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EX-10.5 - PROMISSORY NOTE DATED JULY 26, 2017 ISSUED TO A.R. MILLER FOR ACQUISITION OF LA - WEED, INC.exhibit_10-5.htm
EX-23.1 - CONSENT OF M&K CPAS, PLLC. - WEED, INC.exhibit_23-1.htm
EX-10.6 - DEED OF TRUST DATED JULY 26, 2017 RELATED TO ACQUISITION OF LA VETA, CO PROPERTY - WEED, INC.exhibit_10-6.htm
EX-10 - SHARE EXCHANGE AGREEMENT BY AND BETWEEN WEED, INC. AND SANGRE AT, LLC DATED APRI - WEED, INC.exhibit_10-4.htm
EX-10.3 - EMPLOYMENT AGREEMENT WITH RYAN BREEN DATED OCTOBER 1, 2016 - WEED, INC.exhibit_10-3.htm
EX-10.2 - EMPLOYMENT AGREEMENT WITH NICOLE BREEN DATED OCTOBER 1, 2016 - WEED, INC.exhibit_10-2.htm
EX-10.1 - EMPLOYMENT AGREEMENT WITH GLENN E. MARTIN DATED OCTOBER 1, 2016 - WEED, INC.exhibit_10-1.htm
EX-3.2 - BYLAWS OF WEED, INC. - WEED, INC.exhibit_3-2.htm
EX-3.1 - ARTICLES OF INCORPORATION OF WEED, INC. - WEED, INC.exhibit_3-1.htm
 
As filed with the Securities and Exchange Commission on August 11, 2017
 
Registration No. 333-

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

Form S-1
 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 

 
WEED, Inc.
(Exact name of registrant as specified in its charter)
 

 
Nevada
8731
83-0452269
(State or other jurisdiction of
incorporation or organization
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
 

 
4920 N. Post Trail
Tucson, AZ 85750
 
(520) 818-8582
(Address, including zip code, of registrant’s principal executive offices)
(Telephone number, including area code)
 

 
Glenn E. Martin, President
WEED, Inc.
4920 N. Post Trail
Tucson, AZ 85750
(520) 818-8582 (Name, address, including zip code, and telephone
number, including area code, of agent for service)
 
COPIES TO:
 
Craig V. Butler, Esq.
Law Offices of Craig V. Butler
300 Spectrum Center Drive, Suite 300
Irvine, CA 92618
(949) 484-5667
 

Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective.
 
 
i
 
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
(Do not check if a smaller reporting company)
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
 

 
CALCULATION OF REGISTRATION FEE
 
 
Title of each
class of
securities to be
registered
 
 
Amount
to be
registered (1)
 
Proposed
maximum
offering price
per share (2)
 
Proposed
maximum
aggregate
offering price (1)
 
 
Amount of
registration
fee (3)
 
Common Stock, $0.001 par value
 
8,982,015
 
$1.05
 
$9,431,115.75
 
$1,093.07
 
Total Registration Fee
 
$1,093.07
 
(1)
The Registrant is registering for resale by the selling stockholders identified in the prospectus contained herein 8,982,015 shares of common stock. Pursuant to Rule 416 under the Securities Act of 1933, as amended, the shares of common stock registered hereby also include an indeterminate number of additional shares of common stock as may from time to time become issuable by reason of stock splits, stock dividends, recapitalizations or other similar transactions. Pursuant to Rule 416 of the Securities Act, as amended, this registration statement shall be deemed to cover additional securities (i) to be offered or issued in connection with any provision of any securities purported to be registered hereby to be offered pursuant to terms that provide for a change in the amount of securities being offered or issued to prevent dilution resulting from stock splits, stock dividends, or similar transactions and (ii) of the same class as the securities covered by this registration statement issued or issuable prior to completion of the distribution of the securities covered by this registration statement as a result of a split of, or a stock dividend paid with respect to, the registered securities.
(2)
Estimated solely for purposes of calculating the registration fee under Rule 457 under the Securities Act, as amended, based on the average of the high and low price of the Registrant’s common stock on August 7, 2017, as quoted on OTC Markets on a day within five business days from the date of filings of this registration statement, which was $1.05 per share (based on high and low prices of $1.07 and $1.02).
(3)
The registration fee is calculated pursuant to Rule 457(c) of the Securities Act of 1933 based on the average of the high and low price of the Registrant’s common stock on August 7, 2017, as quoted on OTC Markets on a day within five business days from the date of filings of this registration statement, which was $1.05 per share (based on high and low prices of $1.07 and $1.02).
 
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 
ii
 
 
YOU MAY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR SALE OF COMMON STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THESE SHARES OF THE COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER OR SOLICITATION IS UNLAWFUL.
 8,982,015 SHARES
 
 
WEED, INC.
________________
 
   
 
TABLE OF CONTENTS
 
 
 
 
 
Page
 
 
 
 
Prospectus Summary
2
-----------------------
  PROSPECTUS
-----------------------
 
 
 
 
 
 _____________, 2017
 
 
 
 
 
 
 
 
 
 
 
Corporate Information
2
Risk Factors
4
Use of Proceeds
8
Selling Security Holders
9
Plan of Distribution
13
Description of Securities
15
Interests of Experts and Counsel
15
Description of Business
16
Description of Property
23
Legal Proceedings
23
Index to Financial Statements
25
Management’s Discussion and Analysis or Plan of Operation
26
Changes in Accountants
35
Directors, Executive Officers
36
Executive Compensation
37
Security Ownership
39
Certain Transactions
39
Available Information
42
Experts
42
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
iii
 
 
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
Subject to Completion, Dated August 11, 2017
 
PROSPECTUS
 
8,982,015 shares of common stock
 
WEED, INC.
 
This prospectus relates to the resale of Common Shares which were issued by WEED, Inc., a Nevada corporation (“we” or the “Company”) in previous private placement transactions by the selling security holders named herein under “Selling Shareholders.” We will not receive any proceeds from the resale of these Common Shares.
 
The Selling Shareholders may offer all or part of the shares for resale from time to time through public or private transactions, at either prevailing market prices or at privately negotiated prices. The Company is paying for all registration, listing and qualification fees, printing fees and legal fees.
 
Our Common Shares are quoted on OTC Market’s “OTC Pink” tier under the ticker symbol “BUDZ.” On August 7, 2017, the closing price of our Common Shares was $1.03 per share.
 
Investing in the common stock involves risks. WEED, Inc., currently has limited operations, limited income, and limited assets, is in unsound financial condition, and you should not invest unless you can afford to lose your entire investment. See “Risk Factors” beginning on page 4. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
 
 
The date of this prospectus is August __, 2017
 
 
 
 
 
 
 
 
 
 
 
 
1
 
 
PROSPECTUS SUMMARY
 
You should read the following summary together with the more detailed information and the financial statements appearing elsewhere in this Prospectus. This Prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” and elsewhere in this Prospectus. Unless the context indicates or suggests otherwise, references to “we,” “our,” “us,” the “Company,” or the “Registrant” refer to WEED, Inc., a Nevada corporation.
 
WEED, INC.
 
We are an early stage holding company currently focused on the development and application of cannabis-derived compounds for the treatment of human disease. Our wholly-owned subsidiary, Sangre AT, LLC (“Sangre”), has begun a planned five-year Cannabis Genomic Study to complete a global genomic classification of the Cannabis plant genus. By targeting cannabis-derived molecules that stimulate the endocannabinoid system, Sangre’s research team plans to develop scientifically-valid and evidence-based cannabis strains for the production of disease-specific medicines. The goal of the research is to identify, collect, patent, and archive a collection of highly-active medicinal strains. We plan to conduct this study only in states where cannabis has been legalized for medicinal purposes.
 
Using annotated genomic data and newly generated phenotypic data, Sangre plans to identify and isolate regions of the plant genome which are related to growth, synthesis of desired molecules, and drought and pest resistance. This complex data set would then be utilized in a breeding program to generate and establish new hybrid cultivars which exemplify the traits that are desired by the medical and patient community. This breeding program would produce new seed stocks and clones, which we plan on patenting. If successful this intellectual property should generate immense value for the Company. After developing a comprehensive understanding of the annotated genome of a variety of cannabis strains, and obtaining intellectual property protection over the most promising strains, we plan to provide the blueprints for the development of significant medicinal products for the treatment of human diseases including, but not limited to, autism, pediatric brain cancer, PTSD, epilepsy, chronic pain, and Crohn’s disease.
 
Currently, we do not have the money or funding to achieve the above goals and we will not be able to achieve our goals unless we are successful in obtaining additional funding, likely through sales of our securities, all which may serve to dilute the ownership position of our current and future shareholders.
 
Corporate Information
 
We were originally incorporated under the name Plae, Inc., in the State of Arizona on August 20, 1999. At the time we operated under the name Plae, Inc., no business was conducted. No books or records were maintained and no meetings were held. In essence, nothing was done after incorporation until Glenn E. Martin took possession of Plae, Inc. in January 2005. On February 18, 2005, the corporate name was changed to King Mines, Inc. and then subsequently changed to its current name, United Mines, Inc., on March 30, 2005. No shares were issued until the Company became United Mines, Inc. From 2005 until 2015, we were an exploration stage mineral exploration company that owned a number of unpatented BLM mining claims and Arizona State Land Department exploration leases.
 
On November 26, 2014, our Board of Directors approved the redomestication of our company from Arizona to Nevada (the “Articles of Domestication”), and approved Articles of Incorporation in Nevada, which differed from then-Articles of Incorporation in Arizona, primarily by (a) changing our name from United Mines, Inc. to WEED, Inc., (b) authorizing Twenty Million (20,000,000) shares of preferred stock, with blank check rights granted to our Board of Directors, and (c) authorizing Two Hundred Million (200,000,000) shares of common stock (the “Nevada Articles of Incorporation”). On December 19, 2014, the holders of a majority of our outstanding common stock approved the Articles of Domestication and the Nevada Articles of Incorporation at a Special Meeting of Shareholders. On January 16, 2015, the Articles of Domestication and the Nevada Articles of Incorporation went effective with the Secretary of State of the State of Nevada. On February 2, 2015, our name change to WEED, Inc., and a corresponding ticker symbol change to “BUDZ” went effective with FINRA and was reflected on the quotation of our common stock on OTC Markets.
 
 
2
 
 
These changes were effected in order to make our corporate name and ticker symbol better align with our short-term and long-term business focus, which in the short-term is to conduct Sangre’s Cannabis Genomic Study over the next 5 years, process those results, and in the long-term to be an international cannabis research and product development company, with a globally-recognized brand focusing on building and purchasing labs, land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to universities, state governments, licensed dispensary owners and worldwide organic grow operators on a contract basis, with a concentration on the legal and medical Cannabis sector. Our long-term plan is to become a True “Seed-to-Sale” global holding company providing infrastructure, financial solutions, product development and real estate options in this new emerging market. Our long term plans may also include acquisitions of synergistic businesses, such as distilleries to make infused beverages and/or super oxygenated water with CBD and THC. We have also formed WEED Australia Ltd., registered as an unlisted public company in Australia, to address future global demand, however the entity has been dormant since its inception.
 
Our corporate offices are located at 4920 N. Post Trail, Tucson, AZ 85750, telephone number (520) 818-8582.
 
SUMMARY OF THE OFFERING
 
Common Shares offered by Selling Shareholders
 
8,982,015 Common Shares.
  
 
  
Common Shares outstanding before the offering
 
99,991,020 Common Shares as of the date hereof.
  
 
  
Common Shares outstanding after the offering
 
99,991,020 Common Shares.
  
 
  
Use of proceeds
 
We will not receive any proceeds from the sale of shares by the Selling Shareholders.
  
 
  
OTC Markets Trading Symbol
 
BUDZ
  
 
  
Risk Factors
 
The Common Shares offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors”.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
 
 
RISK FACTORS
 
We have a limited operating history and historical financial information upon which you may evaluate our performance.
 
You should consider, among other factors, our prospects for success in light of the risks and uncertainties encountered by companies that, like us, are in their early stages of development. We may not successfully address these risks and uncertainties or successfully complete our studies and/or implement our existing and new products. If we fail to do so, it could materially harm our business and impair the value of our common stock. Even if we accomplish these objectives, we may not generate the positive cash flows or profits we anticipate in the future. We were incorporated in the State of Arizona on August 20, 1999. From 2005 until 2015, we were an exploration stage mineral exploration company that owned a number of unpatented mining claims and Arizona State Land Department claims. On November 26, 2014, our Board of Directors approved the redomestication of our company from Arizona to Nevada and we shifted our business focus to a company concentrating on the development and application of cannabis-derived compounds for the treatment of human disease. Although our subsidiary, Sangre, has begun its planned five-year Cannabis Genomic Study to complete a global genomic classification of the Cannabis plant genus the completion of the study is likely years away. Unanticipated problems, expenses and delays are frequently encountered in establishing a new business, conducting research, and developing new products. These include, but are not limited to, inadequate funding, unforeseen research issues, lack of consumer acceptance, competition, product development, and inadequate sales and marketing. The failure by us to meet any of these conditions would have a materially adverse effect upon us and may force us to reduce or curtail operations. No assurance can be given that we can or will ever operate profitably.
 
We may not be able to meet our future capital needs.
 
To date, we have not generated any revenue and we have limited cash liquidity and capital resources. Our future capital requirements will depend on many factors, including the progress and results of our Cannabis Genomic Study, our ability to develop products, cash flow from operations, and competing market developments. We anticipate the Cannabis Genomic Study will cost approximately $15,000,000 to complete. We will need additional capital in the near future. Any equity financings will result in dilution to our then-existing stockholders. Although we currently do not have any debt financing, any sources of debt financing in the future may result in a high interest expense. Any financing, if available, may be on unfavorable terms. If adequate funds are not obtained, we will be required to reduce or curtail operations.
 
If we cannot obtain additional funding, our research and development efforts may be reduced or discontinued and we may not be able to continue operations.
 
We have historically experienced negative cash flows from operations since our inception and we expect the negative cash flows from operations to continue for the foreseeable future. Unless and until we are able to generate revenues, we expect such losses to continue for the foreseeable future. As discussed in our financial statements, there exists substantial doubt regarding our ability to continue as a going concern.
 
Research and development efforts are highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, issuing additional equity or debt.
 
In addition, we may also raise additional capital through additional equity offerings, and licensing our research and/or future products in development. While we will continue to explore these potential opportunities, there can be no assurances that we will be successful in raising sufficient capital on terms acceptable to us, or at all, or that we will be successful in licensing our future products. Based on our current projections, we believe we have insufficient cash on hand to meet our obligations as they become due based on current assumptions. The uncertainties surrounding our future cash inflows have raised substantial doubt regarding our ability to continue as a going concern.
 
 
4
 
 
Any disruption and/or instability in economic conditions and capital markets could adversely affect our ability to access the capital markets, and thus adversely affect our business and liquidity.
 
Economic conditions and issues with the financial markets have had, and will continue to have, a negative impact on our ability to access the capital markets, and thus have a negative impact on our business and liquidity. The shortage of liquidity and credit combined with the substantial losses in worldwide equity markets could lead to an extended worldwide recession. We may face significant challenges if conditions in the capital markets do not improve. Our ability to access the capital markets has been and continues to be severely restricted at a time when we need to access such markets, which could have a negative impact on our business plans. Even if we are able to raise capital, it may not be at a price or on terms that are favorable to us. We cannot predict the occurrence of future disruptions or how long the current conditions may continue.
 
Our proposed business is dependent on laws pertaining to the cannabis industry
 
Continued development of the cannabis industry is dependent upon continued legislative authorization of marijuana at the state level. Any number of factors could slow or halt progress in this area. Further, progress for the industry, while encouraging, is not assured. While there may be ample public support for legislative action, numerous factors impact the legislative process. Any one of these factors could slow or halt use of marijuana, which would negatively impact our business.
 
As of the end of February, 2017, 28 states and the District of Columbia allow its citizens to use medical marijuana. Voters in the states of Colorado, Washington, Alaska, Oregon and the District of Columbia have approved ballot measures to legalize cannabis for adult use. The state laws are in conflict with the Federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The prior administration (President Obama) effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, the Trump administration has indicated the potential for stricter enforcement of the marijuana industry at the federal level, but to date there has been very little in terms of action. There is no guarantee that the Trump administration or future administrations will maintain the low-priority enforcement of federal laws in the marijuana industry that was adopted by the Obama administration. The Trump administration or any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to our business and our shareholders.
 
Further, and while we do not intend to harvest, distribute or sell cannabis, if we conduct research with the cannabis plant or lease buildings to growers of cannabis, etc., we could be deemed to be participating in marijuana cultivation, which remains illegal under federal law, and exposes us to potential criminal liability, with the additional risk that our properties could be subject to civil forfeiture proceedings.
 
The cannabis industry faces strong opposition. 
 
It is believed by many that large well-funded businesses may have a strong economic opposition to the cannabis industry. We believe that the pharmaceutical industry clearly does not want to cede control of any product that could generate significant revenue. For example, medical cannabis will likely adversely impact the existing market for the current “marijuana pill” sold by mainstream pharmaceutical companies. Further, the medical cannabis industry could face a material threat from the pharmaceutical industry, should cannabis displace other drugs or encroach upon the pharmaceutical industry’s products. The pharmaceutical industry is well funded with a strong and experienced lobby that eclipses the funding of the medical cannabis movement. Any inroads the pharmaceutical industry could make in halting or impeding the cannabis industry could have a detrimental impact on our proposed business.
 
 
5
 
 
Cannabis remains illegal under Federal law. 
 
Cannabis is a schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of cannabis has been legalized, its production and use remains a violation of federal law. Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, strict enforcement of federal law regarding marijuana would likely result in our inability to proceed with our business plan.
 
Laws and regulations affecting the medical cannabis industry are constantly changing, which could detrimentally affect our proposed operations. 
 
Local, state and federal medical cannabis laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
 
If we are unable to recruit and retain qualified personnel, our business could be harmed.
 
Our growth and success highly depend on qualified personnel. Competition in the industry could cause us difficulty in recruiting or retaining a sufficient number of qualified technical personnel, which could harm our ability to develop new products. Also, the fact cannabis remains illegal at the federal level may dissuade qualified personnel from working in the cannabis industry, thus limiting the pool of qualified individuals to run our business. If we are unable to attract and retain necessary key talents, it would harm our ability to develop competitive product and retain good customers and could adversely affect our business and operating results.
 
We may be unable to adequately protect our proprietary rights.
 
Our ability to compete partly depends on the superiority, uniqueness and value of our intellectual property. To protect our proprietary rights, we will rely on a combination of patent, copyright and trade secret laws, confidentiality agreements with our employees and third parties, and protective contractual provisions. Despite these efforts, any of the following occurrences may reduce the value of our intellectual property:
 
 Our applications for patents relating to our business may not be granted and, if granted, may be challenged or invalidated;
 Issued patents may not provide us with any competitive advantages;
 Our efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology;
 Our efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those we develop;
 Another party may obtain a blocking patent and we would need to either obtain a license or design around the patent in order to continue to offer the contested feature or service in our products; or
 The fact cannabis is illegal at the federal level may impact our ability to secure patents from the United States Patent and Trademark Office, and other intellectual property protections may not be available to us.
 
 
6
 
 
We may become involved in lawsuits to protect or enforce our patents that would be expensive and time consuming.
 
In order to protect or enforce our patent rights, we may initiate patent litigation against third parties. In addition, we may become subject to interference or opposition proceedings conducted in patent and trademark offices to determine the priority and patentability of inventions. The defense of intellectual property rights, including patent rights through lawsuits, interference or opposition proceedings, and other legal and administrative proceedings, would be costly and divert our technical and management personnel from their normal responsibilities. An adverse determination of any litigation or defense proceedings could put our pending patent applications at risk of not being issued.
 
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. For example, during the course of this kind of litigation, confidential information may be inadvertently disclosed in the form of documents or testimony in connection with discovery requests, depositions or trial testimony. This disclosure could have a material adverse effect on our business and our financial results.
 
The Selling Shareholders may sell their shares of common stock in the open market, which may cause our stock price to decline.
 
