Attached files
| file | filename |
|---|---|
| 8-K - TTNN SUPER 8-K RE ACQUISITION OF CANNASYS - CANNASYS INC | ttnnsupereightk.htm |
| EX-10.1 - SUBLEASE - CANNASYS INC | sublease.htm |
| EX-99.4 - PROFORMA - CANNASYS INC | proforma.htm |
| EX-10.3 - EMPLOYMENT LETTER AGREEMENT FOR MR. ROGERS - CANNASYS INC | employmentdan.htm |
| EX-99.1 - FINANCIAL STATEMENTS (AUDITED) - CANNASYS INC | tenkfinancials.htm |
| EX-10.2 - EMPLOYMENT LETTER AGREEMENT FOR MR. JENNEWINE - CANNASYS INC | employmentchad.htm |
| EX-2.1 - AGREEMENT AND PLAN OF MERGER - CANNASYS INC | agreementandplanofmerger.htm |
Exhibit 99.3
CannaSys, Inc.
Unaudited Financial Statements
For the Three Months and Six Months Ended June 30, 2014 (Unaudited)
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CannaSys, Inc.
Index to Financial Statements
For the Period Ended June 30, 2014
Financial Statements:
Balance Sheets 2
Statements of Operations 3
Statements of Cash Flows 4
Notes to Financial Statements 5
{00246312/3 }
CannaSys, Inc.
Balance Sheet
For the Period Ended June 30, 2014
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June 30, 2014
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December 31, 2013
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|||||||
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Assets
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||||||||
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Current Assets
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||||||||
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Cash and cash equivalents
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61,468 | 88,389 | ||||||
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Prepaid expenses and other assets
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1,700 | 1,685 | ||||||
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Total Current Assets
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63,168 | 90,074 | ||||||
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Total Assets
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63,168 | 90,074 | ||||||
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Liabilities and Members' Deficit
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||||||||
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Current Liabilities:
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||||||||
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Accounts payable
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16,105 | 10,000 | ||||||
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Accrued Expenses
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7,024 | 2,579 | ||||||
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Total Current Liabilities
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23,129 | 12,579 | ||||||
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Members' Deficit
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||||||||
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Members' Equity
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309,988 | 109,988 | ||||||
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Retained Earnings
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(269,949 | ) | (32,493 | ) | ||||
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Total Equity
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40,039 | 77,495 | ||||||
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Total Liabilities and Members' Deficit
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63,168 | 90,074 | ||||||
The accompanying notes are an integral part of these financial statements.
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CannaSys, Inc.
Statements of Operations
Three Months Ended March 31, 2014
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For the Three Months Ended
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For the Three Months Ended
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June 30, 2014
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June 30, 2013
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|||||||
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Sales revenue
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- | - | ||||||
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Cost of goods sold
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68,206 | - | ||||||
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Gross Profit
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(68,206 | ) | - | |||||
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Operating Expenses
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||||||||
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Payroll expense
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31,273 | - | ||||||
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General and administrative
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15,242 | - | ||||||
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Total Operating Expenses
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46,515 | - | ||||||
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Loss from Operations
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(114,721 | ) | - | |||||
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Other income (expense)
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||||||||
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Interest expense
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- | - | ||||||
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Other
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- | - | ||||||
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Other income (expense), net
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- | - | ||||||
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Net loss and comprehensive loss
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(114,721 | ) | - | |||||
The accompanying notes are an integral part of these financial statements.
{00246312/3 }
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CannaSys, Inc.
Statements of Operations
Six Months Ended June 30, 2014
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For the Six Months Ended
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For the Six Months Ended
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|||||||
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June 30, 2014
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June 30, 2013
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|||||||
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Sales revenue
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- | - | ||||||
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Cost of goods sold
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151,212 | - | ||||||
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Gross Profit
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(151,212 | ) | - | |||||
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Operating Expenses
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||||||||
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Payroll Expense
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50,348 | |||||||
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General and administrative
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35,896 | - | ||||||
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Total Operating Expenses
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86,244 | - | ||||||
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Loss from Operations
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(237,456 | ) | - | |||||
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Other income (expense)
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||||||||
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Interest expense
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- | - | ||||||
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Other
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- | - | ||||||
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Other income (expense), net
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- | - | ||||||
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Net loss and comprehensive loss
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(237,456 | ) | - | |||||
{00246312/3 }
CannaSys, Inc.
Statement of Cash Flows
For the Period Ended June 30, 2014
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For the Six Months
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For the Six Months
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(Inception of October 4, 2013)
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Ended
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Ended June 30, 2013
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June 30, 2014
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|||||||
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Cash flow from operating activities
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||||||||
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Net loss
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- | (237,456 | ) | |||||
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Adjustments to reconcile net loss to net cash used in
operating activities:
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||||||||
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Depreciation and amortization
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Unpaid interest
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||||||||
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Change in operating assets and liabilities:
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Accounts receivable
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||||||||
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Inventory
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||||||||
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Prepaid expenses
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- | (15 | ) | |||||
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Accounts payable
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- | 6,105 | ||||||
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Accrued Expenses
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- | 4,700 | ||||||
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Commissions payable
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||||||||
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Net cash used in operating activities
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- | (226,666 | ) | |||||
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Cash flow (used for)/provided by investing activities
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||||||||
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Cash flow used for financing activities
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||||||||
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Capital Contributed
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- | 200,000 | ||||||
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Member activity
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||||||||
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Net cash provided by financing activities
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- | 200,000 | ||||||
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Net (decrease)/increase in cash
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- | (26,666 | ) | |||||
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Cash at beginning of the year
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- | 177,022 | ||||||
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Cash at end of the year
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- | 150,356 | ||||||
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Supplemental Disclosures:
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||||||||
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Interest paid
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- | -- | ||||||
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Income taxes paid
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- | -- | ||||||
The accompanying notes are an integral part of these financial statements.
