UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended October 31, 2015
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from________ to ___________

 

Commission File No. 000-55031

 

THE MARYJANE GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		98-1039235
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
910 16th Street, Suite 412, Denver, CO 80202		(303) 835-8603
(Address of principal executive offices)		(Registrant’s Telephone Number)

 

N/A

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

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨    Accelerated filer ¨    Non-accelerated filer ¨    Smaller reporting company þ

 

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

 

The number of shares outstanding of each of the issuer’s classes of Common Stock as of December 21, 2015 was 1,450,165,023.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains both historical and forward-looking statements. The forward-looking statements in this quarterly report are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. These forward-looking statements include, but are not limited to, statements concerning our plans to continue the marketing, commercialization and sale of our services and planned future products and product candidates; address certain markets; and evaluate additional product candidates for subsequent sales. In some cases, these statements may be identified by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, the outcome of an ongoing contractual dispute in connection with our accounts receivable factoring arrangement, levels of business activity, performance, or achievements. These statements involve known and unknown risks and uncertainties that may cause our or our industry’s results, levels of activity, performance or achievements to be materially different from those expressed or implied by forward-looking statements.

 

Management’s Discussion and Analysis (“MD&A”) should be read together with our financial statements and related notes included elsewhere in this quarterly report. This quarterly report, including the MD&A, contains trend analysis and other forward-looking statements. Any statements in this quarterly report that are not statements of historical facts are forward-looking statements. These forward-looking statements made herein are based on our current expectations, involve a number of risks and uncertainties and should not be considered as guarantees of future performance.

 

Other factors that could cause actual results to differ materially include without limitation:

 

	●	our ability to continue to finance our business;

	●	an inability to arrange debt or equity financing;

	●	adverse changes in laws or rules or regulations of governmental agencies;

	●	interruptions or cancellation of existing contracts;

	●	impact of competitive services and pricing;

	●	the ability of management to execute plans and motivate personnel in the execution of those plans;

	●	the presence of competitors with greater financial resources;

	●	our ability to maintain our current pricing model and/or decrease our cost of sales;

	●	the adoption of new, or changes in, accounting principles;

●

the costs inherent with complying with new statutes and regulations applicable to public reporting companies, such as the Sarbanes-Oxley Act of 2002

 

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in the forward-looking statements in this quarterly report. Other unknown or unpredictable factors also could have material adverse effects on our future results. The forward-looking statements in this quarterly report are made only as of the date of this quarterly report, and we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

INDEX TO FINANCIAL STATEMENTS

 

		Page
Consolidated Balance Sheets as of October 31, 2015 and April 30, 2015		F-1
Consolidated Statements of Operations for the three months ended October 31, 2015 and 2014		F-2
Consolidated Statements of Cash Flows for the three months ended October 31, 2015 and 2014		F-3
Condensed Notes to Consolidated Financial Statements		F-4

THE MARYJANE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 

		October 31,				April 30,
		2015				2015
ASSETS
Current Assets:
Cash		$	57,681			$	44,990
Inventory			2,160				—
Prepaid expenses			1,233				39,808
Employee advances			4,198				55
Total current assets			65,272				84,853
Fixed assets, net			30,554				18,313
Security deposits			24,500				14,500
Non-refundable purchase deposit			30,000				—
Total assets		$	150,326			$	117,666
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Convertible notes payable, net of debt discount of $203,225 and $417,752, respectively		$	132,057			$	327,549
Accounts payable			77,760				23,056
Promissory note			106,336				17,160
Other current liabilities			398,638				287,879
Total current liabilities			714,791				655,644
Long-term Liabilities:
Convertible notes payable, net of debt discount of $0 and $0, respectively			—				4,263
Accrued interest			105				603
Derivative liabilities			111,711				203,145
Total long-term liabilities			111,816				208,011
Total liabilities			826,607				863,655
Commitments and Contingencies Stockholders’ Deficit:
Series A Preferred stock - par value $0.001; 2,000,000 shares authorized; 100,000 shares issued and outstanding			—				—
Common stock - par value $0.001; 2,000,000,000 shares authorized; 1,288,927,901 and 30,637,844 issued and outstanding, respectively			1,288,928				30,638
Additional paid in capital			2,239,737				2,211,957
Prepaid services			(600	)			(54,536	)
Accumulated deficit			(4,204,347	)			(2,934,048	)
Total stockholders’ deficit			(676,281	)			(745,989	)
Total liabilities and stockholders’ deficit		$	150,326			$	117,666

 

The accompanying footnotes are an integral part of these consolidated financial statements.

THE MARYJANE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Three Months Ended October 31,								Six Months Ended October 31,
		2015				2014				2015				2014
Revenues, net		$	310,587			$	164,293			$	547,607			$	277,232
Cost of revenue			214,780				94,152				387,031				181,249
Gross profit			95,807				70,141				160,576				95,983
Operating expenses:
General and administration			252,313				1,091,394				643,417				1,572,854
Sales and marketing			38,163				2,515				54,670				9,632
Depreciation and amortization			2,090				1,007				4,392				2,015
Total operating expenses			292,566				1,094,916				702,478				1,584,501
Operating loss			(196,758	)			(1,024,775	)			(541,902	)			(1,488,518	)
Other income and (expense)
Miscellaneous income			28				13,324				64				15,919
Interest expense			(196,351	)			(90,106	)			(611,381	)			(154,501	)
Loan closing costs			—				(20,600	)			—				(20,600	)
Disposal of fixed assets			—				—				—				(52,142	)
Loss on settlement of debt			—				—				(145,415	)			—
Change in fair value of derivative liability			(28,336	)			—				(28,974	)			—
Total other income (expense)			(224,658	)			(97,382	)			(785,068	)			(211,324	)
Loss before taxes			(421,417	)			(1,122,157	)			(1,326,970	)			(1,699,842	)
Provision for income taxes			—				—				—				—
Net loss		$	(421,417	)		$	(1,122,157	)		$	(1,326,970	)		$	(1,699,842	)
Loss per share, basic		$	(0.00	)		$	(0.06	)		$	(0.00	)		$	(0.16	)
Weighted average number of shares outstanding			1,037,428,811				19,096,727				732,717,048				10,360,000

 

The accompanying footnotes are an integral part of these consolidated financial statements.

THE MARYJANE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended October 31,
		2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(1,326,970	)		$	(1,699,842	)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:
Depreciation			4,391				2,015
Amortization of prepaid services			69,935
Amortization of debt discount			511,125				140,318
Amortization of prepaid expense			38,575				911,352
Write off of non-cash consulting costs			4,000				94,650
Change in fair value of derivative liability			28,335				—
Loss on disposal of fixed assets			—				52,142
Loss on settlement of debt			145,415				—
Change in operating assets and liabilities:
Accounts receivables			—				(11,092	)
Other current assets			(6,302	)			8,445
Accounts payable			54,704				20,882
Bank overdraft			—				(13,757	)
Other current liabilities			141,518				120,683
Other long-term liabilities			1,221				3,483
Net cash flows used in operating activities			(334,054	)			(370,721	)
CASH FLOWS FROM INVESTING ACTIVITIES
Security deposit			(10,000	)			(14,500	)
Non refundable purchase deposit			(30,000	)
Purchase of fixed assets			(16,633	)			(2,723	)
Net cash flows used in investing activities			(56,633	)			(17,223	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible promissory notes			314,200				411,100
Proceeds from promissory note			208,790				—
Payment of promissory note			(119,614	)			—
Net cash flows provided by financing activities			403,376				411,100
Increase (decrease) in cash			12,690				23,156
Cash, beginning of period			44,990				3,431
Cash, end of period		$	57,680			$	26,587
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest		$	60,554			$	—
Cash paid for income taxes		$	—			$	—
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITY
Non-cash additions of convertible notes		$	24,250			$	—
Beneficial conversion feature for convertible notes			—				434,076
Shares issued with employment agreements			—				1,162,025
Shares issued for services			—				111,800

 

The accompanying footnotes are an integral part of these consolidated financial statements.

THE MARYJANE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – THE COMPANY

 

The MaryJane Group, Inc., f/k/a Pladeo Corp., a Nevada corporation (the “Company”), had six wholly-owned subsidiaries at October 31, 2015, as listed below:

 

		Date of Organization or Incorporation
Mary Jane Entertainment, LLC		May 21, 2013
Capital Growth Corporation		February 4, 2014
Bud and Breakfast, LLC		April 10, 2014
Mary Jane Hospitality, LLC		July 22, 2014
MJ Ranch, LLC		June 8, 2015
SA Hotel, LLC		June 23, 2015

 

Unless the context otherwise requires, the Company and the above listed wholly-owned subsidiaries collectively are sometimes referred to as “our Company,” “we,” “our,” or “us.”

 

Overview of Operating Businesses

 

On January 1, 2014, the State of Colorado became the first state to legalize the use of recreational marijuana. Colorado residents, who are at least 21 years of age with photo identification, may purchase as much as one ounce of marijuana in a single transaction. Non-Colorado residents, bearing the same identification, may purchase as much as one-quarter ounce. Marijuana cannot be consumed in any public space, including the shops where it was purchased. Our operating subsidiaries, as outlined herein, were formed for the purpose of providing financing to assist Colorado marijuana growers, providing cannabis friendly lodging and to provide value added services of information and entertainment to the consumers supporting the recreational marijuana industry.

