Inventories

 

Inventories consist of safes and brackets. All inventories are valued at lower of average cost or market. The company periodically reviews inventories and items considered obsolete or outdated are reduced to their estimated net realizable value.

 

The components of inventory as of March 31, 2015 and December 31, 2014 are valued as follows:

 

		March 31, 2015				December 31, 2014
Safes		$	290			$	25,652
Brackets			43				46
Total Inventory		$	333			$	25,698

 

Shipping and Handling Freight Fees and Costs

 

All amounts billed to a customer in a sales transaction related to shipping and handling represent revenues earned and are reported as revenue. The costs incurred by the Company for shipping and handling are reported as part of cost of goods sold.

 

Revenue recognition

 

Revenue is recognized when the four criteria for revenue recognition are met: (1) persuasive evidence of an arrangement exists; (2) shipment or delivery has occurred; (3) the price is fixed or determinable and (4) collectability is reasonably assured. The Company has recognized revenue associated with its mission as stated above in the nature of operations footnote. Sales to customers are recorded when the goods are shipped to the customer. Sales are reported net of allowances for estimated returns and allowances in the accompanying statements of income. Allowances for returns are estimated based on historical customer return rates. The Company has not had any product returns since inception. Customers pre-pay for orders though a website with their credit cards prior to the shipment of the goods, which takes place within a few days after the order is placed.

 

Advertising expense

 

The Company expenses advertising costs as incurred. Advertising expense charged to operating expenses was $2,763 and $95 for the three months ended March 31, 2015 and 2014, respectively.

 

Rent expense

 

The Company pays rent on a month to month basis. Rent expense charged to operating expenses was $1,388 and $1,950 for the three months ended March 31, 2015 and 2014, respectively.

 

Research and development costs

 

Research and development costs, consisting primarily of expenditures paid to our manufacturing and development partner in China, are expensed as incurred. Research and development expense charged to operating expenses was $0 and $0 for the three months ended March 31, 2015 and 2014, respectively.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

Fair value measurements

 

Generally accepted accounting principles require disclosing the fair value of financial instruments to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheet. The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement.

 

In assessing the fair value of financial instruments, the Company uses a variety of methods and assumptions, which are based on estimates of market conditions and risks existing at the time. For certain instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments. All debt is based on current rates at which the Company could borrow funds with similar remaining maturities and approximates fair value.

 

GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below:

 

Level 1:  Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

 

Level 2:  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

 

Level 3:  Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

 

Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter

 

Recent Accounting Pronouncements

 

On May 1, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company will continue to assess the impact on its financial statements.

 

In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the financial statements. 

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholder’s equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this new standard for the fiscal year ending December 31, 2015 and the Company will continue to assess the impact on its financial statements.

 

Income Taxes

 

The Company provides for income taxes under the provisions of Accounting Standards Codification (“ASC”) Topic No. 740, “Income Taxes”, which requires that an asset and liability based approach be used in accounting for income taxes. Deferred income tax assets and liabilities are recorded to reflect the tax consequences on future years of the temporary differences of revenue and expense items for financial statement and income tax purposes. Valuation allowances are provided against assets, which are not likely to be realized.

 

Stock-based Compensation

 

The Company adopted ASC 718, "Compensation - Stock Compensation" for stock-based compensation. ASC 718 requires that the fair value of the equity instruments (such as stock options) exchanged for services be recognized as an expense in the financial statements as the related services are performed.

 

Earnings Per Share

 

Earnings per share ("EPS") has been calculated in accordance with ASC 260, “Earnings Per Share" which requires the presentation of both basic net income per share and net income per common share assuming dilution. Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the year. Diluted earnings per share reflects the potential dilution that could occur upon the exercise of common stock options resulting in the issuance of common stock to stockholders who would then share in the earnings of the Company. ASC 260 precludes the inclusion of any potential common shares in the computation of any diluted per-share amounts when such inclusion is anti-dilutive.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

NOTE 3.

 

RELATED PARTY TRANSACTIONS

 

Loans Payable

 

Effective May 1, 2013 entered into an agreement with Axius Consulting Group, Inc (“Axius”). It is the intent of both parties to create a line of credit agreement. The company may borrow up to $50,000 from Axius. The unpaid principal of this line of credit shall bear an interest rate of Four percent per annum. Interest on the unpaid balance of the note shall accrue monthly but shall not be due and payable until the principal balance becomes due and payable. The principal balance of the note is due and payable on December 31, 2014. The outstanding balance of the note payable was $0 and $35,774 at March 31, 2015 and 2014, respectively. Total interest accrued on the note was $837 and $962 for the three months ended March 31, 2015 and 2014, respectively. On December 30, 2014 an extension agreement was signed extending the due date of the Note to June 30, 2015 without penalty.

 

Effective January 1, 2014 entered into an agreement Lorraine Yarde It is the intent of both parties to create a line of credit agreement. The company may borrow up to $100,000 from Lorraine Yarde. The unpaid principal of this line of credit shall bear an interest rate of Four percent per annum. Interest on the unpaid balance of the note shall accrue monthly but shall not be due and payable until the principal balance becomes due and payable. The principal balance of the note is due and payable on December 31, 2014. The outstanding balance of the note payable was $40,000 and $55,000 at March 31, 2015 and 2014, respectively. Total interest accrued on the note was $2,533 and $500 at March 31, 2015 and 2014, respectively. On December 30, 2014 an extension agreement was signed extending the due date of the Note to June 30, 2015 without penalty.

 

Effective January 1, 2014 the Company entered into a Master Promissory Note agreement with Naples Family Trust. It is the intent of both parties to create a line of credit agreement. Under the terms of the note the Company may borrow up to $100,000. The unpaid principal of this line of credit shall bear an interest rate of four percent per annum. Interest on the unpaid balance of the note shall accrue monthly but shall not be due and payable until the principal balance becomes due and payable. The principal balance of the note is due and payable on December 31, 2014. The outstanding balance of the note payable was $30,000 and $0 at March 31, 2015 and 2014, respectively. Total interest accrued on the note was $1,100 and $0 at March 31, 2015 and 2014, respectively. On December 30, 2014 an extension agreement was signed extending the due date of the Note to June 30, 2015 without penalty.