The Selling Shareholders may sell the shares of common stock being registered in this offering in the public market. That means that up to 8,982,015 shares of common stock, the number of shares being registered in this offering, may be sold in the public market. Such sales will likely cause our stock price to decline.
 
Sale of our common stock by the Selling Shareholders could encourage short sales by third parties, which could contribute to the further decline of our stock price.
 
The significant downward pressure on the price of our common stock caused by the sale of material amounts of common stock could encourage short sales by third parties. Such an event could place further downward pressure on the price of our common stock.
 
Our common stock has been thinly traded and we cannot predict the extent to which a trading market will develop.
 
Our common stock is traded on the OTC Markets’ “Pink Current Information” tier. Our common stock is thinly traded compared to larger more widely known companies. Thinly traded common stock can be more volatile than common stock trading in an active public market. We cannot predict the extent to which an active public market for our common stock will develop or be sustained after this offering.
 
Because we are subject to the “penny stock” rules, the level of trading activity in our stock may be reduced.
 
Our common stock is traded on the OTC Markets’ “Pink Current Information” tier. Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. Penny stocks, like shares of our common stock, generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on NASDAQ. The penny stock rules require a broker-dealer, prior toa transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.
 
 
 
7
 
 
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
 
We have made forward-looking statements in this prospectus, including the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are only predictions and involve known and unknown risks and uncertainties, including the risks outlined under “Risk Factors” and elsewhere in this prospectus.
 
Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, events, levels of activity, performance or achievement. We are not under any duty to update any of the forward-looking statements after the date of this prospectus to conform these statements to actual results, unless required by law.
 
USE OF PROCEEDS
 
This prospectus relates to shares of our common stock that may be offered and sold from time to time by the Selling Shareholders. We will not receive any proceeds from the sale of shares of common stock in this offering.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
 
 
SELLING SHAREHOLDERS
 
The Selling Shareholders may offer from time to time up to an aggregate of 8,982,015 shares of our Common Stock.
 
Except as otherwise provided, the following table sets forth certain information with respect to the beneficial ownership of our common stock including the names of the Selling Shareholders, the number of shares of our Common Stock owned beneficially by the Selling Shareholders as of August 7, 2017, the number of shares of Common Stock being offered by each selling stockholder hereby, and the number and percentage of shares of Common Stock that will be owned by each selling stockholder following the completion of this offering:
 
Name of Selling Shareholder
 
Shares of Common Stock Owned Prior to Offering
 
 
Shares of Common Stock to be Offered for the Selling Shareholder’s Account
 
 
Shares of Common Stock Owned by Selling Shareholder After the Offering
 
 
Percent of Common Stock to be Owned by the Selling Shareholder After the Offering
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Victor and Krista Amereno
  2,124 
  2,124 
  -- 
  -- 
Melanie Anderson
  250,000 
  250,000 
  -- 
  -- 
James Burton Anderson
  500,000 
  500,000 
  -- 
  -- 
Kelly Berry
  1,063 
  1,063 
  -- 
  -- 
Daniel J Breen/Ryan Breen
  37,151 
  37,151 
  -- 
  -- 
Jayne Breen
  860,000 
  860,000 
  -- 
  -- 
John Breen
  22,291 
  22,291 
  -- 
  -- 
Nakai Breen
  5,309 
  5,309 
  -- 
  -- 
Ryan Breen
  5,010,615 
  1,000,000 
  4,010,615 
  4.01%
Mark Brewster
  534 
  534 
  -- 
  -- 
Richard Bridgeforth
  43,186 
  43,186 
  -- 
  -- 
Buena Vista Consultant LLC (1)
  3,186 
  3,186 
  -- 
  -- 
Candice Bullis
  1,063 
  1,063 
  -- 
  -- 
Mindy Bullis
  2,124 
  2,124 
  -- 
  -- 
Michelle Cammaran
  532 
  532 
  -- 
  -- 
Kiante Devaun Carroll
  5,309 
  5,309 
  -- 
  -- 
CFO Solutions LLC (2)
  3,077 
  3,077 
  -- 
  -- 
CH Capital LLC (3)
  53,070 
  53,070 
  -- 
  -- 
Charles Castelli
  50,000 
  50,000 
  -- 
  -- 
Jessica M Cox
  2,124 
  2,124 
  -- 
  -- 
John D’Andrea
  5,309 
  5,309 
  -- 
  -- 
Dale R Johnson
  120,000 
  120,000 
  -- 
  -- 
Philip Doyley
  2,124 
  2,124 
  -- 
  -- 
David A Eckert
  132,970 
  132,970 
  -- 
  -- 
 
 
9
 
 
FMTC Roth Ira FBO David A Eckert
  19,696 
  19,696 
  -- 
  -- 
Elliott Kwestels
  128,000 
  128,000 
  -- 
  -- 
Charlotte Elliott & Gary Elliott
  3,186 
  3,186 
  -- 
  -- 
Aimee Elliott
  5,309 
  5,309 
  -- 
  -- 
Fred Erickson
  2,124 
  2,124 
  -- 
  -- 
Experimental Schools Corporation of Arizona (4)
  2,124 
  2,124 
  -- 
  -- 
Joseph Feeney
  2,124 
  2,124 
  -- 
  -- 
Larry Fuller
  2,030 
  2,030 
  -- 
  -- 
Joe & Theresia Gantenhammer
  1,594 
  1,594 
  -- 
  -- 
GEM Management Group LLC Nicole Breen
  19,947,520(10)
  305,505 
  19,642,015(10)
  19.58%
Christopher Gewelke
  1,063 
  1,063 
  -- 
  -- 
Peter Gilboy
  2,656 
  2,656 
  -- 
  -- 
Lawrence Gochioco
  2,000 
  2,000 
  -- 
  -- 
Malcolm Gochioco
  1,000 
  1,000 
  -- 
  -- 
Niels Karsten Gudell
  2,124 
  2,124 
  -- 
  -- 
Shaddine Gum
  1,063 
  1,063 
  -- 
  -- 
Whitney Gum
  1,063 
  1,063 
  -- 
  -- 
Darren Hamans
  10,000 
  10,000 
  -- 
  -- 
Chris Harriman
  124,601 
  124,601 
  -- 
  -- 
Camille Hartmetz
  532 
  532 
  -- 
  -- 
JB Henrickson
  12,303 
  12,303 
  -- 
  -- 
Scott Hill
  13,170 
  13,170 
  -- 
  -- 
Sandra Hogan
  3,000 
  3,000 
  -- 
  -- 
Arnold Hollander
  1,063 
  1,063 
  -- 
  -- 
Richard Huff
  1,063 
  1,063 
  -- 
  -- 
Scott Douglas Hurley
  1,063 
  1,063 
  -- 
  -- 
Rudy Ingersoll
  2,124 
  2,124 
  -- 
  -- 
Jeff Miller
  240,000 
  240,000 
  -- 
  -- 
Dale Johnson
  94 
  94 
  -- 
  -- 
KGP Consulting LLC (5)
  1,063 
  1,063 
  -- 
  -- 
Gurutej Kaur Khalsa
  1,063 
  1,063 
  -- 
  -- 
RBC Capital Markets LLc Cust FBO Elliot Kwestels
  8,000 
  8,000 
  -- 
  -- 
Brenda L Damarin TTEE
  2,000 
  2,000 
  -- 
  -- 
Ashley Jason Lee
  1,063 
  1,063 
  -- 
  -- 
Craig Lee
  532 
  532 
  -- 
  -- 
Edward E Lehman
  5,230 
  5,230 
  -- 
  -- 
Roger Leon
  1,063 
  1,063 
  -- 
  -- 
Derrick Lewis
  2,656 
  2,656 
  -- 
  -- 
 
 
10
 
 
Steven Long
  2,124 
  2,124 
  -- 
  -- 
Charles Lull
  490,063 
  490,063 
  -- 
  -- 
Ashley & Robert Luna
  10,615 
  10,615 
  -- 
  -- 
Linda J Martin
  21,229 
  21,229 
  -- 
  -- 
Nodar Temuri Maskhulia
  1,063 
  1,063 
  -- 
  -- 
Edward Matkoff
  55,000 
  55,000 
  -- 
  -- 
Rodger Mattes
  2,124 
  2,124 
  -- 
  -- 
Edward Mccullough
  1,063 
  1,063 
  -- 
  -- 
Alexandra Miller
  2,124 
  2,124 
  -- 
  -- 
Gregory Miller
  1,063 
  1,063 
  -- 
  -- 
Gregory Paul Miller
  1,099 
  1,099 
  -- 
  -- 
Jaret Miller
  6,370 
  6,370 
  -- 
  -- 
Mari Miller
  1,063 
  1,063 
  -- 
  -- 
Melissa Miller
  1,063 
  1,063 
  -- 
  -- 
Jenny Miranda
  532 
  532 
  -- 
  -- 
Robin Mitchell
  4,778 
  4,778 
  -- 
  -- 
Flora Nefwani
  2,124 
  2,124 
  -- 
  -- 
Jaliyah Nefwani
  1,063 
  1,063 
  -- 
  -- 
Kingston Nefwani
  1,063 
  1,063 
  -- 
  -- 
Marialice Nichols
  6,000 
  6,000 
  -- 
  -- 
Gabriel O’Daniel
  5,309 
  5,309 
  -- 
  -- 
Holliegh O’Daniel
  5,309 
  5,309 
  -- 
  -- 
Jordan O’Daniel
  5,309 
  5,309 
  -- 
  -- 
Kimberly O’Daniel
  21,229 
  21,229 
  -- 
  -- 
Ronald Olsen
  10,934 
  10,934 
  -- 
  -- 
Ronald C Olsen
  1,329 
  1,329 
  -- 
  -- 
Steve Pagac
  1,063 
  1,063 
  -- 
  -- 
Patrick Brodnick
  240,000 
  240,000 
  -- 
  -- 
Jason & Christina Pawelczyk
  2,124 
  2,124 
  -- 
  -- 
Perleberg Enterprises Inc. (6)
  1,063 
  1,063 
  -- 
  -- 
Bryan H Perleberg
  532 
  532 
  -- 
  -- 
Tyler D Perleberg
  532 
  532 
  -- 
  -- 
Michael Peskin
  922 
  922 
  -- 
  -- 
Todd Peterson
  12,000 
  12,000 
  -- 
  -- 
Robert Pulver
  1,063 
  1,063 
  -- 
  -- 
Jessica Raygoza
  532 
  532 
  -- 
  -- 
RBC Capital Markets LLC Cust FBO Elliott Kwestels
  4,000 
  4,000 
  -- 
  -- 
Keith Regan
  4,245 
  4,245 
  -- 
  -- 
Danny Roth
  1,000 
  1,000 
  -- 
  -- 
Sal Rutigliano
  165,000 
  165,000 
  -- 
  -- 
Alec Noel Sanchez
  1,063 
  1,063 
  -- 
  -- 
 
 
11
 
 
Jordyn Kane Sanchez
  1,063 
  1,063 
  -- 
  -- 
Nicole Sanchez
  2,124 
  2,124 
  -- 
  -- 
Barbra Sasselli
  1,063 
  1,063 
  -- 
  -- 
Melanie Scopelitus
  90,000 
  90,000 
  -- 
  -- 
Kalena Larise Scott
  1,063 
  1,063 
  -- 
  -- 
Kimberly Scott
  2,124 
  2,124 
  -- 
  -- 
Carmen Seabre
  1,700 
  1,700 
  -- 
  -- 
Valerie Seabre
  31,842 
  31,842 
  -- 
  -- 
Buddy Shaw
  532 
  532 
  -- 
  -- 
Linda Shaw
  21,229 
  21,229 
  -- 
  -- 
Linda & Jerry Shaw
  5,309 
  5,309 
  -- 
  -- 
Patricia Shouse
  1,063 
  1,063 
  -- 
  -- 
Robert Shouse
  1,063 
  1,063 
  -- 
  -- 
Sikh Dharma of Phoenix, Inc. (7)
  6,370 
  6,370 
  -- 
  -- 
Carmine Simpson
  1,500 
  1,500 
  -- 
  -- 
Soul Singh & Meher Kaur Khalsa
  5,309 
  5,309 
  -- 
  -- 
Jonathan Smuda
  532 
  532 
  -- 
  -- 
Wendy L Starr-Turley
  532 
  532 
  -- 
  -- 
Stephanie & Jose Alonso Garcia
  1,063 
  1,063 
  -- 
  -- 
Stephen R Murphy
  25,000 
  25,000 
  -- 
  -- 
David Summers
  1,063 
  1,063 
  -- 
  -- 
Gordan Surran
  532 
  532 
  -- 
  -- 
Tanque Verde Baptist Church
  10,615 
  10,615 
  -- 
  -- 
Thomas Harrington
  102,000 
  102,000 
  -- 
  -- 
Diane Thomas
  1,063 
  1,063 
  -- 
  -- 
Diane K Wallace
  162 
  162 
  -- 
  -- 
John M Wallace
  162 
  162 
  -- 
  -- 
Water of Life Metropolation Community (8)
  10,615 
  10,615 
  -- 
  -- 
Benita Watford
  6,370 
  6,370 
  -- 
  -- 
Russell Watson
  10,615 
  10,615 
  -- 
  -- 
Edward Weaver
  1,063 
  1,063 
  -- 
  -- 
Roger Weckworth
  1,275 
  1,275 
  -- 
  -- 
Herbert Weiss
  2,500 
  2,500 
  -- 
  -- 
Beverly Weiss
  5,309 
  5,309 
  -- 
  -- 
Charles Welch
  2,230 
  2,230 
  -- 
  -- 
Antonia Whyte
  20,000 
  20,000 
  -- 
  -- 
Patrick E Williams
  195,850 
  195,850 
  -- 
  -- 
Varooge Yarganian
  1,063 
  1,063 
  -- 
  -- 
Jennifer Jill Zavada
  1,063 
  1,063 
  -- 
  -- 
 
 
12
 
 
Tom Zdroik
  1,063 
  1,063 
  -- 
  -- 
Lex Seabre
  1,500,000 
  1,500,000 
  -- 
  -- 
Rodger Seabre
  1,300,000 
  1,300,000 
  -- 
  -- 
Mary A Williams
  145,850 
  145,850 
  -- 
  -- 
Travis Nelson
  50,000 
  50,000 
  -- 
  -- 
Amanda Gross
  33,000 
  33,000 
  -- 
  -- 
Ted Hadfields
  50,000 
  50,000 
  -- 
  -- 
Yuriy Fofanov
  50,000 
  50,000 
  -- 
  -- 
Chad Wagner
  25,000 
  25,000 
  -- 
  -- 
Russ Karlen
  100,000 
  100,000 
  -- 
  -- 
Eric Karlen
  20,000 
  20,000 
  -- 
  -- 
Matthew Turner
  20,000 
  20,000 
  -- 
  -- 
 
(1)
Buena Vista Consultant LLC is controlled by Alan Blankenship.
(2)
CFO Solutions LLC is controlled by J.B. Henriksen.
(3)
CH Capital LLC is controlled by Mark Steward.
(4) 
Experimental Schools Corporation of Arizona is controlled by Nicholas Sofka.
(5)
KGP Consulting LLC is controlled by Kerri G. Parsons.
(6)
Perleberg Enterprises Inc. is controlled by Dean Perlberg
(7)
Sikh Dharma of Phoenix, Inc. is controlled by Soul Singh Khaksa.
(8)
Water of Life Metropolation Community is controlled by Rev. James Burns.
(9)
Because these shares are held jointly with Daniel J. Breen they are not included in Ryan Breen’s ownership, which is listed separately.
(10)
Includes all shares beneficially-owned by Ms. Nicole Breen, including those in her name, those in children’s names, and those held in the name of GEM Management, LLC.
 
None of the Selling Shareholders has, or within the past three years has had, any position, office or material relationship with us or any of our predecessors or affiliates, except as follows:
 
● Nicole Breen is our Secretary and Treasurer and serves on our Board of Directors.
 
PLAN OF DISTRIBUTION
 
We are not offering any of the Selling Shareholders’ securities. These shares may be sold by the Selling Shareholders from time to time at prevailing market prices. We will not receive any of the proceeds from any sale by the Selling Shareholders. The Selling Shareholders may sell or distribute their shares in transactions through underwriters, brokers, dealers or agents from time to time or through privately negotiated transactions, including in distributions to shareholders or partners or other persons affiliated with the Selling Shareholders. If the Selling Shareholder enters into an agreement after the date of this prospectus to sell their shares to a broker-dealer as a principal and that broker-dealer is acting as an underwriter, we will file a post-effective amendment to the registration statement containing this prospectus identifying the broker-dealer and disclosing required information on the plan of distribution. Additionally, prior to any involvement of any broker-dealer in the offering, such broker-dealer must seek and obtain clearance of the underwriting compensation and arrangements from the Financial Industry Regulatory Agency.
 
 
 
 
13
 
 
Penny Stock Rules / Section 15(g) of the Exchange Act
 
Our shares may be considered penny stock covered by Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6 promulgated thereunder. They impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors who are generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 (including spouse's net worth and may include the fair market value of home furnishings and automobiles, but excluding from the calculation the value any primary residence and the related amount of any indebtedness on primary residence up to the fair market value of the primary residence (any indebtedness that exceeds the fair market value of the primary residence must be deducted from net worth calculation)) or annual income exceeding $200,000 or $300,000 jointly with their spouses.
 
Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules. Rule 15g-2 declares unlawful broker/dealer transactions in penny stocks unless the broker/dealer has first provided to the customer a standardized disclosure document.
 
Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny stock transaction unless the broker/dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.
 
Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for a customer unless the broker/dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.
 
Rule 15g-5 requires that a broker/dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales person’s compensation.
 
Rule 15g-6 requires broker/dealers selling penny stocks to provide their customers with monthly account statements.
 
Rule 15g-9 requires broker/dealers to approved the transaction for the customer’s account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination and that it is unlawful to effect the transaction without written authorization for the transaction from the customer.
 
The application of the penny stock rules may affect your ability to resell your shares due to broker-dealer reluctance to undertake the above-described regulatory burdens.
 
 
 
 
 
14
 
 
DESCRIPTION OF SECURITIES
 
Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value $0.001. As of June 30, 2017, there are 99,991,020 shares of our common stock issued and outstanding, held by approximately 258 shareholders of record. There are no shares of our preferred stock outstanding as of the date of this filing.
 
Common Stock. Each shareholder of our common stock is entitled to a pro rata share of cash distributions made to shareholders, including dividend payments. The holders of our common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders. There is no cumulative voting with respect to the election of our directors or any other matter. Therefore, the holders of more than 50% of the shares voted for the election of those directors can elect all of the directors. The holders of our common stockare entitled to receive dividends when and if declared by our Board of Directors from funds legally available therefore. Cash dividends are at the sole discretion of our Board of Directors. In the event of our liquidation, dissolution or winding up, theholders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of our liabilities and after provision has been made for each class of stock, if any, having any preference in relation to our common stock. Holders of shares of our common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock.
 
Dividend Policy. We have never issued any dividends and do not expect to pay any stock dividend or any cash dividends on our common stock in the foreseeable future. We currently intend to retain our earnings, if any, for use in our business. Any dividends declared on our common stock in the future will be at the discretion of our Board of Directors and subject to any restrictions that may be imposed by our lenders.
 
Preferred Stock. We are authorized to issue 20,000,000 shares of preferred stock, par value $0.001. We have not issued, nor established any series for, any of our preferred stock. Our preferred stock is “blank check preferred” whereby our Board of Directors may create a series of preferred stock and set the rights and preferences of such preferred stock, without further shareholder approval. The availability or issuance of preferred shares in the future could delay, defer, discourage or prevent a change in control. On January 14, 2015, our Board of Directors approved the creation of a class of preferred stock to be entitled “Series B Convertible Preferred Stock” with the following rights and preferences: (i) no dividend rights; (ii) no liquidation preference over the Company’s common stock; (iii) conversion rights into shares of common stock at a ratio of 20 shares of common stock for each share of Series B Convertible Preferred Stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) voting rights on an “as converted” basis on all matters properly brought before our common stockholders for a vote. This class of preferred stock has not been created yet and no shares have been issued, but we agreed to create this class of preferred stock and issue shares as set forth in the employment agreements we have with Glenn E. Martin, Nicole Breen and Ryan Breen, as detailed herein.
 