 

Bed and Breakfast Lease

 

On June 24, 2015, The MaryJane Group, Inc. (the “Company”) executed a Lease Option Agreement (the “Lease”) with Hotel San Ayre, LLC for the purchase of Hotel San Ayre and its four property locations in Colorado Springs, Colorado. The two-year lease option term commences on July 15, 2015 and terminates the earlier of July 14, 2017 or the closing date of the purchase thereof. The base rental amount for the first 12 months of the Lease is $12,500 and is $13,500 for the last 12 months of the Lease. The Company is responsible for all operation, repair, use and maintenance of the premises during the term of the Lease. Joel Schneider, the Company’s Chief Executive Officer, personally guaranteed the Lease.

 

Upon execution of the Lease, the Company paid a hard deposit of $30,000 which may be applied to the future purchase; however, is not considered a security deposit and is not refundable if the purchase option is not exercised. The purchase price for the Hotel San Ayre is $2,100,000 on an as-is basis.

Fiscal year end

 

We elected April 30^th as our fiscal year ending date.

 

Going concern uncertainty

 

At October 31, 2015, we had an accumulated deficit of $4,165,990 and for the six months ended October 31, 2015, we incurred losses of $1,231,944. Our ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations, and therefore, these matters raise substantial doubt about our ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

Interim Financial Statements

 

The accompanying unaudited interim condensed consolidated financial statements of The MaryJane Group, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at April 30, 2015 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP 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 revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended April 30, 2015 as filed with the SEC on July 27, 2015.

 

Recently Issued and Newly Adopted Accounting Pronouncements

 

There have been no material changes to our significant accounting policies as summarized in NOTE 2 of our Annual Report on Form 10-K/A for the year ended April 30, 2015. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying condensed consolidated financial statements.

Reclassifications

 

Certain prior period amounts have been reclassified to conform to the current period presentation.

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Fair Value of Financial Instruments

 

Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short- and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments. We have elected not to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short- and long-term debt with similar terms and remaining maturities are used to estimate the fair value of the our short- and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.

 

We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).

 

Assets and liabilities recorded in the condensed consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows:

 

	Level 1 -	Unadjusted quoted prices in active markets for identical assets or liabilities.

	Level 2 -	Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 -

Unobservable inputs for the asset or liability.

 

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability as detailed below. The fair value of this warrant liability is included in long-term liabilities on the accompanying condensed consolidated financial statements.

 

The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis:

 

Description		Assets/ (Liabilities) Measured at Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Other Unobservable Inputs (Level3)
Fair value of warrant liability		$	(111,711	)		$	—			$	—			$	(111,711	)

The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the quarter ended October 31, 2015

 

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance at April 30, 2015		$	(203,145	)
Issuances of derivative liabilities			—
Change in fair value of derivative liabilities			28,336
Transfers in and/out of Level 3			—
Warrants exercised			63,098
Ending balance at October 31, 2015		$	(111,711	)

 

The above table of Level 3 liabilities begins with the prior period balance and adjusts the balance for changes that occurred during the current period. The ending balance of the Level 3 securities presented above represent our best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.

 

Reclassifications

 

Certain prior period amounts have been reclassified to conform to current year presentation.

 

NOTE 4 – FIXED ASSETS

 

Fixed assets consist of the following:

 

		October 31, 2015				April 30, 2015
Furniture and fixtures		$	39,826			$	23,194
Leasehold improvements			2,320				2,320
Equipment			865				865
			43,011				26,379
Less: accumulated depreciation			(12,457	)			(8,066	)
TOTAL PROPERTY AND EQUIPMENT		$	30,554			$	18,313

 

Depreciation expense for the three and six months ended October 31, 2015 was $2,090 and $4,391. Depreciation expense for the three and six months ended October 31, 2014 was $1,007 and $2,015, respectively.

 

NOTE 5 – PROMISSORY NOTES

 

On February 12, 2015, we entered into a loan agreement with an entity and borrowed $39,000. Pursuant to the terms of the loan agreement, we are required to make 100 equal installments of $553, or an aggregate of $55,300, to repay the principal balance and interest in full. On May 13, 2015, we entered into a new loan agreement with the same lender and borrowed $63,000. Pursuant to the terms of the loan agreement, we are required to make 100 equal installments of $894, or an aggregate of $89,400, to repay the principal balance and interest in full. We used approximately $20,500 to repay the February 12^th loan and the balance of the proceeds were used as working capital. During the quarter, we paid an additional $37,095 towards the principal.

 

On May 22, 2015, a third party purchased a Convertible Promissory Note issued on April 30, 2014 in the aggregate amount of $53,275. We issued a 12% Convertible Promissory Note in the aggregate amount of

$53,275. We issued an additional 12% Convertible Promissory Note in the aggregate amount of $38,000. Each note matures May 22, 2016 and is convertible at a 40% discount from the lowest Trading Price in the 10 trading days prior to conversion date. We received $33,000 in net proceeds from this transaction which we used for general working capital.

 

On June 11, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $60,000. This note matures on June 11, 2016 and is convertible at 57% of the lowest trading price for the 20 days prior to the conversion date. We received $57,000 in net proceeds from this transaction which we used for general working capital.

 

On June 12, 2015, a third party purchased two Convertible Promissory Notes issued on June 16, 2014 and July 1, 2014. We issued a Convertible Promissory Note in the aggregate amount of $52,087 and an 8% Convertible Promissory Note in the aggregate amount of $30,000. The notes mature June 12, 2016 and is convertible at 59% of the lowest trading price for the 20 days prior to the conversion date. We received $28,500 in net proceeds from this transaction which we used for general working capital.

 

On June 23, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $69,000. The note matures June 23, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issue Date or (ii) the 25 trading days prior to the conversion date. We received $60,000 in net proceeds from this transaction which we used for general working capital.

 

On June 30, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $50,750. The note matures March 30, 2015 and is convertible at 55% of the average of the two lowest prices in the prior 5 trading days prior to the conversion date. We received $45,000 in net proceeds from this transaction which we used for general working capital.

 

On August 6, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $36,750. The note matures August 6, 2016 and is convertible at 57% of the lowest trading price for the 20 trading days prior to the conversion date. We received $35,000 in net proceeds from this transaction which we used for general working capital.

 

On August 19, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $29,700. The note matures August 19, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $25,000 in net proceeds from this transaction which we used for general working capital.

 

On August 19, 2015, we entered into a loan agreement with an entity and borrowed $50,000. Pursuant to the terms of the loan agreement, we are required to make 112 equal installments of $625, or an aggregate of $70,000, to repay the principal balance and interest in full. As December 11, 2015, the Company has made 79 payments totaling $49,375 and the remaining balance due under this loan on that date is $20,625. We received$50,000 in net proceeds from this transaction which we used for general working capital. We have committed our daily receivables.

 

On October 12, 2015, we entered into a loan agreement with an entity and borrowed $53,000. Pursuant to the terms of the loan agreement, we are required to make 110 equal installments of $689. Or an aggregate of $75,790, to repay the principal balance and interest in full. As of December 11, 2015, the Company has made 40 payments totaling $27,560 and the remaining balance due under this loan on that date is $48,230. We received $51,601 in net proceeds from this transaction after paying $1,399 in loan closing costs, which we used for general working capital.

 

During the quarter ended October 31, 2015, approximately $101,375 of principal and interest was converted into an aggregate 319,197,532 shares of common stock.

 

During the quarter ended October 31, 2015, the Company issued 44,642,847 shares upon the exercise of a warrant valued at $25,000. The shares were issued pursuant to a cashless exercise provision contained in the warrant.

 

NOTE 6 – OTHER CURRENT LIABILITIES

 

Other current liabilities consist of the following:

 

		October 31, 2015				April 30, 2015
Payroll tax liability		$	257,586			$	182,143
Accrued IRS and state interest and penalties			72,381				41,812
Accrued state sales tax interest and penalties			5,787				—
Accrued lodging and sales tax			48,067				35,269
Accrued interest expense			14,284				22,373
Accrued payroll			286				4,424
Other current liabilities			2,140				1,858
TOTAL OTHER CURRENT LIABILITIES		$	400,531			$	287,879

 

NOTE 7 – CAPITAL STOCK

 

Preferred Stock

 

At October 31, 2015 we had 2,000,000 shares of preferred stock, $0.001 par value authorized (the “Preferred Shares”). We had no Preferred Shares outstanding at October 31, 2015. On June 19, 2015, the Board of Directors designated 100,000 shares of its blank check preferred stock as Series A Preferred Stock, par value $0.001 per share. Each share of Series A Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Company. The Certificate of Designation is filed as an exhibit to this Current Report on Form 8K and is incorporated herein by reference.

Common Stock

 

At October 31, 2015 we had 2,000,000,000 shares of common stock, $0.001 par value authorized (the “Common Shares”), with 1,288,927,901 Common Shares issued and outstanding.

 

Common Stock Issuances During the Quarter Ended October 31, 2015

 

Shares Issued				Fair Market Value of Shares Issued				Purpose
	319,197,532			$	101,375			Debt conversion
	44,642,857				25,000			Warrant exercise
	363,840,389			$	126,375

 

Warrants to Purchase Common Stock of the Company

 

We use the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) to determine the fair value of Warrant(s). The Black-Scholes Model is an acceptable model in accordance with GAAP.