 

NOTE 4.

 

License Agreements

 

Included in the assets purchase of Axius Consulting Group, Inc. was a Patent & Licensing Rights Agreement with bioMETRX. The agreement grants the licensee a royalty based, ($.50 per unit) exclusive license under their Patent License to use, manufacture, have manufactured, license and/or sell licensed intellectual property for any legal purpose with North America within the health care and consumer health markets. The term of the agreement is from the effective date (March 1, 2009) to the full end of the term or terms for which Patent Rights have not expired or, if only Technology Rights are licensed and no Patent Rights are applicable, for a term of 9 years.

 

NOTE 5.

 

Income Taxes

 

As of March 31, 2015, the Company has net operating loss carry forwards of approximately $4,057,000 that may be available to reduce future years’ taxable income in varying amounts through 2031. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly , the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company did not have any material unrecognized tax benefit at March 31 2015 and December 31, 2014, respectively. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. The Company recognized no interest and penalties during the three months ended March 31, 2015 and year ending December 31, 2014, respectively.

 

The Company files U.S. federal tax returns and a tax return in states where obligated. All tax periods since inception remain open to examination by the taxing jurisdictions to which the Company is subject.

 

NOTE 6.

 

Employment Agreement

 

The President of the Company, Ms. Lorraine Yarde, signed an employment contract effective January 1, 2015 which is effective until termination. The agreement stipulates a base salary of $175,000 plus an annual performance bonus targeted at fifty percent of salary. The agreement entitles Ms. Yarde to annual salary increases of ten percent as well as other customary employee benefits such as paid vacation and eligibility to participate in the Company’s health insurance plan or reimbursement of up to $1,000 per month until a company-health insurance plan is established. The agreement allows Ms. Yarde to convert any unpaid compensation to Company stock at a 50% discount to the then market price, in the form of unregistered securities. As of March 31, 2015 unpaid compensation under the agreement totaled $43,750 and no stock was converted to date. Upon the signing of the agreement Ms. Yarde was granted employee stock options to purchase 10,000,000 shares of the Company’s Common Stock with vesting period and strike price as follows:

 

	(i)	5,000,000 shares vested immediately with a strike price of $0.05 per share.
	(ii)	2,500,000 shares vest on July 1, 2015 with a strike price of $0.05 per share
	(iii)	1,500,000 shares vest on January 1, 2016 with a strike price of $0.10 per share
	(iv)	1,000,000 shares vest on January 1, 2017 with a strike price of $0.25 per share

 

NOTE 7.

 

Stock options and warrants

 

A summary of stock option and warrant activity for the period from inception January 1, 2015 to March 31, 2015 follows:

 

		Stock
Description		Options				Warrants
Outstanding at January 1, 2015			10,000,000				8,250,000
Cancelled March 3, 2015			-				(8,250,000	)
Outstanding at March 31, 2015			10,000,000				-

 

Employee stock options totaling 10,000,000 shares granted to Ms. Yarde on January 1, 2015 can be exercised at any time, up to and including 24 months after expiration or termination of the agreement. The estimated fair value of the options at January 1, 2015 of $2,037,700, (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.025, $0.025, $0.025 and $0.025 share price, respectively, (ii) $0.05, $0.05, $0.10 and $0.25 exercise price, respectively, (iii) term of 2, 2.5, 3, and 4 years, respectively, (iv) 100%, 100%, 100% and 100% expected volatility, respectively, and (v) 0.66%, 0.66%, 0.66% and 0.66% risk free interest rate, respectively) will be expensed over the two year vesting period of the options. Compensation expense attributable to stock options was $1,403,675 for the three months ended March 31, 2015. As of March 31, 2015, there was $634,025 of total unrecognized compensation cost relating to unexpired stock options.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

Pursuant to a Letter Agreement dated August 20, 2010 with Dr. Reed Karim for marketing services for a term of two years ending on August 31, 2012, the Company issued a total of 1,260,000 post-split (252,000 pre-split) warrants to Dr. Karim. Each warrant is exercisable into one share of Company common stock at an exercise price of $0.005 post-split ($0.025 pre-split) per share. 630,000 of the warrants vested August 20, 2010 and expire August 20, 2015, 315,000 of the warrants vested September 1, 2011 and expire September 1, 2016, and 315,000 of the warrants vested September 1, 2012 and expire September 1, 2017. The $59,693 estimated fair value of the 1,260,000 warrants (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.05 share price, (ii) $0.005 exercise price, (iii) terms of 5 years, 6 years, and 7 years, (iv) 100% expected volatility, and (v) risk free interest rates of 1.47%, 1.78%, and 2.08%) has been expensed evenly over the period from August 20, 2010 to August 31, 2012.

 

On May 23, 2011, pursuant to an amendment to the Letter Agreement dated August 20, 2010 referred to in the preceding paragraph, the Company increased the number of issued warrants to Dr. Karim from a total of 1,260,000 post-split (252,000 pre-split) warrants to a total of 8,800,000 post-split (1,650,000 pre-split) warrants. 2,750,000 of the warrants vested August 20, 2010 and expire August 20, 2015, 2,750,000 warrants vested September 1, 2011 and expire September 1, 2016, and 2,750,000 warrants vested September 1, 2012 and expire September 1, 2017. The $329,542 excess of the $389,235 estimated fair value of the 8,800,000 warrants (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.05 share price, (ii) $0.005 exercise price, (iii) terms of 4.25 years, 5.25 years, and 6.25 years, (iv) 100% expected volatility, and (v) risk free interest rates of 1.46%, 1.89%, and 2.23%) over the $59,693 estimated fair value of the 1,260,000 warrants at August 20, 2010 referred to in the preceding paragraph has been expensed evenly over the period from May 23, 2011 to August 31, 2012.