INTEREST OF NAMED EXPERTS AND COUNSEL
 
Law Offices of Craig V. Butler serves as our legal counsel in connection with this offering. Mr. Butler does not own any of our securities.
 
 
 
 
 
15
 
 
DESCRIPTION OF BUSINESS
 
General
 
We are an early stage holding company currently focused on the development and application of cannabis-derived compounds for the treatment of human disease. Our wholly-owned subsidiary, Sangre AT, LLC (“Sangre”), has begun a planned five-year Cannabis Genomic Study to complete a global genomic classification of the Cannabis plant genus. By targeting cannabis-derived molecules that stimulate the endocannabinoid system, Sangre’s research team plans to develop scientifically-valid and evidence-based cannabis strains for the production of disease-specific medicines. The goal of the research is to identify, collect, patent, and archive a collection of highly-active medicinal strains. We plan to conduct this study only in states where cannabis has been legalized for medicinal purposes.
 
Using annotated genomic data and newly generated phenotypic data, Sangre plans to identify and isolate regions of the plant genome which are related to growth, synthesis of desired molecules, and drought and pest resistance. This complex data set would then be utilized in a breeding program to generate and establish new hybrid cultivars which exemplify the traits that are desired by the medical and patient community. This breeding program would produce new seed stocks and clones, which we plan on patenting. If successful this intellectual property should generate immense value for the Company. After developing a comprehensive understanding of the annotated genome of a variety of cannabis strains, and obtaining intellectual property protection over the most promising strains, we plan to provide the blueprints for the development of significant medicinal products for the treatment of human diseases including, but not limited to, autism pediatric brain cancer, PTSD, epilepsy, chronic pain, and Crohn’s disease.
 
Our current, short-term goals relate to the Cannabis Genomic Study and the resulting development of a variety of new cannabis strains, and, over the next 5 years, we plan to process those results in order to become an international cannabis research and product development company, with a globally-recognized brand focusing on building and purchasing labs, land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to universities, state governments, licensed dispensary owners and organic grow operators on a contract basis with a concentration on the legal and medical cannabis sector..
 
Our long-term plan is to become a true “Seed-to-Sale” global holding company providing infrastructure, financial solutions, product development, and real estate options in this new emerging market. Our long term growth may also come from the acquisition of synergistic businesses, such as distilleries, to make anything from infused beverages to super oxygenated water with CBD and THC. Currently, WEED Inc has formed WEED Australia Ltd., registered as an unlisted public company in Australia to address this Global demand. We have also formed WEED Australia Ltd., registered as an unlisted public company in Australia, to address future global demand, however the entity has been dormant since its inception.
 
Our website is www.weedunitedstates.com.
 
Cannabis Genomic Study
 
After more than 40 years of illicit, underground breeding programs, the genetic integrity of Cannabis has been significantly degraded. Our subsidiary, Sangre AT, LLC (“Sangre”) plans to use a gene-based breeding program to root out inferior cultivars and replace them with fully-validated and patentable cultivars which produce consistent plant products for the medicinal markets. We believe our unique gene-based breeding program will improve cultivars and introduce integrity, stability, and quality to the market in the following ways:
 
 Accelerated and optimized growth rates; modern genomic resources will enhance traditional breeding methods
 
 Generation of new cultivars, accelerating and perfecting the art of selective breeding
 
 Provide the ability to assay for specific genes within the crop, which is critical to strain tracking and market quality assurance
 
 Improve disease and drought resistance
 
 
16
 
 
We believe our gene-based breeding program will facilitate and accelerate:
 
 Improved therapeutic properties
 
 New therapies for migraines/chronic pain, epilepsy, cancer, PTSD, chronic head injury, and others
 
 Enhanced opportunities for new drug discovery through collaborations with national medical research and treatment centers and Bio-pharma companies
 
 Development and protection of intellectual property
 
The Research Plan
 
In order to achieve the desired results outlined above, Sangre has developed a research plan entitled the “Cannabis Genomic Study.” The goal of the study is to complete a global genomic classification of the Cannabis plant genus. Once the classification is complete, the research team plans to develop new cannabis strains that show the highest likelihood of being successful in the treatment of a variety of human diseases, test those strains and then work to produce those strains in a medicinal form for the treatment of disease. The research plan will be conducted using the following steps: Extraction, Purification, Sequencing. Annotation, and Cloning (micro-propagation).
 
Extraction: The extraction of genomic DNA from cannabis is a complex process of cell lysis and DNA recovery. Sangre AgroTech has evaluated, updated, and validated new methods for DNA recovery.
 
Purification: Using next generation purification chemistries, the DNA is cleaned and concentrated for downstream applications.
 
Sequencing: The Cannabis DNA is sequenced using both the Illumina MiSeq and MinIon instruments.
 
Annotation: The genomic data is assembled and annotated using proprietary bioinformatic systems and the data provided to the Sangre AgroTech genetic breeders and cellular cloners.
 
Cloning: Through this process, new, high-value cannabis strains are developed.
 
The objectives of the research plan are as follows:
 
Technical Objective 1: Using two next generation sequencing platforms and proprietary bioinformatics programs, we will sequence five cultivars of Cannabis, and generate fully annotated genomic data.
 
Technical Objective 2: Using the selected cultivars, backcross and forward hybridization studies will be performed to produce a new generation of stock. The progeny of these crosses will be grown, genetically finger-printed, and introduced to the market under patent protection. Up-selection and cultivation of cultivars for quality assurance.
 
Technical Objective 3: Genotypic and phenotypic measurements of the offspring will be performed using Next Generation Sequence Analysis, Genotyping, and Phenotyping analysis. Product focus groups will evaluate new cultivars. Patent protection will be initiated for new cultivars which meet product development criteria.
 
Technical Objective 4: Utilize gene-driven breeding of up-selected cultivars to initiate the generation of “designer” cultivars for clinical research.
 
 
17
 
 
Technical Objective 5: Market placement of selected, genetically enhanced cultivars for the medicinal and bio-pharma markets.
 
Competitive Advantages
 
Sangre’s research and development team works with next generation sequencing (NGS) and emerging third generation instruments, and has developed the most advanced proprietary bioinformatics data systems available. Sangre uses a unique two sequencing approach. One system provides DNA reads of up to 300,000 base pair reads and an NGS system which provides highly accurate short reads. This allows the genomic data to be assembled in a scaffold construct; the long reads forming the scaffold and the short reads providing highly accurate verification and quality assurance of the genomic data. This approach, together with the bioinformatics program, facilitates a highly accurate construct of the Cannabis genome which can be annotated and facilitate gene discovery and gene location. Sangre combination of personnel, skill-sets, and data analytics capabilities will allow us to accomplish our goals in months, rather than years.
 
Using annotated genomic data and newly generated phenotypic data, we plan to identify and isolate regions of the genome which are related to growth, synthesis of desired molecules, and environmental compatibility. This complex data set will be utilized in a breeding program to generate and establish new hybrid cultivars which exemplify the traits that are desired by the medical community. This breeding program will produce new seed stocks, clones, cultivars, and intellectual property which will generate value for the business organization.
 
Sangre will develop a translational breeding program to establish a new collection of Cannabis cultivars for the national market. Using genetic screening technology and micro-propagation, cultivars can be up-selected for specific traits and grown to address the needs of consumers in the medicinal and drug discovery markets. The combination of next generation genomics, selective hybridization, and In Vitro cloning provide us with the tools to enhance new cultivars of patentable Cannabis.
 
Marketing
 
We have not developed a marketing plan and do not intend to until we are in the latter stages of the Cannabis Genomic Study and believe we have strains that are marketable for the treatment of disease. At that time we plan to develop a marketing plan for our newly-developed strains of Cannabis. We believe that if we are successful in developing strains of Cannabis that effectively treat human diseases then the market for our products will be a vibrant market.
 
Manufacturing
 
We are not currently manufacturing any products and do not intend to do so until we are in the latter stages of the Cannabis Genomic Study and believe we have strains that are marketable for the treatment of disease such that we could begin the manufacturing of such products, either in-house or through relationships with third party companies. We do not currently have any relationships with third party companies for the manufacturing of any products.
 
Competition
 
As Cannabis has moved through the legalization process in North America, research groups in Canada and the Unites States have initiated work on understanding the Cannabis genome.
 
 
 
18
 
 
Next Generation Sequencing
 
Next-generation sequencing (NGS), introduced nearly ten years ago, is the catch-all term used to describe several sequencing technologies including:
 
 Illumina (Solexa) sequencing
 
 Roche 454 sequencing
 
 Ion torrent: Proton / PGM sequencing
 
 SOLiD sequencing
 
These recent sequencing technologies allow scientists to sequence DNA and RNA much more quickly and cheaply than the previously used Sanger sequencing, and as such, have greatly expanded the study of genomics and molecular biology. Numerous laboratories within the Cannabis community are currently employing this technology.
 
Colorado State University – Boulder
 
To the best of our knowledge, Colorado State University – Boulder is conducting a Cannabis Genomic Research Initiative, which is currently seeking to describe the Cannabis genome. The data generated through this effort is provided through the public domain to growers in an effort to stimulate the production of new, high-value stains of Cannabis. .
 
Anandia Labs
 
Anandia Labs is conducting work in the area of Cannabis genomics based on sequence work which was completed in 2011. The sequencing work conducted was based on “next generation sequencing” technology and resulted in the generation of tens-of-thousands of DNA segments that have yet to be completely and correctly reassembled. Much of the sequence data that was generated through their sequencing efforts has been placed into the public domain and shared with other laboratories. In some instances, the data has been found to be less than accurate.
 
Phylos Biosciences
 
Phylos Biosciences is currently using DNA-based genetic fingerprinting to establish relationships between strains and to assist in the development of phenotypic databases to accelerate traditional breeding programs. Phylos Biosciences has a primary goal of bringing clarity to the Cannabis market and promote the generation of IP held by individual growers. To the best of our knowledge, Phylos Biosciences is not engaged in whole genome sequencing and is not engaged in any genetic enhancements of the Cannabis strains. They simply supply genetic data to their customer base to more effectively drive the traditional breeding process.
 
New West Genetics
 
New West Genetics aims to improve and develop industrial hemp as a viable crop for the United States. New West Genetics seeks to exploit the diverse end uses of hemp and optimize the genetics of hemp to create a lucrative crop to add to the rotation of US farmers. Industrial hemp’s uses and potential are as great as many major crops, if not more. We believe NWG is utilizing modern sequencing technology and statistical genomics approaches to understand these factors as they apply to hemp production in states where it is legal to grow. Understanding the genotype to phenotype map will be increasingly useful for expanding production of hemp.
 
 
19
 
 
Intellectual Property
 
Currently, we do not have any patents, but consider certain elements of our Cannabis Genomic Study to be trade secrets and we protect it as our intellectual property. In the future, if we are successful in identifying certain Cannabis strains as promising for the treatment of diseases we will seek to patent those strains.
 
Government Regulation
 
As of the end of February, 2017, 28 states and the District of Columbia allow its citizens to use medical marijuana. Voters in the states of Colorado, Washington, Alaska, Oregon and the District of Columbia have approved ballot measures to legalize cannabis for adult use. The state laws are in conflict with the Federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The prior administration (President Obama) effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, the Trump administration has indicated the potential for stricter enforcement of the marijuana industry at the federal level, but to date there has been very little in terms of action. There is no guarantee that the Trump administration or future administrations will maintain the low-priority enforcement of federal laws in the marijuana industry that was adopted by the Obama administration. The Trump administration or any new administration that follows could change this policy and decide to enforce the federal laws strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to our business and our shareholders.
 
Further, and while we do not intend to harvest, distribute or sell cannabis, if we conduct research with the cannabis plant or lease buildings to growers of marijuana, etc., we could be deemed to be participating in marijuana cultivation, which remains illegal under federal law, and exposes us to potential criminal liability, with the additional risk that our properties could be subject to civil forfeiture proceedings.
 
Sangre Agreement
 
On April 20, 2017, we entered into a Share Exchange Agreement with Sangre AT, LLC, a Wyoming limited liability company, under which we acquired all of the issued and outstanding limited liability company membership units of Sangre in exchange for Five Hundred Thousand (500,000) shares of our common stock, restricted in accordance with Rule 144. As a result of this agreement, Sangre is a wholly-owned subsidiary of WEED, Inc.
 
Employees
 
As of June 30, 2017 we employed three persons on a full time basis, namely Glenn E. Martin, Nicole Breen and Ryan Breen. Sangre contracts with two individuals on full-time basis and three individuals on a part-time basis. All these individuals are independent contractors.
 
 
20
 
 
La Veta, Co. Property
 
On July 26, 2017, we acquired property located in La Veta, Colorado in order for Sangre to complete its 5-Year, $15+ million Cannabis Genomic Study. The site includes a 10,000+ sq. ft. building that will house Sangre’s genomic research facility, a 4,000+ square foot building for plant product analytics and plant product extraction, a 3,500 sq. ft. corporate office center, and 25 RV slots with full water and electric, which we plan to convert into a series of small research pods. Under the terms of the purchase agreement, we paid $525,000 down, including 25,000 shares of our common stock, and Sangre took immediate possession of the property. We are obligated to pay an additional $400,000 in cash and issue an additional 75,000 shares of our common stock over the next two years in order to pay the entire purchase price. We estimate it will take approximately $675,000 in order to convert the existing buildings into the facilities necessary for Sangre AgroTech to conduct its research, plus an additional $1,000,000 for security & ground buildout. An additional $1 million for scientific equipment has been ordered for plant production and product extraction. We plan to complete the initial property renovations by Q1 of 2018. The equipment is scheduled to be delivered in Q2 2018. We will need to raise additional funds in order to pay the remainder of the purchase price, as well as to complete the planned renovations.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21
 
 
ORGANIZATION WITHIN LAST FIVE YEARS
 
We were originally incorporated under the name Plae, Inc., in the State of Arizona on August 20, 1999. At the time we operated under the name Plae, Inc., no business was conducted. No books or records were maintained and no meetings were held. In essence, nothing was done after incorporation until Glenn E. Martin took possession of Plae, Inc. in January 2005. On February 18, 2005, the corporate name was changed to King Mines, Inc. and then subsequently changed to its current name, United Mines, Inc., on March 30, 2005. No shares were issued until the Company became United Mines, Inc. From 2005 until 2015, we were an exploration stage mineral exploration company that owned a number of unpatented mining claims and Arizona State Land Department claims.
 
On November 26, 2014, our Board of Directors approved the redomestication of our company from Arizona to Nevada (the “Articles of Domestication”), and approved Articles of Incorporation in Nevada, which differed from then-Articles of Incorporation in Arizona, primarily by (a) changing our name from United Mines, Inc. to WEED, Inc., (b) authorizing Twenty Million (20,000,000) shares of preferred stock, with blank check rights granted to our Board of Directors, and (c) authorizing Two Hundred Million (200,000,000) shares of common stock (the “Nevada Articles of Incorporation”). On December 19, 2014, the holders of a majority of our outstanding common stock approved the Articles of Domestication and the Nevada Articles of Incorporation at a Special Meeting of Shareholders. On January 16, 2015, the Articles of Domestication and the Nevada Articles of Incorporation went effective with the Secretary of State of the State of Nevada. On February 2, 2015, our name change to WEED, Inc., and a corresponding ticker symbol change to “BUDZ” went effective with FINRA and was reflected on the quotation of our common stock on OTC Markets.
 
These changes were effected in order to make our corporate name and ticker symbol better align with our short-term and long-term business focus. Our current, short-term goals relate to the Cannabis Genomic Study and the resulting development of a variety of new cannabis strains, and, over the next 5 years, we plan to process those results in order to become an international cannabis research and product development company, with a globally-recognized brand focusing on building and purchasing labs, land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to universities, state governments, licensed dispensary owners and organic grow operators on a contract basis with a concentration on the legal and medical cannabis sector..
 
Our long-term plan is to become a true “Seed-to-Sale” global holding company providing infrastructure, financial solutions, product development, and real estate options in this new emerging market. Our long term growth may also come from the acquisition of synergistic businesses, such as distilleries, to make anything from infused beverages to super oxygenated water with CBD and THC. Currently, WEED Inc has formed WEED Australia Ltd., registered as an unlisted public company in Australia to address this Global demand. We have also formed WEED Australia Ltd., registered as an unlisted public company in Australia, to address future global demand, however the entity has been dormant since its inception. We will look to conduct future research, marketing, import/exporting, and manufacturing of our proprietary products on an international level.
 
 
 
 
 
22
 
 
DESCRIPTION OF PROPERTY
 
Our company headquarters and executive offices are located at 4920 N. Post Trail, Tucson, AZ 85750. Our offices are currently located in office space provided by our President on a month-to-month basis at a monthly rent of $1,000, which began on April 1, 2017. Our office space is approximately 1,000 square feet. We also maintain two virtual office locations, located at 1 South Church Avenue, Suite 1200, Tucson, AZ 85750, and 3960 Howard Hughes Parkway, Suite 500, Las Vegas NV 89169.
 
On July 26, 2017, we acquired property located in La Veta, Colorado in order for Sangre to complete its 5-Year, $15+ million Cannabis Genomic Study. The site includes a 10,000+ sq. ft. building that will house Sangre’s genomic research facility, a 4,000+ square foot building for plant product analytics and plant product extraction, a 3,500 sq. ft. corporate office center, and 25 RV slots with full water and electric, which we plan to convert into a series of small research pods. Under the terms of the purchase agreement, we paid $525,000 down, including 25,000 shares of our common stock, and Sangre took immediate possession of the property. We are obligated to pay an additional $400,000 in cash and issue an additional 75,000 shares of our common stock over the next two years in order to pay the entire purchase price. We estimate it will take approximately $675,000 in order to convert the existing buildings into the facilities necessary for Sangre AgroTech to conduct its research, plus an additional $1,000,000 for security & ground buildout. An additional $1 million for scientific equipment has been ordered for plant production and product extraction. We plan to complete the initial property renovations by Q1 of 2018. The equipment is scheduled to be delivered in Q2 2018. We will need to raise additional funds in order to pay the remainder of the purchase price, as well as to complete the planned renovations.
 
LEGAL PROCEEDINGS
 
We are not currently involved in any legal proceedings.
 
In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.
 
 
 
 
 
 
 
 
 
 
 
 
 
23
 
 
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
Our stock is quoted on the OTC Markets’ “Pink Current Information” tier under the symbol “BUDZ.” We were originally quoted over-the-counter on November 2009. We have 99,991,020 shares of our common stock outstanding. The following table sets forth the high and low bid information for each quarter within the two most recent fiscal years, as estimated based on information on OTC Markets. The information reflects prices between dealers, and does not include retail markup, markdown, or commission, and may not represent actual transactions.
 
 
 
 
 
Bid Prices
 
Fiscal Year
Ended
December 31,
 
 
Period
 
 
High
 
 
 
Low
 
 
 
 
 
 
 
 
 
 
2016
 
First Quarter
 $0.13 
 $0.043 
 
 
Second Quarter
 $0.10 
 $0.055 
 
 
Third Quarter
 $0.14 
 $0.07 
 
 
Fourth Quarter
 $0.89 
 $0.15 
 
 
 
    
    
2015
 
First Quarter
 $0.115 
 $0.07 
 
 
Second Quarter
 $0.10 
 $0.06 
 
 
Third Quarter
 $0.085 
 $0.05 
 
 
Fourth Quarter
 $0.08 
 $0.043 
 
The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to a few exceptions which we do not meet. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith.
 
There is currently no outstanding options to purchase WEED, Inc. common stock. We do not have any convertible debentures outstanding that permit the holder to convert the outstanding obligation into shares of our common stock.
 
The number of holders of record of shares of our common stock is Two Hundred Fifty Eight (258).
 
There have been no cash dividends declared on our common stock. Dividends are declared at the sole discretion of our Board of Directors.
 
We have not adopted any stock option or stock bonus plans.
 