 

Warrant Activity during the Quarter Ended October 31, 2015

 

On June 26, 2015, warrants issued were exercised as a cashless conversion for 28,769,841 shares, net of 6,944,444 that were surrendered as part of the cashless conversion. The remaining balance of shares eligible to be exercised is 61,085,658

 

On September 10, 2015, warrants issued were exercised as a cashless conversion for 44,642,847, net of 12,755,102 that were surrendered as part of the cashless conversion. The remaining balance of shares eligible to be exercised is 31,250,000.

 

Amendment to Articles of Incorporation

 

On May 11, 2015, the Board of Directors and shareholders owning a majority of the shares outstanding of the Company approved an increase in its authorized shares of common stock. The Company filed a Certificate of Amendment to Certificate of Incorporation with the Nevada Secretary of State to increase its authorized shares of common stock from 200,000,000 to 1,000,000,000 shares, $0.001 par value per share.

 

On June 19, 2015, the Board of Directors designated 100,000 shares of its blank check preferred stock as Series A Preferred Stock, par value $0.001 per share. Each share of Series A Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Company.

 

On June 25, 2015, the Board of Directors and a majority of the shareholders approved an increase in its authorized shares and filed a Certificate of Amendment to Certificate of Incorporation with the Nevada Secretary of State to increase its authorized capital to 2,002,000,000 shares including 2,000,000,000 shares of common stock, $0.001 par value per share, and 2,000,000 of preferred stock, $0.001 par value per share.

Issuance of Series A Preferred Stock

 

On June 23, 2015, the Board of Directors approved the issuance of 100,000 shares of Series A Preferred Stock to Joel Schneider, the Company’s Chief Executive Office and President, for certain financial accommodations made to the Company including personal guarantees on loans and property leases.

 

NOTE 8 – SUBSEQUENT EVENTS

 

Conversion of Debt

 

On November 10, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $10,000. The note matures November 10, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $10,000 in net proceeds from this transaction which we used for working capital.

 

Subsequent to October 31, 2015, approximately $27,400 of principal and interest was converted into an aggregate of 161,212,122 shares of common stock.

 

On December 8, 2015 we completed a financing with three investors whereby the Company received an aggregate of $75,000 in net proceeds from the transaction(s) which we used for working capital. Pursuant to the transaction we issued three (3) notes in the aggregate amount of $81,000. The notes matures December 3, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 20 trading days immediately prior to the Original Issuance Date or (ii) the 20 trading days prior to the conversion date.

 

Contemporaneously with the transaction(s) described in the previous paragraph, the three investors acquired a promissory note from a third party investor, which was originally issued in the principal amount of $38,000, and with accrued and unpaid interest totaled approximately $40,448 on the date of sale. The Company was in default under the terms of the promissory note and as a result the three investors acquired that note for an aggregate of $50,000. As consideration for the financial accommodations made by these three investors preventing the note from going into collections the Company issued each of these investors two additional notes, the first being in the amount of $13,482.88 or an aggregate of $40,448.64 which represented the principal and accrued interest amount due under the promissory note. The second note issued to these investors was issued in the principal amount of $10,321.77, or $30,965.31 in the aggregate which partially represented the additional expense of $9,552 of purchasing the note and an aggregate of $21,413.31 which represents legal fees and an original issue discount related to the $27,000 promissory notes described in the preceding paragraph. The Company received no proceeds from this transaction(s).

 

The number of shares outstanding as of the date of this filing includes 25,000 that are owed to a former consultant of the Company but have not been issued.

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

 

General

 

The following discussion and analysis provides information which our management believes to be relevant to an assessment and understanding of our results of operations and financial condition. This discussion should be read together with our financial statements and the notes to the financial statements, which are included in this Quarterly Report on Form 10-Q (the “Report”). This information should also be read in conjunction with the information contained in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on July 27, 2015 including the audited consolidated financial statements and notes included therein as of and for the year ended April 30, 2015. The reported results will not necessarily reflect future results of operations or financial condition.

 

Throughout this Report, the terms “we,” “us,” “our,” “our Company,” or “The Mary Jane Group,” refers to The MaryJane Group, Inc., a Nevada corporation, and unless otherwise specified, includes our wholly owned operating subsidiaries listed below.

 

We maintain a website at www.themaryjanegrp.com and our Common Stock trades on the OTCQB under the symbol “MJMJ.’’

 

Corporate Overview and History of The MaryJane Group, Inc.

 

The MaryJane Group, Inc., f/k/a Pladeo Corp., a Nevada corporation (the “Company”) was incorporated in Nevada on February 16, 2012 for the purpose of developing online chat systems free of charge. The Company was unable to raise sufficient funds to implement its business plan. As a result of being unable to properly fund and build our business of developing online chart systems, we were considered a “shell company” under the rules of the Commission. On February 26, 2014, Joel Schneider, entered into a share purchase agreement with Lisbeth Guerrero, the Company’s former sole officer and director, pursuant to which he purchased 8,000,000 shares of the Company’s common stock, representing 77.2% of the issued and outstanding shares of the Company’s common stock on that date (the “Share Purchase Agreement”). In connection with the purchase, Ms. Guerrero resigned as sole officer and director and Mr. Schneider became our sole officer and director.

 

On February 27, 2014, we entered into and closed a Securities Exchange Agreement by and among the Company, Capital Growth Corporation, a Colorado corporation (“CGC”) and the shareholders of CGC on February 27, 2014 (the “CGC Acquisition”) and on March 14, 2014, we entered into and closed a Securities Exchange Agreement between the Company and the managing member of Mary Jane Entertainment, LLC, Mile High Times, LLC, Mary Jane Tours, LLC, and Dab City Radio, LLC, each a Colorado limited liability company (referred to individually by name or collectively as the “Mary Jane companies”) (the “Mary Jane companies Acquisition”). As a result, we ceased being a shell company upon the acquisition of the five operating subsidiaries. Shortly thereafter, the Company changed its name to The MaryJane Group, Inc.

 

Subsequent to completing the Acquisition with CGC and the Mary Jane companies, we formed the following Colorado limited liability companies as wholly-owned subsidiaries, namely: Mary Jane Glassworks, LLC and Bud and Breakfast, LLC (both organized on April 10, 2014), Mary Jane Hospitality, LLC and Mary Jane Events, LLC (both organized on July 22, 2014), and Mary Jane Designs, LLC (organized on August 28, 2014). In an effort to streamline operations and focus on our core business of hospitality in the cannabis industry, we dissolved the following entities on November 21, 2014: (i) Mary Jane Tours, LLC; (ii) Mile High Times, LLC; (iii) Dab City Radio, LLC; and (iv) Mary Jane Glassworks, LLC.

 

Unless otherwise stated or unless the context otherwise requires, the description of our business set forth below is provided on a combined basis, taking into account our newly-acquired wholly owned subsidiaries mentioned herein.

Overview of Operating Businesses

 

Our primary focus includes providing lodging, events, spa services and brand merchandising concentrated in the cannabis industry.

 

Legalization of recreational marijuana initially in Colorado and Washington and the growing number of jurisdictions with medical marijuana laws spawned a “Green Rush” in America in 2014. On January 1, 2014, the State of Colorado became the first state to legalize the use of recreational marijuana. Colorado residents, who are at least 21 years of age with photo identification, may legally purchase as much as one ounce of marijuana in a single transaction. Non-Colorado residents, bearing the same identification, may purchase as much as one-quarter ounce. Marijuana cannot be consumed in any public space, including the shops where it was purchased. In 2015, Oregon, Alaska and the District of Columbia legalized marijuana for recreational use; however, sales currently remain banned in the District. Additionally, 23 states have legalized marijuana for medical purposes.

 

According to a recent report from The ArcView Group, a cannabis industry investment and research firm based in Oakland, California (“ArcView”), found that the U.S. market for legal cannabis grew 74% in 2014 to $2.7 billion, up from 1.5 billion in 2013, making legal marijuana the fastest-growing industry in the United States. The report projects a 32% growth in the market and concluded that if the trend toward legalization spreads to all 50 states, the total market value would top $36.8 billion – more than $3 billion larger than the organic food industry. ArcView predicts that over the next five years, 14 more states will legalize recreational marijuana and two more states will legalize medical marijuana. Currently, at least ten states are already considering legalizing recreational marijuana.

 

In Colorado, the recreational and medical marijuana sales totaled $700 million in 2014; however, the real economic impact is expected to be much higher as this figure excludes marijuana-related products such as pipes or any marijuana-related increase in tourism.

 

Our operating subsidiaries, as outlined herein, were formed for the purpose of providing financing to assist Colorado marijuana growers, providing cannabis-friendly lodging and providing value added services of information and entertainment to consumers supporting the recreational marijuana industry. While our services are currently concentrated only in Colorado, we believe that our business model can easily be expanded as recreational marijuana becomes legal in other states.