 

Effective March 3^rd, 2015, the Company has terminated the agreements dated August 31, 2010 and May 23, 2011 with Dr. Karim. As a result of the termination the Dr. Karim has no further right to purchase or receive stock or warrants from the company and all outstanding, unexercised warrants will be cancelled.

 

NOTE 8.

 

Equity

 

Common Stock.

 

Stock Split

 

On August 22, 2012 the Company amended its Certificate of Incorporation to split its outstanding shares of the companies’ common stock at a ratio of 5-for-1. The par value of the common stock was decreased to $.001 and increased the number of authorized shares to issue to 250,000,000. The accompanying financial statements have been adjusted to retroactively reflect the stock split.

 

Preferred Stock.

 

The company is authorized to issue a second class of 50,000,000 preferred shares.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

NOTE 9.

 

Consulting Agreements

 

On February 20, 2014, the Company executed a Consulting Agreement with Wall Street Buy Sell Hold Inc. (the “Consultant) to become effective once the Company’s Form S-1 registration statement becomes effective. The Agreement provides for the Consultant to perform certain specified business and investor relations services for the Company for a term of six months commencing on the effective date of the Company’s Form S-1 registration statement. If an opt-out clause is not exercised at the end of the six months, the term will extend for an additional six month period. The Agreement provides for the payment of monthly cash compensation to the Consultant of $20,000 per month until such time as the Company has raised $1,500,000 in its public offering and $30,000 per month thereafter.

 

On February 10, 2014, the consultant was issued 5,000,000 post-split shares of common stock for investor relations consulting services. These shares were returned by the consultant to treasury and the consultant was issued a warrant to purchase 5,000,000 shares of common stock. The issued warrant will vest immediately. Additionally, a warrant to purchase 2,500,000 shares will be issued at 6 months of service. A final warrant to purchase 2,500,000 shares will be issued at the end of 12 months if the company continues the agreement to 12 months.

 

On December 1, 2014 the Company voided and terminated its agreement with the Consultant. The voiding and termination of the agreement will cancel all warrants previously issued under the agreement.

 

Effective August 19, 2014, the Company executed a Marketing Agreement with Josh Tolley who has become a spokesperson for the Company. In consideration for his services the Company shall issue 100,000 shares of common stock as stock based compensation for this Agreement. The term of the agreement is six months. At the end of the initial six month period, it is the intent of the Company to extend this relationship for an additional period, provided the Parties are in mutual agreement that they have established a good working relationship, at which time a new Agreement will be executed between the Parties. The shares were issued to Mr. Tolley on August 19, 2014.

 

Effective January 6th, 2015, the Company executed a business consulting agreement with Paramount Advisors, LLC. The consultant will act as advisor in co connection with the Company’s business matters, investor relations, and advertising services.

 

The Company shall pay the consultant the following:

 

(a) A total of 900,000 shares of validly issued unregistered shares of the Company’s common stock par value $0.001 per share, which trades on the OTC under the symbol “RXSF” in two equal installments as follows:

 

	i.	450,000 shares due immediately; and
	ii.	450,000 shares due on or before March 1, 2015

 

(b) A total of $18,000 in cash, payable in equal monthly installments of $3,000 per month. Said cash payments will not be due to consultant until the Company has successfully completed a capital raise of at least one hundred thousand dollars and upon that occurrence, the Company shall pay the consultant all monthly payments that it had accrued from the beginning of this Agreement and remain current on all cash payments from that time. The Agreement will commence on the date first set forth above and shall continue for a term of six months, thereafter.

 

Effective February 23^rd, 2015 the company terminated its agreement with Paramount advisors due to non-performance.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

Effective February 12, 2015, the company executed a consulting agreement with Sean McManus. The Company has engaged Consultant to provide services in connection with the Company’s sale and distribution of its flagship Rx DrugSAFE product. Consultant will introduce the Company to sales opportunities, strategic partners and such other services as the Company and Consultant may deem appropriate. Upon execution of this Agreement, the Company shall pay to Consultant an initial retainer of 100,000, restricted shares of Rx Safes, Inc. common stock. For any sales of the Company’s products directly attributable to the efforts of the Consultant, Consultant will be paid a commission of 10% of the net sales to the Company for as long as any agreement is in effect between the Company and any Client directly introduced to Company by Consultant, and for a tail period of 24 months after the last date of any agreement, whether terminated or otherwise expired between Company and Client or 24 months after delivery of the product to the Client, whichever is later in time. This Agreement shall continue in full force and effect for 6 consecutive months. The Company and Consultant may negotiate to extend the term of this Agreement and the terms and conditions under which the relationship shall continue.

 

Effective March 1^st, 2015, the Company executed an investor relations agreement with Renmark Financial Communications Inc. The investor relations program is a continuous effort to create awareness and build an audience that will follow the growth of the Company. Renmark will establish a liaison between the company and its retail investors and make the company more visible in the market place. The agreement is on a monthly basis. The Company will have the right to terminate the agreement at any time. Compensation for the services rendered is a monthly fee of $4,000.

 

NOTE 10.

 

Fair Value Measurements and Derivative Liability

 

The Company evaluates all of it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, the Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

 

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

 

On February 25, 2015, the Company entered into an agreement Coventry Enterprises, LLC to invest up to $100,000 into the Company in exchange for the issuance of two convertible promissory notes each in the amount of $50,000.  Each note bears interest at the rate of 8%.  All outstanding interest and principle is due and payable February 25, 2016.  The note is convertible by Coventry into shares of the Company’s common stock at any time on or after the Issuance Date.  The conversion price for each share is equal to 65% multiplied by the lowest trading price of the Common Stock on the OTC Market for the 20 prior trading days.