 
 
 
 
24
 
 
FINANCIAL STATEMENTS
 
 
Index to Financial Statements
 
 
 
 
 
Independent Auditors’ Report                                                                                                  
 
F-1
Consolidated Balance Sheets of WEED, Inc. as of December 31, 2016 and 2015
 
F-2
Consolidated Statements of Operations of WEED, Inc. for the Years Ended December 31, 2016 and 2015
 
F-3
Consolidated Statements of Changes in Stockholders’ Equity of WEED, Inc. for the Years Ended December 31, 2016 and 2015
 
F-4
Consolidated Statements of Cash Flows of WEED, Inc. for the Years Ended December 31, 2016 and 2015
 
F-5
Notes to Financial Statements 
 
F-6
 
 
 
 
 
 
Consolidated Balance Sheets of WEED, Inc. as of March 31, 2017 (Unaudited)
 
F-21
Consolidated Statement of Operations of WEED, Inc. for the Three Months Ended March 31, 2017 and 2016 (Unaudited)
 
F-22
Consolidated Statements of Cash Flows of WEED, Inc. for the Three Months Ended March 31, 2017 and March 31, 2016 (Unaudited)
 
F-23
Notes to Condensed Consolidated Financial Statements
 
F-24
 
 
 
 
 
 
 
 
 
 
 
25
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and
Stockholders of Weed, Inc.
 
We have audited the accompanying balance sheets of Weed, Inc. as of December 31, 2016 and 2015, and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2016. Weed, Inc’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Weed, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/ M&K CPAS, PLLC
 
 
Houston, Texas
 
 
August 11, 2017
 
 
 
 
 
 
 
 
 
 
 
F-1
 
 
WEED, INC. (Formerly United Mines, Inc.)
BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash
 $231 
 $7 
Prepaid expenses
  5,053 
  2,067 
Total current assets
  5,284 
  2,074 
 
    
    
Property and equipment, net
  264 
  394 
 
    
    
Total assets
 $5,548 
 $2,468 
 
    
    
 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    
    
 
    
    
Current liabilities:
    
    
Accounts payable
 $35,661 
 $51,748 
Accrued officer compensation
  157,505 
  86,000 
Accrued interest
  36,760 
  32,022 
Convertible notes payable
  35,000 
  35,000 
Notes payable, related parties
  16,300 
  13,300 
Total current liabilities
  281,226 
  218,070 
 
    
    
Commitments and contingencies
  - 
  - 
 
    
    
Stockholders' equity (deficit):
    
    
Preferred stock, $0.001 par value, 20,000,000 shares
    
    
authorized, no shares designated, issued and outstanding
  - 
  - 
Common stock, $0.001 par value, 200,000,000 shares
    
    
authorized, 103,953,307 and 61,118,307 shares issued and
    
    
outstanding at December 31, 2016 and 2015, respectively
  103,953 
  61,118 
Additional paid in capital
  15,219,762 
  11,056,712 
Subscriptions payable, consisting of -0- and 1,770,000
    
    
shares at December 31, 2016 and 2015, respectively
  - 
  114,990 
Accumulated deficit
  (15,599,393)
  (11,448,422)
Total stockholders' equity (deficit)
  (275,678)
  (215,602)
 
    
    
Total liabilities and stockholders' equity (deficit)
 $5,548 
 $2,468 
 
    
    
The accompanying notes are an integral part of these financial statements.
 
 
F-2
 
 
WEED, INC. (Formerly United Mines, Inc.)
STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Years    
 
 
 
Ended December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Revenue
 $- 
 $- 
 
    
    
Operating expenses:
    
    
General and administrative
  2,211,787 
  594,446 
Professional fees
  1,933,733 
  639,149 
Depreciation and amortization
  130 
  130 
Total operating expenses
  4,145,650 
  1,233,725 
 
    
    
Net operating loss
  (4,145,650)
  (1,233,725)
 
    
    
Other expense:
    
    
Interest expense
  (5,321)
  (4,824)
 
    
    
Net loss
 $(4,150,971)
 $(1,238,549)
 
    
    
 
    
    
Weighted average number of common shares
    
    
outstanding - basic and fully diluted
  71,250,288 
  54,390,978 
 
    
    
Net loss per share - basic and fully diluted
 $(0.06)
 $(0.02)
 
    
    
The accompanying notes are an integral part of these financial statements.
 
 
 
 
F-3
 
 
WEED, INC. (Formerly United Mines, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Additional
 
 
 
 
 
 
 
 
 Total
 
 
 
Preferred Stock
 
 
Common Stock
 
 
 Paid-In
 
 
 Subscriptions
 
 
 Accumulated
 
 
 Stockholders'
 
 
 
 Shares
 
 
 Amount
 
 
 Shares
 
 
 Amount
 
 
 Capital
 
 
 Payable
 
 
 Deficit
 
 
 Equity (Deficit)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2014
  - 
 $- 
  44,333,307 
 $44,333 
 $9,901,547 
 $156,100 
 $(10,209,873)
 $(107,893)
 
    
    
    
    
    
    
    
    
Common stock sold for cash
  - 
  - 
  555,000 
  555 
  60,945 
  (37,500)
  - 
  24,000 
 
    
    
    
    
    
    
    
    
Common stock issued for services, related parties
  - 
  - 
  12,000,000 
  12,000 
  828,000 
  - 
  - 
  840,000 
 
    
    
    
    
    
    
    
    
Common stock issued for services
  - 
  - 
  4,230,000 
  4,230 
  266,020 
  (3,610)
  - 
  266,640 
 
    
    
    
    
    
    
    
    
Imputed interest on non-interest bearing related party debts
  - 
  - 
  - 
  - 
  200 
  - 
  - 
  200 
 
    
    
    
    
    
    
    
    
Net loss for the year ended December 31, 2015
  - 
  - 
  - 
  - 
  - 
  - 
  (1,238,549)
  (1,238,549)
 
    
    
    
    
    
    
    
    
Balance, December 31, 2015
  - 
 $- 
  61,118,307 
 $61,118 
 $11,056,712 
 $114,990 
 $(11,448,422)
 $(215,602)
 
    
    
    
    
    
    
    
    
Common stock sold for cash
  - 
  - 
  325,000 
  325 
  69,675 
  - 
  - 
  70,000 
 
    
    
    
    
    
    
    
    
Common stock issued for down payment on land purchase
  - 
  - 
  50,000 
  50 
  42,450 
  - 
  - 
  42,500 
 
    
    
    
    
    
    
    
    
Common stock issued for services, related parties
  - 
  - 
  36,000,000 
  36,000 
  3,564,000 
  - 
  - 
  3,600,000 
 
    
    
    
    
    
    
    
    
Common stock issued for services
  - 
  - 
  6,460,000 
  6,460 
  486,342 
  (114,990)
  - 
  377,812 
 
    
    
    
    
    
    
    
    
Imputed interest on non-interest bearing related party debts
  - 
  - 
  - 
  - 
  583 
  - 
  - 
  583 
 
    
    
    
    
    
    
    
    
Net loss for the year ended December 31, 2016
  - 
  - 
  - 
  - 
  - 
  - 
  (4,150,971)
  (4,150,971)
 
    
    
    
    
    
    
    
    
Balance, December 31, 2016
  - 
 $- 
  103,953,307 
 $103,953 
 $15,219,762 
 $- 
 $(15,599,393)
 $(275,678)
 
    
    
    
    
    
    
    
    
The accompanying notes are an integral part of these financial statements.
 
 
F-4
 
 
WEED, INC. (Formerly United Mines, Inc.)         
STATEMENTS OF CASH FLOWS         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Years    
 
 
 
Ended December 31,
 
 
 
2016
 
 
2015
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
Net (loss)
 $(4,150,971)
 $(1,238,549)
Adjustments to reconcile net loss
    
    
to net cash used in operating activities:
    
    
Depreciation
  130 
  130 
Imputed interest on non-interest bearing related party debts
  583 
  200 
Shares issued for down payment on land purchase
  42,500 
  - 
Shares issued for services, related parties
  3,600,000 
  840,000 
Shares issued for services
  377,812 
  266,640 
Decrease (increase) in assets:
    
    
Prepaid expenses
  (2,986)
  7,956 
Increase (decrease) in liabilities:
    
    
Accounts payable
  (16,087)
  19,199 
Accrued compensation
  71,505 
  74,000 
Accrued interest
  4,738 
  4,624 
Net cash used in operating activities
  (72,776)
  (25,800)
 
    
    
CASH FLOWS FROM FINANCING ACTIVITIES
    
    
Proceeds from notes payable, related parties
  16,005 
  1,300 
Repayments on notes payable, related parties
  (13,005)
  (5,115)
Proceeds from the sale of common stock
  70,000 
  24,000 
Net cash provided by financing activities
  73,000 
  20,185 
 
    
    
NET CHANGE IN CASH
  224 
  (5,615)
CASH AT BEGINNING OF PERIOD
  7 
  5,622 
 
    
    
CASH AT END OF PERIOD
 $231 
 $7 
 
    
    
SUPPLEMENTAL INFORMATION:
    
    
Interest paid
 $- 
 $- 
Income taxes paid
 $- 
 $- 
 
    
    
The accompanying notes are an integral part of these financial statements.
 
 
F-5
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Note 1 – Nature of Business and Significant Accounting Policies
 
Nature of Business
WEED, Inc. (the “Company”), (formerly United Mines, Inc.) was incorporated under the laws of the State of Arizona on August 20, 1999 (“Inception Date”) as Plae, Inc. to engage in the exploration of gold and silver mining properties. On November 26, 2014, the Company was renamed from United Mines, Inc. to WEED, Inc. and was repurposed to pursue a business involving the purchase of land, and building Commercial Grade “Cultivation Centers” to consult, assist, manage & lease to Licensed Dispensary owners and organic grow operators on a contract basis, with a concentration on the legal and medical marijuana sector. The Company’s plan is to become a True “Seed-to-Sale” company providing infrastructure, financial solutions and real estate options in this new emerging market. The Company, under United Mines, was formerly in the process of acquiring mineral properties or claims located in the State of Arizona, USA. The name was previously changed on February 18, 2005 to King Mines, Inc. and then subsequently changed to United Mines, Inc. on March 30, 2005. The Company trades on the OTC Pink Sheets under the stock symbol: BUDZ.
 
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.
 
The Company has a calendar year end for reporting purposes.
 
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the 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
We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents on hand for the periods presented herein.
 
Fair Value of Financial Instruments
Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.
 
Property and Equipment
Property and equipment is stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:
 
Software
3 years
Furniture and fixtures
5 years
Equipment
5-7 years
 
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.
 
 
F-6
 
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Impairment of Long-Lived Assets
Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations.
 
Basic and Diluted Loss Per Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
 
Stock-Based Compensation
Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company’s stock based compensation consisted of the following during the years ended December 31, 2016 and 2015, respectively:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Common stock issued for down payment on land purchase
 $42,500 
 $- 
Common stock issued for services, related parties
  3,600,000 
  840,000 
Common stock issued for services
  377,812 
  266,640 
Total stock based compensation
 $4,020,312 
 $1,106,640 
 
Revenue Recognition
Sales on fixed price contracts are recorded when services are earned, the earnings process is complete or substantially complete, and the revenue is measurable and collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue from sales in which payment has been received, but the earnings process has not occurred. Sales have not yet commenced on the MMJ business. The Company also did not recognize revenues from its previous mining operations during the periods presented herein.
 
Advertising and Promotion
All costs associated with advertising and promoting products are expensed as incurred. These expenses were $-0- and $-0- for the years ended December 31, 2016 and 2015, respectively.
 
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.
 
Uncertain Tax Positions
In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
 
 
 
F-7
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.
 
The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.
 
Recently Issued Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reportingunit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to early adopt the ASU in 2017.
 
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
 
In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. ASU 2016-20 amended guidance regarding accounting for Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. When effective, this standard will replace most existing revenue recognition guidance in generally accepted accounting principles (“GAAP”). The standard also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressed in GAAP. This guidance is required to be adopted by us in the first quarter of fiscal 2019 by either recasting all years presented in our financial statements or by recording the impact of adoption as an adjustment to retained earnings at the beginning of the year of adoption. We are currently evaluating the impact this guidance will have on our consolidated financial statements.
 
In October 2016, the FASB issued ASU No. 2016-17, Consolidation (Topic 810): Interests Held through Related Parties that are under Common Control. The amendments in this Update improve GAAP involving situations consisting of common control, wherein a single decision maker focuses on the economics to which it is exposed when determining whether it is the primary beneficiary of a variable interest entity (“VIE”) before potentially evaluating which party is most closely associated with the VIE. ASU 2016-17 is effective for public entities for fiscal periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
 
In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory, which reduces the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party. This amendment should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. ASU 2016-16 is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. That is, earlier adoption should be in the first interim period if an entity issues interim financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
 
 
 
F-8
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
No other new accounting pronouncements, issued or effective during the years ended December 31, 2016 and 2015, have had or are expected to have a significant impact on the Company’s financial statements.
 
 
Note 2 – Going Concern
 
As shown in the accompanying financial statements, the Company has no revenues, incurred net losses from operations resulting in an accumulated deficit of $15,599,393, and had negative working capital of ($275,942) at December 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new products and services to begin generating revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
 
The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
 
Note 3 – Related Party
 
Notes Payable
From time to time, the Company has received short term loans from officers and directors as disclosed in Note 7 below.
 
Common Stock
On October 1, 2016, the Company granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $700,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 14,000,000 shares of common stock to Mr. Martin for services performed pursuant to his previous employment agreement. The total fair value of the common stock was $1,400,000 based on the closing price of the Company’s common stock on the date of grant.
 
On October 1, 2016, the Company granted 4,000,000 shares of common stock to a related party as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $400,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 8,000,000 shares of common stock to a related party for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $800,000 based on the closing price of the Company’s common stock on the date of grant.
 
On October 1, 2016, the Company granted 1,000,000 shares of common stock to a related party as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $100,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 2,000,000 shares of common stock to a related party for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $200,000 based on the closing price of the Company’s common stock on the date of grant.
 
On January 1, 2015, the Company granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, for services performed. The total fair value of the common stock was $490,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
 
 
F-9
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
On January 1, 2015, the Company granted 4,000,000 shares of common stock to a related party for services performed. The total fair value of the common stock was $280,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On January 1, 2015, the Company granted 1,000,000 shares of common stock to a related party for services performed. The total fair value of the common stock was $70,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
A total of $157,505 and $86,000 of officer compensation was unpaid and outstanding at December 31, 2016 and 2015, respectively.
 
Capital Contributions
The Company imputed interest on non-interest bearing, related party loans, resulting in a total of $583 and $200 of contributed capital during the years ended December 31, 2016 and 2015, respectively.
 
 
Note 4 – Fair Value of Financial Instruments
 
Under FASB ASC 820-10-5, fair value is defined as 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
 
The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
 
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
 
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
 
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
 
 
 
F-10
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of December 31, 2016 and 2015, respectively:
 
 
 
Fair Value Measurements at December 31, 2016
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
Assets
 
 
 
 
 
 
 
 
 
Cash
 $7 
 $- 
 $- 
Total assets
  7 
  - 
  - 
Liabilities
    
    
    
Convertible notes payable
  - 
  35,000 
  - 
Notes payable, related parties
  - 
  16,300 
  - 
Total liabilities
  - 
  51,300 
  - 
 
 $7 
 $(51,300)
 $- 
 
 
 
Fair Value Measurements at December 31, 2015
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
Assets
 
 
 
 
 
 
 
 
 
Cash
 $7 
 $- 
 $- 
Total assets
  7 
  - 
  - 
Liabilities
    
    
    
Convertible notes payable
  - 
  35,000 
  - 
Notes payable, related parties
  - 
  13,300 
  - 
Total liabilities
  - 
  48,300 
  - 
 
 $7 
 $(48,300)
 $- 
 
The fair values of our related party debts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.
 
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the years ended December 31, 2016 or the year ended December 31, 2015.
 
 
Note 5 – Property and Equipment
 
Property and equipment consist of the following at December 31, 2016 and 2015, respectively:
 
 
 
December 31,
 
 
 
2016
 
 
2015
 
Office equipment
 $650 
 $650 
Less accumulated depreciation
  (386)
  (256)
 
 $264 
 $394 
 
Depreciation and amortization expense totaled $130 and $130 for the years ended December 31, 2016 and 2015, respectively.
 
 
 
F-11
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Note 6 – Convertible Notes Payable
 
Convertible notes payable consist of the following at December 31, 2016 and 2015, respectively:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
On December 7, 2007, the Company issued a 10% note payable to the Lebrecht Group, PC (“Lebrecht Note”) for services rendered related to the registration of certain securities of the Company. The note and accrued interest were due December 7, 2008 and at the option of the holder payable in full on the maturity date or in 12 monthly payments beginning on the maturity date. The note and accrued interest are convertible to common shares at any time at the option of the holder at 75% of the average closing bid price on the five trading days immediately preceding the conversion. Management estimates, at this time, that 1,650,000 shares may be issued if this conversion feature is exercised. In accordance with generally accepted accounting principles, the 25% discount to market related to the beneficial conversion feature has been reported as a component of additional paid in capital. Additionally, since this represents a prepayment for services related to a future public offering, management had elected to offset the cost to future capital raised as a result of the offering, if any. Currently in default.
 $35,000 
 $35,000 
Total convertible notes payable
  35,000 
  35,000 
Less unamortized debt discounts:
    
    
Discount on beneficial conversion feature
  - 
  - 
Convertible notes payable (in default)
 $35,000 
 $35,000 
 
The Company recognized interest expense related to the convertible debts for the years ended December 31, 2016 and 2015, respectively, as follows:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Interest
 $3,500 
 $3,500 
Amortization of beneficial conversion feature
  - 
  - 
Total interest expense
 $3,500 
 $3,500 
 
In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debts by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.
 
Furthermore, the Company confirmed and agreed with Lebrecht Law Group, PC that they would not force the Company to settle in shares of common stock in the event there are not enough authorized shares at time of conversion.
 
 
 
F-12
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Note 7 – Notes Payable, Related Parties
 
Notes payable, related parties consist of the following at December 31, 2016 and 2015, respectively:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
On various dates, the Company received advances from the Company’s CEO. The unsecured non-interest bearing loans were due on demand. The loans were repaid in full over various dates from March 15, 2016 through November 3, 2016.
 $- 
 $- 
 
    
    
On August 23, 2016, the Company received an unsecured, non-interest bearing loan in the amount of $3,000, due on demand from an affiliate, bearing interest at 10% per annum.
  3,000 
  - 
 
    
    
On January 21, 2015, the Company received an unsecured loan in the amount of $1,300, due on demand from an affiliate, bearing interest at 10% per annum.
  1,300 
  1,300 
 
    
    
On April 12, 2010, the Company received an unsecured, non-interest bearing loan in the amount of $2,000, due on demand from an affiliate. Interest is being imputed at the Company’s estimated borrowing rate, or 10% per annum.
  2,000 
  2,000 
 
    
    
Over various dates in 2011 and 2012, the Company received unsecured loans in the aggregate amount of $10,000, due on demand, bearing interest at 10%, from an affiliate.
  10,000 
  10,000 
 
    
    
Notes payable, related parties
 $16,300 
 $13,300 
 
The Company recorded interest expense in the amount of $1,821 and $1,324 for the years ended December 31, 2016 and 2015, respectively, including imputed interest expense in the amount of $583 and $200 for the years ended December 31, 2016 and 2015, respectively related to notes payable, related parties.
 
 
Note 8 – Commitments and Contingencies
 
On November 8, 2016, the Company entered into an agreement with Gregory DiPaolo’s Pro Am Golf, LLC to acquire land currently housing a golf course and restaurant. The total purchase price of $1,600,000 is to be paid with a deposit of 50,000 shares of common stock, followed by cash of $1,250,000 and 300,000 shares of the Company’s common stock to be delivered at closing. The deposit of 50,000 shares issued as a deposit was $42,500 based on the closing price of the Company’s common stock on the date of grant. The Company subsequently closed on the property on July 27, 2017.
 