 

Capital Growth Corporation, organized on February 4, 2014 (“Capital Growth”), was formed for the purpose of providing short- and long-term financing to assist growers and retail establishments engaged in the manufacture and distribution of recreational marijuana within the State of Colorado. Since its formation, Capital Growth has not entered into any funding transactions. The Company utilizes Capital Growth as a business development company. Mary Jane Entertainment, LLC was formed to provide contracted limousine and party-bus services and currently continues to operate on a limited basis. Bud and Breakfast, LLC was formed to operate and manage our two marijuana-friendly Bud + Breakfast locations with a third location opening in mid-July 2015. We intend to actively seek additional Bud + Breakfast locations. Mary Jane Hospitality, LLC was formed to seek additional lodging and hospitality businesses located in Colorado, and to also seek the same type of businesses in other jurisdictions as recreational marijuana becomes legal in other states. Mary Jane Events, LLC was formed for the purposes of planning private and corporate events focused upon the recreational/medicinal marijuana industry. Mary Jane Designs, LLC was formed to expand and promote our branded merchandise at our properties.

 

Neither the Company, nor any of its subsidiaries, have been involved in any bankruptcy, receivership or any similar proceeding, and except for the subject acquisitions set forth herein, has not had or been a party to any material reclassifications, mergers or consolidations since inception.

 

The Company’s primary SIC code is 7990 – Services; Miscellaneous Amusement and Recreation.

We maintain the following websites: www.themaryjanegrp.com and www.budandbfast.com.

 

Our Products

 

Bud + Breakfast at the Adagio

 

On April 10, 2014, we entered into a one-year lease with the owner of the Adagio Bed and Breakfast located at 1430 Race Street, Denver, Colorado (the “Adagio”). We transformed the Adagio from a traditional bed and breakfast to the first, all-inclusive “Bud + Breakfast” in what our management believes to be the first of its kind. The guest package includes a Wake and Bake Breakfast, a 4:20 Happy Hour and a facility to consume the best marijuana and marijuana edibles Colorado has to offer. We provide our guests an on-site chef who prepares a gourmet breakfast and afternoon hors d’oeuvres. Since beginning Bud + Breakfast operations in April 2014, reservations and occupancy rates have increased dramatically with corresponding revenue of approximately $50,000 to $60,000 per month. Our Bud + Breakfast locations allow us to book tours and sell our branded apparel, merchandise and remaining glass products to guests. As a result of our success at the Adagio, we are actively seeking additional lodging facilities.

 

On February 27, 2015, we exercised our option to purchase the Adagio and executed a Contract to Buy and Sell Real Estate (the "Sales Contract") with A Capital Inn, Inc. (the "Seller"). The purchase price for the Adagio was $1,500,000 with the Seller agreeing to finance $1,000,000. Upon execution of the Sales Contract, the Company made a non-refundable deposit of $50,000 and on May 15, 2015 we made an additional $25,000 non-refundable deposit; however, we were unable to secure proper financing to close the purchase. Subsequently, we entered into a six-month lease agreement for the monthly rate of $10,000 plus a royalty of 2 ½% of gross lodging revenue which ends on December 31, 2015. We are currently negotiating a longer term lease for the Adagio. In the event we are unable to negotiate a long term lease for the adagio we will vacate that property on or about January 31, 2016. The Company is also seeking a new location within the City of Denver.

 

Bud + Breakfast at Mountain Vista

 

After validating our Bud + Breakfast business model at the Adagio, on September 4, 2014, we entered into a one-year lease with the owners of the Mountain Vista Bed and Breakfast located at 358 Lagoon Lane, Silverthorne, Colorado. Since opening on October 1, 2014, we have achieved occupancy levels higher than expected and generated revenues of approximately $12,000 to $17,000 per month. Effective June 1, 2015, we added a fifth room to the property and project this additional room will generate an additional $1,800 to $2,500 per month. We extended the lease for the Bud + Breakfast at Mountain Vista until December 31, 2016. The new lease terms require us to pay a base rent of $5,000 per month and a 1% royalty per month.

 

Hotel San Ayre, a Bud + Breakfast Property

 

On June 24, 2015, we executed a two-year lease with the owner of Hotel San Ayre with an option to purchase its four locations in Colorado Springs, Colorado. This property is our largest project to date in terms of rentable units with 11 rooms. The business model for Hotel San Ayre will be slightly different from our traditional Bud + Breakfast locations. Guests will receive similar offerings including our Wake and Bake Breakfast and 4:20 Happy Hour. Our staffing needs will be less robust at this location and all guests will have access to a lounge that will include all amenities found at our other locations including a game room, hot tub, and outdoor lounge area.

 

Canna-camp

 

On May 22, 2015, we entered into a joint-venture agreement with the owners of the Wilderness Trails Ranch, LLC to open an exclusive cannabis resort near Durango, Colorado. As of July 2, 2105 we withdrew our position in the joint-venture due to our partner’s lack of ability to perform. We are currently seeking a new location for Canna-camp 2016.

Funding During Three Months Ended October 31, 2015

 

On August 6, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $36,750. The note matures August 6, 2016 and is convertible at 57% of the lowest trading price for the 20 trading days prior to the conversion date. We received $35,000 in net proceeds from this transaction which we used for general working capital.

 

On August 19, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $29,700. The note matures August 19, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $25,000 in net proceeds from this transaction which we used for general working capital.

 

On August 19, 2015, we entered into a loan agreement with an entity and borrowed $50,000. Pursuant to the terms of the loan agreement, we are required to make 112 equal installments of $625, or an aggregate of $70,000, to repay the principal balance and interest in full. As December 11, 2015, the Company has made 79 payments totaling $49,375 and the remaining balance due under this loan on that date is $20,625. We received $50,000 in net proceeds from this transaction which we used for general working capital.

 

On October 12, 2015, we entered into a loan agreement with an entity and borrowed $53,000. Pursuant to the terms of the loan agreement, we are required to make 110 equal installments of $689. Or an aggregate of $75,790, to repay the principal balance and interest in full. As of December 11, 2015, the Company has made 40 payments totaling $27,560 and the remaining balance due under this loan on that date is $48,230. We received $51,601 in net proceeds from this transaction after paying $1,399 in loan closing costs, which we used for general working capital.

 

Recent Events Since October 31, 2015

 

On November 10, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $10,000. The note matures November 10, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $10,000 in net proceeds from this transaction which we used for working capital.

 

Subsequent to October 31, 2015, approximately $27,400 of principal and interest was converted into an aggregate of 161,212,122 shares of common stock.

 

On December 8, 2015 we completed a financing with three investors whereby the Company received an aggregate of $75,000 in net proceeds from the transaction(s) which we used for working capital. Pursuant to the transaction we issued three (3) notes in the aggregate amount of $81,000. The notes matures December 3, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 20 trading days immediately prior to the Original Issuance Date or (ii) the 20 trading days prior to the conversion date.

 

Contemporaneously with the transaction(s) described in the previous paragraph, the three investors acquired a promissory note from a third party investor, which originally issued in the principal amount of $38,000, and with accrued and unpaid interest totaled approximately $40,448 on the date of sale. The Company was in default under the terms of the promissory note and as a result the three investors acquired that note for an aggregate of $50,000. As consideration for the financial accommodations made by these three investors preventing the note from going into collections the Company issued each of these investors two additional notes, the first being in the amount of $13,482.88 or an aggregate of $40,448.64 which represented the principal and accrued interest amount due under the promissory note. The second note issued to these investors was issued in the principal amount of $10,321.77, or $30,965.31 in the aggregate which partially represented the additional expense of $9,552 of purchasing the note and an aggregate of $21,413.31 which represents legal fees and an original issue discount related to the $27,000 promissory notes described in the preceding paragraph. The Company received no proceeds from this transaction(s).

 

The number of shares outstanding as of the date of this filing includes 25,000 that are owed to a former consultant of the Company but have not been issued.

 

Results of Operations

 

Three months ended October 31, 2105 compared to three months ended October 31, 2014

 

Net Revenue

 

Net revenue for the three months ended October 31, 2015 totaled $310,587 compared to $164,293 in the comparable period in 2014, representing an increase of 89%. Our net revenue increased $73,556 from net revenue of $237,021 during the three months ended July 31, 2015. This increase is primarily a result of increased revenue from our bed and breakfast operations during the quarter which management believes is a direct result of the Company’s increased exposure through marketing and advertising.

 

Cost of Goods Revenue

 

Cost of revenue for the three months ended October 31, 2015 totaled $214,780 compared to $94,152 in the comparable period in 2014. Our cost of revenue increased by $120,628 from cost of revenue of $94,152 during the quarter ended October 31, 2014. Cost of revenue as a percentage of sales for the three months ended October 31, 2015 was 69% compared to 57% for the three months ended October 31, 2014. The reduction of our gross profit is a result of the initial costs related to the startup of the Hotel San Ayre, offset in part by increased revenue at both the Adagio and Mountain Vista.

 

General and Administrative

 

General and administrative costs for the three months ended October 31, 2015 decreased by $839,081 to $252,313 from $1,091,394 in the comparable period in 2014. This decrease is directly attributable to no stock based compensation being paid during the quarter ended October 31, 2015.

 

Sales and Marketing

 

Sales and marketing costs for the three months ended October 31, 2015 were $38,163 compared to $2,515 for the comparable period in 2014.

 

Depreciation

 

Depreciation expense for the three months ended October 31, 2015 was $2,090 compared to $1,007 for the comparable period in 2014.

 

Other Income (Expense)

 

Other expense for the three months ended October 31, 2015 was $224,658 compared to $97,382 for the comparable period in 2014, primarily a result of interest expense and loan closing costs associated with our debt funding.