 

The company identified embedded derivatives related to the Coventry and EMA Convertible Promissory Notes entered into on February 25 and March 28, 2015, respectively. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. Under ASC-815, the conversion options embedded in the notes payable described in Note 8 require derivate liability classification because they do not contain an explicit limit to the number of shares that could be issued upon settlement.

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

As defined in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

 

Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date.

 

Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

 

Derivative liability — the Company’s derivative liability is classified within Level 3 of the fair value hierarchy.

 

The Company uses the Black-Scholes Option Pricing Model to value its option based derivatives based upon the following assumptions: share conversion price $0.0325 expected volatility of 891%, risk free interest rate at 0.26 % annually and an expected term equal to the remaining term of the note.

 

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as at March 31, 2015.

 

Recurring Fair Value Measurements		Level 1				Level 2				Level 3				Total
Liabilities:
Derivative liability – March 31, 2015		$	-			$	-			$	125,846			$	125,846

 

 

RX SAFES INC.

NOTES TO THE FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

 

During the three months ended March 31, 2015 the company amortized $5,067 of the debt discounts to the current period operations as interest expense.

 

Convertible Notes Payable		March 31, 2015				December 31, 2014
Convertible debt issued February 25, 2015, due February 25, 2016, convertible into common stock at 65% of the lowest closing for the twenty days trading immediately preceding the date of conversion, (less unamortized debt discount of $45,343 and $0)		$	4,657			$	0
Convertible debt issued March 28, 2015, due March 28, 2016, convertible into common stock at 65% of the lowest closing for the twenty days trading immediately preceding the date of conversion, (less unamortized debt discount of $49,590 and $0		$	410			$	0
Total convertible debt		$	5,067			$	0

 

NOTE 11.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had minimal revenues for the three months ending March 31, 2015 and year ended December 31, 2014, respectively. The Company currently has limited working capital, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 12.

 

Subsequent Events

 

On April 1, 2015, the Company executed an addendum to the Agreement dated February 12, 2015 with Sean McManus, extending the term for an additional 6 months and expanding the services to be performed by the Consultant. Upon execution of this addendum the Company issued the Consultant 1,000,000 restricted shares of Rx Safes, Inc. common stock.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Company Overview

 

We design, develop, engineer and market fingerprint medical security storage solutions for consumers and healthcare professionals. Our CEO and director, Ms. Yarde, has years of experience designing, developing and marketing consumer based security fingerprint products including garage door openers, front door locks, thermostats and mail boxes through multiple distribution channels, in prior companies. Founded in 2010, we are a pioneer in a new targeted sector in Prescription (Rx) and over-the-counter (OTC) drug security, providing real solutions to address Rx and OTC drug abuse. The Rx DrugSAFE™ product line of medical safes and prescription drug products offers consumers security products specifically designed to safely and securely store medications in the home. These secure storage products also offer healthcare professionals a secure and convenient means by which to control access to medications, addressing both loss prevention and safety concerns within a variety of healthcare settings. Our Rx DrugSAFE™ products are easy to set up and operate, convenient and competitively priced.

 

We spent over a year redesigning the core electronics technology and mechanical locking mechanisms of our products in order to provide further security and convenience for our customers. We have taken our experience in safe and security product design and fingerprint technology and our understanding of consumer’s wants and needs and developed a product line that we believe can help save thousands of lives.

 

In the next 12 months, we intend to continue with our research and product development, implement on several areas of our marketing and distribution plan, purchase inventory of our existing product and new product designs and use working capital to hire sales and support personnel, secure necessary business insurances and continue to establish business relationships to generate awareness, increase sales and comply with all necessary reporting requirements.

 

We will need to raise capital to meet our objectives. We had a registered offering to sell up to $2,460,000 in net proceeds. The offering is now closed. We were only able to raise $72,200 in that offering, but we are continuing our fundraising efforts, which have been somewhat hampered in 2014 because we did not have a symbol and were not yet trading. On December 18, 2014, we were finally able to complete the process with FINRA and we are now trading under the symbol, RXSF. We hope that our trading status will bring more financing opportunities to the table for our company.

 

On August 26, 2014, we had received a Purchase Order from the Oklahoma Division of Narcotics and Dangerous Drug Control, following our being named as the winning bidder of an Invitation to Bid we submitted on August 11, 2014. The Purchase Order was for 500 units of the current Rx DrugSAFE personal Fingerprint Prescription Drug Lock Box and was funded by a Grant 2012-PMBX-0012 awarded by the Bureau of Justice Assistance, which is a Component of the United States Department of Justice. This order was successfully shipped to the customer on January 29, 2015 and we generated a receivable in the amount of $49,500. As a follow on from the shipment of this order we have begun reaching out to other State’s corresponding Departments, to discuss a similar program, where they would offer the Rx DrugSAFE product to at risk families within each State. We are directing them to the Bureau of Justice Assistance Grant as a possible means of funding such programs.

 

 

On February 25, 2015 we entered into a securities purchase agreement with Coventry Enterprises, LLC (“Coventry”) whereby Coventry agreed to invest up to $100,000 in exchange for our issuance of two convertible promissory notes, each in the original principal amount of $50,000.00. The Notes bear interest at a rate of 8% per annum. All outstanding principal and accrued interest under the Notes is due and payable on February 25, 2016. In addition, on the same date we entered into an Equity Purchase Agreement with Coventry, whereby Coventry agreed to purchase up to $10,000,000 of our common stock, to be registered in a Form S-1 registration statement. The agreement will have a three-year term unless sooner terminated because $10,000,000 of our common stock has already been sold to Coventry. The registration of the shares is not mandatory and we may choose to look to other forms of financing to support the ongoing efforts of the business.

 

On March 28, 2015 we entered into a securities purchase agreement with EMA Financial. LLC (“EMA”) whereby EMA agreed to invest $50,000 in exchange for our issuance of a convertible note, in the principal amount of $50,000. The Note bears interest at a rate of 8% per annum. All outstanding principal and accrued interest under the Note is due and payable on March 28, 2016.

