UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended June 30, 2015
[  ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from __________ to__________
	Commission File Number: 333-178482

Cannabis-Rx, Inc.

(Exact name of registrant as specified in its charter)

Nevada	30-0693512
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
7702 E Doubletree Ranch Rd. Ste 300 Scottsdale AZ 88258
(Address of principal executive offices)

480.902.3399

(Registrant’s telephone number)

_______________________________________________________

(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 [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).  [X] Yes [ ] 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.

[  ] Large accelerated filer	[  ] Accelerated filer
[  ] Non-accelerated filer	[X] Smaller reporting company

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 156,000,000 as of September 11, 2015

TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4:	Controls and Procedures	7
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	10
Item 1A:	Risk Factors	10
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3:	Defaults Upon Senior Securities	10
Item 4:	Mine Safety Disclosures	10
Item 5:	Other Information	10
Item 6:	Exhibits	10

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our consolidated financial statements included in this Form 10-Q are as follows:

F-1	Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 (unaudited);
F-2	Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 (unaudited);
F-3	Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 (unaudited); and
F-4	Notes to Unaudited Consolidated Financial Statements.

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended June 30, 2015 are not necessarily indicative of the results that can be expected for the full year.

3

CANNABIS-RX INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

	June 30,			December 31,
	2015			2014
ASSETS
Real Estate Inventory
Properties held for sale	$	3,325,486		$	7,335,148
Properties under development		8,859,075			6,741,130
Real  Estate Inventory		12,184,561			14,076,278
Properties held for investment
Buildings, net		656,123			672,465
Land		593,285			593,285
Properties held for investment, net		1,249,408			1,265,750
Cash		2,434,858			1,098,530
Rent Receivable		110,500			—
Prepaid income tax		25,000			—
Due from Berkshire Homes, Inc. – related party		52,496			156,968
Prepaid Expense		37,303			25,000
TOTAL ASSETS	$	16,094,126		$	16,622,526
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable to related parties	$	20,459			10,420
Accounts payable and accrued expenses		39,500			72,991
Accrued interest		1,300,705			884,705
Security deposit		39,000			39,000
Option to purchase deposit		100,000			100,000
Promissory notes		16,250,000			16,250,000
Total Liabilities		17,749,664			17,357,116
Stockholders’ Deficit
Preferred stock, par value $0.0001, 50,000,000    authorized and 2,000,000 shares issued and outstanding on June 30, 2015 and December 31, 2014		200			200
Common stock, par value $0.0001, 1,500,000,000 shares authorized 156,000,000 and 156,000,000 shares issued and outstanding on  June 30, 2015 and December 31, 2014, respectively		15,600			15,600
Additional paid-in capital		65,000			65,000
Share subscriptions receivable		(20,000	)		(20,000	)
Accumulated deficit		(1,716,338	)		(795,390	)
Total Stockholders' Deficit		(1,655,538	)		(734,590	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		16,094,126			16,622,526

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

F-1

CANNABIS-RX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended June 30, 2015			Three months ended June 30, 2014			Six months ended June 30, 2015			Six months ended June 30, 2014
REVENUES	$	2,509,422		$	2,776,131		$	8,731,157		$	3,629,631
RENTAL INCOME		55,250			—			110,500			—
TOTAL REVENUES		2,564,672			2,776,131			8,841,657			3,629,631
COST OF SALES		3,069,716			2,573,782			8,981,461			3,336,115
GROSS PROFIT (LOSS)		(505,044	)		202,349			(139,804	)		293,516
EXPENSES
Depreciation		8,168			—			16,336			—
Consulting fees		25,000			—			55,000			11,500
General and administrative		47,720			107,741			121,633			117,601
Marketing and public relations		7,696			—			8,525			—
Professional fees		17,626			18,555			40,479			26,849
Management fees and expenses		80,526			35,776			123,171			54,526
TOTAL EXPENSES		186,736			162,072			365,144			210,476
INCOME (LOSS) FROM OPERATIONS		(691,780	)		40,277			(504,948	)		83,040
OTHER INCOME (EXPENSE)
Interest expense		(208,000	)		(213,479	)		(416,000	)		(372,438	)
Gain on settlement of loan receivable					71,878						71,878
TOTAL OTHER INCOME (EXPENSE)		(208,000	)		(141,601	)		(416,000	)		(300,560	)
NET INCOME (LOSS)	$	(899,780	)	$	(101,324	)	$	(920,948	)	$	(217,520	)
NET INCOME (LOSS) PER SHARE: BASIC AND DILUTED	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED		156,000,000			156,000,000			156,000,000			138,444,444