 

Net Loss

 

Net loss for the three months ended October 31, 2015 was $421,417 compared to $1,122,157 for the comparable period in 2014.

 

Six months ended October 31, 2015 compared to six months ended October 31, 2014

 

Net Revenue

 

Net revenue for the six months ended October 31, 2015 totaled $547,607 compared to $277,232 in the comparable period in 2014. During the six months ended October 31, 2015, our net revenue increased month over month. These increases are primarily a result of revenue from our bed and breakfast operations.

 

Cost of Goods Revenue

 

Cost of revenue for the six months ended October 31, 2015 totaled $387,031 compared to $181,249 in the comparable period in 2014. Cost of revenue as a percentage of sales for the six months ended October 31, 2015 was 70.6% as compared to 65% during the same period in 2014.

 

General and Administrative

 

General and administrative costs for the six months ended October 31, 2015 decreased by $929,437 to $643,417 from $1,572,854 in the comparable period in 2014. This decrease is directly attributable to less costs associated with the issuance of shares of our Common Stock to employees, consultants and vendors.

 

Sales and Marketing

 

Sales and marketing costs for the six months ended October 31, 2015 were $54,670 compared to $9,632 for the comparable period in 2014.

 

Depreciation

 

Depreciation expense for the six months ended October 31, 2015 was $4,391 compared to $2,015 for the comparable period in 2014.

 

Other Income (Expense)

 

Other expense for the six months ended October 31, 2015 was $785,068 compared to $211,324 for the comparable period in 2014, primarily a result of interest expense associated with our debt funding.

 

Net Loss

 

Net loss for the six months ended October 31, 2015 was $1,326,970 compared to $1,699,842 for the comparable period in 2014.

 

 

 

Liquidity and Capital Resources

 

We are dependent upon obtaining additional financing in order to adequately fund working capital, infrastructure, expansion expenses and significant marketing/investor related expenditures to gain market recognition, so that it can achieve a level of revenue adequate to support our cost structure, none of which can be assured. We believe that we will need approximately $1 million over the next twelve months. While initial operations have been funded with private placements of equity and bridge loans, there can be no assurance that adequate financing will continue to be available, and, if available, be on terms that are favorable. As of October 31, 2015, we had $57,580 on deposit.

 

As of October 31, 2015, our working capital deficit was $649,519, our accumulated deficit was $4,204,347, and our stockholders’ deficit was $676,281. Operating loss was $196,758 for the three months ended October 31, 2015.

 

We reduced our net cash flows used in operation during the three months ended October 31, 2015 from the three months ended July 31, 2015 and we expect to improve upon it further during the fiscal year ended April 30, 2016 as the Hotel San Ayre increases its occupancy; however, due to conditions and influences out of our control, including the current state of the national economy, we cannot guarantee that this improvement will be achieved or that it will be achieved in the stated time frame, nor is there any assurance that such an operating level can ever be achieved.

 

Off-Balance Sheet Arrangements

 

As of October 31, 2015, we had no material off-balance sheet arrangements.

 

In the normal course of business, we may be confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits, claims, environmental actions or the actions of various regulatory agencies. We consult with counsel and other appropriate experts to assess the claim. If, in our opinion, we have incurred a probable loss as set forth by generally accepted accounting principles in the U.S. (“GAAP”), an estimate is made of the loss and the appropriate accounting entries are reflected in our financial statements. After consultation with legal counsel, we do not anticipate that liabilities arising out of currently threatened lawsuits and claims, if any, will have a material adverse effect on our financial position, results of operations or cash flows.

 

Critical Accounting Estimates

 

Please refer to our Annual Report on Form 10-K for the year ended April 30, 2015 filed with the Commission on July 27, 2015 and incorporated herein by reference, for detailed explanations of our critical accounting estimates, which have not changed significantly during the three months ended October 31, 2015.

New Accounting Pronouncements

 

There have been no material changes to our significant accounting policies as summarized in our Annual Report on Form 10-K for the year ended April 30, 2015. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our condensed consolidated financial statements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

None.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms and is accumulated and communicated to our management, as appropriate, in order to allow timely decisions in connection with required disclosure.

 

Evaluation of Disclosure Controls and Procedures

 

Joel C. Schneider, our principal executive and financial officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of January 31, 2015, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by us is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, Mr. Schneider concluded that our disclosure controls and procedures as of January 31, 2015 were not effective to provide reasonable assurance that information required to be disclosed in our periodic filings under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure, due to the material weaknesses as described below.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

 

We believe our weaknesses in internal controls and procedures are due to our lack of sufficient personnel with expertise in the area of SEC, GAAP and tax accounting procedures. In addition, we lack the personnel structure, size and complexity to segregate duties sufficiently for proper controls. We are currently without sufficient funds to hire additional personnel with expertise in these areas and to segregate duties for proper controls, and until such time as additional personnel are hired, we believe that we will continue to recognize a weakness in our internal controls and procedures.

 

Our plan is to hire additional personnel to properly implement a control structure when the appropriate funds become available. In the meantime, Mr. Schneider will continue to perform or supervise the performance of additional accounting and financial analyses and other post-closing procedures including detailed validation work with regard to balance sheet account balances, additional analysis on income statement amounts and managerial review of all significant account balances and disclosures, to ensure that the our Quarterly Report and the financial statements forming part thereof are in accordance with GAAP.

Changes in Internal Controls

 

During the three months ended October 31, 2015, there were no changes in our internal controls over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

We are a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, and as such, are not required to provide the information required under this Item.

 

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

 

On August 6, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $36,750. The note matures August 6, 2016 and is convertible at 57% of the lowest trading price for the 20 trading days prior to the conversion date. We received $35,000 in net proceeds from this transaction which we used for general working capital.

 

On August 19, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $29,700. The note matures August 19, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $25,000 in net proceeds from this transaction which we used for general working capital.

 

During the quarter ended October 31, 2015, approximately $101,375 of principal and interest was converted into an aggregate 319,197,532 shares of common stock.

 

During the quarter ended October 31, 2015, the Company issued 44,642,847 shares upon the exercise of a warrant valued at $25,000. The shares were issued pursuant to a cashless exercise provision contained in the warrant.

 

Issuance of Securities Subsequent to October 31, 2015.

 

On November 10, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $10,000. The note matures November 10, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $10,000 in net proceeds from this transaction which we used for working capital.

 

Subsequent to October 31, 2015, approximately $27,400 of principal and interest was converted into an aggregate of 161,212,122 shares of common stock.

 

On December 8, 2015 we completed a financing with three investors whereby the Company received an aggregate of $75,000 in net proceeds from the transaction(s) which we used for working capital. Pursuant to the transaction we issued three (3) notes in the aggregate amount of $81,000. The notes matures December 3, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 20 trading days immediately prior to the Original Issuance Date or (ii) the 20 trading days prior to the conversion date.

 

Contemporaneously with the transaction(s) described in the previous paragraph, the three investors acquired a promissory note from a third party investor, which originally issued in the principal amount of $38,000, and with accrued and unpaid interest totaled approximately $40,448 on the date of sale. The Company was in default under the terms of the promissory note and as a result the three investors acquired that note for an aggregate of $50,000. As consideration for the financial accommodations made by these three investors preventing the note from going into collections the Company issued each of these investors two additional notes, the first being in the amount of $13,482.88 or an aggregate of $40,448.64 which represented the principal and accrued interest amount due under the promissory note. The second note issued to these investors was issued in the principal amount of $10,321.77, or $30,965.31 in the aggregate which partially represented the additional expense of $9,552 of purchasing the note and an aggregate of $21,413.31 which represents legal fees and an original issue discount related to the $27,000 promissory notes described in the preceding paragraph. The Company received no proceeds from this transaction(s).

 

The number of shares outstanding as of the date of this filing includes 25,000 that are owed to a former consultant of the Company but have not been issued.

  

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibit No.	Date of Document	Name of Document
31.1	03/13/15	Certification of Chief Executive Officer and Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 14d-14(a).*
32.1	03/13/15	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.*
101.INS	n/a	XBRL Instance Document*
101.SCH	n/a	XBRL Taxonomy Extension Schema Document*
101.CAL	n/a	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	n/a	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	n/a	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	n/a	XBRL Taxonomy Extension Presentation Linkbase Document*

 

*

Filed herewith.

