The following discussion includes certain forward-looking statements within the
meaning of the safe harbor protections of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements that include words such as "believe," "expect," "should,"
"intend," "may," "anticipate," "likely," "contingent," "could," "may," or other
future-oriented statements, are forward-looking statements. Such forward-looking
statements include, but are not limited to, statements regarding our business
plans, strategies and objectives, and, in particular, statements referring to
our expectations regarding our ability to continue as a going concern, generate
increased market awareness of, and demand for, our current products, realize
profitability and positive cash flow, and timely obtain required financing.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ from anticipated results. The forward-looking
statements are based on our current expectations and what we believe are
reasonable assumptions given our knowledge of the markets; however, our actual
performance, results and achievements could differ materially from those
expressed in, or implied by, these forward-looking statements. Factors within
and beyond our control that could cause or contribute to such differences
include, among others, our critical capital raising efforts in an uncertain and
volatile economical environment, our ability to maintain relationship with
strategic companies, our cash preservation and cost containment efforts, our
ability to retain key management personnel, our relative inexperience with
advertising, our competition and the potential impact of technological
advancements thereon, the impact of changing economic, political, and
geo-political environments on our business, as well as those factors discussed
elsewhere in this Form 10-Q and in "Item 1 - Our Business," "Item 7 -
Management's Discussion and Analysis," and elsewhere in our most recent Form
10-K, filed with the
Readers are urged to carefully review and consider the various disclosures made by us in this report and those detailed from time to time in our reports and filings with the
Current Business of the Company
We are a holding company engaged in the business of providing support and management to entities operating in the medical marijuana space, currently only in
PharmaJanes™ is currently developing a web and phone application that allows individuals to place orders for medical marijuana through a website and smart phone application anywhere such a transaction is legal in
The purpose of PharmaJanes™ is to give patients a simple ordering platform, while allowing local collectives to service the orders in compliance with state and local laws and ordinances. PharmaJanesTM will act solely as an expediter and processor of the orders, and the fulfillment function will be done entirely within the particular state of residence of the purchaser, by licensed collectives or other licensed medical marijuana providers in that state
PharmaJanes™ currently has annual marketing contracts in place with many collectives for this service and will be the exclusive point-of sale for the collectives under contract. The Company also has signed an agreement with SK3 Group, Inc. to become the exclusive on-line and smart phone ordering platform for Collectives managed through the SK3 Group system. Members of the Collectives managed by SK3 Group will soon be able to order their medical cannabis needs through PharmaJanesTM.
The Company also has acquired the Simple PrepayTM merchant payment solution from iEquity Corp. The Simple PrepayTM system was developed to offer dispensaries, collectives, and delivery services of medical cannabis a convenient payment solution. Medical marijuana patients will be able to upload funds onto their Simple PrepayTM account via a smart phone application or via a website, allowing them to purchase their medical cannabis needs with privacy and simplicity.
Combined with the PharmaJanes™ on-line and smart phone ordering platform, medical marijuana patients will be able to order, process and pay for their authorized needs, in a simple, safe and secure ordering and payment interface. Local licensed collectives or other licensed medical marijuana providers in the home state of the end user, will then fulfill the orders provided through this new system, in full compliance with state and local laws and ordinances. The Company itself will act solely as a background ordering and payment service, and will not be cultivating, shipping, delivering, or otherwise handling the medical marijuana, all of which will be handled directly by collectives or other providers licensed and authorized in the state in which the delivery is both authorized and completed.
PharmaJanesTM will act solely as an expediter and processor of the authorized orders, and Simple PrepayTM will provide the secure payment platform, while the actual fulfillment function will be done entirely within the particular collective.
In early March, 2014, we announced an agreement in principal to merge with SK3 Group, Inc. (OTC Pink: SKTO) Final terms of the merger are still being worked out and a merger agreement was signed on
The previously announced dividend of the 100 million shares of AEGY to be issued to SKTO will be accounted for in the merger by treating those shares as held proportionately by the SKTO shareholders as of the record date. Closing of the proposed merger will require the new holding company to register the shares to be issued in the merger to the shareholders of both AEGY and SKTO, and SKTO has retained an independent accounting firm to conduct an audit of its books as the first required step in the registration process. The audit is expected to be completed in July, 2014after which the registration statement will be filed for review by the
As a result of the merger, the Boards of Directors of the two companies will be restructured and combined into a new Board of Directors in the surviving holding company.
Results of Operations for Three and Nine Months Ended
For the three months ended
For the nine months ended
Liquidity and Capital Resources and Going Concern
As shown in the accompanying financial statements, for the nine months ended
We have incurred significant net losses and negative cash flows from operations since our inception. As of
We anticipate that cash used in product development and operations, especially in the marketing, production and sale of our products, will increase significantly in the future.
If we are unable to secure additional financing to cover our operating losses until breakeven operations can be achieved, there is no assurance that we will be able to continue as a going concern. Our independent registered public accounting firm included a paragraph regarding going concern in its report on our audited financial statements for the year end
Off-Balance Sheet Arrangements
We currently do not have any off-balance sheet arrangements.
Critical Accounting Policies, Convertible Notes Payable, Derivative Liabilities, and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in
The Company has incurred deferred offering costs in connection with raising additional capital through the sale of its common stock. These costs are capitalized and charged against additional paid-in capital when common stock is issued. If there is no issuance of common stock, the costs incurred are charged to operations.
Research and development costs are charged to operations when incurred and are included in operating expenses.
4 Contractual Obligations
We have entered into a consulting agreement effective