Accompanying notes are an integral part of these unaudited consolidated financial statements.

F-2

 CANNABIS-RX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six months ended June 30, 2015			Six months ended June 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(920,948	)	$	(217,520	)
Adjustments to reconcile net loss to net cash
used in operating activities
Gain on loan receivable		—			(71,878	)
Depreciation		16,336			—
Changes in assets and liabilities
Properties		1,891,717			(10,223,466	)
Accounts payable - related party		10,045			1,561
Accounts payable and accrued expenses		382,509			372,439
Receivable		(110,500	)		—
Prepaid expenses		(12,303	)		—
Income tax receivable		(25,000	)		—
Net cash provided by (used in) operating activities		1,231,856			(10,138,864	)
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment from advances to Berkshire Homes, Inc.		104,472			—
Proceeds from loan receivable settlement		—			255,321
Loan receivable		—			(183,443	)
Net cash provided by investing activities		104,472			71,878
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of stock		—			2,000
Proceeds from promissory notes		—			8,000,000
Net cash provided by financing activities		—			8,002,000
NET CHANGE IN CASH		1,336,328			(2,064,986	)
CASH - BEGINNING OF PERIOD		1,098,530			2,186,879
CASH - END OF PERIOD	$	2,434,858		$	121,893
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	—		$	—
Cash paid for taxes	$	—		$	—
NON-CASH TRANSACTIONS:
Subscription receivable	$	—		$	20,000

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

F-3

CANNABIS-RX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 - NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

Organization and Description of Business

Cannabis-RX Inc. (the “Company”) was incorporated in Delaware on July 5, 2011. The business plan of the Company was to create a marketing and promotion platform for a stretch and fitness apparatus. On July 3, 2013, the Company changed its business to acquiring, improving and selling real property, and changed its name from L3 Corp. to Longview Real Estate, Inc. On January 30, 2014, the Company changed its name to Cannabis-Rx Inc. with the Company’s real estate business expanding to include the regulated cannabis industry by purchasing and selling real estate assets and leasing space and related facilities to licensed marijuana growers and dispensary owners for their operations. In addition, the Company plans to expand its business to provide financing and consulting services to the cannabis industry in addition to commercial real estate solutions.

The accompanying unaudited interim financial statements of Cannabis-RX, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the Company’s audited 2014 annual financial statements and notes thereto filed on Form 10-K with the SEC. In the opinion of management, all adjustments, consisting of normal reoccurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods present have been reflected herein. The results of operation for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure required in the Company’s fiscal 2014 financial statements have been omitted.

NOTE 2 – GOING CONCERN 

These consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $1,716,338 as of June 30, 2015. Further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans and/or private placement of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 3 - REAL ESTATE INVENTORY

Inventories are stated at the lower of cost or market. During the current interim period, the Company received net proceeds of $1,891,717 from real estate properties purchased for resale.

Inventory balance: 12/31/2014	14,076,278
Properties Sold:	(8,960,603	)
Properties Acquired:	7,068,886
Ending Balance: (6/30/15)	12,184,561

F-4

NOTE 4 - PROMISSORY NOTES

During 2013, the Company borrowed $150,000 under 2 notes at 18% interest per annum.  The notes have matured but have not been declared in default. We continue to accrue interest at the face amount.