SIGNATURES

 

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

 

DATE: December 21, 2015

 

	THE MARYJANE GROUP, INC.
	By:	/s/	Joel C. Schneider
			Joel C. Schneider
			Chief Executive Officer
			Principal Executive Officer
			Chief Financial Officer
			Principal Financial Officer

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

 

I, Joel Schneider, certify that:

 

(1)

I have reviewed this quarterly report on Form 10-Q of The MaryJane Group, Inc.;

 

(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5)

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

December 21, 2015		/s/ Joel C. Schneider
		Joel C. Schneider Chief Executive Officer/Principal Executive Officer Chief Financial Officer/Principal Financial Officer

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of The MaryJane Group, Inc. (the “Company”) on Form 10-Q for the period ending July 31, 2015, as filed with the Securities and Exchange Commission (the “Report”), I, Joel C. Schneider, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

/s/ Joel C. Schneider

Joel C. Schneider

Chief Executive Officer

Chief Financial Officer

December 21, 2015

 

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

v3.3.1.900

Document and Entity Information - shares	6 Months Ended
	Oct. 31, 2015	Dec. 21, 2015
Document And Entity Information
Entity Registrant Name	MaryJane Group, Inc.
Entity Central Index Key	0001554225
Document Type	10-Q
Document Period End Date	Oct. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--04-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,450,165,023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2016

v3.3.1.900

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Oct. 31, 2015	Apr. 30, 2015
Assets, Current
Cash	$ 57,681	$ 44,990
Inventory	2,160
Prepaid Expense	1,233	$ 39,808
Employee advances	4,198	55
Assets, Current	65,272	84,853
Fixed assets, net	30,554	18,313
Security deposit	24,500	$ 14,500
Non-refundable purchase deposit	30,000
Total assets	150,326	$ 117,666
Current Liabilities:
Convertible notes payable, net of debt discount of $239,788 and $417,752, respectively	132,057	327,549
Accounts Payable, Current	77,760	23,056
Promissory note	106,336	17,160
Other Liabilities, Current	398,638	287,879
Total current liabilities	$ 714,791	655,644
Long-term Liabilities:
Convertible notes payable, net of debt discount of $18,334 and $0, respectively		4,263
Accrued interest	$ 105	603
Derivative liabilities	111,711	203,145
Total long-term liabilities	111,816	208,011
Total liabilities	$ 826,607	$ 863,655
Commitments and Contingencies
Stockholders' Deficit:
Series A Preferred stock - par value $0.001; 2,000,000 shares authorized; 100,000 shares issued and outstanding
Common stock - par value $0.001; 2,000,000,000 shares authorized; 924,862,512 and 30,637,844 issued and outstanding, respectively	$ 1,288,928	$ 30,638
Additional paid in capital	2,239,737	2,211,957
Prepaid services	(600)	(54,536)
Accumulated deficit	(4,204,347)	(2,934,048)
Total stockholders' deficit	(676,281)	(745,989)
Total liabilities and stockholders' deficit	$ 150,326	$ 117,666

v3.3.1.900

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Oct. 31, 2015	Apr. 30, 2014
Statement of Financial Position [Abstract]
Debt Discount on Convertible notes payable	$ 203,225	$ 417,752
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	2,000,000	2,000,000
Preferred Stock, Shares Issued	100,000	100,000
Preferred Stock, Shares, Outstanding	100,000	100,000
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Stock, Shares Issued	1,288,927,901	30,637,844
Common Stock, Shares, Outstanding	1,288,927,901	30,637,844

v3.3.1.900

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 31, 2015	Oct. 31, 2014	Oct. 31, 2015	Oct. 31, 2014
Income Statement [Abstract]
Revenues, net	$ 310,587	$ 164,293	$ 547,607	$ 277,323
Cost of revenue	214,780	94,152	387,031	181,249
Gross profit	95,807	70,141	160,576	95,983
Operating Expenses
General and administration	252,313	1,091,394	643,417	1,572,854
Sales and marketing	38,163	2,515	54,670	9,632
Depreciation and amortization	2,090	1,007	4,392	2,015
Total operating expenses	292,566	1,094,916	702,478	1,584,501
Operating loss	(196,758)	(1,024,775)	(541,902)	(1,488,518)
Other income and (expense)
Miscellaneous income	28	13,324	64	15,919
Interest expense	$ (196,351)	(90,106)	$ (611,381)	(154,501)
Loan closing costs		$ (20,600)		(20,600)
Disposal of fixed assets				$ (52,142)
Loss on settlement of debt			$ 145,415
Change in fair value of derivative liability	$ (28,336)		28,336
Total other income (expense)	(224,658)	$ (97,382)	(785,068)	$ (211,324)
Loss before taxes	$ (421,417)	$ (1,122,157)	$ (1,326,970)	$ (1,699,842)
Provision for income taxes
Net loss	$ (421,417)	$ (1,122,157)	$ (1,326,970)	$ (1,699,842)
Loss per share, basic	$ (0.00)	$ (.06)	$ 0.00	$ (.16)
Weighted average number of shares outstanding	1,037,428,811	19,096,727	732,717,048	10,360,000

v3.3.1.900

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,327,608)	$ (1,699,842)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:
Depreciation	4,392	$ 2,015
Amortization of prepaid services	69,935
Amortization of debt discount	511,125	$ 140,318
Amortization of prepaid expense	38,757	911,352
Write off of non-cash consulting costs	4,000	$ 94,650
Change in fair value of derivative liability	$ (28,336)
Loss on disposal of fixed assets		$ 52,142
Loss on settlement of debt	$ 145,415
Change in operating assets and liabilities:
Accounts receivables		$ (11,092)
Other current assets	$ (6,302)	8,445
Accounts payable	$ 54,704	20,882
Bank overdraft		(13,757)
Other current liabilities	$ 141,518	120,683
Other long-term liabilities	1,221	3,483
Net cash flows used in operating activities	(334,054)	(370,721)
CASH FLOWS FROM INVESTING ACTIVITIES
Security deposit	(10,000)	$ (14,500)
Non refundable purchase deposit	(30,000)
Purchase of fixed assets	(16,633)	$ (2,723)
Net cash flows used in investing activities	(56,633)	(17,223)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible promissory notes	314,200	$ 411,100
Proceeds from promissory note	208,790
Payment of promissory note	(119,614)
Net cash flows provided by financing activities	403,376	$ 411,100
Increase (decrease) in cash	12,690	23,156
Cash, beginning of period	44,990	3,431
Cash, end of period	57,681	$ 26,587
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$ 60,554
Cash paid for income taxes
SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITY
Non-cash additions of convertible notes	$ 24,250
Beneficial conversion feature for convertible notes		$ 434,076
Shares issued with employment agreements		1,162,025
Shares issued for services		$ 111,800

v3.3.1.900

THE COMPANY	6 Months Ended
	Oct. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
THE COMPANY	NOTE 1 – THE COMPANY   The MaryJane Group, Inc., f/k/a Pladeo Corp., a Nevada corporation (the “Company”), had six wholly-owned subsidiaries at October 31, 2015, as listed below:       Date of Organization or Incorporation       Mary Jane Entertainment, LLC   May 21, 2013 Capital Growth Corporation   February 4, 2014 Bud and Breakfast, LLC   April 10, 2014 Mary Jane Hospitality, LLC   July 22, 2014 MJ Ranch, LLC   June 8, 2015 SA Hotel, LLC   June 23, 2015   Unless the context otherwise requires, the Company and the above listed wholly-owned subsidiaries collectively are sometimes referred to as “our Company,” “we,” “our,” or “us.”   Overview of Operating Businesses   On January 1, 2014, the State of Colorado became the first state to legalize the use of recreational marijuana. Colorado residents, who are at least 21 years of age with photo identification, may purchase as much as one ounce of marijuana in a single transaction. Non-Colorado residents, bearing the same identification, may purchase as much as one-quarter ounce. Marijuana cannot be consumed in any public space, including the shops where it was purchased. Our operating subsidiaries, as outlined herein, were formed for the purpose of providing financing to assist Colorado marijuana growers, providing cannabis friendly lodging and to provide value added services of information and entertainment to the consumers supporting the recreational marijuana industry.   Bed and Breakfast Lease   On June 24, 2015, The MaryJane Group, Inc. (the “Company”) executed a Lease Option Agreement (the “Lease”) with Hotel San Ayre, LLC for the purchase of Hotel San Ayre and its four property locations in Colorado Springs, Colorado. The two-year lease option term commences on July 15, 2015 and terminates the earlier of July 14, 2017 or the closing date of the purchase thereof. The base rental amount for the first 12 months of the Lease is $12,500 and is $13,500 for the last 12 months of the Lease. The Company is responsible for all operation, repair, use and maintenance of the premises during the term of the Lease. Joel Schneider, the Company’s Chief Executive Officer, personally guaranteed the Lease.   Upon execution of the Lease, the Company paid a hard deposit of $30,000 which may be applied to the future purchase; however, is not considered a security deposit and is not refundable if the purchase option is not exercised. The purchase price for the Hotel San Ayre is $2,100,000 on an as-is basis. Fiscal year end   We elected April 30th as our fiscal year ending date.   Going concern uncertainty   At October 31, 2015, we had an accumulated deficit of $4,165,990 and for the six months ended October 31, 2015, we incurred losses of $1,231,944. Our ability to continue in business is dependent upon obtaining sufficient financing or attaining profitable operations. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations, and therefore, these matters raise substantial doubt about our ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties, nor do they include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

v3.3.1.900

BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	6 Months Ended
	Oct. 31, 2015
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS   Interim Financial Statements   The accompanying unaudited interim condensed consolidated financial statements of The MaryJane Group, Inc. have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The balance sheet at April 30, 2015 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP 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 revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended April 30, 2015 as filed with the SEC on July 27, 2015.   Recently Issued and Newly Adopted Accounting Pronouncements   There have been no material changes to our significant accounting policies as summarized in NOTE 2 of our Annual Report on Form 10-K/A for the year ended April 30, 2015. We do not expect that the adoption of any recent accounting pronouncements will have a material impact on our accompanying condensed consolidated financial statements. Reclassifications   Certain prior period amounts have been reclassified to conform to the current period presentation.