On September 30, 2014, the majority of shareholders approved a Settlement Agreement dated December 11, 2013 and signed on August 19, 2014 pursuant to Case No. C20125545 in the Superior Court of the State of Arizona, whereby among other provisions, the Plaintiffs, consisting of United Mines, Inc. (“UMI”) and its then principals, agreed to the cancellation of a total of 4,820,953 shares of common stock and control of the Company in exchange for (i) sixty five (65) of the unpatented Bureau of Land Management (“BLM”) mining claims, the mill site, buildings and equipment, (ii) the four (4) Arizona State Land Department Exploration Permits registered to the Company, (iii) any permits, financial and reclamation guaranties, bonds and licenses connected with the foregoing assets. In addition, thirty-three (33) unpatented BLM mining claims remained the property of UMI, along with any associated permits, financial and reclamation guaranties, bonds, licenses, and the rights to the corporation, the corporation’s name, stock symbol, or any other asset of UMI, shall remain the property of UMI under the management of Glenn E. Martin. As of the date of this report, the Plaintiffs have not surrendered the stock certificates to the Company.
 
 
Note 9 – Stockholders’ Equity
 
Preferred Stock
On December 5, 2014, the Company amended the Articles of Incorporation, pursuant to which 20,000,000 shares of “blank check” preferred stock with a par value of $0.001 were authorized. No series of preferred stock has been designated to date.
 
 
 
F-13
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Common Stock
On December 5, 2014, the Company amended the Articles of Incorporation, and increased the authorized shares to 200,000,000 shares of $0.001 par value common stock.
 
Common Stock Sales (2016)
On October 31, 2016, the Company sold 50,000 units at $0.10 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $5,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 25, 2016, the Company sold 150,000 units at $0.3333 per unit, consisting of 150,000 shares of common stock and warrants to purchase 150,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 19, 2016, the Company sold 25,000 units at $0.20 per unit, consisting of 25,000 shares of common stock and warrants to purchase 25,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $5,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 19, 2016, the Company sold 100,000 units at $0.10 per unit, consisting of 100,000 shares of common stock and warrants to purchase 100,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $10,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Common Stock Sales (2015)
On August 17, 2015, the Company sold 90,000 units at $0.10 per unit, consisting of 90,000 shares of common stock and warrants to purchase 90,000 shares of common stock at an exercise price of $0.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $9,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On February 20, 2015, the Company sold 40,000 units at $0.25 per unit, consisting of 40,000 shares of common stock and warrants to purchase 100,000 shares of common stock at an exercise price of $0.75 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $10,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On January 30, 2015, the Company sold 50,000 units at $0.10 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $0.75 per share, exercisable until December 31, 2015, in exchange for total proceeds of $5,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Common Stock in Satisfaction of Subscriptions Payable (2016)
On October 27, 2016, the Company issued a total of 4,650,000 shares of common stock in satisfaction of common stock granted during the year ended December 31, 2015, in the aggregate value of $304,302.
 
Common Stock Issued as Down Payment for Land Purchase (2016)
On November 8, 2016, the Company granted 50,000 shares of common stock as a good faith deposit on a potential land purchase agreement that has not yet closed, as the Company does not currently have sufficient resources. The total fair value of the common stock was $42,500 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Issued for Services, Related Parties (2016)
On October 1, 2016, the Company granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $700,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 14,000,000 shares of common stock to Mr. Martin for services performed pursuant to his previous employment agreement. The total fair value of the common stock was $1,400,000 based on the closing price of the Company’s common stock on the date of grant.
 
 
 
F-14
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
On October 1, 2016, the Company granted 4,000,000 shares of common stock to a related party as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $400,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 8,000,000 shares of common stock to a related party for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $800,000 based on the closing price of the Company’s common stock on the date of grant.
 
On October 1, 2016, the Company granted 1,000,000 shares of common stock to a related party as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $100,000 based on the closing price of the Company’s common stock on the date of grant.
 
In addition, on October 1, 2016, the Company granted a total of 2,000,000 shares of common stock to a related party for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $200,000 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Issued for Services (2016)
On October 19, 2016, the Company granted 10,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,500 based on the closing price of the Company’s common stock on the date of grant.
 
On September 28, 2016, the Company granted 600,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of the Company’s common stock on the date of grant.
 
On September 28, 2016, the Company granted 600,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of the Company’s common stock on the date of grant.
 
On September 28, 2016, the Company granted 600,000 shares of common stock to a third consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of the Company’s common stock on the date of grant.
 
On July 1, 2016, the Company granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $35,000 based on the closing price of the Company’s common stock on the date of grant.
 
On July 1, 2016, the Company granted 500,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $35,000 based on the closing price of the Company’s common stock on the date of grant.
 
On March 18, 2016, the Company granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $5,820 based on the closing price of the Company’s common stock on the date of grant.
 
On March 18, 2016, the Company granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $48,500 based on the closing price of the Company’s common stock on the date of grant.
 
On March 18, 2016, the Company granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $11,640 based on the closing price of the Company’s common stock on the date of grant.
 
On February 12, 2016, the Company granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $5,832 based on the closing price of the Company’s common stock on the date of grant.
 
On February 1, 2016, the Company granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $22,000 based on the closing price of the Company’s common stock on the date of grant.
 
On February 1, 2016, the Company granted 500,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $22,000 based on the closing price of the Company’s common stock on the date of grant.
 
On February 1, 2016, the Company granted 20,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $880 based on the closing price of the Company’s common stock on the date of grant.
 
 
 
F-15
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
On February 1, 2016, the Company granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $2,640 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Issued for Services (2015)
On November 25, 2015, the Company granted 500,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $30,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On November 1, 2015, the Company granted 260,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $20,800 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On October 1, 2015, the Company granted 600,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $33,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On September 24, 2015, the Company granted 100,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $5,500 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On September 1, 2015, the Company granted 250,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $21,250 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On August 12, 2015, the Company granted 60,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $4,440 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
On April 1, 2015, the Company granted 600,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $48,000 based on the closing price of the Company’s common stock on the date of grant.
 
On April 1, 2015, the Company granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $40,000 based on the closing price of the Company’s common stock on the date of grant.
 
On March 16, 2015, the Company granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $4,000 based on the closing price of the Company’s common stock on the date of grant.
 
On March 16, 2015, the Company granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $4,800 based on the closing price of the Company’s common stock on the date of grant.
 
On March 16, 2015, the Company granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $9,600 based on the closing price of the Company’s common stock on the date of grant.
 
On March 16, 2015, the Company granted 40,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $3,200 based on the closing price of the Company’s common stock on the date of grant.
 
On March 16, 2015, the Company granted 40,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $3,200 based on the closing price of the Company’s common stock on the date of grant.
 
On February 20, 2015, the Company granted 240,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $21,600 based on the closing price of the Company’s common stock on the date of grant.
 
On February 12, 2015, the Company granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,850 based on the closing price of the Company’s common stock on the date of grant.
 
 
F-16
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
On January 1, 2015, the Company granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,400 based on the closing price of the Company’s common stock on the date of grant.
 
On January 1, 2015, the Company granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, for services performed. The total fair value of the common stock was $490,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On January 1, 2015, the Company granted 4,000,000 shares of common stock to a related party for services performed. The total fair value of the common stock was $280,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On January 1, 2015, the Company granted 1,000,000 shares of common stock to a related party for services performed. The total fair value of the common stock was $70,000 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
Capital Contributions
The Company imputed interest on non-interest bearing, related party loans, resulting in a total of $583 and $200 of contributed capital during the years ended December 31, 2016 and 2015, respectively.
 
 
Note 10 – Common Stock Warrants
 
Common Stock Warrants Granted (2016)
On October 31, 2016, the Company sold warrants to purchase 50,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $5,000 in conjunction with the sale of 50,000 shares of common stock. The relative fair value of the 50,000 common stock warrants using the Black-Scholes option-pricing model was $914, or $0.01828 per share, based on a volatility rate of 217%, a risk-free interest rate of 0.66% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 25, 2016, the Company sold warrants to purchase 150,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $50,000 in conjunction with the sale of 150,000 shares of common stock. The relative fair value of the 150,000 common stock warrants using the Black-Scholes option-pricing model was $2,725, or $0.01817 per share, based on a volatility rate of 217%, a risk-free interest rate of 0.66% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 19, 2016, the Company sold warrants to purchase 25,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $5,000 in conjunction with the sale of 25,000 shares of common stock. The relative fair value of the 25,000 common stock warrants using the Black-Scholes option-pricing model was $608, or $0.02432 per share, based on a volatility rate of 216%, a risk-free interest rate of 0.65% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On October 19, 2016, the Company sold warrants to purchase 100,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $10,000 in conjunction with the sale of 100,000 shares of common stock. The relative fair value of the 100,000 common stock warrants using the Black-Scholes option-pricing model was $2,856, or $0.02856 per share, based on a volatility rate of 216%, a risk-free interest rate of 0.65% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Common Stock Warrants Granted (2015)
On August 17, 2015, the Company sold warrants to purchase 90,000 shares of common stock at $0.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $9,000 in conjunction with the sale of 90,000 shares of common stock. The relative fair value of the 90,000 common stock warrants using the Black-Scholes option-pricing model was $2,501, or $0.02779 per share, based on a volatility rate of 207%, a risk-free interest rate of 0.40% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
 
 
F-17
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
On February 20, 2015, the Company sold warrants to purchase 100,000 shares of common stock at $0.75 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $10,000 in conjunction with the sale of 40,000 shares of common stock. The relative fair value of the 100,000 common stock warrants using the Black-Scholes option-pricing model was $3,179, or $0.03179 per share, based on a volatility rate of 210%, a risk-free interest rate of 0.23% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On January 30, 2015, the Company sold warrants to purchase 50,000 shares of common stock at $0.75 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $5,000 in conjunction with the sale of 50,000 shares of common stock. The relative fair value of the 50,000 common stock warrants using the Black-Scholes option-pricing model was $1,890, or $0.03781 per share, based on a volatility rate of 212%, a risk-free interest rate of 0.18% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Common Stock Warrants Cancelled
No warrants were cancelled during the years ended December 31, 2016 and 2015.
 
Common Stock Warrants Expired
A total of 190,000 and 325,000 warrants expired during years ended December 31, 2016 and 2015, respectively.
 
Common Stock Warrants Exercised
No warrants were exercised during the years ended December 31, 2016 and 2015.
 
The following is a summary of information about the Common Stock Warrants outstanding at December 31, 2016.
 
 
 
 
 
Shares Underlying
Shares Underlying Warrants Outstanding
 
Warrants Exercisable
 
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
 
Shares
 
Average
 
Weighted
 
Shares
 
Weighted
Range of
 
Underlying
 
Remaining
 
Average
 
Underlying
 
Average
Exercise
 
Warrants
 
Contractual
 
Exercise
 
Warrants
 
Exercise
Prices
 
Outstanding
 
Life
 
Price
 
Exercisable
 
Price
 
 
 
 
 
 
 
 
 
 
 
$1.50
 
325,000
 
9.75 months
 
$1.50
 
325,000
 
$1.50
 
The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Average risk-free interest rates
    0.66%
    0.27%
Average expected life (in years)
    1.0 
    1.0 
 
The Black-Scholes option pricing model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s common stock warrants have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its common stock warrants. During the years ended December 31, 2016 and 2015 there were no warrants granted with an exercise price below the fair value of the underlying stock at the grant date.
 
The weighted average fair value of warrants granted with exercise prices at the current fair value of the underlying stock was approximately $0.02186 and $0.03154 per warrant granted during the years ended December 31, 2016 and 2015, respectively.
 
 
 
F-18
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
The following is a summary of activity of outstanding common stock warrants:
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
Average
 
 
 
Number of
 
 
Exercise
 
 
 
Shares
 
 
Price
 
 
 
 
 
 
 
 
Balance, December 31, 2014
  275,000 
 $0.50 
Warrants expired
  (325,000)
  0.54 
Warrants granted
  240,000 
  0.66 
Balance, December 31, 2015
  190,000 
 $0.63 
Warrants expired
  (190,000)
  0.63 
Warrants granted
  325,000 
  1.50 
Balance, December 31, 2016
  325,000 
 $1.50 
 
    
    
Exercisable, December 31, 2016
  325,000 
 $1.50 
 
 
Note 11 – Income Taxes
 
The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
 
For the years ended December 31, 2016 and 2015, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2016 and December 31, 2015, the Company had approximately $10,212,000 and $8,050,000 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2031.
 
The components of the Company’s deferred tax asset are as follows:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
Deferred tax assets:
 
 
 
 
 
 
Net operating loss carry forwards
 $3,574,200 
 $2,817,500 
 
    
    
Net deferred tax assets before valuation allowance
 $3,574,200 
 $2,817,500 
Less: Valuation allowance
  (3,574,200)
  (2,817,500)
Net deferred tax assets
 $- 
 $- 
 
Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016 and 2015, respectively.
 
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
 
 
 
December 31,
 
 
December 31,
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Federal and state statutory rate
  35%
  35%
Change in valuation allowance on deferred tax assets
  (35%)
  (35%)
 
In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.
 
 
 
F-19
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Years Ended December 31, 2016 and 2015
 
Note 12 – Subsequent Events
 
Common Stock Sales
On January 23, 2017, the Company sold 2,000 units at $2.00 per unit, consisting of 2,000 shares of common stock and warrants to purchase 2,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 23, 2018, in exchange for total proceeds of $4,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On January 9, 2017, the Company sold 50,000 units at $1.00 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 9, 2018, in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Warrants Exercised
On January 7, 2017, a warrant holder exercised warrants to purchase 2,666 shares of common stock at a strike price of $1.50 in exchange for proceeds of $3,999.
 
Common Stock Issued for Bartered Assets
On January 18, 2017, the Company exchanged 66,000 units, consisting of 66,000 shares of common stock and warrants to purchase 66,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 18, 2018, in exchange for a 2017 Audi Q7 and a 2017 Audi A4. The total fair value received, based on the market price of the stock at $4.02 per share, was allocated to the $105,132 purchase price of the vehicles and the $160,188 excess value of the common stock and warrants was expensed as stock based compensation.
 
Common Stock Issued for Services
On March 2, 2017, the Company granted 12,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $34,200 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Cancellations
On January 26, 2017, the Company cancelled a total of 1,000,000 shares of common stock previously granted to two individuals for non-performance of services.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-20
 
 
WEED, INC. (Formerly United Mines, Inc.)
BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
ASSETS
 
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash
 $167,015 
 $231 
Prepaid expenses
  40,508 
  5,053 
Total current assets
  207,523 
  5,284 
 
    
    
Property and equipment, net
  101,158 
  264 
 
    
    
Total assets
 $308,681 
 $5,548 
 
    
    
 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    
    
 
    
    
Current liabilities:
    
    
Accounts payable
 $22,557 
 $35,661 
Accrued officer compensation
  177,005 
  157,505 
Accrued interest
  37,993 
  36,760 
Convertible notes payable
  35,000 
  35,000 
Notes payable, related parties
  21,126 
  16,300 
Total current liabilities
  293,681 
  281,226 
 
    
    
Commitments and contingencies
  - 
  - 
 
    
    
Stockholders' equity (deficit):
    
    
Preferred stock, $0.001 par value, 20,000,000 shares
    
    
authorized, no shares designated, issued and outstanding
  - 
  - 
Common stock, $0.001 par value, 200,000,000 shares
    
    
authorized, 103,135,973 and 103,953,307 shares issued and
    
    
outstanding at March 31, 2017 and December 31, 2016, respectively
  103,136 
  103,953 
Additional paid in capital
  15,788,499 
  15,219,762 
Subscriptions payable, consisting of 425,000 and -0- shares
    
    
at March 31, 2017 and December 31, 2016, respectively
  377,500 
  - 
Accumulated deficit
  (16,254,135)
  (15,599,393)
Total stockholders' equity (deficit)
  15,000 
  (275,678)
 
    
    
Total liabilities and stockholders' equity (deficit)
 $308,681 
 $5,548 
 
    
    
See accompanying notes to financial statements.
 
 
F-21
 
 
WEED, INC. (Formerly United Mines, Inc.)
STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months
 
 
 
Ended March 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Revenue
 $- 
 $- 
 
    
    
Operating expenses:
    
    
General and administrative
  68,134 
  24,720 
Professional fees
  580,986 
  120,348 
Depreciation and amortization
  4,238 
  33 
Total operating expenses
  653,358 
  145,101 
 
    
    
Net operating loss
  (653,358)
  (145,101)
 
    
    
Other expense:
    
    
Interest expense
  (1,384)
  (1,227)
 
    
    
Net loss
 $(654,742)
 $(146,328)
 
    
    
 
    
    
Weighted average number of common shares
    
    
outstanding - basic and fully diluted
  103,393,921 
  61,118,307 
 
    
    
Net loss per share - basic and fully diluted
 $(0.01)
 $(0.00)
 
    
    
See accompanying notes to financial statements.
 
 
 
 
F-22
 
 
 
WEED, INC. (Formerly United Mines, Inc.)
 
 
STATEMENTS OF CASH FLOWS
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months
 
 
 
Ended March 31,
 
 
 
2017
 
 
2016
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
Net (loss)
 $(654,742)
 $(146,328)
Adjustments to reconcile net loss
    
    
to net cash used in operating activities:
    
    
Depreciation
  4,238 
  33 
Imputed interest on non-interest bearing related party debts
  151 
  69 
Shares issued for services
  547,138 
  119,312 
Decrease (increase) in assets:
    
    
Prepaid expenses
  (35,455)
  775 
Increase (decrease) in liabilities:
    
    
Accounts payable
  (13,104)
  1,544 
Accrued compensation
  19,500 
  19,500 
Accrued interest
  1,233 
  1,158 
Net cash used in operating activities
  (131,041)
  (3,937)
 
    
    
CASH FLOWS FROM FINANCING ACTIVITIES
    
    
Proceeds from notes payable, related parties
  9,000 
  10,000 
Repayments on notes payable, related parties
  (4,174)
  (6,000)
Proceeds from the sale of common stock
  292,999 
  - 
Net cash provided by financing activities
  297,825 
  4,000 
 
    
    
NET CHANGE IN CASH
  166,784 
  63 
CASH AT BEGINNING OF PERIOD
  231 
  7 
 
    
    
CASH AT END OF PERIOD
 $167,015 
 $70 
 
    
    
SUPPLEMENTAL INFORMATION:
    
    
Interest paid
 $- 
 $- 
Income taxes paid
 $- 
 $- 
 
    
    
NON-CASH INVESTING AND FINANCING ACTIVITIES:
    
    
Value of fixed assets acquired in exchange for stock
 $105,132 
 $- 
 
    
    
See accompanying notes to financial statements.
 
 
 
F-23
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Note 1 – Nature of Business and Significant Accounting Policies
 
Nature of Business
WEED, Inc. (the “Company”), (formerly United Mines, Inc.) was incorporated under the laws of the State of Arizona on August 20, 1999 (“Inception Date”) as Plae, Inc. to engage in the exploration of gold and silver mining properties. On November 26, 2014, the Company was renamed from United Mines, Inc. to WEED, Inc. and was repurposed to pursue a business involving the purchase of land, and building Commercial Grade “Cultivation Centers” to consult, assist, manage & lease to Licensed Dispensary owners and organic grow operators on a contract basis, with a concentration on the legal and medical marijuana sector. The Company’s plan is to become a True “Seed-to-Sale” company providing infrastructure, financial solutions and real estate options in this new emerging market. The Company, under United Mines, was formerly in the process of acquiring mineral properties or claims located in the State of Arizona, USA. The name was previously changed on February 18, 2005 to King Mines, Inc. and then subsequently changed to United Mines, Inc. on March 30, 2005. The Company trades on the OTC Pink Sheets under the stock symbol: BUDZ.
 
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein.
 
The Company has a calendar year end for reporting purposes.
 
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the 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
We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents on hand for the periods presented herein.
 
Fair Value of Financial Instruments
Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, prepaid expenses and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.
 
Property and Equipment
Property and equipment is stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:
 
Software
3 years
Furniture and fixtures
5 years
Equipment
5-7 years
 
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.
 
 
F-24
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)

Impairment of Long-Lived Assets
Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations.
 
Basic and Diluted Loss Per Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
 
Stock-Based Compensation
Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company’s stock based compensation issued for services was $547,138 and $119,312 for the three months ended March 31, 2017 and 2016, respectively.
 
Revenue Recognition
Sales on fixed price contracts are recorded when services are earned, the earnings process is complete or substantially complete, and the revenue is measurable and collectability is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue from sales in which payment has been received, but the earnings process has not occurred. Sales have not yet commenced on the MMJ business. The Company also did not recognize revenues from its previous mining operations during the periods presented herein.
 