During 2013, the Company borrowed $8,100,000 under 3 notes at 5% interest per annum. The promissory notes are unsecured and mature twenty-four months from their issuances. 

On January 27, 2014 the Company issued a promissory note in the principal amount of $4,000,000 at the interest rate of 5% per annum and due and payable twenty four months from the date of issuance, subject to acceleration in the event of default and may be prepaid in whole or in part without penalty or premium.

 On February 19, 2014 the Company issued a promissory note in the principal amount of $4,000,000 at the interest rate of 5% per annum and due and payable twenty four months from the date of issuance, subject to acceleration in the event of default and may be prepaid in whole or in part without penalty or premium.  

On March 27, 2014 the Company entered into a secured lending agreement in the principal amount of $14,000,000 at the interest rate of 5% per annum and due and payable twenty four months from the date of issuance, subject to acceleration in the event of default and may be prepaid in whole or in part without penalty or premium. No funds have been received from this agreement as of March 31, 2014.

Total interest expense recorded on the notes for the periods ended June 30, 2015 and 2014 was $416,000 and $372,438.

NOTE 5 - RELATED PARTY TRANSACTIONS

As of June 30, 2015, the Company had a balance of $20,459 owed to a director and officer for management fees and expenses paid on behalf of the Company.

During 2014, the Company advanced $156,968 to Berkshire Homes, Inc., a public company with a common director and management. During the period, the Company repaid $104,472, of the outstanding advances. As of June 30, 2015, the outstanding balance was $ 52,496.

The balances owed to or by related parties are unsecured, non-interest bearing and repayable on demand.

F-5

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Company Overview

We were incorporated on July 5, 2011 in the State of Delaware. We are engaged in the business of acquiring a portfolio of distressed properties in certain strategic areas at deep discounts, rehabilitating these properties and selling or leasing them for the quickest and highest return possible. In conjunction with these real estate operations, in January 2014, we began catering to the real estate needs of the regulated cannabis industry, in states and other locations where such business is licensed and permitted. In this niche market, we plan to purchase real estate assets and lease growing space and related facilities to licensed marijuana growers and dispensary owners for their operations.

To date, we have raised $16,250,000 through the sale of unsecured promissory notes. We continue to seek out the best financing opportunities in order to deploy funds into our business operations that we believe best suited to the real estate industry, as well as pursue real estate opportunities in the cannabis industry.

Commercial Real Estate Solutions

We have been searching in Colorado, Washington, Florida and California or properties to acquire suited to the cannabis industry. We will continue to evaluate and consider the purchase of industrial commercial buildings that are in the designated zoned areas of municipalities. To date, after extensive due diligence, we have acquired only two properties suited for cannabis use. Furthermore, the final use of these properties is not limited to the cannabis industry. One of these properties was sold.

In order to attract cannabis-related tenants to lease our properties, we are willing to renovate these spaces based on the requirements of the business, and incorporate these additional costs into their lease. For example, if it is a grow facility we will provide significant electrical, HVAC, and security upgrades. Often these tenant improvements are the responsibility of the leasee. Additionally, we are willing to facilitate these improvements by offering to consult on the build-out of their facility and/or capital based on the needs of the tenant, the term of the lease, and their business model. However, after our due diligence certain projects were not pursed inasmuch as they failed to meet our underwriting standards.

In the marijuana space, tenants typically pay a 30 – 40 percent premium to lease space to operate in, simply due to the nature of the business. We plan to offer our space at a lesser premium to the usual 30 - 40 percent. Our targets are 20 - 30 percent. Notwithstanding, we have been unable to find properties in this space to meet this criteria, and we are finding that it is more difficult to obtain financing from reputable lenders as a result of our plans in the cannabis industry. We are considering reducing our focus in the cannabis space and refocusing our efforts to our primary business of real estate acquisitions and sales.