v3.3.1.900

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Oct. 31, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Fair Value of Financial Instruments   Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short- and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments. We have elected not to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short- and long-term debt with similar terms and remaining maturities are used to estimate the fair value of the our short- and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.   We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).   Assets and liabilities recorded in the condensed consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows:   Level 1 -  Unadjusted quoted prices in active markets for identical assets or liabilities.       Level 2 -  Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.       Level 3 -  Unobservable inputs for the asset or liability.   The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability as detailed below. The fair value of this warrant liability is included in long-term liabilities on the accompanying condensed consolidated financial statements.   The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis:   Description   Assets/ (Liabilities) Measured at Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Other Unobservable Inputs (Level3)                             Fair value of warrant liability   $ (111,711 )   $ —     $ —     $ (111,711 ) The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the quarter ended October 31, 2015       Fair Value Measurements Using Significant Unobservable Inputs (Level 3)             Balance at April 30, 2015   $ (203,145 ) Issuances of derivative liabilities     —   Change in fair value of derivative liabilities     28,336 Transfers in and/out of Level 3     —   Warrants exercised     63,098 Ending balance at October 31, 2015   $ (111,711 )   The above table of Level 3 liabilities begins with the prior period balance and adjusts the balance for changes that occurred during the current period. The ending balance of the Level 3 securities presented above represent our best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.   Reclassifications   Certain prior period amounts have been reclassified to conform to current year presentation.

v3.3.1.900

FIXED ASSETS	6 Months Ended
	Oct. 31, 2015
Property, Plant and Equipment [Abstract]
FIXED ASSETS	NOTE 4 – FIXED ASSETS   Fixed assets consist of the following:       October 31, 2015     April 30, 2015   Furniture and fixtures   $ 39,826     $ 23,194   Leasehold improvements     2,320       2,320   Equipment     865       865         43,011       26,379   Less: accumulated depreciation     (12,457 )     (8,066 ) TOTAL PROPERTY AND EQUIPMENT   $ 30,554     $ 18,313     Depreciation expense for the three and six months ended October 31, 2015 was $2,090 and $4,391. Depreciation expense for the three and six months ended October 31, 2014 was $1,007 and $2,015, respectively.

v3.3.1.900

PROMISSORY NOTES	6 Months Ended
	Oct. 31, 2015
Notes to Financial Statements
PROMISSORY NOTES	NOTE 5 – PROMISSORY NOTES   On February 12, 2015, we entered into a loan agreement with an entity and borrowed $39,000. Pursuant to the terms of the loan agreement, we are required to make 100 equal installments of $553, or an aggregate of $55,300, to repay the principal balance and interest in full. On May 13, 2015, we entered into a new loan agreement with the same lender and borrowed $63,000. Pursuant to the terms of the loan agreement, we are required to make 100 equal installments of $894, or an aggregate of $89,400, to repay the principal balance and interest in full. We used approximately $20,500 to repay the February 12th loan and the balance of the proceeds were used as working capital. During the quarter, we paid an additional $37,095 towards the principal.   On May 22, 2015, a third party purchased a Convertible Promissory Note issued on April 30, 2014 in the aggregate amount of $53,275. We issued a 12% Convertible Promissory Note in the aggregate amount of $53,275. We issued an additional 12% Convertible Promissory Note in the aggregate amount of $38,000. Each note matures May 22, 2016 and is convertible at a 40% discount from the lowest Trading Price in the 10 trading days prior to conversion date. We received $33,000 in net proceeds from this transaction which we used for general working capital.   On June 11, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $60,000. This note matures on June 11, 2016 and is convertible at 57% of the lowest trading price for the 20 days prior to the conversion date. We received $57,000 in net proceeds from this transaction which we used for general working capital.   On June 12, 2015, a third party purchased two Convertible Promissory Notes issued on June 16, 2014 and July 1, 2014. We issued a Convertible Promissory Note in the aggregate amount of $52,087 and an 8% Convertible Promissory Note in the aggregate amount of $30,000. The notes mature June 12, 2016 and is convertible at 59% of the lowest trading price for the 20 days prior to the conversion date. We received $28,500 in net proceeds from this transaction which we used for general working capital.   On June 23, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $69,000. The note matures June 23, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issue Date or (ii) the 25 trading days prior to the conversion date. We received $60,000 in net proceeds from this transaction which we used for general working capital.   On June 30, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $50,750. The note matures March 30, 2015 and is convertible at 55% of the average of the two lowest prices in the prior 5 trading days prior to the conversion date. We received $45,000 in net proceeds from this transaction which we used for general working capital.   On August 6, 2015, we issued an 8% Convertible Promissory Note in the aggregate amount of $36,750. The note matures August 6, 2016 and is convertible at 57% of the lowest trading price for the 20 trading days prior to the conversion date. We received $35,000 in net proceeds from this transaction which we used for general working capital.   On August 19, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $29,700. The note matures August 19, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $25,000 in net proceeds from this transaction which we used for general working capital.   On August 19, 2015, we entered into a loan agreement with an entity and borrowed $50,000. Pursuant to the terms of the loan agreement, we are required to make 112 equal installments of $625, or an aggregate of $70,000, to repay the principal balance and interest in full. As December 11, 2015, the Company has made 79 payments totaling $49,375 and the remaining balance due under this loan on that date is $20,625. We received$50,000 in net proceeds from this transaction which we used for general working capital. We have committed our daily receivables.   On October 12, 2015, we entered into a loan agreement with an entity and borrowed $53,000. Pursuant to the terms of the loan agreement, we are required to make 110 equal installments of $689. Or an aggregate of $75,790, to repay the principal balance and interest in full. As of December 11, 2015, the Company has made 40 payments totaling $27,560 and the remaining balance due under this loan on that date is $48,230. We received $51,601 in net proceeds from this transaction after paying $1,399 in loan closing costs, which we used for general working capital.   During the quarter ended October 31, 2015, approximately $101,375 of principal and interest was converted into an aggregate 319,197,532 shares of common stock.   During the quarter ended October 31, 2015, the Company issued 44,642,847 shares upon the exercise of a warrant valued at $25,000. The shares were issued pursuant to a cashless exercise provision contained in the warrant.

v3.3.1.900

OTHER CURRENT LIABILITIES	6 Months Ended
	Oct. 31, 2015
Other Liabilities Disclosure [Abstract]
OTHER CURRENT LIABILITIES	NOTE 6 – OTHER CURRENT LIABILITIES   Other current liabilities consist of the following:       October 31, 2015     April 30, 2015   Payroll tax liability   $ 257,586     $ 182,143   Accrued IRS and state interest and penalties     72,381       41,812   Accrued state sales tax interest and penalties     5,787       —   Accrued lodging and sales tax     48,067       35,269   Accrued interest expense     14,284       22,373   Accrued payroll     286       4,424   Other current liabilities     2,140       1,858   TOTAL OTHER CURRENT LIABILITIES   $ 400,531     $ 287,879

v3.3.1.900

CAPITAL STOCK	6 Months Ended
	Oct. 31, 2015
Notes to Financial Statements
CAPITAL STOCK	NOTE 7 – CAPITAL STOCK   Preferred Stock   At October 31, 2015 we had 2,000,000 shares of preferred stock, $0.001 par value authorized (the “Preferred Shares”). We had no Preferred Shares outstanding at October 31, 2015. On June 19, 2015, the Board of Directors designated 100,000 shares of its blank check preferred stock as Series A Preferred Stock, par value $0.001 per share. Each share of Series A Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Company. The Certificate of Designation is filed as an exhibit to this Current Report on Form 8K and is incorporated herein by reference. Common Stock   At October 31, 2015 we had 2,000,000,000 shares of common stock, $0.001 par value authorized (the “Common Shares”), with 1,288,927,901 Common Shares issued and outstanding.   Common Stock Issuances During the Quarter Ended October 31, 2015   Shares Issued     Fair Market Value of Shares Issued     Purpose   319,197,532     $ 101,375     Debt conversion   44,642,857       25,000     Warrant exercise   363,840,389     $ 126,375         Warrants to Purchase Common Stock of the Company   We use the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) to determine the fair value of Warrant(s). The Black-Scholes Model is an acceptable model in accordance with GAAP.   Warrant Activity during the Quarter Ended October 31, 2015   On June 26, 2015, warrants issued were exercised as a cashless conversion for 28,769,841 shares, net of 6,944,444 that were surrendered as part of the cashless conversion. The remaining balance of shares eligible to be exercised is 61,085,658   On September 10, 2015, warrants issued were exercised as a cashless conversion for 44,642,847, net of 12,755,102 that were surrendered as part of the cashless conversion. The remaining balance of shares eligible to be exercised is 31,250,000.   Amendment to Articles of Incorporation   On May 11, 2015, the Board of Directors and shareholders owning a majority of the shares outstanding of the Company approved an increase in its authorized shares of common stock. The Company filed a Certificate of Amendment to Certificate of Incorporation with the Nevada Secretary of State to increase its authorized shares of common stock from 200,000,000 to 1,000,000,000 shares, $0.001 par value per share.   On June 19, 2015, the Board of Directors designated 100,000 shares of its blank check preferred stock as Series A Preferred Stock, par value $0.001 per share. Each share of Series A Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Company.   On June 25, 2015, the Board of Directors and a majority of the shareholders approved an increase in its authorized shares and filed a Certificate of Amendment to Certificate of Incorporation with the Nevada Secretary of State to increase its authorized capital to 2,002,000,000 shares including 2,000,000,000 shares of common stock, $0.001 par value per share, and 2,000,000 of preferred stock, $0.001 par value per share. Issuance of Series A Preferred Stock   On June 23, 2015, the Board of Directors approved the issuance of 100,000 shares of Series A Preferred Stock to Joel Schneider, the Company’s Chief Executive Office and President, for certain financial accommodations made to the Company including personal guarantees on loans and property leases.

