UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2014

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 000-54798

3240 W 71st Avenue, Unit 5 

Westminster CO 80030 

(Address of principal executive offices)

(720)-319-5602 

(Registrant’s telephone number, including area code)

________________________________________________________________ 

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 x No ¨

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

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

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

As of July 16, 2014, 29,133,201 shares of common stock, par value $0.001 per share, were issued and outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Cannabis Kinetics Corp. 

(formerly Lingas Ventures, Inc.) 

Condensed Financial Statements 

(Expressed in US dollars) 

For the period ended May 31, 2014

Cannabis Kinetics Corp. 

(formerly Lingas Ventures, Inc.) 

Condensed Balance Sheets 

(Expressed in US dollars)

(The accompanying notes are an integral part of these condensed unaudited financial statements)

Cannabis Kinetics Corp. 

(formerly Lingas Ventures, Inc.) 

Condensed Statements of Operations 

(Expressed in US dollars) 

(unaudited)

(The accompanying notes are an integral part of these condensed unaudited financial statements)

Cannabis Kinetics Corp. 

(formerly Lingas Ventures, Inc.) 

Condensed Statements of Cash Flows 

(Expressed in US dollars) 

(unaudited)

(The accompanying notes are an integral part of these condensed unaudited financial statements)

Cannabis Kinetics Corp. 

(formerly Lingas Ventures, Inc.) 

Notes to the Financial Statements 

(Expressed in US dollars) 

(unaudited)

Cannabis Kinetics Corp.  

(formerly Lingas Ventures, Inc.)  

Notes to the Financial Statements  

(Expressed in US dollars)  

(unaudited)

Cannabis Kinetics Corp.  

(formerly Lingas Ventures, Inc.)  

Notes to the Financial Statements 

(Expressed in US dollars)  

(unaudited)

Cannabis Kinetics Corp.  

(formerly Lingas Ventures, Inc.)  

Notes to the Financial Statements  

(Expressed in US dollars)  

(unaudited)

Cannabis Kinetics Corp.  

(formerly Lingas Ventures, Inc.)   

Notes to the Financial Statements   

(Expressed in US dollars)   

(unaudited)

Item 2. Management’s Discussion and Analysis or Plan of Operations.

As used in this Quarterly Report on Form 10-Q, references to the “Company,”, “we,” “our” or “us” refer to Cannabis Kinetics, Corp. unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with the financial statements of the Company which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

Plan of Operation

As a result of a change of control of the Company pursuant to a stock purchase agreement entered into on March 19, 2014 whereby the former principals shareholders of the Company sold an aggregate of 145,000,000 shares of common stock of the Company to Eric Hagen (49,000,000 shares); Jonathan Hunt (48,000,000 shares) and Steven Brandt (48,000,000 shares) which represented 50% of the issued and outstanding share capital of the Company on a fully-diluted basis, for $21,750, and resigned as officers and directors of the Company and Messrs. Hagen, Hunt and Brandt were appointed officers and directors, management intends to focus on various opportunities in the recreational and medical marijuana industry.

On May 1, 2014, the Company filed an Amendment to its Articles of Incorporation to change its name from Lingas Ventures, Inc. to Cannabis Kinetics Corp., to provide for a 1 for 10 reverse stock split and to authorize the issuance of 10,000,000 shares of blank check preferred stock. On June 4, 2014, the Company’s new trading symbol, CANK became effective.

On June 6, 2014, the Company, REM International, LLC, a Colorado limited liability company (“REM”), and Robert E. Matuszewki, the owner of all of the issued and outstanding equity interests in REM (the “Principal”), entered into an asset purchase agreement (the “Purchase Agreement”) pursuant to which the Company agreed to purchase substantially all of the assets of REM in consideration for $118,500 in cash and 1,500,000 shares of the Company’s common stock, par value $0.001, subject to the terms and conditions of the Purchase Agreement. The closing of the transactions contemplated by the Purchase Agreement is subject to the satisfaction or waiver of certain conditions provided for in the Purchase Agreement, including the receipt of REM’s audited financial statements which comply with the rules and regulations of the SEC and a consent from its independent auditors. Upon the closing of the transactions contemplated by the Purchase Agreement, it is intended that Robert E. Matuszewski will be appointed an officer and director of the Company.

On June 10, 2014, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock designating 750,000 shares of the Company’s authorized preferred stock as Series B Convertible Preferred Stock, par value $0.001 per share (“Series B Stock”). A summary of the material provisions of the Certificate of Designation governing the Series B Stock is set forth in the Company’s Current Report on Form 8-K filed with the SEC on June 12, 2014.

On June 23, 2014, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock designating 5,500,000 shares of the Company’s authorized preferred stock as Series A Convertible Preferred Stock, par value $0.001 per share (“Series A Stock”). A summary of the material provisions of the Certificate of Designation governing the Series A Stock is set forth in the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2014.

Results of Operations

For the three months ended May 31, 2014 and May 31, 2013

Revenues

The Company is in its development stage and did not generate any revenues during the three months ended May 31, 2014 and May 31, 2013.