 

Despite these recent transactions, we can provide no assurance that we will be able to continue to raise money under terms that are beneficial to us and our shareholders.

 

On March 25, 2015, we engaged the services of a grant writer who will work with us to assist non-profits in identifying and obtaining private, local, state and government grant funds to purchase our products. Our grant writer will assist non-profit organizations looking to purchase Rx DrugSAFE units effectively craft healthcare proposals and outcome evaluation plans that are required for many government and foundation grants. She has created many winning proposals that were awarded by large government funders and is also a co-founder of Axis Bridge, a nonprofit organization that helps rehabilitate and care for people struggling with substance abuse. This experience should provide us with the breadth of knowledge necessary to bring this valuable service to non-profit organizations across the country.

 

If we are able to raise enough capital, we plan to use $246,000 for Research and Development and will use this capital to develop additional products to add to our product line. To date, we have funded our Research and Development through the sale of unregistered securities. The majority of the product development work was conducted under our agreement with Axius Consulting Group, Inc. whose principals have extensive experience in designing and developing consumer biometrics products. Based on our needs which were identified from feedback we received from customers as well as from a security specialist who evaluated our product, Axius worked with our sourcing company in China, providing them with the specifications for the product changes that were needed and then assisting them in conjunction with Rx Safes, Inc. to facilitate the prototyping and testing of these various changes to the product. Although we can continue to use this newly designed core technology, if we are able to raise sufficient capital we will further re-design our core electronic fingerprint and mechanical locking systems to incorporate the latest improvements in technology and cost reduction. As part of our product roadmap, we presently have three additional products at various stages of design. Firstly, we have a hand manufactured model of a larger version of the Rx DrugSAFE, the Rx DrugSAFE Pro, which can still be used in the home but is primarily designed to accommodate larger and a greater number of prescription pill bottles to support the needs of a variety of healthcare environments including assisted living facilities, nursing homes and emergency service vehicles. In order to commercialize these products, there are various steps we must take. The second product is the Rx DrugSAFE IC, which is designed to be securely mounted inside of an existing medicine cabinet. Finally, our third product is a proof of concept of the proposed Mobile Medical Station (MMS). The MMS is a waterproof, shockproof and secure rolling case with telescopic handle that is secured with our patented fingerprint technology. The case incorporates state of the art vital statistics monitoring equipment, a rugged field tablet containing patient H&P data which can be securely uploaded to the primary healthcare enterprise system and one of our Rx DrugSAFE fingerprint lockboxes for the safe and secure transportation of medications.

 

 

The fingerprint technology we plan on using in the Rx Drug SAFE Pro is identical to that of our current product. However, we will need to create CAD drawings for the assembly and then manufacture tooling for all the parts that make up the metal box. Once commenced, we anticipate that this will take approximately 2 months. We will then need to manufacture several samples of these parts, known as “first shots” from the tooling to test the integrity of the tools. This sampling is expected to take one month. Once we have verified that the tools are sufficient, we will then need to hand-assemble and test approximately 20 samples of the Rx DrugSAFE PRO with the new electronics, mechanical lock and other new design features that were incorporated into the new Rx DrugSAFE. At this point we will need to design in stronger mechanical locking components to support the larger size and greater weight of the Rx DrugSAFE Pro. This step is anticipated to take an additional 2 months. We have the option of working with our existing manufacturing and development partner in China, Good Promotions, to source the necessary components, make the mold and prototype the Rx DrugSAFE Pro so that we can test the product prior to mass manufacturing. Alternatively, if we determine that it makes the most sense and is financially viable, we may decide to identify a metal fabricator in the US to make the molds and prototypes and subsequent production units. This is an important business decision as once the molds have been built we will be somewhat committed to work with the manufacturer who has the molds as they are almost impossible to ship. Once we have paid for the production of the molds, if we wanted to change direction and use a different manufacturer to make the product, we would likely have to pay for new molds to be made.

 

Regardless of which manufacturing route we decide to take, once these samples are properly tested we will then be able to place an order for production. We were hopeful to raise money by the end of June 2015, but we have only raised limited funds from the sale of convertible notes. Our new plan is to conduct a private offering of equity shares. If we are successful in raising capital by the end of June 2015, we anticipate that this will occur at the end of August 2015 so we will have units of the Rx DrugSAFE PRO available for resale in December 2015. Many of the healthcare facilities we have spoken with to date have requested additional features be available with our products to make them more applicable for their use. As part of the development of the Rx DrugSAFE PRO, we will also evaluate the cost of adding audit tracking capabilities to the safe, which will require additional flash memory, newly developed software and a time clock be added to the Printed Circuit Board. We may consider engaging the services of a US based engineering partner to perform this evaluation and deliver a report on the feasibility and cost differential for adding these additional features. This evaluation is anticipated to take 2 months and will be designed into the electronics over time.

 

All of the steps needed for the development of the Rx DrugSAFE PRO will be taken with the Rx DrugSAFE IC. This product is an insert designed to be installed inside of most standard medicine cabinets to allow seamless introduction of our secure technology in a place most households are familiar with keeping their medications. Because we do not intend to change the fingerprint module we use in the IC, we will simply focus on the industrial and mechanical design for this product and will work with our manufacturing and development partner, Good Promotions, to complete these designs and create the mold. If we are successful in raising capital by the end of May 2015, we anticipate we will begin the process of developing this product in July 2015 and that the CAD drawing and tooling for this will be completed at the end of June. Sampling of the parts will take place in September 2015 and then testing of the finished sample units will be conducted in October and December 2015. The IC will need to be tested in various standard medicine cabinets offered for sale in the US prior to launching in the market. We should be able to place or first order for this product for availability at the end of 2015 or early 2016. As with the Pro, we have already received a number of enquiries for the IC version of our product.