4

In Florida, we purchased and rehabilitated a 9.23 acre property totaling 209,000 square feet in a trio of industrial buildings to house cannabis operations. However, because the ballot measure did not receive 60% voter approval the measure failed. Regardless, we are confident in our ability to maximize the value of the asset and will market the property for sale.

At present, we have acquired 69 properties for a total cost of $25,350,652. Of the 69 properties, 51 have been rehabilitated and sold or are under contract for sale,7 have been rehabilitated and are listed for sale, and 0 properties are held for investment purposes. The remaining11 properties are in the process of rehabilitation, except for 0 properties that we hold for investment. To date, we now own three classes of real estate: single family, multi-family and commercial, all of which are located in Florida, Illinois, California, Ohio, Michigan, Arizona and Washington. Some of these properties are held by us and some are held in our wholly-owned subsidiary, Praetorian Capital, LLC, a Florida limited liability company formed on October 22, 2013. The one property we owned in Colorado has been sold.

Financing and Consulting Services

While we continue to be willing to consider and provide financing and consulting services to the cannabis industry, in addition to our commercial real estate solutions, we have not undertaken such proposals based on our due diligence. We will continue to entertain financing options with licensed or existing operators within the marijuana industry that require start-up, operating or expansion capital. As previously indicated, we have invested in two building designated to be used in the cannabis industry. We will also consider providing capital to current and potential tenants of our buildings that require funding to refinance current debt, as long as they meet our underwriting criteria. Additionally, we offer sale-and-leaseback financing arrangements with tenant purchase options. These types of financing solutions provide flexibility for our tenants long-term, while capitalizing their operations.

Through our network of real estate experts - legal, licensing, construction and growing - we plan to provide consulting services to our tenants in the marijuana industry trying to navigate the real estate/zoning process and/or regulatory environment. We provide counsel to help businesses set up their grow operations. Specifically, we can provide guidance/counsel regarding construction management and grow design (electrical, HVAC, lighting, etc.). We are also looking into providing regulatory compliance consulting.

Results of Operations for the three and six months ended June 30, 2015 and 2014

Revenues

We generated sales of $2,509,422 and rental income of $55,250 for the three months ended June 30, 2015, as compared with sales of $2,776,131 and $0 rental income for the same period ended 2014. We generated sales of $8,731,157 and rental incomeof $110,500 for the six months ended June 30, 2015, as compared with sales of $3,629,631 and $0 rental income for the same period ended 2014. We expect our sales to continue to climb in 2015 as we dispose of the properties that we have previously acquired.

Our cost of sales totaled $3,069,716 for the three months ended June 30, 2015, as compared with $2,573,782 for the same period ended 2014. Our cost of sales totaled $8,981,461 for the six months ended June 30, 2015, as compared with $3,336,115 for the same period ended 2014. Our costs of sales includes: purchase price, rental expenses, rehabilitation, escrow, closing costs, and commissions.

We recorded a gross loss of $505,044 for the three months ended June 30, 2015, as compared with a gross profit of $202,349 for the same period ended 2014. We recorded a gross loss of $139,804 for the six months ended June 30, 2015, as compared with a gross profit of $293,516 for the same period ended 2014.

5

Operating Expenses

Operating expenses increased to $186,736 for the three months ended June 30, 2015 compared to $162,072 for the three months ended June 30, 2014. Our operating expenses for the three months ended June 30, 2015 consisted of general and administrative expenses of $47,720, management fees and expenses of $80,526, professional fees of $17,626, deprecation of $8,168, consulting fees of $25,000 and marketing and public relations fees of $7,696. In comparison, our operating expenses for the three months ended June 30, 2014 consisted of management fees of $35,776, professional fees of $18,555 and general and administrative expenses of $107,741.

