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CANNABIS SATIVA, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations.

August 19, 2014


The following is management's discussion and analysis of certain significant factors affecting the Company's financial position and operating results during the periods included in the accompanying condensed financial statements. Except for the historical information contained herein, the matters set forth in this discussion are forward-looking statements.


We are in the business of developing, manufacturing, and selling plant-derived lotions, creams, and other formulations for human consumption. The Company's market will include direct selling to retailers and consumers, and also to other companies under terms of licensing rights to product formulas. Through the Company's acquisition of Kush our plan is to engage in developing, producing, marketing and selling end consumer products to the nutriceutical industry containing the hemp plant extract, Cannabidoil (CBD).

Results of Operation For the period from inception For the three (April 9, months ended 2013) through June 30, 2014 June 30, 2013 (Unaudited) (Unaudited) Revenue $ 227 $ - Cost of goods sold 915 - Gross profit (688 ) - General and administrative expenses 99,889 35,322 Interest expense 3,534 - Loss from continued operations (104,111 ) (35,322 ) Net Loss $ (104,111 )$ (35,322 )

Comparative financial data for the full six months ended June 30, 2013 is not included in this report because the Company was only recently incorporated in April 2013.

Revenue - The Company had immaterial revenues related to its ongoing operations for the periods ended June 30, 2014.

Cost of Goods Sold - The Company had immaterial cost of goods sold for the periods ended June 30, 2014.

General and Administrative Expenses - The Company had general and administrative expenses of $99,889 for the three months ended June 30, 2014 and general and administrative expenses of $35,322 for the period from the date of inception (April 9, 2013) through June 30, 2013 General and administrative expenses consisted primarily of professional fees, consulting expenses, payroll expenses, rent and transfer agent fees.



Interest Expense - The Company had interest expenses of $3,534 for the three months ended June 30, 2014 and $0 for the period from the date of inception (April 9, 2013) through June 30, 2013. Interest expense for the period ended June 30, 2014 was primarily related to the Company's imputed interest on its advances from related parties.

Liquidity and Capital Resources

There have been significant changes in our business and financial condition as a result of the Reorganization with Wild Earth Naturals and our acquisition of Kush. We anticipate that we will require significant additional debt or equity capital in order to continue our operations and implement our business plan. We have not entered into any agreement or arrangement for the provision of such financing and no assurances can be given that such financing will be available to us on acceptable terms or at all.

We have had to rely on short-term funding from management or shareholders to cover ongoing expenses. There can be no assurance that management and shareholders will continue to loan the Company funds.

Forward-Looking Statements

We have made forward-looking statements, within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, in this quarterly report on Form 10-Q, including the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include the information concerning our possible or assumed search for new business opportunities and future costs of operations. 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.

Forward-looking statements involve risks, uncertainties and assumptions. These uncertainties and other factors include, but are not limited to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2013 in Part I, Item 1A under the caption "Risk Factors" and in Item 2.01 of our current reports on Form 8-K filed with the Securities and Exchange Commission on July 18, 2013 and July 7, 2014, respectively. Actual results may differ materially from those expressed in the forward-looking statements. You should understand that many important factors could cause our results to differ materially from those expressed in the forward-looking statements. These factors include, without limitation, Kush as a development stage business, the Company's need for additional capital, our regulatory environment, our limited operating history, our ability to implement our growth strategy, our ability to integrate acquired companies and their assets and personnel into our business, our obligations to pay professional fees, and other economic conditions and increases in corporate maintenance and reporting costs. Unless legally required, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Off Balance Sheet Arrangements


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Source: Edgar Glimpses

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