Advertising and Promotion
All costs associated with advertising and promoting products are expensed as incurred. These expenses were $1,621 and $-0- for the three months ended March 31, 2017 and 2016, respectively.
 
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.
 
Uncertain Tax Positions
In accordance with ASC 740, “Income Taxes” (“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
 
Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities.
 
The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.
 
 
 
F-25
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Recently Issued Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to early adopt the ASU in 2017.
 
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements.
 
No other new accounting pronouncements, issued or effective during the three months ended March 31, 2017, have had or are expected to have a significant impact on the Company’s financial statements.
 
 
Note 2 – Going Concern
 
As shown in the accompanying financial statements, the Company has no revenues, incurred net losses from operations resulting in an accumulated deficit of $16,254,135, and had negative working capital of ($86,158) at March 31, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new products and services to begin generating revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful; therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
 
The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
 
Note 3 – Related Party
 
Notes Payable
From time to time, the Company has received short term loans from officers and directors as disclosed in Note 7 below.
 
Capital Contributions
The Company imputed interest on non-interest bearing, related party loans, resulting in a total of $151 and $69 of contributed capital during the three months ended March 31, 2017 and 2016, respectively.
 
Common Stock Issued for Bartered Assets
On January 18, 2017, the Company exchanged 66,000 units, consisting of 66,000 shares of common stock and warrants to purchase 66,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 18, 2018, in exchange for a 2017 Audi Q7 and a 2017 Audi A4 driven by the Officers. The total fair value received, based on the market price of the stock at $4.02 per share, was allocated to the $105,132 purchase price of the vehicles and the $160,188 excess value of the common stock and warrants was expensed as stock based compensation.
 
A total of $177,005 and $157,505 of officer compensation was unpaid and outstanding at March 31, 2017 and December 31, 2016, respectively.
 
 
 
F-26
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Note 4 – Fair Value of Financial Instruments
 
Under FASB ASC 820-10-5, fair value is defined as 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 (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
 
The Company has certain financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
 
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
 
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
 
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
 
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of March 31, 2017 and December 31, 2016, respectively:
 
 
 
Fair Value Measurements at March 31, 2017
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
Assets
 
 
 
 
 
 
 
 
 
Cash
 $167,015 
 $- 
 $- 
Total assets
  167,015 
  - 
  - 
Liabilities
    
    
    
Convertible notes payable
  - 
  35,000 
  - 
Notes payable, related parties
  - 
  21,126 
  - 
Total liabilities
  - 
  56,126 
  - 
 
 $167,015 
 $(56,126)
 $- 
 
 
 
Fair Value Measurements at December 31, 2016
 
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
Assets
 
 
 
 
 
 
 
 
 
Cash
 $231 
 $- 
 $- 
Total assets
  231 
  - 
  - 
Liabilities
    
    
    
Convertible notes payable
  - 
  35,000 
  - 
Notes payable, related parties
  - 
  16,300 
  - 
Total liabilities
  - 
  51,300 
  - 
 
 $231 
 $(51,300)
 $- 
 
The fair values of our related party debts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.
 
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the three months ended March 31, 2017 and the year ended December 31, 2016.
 
 
 
F-27
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Note 5 – Property and Equipment
 
Property and equipment consist of the following at March 31, 2017 and December 31, 2016, respectively:
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
Automobiles
 $105,132 
 $- 
Office equipment
  650 
  650 
 
  105,782 
  650 
Less accumulated depreciation
  (4,624)
  (386)
 
 $101,158 
 $264 
 
Depreciation and amortization expense totaled $4,238 and $33 for the three months ended March 31, 2017 and 2016, respectively.
 
 
Note 6 – Convertible Notes Payable
 
Convertible notes payable consist of the following at March 31, 2017 and December 31, 2016, respectively:
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
On December 7, 2007, the Company issued a 10% note payable to the Lebrecht Group, PC (“Lebrecht Note”) for services rendered related to the registration of certain securities of the Company. The note and accrued interest were due December 7, 2008 and at the option of the holder payable in full on the maturity date or in 12 monthly payments beginning on the maturity date. The note and accrued interest are convertible to common shares at any time at the option of the holder at 75% of the average closing bid price on the five trading days immediately preceding the conversion. Management estimates, at this time, that 1,650,000 shares may be issued if this conversion feature is exercised. In accordance with generally accepted accounting principles, the 25% discount to market related to the beneficial conversion feature has been reported as a component of additional paid in capital. Additionally, since this represents a prepayment for services related to a future public offering, management had elected to offset the cost to future capital raised as a result of the offering, if any. Currently in default.$
  35,000 
 $35,000 
 
The Company recognized interest expense of $875 and $875 related to the convertible debts for the three months ended March 31, 2017 and 2016, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
F-28
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Note 7 – Notes Payable, Related Parties
 
Notes payable, related parties consist of the following at March 31, 2017 and December 31, 2016, respectively:
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
On various dates, the Company received advances from the Company’s CEO. The unsecured non-interest bearing loans were due on demand.
 $4,826 
 $- 
 
    
    
On August 23, 2016, the Company received an unsecured, non-interest bearing loan in the amount of $3,000, due on demand from an affiliate, bearing interest at 10% per annum.
  3,000 
  3,000 
 
    
    
On January 21, 2015, the Company received an unsecured loan in the amount of $1,300, due on demand from an affiliate, bearing interest at 10% per annum.
  1,300 
  1,300 
 
    
    
On April 12, 2010, the Company received an unsecured, non-interest bearing loan in the amount of $2,000, due on demand from an affiliate. Interest is being imputed at the Company’s estimated borrowing rate, or 10% per annum.
  2,000 
  2,000 
 
    
    
Over various dates in 2011 and 2012, the Company received unsecured loans in the aggregate amount of $10,000, due on demand, bearing interest at 10%, from an affiliate.
  10,000 
  10,000 
 
    
    
Notes payable, related parties
 $21,126 
 $16,300 
 
The Company recorded interest expense in the amount of $509 and $352 for the three months ended March 31, 2017 and 2016, respectively, including imputed interest expense in the amount of $151 and $69 for the three months ended March 31, 2017 and 2016, respectively related to notes payable, related parties.
 
 
Note 8 – Commitments and Contingencies
 
On November 8, 2016, the Company entered into an agreement with Gregory DiPaolo’s Pro Am Golf, LLC to acquire land currently housing a golf course and restaurant. The total purchase price of $1,600,000 is to be paid with a deposit of 50,000 shares of common stock, followed by cash of $1,250,000 and 300,000 shares of the Company’s common stock to be delivered at closing. The deposit of 50,000 shares issued as a deposit was $42,500 based on the closing price of the Company’s common stock on the date of grant. The Company subsequently closed on the property on July 27, 2017.
 
 
Note 9 – Stockholders’ Equity
 
Preferred Stock
On December 5, 2014, the Company amended the Articles of Incorporation, pursuant to which 20,000,000 shares of “blank check” preferred stock with a par value of $0.001 were authorized. No series of preferred stock has been designated to date.
 
Common Stock
On December 5, 2014, the Company amended the Articles of Incorporation, and increased the authorized shares to 200,000,000 shares of $0.001 par value common stock.
 
 
 
 
F-29
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Common Stock Sales
On March 15, 2017 and March 31, 2017, the Company received an aggregate $235,000 of advances on the subsequent sale on April 20, 2017 of 375,000 units at $1.00 per unit, consisting of 375,000 shares of common stock and warrants to purchase 375,000 shares of common stock at an exercise price of $3.00 per share, exercisable until April 20, 2018, in exchange for total proceeds of $375,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. The $235,000 was presented as a subscriptions payable at March 31, 2017.
 
On January 23, 2017, the Company sold 2,000 units at $2.00 per unit, consisting of 2,000 shares of common stock and warrants to purchase 2,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 23, 2018, in exchange for total proceeds of $4,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
On January 9, 2017, the Company sold 50,000 units at $1.00 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 9, 2018, in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Warrants Exercised
On January 7, 2017, a warrant holder exercised warrants to purchase 2,666 shares of common stock at a strike price of $1.50 in exchange for proceeds of $3,999.
 
Common Stock Issued for Bartered Assets
On January 18, 2017, the Company exchanged 66,000 units, consisting of 66,000 shares of common stock and warrants to purchase 66,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 18, 2018, in exchange for a 2017 Audi Q7 and a 2017 Audi A4. The total fair value received, based on the market price of the stock at $4.02 per share, was allocated to the $105,132 purchase price of the vehicles and the $160,188 excess value of the common stock and warrants was expensed as stock based compensation.
 
Common Stock Issued for Services
On March 2, 2017, the Company granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $142,500 based on the closing price of the Company’s common stock on the date of grant. The shares were subsequently issued on April 28, 2017, therefore the issuance was presented as a subscription payable at March 31, 2017.
 
On March 2, 2017, the Company granted 12,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $34,200 based on the closing price of the Company’s common stock on the date of grant.
 
On January 7, 2017, the Company granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $210,250 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Cancellations
On January 26, 2017, the Company cancelled a total of 1,000,000 shares of common stock previously granted to two individuals for non-performance of services.
 
Capital Contributions
The Company imputed interest on non-interest bearing, related party loans, resulting in a total of $151 and $69 of contributed capital during the three months ended March 31, 2017 and 2016, respectively.
 
 
Note 10 – Common Stock Warrants
 
Common Stock Warrants Granted
On January 23, 2017, the Company sold warrants to purchase 2,000 shares of common stock at $3.00 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $4,000 in conjunction with the sale of 2,000 shares of common stock. The relative fair value of the 2,000 common stock warrants using the Black-Scholes option-pricing model was $5,106, or $2.55281 per share, based on a volatility rate of 211%, a risk-free interest rate of 0.79% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
 
 
F-30
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
On January 9, 2017, the Company sold warrants to purchase 50,000 shares of common stock at $3.00 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $50,000 in conjunction with the sale of 50,000 shares of common stock. The relative fair value of the 50,000 common stock warrants using the Black-Scholes option-pricing model was $108,228, or $2.16456 per share, based on a volatility rate of 210%, a risk-free interest rate of 0.82% and an expected term of 1.0 year. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.
 
Warrants Exercised
On January 7, 2017, a warrant holder exercised warrants to purchase 2,666 shares of common stock at a strike price of $1.50 in exchange for proceeds of $3,999.
 
Common Stock Warrants Expired or Cancelled
No warrants were expired or cancelled during the three months ended March 31, 2017.
 
 
Note 11 – Income Taxes
 
The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.
 
For the three months ended March 31, 2017 and the year ended December 31, 2016, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At March 31, 2017 and December 31, 2016, the Company had approximately $10,334,000 and $8,056,000 of federal net operating losses, respectively. The net operating loss carry forwards, if not utilized, will begin to expire in 2031.
 
The components of the Company’s deferred tax asset are as follows:
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
Deferred tax assets:
 
 
 
 
 
 
Net operating loss carry forwards
 $3,616,900 
 $2,862,500 
 
    
    
Net deferred tax assets before valuation allowance
 $3,616,900 
 $2,862,500 
Less: Valuation allowance
  (3,616,900)
  (2,862,500)
Net deferred tax assets
 $- 
 $- 
 
Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at March 31, 2017 and December 31, 2016, respectively.
 
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
 
 
 
March 31,
 
 
December 31,
 
 
 
2017
 
 
2016
 
 
 
 
 
 
 
 
Federal and state statutory rate
  35%
  35%
Change in valuation allowance on deferred tax assets
  (35%)
  (35%)
 
In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.
 
 
 
F-31
WEED, INC.
(Formerly United Mines, Inc.)
Notes to Financial Statements
For the Three Months Ended March 31, 2017 and 2016
(Unaudited)
 
Note 12 – Subsequent Events
 
Common Stock Sales
On April 20, 2017, the Company received the final payment of $140,000, in addition to the previously received $235,000, on the sale of 375,000 units at $1.00 per unit, consisting of 375,000 shares of common stock and warrants to purchase 375,000 shares of common stock at an exercise price of $3.00 per share, exercisable until April 20, 2018. The total proceeds of $375,000 received were allocated between the common stock and warrants on a relative fair value basis.
 
Common Stock Issued for Acquisition
On May 9, 2017, the Company issued a total of 500,000 shares of common to seven individuals pursuant to the closing of an acquisition of Sangre AT, LLC, a Wyoming limited liability company (“Sangre”) in exchange for 100% of the interests in Sangre. The total fair value of the common stock was $569,000 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Issued on Subscriptions Payable
On April 28, 2017, the Company issued 50,000 shares of common stock on a subscriptions payable in the amount of $142,500 to a consultant for services performed in the prior period.
 
Common Stock Issued for Services
On April 20, 2017, the Company granted an aggregate of 216,000 shares of common stock to eleven consultants for services performed. The aggregate fair value of the common stock was $433,663 based on the closing price of the Company’s common stock on the date of grant.
 
On April 20, 2017, the Company granted an aggregate of 216,000 shares of common stock to eleven consultants for services performed. The aggregate fair value of the common stock was $433,663 based on the closing price of the Company’s common stock on the date of grant.
 
Common Stock Cancellations
On May 9, 2017, the Company cancelled a total of 600,000 shares of common stock previously granted to a consultant for non-performance of services.
 
On April 25, 2017, a total of 4,820,953 shares were cancelled and returned to treasury pursuant to compliance with the September 30, 2014 approval by the majority of shareholders of the terms of a Settlement Agreement dated December 11, 2013 and signed on August 19, 2014 pursuant to Case No. C20125545 in the Superior Court of the State of Arizona, whereby among other provisions, the Plaintiffs, consisting of United Mines, Inc. (“UMI”) and its then principals, agreed to the cancellation of a total of 4,820,953 shares of common stock and control of the Company in exchange for (i) sixty five (65) of the unpatented Bureau of Land Management (“BLM”) mining claims, the mill site, buildings and equipment, (ii) the four (4) Arizona State Land Department Exploration Permits registered to the Company, (iii) any permits, financial and reclamation guaranties, bonds and licenses connected with the foregoing assets. In addition, thirty-three (33) unpatented BLM mining claims remained the property of UMI, along with any associated permits, financial and reclamation guaranties, bonds, licenses, and the rights to the corporation, the corporation’s name, stock symbol, or any other asset of UMI, shall remain the property of UMI under the management of Glenn E. Martin.
 
 
 
 
 
 
 
 
 
 
F-32
 
 
SELECTED FINANCIAL DATA
 
As a smaller reporting company we are not required to provide this information.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
Disclaimer Regarding Forward Looking Statements
 
Our Management’s Discussion and Analysis or Plan of Operations contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs andavailability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations anddifficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
 
Although the forward-looking statements in this Registration Statement reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
 
Overview
 
We are an early stage holding company currently focused on the development and application of cannabis-derived compounds for the treatment of human disease. Our wholly-owned subsidiary, Sangre AT, LLC (“Sangre”), has begun a planned five-year Cannabis Genomic Study to complete a global genomic classification of the Cannabis plant genus. By targeting cannabis-derived molecules that stimulate the endocannabinoid system, Sangre’s research team plans to develop scientifically-valid and evidence-based cannabis strains for the production of disease-specific medicines. The goal of the research is to identify, collect, patent, and archive a collection of highly-active medicinal strains. We plan to conduct this study only in states where cannabis has been legalized for medicinal purposes.
 
Using annotated genomic data and newly generated phenotypic data, Sangre plans to identify and isolate regions of the plant genome which are related to growth, synthesis of desired molecules, and drought and pest resistance. This complex data set would then be utilized in a breeding program to generate and establish new hybrid cultivars which exemplify the traits that are desired by the medical and patient community. This breeding program would produce new seed stocks and clones, which we plan on patenting. If successful this intellectual property should generate immense value for the Company. After developing a comprehensive understanding of the annotated genome of a variety of cannabis strains, and obtaining intellectual property protection over the most promising strains, we plan to provide the blueprints for the development of significant medicinal products for the treatment of human diseases, including, but not limited to, as autism, pediatric brain cancer, PTSD, epilepsy, chronic pain, and Crohn’s disease.
 
Our current, short-term goals relate to the Cannabis Genomic Study and the resulting development of a variety of new cannabis strains, and, over the next 5 years, we plan to process those results in order to become an international cannabis research and product development company, with a globally-recognized brand focusing on building and purchasing labs, land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to universities, state governments, licensed dispensary owners and organic grow operators on a contract basis with a concentration on the legal and medical cannabis sector.
 
Our long-term plan is to become a true “Seed-to-Sale” global holding company providing infrastructure, financial solutions, product development, and real estate options in this new emerging market. Our long term growth may also come from the acquisition of synergistic businesses, such as distilleries, to make anything from infused beverages to super oxygenated water with CBD and THC. Currently, WEED Inc has formed WEED Australia Ltd., registered as an unlisted public company in Australia to address this Global demand. We have also formed WEED Australia Ltd., registered as an unlisted public company in Australia, to address future global demand, however the entity has been dormant since its inception. We will look to conduct future research, marketing, import/exporting, and manufacturing of our proprietary products on an international level.
 
 
26
 
 
On July 26, 2017, we acquired property located in La Veta, Colorado in order to Sangre to complete its 5-Year, $15+ million Cannabis Genomic Study. The site includes a 10,000+ sq. ft. building that will house Sangre’s genomic research facility, a 4,000+ square foot building for plant product analytics and plant product extraction, a 3,500 sq. ft. corporate office center, and 25 RV slots with full water and electric, which we plan to convert into a series of small research pods. Under the terms of the purchase agreement, we paid $525,000 down, along with 25,000 shares of our common stock, and Sangre took immediate possession of the property. We are obligated to pay an additional $400,000 in cash and issue an additional 75,000 shares of our common stock over the next two years in order to pay the entire purchase price. We estimate it will take approximately $675,000 in order to convert the existing buildings into the facilities necessary for Sangre AgroTech to conduct its research, plus an additional $1,000,000 for security & ground buildout, and an additional $1 million for scientific equipment, ordered for plant production and product extraction. We plan to complete the initial property renovations by Q1 of 2018. The equipment is scheduled to be delivered in Q2 2018. We will need to raise additional funds in order to pay the remainder of the purchase price, as well as to complete the planned renovations.
 
Corporate Overview
 
We were originally incorporated under the name Plae, Inc., in the State of Arizona on August 20, 1999. At the time we operated under the name Plae, Inc., no business was conducted. No books or records were maintained and no meetings were held. In essence, nothing was done after incorporation until Glenn E. Martin took possession of Plae, Inc. in January 2005. On February 18, 2005, the corporate name was changed to King Mines, Inc. and then subsequently changed to its current name, United Mines, Inc., on March 30, 2005. No shares were issued until the Company became United Mines, Inc. From 2005 until 2015, we were an exploration stage mineral exploration company that owned a number of unpatented mining claims and Arizona State Land Department claims.
 
On November 26, 2014, our Board of Directors approved the redomestication of our company from Arizona to Nevada (the “Articles of Domestication”), and approved Articles of Incorporation in Nevada, which differed from then-Articles of Incorporation in Arizona, primarily by (a) changing our name from United Mines, Inc. to WEED, Inc., (b) authorizing Twenty Million (20,000,000) shares of preferred stock, with blank check rights granted to our Board of Directors, and (c) authorizing Two Hundred Million (200,000,000) shares of common stock (the “Nevada Articles of Incorporation”). On December 19, 2014, the holders of a majority of our outstanding common stock approved the Articles of Domestication and the Nevada Articles of Incorporation at a Special Meeting of Shareholders. On January 16, 2015, the Articles of Domestication and the Nevada Articles of Incorporation went effective with the Secretary of State of the State of Nevada. On February 2, 2015, our name change to WEED, Inc., and a corresponding ticker symbol change to “BUDZ” went effective with FINRA and was reflected on the quotation of our common stock on OTC Markets.
 
These changes were effected in order to make our corporate name and ticker symbol better align with our short-term and long-term business focus. Our current, short-term goals relate to the Cannabis Genomic Study and the resulting development of a variety of new cannabis strains, and, over the next 5 years, we plan to process those results in order to become an international cannabis research and product development company, with a globally-recognized brand focusing on building and purchasing labs, land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to universities, state governments, licensed dispensary owners and organic grow operators on a contract basis with a concentration on the legal and medical cannabis sector.
 