v3.3.1.900

SUBSEQUENT EVENTS	6 Months Ended
	Oct. 31, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 8 – SUBSEQUENT EVENTS   Conversion of Debt   On November 10, 2015, we issued a 10% Convertible Promissory Note in the aggregate amount of $10,000. The note matures November 10, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 25 trading days immediately prior to the Original Issuance Date or (ii) the 25 trading days prior to the conversion date. We received $10,000 in net proceeds from this transaction which we used for working capital.   Subsequent to October 31, 2015, approximately $27,400 of principal and interest was converted into an aggregate of 161,212,122 shares of common stock.   On December 8, 2015 we completed a financing with three investors whereby the Company received an aggregate of $75,000 in net proceeds from the transaction(s) which we used for working capital. Pursuant to the transaction we issued three (3) notes in the aggregate amount of $81,000. The notes matures December 3, 2016 and is convertible at 50% to the lowest sale price of common stock in (i) 20 trading days immediately prior to the Original Issuance Date or (ii) the 20 trading days prior to the conversion date.   Contemporaneously with the transaction(s) described in the previous paragraph, the three investors acquired a promissory note from a third party investor, which was originally issued in the principal amount of $38,000, and with accrued and unpaid interest totaled approximately $40,448 on the date of sale. The Company was in default under the terms of the promissory note and as a result the three investors acquired that note for an aggregate of $50,000. As consideration for the financial accommodations made by these three investors preventing the note from going into collections the Company issued each of these investors two additional notes, the first being in the amount of $13,482.88 or an aggregate of $40,448.64 which represented the principal and accrued interest amount due under the promissory note. The second note issued to these investors was issued in the principal amount of $10,321.77, or $30,965.31 in the aggregate which partially represented the additional expense of $9,552 of purchasing the note and an aggregate of $21,413.31 which represents legal fees and an original issue discount related to the $27,000 promissory notes described in the preceding paragraph. The Company received no proceeds from this transaction(s).   The number of shares outstanding as of the date of this filing includes 25,000 that are owed to a former consultant of the Company but have not been issued.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Oct. 31, 2015
Accounting Policies [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments   Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short- and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments. We have elected not to carry our debt instruments at fair value. The carrying amount of our debt approximates fair value. Interest rates that are currently available to us for issuance of short- and long-term debt with similar terms and remaining maturities are used to estimate the fair value of the our short- and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.   We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with GAAP. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).   Assets and liabilities recorded in the condensed consolidated balance sheets at fair value are categorized based on a hierarchy of inputs, as follows:   Level 1 -  Unadjusted quoted prices in active markets for identical assets or liabilities.       Level 2 -  Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.       Level 3 -  Unobservable inputs for the asset or liability.   The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability as detailed below. The fair value of this warrant liability is included in long-term liabilities on the accompanying condensed consolidated financial statements.   The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis:   Description   Assets/ (Liabilities) Measured at Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Other Unobservable Inputs (Level3)                             Fair value of warrant liability   $ (111,711 )   $ —     $ —     $ (111,711 ) The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the quarter ended October 31, 2015       Fair Value Measurements Using Significant Unobservable Inputs (Level 3)             Balance at April 30, 2015   $ (203,145 ) Issuances of derivative liabilities     —   Change in fair value of derivative liabilities     28,336 Transfers in and/out of Level 3     —   Warrants exercised     63,098 Ending balance at October 31, 2015   $ (111,711 )   The above table of Level 3 liabilities begins with the prior period balance and adjusts the balance for changes that occurred during the current period. The ending balance of the Level 3 securities presented above represent our best estimates and may not be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.
Reclassifications	Reclassifications   Certain prior period amounts have been reclassified to conform to current year presentation.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Oct. 31, 2015
Summary Of Significant Accounting Policies Tables
Schedule of financial assets and liabilities reported at fair value and measured on a recurring basis	The following table provides the financial assets and liabilities reported at fair value and measured on a recurring basis:   Description   Assets/ (Liabilities) Measured at Fair Value     Quoted Prices in Active Markets for Identical Assets (Level 1)     Significant Other Observable Inputs (Level 2)     Significant Other Unobservable Inputs (Level3)                             Fair value of warrant liability   $ (111,711 )   $ —     $ —     $ (111,711 )
Schedule of change in fair value associated with Liabilities	The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the quarter ended October 31, 2015       Fair Value Measurements Using Significant Unobservable Inputs (Level 3)             Balance at April 30, 2015   $ (203,145 ) Issuances of derivative liabilities     —   Change in fair value of derivative liabilities     28,336 Transfers in and/out of Level 3     —   Warrants exercised     63,098 Ending balance at October 31, 2015   $ (111,711 )

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FIXED ASSETS (Tables)	6 Months Ended
	Oct. 31, 2015
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment [Table Text Block]	Fixed assets consist of the following:       October 31, 2015     April 30, 2015   Furniture and fixtures   $ 39,826     $ 23,194   Leasehold improvements     2,320       2,320   Equipment     865       865         43,011       26,379   Less: accumulated depreciation     (12,457 )     (8,066 ) TOTAL PROPERTY AND EQUIPMENT   $ 30,554     $ 18,313

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OTHER CURRENT LIABILITIES (Tables)	6 Months Ended
	Oct. 31, 2015
Other Liabilities Disclosure [Abstract]
Other Current Liabilities [Table Text Block]	Other current liabilities consist of the following:       October 31, 2015     April 30, 2015   Payroll tax liability   $ 257,586     $ 182,143   Accrued IRS and state interest and penalties     72,381       41,812   Accrued state sales tax interest and penalties     5,787       —   Accrued lodging and sales tax     48,067       35,269   Accrued interest expense     14,284       22,373   Accrued payroll     286       4,424   Other current liabilities     2,140       1,858   TOTAL OTHER CURRENT LIABILITIES   $ 400,531     $ 287,879

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CAPITAL STOCK (Tables)	6 Months Ended
	Oct. 31, 2015
Capital Stock Tables
Schedule of Common Stock Issuances During the Year	Common Stock Issuances During the Quarter Ended October 31, 2015   Shares Issued     Fair Market Value of Shares Issued     Purpose   319,197,532     $ 101,375     Debt conversion   44,642,857       25,000     Warrant exercise   363,840,389     $ 126,375

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Oct. 31, 2015	Jul. 31, 2015	Apr. 30, 2015
Fair value of warrant liability	$ 111,711		$ 203,145
Assets [Member]
Fair value of warrant liability		$ (111,711)
Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of warrant liability
Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of warrant liability
Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of warrant liability		$ (111,711)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 31, 2015	Oct. 31, 2014	Oct. 31, 2015	Oct. 31, 2014
Summary Of Significant Accounting Policies Details 2
Fair value of warrant liability			$ 203,145
Issuances of derivative liabilities
Change in fair value of derivative liabilities	$ (28,336)		$ 28,336
Transfers in and/out of Level 3
Warrants exercised			$ 63,098
Fair value of warrant liability	$ 111,711		$ 111,711

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FIXED ASSETS (Details) - USD ($)	3 Months Ended		6 Months Ended
	Oct. 31, 2015	Oct. 31, 2014	Oct. 31, 2015	Oct. 31, 2014	Jul. 31, 2015	Apr. 30, 2015
Property, Plant and Equipment, Gross	$ 43,011		$ 43,011			$ 26,379
Less: accumulated depreciation	(12,457)		(12,457)			(8,066)
Property, Plant and Equipment, Net	30,554		30,554			18,313
Depreciation	$ 2,090	$ 1,007	$ 4,392	$ 2,015
Furniture and Fixtures [Member]
Property, Plant and Equipment, Gross					$ 39,826	23,194
Leasehold Improvements [Member]
Property, Plant and Equipment, Gross					2,320	2,320
Equipment [Member]
Property, Plant and Equipment, Gross					$ 865	$ 865

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PROMISSORY NOTES (Details Narrative)	Feb. 12, 2015 USD ($) Integer
Notes to Financial Statements
Loan borrowes with an entity	$ 39,000
No Of Installments | Integer	100
Installment Amount	$ 553

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OTHER CURRENT LIABILITIES (Details) - USD ($)	Oct. 31, 2015	Apr. 30, 2015	Apr. 30, 2014
Other Current Liabilities Details
Payroll tax liability	$ 257,586		$ 182,143
Accrued IRS and state interest and penalties	72,381		$ 41,812
Accrued state sales tax interest and penalties	5,787
Accrued lodging taxes	48,067		$ 35,269
Accrued interest expense	14,284		22,373
Accrued payroll	286		4,424
Other current liabilities	2,140		1,858
TOTAL OTHER CURRENT LIABILITIES	$ 398,638	$ 287,879	$ 287,879