 

If we are able to raise $1,835,000 by the end of June 2015 we will be able to commence production design of the Mobile Medical Station. It is our intention to develop strategic relationships with OEM suppliers for each of the required devices including the case and offer a standard MMS along with customizable options, depending upon the specific needs of the healthcare provider group. We will work with the case manufacturer to incorporate our fingerprint interface into the case. This process may require some additional tooling of parts to incorporate the technology but this will not be determined until we begin the project. We anticipate that the MMS will be available for initial order at the end of 2015.

 

If we are only able to raise $585,000 necessary to continue our business operations we will have to scale back the number of samples of the Rx DrugSAFE PRO that we produce for testing although the schedule will stay the same. We will not be able to afford evaluation for adding new technology but anticipate the timeline to bring the basic RxDrugSAFE PRO to market will remain the same. However, we anticipate that the development of the Rx DrugSAFE IC will be delayed until additional funds are available that can be further dedicated to Research and Development. We will also have to delay the production design of the MMS.

 

 

In order to create a market for our current and future products we recognize the importance of having a strong sales and marketing plan. We have budgeted $369,000 in any capital we are able to raise to be spent on sales and marketing over the next 12 months of operations.

 

We have already taken steps to establish sales channels for our products and have begun to re-engage with the large distributors McKesson, Cardinal Health and Amerisource Bergen. We plan to invest in the participation of their various marketing programs to provide exposure for our products within their channels of distribution, which are the national pharmacy chains as well as the many independently owned or franchised neighborhood pharmacies as well as commercial healthcare facilities. With McKesson and Cardinal Health, we already have established distribution agreements in place and anticipate it will take a month or two to re-establish parameters for these two accounts. We have yet to establish a distribution agreement with Amerisource Bergen and anticipate that this will take approximately 3 months to develop the necessary relationships and establish an agreement. We will be able to accomplish these two prior goals even if we are only able to raise the minimum necessary to continue operations. However, a key to making these relationships successful is participating in their various “pay to play” programs where each company’s sales force is incentivized to sell particular products based on our participation in such programs. These programs include but are not limited to providing targeted sales material to the reps to help market our product, attending and exhibiting at various trade shows hosted by each respective distributor, offering special discounted pricing and providing special financial incentives to the sales reps to encourage them to sell our products. The participation in such programs is an ongoing effort and if we are only able to raise the minimum necessary to continue our business operations, we will not have the adequate financial resources in place to participate and will therefore have to rely on traditional grass roots efforts, i.e., establishing our own demand at the end user level, in order to make these relationships a success.

 

Effective March 1, 2015 we have retained an investor/public relations firm called Renmark Financial Communications Financiers, to work with the company to gain exposure and build awareness and visibility of our company in the marketplace.

 

A critical part of any business success is a strong web and social media presence. To facilitate this, we intend to hire a company to manage our social media presence as well as revamp and optimize our own website with SEO and SEM with an ultimate goal to be in the top 3 of browser searches for our products and related products. If we are able to raise the necessary funds, the goal would be to increase our ranking over a period of 6 months. This is a top priority for us to be able to increase consumer awareness of our business and we will execute this even if we are only able to raise the minimum amount required to continue operations as this is considered a critical component of our ongoing sales and marketing efforts. To support this we will also need to create strong visual branding and have already identified a graphics design consultant we will engage to strengthen our visual presence across the web, promotional material and in any media campaigns. Even if we are only able to raise the minimum amount needed to continue operations, we will still set aside the necessary resource to engage a graphics person although we will scale down the amount of time spent on visual branding to only address the web based needs of the company.

 

An effective way to reach our targeted consumer audience is through the use of an infomercial. We will set aside approximately $100,000 of our sales and marketing budget to produce both a short form and long form infomercial and buy media time in select target markets to test the success of this for our current product. If successful we will dedicate additional resources from an intended subsequent capital raise to launch a full blown infomercial campaign and will engage with a third party fulfillment company to handle the incoming calls and product fulfillment. We will be able to fund an infomercial at this level if we are able to raise $1,835,000. If we are not able to raise that, we will not have sufficient funds to develop an infomercial or purchase media time and therefore will not be able to execute on this part of our plan.

 

Our ultimate goal for the consumer version of our product is to make it widely attainable to the public through medical reimbursement. To this end, we will once again pursue FDA registration, set aside approximately $10,000 to pay the necessary product and facility registration fees and will then hire a consultant to assist us in the process of navigating CMS and private health insurance companies to recognize the product as a medical device and offer reimbursement of the majority of the purchase price through their plans so that the customer will only have to pay a small co-payment to purchase the product. If we are successful in raising capital by the end of June 2015, our goal is to have the Rx DrugSAFE product be reimbursable by September 2015. However, if we are only able to raise the minimum amount required to continue operations we will still look to immediately obtain the necessary registrations and pay the corresponding fees but will not be in a position to hire a consultant to assist us in establishing the product as a reimbursable medical device and will instead need to navigate this effort without the assistance of an industry expert. Without the guidance of an industry specialist, we anticipate that the September 2015 goal would be too aggressive and we would likely push back our targeted date to December 2015.

 

 

We have also found trade shows to be an effective way to reach a large number of potential customers for a small investment of capital and plan on attending 5 in the next 12 month period. To support our intended growth in facilities within the healthcare industry and once we are able to raise the necessary funds, we will invest approximately $50,000 of our sales and marketing budget to attend and exhibit at a number of industry trade shows, securing booth space, and creating a small trade show display for the company and products. If we are only able to raise the minimum amount required to continue operations we will significantly reduce our trade show budget to $10,000 and will likely select only one event to attend in the initial 12 month period in addition to the already scheduled International Cannabis Association Conference in June, 2015, where Rx Safes, Inc. will be exhibiting and our CEO Lorraine Yarde will be speaking on the topic of Patient Responsibility and using the Rx DrugSAFE to Reduce Dispensary Liability.