Our long-term plan is to become a true “Seed-to-Sale” global holding company providing infrastructure, financial solutions, product development, and real estate options in this new emerging market. Our long term growth may also come from the acquisition of synergistic businesses, such as distilleries, to make anything from infused beverages to super oxygenated water with CBD and THC. Currently, WEED Inc has formed WEED Australia Ltd., registered as an unlisted public company in Australia to address this Global demand. We have also formed WEED Australia Ltd., registered as an unlisted public company in Australia, to address future global demand, however the entity has been dormant since its inception. We will look to conduct future research, marketing, import/exporting, and manufacturing of our proprietary products on an international level.
 
 
27
 
 
On April 20, 2017, we entered into a Share Exchange Agreement with Sangre AT, LLC, a Wyoming limited liability company, under which we acquired all of the issued and outstanding limited liability company membership units of Sangre in exchange for Five Hundred Thousand (500,000) shares of our common stock, restricted in accordance with Rule 144. As a result of this agreement, Sangre is a wholly-owned subsidiary of WEED, Inc.
 
This discussion and analysis should be read in conjunction with our financial statements included as part of this Registration Statement.
 
Results of Operations for Three Months ended March 31, 2017 compared to Three Months ended March 31, 2016
 
Summary of Results of Operations
 
 
 
Three Months Ended March 31,
 
 
 
2017
 
 
2016
 
Revenue
 $- 
 $- 
 
    
    
Operating expenses:
    
    
 
    
    
General and administrative
  68,134 
  24,720 
Professional fees
  580,986 
  120,348 
Depreciation and amortization
  4,238 
  33 
Total operating expenses
  653,358 
  145,101 
 
    
    
Net operating loss
  (653,358)
  (145,101)
 
    
    
Interest expense
  (1,384)
  (1,227)
 
    
    
Net loss
 $(654,742)
 $(146,328)
 
Operating Loss; Net Loss
 
Our net loss increased by $508,414, from ($146,328) to ($654,742), from the three months ended March 31, 2017 compared to the three months ended March 31, 2016. Our operating loss increased by $508,257, from ($145,101) to ($653,358) for the same period. The increase in operating loss and net loss compared to the prior year period is primarily a result of a significant increase in professional fees and a slight increase in general and administrative expenses. These changes are detailed below.
 
Revenue
 
We have not had any revenues since our inception. Prior to February 18, 2005, we were an exploration stage mineral exploration company that owned a number of unpatented mining claims and Arizona State Land Department claims. In late 2014, we changed our short-term and long-term business focus, which in the short-term is to conduct Sangre’s Cannabis Genomic Study over the next 5 years and process those result, and in the long-term is to be a company focused on purchasing land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to licensed dispensary owners and organic grow operators on a contract basis, with a concentration on the legal and medical marijuana (Cannabis) sector. Our long-term plan is to become a True “Seed-to-Sale” company providing infrastructure, financial solutions and real estate options in this new emerging market, worldwide. We plan to make our brand global and therefore we will look for opportunities to conduct future research, marketing, import and exporting, and manufacturing of any proprietary products on an international level.
 
 
28
 
 
General and Administrative Expenses
 
General and administrative expenses increased by $43,414, from $24,720 for the three months ended March 31, 2016 to $68,134 for the three months ended March 31, 2017, primarily due to increased consulting and administrative costs incurred as we changed our business focus from mining to one involved in the cannabis research industry.
 
Professional Fees
 
Our professional fees increased during the three months ended March 31, 2017 compared to the three months ended March 31, 2016. Our professional fees were $580,986 for the three months ended March 31, 2017 and $120,348 for the three months ended March 31, 2016. These fees are largely related to fees paid for legal and accounting services, along with compensation to independent contractors, and increased significantly primarily as a result of increased stock-based compensation awards. We expect these fees to continue to grow steadily as our business expands. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.
 
Interest Income/Expense; Net
 
Interest expense increased from $1,227 to $1,384 for the three months ended March 31, 2016 compared to the same period in 2017. Our interest expense primarily relates to interest on a convertible note and short term loans.
 
Liquidity and Capital Resources for Three Months ended March 31, 2017 compared to Three Months ended March 31, 2016
 
Introduction
 
During the three months ended March 31, 2017 and 2016, because of our operating, we did not generate positive operating cash flows. Our cash on hand as of March 31, 2017 was $167,015 and our monthly cash flow burn rate is approximately $45,000. Our short term cash needs have been satisfied through proceeds from the sales of our securities. We currently do not believe we will be able to satisfy our cash needs from our revenues for many years to come.
 
Our cash, current assets, total assets, current liabilities, and total liabilities as of March 31, 2017 and December 31, 2016, respectively, are as follows:
 
 
 
March 31, 2017
 
 
December 31, 2016
 
 
 
Change
 
 
 
 
 
 
 
 
 
 
 
Cash
 $167,015 
 $231 
 $166,784 
Total Current Assets
  207,523 
  5,284 
  202,239 
Total Assets
  308,681 
  5,548 
  303,133 
Total Current Liabilities
  293,681 
  281,226 
  12,455 
Total Liabilities
 $293,681 
 $281,226 
 $12,455 
 
Our current assets increased by $202,239 as of March 31, 2017 as compared to December 31, 2016, due to a significant increase in cash and prepaid expenses as of March 31, 2017. The increase in our total assets between the two periods was primarily attributed to the increase in our cash on hand of $166,784, which was primarily due to the cash we had from the sales of our securities as of March 31, 2017, as well as a significant increase in our property and equipment, net, which was primarily due to the addition of two vehicles acquired in January of 2017.
 
 
29
 
 
Our current liabilities and total liabilities increased by $12,455, as of March 31, 2017 as compared to December 31, 2016. A primary cause of this increase was an increase of $19,500 in our accrued officer compensation and an increase of approximately $5,000 in short term loans, partially offset by an approximate $13,000 decrease in our accounts payable between the two periods.
 
In order to repay our obligations in full or in part when due, we will be required to raise capital from other sources. There is no assurance, however, that we will be successful in these efforts.
 
Cash Requirements
 
We had cash available as of March 31, 2017 of $167,015 and $231 on December 31, 2016. Based on our lack of revenues and our current monthly burn rate, around $45,000, we will need to continue borrowing from our shareholders and other related parties, and/or raise money from the sales of our securities, to fund our future planned operations.
 
Sources and Uses of Cash
 
Operations
 
We had net cash used by operating activities of $131,041 for the three months ended March 31, 2017, as compared to $3,937 for the three months ended March 31, 2016. For the period in 2017, the net cash used in operating activities consisted primarily of our net loss of ($654,742), offset by shares issued for services of $547,138, depreciation of $4,238, and adjusted by an increase in prepaid expenses of $35,455, accrued compensation of $19,500, accrued interest of $1,233, and a decrease in accounts payable of $13,104. For the same period in 2016, the net cash provided by operating activities consisted primarily of our net loss of ($146,328), partially offset by shares issued for services of $119,312 and adjusted by a decrease in prepaid expenses of $775, and increases in accounts payable of $1,544, accrued compensation of $19,500, and accrued interest of $1,158.
 
Investments
 
We did not have any net cash provided (used) by investing activities for the three months ended March 31, 2017 or March 31, 2016.
 
Financing
 
Our net cash provided by financing activities for the three months ended March 31, 2017 was $297,825, compared to $4,000 for the three months ended March 31, 2016. For the period in 2017, our financing activities related to proceeds from the sale of common stock of $292,999 and proceeds from notes payable, related parties of $9,000, offset by repayments on notes payable, related parties of ($4,174). For the period in 2016, our financing activities consisted of proceeds from notes payable, related parties of $10,000, offset by repayments on notes payable, related parties of ($6,000).
 
 
 
 
30
 
 
Year Ended December 31, 2016 compared to Year Ended December 31, 2015
 
Results of Operations
 
Summary of Results of Operations
 
 
 
Year Ended
December 31,
 
 
 
2016
 
 
2015
 
Revenue
 $- 
 $- 
 
    
    
Operating expenses:
    
    
 
    
    
General and administrative
  2,211,787 
  594,446 
Professional fees
  1,933,733 
  639,149 
Depreciation and amortization
  130 
  130 
Total operating expenses
  4,145,650 
  1,233,725 
 
    
    
Net operating loss
  (4,145,650)
  (1,233,725)
 
    
    
Interest expense
  (5,321)
  (4,824)
 
    
    
Net loss
 $(4,150,971)
 $(1,238,549)
 
Operating Loss; Net Loss
 
Our net loss increased by $2,912,422, from ($1,238,549) to ($4,150,971), from the year ended 2015 compared to 2016. Our operating loss increased by $2,911,925, from ($1,233,725) to ($4,145,650) for the same period. The increase in operating loss and net loss compared to the prior year is primarily a result of our increase in general and administrative expenses, as well as our increase in professional fees. These changes are detailed below.
 
Revenue
 
We have not had any revenues since our inception. Prior to February 18, 2005, we were an exploration stage mineral exploration company that owned a number of unpatented mining claims and Arizona State Land Department claims. In late 2014, we changed our short-term and long-term business focus, which in the short-term is to conduct Sangre’s Cannabis Genomic Study over the next 5 years and process those result, and in the long-term is to be a company focused on purchasing land and building commercial grade “Cultivation Centers” to consult, assist, manage & lease to licensed dispensary owners and organic grow operators on a contract basis, with a concentration on the legal and medical marijuana (Cannabis) sector. Our long-term plan is to become a True “Seed-to-Sale” company providing infrastructure, financial solutions and real estate options in this new emerging market, worldwide. We plan to make our brand global and therefore we will look for opportunities to conduct future research, marketing, import and exporting, and manufacturing of any proprietary products on an international level.
 
General and Administrative Expenses
 
General and administrative expenses increased by $1,617,341, from $594,446 for the year ended December 31, 2015 to $2,211,787 for the year ended December 31, 2016, primarily due to an increase in our stock-based compensation awarded to our executives.
 
 
31
 
 
Professional Fees
 
Our professional fees increased during the year ended December 31, 2016 compared to the year ended December 31, 2015. Our professional fees were $1,933,733 for the year ended December 31, 2016 and $639,149 for the year ended December 31, 2015. These fees are largely related to fees paid for legal and accounting services, along with compensation to independent contractors, and increased significantly primarily as a result of increased stock-based compensation awards. We expect these fees to continue grow steadily as our business expands. In the event we undertake an unusual transaction, such as an acquisition, securities offering, or file a registration statement, we would expect these fees to substantially increase during that period.
 
Interest Income/Expense; Net
 
Interest expense increased from $4,824 to $5,321 for the year ended December 31, 2015 compared to the same period in 2016. Our interest expense primarily relates to interest on a convertible note and short term loans.
 
Liquidity and Capital Resources
 
Introduction
 
During the years ended December 31, 2016 and 2015, because of our operating losses, we did not generate positive operating cash flows. Our cash on hand as of December 31, 2016 was $231 and our monthly cash flow burn rate was approximately $6,000. As a result, we had significant short term cash needs. These needs were satisfied through proceeds from the sales of our securities. We currently do not believe we will be able to satisfy our cash needs from our revenues for many years to come.
 
Our cash, current assets, total assets, current liabilities, and total liabilities as of December 31, 2016 and 2015, respectively, are as follows:
 
 
 
December 31, 2016
 
 
December 31, 2015
 
 
 
Change
 
 
 
 
 
 
 
 
 
 
 
Cash
 $231 
 $7 
 $224 
Total Current Assets
  5,284 
  2,074 
  3,210 
Total Assets
  5,548 
  2,468 
  3,080 
Total Current Liabilities
  281,226 
  218,070 
  63,156 
Total Liabilities
 $281,226 
 $218,070 
 $63,156 
 
Our current assets increased by $3,210 as of December 31, 2016 as compared to December 31, 2015. The increase in our total assets between the two periods was primarily attributed to an increase in prepaid expenses as of December 31, 2016.
 
Our current liabilities and total liabilities increased by $63,156, as of December 31, 2016 as compared to December 31, 2015. A large portion of this increase was due to higher accrued officer compensation.
 
In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.
 
 
32
 
 
Cash Requirements
 
We had cash available as of December 31, 2016 of $231 and $7 on December 31, 2015. Based on our revenues, cash on hand and current monthly burn rate of approximately $45,000, we will need to continue borrowing from our shareholders and other related parties, and/or raise money from the sales of our securities, to fund operations.
 
Sources and Uses of Cash
 
Operations
 
We had net cash used in operating activities of $72,776 for the year ended December 31, 2016, as compared to $25,800 for the year ended December 31, 2015. In 2016, the net cash used in operating activities consisted primarily of our net loss of ($4,150,971), offset by shares issued for services, related parties of $3,600,000, shares issued for services of $377,812, and shares issued for down payment on land purchase of $42,500, adjusted by an increase in prepaid expenses of $2,986, accrued compensation of $71,505, accrued interest of $4,738, and a decrease in accounts payable of $16,087. For the same period in 2016, the net cash provided by operating activities consisted primarily of our net loss of ($1,238,549), offset by shares issued for services, related parties of $840,000 and shares issued for services of $266,640, adjusted by an increase in accounts payable of $19,199, accrued compensation of $74,000, accrued interest of $4,624, and a decrease in prepaid expenses of $7,956.
 
Investments
 
We did not have any net cash provided (used) by investing activities for the years ended December 31, 2016 or December 31, 2015.
 
Financing
 
Our net cash provided by financing activities for the year ended December 31, 2016 was $73,000, compared to $20,185 for the year ended December 31, 2015. For the period in 2016, our financing activities related to proceeds from the sale of common stock of $70,000 and proceeds from notes payable, related parties of $16,005, offset by repayments on notes payable, related parties of ($13,005). For the period in 2015, our financing activities consisted of proceeds from the sale of common stock of $24,000 and proceeds from notes payable, related parties of $1,300, offset by repayments on notes payable, related parties of ($5,115)
 
 
 
 
 
 
 
 
 
 
 
 
33
 
 
Contractual Obligations
 
December 31, 2016:
 
    
 
2017
 
 
2018
 
 
2019
 
 
2020
 
 
2021
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt obligations
 $51,300 
 $- 
 $- 
 $- 
 $- 
 $51,300 
Operating leases
  9,000 
  12,000 
  12,000 
  12,000 
  12,000 
  57,000 
 
 $60,300 
 $12,000 
 $12,000 
 $12,000 
 $12,000 
 $108,300 
 
 
Off Balance Sheet Arrangements
 
We have no off balance sheet arrangements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34
 
 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
We have no information required to be disclosed under this Item.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are exposed to market risks, which include interest rate changes in United States of America and commodity prices. We do not engage in financial transactions for trading or speculative purposes.
 
Interest Rate Risk. There may be interest charged on our accounts payable, as well as interest we charge on our accounts receivable, depending on their age. Typically these interest rates are fixed are not affected by changes in market interest rates. However, from time to time we may enter into debt transactions that have a variable interest rate which would leave us subject to interest rate fluctuations.
 
Commodity Prices. If we get operational, we will be exposed to fluctuation in market prices for the raw materials necessary to manufacture our products. To mitigate risk associated with increases in market prices and commodity availability, we will attempt to negotiate contracts with favorable terms directly with vendors. We do not believe we will enter into forward contracts or other market instruments as a means of achieving our objectives or minimizing our risk exposures on these materials.
 
 
 
 
 
 
 
 
 
 
 
 
35
 
 
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
 
The following table sets forth the names and ages of the current directors and executive officers of the Company, the principal offices and positions with the Company held by each person and the date such person became a director or executive officer of the Company. The executive officers of the Company are elected annually by the Board of Directors. The directors serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. Unless described below, there are no family relationships among any of the directors and officers.
 
Name
 
Age
 
Position(s)
 
 
 
 
 
Glenn E. Martin
 
63
 
President, Chief Executive Officer, Chief Financial Officer and a Director
 
 
 
 
 
Nicole M. Breen
 
41
 
Secretary, Treasurer and a Director
 
Glenn E. Martin was appointed as our President, Chief Executive Officer and Chief Financial Officer on September 30, 2014. Mr. Martin has been a Director since January 1, 2005. Mr. Martin was our President from 2005 until 2012. Prior to joining United Mines, Mr. Martin has served in an executive capacity with several different companies. From 1988 through the fall of 1992, Mr. Martin was Executive Director of World Trade Center, Tucson, a subsidiary of the former Twin Towers in New York City. In this position he oversaw the day to day operation, including projects, programs, and seminars for the U.S. Dept. of Commerce associate office in the W.T.C., Tucson promoting D.O.C. programs, servicing clients for both the D.O.C. and Small Business administration. During his tenure with World Trade Center he served as speaker for international trade seminars and the AIESEC (U.S) National Leadership Seminars. Member; Hong Kong Trade Association 1988 to present. Member; Society of Mining, Metallurgy & Exploration (2008) Guest speaker at Inaugural HKBAH Annual Event in May 2010 & member of Hong Kong Business Association of Hawaii (2010)
 
During our fiscal years ended December 31, 2016 and December 31, 2015, Mr. Martin received $7,995 and $4,000, respectively, in cash compensation for his services in addition to a total of 28,000,000 shares of our common stock as compensation for the years ended December 31, 2015 and December 31, 2016. As of December 31, 2016, Mr. Martin owns or controls an aggregate of 55,841,078 shares of our common stock.
 
Nicole M. Breen, was appointed as our Secretary and Treasurer on September 30, 2014. Ms. Breen has been a Director since January 1, 2005. Ms. Breen was our Secretary and Treasurer from 2005 until 2012. From June 2000 to 2012 she served as the Managing Associate of GEM Management Group, LLC specializing in acquiring mineral rights and mining properties, along with servicing administration requirements for the company. All Ms. Breen’s current work in the Cannabis industry is done on our behalf. In this position she oversees as corporate secretary, recording secretary and the day-to-day treasury operations of the company. Ms. Breen received her Bachelor of Science in Physical Education in Education, with a minor in Elementary Education, from the University of Arizona.
 
During our fiscal years ended December 31, 2016 and December 31, 2015, Ms. Breen did not receive cash compensation for her services but she did receive a total of 16,000,000 shares of our common stock as compensation for the years ended December 31, 2015 and December 31, 2016. As of December 31, 2016, Ms. Breen owned 19,947,520 shares of our common stock.
 
Nicole Breen is Glenn Martin’s daughter.
 
 
36
 
 
EXECUTIVE COMPENSATION
 
The Summary Compensation Table shows certain compensation information for services rendered in all capacities for the fiscal years ended December 31, 2016 and 2015. Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in any of the applicable years. The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.
 
   SUMMARY COMPENSATION TABLE   
Name and Principal Position
Year
 
Salary
($)
 
Bonus
($)
Stock 
Awards
($)
Option 
Awards
 ($)
Non-Equity
 Incentive
 Plan
 Compensa-tion 
($)
Nonqualified
 Deferred 
Compensation
Earnings 
($)
All
 Other 
Compensa-
tion 
($)
Total
 ($)
Glenn E. Martin
President, CEO and CFO
2016
2015
7,995
4,000
-0-
-0-
2,100,000
490,000
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
2,107,995
494,000
Nicole M. Breen
Secretary and Treasurer
2016
2015
-0-
-0-
-0-
-0-
1,200,000
280,000
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
1,200,000
280,000
 
 
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
 
Option Awards
Stock Awards
Name
Number of Securities Underlying Unexercised Options
(#)
Exercisable
Number of Securities Underlying Unexercised Options
(#)
Unexercisable
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
Option Exercise Price
($)
Option Expiration Date
Number of Shares or Units of Stock That Have Not Vested
(#)
Market Value of Shares or Units of Stock That Have Not Vested
($)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
 
 
 
 
 
 
 
 
 
 
Glenn E. Martin
-0-
-0-
-0-
N/A
N/A
-0-
-0-
-0-
-0-
 
 
 
 
 
 
 
 
 
 
Nicole M. Breen
-0-
-0-
-0-
N/A
N/A
-0-
-0-
-0-
-0-
 
 
 
37
 
 
In 2014 and 2016 we entered into employment agreements with Glenn E. Martin, our Chief Executive Officer and Chief Financial Officer, Nicole Breen, our Secretary and Treasurer and Ryan Breen, our Vice President and Social Media Officer.
 
