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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Commission file number 000-54754

THC Farmaceuticals, Inc.

(f/k/a City Media, Inc.)

(Exact Name of Small Business Issuer as specified in its charter)

UTAH

(State or other Jurisdiction of Incorporation or Organization)

7170 E. McDonald Dr., Ste 3

Scottsdale, Arizona   85253

(Address of principal executive offices)

(480) 725-9060

(Issuer's telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 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 [X]     NO [   ] (The Registrant does not have a corporate Web site.)

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 if the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  YES [   ]     NO [X]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of May 8, 2015, 14,996,600 shares of the registrant's common stock were outstanding.

 

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FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contains forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended

PART I – FINANCIAL INFORMATION

March 31, 2015

C O N T E N T S

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THC FARMACEUTICALS, INC.

Condensed Consolidated Balance Sheets

March 31, 2015 and September 30, 2014

(Unaudited)

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

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THC FARMACEUTICALS, INC.

Condensed Consolidated Statements of Operations

For the Three Months and Six Months Ended March 31, 2015 and 2014

(Unaudited)

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

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THC FARMACEUTICALS, INC.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2015 and 2014

(Unaudited)

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

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THC FARMACEUTICALS, INC.

Notes to Condensed Consolidated Financial Statements

March 31, 2015

NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2015, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2014.  The results of operations for the three-month period ended March 31, 2015 are not necessarily indicative of the operating results for the full year.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position or cash flows.  Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.

NOTE 3 – RELATED PARTY TRANSACTIONS / SERVICE AGREEMENT

The Company has a Service Agreement with Wasatch ATM ("Wasatch"), a Utah limited liability corporation owned and managed by a Company stockholder.  The agreement provides for Wasatch to provide all maintenance, repair and service work along with distribution of vault cash.  Since December 1, 2014, Wasatch has been compensated at a rate of $1,500 per month. The fee paid to Wasatch may be subject to change.

 

NOTE 4 - RELATED PARTY TRANSACTIONS / LONG-TERM DEBT

For the quarter ending September 30, 2014, the Company owed $77,701 in related party long-term debt and $12,480 in related party accrued interest. During the quarter ending December 31, 2014, these amounts were paid in full by the Company as part of the change of control transaction and a new loan of $5,000 was made by a related party. On March 31, 2015, the Company owed $616,368 in related party long-term debt and no related party accrued interest.

NOTE 5 - SUBSEQUENT EVENTS

On April 3, 2015, Patrick Bilton resigned as a director as discussed in our previously filed 8-K, incorporated as Exhibit 2.4 by reference.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

When used in this Annual Report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements regarding events, conditions, and financial trends that may affect Guide's future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this Annual Report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and actual results may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed further below under "Trends and Uncertainties," and also include general economic factors and conditions that may directly or indirectly impact our financial condition or results of operations.

On February 15, 2015, we filed amended articles of incorporation with the Secretary of State of Utah changing our name from City Media, Inc. to THC Farmaceuticals, Inc.  Our trading symbol is CBDG.

Plan of Operation

The Company has also acquired hemp related patents or patent rights and minority ownership of LVCIC, a cannabis information center in Las Vegas, Nevada.

Presently, the Company does not have sufficient funds, without additional equity or debt financing to support operations for the next fiscal year.  There is presently no commitment to provide any further funding to the Company.  Given our current lack of liquidity and difficulty in obtaining debt from traditional banking sources, we will focus future fund raising on the sale of our equity securities.  There can be no assurance that we will be successful at raising additional capital and without additional capital, we will not be able to expand operations and reach long term profitability.

Results of Operations

Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

During the three months ended March 31, 2015, we recognized $5,870 in revenues.  During the three months ended March 31, 2014, we recognized $4,878 in revenues.  The increase in revenue for the period ended 2015 over the same period in 2014 appears to be attributable to an increase in consumer demand for cash transactions created by an improving economy and tourism industry in Utah.

We had a net loss for the three months ended March 31, 2015, of $9,321 and a net loss of $3,630 for the three months ended March 31, 2014.  The loss for the quarter ended March 31, 2015 was more than the loss which occurred during the same quarter in 2014, primarily due to increases in general and administrative expenses during the quarter ended March 31, 2015 from planning and consulting activities.  

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We will need additional capital to expand operations and anticipate seeking both debt and equity capital in 2015. Additionally, as our business operations are only beginning, it is difficult to predict our ability to generate sufficient revenue to generate positive cash flows.  Currently our biggest expenses are related to general and administrative costs consisting mainly of accounting and legal fees, which were $10,691 for the three months ended March 31, 2015 and $4,036 for the three months ended March 31, 2014.  Our service fee to maintain ATM cash levels and operating functionality is $1,500 per month.  We anticipate these fees remaining constant during 2015; however, they may rise in the future if we deploy more machines.

Six Months Ended March 31, 2015 Compared to Six Months Ended March 31, 2014

During the six months ended March 31, 2015, we recognized $10,277 in revenues.  During the six months ended March 31, 2014, we recognized $9,881 in revenues.  The nominal increase in revenue for the period ended 2015 over the same period in 2014 can be attributed to increased demand for cash transactions in the last fiscal quarter as described above.

We had a net loss for the six months ended March 31, 2015, of $19,626 and a net loss of $17,824 for the six months ended March 31, 2014.  Our net loss for the 2015 period was the result of costs of service for maintaining our ATM machines, as well as general and administrative expenses.

Liquidity and Capital Resources

We had $586,025 cash or cash equivalents on hand as of March 31, 2015.  However, $575,000 of that amount was a short-term intercompany transfer from Weed Growth Fund, Inc., the Company's largest shareholder, and that amount was returned to Weed Growth Fund, Inc. on April 16, 2015 at which point the cash balance was $12,861.

For the quarter ending March 31, 2015, the Company owed $616,368 to its parent company, Weed Growth Fund, Inc. for loans made to the Company.

The Company has accumulated losses of $176,703.  As previously discussed above, management's plans include a review of the ATM business model and the addition of new business units in order to improve our cash flows and profitability.  The Company does anticipate receiving loan commitments from shareholders to sufficient fund operations for the next 12 months.

Off-Balance Sheet Arrangements

We had no Off-Balance Sheet arrangements during the quarter ended March 31, 2015.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective.

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Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

None.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

We issued 3,000,000 shares its common stock to David Tobias during the quarter ended March 31, 2015, pursuant to our agreement with Mr. Tobias dated January 5, 2015 and filed as Exhibit 10.2 to our Form 8-K filed with the SEC on January 6, 2015.

None.

None.

None.

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The following documents are included herein:

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 15^th day of May, 2015.

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EXHIBIT INDEX