 

Because we will need to regularly inform our customers and the market on our business progress as well as provide updated information on trends in our industry our goal would be to issue a Press Release a minimum of once every two weeks as the business continues to achieve its milestones and the industry landscape changes. However, with limited resources should we only raise the minimum amount required to continue operations, we will have to significantly decrease our commitment to this effort limiting the issuing of a Press Release to once every month. This could have a negative impact on the marketplace as we will not be able to effectively communicate our progress to the market.

 

On March 26, 2015, we announced that we have established our first marijuana business reseller agreement with Medical Cannabis Institute (MCI), a leading resource for cannabis education, information and training, located in Las Vegas, Nevada. MCI assists patients in navigating the complex world of medical marijuana and will be offering the Rx DrugSAFE for sale to its clients, within its high traffic facility as well as at its website. 23 states plus DC have legalized the sale of marijuana products for medical purposes and the market is growing faster than any other emerging industry. This presents a unique opportunity for Rx Safes to position its Rx DrugSAFE product as a tool to keep marijuana and cannabis infused edibles securely locked up and away from children in the home.

 

Finally, we have identified a number of not for profit organizations with whom we would like to partner. These organizations have access to targeted audiences of potential consumers of our product and would advertise our product on their website, at various events and as part of targeted campaigns. All of these organizations require financial sponsorship in order to take advantage of the wide reach they enjoy and this outreach could be key in creating awareness of our product by qualified potential customers who are already taking the time to investigate the issue of prescription drug abuse by visiting the organizations site or attending an event. We will need to raise at least $1,210,000 of our targeted amount to in order to participate with at least one of these organizations. If we only raise the minimum amount, we will not be able to afford the sponsorship fees and will therefore not be able to pursue this avenue to potential customers.

 

With our multifaceted effort to create a market for our product it is essential to ensure we have adequate product to meet the potential demand and will therefore budget $615,000 raised through the offering to place an immediate inventory order from our existing manufacturing partner Good Promotions and have it shipped and housed at Exxtra Express with whom we have already established a warehousing and distribution relationship. These units will have a lead time of approximately 90 days to arrive at our warehousing facility from the time of order. We find it effective to invest in a third party warehouse to fulfill our orders as we benefit from their fast turn around and discounted shipping rates and overall believe the company will save a substantial amount of money using them as a partner. We plan to order approximately 7,500 units of our current product and set aside any remaining balance to place a small order for each of the Pro and IC products once we have completed their product design so that we can do a pilot test of those products in select markets. Through our manufacturing sourcing partner we have access to multiple factories should our capacity outgrow the capabilities of our present facility. Thus, we believe 7,500 units will not be a problem. If we are only able to raise $585,000, we will have to significantly reduce the amount of units of the Rx DrugSAFE to 2,000 pieces and will likely only be able to afford to order approximately 300 units of the Rx DrugSAFE PRO product. This will have a negative impact on our pricing as the less units we order, the higher the cost. This will also clearly impact our revenue potential and will mean that the release of the Rx DrugSAFE IC will need to be postponed until we have adequate capital to order the necessary inventory.

 

 

We have budgeted $1,205,000 of any monies we are able to raise for general working capital. Up to February 2014 we had been operating the business from a home office but in March 2014 we identified suitable office space to relocate the company within a Regus Executive Suite facility. The space we have secured is in an executive office and although we presently have only one small office, we have the ability to easily expand the space needed as we bring on additional personnel. We expect to incur additional office expense for telephone/internet, office furniture and equipment postage and utilities and have budgeted another $50,000 to cover these expenses. We will then look to hire personnel to help support the company’s intended growth and execute on our business plan. These resources will include three executive personnel, a CEO, currently held by Ms. Yarde, CFO and COO, two senior sales executives, one to focus on developing our market in the consumer space and the other focusing on the healthcare industry in general, each with their respective sales support administrator, an in-house bookkeeper, and a receptionist/office administrator. This hiring effort will begin immediately once we have raised the necessary capital and we are budgeting approximately $750,000 within the next 12 months of operations for payroll costs and benefits. Effective January 1, 2015, we entered into an employment agreement with our CEO, Lorraine Yarde, which secures her ongoing commitment to the company. However, until we are able to raise enough money, we are not able to compensate Ms. Yarde under her agreement and her salary and benefits are presently accruing.

 

The remaining $380,000 of working capital will be used as needed to continue to support our business. The money will be spent in the areas of T&E, consulting and professional fees (we will place our securities counsel, The Doney Law Firm, our audit firm ZBS Group, LLP and our accountants, Tichy and Ioanides, CPA on monthly retainers), inventory management and distribution (Exxtra Express), and to build on our intellectual property portfolio through the filing of design patents for each of our products and other day to day operating expenses. If we are only able to raise $585,000 it will force us to significantly scale back our proposed operations. We will still need to maintain suitable office space but will simply keep 1- 2 small offices in the Executive Suite and reduce the monthly budget to approx. $1,000 per month, including phones and internet. We will also then eliminate the need to purchase costly office furniture and equipment.

 

Results of Operations for the three months ended March 31, 2015 and 2014

 

Revenues

 

Our total revenue reported for the three months ended March 31, 2015 was $49,920, an increase from $1,066 for the same period ended 2014. The revenues we had for the three months ended March 31, 2015 were predominantly from the fulfillment of our purchase order from the Oklahoma Bureau of Narcotics. We had a gross profit for the three months ended March 31, 2015 of $24,628, or approximately 49% of revenues. We hope to achieve increased revenues once we establish sales channels for our products and implement our business strategies as described above. If we are unable to obtain financing, however, the implementation of our business strategies will be frustrated and we could go out of business.

 

 

Operating Expenses

 

Operating expenses increased to $1,479,641 for the three months ended March 31, 2015 from $12,930 for the three months ended March 31, 2014. The main reason for the sharp increase in operating expenses was due to a compensation expense of $1,403,657 for options issued under an employment agreement with our officer and director. The detail by major category is reflected in the table below.