Under the terms of our agreement with Mr. Martin dated October 1, 2016, he serves as our President and Chief Executive Officer. The agreement is for a two-year term and Mr. Martin received Seven Million (7,000,000) shares of our common stock, restricted in accordance with Rule 144, and is to received Seven Million (7,000,000) additional shares as his annual salary for agreeing to serve as our President and Chief Executive Officer. Additionally, Mr. Martin is entitled to One Million (1,000,000) shares of a yet-to-be-created class of Series B Preferred Stock if we regain “fully-reporting” status with the Securities and Exchange Commission. We are obligated to maintain and pay the premiums for “key man” life insurance in the amount of $1,000,000. Our agreement with Mr. Martin also contains various provisions related to his termination without cause and in the event we undergo a change of control transaction. To date, no “key man” insurance has been obtained.
 
Under the terms of our agreement with Mrs. Breen dated October 1, 2016, she serves as our Secretary and Treasurer. The agreement is for a two-year term and Ms. Breen received Four Million (4,000,000) shares of our common stock, restricted in accordance with Rule 144, and is to received Four Million (4,000,000) additional shares as her annual salary for agreeing to serve as our Secretary and Treasurer. Additionally, Ms. Breen is entitled to One Hundred Thousand (100,000) shares of a yet-to-be-created class of Series B Preferred Stock if we regain “fully-reporting” status with the Securities and Exchange Commission. Our agreement with Ms. Breen also contains various provisions related to her termination without cause and in the event we undergo a change of control transaction.
 
Under the terms of our agreement with Mr. Ryan Breen dated October 1, 2016, he serves as our Vice President and Social Media Officer. The agreement is for a two-year term and Mr. Breen received One Million (1,000,000) shares of our common stock, restricted in accordance with Rule 144, and is to received One Million (1,000,000) additional shares as his annual salary for agreeing to serve as our Vice President and Social Media Officer. Additionally, Mr. Breen is entitled to One Hundred Thousand (100,000) shares of a yet-to-be-created class of Series B Preferred Stock if we regain “fully-reporting” status with the Securities and Exchange Commission. Our agreement with Mr. Breen also contains various provisions related to his termination without cause and in the event we undergo a change of control transaction.
 
When our Board of Directors approved the employments agreements they resolved to create a new series of preferred stock to be entitled “Series B Convertible Preferred Stock” with the following rights and preferences: (i) no dividend rights; (ii) no liquidation preference over the Company’s common stock; (iii) conversion rights into shares of common stock at a ratio of 20 shares of common stock for each share of Series V Convertible Preferred Stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) voting rights on an “as converted” basis on all matters properly brought before our common stockholders for a vote.
 
Long-Term Incentive Plans. We do not provide its officers or employees with pension, stock appreciation rights, long-term incentive or other plans and has no intention of implementing any of these plans for the foreseeable future.
 
Employee Pension, Profit Sharing or other Retirement Plans. We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although it may adopt one or more of such plans in the future.
 
Compensation of Directors
 
Our directors did not receive any compensation for their services as directors during the fiscal year ended December 31, 2016 or 2015.
 
 
38
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth, as of June 30, 2017, certain information with respect to our equity securities owned of record or beneficially by (i) each Officer and Director of the Company; (ii) each person who owns beneficially more than 10% of each class of the Company’s outstanding equity securities; and (iii) all Directors and Executive Officers as a group.
 
Common Stock
Title of Class
Name and Address
of Beneficial Owner (1)
Amount and Nature of
Beneficial Ownership
Percent
of Class (2)
Common Stock
Glenn E. Martin (3)(4)
55,841,078
55.80%
 
   
 
 
Common Stock
Nicole M. Breen (3)(5)
19,947,520
19.89%
 
 
 
 
Common Stock
Ryan Breen (6)
5,010,615
5.01%
 
   
 
 
Common Stock
All Directors and Officers
As a Group (2 persons)
75,788,598
75.49%
 
(1) 
Unless otherwise indicated, based on 99,991,020 shares of common stock issued and outstanding. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for the purposes of computing the percentage of any other person.
 
(2) 
Indicates one of our officers or directors.
 
(3) 
Unless indicated otherwise, the address of the shareholder is WEED, Inc., at 4920 N. Post Trail, Tucson, AZ 85750.
 
(4) 
Includes 80,666 shares of common stock held in the name of Tanque Verde Valley Missionary Society, an entity controlled by Mr. Martin.
 
(5) 
Includes 305,505 shares of common stock held in the name of GEM Management Group, LLC, an entity controlled by Ms. Breen, and an aggregate of 15,927 shares of common stock held in the name of Ms. Breen’s children.
 
(6) 
Ryan Breen is the spouse of Nicole M. Breen.
 
The issuer is not aware of any person who owns of record, or is known to own beneficially, ten percent or more of the outstanding securities of any class of the issuer, other than as set forth above. The issuer is not aware of any person who controls the issuer as specified in Section 2(a)(1) of the 1940 Act. There are no classes of stock other than common stock issued or outstanding. The Company does not have an investment advisor.
 
There are no current arrangements which will result in a change in control.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
On October 1, 2016, we granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $700,000 based on the closing price of our common stock on the date of grant.
 
 
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In addition, on October 1, 2016, we granted a total of 14,000,000 shares of common stock to Mr. Martin for services performed pursuant to his previous employment agreement. The total fair value of the common stock was $1,400,000 based on the closing price of our common stock on the date of grant.
 
On October 1, 2016, we granted 4,000,000 shares of common stock to Nicole Breen as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $400,000 based on the closing price of our common stock on the date of grant.
 
In addition, on October 1, 2016, we granted a total of 8,000,000 shares of common stock to Nicole Breen for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $800,000 based on the closing price of our common stock on the date of grant.
 
On October 1, 2016, we granted 1,000,000 shares of common stock to Ryan Breen as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $100,000 based on the closing price of our common stock on the date of grant.
 
On October 1, 2016, we granted a total of 2,000,000 shares of common stock to Ryan Breen for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $200,000 based on the closing price of our common stock on the date of grant.
 
On January 1, 2015, we granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, for services performed. The total fair value of the common stock was $490,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On January 1, 2015, we granted 4,000,000 shares of common stock to Nicole Breen for services performed. The total fair value of the common stock was $280,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On January 1, 2015, we granted 1,000,000 shares of common stock to Ryan Breen for services performed. The total fair value of the common stock was $70,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
On or about December 5, 2014, we issued 18,000,000 shares to Glenn Martin, our Chief Executive Officer, at $0.05 per share, in exchange for services rendered to the company.
 
On or about September 30, 2014, we issued: (i) an aggregate of 9,600,000 shares to Glenn Martin, Nicole Breen and Ryan Breen, affiliates of the company, at $0.05 per share, in exchange for services rendered to the company.
 
We lease our executive offices our Glenn E. Martin, our President, on a month-to-month basis at a monthly rent of $1,000, which began on April 1, 2017.
 
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
 
Section 15 of our Articles of Incorporation provides that, to the fullest extent permitted by law, no director or officer shall be personally liable to the corporation or its shareholders for damages for breach of any duty owed to the corporation or its shareholders.
 
 
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Section 16 of our Articles of Incorporation provides that, to the fullest extent permitted by the General Corporation Law of the State of Nevada we will indemnify our officers and directors from and against any and all expenses, liabilities, or other matters.
 
Article IX of our Bylaws further addresses indemnification of our directors and officers and allows us to indemnify our directors in the event they meet certain criteria in terms of acting in good faith and in an official capacity within the scope of their duties, when such conduct leads them to be involved in a legal action.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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AVAILABLE INFORMATION
 
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the resale of shares of our common stock by the Selling Shareholders. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us, our common stock and the Selling Shareholders, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and in each instance we refer you to the copy of such contract or other document filed as an exhibit to the registration statement. A copy of the registration statement and the exhibits filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street, NE, Washington, DC 20549, and copies of all or any part of the registration statement may be obtained from that office upon the payment of the fees prescribed by the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov.
 
Upon effectiveness of this registration statement, we will become subject to the information and periodic reporting requirements of the Exchange Act and, in accordance therewith, we will file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above.
 
 
EXPERTS
 
The financial statements of WEED, Inc. as of December 31, 2016 and December 31, 2015 and for the years ended December 31, 2016 and December 31, 2015, and the balance sheets of WEED, Inc. as of December 31, 2016 and December 31, 2015 have been included herein in reliance upon the reports of M&K CPAS, PLLC., independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.
 
 
 
 
 

 
 
 
 
42
 
 
PART II – INFORMATION NOT REQUIRED IN PROSPECTUS
 
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
We will pay all expenses in connection with the registration and sale of the common stock by the Selling Shareholders, who may be deemed to be an underwriters in connection with their offering of shares. The estimated expenses of issuance and distribution are set forth below:
 
Registration Fees
Approximately
 $1,094 
Transfer Agent Fees
Approximately
  2,000 
Costs of Printing and Engraving
Approximately
  1,000 
Legal Fees
Approximately
  40,000 
Accounting and Audit Fees
Approximately
  51,000 
   Total
 
 $95,094 
 
INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Section 15 of our Articles of Incorporation provides that, to the fullest extent permitted by law, no director or officer shall be personally liable to the corporation or its shareholders for damages for breach of any duty owed to the corporation or its shareholders.
 
Section 16 of our Articles of Incorporation provides that, to the fullest extent permitted by the General Corporation Law of the State of Nevada we will indemnify our officers and directors from and against any and all expenses, liabilities, or other matters.
 
Article IX of our Bylaws further addresses indemnification of our directors and officers and allows us to indemnify our directors in the event they meet certain criteria in terms of acting in good faith and in an official capacity within the scope of their duties, when such conduct leads them to be involved in a legal action.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
 
RECENT SALES OF UNREGISTERED SECURITIES
 
In the last three fiscal years and subsequent interim periods, we issued the following shares of common stock and preferred stock. The following issuances were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.
 
During the three months ended March 31, 2017, we issued, or agreed to issue, the following:
 
Common Stock Sales
 
(i)           On March 15, 2017 and March 31, 2017, we received an aggregate $235,000 of advances on the subsequent sale on April 20, 2017 of 375,000 units at $1.00 per unit, consisting of 375,000 shares of common stock and warrants to purchase 375,000 shares of common stock at an exercise price of $3.00 per share, exercisable until April 20, 2019, in exchange for total proceeds of $375,000.
 
 
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(ii)           On January 23, 2017, we sold 2,000 units at $2.00 per unit, consisting of 2,000 shares of common stock and warrants to purchase 2,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 23, 2018, in exchange for total proceeds of $4,000.
 
(iii)           On January 9, 2017, we sold 50,000 units at $1.00 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 9, 2018, in exchange for total proceeds of $50,000.
 
Warrants Exercised
 
(i)           On January 7, 2017, a warrant holder exercised warrants to purchase 2,666 shares of common stock at a strike price of $1.50 in exchange for proceeds of $3,999.
 
Common Stock Issued for Bartered Assets
 
(i)           On January 18, 2017, we exchanged 66,000 units, consisting of 66,000 shares of common stock and warrants to purchase 66,000 shares of common stock at an exercise price of $3.00 per share, exercisable until January 18, 2018, in exchange for a 2017 Audi Q7 and a 2017 Audi A4.
 
Common Stock Issued for Services
 
(i)           On March 2, 2017, we granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $142,500 based on the closing price of our common stock on the date of grant.
 
(ii)           On March 2, 2017, we granted 12,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $34,200 based on the closing price of our common stock on the date of grant.
 
(iii)           On January 7, 2017, we granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $210,250 based on the closing price of our common stock on the date of grant.
 
During the three months ended December 31, 2016, we issued, or agreed to issue, the following:
 
(i)           On October 31, 2016, we sold 50,000 units at $0.10 per unit, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $5,000.
 
(ii)           On October 25, 2016, we sold 150,000 units at $0.3333 per unit, consisting of 150,000 shares of common stock and warrants to purchase 150,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $50,000.
 
(iii)           On October 19, 2016, we sold 25,000 units at $0.20 per unit, consisting of 25,000 shares of common stock and warrants to purchase 25,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $5,000.
 
(iv)           On October 19, 2016, we sold 100,000 units at $0.10 per unit, consisting of 100,000 shares of common stock and warrants to purchase 100,000 shares of common stock at an exercise price of $1.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $10,000.
 
 
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(v)           On November 8, 2016, we granted 50,000 shares of common stock as a good faith deposit on a potential land purchase agreement that has not yet closed, as we does not currently have sufficient resources. The total fair value of the common stock was $42,500 based on the closing price of our common stock on the date of grant.
 
(vi)           On October 1, 2016, we granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $700,000 based on the closing price of our common stock on the date of grant.
 
(vii)           In addition, on October 1, 2016, we granted a total of 14,000,000 shares of common stock to Mr. Martin for services performed pursuant to his previous employment agreement. The total fair value of the common stock was $1,400,000 based on the closing price of our common stock on the date of grant.
 
(viii)           On October 1, 2016, we granted 4,000,000 shares of common stock to Nicole Breen as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $400,000 based on the closing price of our common stock on the date of grant.
 
(ix)           In addition, on October 1, 2016, we granted a total of 8,000,000 shares of common stock to Nicole Breen for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $800,000 based on the closing price of our common stock on the date of grant.
 
(x)           On October 1, 2016, we granted 1,000,000 shares of common stock to Ryan Breen as a bonus for services performed pursuant to an amended employment agreement. The total fair value of the common stock was $100,000 based on the closing price of our common stock on the date of grant.
 
(xi)           On October 1, 2016, we granted a total of 2,000,000 shares of common stock to Ryan Breen for services performed pursuant to their previous employment agreement. The total fair value of the common stock was $200,000 based on the closing price of our common stock on the date of grant.
 
(xii)           On October 19, 2016, we granted 10,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,500 based on the closing price of our common stock on the date of grant.
 
Common stock warrants granted during the three months ended December 31, 2016:
 
(i)           On October 31, 2016, we sold warrants to purchase 50,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $5,000 in conjunction with the sale of 50,000 shares of common stock.
 
(ii)           On October 25, 2016, we sold warrants to purchase 150,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $50,000 in conjunction with the sale of 150,000 shares of common stock.
 
(iii)           On October 19, 2016, we sold warrants to purchase 25,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $5,000 in conjunction with the sale of 25,000 shares of common stock.
 
(iv)           On October 19, 2016, we sold warrants to purchase 100,000 shares of common stock at $1.50 per share over a one (1) year period from the date of sale, in exchange for total proceeds of $10,000 in conjunction with the sale of 100,000 shares of common stock.
 
 
II-3
 
 
During the three months ended September 30, 2016, we issued, or agreed to issue, the following:
 
(i)           On September 28, 2016, we granted 600,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on November 23, 2016.
 
(ii)           On September 28, 2016, we granted 600,000 shares of common stock to a different consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on November 23, 2016.
 
(iii)           On September 28, 2016, we granted 600,000 shares of common stock to a third consultant for services performed. The total fair value of the common stock was $60,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on November 23, 2016.
 
During the three months ended June 30, 2016, we did not issue any of our securities.
 
During the three months ended March 31, 2016, we issued, or agreed to issue, the following:
 
(i)           On March 18, 2016, we granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $5,820 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(ii)           On March 18, 2016, we granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $48,500 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(iii)           On March 18, 2016, we granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $11,640 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(iv)           On February 12, 2016, we granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $5,832 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(v)           On February 1, 2016, we granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $22,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(vi)           On February 1, 2016, we granted 500,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $22,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(vii)           On February 1, 2016, we granted 20,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $880 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
(viii)           On February 1, 2016, we granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $2,640 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on October 27, 2016.
 
During the three months ended December 31, 2015, we did not issue any of our securities.
 
 
II-4
 
 
During the three months ended September 30, 2015, we issued, or agreed to issue, the following:
 
(i)           On August 17, 2015, we sold 90,000 units at $0.10 per unit, consisting of 90,000 shares of common stock and warrants to purchase 90,000 shares of common stock at an exercise price of $0.50 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $9,000. We did not issue these shares until the quarter ended December 31, 2016.
 
During the six months ended June 30, 2015, we issued the following:
 
(i)           During the six months ended June 30, 2015, we issued a total of 2,775,000 shares of common stock in satisfaction of common stock granted during the year ended December 31, 2014, in the aggregate value of $156,100
 
(ii)           On January 1, 2015, we granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,400 based on the closing price of our common stock on the date of grant.
 
(iii)           On January 1, 2015, we granted 7,000,000 shares of common stock to our CEO, Glenn E. Martin, for services performed. The total fair value of the common stock was $490,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
(iv)           On January 1, 2015, we granted 4,000,000 shares of common stock to Nicole Breenfor services performed. The total fair value of the common stock was $280,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
(v)           On January 1, 2015, we granted 1,000,000 shares of common stock to Ryan Breen for services performed. The total fair value of the common stock was $70,000 based on the closing price of our common stock on the date of grant. The shares were subsequently issued on June 29, 2015.
 
(vi)           On January 30, 2015, we sold 50,000 units, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $0.10 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $5,000.
 
(vii)           On February 12, 2015, we granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $8,850 based on the closing price of our common stock on the date of grant.
 
(viii)           On February 20, 2015, we granted 240,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $21,600 based on the closing price of our common stock on the date of grant.
 
(ix)           On February 20, 2015, we sold another 40,000 units, consisting of 50,000 shares of common stock and warrants to purchase 50,000 shares of common stock at an exercise price of $0.25 per share over a one (1) year period from the date of purchase in exchange for total proceeds of $10,000.
 
(x)           On March 16, 2015, we granted 50,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $4,000 based on the closing price of our common stock on the date of grant.
 
 
II-5
 
 
(xi)           On March 16, 2015, we granted 60,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $4,800 based on the closing price of our common stock on the date of grant.
 
(xii)           On March 16, 2015, we granted 120,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $9,600 based on the closing price of our common stock on the date of grant.
 
(xiii)           On March 16, 2015, we granted 40,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $3,200 based on the closing price of our common stock on the date of grant.
 
(xiv)           On March 16, 2015, we granted 40,000 shares of common stock to another consultant for services performed. The total fair value of the common stock was $3,200 based on the closing price of our common stock on the date of grant.
 
(xv)           On April 1, 2015, we granted 600,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $40,000 based on the closing price of our common stock on the date of grant.
 
(xvi)           On April 1, 2015, we granted 500,000 shares of common stock to a consultant for services performed. The total fair value of the common stock was $48,000 based on the closing price of our common stock on the date of grant.
 
On or about December 5, 2014, we issued the following:
 
(i)           18,000,000 shares to Glenn Martin, our Chief Executive Officer, at $0.05 per share.
 
(ii)           989,000 shares to two non-affiliates, at an average price of $0.20 per share.
 
On or about September 30, 2014, we issued the following:
 
(i)           An aggregate of 9,600,000 shares to Glenn Martin, Nicole Breen and Ryan Breen, affiliates of we, at $0.05 per share.
 
(ii)           1,500,000 shares to two non-affiliates, valued at $0.05 per share.
 
 
II-6
 
 
EXHIBITS
 
 
To be included in subsequent filing.
 
 
 
II-7
 
 
Undertakings
 
A.           Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
 
B.           The undersigned registrant hereby undertakes:
 
(1)           To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
(a)           To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
 
(b)           To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of Regulation S-K) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
 
(c)           To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
 
(2)           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.
 
(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
 
 
 
 
 
 
 
 
 
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, in the City of Tucson, State of Arizona.
 
 
 
 
WEED, Inc.
 
 
 
 
 
 
 
 
Dated:  August 11, 2017
         /s/ Glenn E. Martin                                                      
 
By:   Glenn E. Martin
 
Its:   President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer)
 
 
 
 
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates stated.
 
 
Dated:  August 11, 2017
         /s/ Glenn E. Martin                                                      
 
By:   Glenn E. Martin, Director and President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer)
 
 
 
 
 
 
Dated:  August 11, 2017
          /s/ Nicole M. Breen
 
By:    Nicole M. Breen, Director, Secretary and Treasurer
 
 
 
 
 
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