{00246312/3 }
CannaSys, Inc.
Notes to Financial Statements
1. Nature of Organization and Summary of Significant Accounting Policies
Organization and Nature of Operations
The Company’s sole direction is to provide technology services in the ancillary space of the cannabis industry. The Company is a technology company and does not produce, sell or handle in any manner cannabis products. CannaSys was formed to serve the technology needs of the cannabis industry. As the current cannabis industry grows and gains momentum around the country, technology needs for the industry have been largely under-served. CannaSys’s focus on this niche element of the industry creates many efficient and profitable tools for both industry owners and consumers. The company was originally formed on October 4, 2013 as a limited liability company, CannaSys, LLC. The Company converted to a C corporation on June 26, 2014.
CannaSys consists of two companies that together serve the entire cannabis industry from grower-wholesaler to end-user via the technologies CannaTrade and CannaCash.
CannaTrade is the technology that will formalize the wholesale marketplace for cannabis and its related products by serving as a mobile and web-based service that licensed producers and retailers can facilitate a market rate based exchange. CannaTrade’s real-time trading platform will be unique to the industry and begin to facilitate the efficient marketplace that will ultimately occur as more states legalize marijuana.
CannaCash will fulfill the need of creating a dynamic gift card program and reward points system for recreational and medical cannabis consumers. The technology program will further assist in allowing retailers the ability to create loyalty programs that can be effectively managed and allow the retailers to reach a broader consumer base. CannaCash is also designed to allow the consumer an efficient way to populate a card with cash value and begin using the points-based rewards program.
Basis of Preparation
The accompanying unaudited interim condensed financial statements have been prepared on the same basis as the annual audited financial statements and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The information included in this report should be read in conjunction with our audited financial statements and notes thereto included in Exhibit 99.1 of this Form 8-K.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has a limited operating history and has suffered operating losses since Inception (October 4, 2013). These factors, among others, may indicate that the Company may be unable to continue as a going concern.
In recent years, we have relied upon our president and certain shareholders to contribute capital to maintain our limited operations .There is no assurance that these loans will continue, or that we will be successful in raising the capital required to continue our operations.
The financial statements do not include any adjustments relating to the recoverability and classification of assets and/or liabilities that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent upon our ability to meet our obligations on a timely basis, and, ultimately to attaining profitability.
Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles permits 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
We consider all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. We had no financial instruments that qualified as cash equivalents at December 31, 2013.
Fair Value of Financial Instruments
The carrying amounts of cash and current liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.
The FASB ASC clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
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Level 1:
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Quoted prices in active markets for identical assets or liabilities.
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Level 2:
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Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.
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Level 3:
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Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Earnings (Loss) per Common Share
We report earnings (loss) per share using a dual presentation of basic and diluted earnings (loss) per share. Basic earnings (loss) per share excludes the impact of common stock equivalents. Diluted earnings (loss) per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. At December 31, 2013, there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.
Income Taxes
We account for income taxes as required by the Income Tax Topic of the FASB ASC, which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
We have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax return in Colorado as “major” tax jurisdictions, as defined. We are not currently under examination by the Internal Revenue Service or any other jurisdiction. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded.
Stock-Based Compensation
Stock-based compensation is accounted for under ASC 718 "Share-Based Payment", using the modified prospective method. ASC 718 requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. ASC 718 also requires the stock option compensation expense to be recognized over the period during which an employee is required to provide service in exchange for the award (generally the vesting period).
Fiscal Year-end
The Company operates on a December 31 year-end.
1. Related Party Transactions
During the year ended December 31, 2013, F-Squared Enterprises LLC contributed $7,488 to us for working capital. F-Squared Enterprises LLC is owned 100% by Brandon Jennewine who serves as a managing member of CannaSys. Dan Rogers also contributed $2,500 to the Company and is a related party to the company.
2. Equity Transactions
B44 LLC also contributed $100,000 to company during the year ended December 31, 2013 and another $100,000 to the company during both the quarter ended March 31, 2014 and during the quarter ended June 30, 2014. B44 LLC is not a related party to the Company.
3. Income Taxes
The Company has incurred net operating losses since inception resulting in a deferred tax asset, which has been fully allowed for; therefore, the net benefit and expense resulted in no income tax provision.
4. Subsequent Events
We have evaluated the effects of all subsequent events through the date the accompanying financial statements were available for use.
On August 15, 2014 the Company entered into an Agreement and Plan of Merger with Thermal Tennis, Inc., a publically held Nevada corporation. As a result of the merger, 100% of the outstanding Common Stock of the Company immediately prior to the closing of the Agreement and Plan of Merger was exchanged for 6,000,000 shares of Thermal Tennis’s Common Stock. At the closing of the merger the board of directors of Thermal Tennis was expanded to two persons and Brandon C. Jennewine was appointed a director, joining Robert R. Deller. Subject to meeting the filing and 10-day advance notice requirements of Rule 14f-1 under the Exchange Act, Mr. Deller will resign as a director, and Daniel J. Rogers will be appointed director. Upon compliance with Regulation 14A of the Exchange Act, Thermal Tennis will amend its articles of incorporation to change its name to CannaSys, Inc. and make other changes to it articles of incorporation as deemed warranted by the board.
Private Placement
On or about August 7, 2014, Thermal Tennis, Inc. issued a total of 1,000,000 unregistered shares of common stock to a total of 20 persons in exchange for $500,000. The proceeds of this offering were delivered to the Company for working capital. The shares were issued in reliance on the exemption from registration set forth in Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D.
{00246312/3 }