Operating expenses increased to $365,144 for the six months ended June 30, 2015 compared to $210,476 for the six months ended June 30, 2014. Our operating expenses for the six months ended June 30, 2015 consisted of general and administrative expenses of $121,633, management fees and expenses of $123,171, professional fees of $40,479, deprecation of $16,336, consulting fees of $55,000 and marketing and public relations fees of $8,525. In comparison, our operating expenses for the six months ended June 30, 2014 consisted of management fees of $54,526, professional fees of $26,849, general and administrative expenses of $117,601 and consulting fees of $11,500.

We anticipate our operating expenses will increase as we continue our business operations. The increase will be attributable to administrative and operating costs associated the acquisition, renovation and sale of residential properties and the professional fees associated with our reporting obligations under the Securities Exchange Act of 1934.

Interest Expenses

Interest expenses increased to $208,000 for the three months ended June 30, 2015, from $213,479 for the three months ended June 30, 2014. Interest expenses increased to $416,000 for the six months ended June 30, 2015, from $372,438 for the six months ended June 30, 2014. We expect that interest expenses will increase as we plan to take on more debt to finance our property acquisitions resulting in higher interest expenses.

Net Loss

We recognized a net loss of $899,780 for the three months ended June 30, 2015, compared to a net loss of $101,324 for the three months ended June 30, 2014. We recognized a net loss of $920,948 for the six months ended June 30, 2015, compared to a net loss of $217,520 for the six months ended June 30, 2014.

Liquidity and Capital Resources

As of June 30, 2015, we had total assets of $16,094,126 consisting mostly of cash and our real property inventory. We had total liabilities of $17,749,664 as of June 30, 2015.

Operating activities provided $1,231,856 in cash for the six months ended June 30, 2015, as compared with $10,138,864 used for the six months ended June 30, 2014. Our positive operating cash flow for 2015 was mainly a result of our real property inventory.

Investing activities provided $104,472 in cash for the six months ended June 30, 2015, as compared with $71,878 provided for the six months ended June 30, 2014. Our positive investing cash flow for the six months ended June 30, 2015 was mainly a result of payment received on advances from Berkshire Homes, Inc.

Financing activities for the six months ended June 30, 2015 generated $0 in cash, as compared with cash flows provided by financing activities of $8,002,000 for the six months ended June 30, 2014.

To date, we have raised $16, 250,000 through the sale of unsecured promissory notes. We continue to seek out the best financing opportunities in order to deploy funds into business operations that we believe best suited in the cannabis industry, as well as continue to pursue our real estate activities.

As of June 30, 2015, we had $2,434,858 in cash. With the cash on hand, we have sufficient cash to operate our business at the current level for the next twelve months. Our plan, however, is to acquire more properties, and to do this, we intend to fund our expansion through debt and/or equity financing arrangements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

6

Going Concern

The accompanying financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We have incurred losses since inception resulting in an accumulated deficit of $1,716,338 as of June 30, 2015 and further losses are anticipated in the development of our business raising substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management anticipates financing operating costs over the next twelve months with loans and/or private placement of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our critical accounting policies are set forth in Note 2 to the financial statements.

Recently Issued Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Off Balance Sheet Arrangements

As of June 30, 2015, there were no off balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of June 30, 2015, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission’s rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2015, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described below.

Our principal executive officers do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officers have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

7

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

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. Management identified the following three material weaknesses that have caused management to conclude that, as of June 30, 2015, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the reasonable assurance level:

1.We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act as of the period ending June 30, 2015. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2.We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3.Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

To remediate the material weakness in our documentation, evaluation and testing of internal controls we plan to engage a third-party firm to assist us in remedying this material weakness once resources become available.

We intend to remedy our material weakness with regard to insufficient segregation of duties by hiring additional employees in order to segregate duties in a manner that establishes effective internal controls once resources become available.

Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the period covered by this report, the period ended June 30, 2015, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

8

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A:Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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

None

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 formatted in Extensible Business Reporting Language (XBRL).
	**Provided herewith

9

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.

	Cannabis-Rx, Inc.
Date:	September 25, 2015
By:	/s/ Llorn Kylo
	Llorn Kylo
Title:	President, Chief Executive Officer, and Director

10