 

		Three Months Ended March 31
		2015				2014
Merchant Account Fees		$	225			$	210
Advertising and Promotion			2,763				95
Automobile Expense			607				149
Bank Service Charges			138				24
Meals and Entertainment			1,267				190
Marketing Expenses			1,738				517
Computer and Internet Expenses			358				87
Freight and Shipping			1,068				-
Business Licenses			223				480
Insurance Expenses			1,291				-
Trade Shows			6,290				-
Office Supplies			677				454
Office Expense			81				32
Officer’s Salary			43,750				-
Compensation Expense			1,403,657				-
Postage			1,006				316
Financial Reporting Services			198				-
Professional Fees			7,886				8,425
Rent Expense			2,131				1,950
Telephone Expenses			1,264				-
Travel Expense			3,004				-
Total Operating Expense		$	1,479,641			$	12,930

 

We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with our business activities and the professional fees associated with our reporting obligations under the Securities Exchange Act of 1934.

 

Other Expenses

 

Other expenses increased to $31,865 for the three months ended March 31, 2015 from $758 for the three months ended March 31, 2014. Our other expenses for the three months ended March 31, 2015 was entirely a result of interest expenses of $48,634, offset by a gain in derivative liability of $16,769. Our other expenses for the three months ended March 31, 2014 was entirely a result of interest expenses of $858, offset by a gain in derivative liability of $100.

 

Net Loss

 

We incurred a net loss of $1,486,878 for the three months ended March 31, 2015, compared to a net loss of $12,912 for the three months ended March 31, 2014.

 

Liquidity and Capital Resources

 

As of March 31, 2015, we had total current assets of $75,327 and total current liabilities of $461,038. We had a working capital deficit of $385,711 as of March 31, 2015.

 

Operating activities provided $2,181 in cash for the three months ended March 31, 2015. Our compensation expense related to the issuance of options to our officer and director in the amount of $1,403,675, gain on derivative liability of $125,847, salary payable of $43,750 and inventory of $25,364 were the main components of our positive operating cash flow, offset mainly by our net loss of $1,486,878 and debt discount on convertible notes of $94,933.

 

Cash flows provided by financing activities during the three months ended March 31, 2015 amounted to $59,726 from the issuance of convertible notes of $100,000, offset by repayments on related party loan advances of $40,274.

 

We had $74,994 in cash available as of March 31, 2015. Management believes that we will need $2,500,000 to implement and fully carry out our business plan and no further funding will be required. However, we must raise at least $585,000 in net proceeds in the next two to twelve months otherwise we may temporarily or permanently have to cease operations.

 

 

On February 25, 2015 we entered into a securities purchase agreement with Coventry whereby Coventry agreed to invest up to $100,000 in exchange for our issuance of two convertible promissory, each in the original principal amount of $50,000.00. The Notes bear interest at a rate of 8% per annum. All outstanding principal and accrued interest under the Notes is due and payable on February 25, 2016. In addition, on the same date we entered into an Equity Purchase Agreement with Coventry, whereby Coventry agreed to purchase up to $10,000,000 of our common stock, to be registered in a Form S-1 registration statement. The agreement will have a three-year term unless sooner terminated because $10,000,000 of our common stock has already been sold to Coventry. The registration of the shares is not mandatory and we may choose to look to other forms of financing to support the ongoing efforts of the business.

 

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of our company as a going concern. However, we had minimal revenues for the three months ending March 31, 2015 and year ended December 31, 2014. We currently have negative working capital, and have not completed our efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

 

Management anticipates that we will be dependent, for the near future, on additional investment capital to fund operating expenses. We intend to position our company so that we may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that we will be successful in this or any of our endeavors or become financially viable and continue as a going concern.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies currently fit this definition. Our significant accounting policies are contained in Note 2 to our financial statements included herein.

 

Recently Issued Accounting Pronouncements

 

On May 1, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company will continue to assess the impact on its financial statements.

 

In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the financial statements.

 

 

On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholder’s equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

 

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company expects to adopt this new standard for the fiscal year ending December 31, 2015 and the Company will continue to assess the impact on its financial statements.

 

Off Balance Sheet Arrangements

 

As of March 31, 2015, there were no off balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, 2015, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2015, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

 

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following three material weaknesses that have caused management to conclude that, as of March 31, 2015, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

 

	1.	We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending March 31, 2015. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
	2.	We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.
	3.	Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

 

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

 

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

 

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

 

Changes in Internal Control over Financial Reporting

 

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended March 31, 2015, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

 

Aside from that below, we are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

On March 10, 2015, we filed a complaint in the District Court for Clark County, Nevada, against Wall Street Buy Sell Hold Inc., a New York corporation, for Fraud in the Inducement, Deceptive Trade Practices and Unjust Enrichment in connection with a Consulting Agreement dated February 10, 2014. As a result of the misrepresentations and actions perpetuated by Wall Street Buy Sell Hold Inc., we are asking court to award us damages, recession of the Consulting Agreement and a return of monies paid thereunder, and for punitive damages.

 

On March 5, 2015, Wall Street Buy Sell Hold Inc. filed a complaint in the Supreme Court for Nassau County, NY against us in connection with the Consulting Agreement. Wall Street Buy Sell Hold Inc. has alleged breach of contract and specific performance for monies and warrants it believes it is owed under the agreement. We intend to vigorously defend this action.

 

Item 1A: Risk Factors

 

See risk factors included in the Company’s Annual Report on form 10-K for 2014.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Effective February 12, 2015, we executed a consulting agreement with Sean McManus. On April 1, 2015, we executed an addendum to this agreement extending the term for an additional 6 months and expanding the services to be performed by the consultant. Upon execution of this addendum we issued the consultant 1,000,000 restricted shares of our common stock.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

N/A.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 formatted in Extensible Business Reporting Language (XBRL).
		**Provided herewith

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

RX Safes, Inc.
Date:	May 20, 2015
By:	/s/ Lorraine Yarde
Name:	Lorraine Yarde
Title:	President, Chief Executive Officer, and Director

 

 

 

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