Total operating expenses

For the three months ended May 31, 2014, total operating expenses were $162,130, consisting of general and administrative expenses. For the three months ended May 31, 2013, total operating expenses were $4,441of general and administrative expenses. Operating expenses increased $157,689 primarily due to stock based compensation of $47,100 and other expenses related to the change in management during this period.

Net loss

For the three months ended May 31, 2014, the Company had a net loss of $162,130, as compared to a net loss for the three months ended May 31, 2013 of $4,441.

For the six months ended May 31, 2014 and May 31, 2013

Revenues

The Company is in its development stage and did not generate any revenues during the six months ended May 31, 2014 and May 31, 2013.

Total operating expenses

For the six months ended May 31, 2014, total operating expenses were $176,223, which consisted of general and administrative expenses. For the six months ended May 31, 2013, total operating expenses were $23,757 of general and administrative expenses. General and administrative expenses were higher during the six months ended May 31, 2014 compared to May 31, 2013 primarily due to stock based compensation of $47,100 and other expenses related to the change in management.

Net loss

For the six months ended May 31, 2014, the Company had a net loss of $176,223, as compared to a net loss for the six months ended May 31, 2013 of $23,757.

Liquidity and Capital Resources

As of May 31, 2014, the Company had a cash balance of $105,819. We estimate that within the next 12 months we will need approximately $1,000,000 to develop our business. We cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance of additional shares and the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If adequate funds are not available or not available on acceptable terms, we may be unable to fund our operations. The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

Going Concern

As of May 31, 2014, the Company has not recognized any revenue, has working capital of $6,319, and has an accumulated deficit of $266,958. Our auditors have issued a going concern opinion on our audited financial statements for the year ended November 30, 2013. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for our expenses. This is because we have not generated any revenues and no sales are yet possible. There is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from sources. Our only other source for cash at this time is investments by others. We must raise cash to stay in business. In response to these problems, management intends to raise additional funds through public or private placement offerings.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that may have a material impact on its financial position or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure. As of May 31, 2014, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of May 31, 2014.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter 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.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this item.

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

Recent sales of unregistered securities

On March 19, 2014, John Ngitew and Grace Parinas, the principals shareholders of the Company, entered into a stock purchase agreement for the sale of an aggregate of 145,000,000 shares of common stock of the Company (the “Purchased Shares”) to Eric Hagen, Jonathan Hunt and Steven Brandt. The consideration paid for the Purchased Shares, which represented 50% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $21,750. The shares issued to Messrs. Hagen, Hunt and Brandt have not been registered under the Securities Act of 1933, as amended (the “Act”), and were issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act.

On May 1, 2014, Eric Hagen, Jonathan Hunt and Steve Brandt, each an officer and director of the Company, were each issued 1,900 shares of common stock of the Company as compensation for services performed for the Company in the month of April 2014. Messrs. Brandt, Hunt and Hagen are each entitled to monthly compensation of $7,500 in cash and $7,500 in common stock of the Company based upon a 50% discount off the average of the previous 20 trading days. The issuance of such shares of common stock by the Company to Messrs. Hagen, Hunt and Brandt have not been registered under the Act, and were issued in reliance on the exemption from registration provided by Section 4(2) of the Act.

On May 8, 2014, Eric Hagen, Jonathan Hunt and Steve Brandt, each an officer and director of the Company, were each issued 5,000 shares of common stock of the Company as compensation for services performed for the Company in the month of April 2014. Messrs. Brandt, Hunt and Hagen are each entitled to monthly compensation of $7,500 in cash and $7,500 in common stock of the Company based upon a 50% discount off the average of the previous 20 trading days. The issuance of such shares of common stock by the Company to Messrs. Hagen, Hunt and Brandt have not been registered under the Act, and were issued in reliance on the exemption from registration provided by Section 4(2) of the Act.

On May 28, 2014, the Company raised $100,000 from the sale of 8,333 shares of Series B Convertible Preferred Stock. The Preferred Stock issued has not been registered under the Act, and was issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act.

On May 23, 2014, the Company raised $7,500 from the sale of 625 shares of Series B Convertible Preferred Stock. The Preferred Stock issued has not been registered under the Act, and was issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act.

On June 20, 2014, the Company and each of Steven Brandt, Jonathan Hunt and Eric Hagen entered into an exchange agreement pursuant to which each such individual agreed to convert $2,750 owed to him by the Company into 91,666 shares of Series A Convertible Preferred Stock of the Company (the “Preferred Stock”). Upon the exchange, the aggregate outstanding balance of $8,250 and any accrued interest thereon was deemed extinguished in consideration of the issuance of 274,998 shares of the Preferred Stock. The Preferred Stock issued to Messrs. Brandt, Hunt and Hagen has not been registered under the Act, and was issued in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act.

On June 26, 2014, Eric Hagen, Jonathan Hunt and Steve Brandt, each an officer and director of the Company, were each issued 37,5000 shares of common stock of the Company as compensation for services performed for the Company. Although Messrs. Brandt, Hunt and Hagen are each entitled to monthly compensation of $7,500 in common stock of the Company based upon a 50% discount off the average of the previous 20 trading days, they agreed that the Company will no longer have to issue the shares to them.

Purchases of equity securities by the issuer and affiliated purchasers.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable

Item 5. Other Information

None 

Item 6. Exhibits.

SIGNATURES

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

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